Madras High Court Condones Delay in Form 10B Filing — Section 119(2)(b) and CBDT Circular No. 16 of 2024 in Focus

Case Background

Case Name: John And Marie Almeida Educational Trust Vs CIT (Madras High Court)
Appeal Number: WP Nos. 15587 & 16818 of 2025
Date of Order: 03/07/2026
Court: Madras High Court

Overview

The Madras High Court recently adjudicated a significant matter involving the condonation of delay in filing Form 10B — the audit report prescribed for charitable and educational trusts claiming exemption under the Income-tax Act, 1961. The case revolved around whether such condonation could be denied merely because the applications were filed beyond a time limit set by a CBDT circular, especially when the delay was attributed to genuine medical hardship faced by the assessee's managing trustee.

The writ petitions were filed by the assessee challenging orders passed by the Commissioner of Income Tax (CIT) that had rejected applications for condonation of delay in filing Form 10B for Assessment Years 2019-20 and 2020-21, filed under Section 119(2)(b) of the Income-tax Act, 1961.

Facts of the Case

John And Marie Almeida Educational Trust, an educational trust managed by its Managing Trustee — an individual approximately 70 years of age at the relevant time — had claimed exemptions in its returns of income for the two assessment years in question. The entitlement to claim such exemptions is contingent upon the return of income being filed along with the audit report in Form 10B.

However, in both assessment years, the Form 10B audit report was filed only a few days after the respective returns of income were submitted — not simultaneously, as mandated. The Managing Trustee attributed this delay to health complications, specifically a slipped disc condition and vision-related ailments, for which medical records were placed on record before the court.

When the assessee subsequently applied for condonation of the delay under Section 119(2)(b) of the Income-tax Act, 1961, the income tax authorities rejected the applications on the ground that they had been filed more than three years after the close of the relevant assessment years — a threshold prescribed under CBDT Circular No. 16 of 2024 dated 18.11.2024.

Contentions of the Assessee

The assessee's counsel advanced the following arguments before the Madras High Court: