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April 21, 2021

Delay in Filing Form 10 leading the Public Charitable Trusts in trouble

by Mahesh Mara in Income Tax

Delay in Filing Form 10 leading the Public Charitable Trusts in trouble

In order to prevent hardships faced by the Charitable Trusts in filing the Form 10 and exercise the powers conferred under section 119(2)(b) of the Income Tax Act 1961. To prevent this hardship the CBDT has issued Circular No. 6/2020 dated 19.02.2020 giving powers to the Jurisdictional Commissioners to admit Condonation Petition and decide on merit the Condonation of delay in filing Form No. 10.

The Assessing Officers has passed the assessment Orders previously in regular assessments without considering the application for Condonation of delay filed by the Charitable Trust and raising huge demands. The Charitable Trusts were put to lot of trouble because they have to pay 20% of the demand and file appeals.

The C.I.T (Appeals), to whom the appeals were filed in such cases, were reluctant to pass orders in favour of the Charitable Trusts because the only issue before them is the Condonation and the CIT, who has to pass order condoning the delay, before whom the Condonation Petition is pending, is of the equal rank.

The CIT, against whom the Condonation petition is pending, is also reluctant to pass order condoning the delay since the assessee has gone on appeal. Because of this unusual situation the appeals are pending before CIT (Appeals). Soon there will be numerous such cases from A.Y. 2016-17 to 2018-19 pending with CIT (Appeals).

Considering the situation Faceless Assessment Team has also started passing such orders without considering the pending petition for Condonation before the jurisdictional CIT, even though the same were brought to their knowledge on receipt of draft assessment orders. It will be of great help to the Trusts if suitable instructions are given to the Assessing Officers in the Faceless Assessment Scheme as well as the Commissioners of Income Tax, who have to dispose of appeals in the Faceless Appeals Scheme and to the jurisdictional Commissioners of Income Tax to act harmoniously to condone the delay and pass orders accordingly, which will go a long way in relieving the Charitable Trusts from this ordeal and in deleting the artificial demands.

Below is the extract of Circular No. 6/2020 dated 19.02.2020 

Circular No. 06/2020-Income Tax

Sub: Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Return of Income for A.Y 2016-17, 2017-18, and 2018-19 and Form No. 9A and Form No. 10. -Reg,

Representations have been received seeking condonation of delay in filing Return of Income by the Charitable Institutions for the Assessment Year 2016-17 onwards on the grounds of hardship. The Board has issued Circulars authorizing the Commissioners of Income Tax to admit belated applications of Form 9A and Form 10 and to decide on merit the condonation of delay u/s 119(2)(b) of the Income-tax Act, 1961 (Act). However, in those cases where the Income Tax Returns have also been filed beyond the due date prescribed under section 139(1) of the Act, the condonation of delay in filing of Form 9A & Form 10 by the Commissioners is not of any help to the assessee, as section 13(9) of the Act, inserted w.c.f. 01.04.2016, stipulates twin conditions of filing of Form 9A/Form 10 and also of filing Return of Income before the due date.

2. Accordingly, in continuation of earlier Circulars issued in this regard, with the view to prevent hardship to the assessee and in exercise of powers conferred under section 119(2)(b) of the Act, the CBDT has decided that where the application for condonation of delay in filing Form 9A and Form 10 has been filed, and the Return of Income has been filed on or before 31st March of the respective assessment years i.e. Assessment Years 2016-17, 2017-18 and 2018-19, the Commissioners of Income-tax (Exemptions) are authorised u/s 119(2)(b) of the Act, to admit such belated applications for condonation of delay in filing Return of Income and decide on merit.

3. For all other application for condonation of delay not mentioned above, the power of condonation of delay u/s 119(2)(b) of the Act will continue with the respective authorities as per the extant Rules and Practice.

(Gulzar Ahmad Wani)

Under Secretary (ITA-I)

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