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Facts
The assessee, a charitable trust, filed an appeal before the CIT(A) with a delay of 331 days. The CIT(A) dismissed the appeal without condoning the delay, thereby not adjudicating the grounds on merit. The assessee attributed the delay to various reasons and sought condonation.
Held
The Tribunal held that the delay in filing the appeal was unintentional and beyond the control of the assessee, and that the expression "sufficient cause" for condonation should be interpreted liberally to advance substantial justice. The Tribunal condoned the delay.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was to be condoned in the interest of substantial justice, and whether the grounds raised by the assessee deserved adjudication on merit.
Sections Cited
154, 143(1)(a), 12A, 249(3), 5, 147, 148
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Income Tax Appellate Tribunal, “H(SMC
Before: SHRI PAWAN SINGH & SHRI GIRISH AGRAWAL
Assessment Year: 2020-21 Shashwat Foundation Trust I.T.O. Exemption 253/C, Kelichi Chawl, Ward 2(3), Mumbai G. K. Marg, Lower Parel, Vs. Mumbai – 400013. (PAN: AALTS8825J) (Appellant) (Respondent) Present for: Assessee : Shri Shyamsunder Agrawal, CA Revenue : Shri Pravin Salunkhe, SR. DR Date of Hearing : 14.10.2025 Date of Pronouncement : 31.10.2025 O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), Delhi, vide order no. ITBA/NFAC/S/250/2024-25/1074468829(1), dated 13.03.2025 passed against the assessment order by Assistant Director of Income Tax, CPC, Bengaluru, u/s. 154 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 31.08.2023 for Assessment Year 2020-21.
2. Grounds taken by the assessee are reproduced as under: Ground No. 1 In the facts and circumstances of the case and in law, the learned C.I.T. (Appeal) has erred in dismissing the appeal and not condoning the delay in filing the appeal without appreciating the fact that: The appellant is a charitable trust Shashwat Foundation Trust AY 2020-21 The Assessing Officer has passed the order u/s 154, disallowing the amount applied for charitable purpose Rs. 23,90,592/-. Ground No. 2 In the facts and circumstances of the case and in law, the learned C.IT. (Appeal) has erred in not considering the grounds on merit. Ground No. 3 In the facts and circumstances of the case and in law, the learned C.1.T. (Appeal) has erred in confirming the adjustment made by the A. O. u/s 143 (1) (a) of the Income Tax Act. Ground No. 4 In the facts and circumstances of the case and in law, the learned C.I.T. (Appeal) has erred in not allowing expenditure incurred on object of the trust Rs. 23,90,592/-, without appreciating the fact that expenditure is more than 85% of income and account accumulated or set apart from application to charitable purposes which is less than 15%. Ground No. 5 In the facts and circumstances of the case and in law, the learned C.I.T. (Appeal) has erred in not given any reason for disallowing and making addition of Rs. 23,90,592/-. No opportunity of being heard was given to the appellant. Ground No. 6 In the facts and circumstances of the case and in law, the learned C.I.T. (Appeal) has erred in ignoring the fact that the trust is registered u/s 12A of the income tax act since 23/10/2013. Trust's Registration Number is TR/46320.”
In view of ground no.1 above, we perused the order of the ld. CIT(A) and noted that the first appeal by the assessee before the ld. CIT(A) was not admitted on account of delay in filing. According to the ld. CIT(A), the said appeal was instituted belatedly and the delay was not condoned for want of sufficient cause as prescribed u/s.249(3). Ld. CIT(A), thus held that appeal filed by the assessee is not admissible and accordingly rejected it without dealing on the merits of the case. We further note from the first appellate order that assessee had made application for condonation of delay explaining its case whereby the delay was on 331 days.
3.1 Before us, assessee furnished a notarised affidavit giving details which resulted into the delay of filing of appeal before the ld. CIT(A). Contents of the said affidavit are reproduced for ready reference: “1. I Mahesh Vithal Nandgaonkar, trustee of "Shashwat Foundation Trust aged about 45 Years residing at 235, C-57 Kelichi Wadi, G.F Marg, Mumbai-400013 hereby Solemnly aftirm and state as under: I am trustee of "Shashwat Foundation Trust". The trust is non-profit organization. Our trust is engaged in the charitable activities and trust is not a profit making organization. The purpose of trust is philanthropy. The trust is registered u/s 12A having serial number -TR/46320 w.e.f. 23/10/2013.
2. In a intimation u/s 143 (1) the CPC has disallowed the amount appled for Charitable purpose Rs.2390592/- and raised the demand of Rs.737460/- 3. Due date of filing the return = 15.02.2021 Return of Income was filed on = 03.03.2021 Date of filing of Form 10B = 03.03.2021 Delay in filing the Return of Income = 17 days Delay in filing Form 10B = 47 days Order u/s 154 Passed on = 23.08.2022 Due date of filing the appeal = 22.09.2022 Therefore delay in filing the appeal = 331 days The delay is due to the fact that the appellant has seen the order u/s 154 on 14.08.2023. And the appellant has filed an appeal on 31.08.2023. The Hon'ble CIT (Appeal) has rejected the appeal and not condone the delay in filing the appeal.
4. If the delay was not condoned it would amount to legalise an illegal and unconstitutional order. The power given to the authority is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. Hence the delay was not intentional. Thus the late filing was due to the reasons totally beyond my control. Looking at the fact that my Shashwat Foundation Trust AY 2020-21 erstwhile counsel has not taken necessary steps, Please take a lenient view and condone the delay. This delay is wholly unintentional and beyond the control of the appellant. The word "Sufficient Cause" has been construed quite liberal in the case of:- R.J. Pratap Singh |100 ITR 698 S.C.] S. N. Ghorpade [48 ITR 54 Mumbai] The word 'Sufficient Cause' is used in section 5 of the Limitation Act, hence equally important relevance is attached to it. The Supreme Court has interpreted this phrase which is binding on all Courts and Quasi - judicial authorities that decide condonation of delay on sufficient cause being shown. Section 5 of the Limitation Act gives the Court discretion to be exercised upon the principles which are well understood by the words "Sufficient Cause" which receive a liberal construction so as to advance substantial justice when no negligence or want of bonafide is imputable to the appellant [Shakuntala Jain AIR 69 S.C.] It is the duty of the Court to see it that justice should be done between the parties. In the case of MST Katji (167 ITR 471 S.C. the S.C. enunciated the following principles. Ordinarily a litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated as against this, when the delay is condoned the highest that can happen is hat a cause would be decided on merits after hearing the parties. The doctrine must be applied in a rational common sense and pragmatic manner. When substantial justice and technical consideration are pitted against each other cause of substantial of justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay.
Shashwat Foundation Trust AY 2020-21 There is no presumptive that delay is occasioned deliberately or on account of culpable negligence or on account of malafides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. I therefore request your Honour to kindly condone the delay in filing the appeal. 1 Mahesh Vithal Nandgaonkar hereby declare that whatever stated hereinabove is true and correct to the best of my knowledge and belief.”
3.2. Upon confrontation of the affidavit and petition for condonation of delay filed by the assessee to the ld. Sr. DR, he supported the view taken by ld. CIT(A), however, left the issue raised by the assessee to be dealt by the Bench at its discretion, by considering the holistic view.
We have perused the material placed on record, including the orders of the authorities below. Admittedly, there is a delay of 331 days in filing the first appeal before the ld. CIT(A), for which assessee did make an application for condonation of delay explaining its case which was rejected resulting into non admission of the said appeal. Merits of the case remained to be adjudicated upon for want admission of appeal. We note that assessee is a trust registered u/s.12A w.e.f. 23.10.2013 and is engaged in charitable objectives.
5. To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient Shashwat Foundation Trust AY 2020-21 cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.
5.1. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: "1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
Shashwat Foundation Trust AY 2020-21 5.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the Shashwat Foundation Trust AY 2020-21 opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach.
In light of the above, if we examine the facts, then it would reveal that there is a delay of 331 days in filing of the first appeal by the assessee before the ld. CIT(A). In its submissions as reproduced in the order of ld. CIT(A), assessee has explained the reasons which prevented it in filing the appeal withing the prescribed limitation. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. Considering the said explanation of the assessee, we condone the same.
Accordingly, in the given set of facts, by condoning the delay in filing the first appeal before ld. CIT(A), we remit the matter back to the file of ld. CIT(A) for meritorious adjudication of the grounds raised by the assessee at the first appellate stage by passing a speaking order. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by it.
Shashwat Foundation Trust AY 2020-21 9. Since, we have remitted the matter back to the file of ld. CIT(A) based on ground no.1, which is allowed, all other grounds are not adjudicated upon and therefore appeal of the assessee is partly allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order is pronounced in the open court on 31st October, 2025