ARIANA CHARITABLE TRUST,ALLAHABAD vs. ITO EXEMPTION, ALLAHABAD, ALLAHABAD

The present case is a result of an order under section 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’) dated 30.04.2024 passed by Addl / JCIT (A)-10, Mumbai. 1.1 On the last date of hearing, the Income Tax Department, through ld. Sr. DR, moved an application for adjournment. After hearing the ld. AR for the assessee, it has been decided to reject the application and adjudicate the matter on the basis of material available on record.

The appellant is a Trust, running a school for classes upto 8th standard. Admittedly, the said society had total receipts of 4168597/- and against this, an expenditure of Rs.4807340/- was claimed. However, during processing under /Alld/2024 A.Y. 2018-19 Ariana Charitable Trust section 143(1), the ld. AO CPC, Bangalore considered the entire receipt of Rs.4168597/- as income and denied the claim of expenses. 2.1 Aggrieved with this action of ld. AO, the appellant approached the First Appellate Authority, where also due to considerable delay in filing of appeal, the ld. First Appellate Authority was of the view that the said delay was not condonable. Accordingly, he dismissed the appeal, leading to this matter being agitated before the ITAT.

On the last date of hearing, the ld. AR averred that the ld. First Appellate Authority did not provide any opportunity to put forth the reasons for delay in filing of the appeal as the concerned persons in the said society were not conversant with the law and consequently were unaware of the need for explaining the delay. In light of this fact, the ld. CIT(A) is seen to have dismissed the appeal on the ground of limitation. 3.1 The ld. AR submitted that an assessee doing charitable work should not be made to suffer due to ignorance of rules and procedures and in any case whatever may be the reasons for poor persuasion before the ld. First Appellate Authority, it is a trite position of law that there could be no receipts without some expenditure. In this case, the entire quantum of expenditure has been negatived leading to an unjustifiably adverse liability of tax on the appellant.

The ld. CIT DR, who was present for the Department, insisted that carelessness in persuading appeal should not normally be condoned.

We have considered the rival submissions, as also gone through the records before us. It is a settled position of law that condonation of delay in filing of appeals should be the norm rather than the exception. Admittedly, in this case, the appellant has made a grave error in not responding adequately to the communications from the ld., First Appellate Authority’s office. However, in the interest of substantive justice, we deem it fit to remand the matter back to the file of ld. First Appellate 2