Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
This query is : Resolved
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24 October 2026
Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust with Section 12A and 80G Registration
I have a charitable trust registered under Section 12A and approved under Section 80G of the Income Tax Act, 1961. The trust regularly gets its accounts audited and files its income tax returns.
For Assessment Year 2024–25, my CA mistakenly filed Form 10BB instead of the applicable Form 10B. The Income Tax Return was also filed based on this incorrect filing.
When we discovered the mistake, we subsequently filed the correct Form 10B and revised the Income Tax Return. However, the Income Tax Department did not consider the revised filings and processed the return by disallowing the exemption claimed by the trust, resulting in an income tax demand.
I need a detailed, practical and legally supported solution to resolve this issue.
Please advise on the following:
1. Whether the department can deny the trust's exemption under Sections 11 and 12 merely because the wrong audit report form was initially filed, when the correct Form 10B and revised ITR were subsequently submitted.
2. Whether an application for condonation of delay under Section 119(2)(b), read with CBDT Circular No. 16/2024 dated 18 November 2024, is required in this case.
3. Which income tax authority should receive the condonation application, considering the time elapsed since the original due date.
4. Whether rectification under Section 154, a grievance on the Income Tax Portal, or an application to the Jurisdictional Assessing Officer/CIT (Exemption) is appropriate after condonation.
5. Whether an appeal before CIT(A) is necessary or advisable if the demand has already been raised and the appeal deadline is running or has expired.
6. The exact step-by-step procedure, relevant legal provisions, applicable CBDT circulars, supporting case laws and documents required to get the demand deleted.
7. Draft the condonation application and any subsequent rectification request or appeal grounds required in this case.
Please consider the fact that the error was inadvertent, the trust holds valid Section 12A and 80G registrations, and the correct audit report and revised return were filed after discovering the mistake. Explain the strongest available legal remedy and the appropriate order in which the applications should be filed.
I have a charitable trust registered under Section 12A and approved under Section 80G of the Income Tax Act, 1961. The trust regularly gets its accounts audited and files its income tax returns.
For Assessment Year 2024–25, my CA mistakenly filed Form 10BB instead of the applicable Form 10B. The Income Tax Return was also filed based on this incorrect filing.
When we discovered the mistake, we subsequently filed the correct Form 10B and revised the Income Tax Return. However, the Income Tax Department did not consider the revised filings and processed the return by disallowing the exemption claimed by the trust, resulting in an income tax demand.
I need a detailed, practical and legally supported solution to resolve this issue.
Please advise on the following:
1. Whether the department can deny the trust's exemption under Sections 11 and 12 merely because the wrong audit report form was initially filed, when the correct Form 10B and revised ITR were subsequently submitted.
2. Whether an application for condonation of delay under Section 119(2)(b), read with CBDT Circular No. 16/2024 dated 18 November 2024, is required in this case.
3. Which income tax authority should receive the condonation application, considering the time elapsed since the original due date.
4. Whether rectification under Section 154, a grievance on the Income Tax Portal, or an application to the Jurisdictional Assessing Officer/CIT (Exemption) is appropriate after condonation.
5. Whether an appeal before CIT(A) is necessary or advisable if the demand has already been raised and the appeal deadline is running or has expired.
6. The exact step-by-step procedure, relevant legal provisions, applicable CBDT circulars, supporting case laws and documents required to get the demand deleted.
7. Draft the condonation application and any subsequent rectification request or appeal grounds required in this case.
Please consider the fact that the error was inadvertent, the trust holds valid Section 12A and 80G registrations, and the correct audit report and revised return were filed after discovering the mistake. Explain the strongest available legal remedy and the appropriate order in which the applications should be filed.
24 October 2026
To remove the income tax demand for your charitable trust for AY 2024–25, file an application for condonation of delay under Section 119(2)(b) before the Pr. CIT/CIT with a request to accept the correct Form 10B. Once condoned, file a Section 154 rectification on the portal citing the order to successfully clear the demand.
24 October 2026
https://docs.google.com/document/d/1Ck9Ul7XCKXBzw5aqvvlRJjLI9SbvNinOywVcQkOS93Y/edit?usp=sharing
28 October 2026
Please share me your email address
CA Rashmi Gandhi
(Expert)
31 October 2026
Need to file rectification
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