CHITRADURGA URBAN DEVELOPMENT AUTHORITY,CHITRADURGA vs. DEPUTY/ASSISTANT COMMISSIONER OF INCOME-TAX, (EXEMPTIONS) CIRCLE 1, MANGALORE, MANGALORE

The present appeal is delayed by 187 days. Along with the appeal, the assessee has filed an application seeking condonation of the delay. As per the assessee, the order dated 06/06/2025 passed by the learned Addl./Joint CIT(A) was received on the same date, and therefore, the appeal was required to be filed on or before 31/08/2025. As per the assessee, it is an Urban Development Authority set up by the Government of Karnataka and holds registration under section 12AA of the Act with effect from the assessment year 2003-04. It was further submitted that the assessee was involved in multiple appellate proceedings relating to the assessment years 2007-08, 2008-09, 2010-11, 2011-12, 2018-19 and 2020-21. Thus, while handling several proceedings pertaining to other assessment years, the impugned order passed in the present case was inadvertently missed. Therefore, necessary directions could not be issued for filing the appeal before the Tribunal. Accordingly, as per the assessee, the delay in filing the present appeal is completely unintentional and has occurred due to circumstances beyond the control of the assessee.

We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag vs. MST Katiji and others, reported in 1987 SCR (2) 387. It is well-established that the Rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee does not stand to benefit from the late filing of the present appeal. In view of the above and having perused the application filed by the assessee, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period, and therefore, we condone the delay in filing the appeal by the assessee, and we proceed to decide the appeal.

In this appeal, the assessee has raised the following grounds: -

We have considered the submissions of both sides and perused the material available on record. For the year under consideration, the assessee filed its return of income on 31/03/2016, declaring a total income of Rs. Nil after claiming exemption under sections 11 and 12 of the Act. The return filed by the assessee was processed vide intimation dated 29/03/2017 issued under section 143(1) of the Act assessing the total income of the assessee at Rs. 4,83,03,670. The learned Addl./Joint CIT(A), vide impugned order, dismissed the appeal filed by the assessee on the ground of delay of 1630 days. Being aggrieved, the assessee is in appeal before us.

During the hearing, the learned Authorised Representative (“learned AR”) submitted that after the receipt of intimation issued under section 143(1) of the Act, the assessee filed a rectification application before the CPC under section 154 of the Act on 24/04/2017. It was further submitted that after filing the rectification application, the assessee did not receive any intimation regarding any order passed on the rectification application filed by the assessee. It was submitted that on 20/09/2021, the assessee received a letter regarding the recovery of outstanding demand of Rs. 2,54,56,820 for the year under consideration. Upon communicating the same to the consultant, the assessee was advised to file an appeal against the intimation issued under section 143(1) of the Act. The learned AR submitted that thereafter, the assessee took the necessary steps to file the appeal before the learned CIT(A), which was filed on 14/10/2021. Thus, it was submitted that due to the aforesaid circumstances, the appeal before the learned CIT(A) was filed after a delay of 1630 days. In support of its 4 contention, the assessee has also placed on record screenshots from the Income Tax Portal to substantiate its contention that no rectification order has been uploaded in response to its application filed under section 154 of the Act.

Having considered the submissions and perused the material available on record, we are of the considered view that the reasons stated by the assessee for seeking condonation of delay before the learned CIT(A) fall within the parameters for grant of condonation as laid down by the Hon’ble Supreme Court in M.S. Katiji (supra). Therefore, substantial justice needs to be preferred when pitted against the technical consideration. Further, in the present case, it is evident that the assessee did not stand to benefit from the late filing of the appeal before the learned CIT(A).

Accordingly, in view of the facts and circumstances of the present case, as noted above, we are of the considered view that the assessee has proved sufficient cause for not filing the appeal before the learned CIT(A) within the prescribed limitation period. Thus, we are of the view that delay should be condoned. Hence, the impugned order is set aside, and the appeal of the assessee is restored to the file of the learned CIT(A) / learned Addl./Joint CIT(A) for de novo consideration, after condoning the delay in filing the appeal by the assessee. We order accordingly. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the parties. The assessee is directed to appear before the learned CIT(A) / learned Addl./Joint CIT(A) on all dates

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on 31st July, 2026.