One-Day Delay in Filing Form 10B During COVID-19 Condoned Due to Genuine Hardship

By | September 3, 2026
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One-Day Delay in Filing Form 10B During COVID-19 Condoned Due to Genuine Hardship
Issue
Whether a one-day delay in filing the audit report in Form 10B during the COVID-19 period should be condoned under Section 119(2)(b) when the delay causes genuine hardship to a charitable trust claiming tax exemption under Section 11.
Facts
  • Assessee Status: The petitioner is a charitable trust claiming tax exemption under Section 11 of the Income-tax Act, 1961 for the relevant assessment year.
  • Procedural Requirement: To claim exemption, the trust was required to file its audit report in Form 10B along with its return of income.
  • Delay in Filing: The audit report in Form 10B was filed with a delay of just one day during the COVID-19 pandemic period, following which the return of income was filed.
  • Condonation Application: The petitioner filed an application under Section 119(2)(b) before the tax authority seeking condonation of the one-day delay in filing Form 10B.
  • Rejection by Revenue: The authority rejected the condonation application solely on the ground that it was filed beyond the timelines prescribed in CBDT Circular No. 16/2024.
Decision
  • No Statutory Limitation: The underlying statute does not prescribe a rigid time limit for seeking condonation under Section 119(2)(b) [Para 4].
  • Genuine Hardship Test: The primary statutory consideration under Section 119(2)(b) is whether strict enforcement would cause genuine hardship to the assessee [Para 4].
  • Existence of Hardship: Denying substantive tax exemption under Section 11 due to a trivial one-day delay during the COVID-19 period would cause severe and genuine hardship to the charitable trust [Para 4].
  • Condonation Granted: The rejection order was set aside, and the one-day delay in filing Form 10B was condoned [Para 4].
  • Verdict: Decided in favour of the assessee.
Key Takeaways
  • Substance Over Procedural Delays: Technical or procedural delays in filing audit reports (Form 10B/10BB) should be condoned liberally under Section 119(2)(b) where the delay is minimal and genuine hardship is demonstrated.
  • Primacy of Genuine Hardship: Executive circulars issued by the CBDT cannot override the statutory mandate of Section 119(2)(b), which requires authorities to evaluate whether an assessee suffers genuine hardship.
  • COVID-19 Relief Context: Courts and tribunals consistently take a lenient view of minor procedural lapses occurring during the disrupted COVID-19 period to ensure substantive tax benefits are not forfeited.
HIGH COURT OF MADRAS
Mahavatar Babaji Charitable Trust
v.
Commissioner of Income-tax, Exemptions
Senthilkumar Ramamoorthy, J.
WP No. 27953 of 2026
WMP Nos. 30621 & 30622 of 2026
AUGUST  13, 2026
A.S. Sriraman for the Petitioner. V.J. Arulraj, Sr. Standing Counsel (IT) for the Respondent.
ORDER
1. Order dated 22.03.2025 rejecting the petitioner’s application to condone delay under Section 119(2)(b) of the Income-Tax Act, 1961 (the I-T Act) is challenged in this writ petition.
2. Learned counsel for the petitioner submits that the audit report in Form 10B was filed by the petitioner on 16.01.2021 with a delay of one day and return of income for said year was filed on 13.02.2021. He also submits that the delay was occasioned on account of the COVID -19 pandemic. Referring to the impugned order, he submits that the petitioner’s request for condonation of delay was rejected by relying on Circular No.16/2024. Citing an earlier order of this order in John and Marie Almeida Educational Trust v. CIT (Exemptions) [W.P.No.15587 and 16818 of 2025, dated 3-7-2026], learned counsel submits that this Court held that clause (b) of subsection (2) of Section 119 does not prescribe a time limit within which an application for condonation should be made.
3. Mr. V.J. Arulraj, learned senior standing counsel, appears on behalf of the respondents. He submits that the application was filed beyond the time limits specified in Circular No.16/2024 and that it was not possible to condone delay on that account.
4. The petitioner is a Charitable Trust. Exemptions were claimed in relation to the relevant assessment year. The audit report was filed with a delay of one day during the COVID-19 period. The only ground on which the application was rejected was the time limit prescribed in Circular No.16/2024. The statute does not prescribe a time limit. The preliminary consideration under the statute is whether genuine hardship would be caused to the assessee. Since the right to avail of exemptions is contingent on the filing of return of income along with audit report in Form 10B, there is no doubt that the petitioner would suffer genuine hardship for the delay of one day in filing of the audit report. Considering all these aspects, I am satisfied that the delay is liable to be condoned. Consequently, the impugned order is set aside and the respondents are directed to proceed further on the basis of this order.
5. The writ petition is disposed of on the above terms. Consequently, connected miscellaneous petitions are closed. No costs.