JM Financial Foundation v. ITO(E)

Case snapshot

Sections / provisions: 11; 12A

Questions before the Court / Tribunal

• CSR-linked grants and delayed Form 10: The reported order deals with charitable exemption and restricted grants/CSR funding together with a procedural delay in Form 10. It reportedly restored the procedural aspect for condonation consideration rather than treating the form delay as automatically fatal.

Material facts and background

Brief facts of the case are as under: – JM Financial Foundation (assessee) is a Charitable Trust,

registered u/s 12A of the Act dated 28/09/2010. The main objects of the trust are of charitable nature for income tax purposes. The assessee filed its return of income for assessment year 2017-18 on 17/10/2017 declaring Nil income and for assessment year 2018-19 on 05/10/2018 also declaring Nil income. 3.1. It is submitted that, assessee has been identified by JM Financial group companies as an implementing agency for the purpose of undertaking the CSR activities in accordance with the applicable provisions of Companies Act, 2013, and the rules made thereunder. For the AY 2017-18, the assessee received contribution from various group entities towards corpus of Rs. 1,88,00,000/and voluntary contributions other than the corpus amounting to Rs.1,00,51,138/- and CSR fund of Rs.11,46,00,000/-. Similarly, for assessment year 2018-19, assessee received voluntary contribution towards CSR fund of Rs.15,65,17,000/-.

3.2. Subsequently, the case was reopened u/s 148 of the Act by issuing notice dated 26/08/2019 for assessment year 2017-18 and 13/03/2024 for assessment year 2018-19. After following the due procedure under the new provisions of the Act, the assessment was completed u/s 147 r.w.s. 144B of the Act. In the assessment order, the Ld.AO, disallowed the claim of assessee towards CSR fund aggregating to Rs. 11,46,00,000/- for assessment year 2017-18 and Rs.15,65,70,000/- for AY 2018-19. A sum of Rs.14,18,78,917/- was held to be disallowed as the assessee had not filed Form 10 within the statutory period of limitation for assessment year 2018-19. Aggrieved by the order of Ld.AO for both the assessment years, assessee preferred appeal for both the years before Ld.CIT(A). The Ld.CIT(A) upheld the reassessment orders passed by Ld.AO for both years under consideration. Aggrieved by the order of Ld.CIT(A) for both the years under consideration, assessee is in appeal before this Tribunal. 3.

The Ld. Counsel, submitted that for assessment year 2017-18,

assessee filed Form10 before Ld.CIT(A) based on a board resolution that was passed on 27/10/2021. The Ld.AR submitted that assessee was under bona fide belief that, it was not required to file Form 10. It was submitted that assessee was acting only in a fiduciary capacity for such funds. 3.1. Ld. Counsel placing reliance on the board resolution placed in the paperbook for AY 2017-18 at page 122, submitted that, the assessee was not allowed to utilize funds towards its objectives

Appellant / assessee submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

2.1. On perusal of the additional grounds, it is noted that no new facts need to be considered in order to adjudicate the same. The ground pertains to the prayer of the assessee to condone delay in filing Form10 before Ld.AO. It is noted that, this ground raised by assessee is genuine and necessary to consider the claim of assessee in order to determine the correct taxable income in assessee’s hands for AY 2018-19. Therefore, in the interest of justice and respectfully following the view expressed by Hon’ble Supreme Court

according to the discretion of the trust. It was submitted that the donor companies had committed these funds for CSR activities that was identified by the donors and, therefore, these funds were not freely available to the assessee. The Ld.Counsel submitted that, as and when the activities are identifiable as per the requirements of the donor, the said funds were utilized and treated to be used for the purposes of the trust. He submitted that, until the amounts are set apart and is shown in the balance sheet as not utilised for the relevant assessment years. 3.2. Ld.Counsel vehemently submitted that the money so set apart, therefore, cannot be treated as income in the hands of assessee for the year under consideration. The Ld.Counsel referred to paperbook page 66 to 99 - assessment year 2017-18 and page 50 to 78 – assessment year 2018-19, wherein copies of the letters from the donors towards CSR contribution is placed. He submitted that, the details of CSR funds received during the year under consideration along with details of the CSR expenditure carried on out of such CSR contributions supported by the acknowledgement of receipt have been furnished in the paper book which is...

Form10 before Ld.AO/Ld.CIT(A). Though, we do not agree with the arguments advanced by Ld.Counsel that filing of Form 10 is mere procedure to be followed and cannot be considered to be a mandatory requirement, it is noted that, the details as available in the return filed by assessee will not have the bifurcation or to that extent identify the amount that has been set apart by the assessee as tied up grant. It is, therefore, necessary for the assessee to furnish Form10 in order to identify such amount that will not fall within the ambit of Section 2(24)(iv) of the Act.

5.7. We also refer to the decision of Co-ordinate Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) wherein this Tribunal condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. It was noted that, the revenue had not filed any counter-affidavit opposing the application of the assessee for condonation of delay. The Hon’ble Supreme Court under similar circumstances had noted in case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause to condone the delay. 5.8. In the present facts of the case, we note that no such affidavit has been furnished by the revenue countering the condonation application of the assessee. At this juncture, we also take assistance and support from the observation of Justice Krishna Iyer wherein he has quoted at various occasion while dealing with technicalities that "any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities"....

Operative decision and relief

filed Form 10 along with the Board Resolution before the Ld.CIT(A), the same is directed to be considered by Ld.AO in accordance with law. In the interest of justice, we remit this issue to the Jurisdictional Assessing Officer (JAO) with a direction to consider the claim of assessee for both the years under consideration, in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly, grounds raised by assessee stand partly allowed for statistical purposes. In the result, appeal filed by assessee stands at for statistical purposes. Order pronounced in the open court on 29/12/2025 Sd/(MAKARAND VASANT MAHADEOKAR) Accountant Member Mumbai Dated: 29/12/2025 SC Sr. P.S.

Authorities and precedents appearing in the judgment

• National Thermal Power Co. Ltd. v. Commissioner of
• India Ltd. v. Commissioner of Income-Tax reported in
• Kerala High Court in the case of Pala Marketing Cooperative Society Ltd. vs. UOI reported in
• Bombay High Court in the case of Sitaldas K. Motwani vs. DGIT reported in
• Solutions (P.) Ltd. vs. CIT reported in
• Bombay High Court in the case of Sitaldas K. Motwani vs. DGIT
• Court in the case of Sanchit Software & Solutions (P.) Ltd. vs. CIT
• Madras High Court in the case of CIT vs. K.S.P
• Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR
• Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on CSR-linked grants and delayed Form 10. The operative result is classified as Partly Allowed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with CSR-linked grants and delayed Form 10. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Keep registration, audit-report, Form 10/10B/10BB and filing timestamps together; many exemption disputes are procedural and depend on when the form existed versus when it was uploaded.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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