Authority under Section 119 cannot travel beyond scope of condonation application to adjudicate upon registration merits.

The Petitioner is a charitable trust registered under the Gujarat Public Trusts Act, 1950 since 1973.

For Assessment Year (A.Y.) 2021-22, the Petitioner’s auditor uploaded the Audit Report in Form 10B on 21.12.2021 (before the extended deadline of 15.02.2022), but the Trust technically "accepted/approved" the report on the e-filing portal on 29.03.2022, resulting in a 42-day delay.

Consequently, the Assessing Officer passed a rectification order under Section 154 of the Income Tax Act, 1961 (“the Act”), disallowing exemptions of ₹7,84,608/- under Section 11.

The Petitioner filed an application for condonation of delay under Section 119(2)(b) of the Act.

The Respondent rejected this application on 31.01.2024, not by addressing the delay, but on the grounds that the Petitioner failed to produce a physical copy of its original 1973 registration certificate.

Whether the Commissioner of Income Tax (Exemption) exceeded his jurisdiction under Section 119(2)(b) by rejecting a condonation application based on the merits of registration rather than the sufficiency of the cause for delay.

The Court applied Section 119(2)(b) of the Income Tax Act, 1961, which empowers the Board (or authorized officers) to condone delays in filing claims for exemption or relief to avoid genuine hardship.

It also referenced Section 12A/12AA regarding the registration of charitable trusts.

CBDT Circular No. 16/2022, which grants the CIT(E) power to condone delays in filing Form 10B for up to 365 days.

The Court reasoned that the scope of an inquiry under Section 119(2)(b) is limited to determining whether there was a "genuine hardship" or sufficient cause for the delay in filing a statutory form.

In this case, the Petitioner had provided a detailed explanation for the 42-day "technical delay" in verifying the Audit Report.

However, the CIT(Exemption) bypassed the merits of the delay and instead rejected the application because the Trust could not produce a decades-old registration certificate, despite the fact that the Revenue had recognized the Trust as registered in prior scrutiny assessments (e.g., A.Y. 2011-12).

The Court held that the CIT(Exemption) fell into error by traveling beyond the scope of the application; the validity of registration is a matter for assessment proceedings, not a prerequisite for deciding a condonation of delay application.

The Court held that the Respondent committed a jurisdictional error by rejecting the condonation request on grounds unrelated to the delay itself.

The matter was remanded to the CIT (Exemption) with directions to pass a fresh order within six weeks, specifically examining the reasons for the delay as stated in the Petitioner's application.

Rule was made absolute.