Condonation of delay in filing Form 10B – ill-health of executive trustee, a bonafide reason

Condonation of delay in filing Form 10B/ITR. ill-health resulting in demise of executive trustee was a bonafide reason

In a recent judgment, Hon’ble Karnataka High Court has held that ill-health and subsequent demise of the executive trustee of the assessee trust constituted bona fide reasons for condonation of delay in filing 10B and Income Tax return.

ABCAUS Case Law Citation:
4884 (2025) (11) abcaus.in HC

In the instant case, the assessee had challenged the order passed under section 119(2)(b) rejecting the condonation application for delay in filing Audit Report in Form 10B and ITR-7 for the assessment year 2013-14.

For the relevant Assessment Year, the petitioner had filed Form 10B and ITR-7 after the prescribed period along with the application seeking condonation of delay under section 119(2)(b) of 127 days in filing Form 10B and ITR-7 returns interalia contending that the executive trustee and the managerial person of the affairs of the petitioner was suffering from several medical illness which later resulted into the demise of such trustee and owing to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner was not in a position to file Form 10B and ITR-7 within the prescribed period.

Before the Hon’ble High Court, it was contended that the delay in filing the I.T. returns was due to genuine hardship as contemplated in the Circular No. 9/2015 dated 09.06.2015 and as such, the Commissioner of Income Tax (Exemption) committed an error in rejecting the application for condonation of delay filed by the petitioner under Section 119(2)(b) of the Act deserved to be set aside.

The Hon’ble High Court observed that perusal of the impugned order indicated that the Income Tax Authorities had adopted hyper technical approach in refusing to condone the delay without appreciating that the inability and omission on the part of the petitioner to file Form 10B and ITR-7 within the prescribed period was due to the ill-health and subsequent demise of the executive trustee of the petitioner who had filed Form 10B and ITR-7 subsequent to expiry of the prescribed period after appointing a new executive trustee.

The Hon’ble High Court opined that the CIT(E) failed to appreciate that the petitioner could not file Form 10B within the prescribed period on account of bonafide reasons, unavoidable circumstances and sufficient cause, which clearly constituted genuine hardship on the part of the petitioner/assessee as contemplated in the CBDT Circular dated 09.06.2015 and failure to appreciate this, has resulted in erroneous conclusion warranting interference by the High Court.

In view of the circumstances of the case, the Hon’ble High Court adopted a justice oriented approach and having regard to valid and sufficient grounds pleaded by the petitioner in support of its claim for condonation of delay, set aside the impugned order and condoned the delay in filing return and Form 10B by the petitioner.

Download Full Judgment Click Here >>

• Form 26 to replace Form 3CD of tax audit report by a CA from Tax Year 2026-27
• When no addition is made on the basis of reasons recorded, reopening is bad in law
• No separate compensation for loss of love and affection under MV Act – SC
• Trust accredited by National Open School eligible for registration u/s 12AB & u/s 80G
• Delay in furnishing Form 10B – Covid Period to be excluded as per decision of Supreme Court