For years, charitable trusts and institutions that missed the deadline for filing Form 10B – the audit report required under the Income Tax Act – found some comfort in approaching the Income Tax Appellate Tribunal (ITAT). Several ITAT benches, particularly in Delhi, had been entertaining such appeals, condoning the delay, and directing authorities to consider the audit report on merits. That comfort zone has now been decisively shut.
In ITA No. 373/2025, decided on September 2, 2025, a Division Bench of the Delhi High Court comprising Hon'ble Mr. Justice V. Kameswar Rao and Hon'ble Mr. Justice Vinod Kumar held that an order passed under Section 119(2)(b) of the Income Tax Act rejecting an application for condonation of delay in filing Form 10B is not an appealable order before the ITAT. The Tribunal, therefore, has no jurisdiction to entertain such an appeal.
The respondent in this case was DelhiMaharashtriya Educational and Cultural Society – an organisation that had filed its return of income for AY 2018-19 on time, and had even prepared the audit report (Form 10B) by October 31, 2018. However, due to what can only be described as an inadvertent procedural lapse, the form was actually uploaded on the IT portal only on November 16, 2018, a delay of 16 days. The CIT (Exemptions), Delhi, rejected the application for condonation of this delay under Section 119(2)(b) on June 14, 2024.
What Happened at ITAT
The Society appealed before the ITAT, which ruled in its favour. The Tribunal took note of the fact that:
- The return of income had been filed on October 31, 2018.
- The Form 10B had been prepared and was available to the assessee on the same date.
- The CBDT had itself extended the deadline for this assessment year to October 31, 2018.
- The actual portal upload was delayed by only 16 days – a purely procedural lapse.
The ITAT condoned the delay and directed the Assessing Officer to consider Form 10B on record and pass appropriate orders. This was very much in line with how several ITAT Delhi benches had been approaching such matters. Some of those earlier orders include:
- B. R. Hospital Research Institute Vs Income Tax Officer [2024] 167 389 (Delhi - Trib.), dated 31st July 2024
- Shakuntalam Bal Vikas Society Vs Income Tax Officer [2024] 166 132 (Delhi - Trib.), dated 27th Aug 2024
- Bhagwant Kishore Memorial Educational Society Vs Income Tax Officer, Exemption [2024] 166 511 (Delhi - Trib.), dated 14th Aug 2024
- National Council for Teacher Education Vs Deputy Director of Income-tax (Exemption), Circle II [2012] 17 48 (Delhi), dated 18th Nov 2011
These orders reflected a consistent, if informal, position: ITAT benches were willing to look at the substance of the delay and grant relief where the lapse was procedural and the organisation's charitable work was not in doubt.
What the High Court Said
Revenue challenged the ITAT's order before the Delhi High Court under Section 260A of the Act, raising two substantial questions of law:
- Whether ITAT erred in accepting the appeal without having jurisdiction to do so?
- Whether the rejection order passed under Section 119(2)(b) for delay in filing Form 10B is not an appealable order before ITAT, as per Section 253 of the Act?
The Court answered both questions in favour of Revenue. It held that the order dated June 14, 2024 of the CIT (Exemptions) was not an appealable order before the ITAT. Once that was established, everything that followed – including ITAT's decision on the merits – fell away. The ITAT's order was set aside in its entirety.
The Court also clarified a procedural safeguard for the respondent: the time spent by the Society in prosecuting the appeal before the ITAT, and separately, the time spent in the writ petition it had filed before the High Court challenging the same rejection order, would not be counted against it for the purposes of computing delay, laches, or limitation. This is an important protection for assessees who approached the ITAT in good faith, relying on earlier tribunal precedents.
Ratio Decidendi
The ratio of this judgment is narrow but decisive. An order passed by the Commissioner of Income Tax (Exemptions) under Section 119(2)(b) of the Income Tax Act, rejecting an application for condonation of delay in filing Form 10B, is not an order enumerated under Section 253 of the Act as one appealable before the ITAT. The right of appeal is a creature of statute and exists only where expressly conferred by law. The ITAT cannot assume jurisdiction to entertain such a challenge. The absence of appellate jurisdiction is not cured by the merits of the underlying cause. Even a well-founded plea for condonation cannot be decided by a forum that has no legal authority to hear it.
Why This Judgment Matters: A Shift in the Legal Landscape
Before this judgment, the position was unsettled. Multiple ITAT Delhi benches had been entertaining such appeals and granting relief. There was no binding High Court ruling clarifying whether ITAT could exercise jurisdiction over Section 119(2)(b) orders at all. Assessees – especially charitable organisations – had been operating under the reasonable assumption that ITAT was a valid forum.
This judgment changes that. It is now clear:
- An order under Section 119(2)(b) rejecting a condonation application for delayed filing of Form 10B cannot be challenged before ITAT.
- Any ITAT order passed in such an appeal is without jurisdiction and therefore a nullity.
- The correct remedy lies elsewhere – before the High Court, most likely through a writ petition under Article 226 of the Constitution of India.
Practical Implications for Charitable Trusts and Institutions
1. ITAT is no longer the right forum.
If your application for condonation of delay in filing Form 10B has been rejected by the CIT (Exemptions) under Section 119(2)(b), do not file an appeal before ITAT. It will not be entertained — or if entertained, will be set aside at a higher stage.
2. The High Court route under Article 226remains open.
A writ petition before the jurisdictional High Court challenging the rejection order is the correct legal remedy. The High Court can examine whether the rejection of condonation was arbitrary, unreasonable, or contrary to the facts on record.
3. What counts as sufficient cause matters more now.
Since the High Court is the forum, the quality and specificity of the reasoning supporting your condonation plea becomes critical. A mere statement of delay is not enough — the circumstances must genuinely reflect an unavoidable or inadvertent lapse, not negligence.
A Note on the Society's Own Case
What makes this judgment particularly significant is that it arose from a case where the facts were sympathetic: the audit report was ready, the return was filed on time, the CBDT had itself extended the deadline, and the delay was a mere 16 days in uploading to the portal — nothing more than a technical slip. Despite all of that, the ITAT's relief was set aside on a pure question of jurisdiction.
This is not a commentary on whether the Society deserved relief plainly; the facts were in its favour. It is simply a recognition that even the most deserving case cannot be decided by a forum that lacks the legal authority to hear it.
It is important to note that ITA No. 373/2025 is a statutory appeal filed by Revenue under Section 260A. The Society was the respondent here, not the petitioner. The High Court's ruling went against the Society on the question of ITAT's jurisdiction. However, this is not where the story ends. The Society had separately pursued its challenge before the High Court under Article 226, and what followed from there is the subject of Part 2.
Part 2 of this series will cover what remedies remain for charitable organisations facing rejection of Form 10B condonation applications, and what the way forward looks like in light of this judgment.