ITAT Delhi on Belated Form 10 and Section 11(2) Accumulation for Charitable Trusts

Background of the Dispute

The Delhi Bench of the Income Tax Appellate Tribunal in Friends Associates Charitable Trust Vs ITO (ITA 6252/DEL/2026, order dated 25/08/2026) dealt with a focused issue concerning a charitable trust registered under Section 12A of the Income Tax Act 1961.

The controversy centered on whether the assessee trust’s claim for accumulation of income amounting to ₹13,95,124 under Section 11(2) could be rejected merely because Form No. 10 was not filed within the statutory time limit, despite:

  • The accumulation having been disclosed in the return of income and in the audit report in Form 10B, and
  • The delay and earlier wrong form filing having already been condoned by the CIT (Exemptions) under Section 119(2)(b).

The Tribunal ultimately restored the matter to the Assessing Officer (AO) for a fresh decision on merits and categorically directed that the Revenue should not object to the delayed filing of Form No. 10.

Procedural History and Assessment Context

Original Processing Under Section 143(1)

  1. The assessee, a charitable trust registered under Section 12A, filed its return of income for Assessment Year 2018-19.
  2. In this return, the assessee claimed benefit of accumulation under Section 11(2) to the extent of ₹13,95,124.
  3. As per law, such accumulation requires filing of Form No. 10 on or before the due date specified under Section 139(1).
  4. The return was processed under Section 143(1) by the CPC, Bengaluru, and subsequently the matter travelled in appeal.

Incorrect Form Filed and Subsequent Condonation

Instead of uploading Form No. 10, the assessee—acting on the advice of a legal consultant—mistakenly submitted Form No. 9A. This form is meant for a different purpose and is not the prescribed form for accumulation under Section 11(2).

Recognizing this error, the assessee approached the CIT (Exemptions), Delhi, seeking condonation under Section 119(2)(b) for:

  • Wrong form filing (Form No. 9A instead of Form No. 10), and
  • Delay in complying with the prescribed procedural requirement.

The CIT (Exemptions) condoned this lapse by passing an order dated 22-11-2021 under Section 119(2)(b).

First Round Before the Tribunal

In the earlier round of litigation, the issue reached the ITAT Delhi in ITA No. 504/Del/2021. Vide order dated 22-11-2022, the Tribunal remitted the matter to the file of the appellate authority (CIT(A)) for de novo adjudication in accordance with law. The remand was premised on the fact that the condonation by CIT (Exemptions) under Section 119(2)(b) had changed the factual and legal matrix, warranting a fresh look.

Second Round Before NFAC / JCIT(A)

Pursuant to the Tribunal’s remand, the appeal was taken up in the faceless regime by the Jt. Commissioner of Income Tax (Appeals)-6, Kolkata, acting as NFAC.

In this second round:

  • The NFAC examined the nature of the claim.
  • It observed that the case was not one where Form No. 9A was required but one that mandatorily called for filing of Form No. 10 for accumulation under Section 11(2).
  • On the basis that Form No. 10 had not been filed within time, the NFAC dismissed the assessee’s appeal.