Madras High Court: Finding that the petitioner, being registered as a “Trust” in the year 2017, would have effectively carried on operation as a “Trust” from April 01, 2017 onwards, the Madras High Court clarified that the delay in filing Form 10B as is required under Section 44AB for the purpose of Section 12A(1)(b) of the Income Tax Act, for the Assessment Year 2018-2019 being the first year of operation, should not come in the legitimate way of any exemptions or deductions that may be available to it.
The Court reiterated that while confirming the tax demand, all the attendant benefits that are available to a taxpayer have to be extended, even if any declarations/documents are not filed within the prescribed date. Reference was made to the decision of the Supreme Court in the case of Formica India Division, Bombay, Burma Trading Corporation Limited vs. Collector of Central Excise [1995 Supp (3) SCC 552/ 1995 (77) ELT 511], where it was repeatedly held that “procedures are rule makers, handmaids of justice and not the mistress of law”.
A Single Judge Bench of Justice C. Saravanan observed that the Income Tax Department is expected to collect just the taxes that are due from a taxpayer, if he is entitled to any deductions, and the delay in filing the declarations or the documents that are required statutorily should not come in the way, in case a taxpayer is otherwise entitled to such exemptions/deductions.
The observations came while considering the case of the petitioner, that there were extenuating circumstances as “Gaja Cyclone” both before the date prescribed for filing Form 10B and that the petitioner did not gain anything by not filing Form 10B in time.
The Bench also referred to a decision of the Apex Court in the case of Unichem Laboratories vs. Commissioner of Central Excise, (2002) 7 SCC 145, where it was held that it is not on the part of the duty of the Department to collect or to retain the tax amount, which is not due to it, and is legitimately due to a taxpayer.
Finally, the Bench allowed the petition in favour of the trust, subject to the petitioner donating a sum of Rs. 25,000 to the Chairman of the Blue Cross of India (BCI), within a period of 30 days. The compliance of the said stipulation by the petitioner shall be construed as quashing of the order under Section 119(2)(b), which rejected the condonation application for filing Form 10B.
Briefly, the dispute relates to the order passed by the Commissioner of Income Tax (Exemption) under Section 119(2)(b) of the Income Tax Act, whereby the application filed by the petitioner for condoning the delay in filing Form 10B as is required under Section 44AB was rejected. The rejection was made even though the petitioner had submitted that for the Assessment Year 2018-2019, due to the “Gaja Cyclone”, the petitioner Trust could not file the statutory Form 10B and furnished some information about the “Gaja Cyclone” from Wikipedia and a copy of the Master’s Attendance Register for November 2018.
Case Relied On:
Unichem Laboratories vs. Commissioner of Central Excise, (2002) 7 SCC 145
Appearances:
Advocate Suhrith Parthasarathy, for the Petitioner/ Taxpayer
Senior Advocate V.J. Arul Raj, for the Respondent/ Revenue