High Court condoned delay in filing Audit Report in Form 10B as the change in dates in filing audit report before return had caused confusion.
In a recent judgment, Kerala High Court condoned the delay in filing Audit Report in Form 10B as the change in dates in filing audit report before return had caused confusion to many persons and the delay was very minimal.
ABCAUS Case Law Citation:
4502 (2025) (04) abcaus.in HC
In the instant case, the assessee petitioner had challenged an order issued under Section 119(2) of the Income Tax Act, 1961 (the Act) dismissing an application for condonation of delay in filing audit report in Form 10B for the assessment year 2021-2022.
The Petitioner was a charitable trust registered under Section 12A of Act and was liable to file their returns as well as audit reports for each assessment year. In the assessment year 2021-2022, the audit reports were filed with a delay of 25 days. However, the return, was filed within time.
Since there was a delay in filing the audit report, an application was filed before the Commissioner under Section 119(2)(b) of the Act for condonation. However, by the impugned order, the application was dismissed.
It was submitted by the petitioner, that the delay in filing the audit report was inadvertent and it was during the Covid-19 Pandemic time, when the Supreme Court had even condoned delay in most of the matters. It was also pointed out the Commissioner had taken a very rigid stance, instead of adopting a liberal approach.
The Hon’ble High Court observed that perusal of the impugned order revealed that no specific reasons had been given by the Commissioner and instead, he merely came to the conclusion that the petitioner had failed to provide any reasons or documentary evidence to prove that the delay was caused due to circumstances beyond petitioner’s control. The approach of the Commissioner has been highly hyper-technical and contrary to the well established principles on condonation of delay.
The Hon’ble High Court further observed that the requirement of audit report to be filed one month before filing the returns had been brought in by an amendment only recently. Till then, the audit reports could be filed along with the returns. In the instant case, the delay in filing the audit report occurred at a time when Covid-19 Pandemic had struck the country.
The Hon’ble High Court noted that the Hon’ble Supreme Court in a recent judgment (abacus 3467 (2021) (03) SC) had suo motu, extended the time for filing various applications in judicial and quasi judicial proceedings. Though the Income Tax Department had objected to the applicability of the said judgment, to the filing of an audit report,
The Hon’ble High Court opined that the principles embodied in the said judgment of the Supreme Court could be adopted, especially since the delay in filing audit report was only 25 days. In this context, it was also pertinent to mention that the CBDT had extended the time to file returns till 15.03.2022, and therefore, petitioner should have filed the audit report 30 days before the returns.
The Hon’ble High Court opined that since the change in dates in filing audit report before return had caused confusion to many persons and the delay was very minimal, a rigid stance ought not to have been adopted.
Accordingly, the order declining to condone the delay was set aside and the delay in filing the audit report for the assessment year 2021-2022 was condoned.
As a result, the writ petition was allowed.
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