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Informist, Tuesday, Oct. 28, 2025

 

NEW DELHI – The Delhi High Court Tuesday said any mistake on an auditor's part should not result in hardship or prejudice to the assessee and set aside an order of an income-tax commissioner (exemptions) rejecting a plea by the Delhi Maharashtriya Educational and Cultural Society to condone the delay in filing an audit report. The commissioner's order would have confirmed the disallowance of tax exemption in respect of income derived from property held under a trust.

 

The court asked the commissioner to pass a fresh order within eight weeks on the application by the petitioner to condone the delay and thereafter proceed in accordance with the law. The court noted that the society had filed its tax return within the stipulated time and a delay of 16 days in filing the audit report was a bona fide mistake.

 

The petitioner, a charitable and religious trust, had filed its income tax return for the assessment year 2018-19 (Apr-Mar) by declaring nil income after claiming exemptions under Sections 11 and 12 of the Income Tax Act, 1961. The return also disclosed details of the audit report dated 2018. However, the report could not be uploaded due to an error on the auditor's part.

 

When the petitioner society learnt that the audit report was not uploaded with the return, it filed the report on the income tax portal. The delay involved was 16 days. In 2020, the tax department passed an intimation order against the society without granting the exemption claimed by it, stating that the return was filed with a delay of 16 days in submitting the audit report. It thereafter raised a demand of INR 22.35 million against the petitioner.

 

In 2024, the commissioner of income tax (exemptions) rejected the condonation application filed by the society on the ground that a clerical error committed by the auditor cannot be considered a reasonable cause of delay. The society argued that the delay was not intentional and there was no negligence on its part. It was caused by an error on the auditor's part, which could not be a reason to not condone the delay, it said.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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