THE WATCH TOWER BIBLE AND TRACT SOCIETY OF INDIA ,BYCULLA vs. ASST. COMMISSIONER OF INCOME TAX EXEMPTIONS CIRCLE 2 MUMBAI , MUMBAI

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ITA 3664/MUM/2026Status: DisposedITAT Mumbai17 July 2026AY 2016-179 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay of 2226 days, following the Bombay High Court's decision in Zulfikar Abdul Rashid Khan. The appeal was restored to the file of the CIT(A) for adjudication on merits.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed as barred by limitation due to a delay of 2226 days. The assessee claimed the delay was due to a bonafide belief in pursuing an alternate remedy and seeking rectification before filing the appeal against the original assessment order.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned due to the assessee bonafide pursuing an alternate remedy.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI MAKARAND VASANT MAHADEOKAR

Pronounced: 17/07/2026

आयकरअपीलीयअिधकरण, मुंबई पीठ�, मुंबई INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: B BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA 3664/MUM/2026 िनधा�रणवष�/AssessmentYear:2016-17) The Watch Tower Bible and Tract Asst. Commissioner of Income- Society of India tax (Exemption) Circle-2, Income Tax Office, 6th floor, The Arcade at Brigade Orchards, Brigade Orchards Spinal Road, MTNL Bldg Cumbala Hill, Peddar Vs. Devanahalli- 562110, Karnataka Road, Mumbai-400026, Maharashtra अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AAATT0149D

अपीलाथ��ारा/Appellant represented by: Shri Mandar Vaidya ��थ��ारा/Respondentrepresented by: Shree Kumar C. (SR AR) सुनवाईकीतारीख/Date of conclusion of hearing: 18/06/2026 घोषणाकीतारीख/Date of pronouncement: 17/07/2026 आदेश / ORDER PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: This appeal is filed by assessee against the order of the learned Commissioner of Income Tax (Appeals)/NFAC-Delhi [“Ld. CIT(E)”], dated 13.01.2026 for the Assessment Year (A.Y.) 2016-17.

2.

Learned counsel for the assessee, at the outset, submitted that the appeal of the assessee was dismissed as barred by limitation without condoning the delay of 2226 days by the Ld. CIT(A). Ld. Counsel for the assessee submitted that the delay in filing appeal before the Ld. CIT(A) was not intentional but was under the bonafide belief that the assessee filed rectification application on 08.10.2019 and was pursuing alternate remedy. Ld. Counsel submitted that 154 application was disposed by the Assessing Officer against which an appeal was filed by the assessee again pursuing the proceedings before the Ld. CIT(A) as the assessee was lacking proper legal advice. Since, the Ld. CIT(A) dismissed the appeal filed by the assessee which was filed against 154 order the assessee was advised to file an appeal against the original assessment order passed u/s 143(3) and accordingly an appeal was filed against the original assessment order with a delay of 2226 days. However, the Ld. CIT(A) dismissed the appeal of the assessee as barred by limitation without condoning the delay. Relying on the decision of the Hon’ble Bombay High Court in the case of Zulfikar Abdul Rashid Khan Vs. Union of India & Anr. in CUSTOM APPEAL NO. 16 OF 2023 dated 25.07.202,. Ld. Counsel submitted that when an assessee is pursuing an alternate remedy under bonafide belief the delay in filing the appeal shall be condoned. Reliance was also placed on the decision of Hon’ble Supreme Court in the case of P. Sarathy Vs. State Bank of India in Civil Appeal No. 6900 of 1997 dated 12.05.2000. 3. Heard rival submissions. We find that the assessee filed a condonation petition before the Ld. CIT(A) along with affidavit and in the affidavit the Chairman of the assessee trust filed affidavit deposing as under:

“I, Shri Tobias Dias, Chairman of THE WATCH TOWER BIBLE AND TRACT TRUST OF INDIA (hereinafter referred to as the “said trust”), having office at 927/1, ADDEVISHWANATHAPURA RAJANUKUNTE BENGALURU 560064 Karnataka {PAN: AAATT0149D}, aged 54 years, solemnly affirm and state as under : 1. For the AY 2016-17, the income tax assessment of the said Trust has been completed under section 143(3) of the Act on 15th December 2018. 2. I say & submit that the trust was aggrieved with the assessment order. However, there were some factual errors in the said assessment order and hence the trust preferred an application u/s. 154 of the Act. 3. I say that the trust was holding a fallacious legal view that the since there were errors in the original assessment order, the trust-assessee had to first get the assessment order rectified and only subsequently the trust could challenge the assessment before the appellate forum. I say that the trust got a wrong legal advice that the assessment order would merge with the order u/s. 154 and after the passing of the order u/s. 154, the order of rectification would solely hold the field. 4. Accordingly, the trust made an application to the Ld. AO u/s. 154 which was allowed since it could not be gainsaid that there were factual errors. The trust, holding a wrong legal view as it was, preferred an appeal before the Ld. CIT(Appeals) against the order u/s. 154, even though the order was in favour of the trust because the trust's impression was that the original assessment order had now merged with the order u/s. 154 and the assessee-trust could challenge that part of the assessment order with which it was aggrieved, only by filing appeal against the order u/s. 154. 5. I say that the appeal filed against the order u/s. 154 came to be dismissed by the Ld. CIT(A) on 17th December 2024. I say that the trust sought legal opinion on filing appeal against the order of the Ld. CIT(A), dismissing the assessee's appeal. The trust was advised that it should file appeal against the original assessment order. 6. I say that the assessee-trust was diligently pursuing the remedy u/s. 154 of the Act, in good faith and without any malafide intention. 7. On being so advised, I immediately requested the trust's CA to draft out and file the appeal. And hence there is a delay in filing the appeal. 8. I submit that the delay has occurred only due to the erroneous legal view that the trust was holding which got cleared only when the trust sought opinion on receipt of the order of the Ld. CIT(A). In view of the above circumstances, I most humbly and respectfully pray that the delay in filing the appeal may kindly be condoned.

4.

Perusal of the affidavit filed by the Chairman of the assessee’s trust shows that the assessee was under the bonafide impression and belief and the assessee has to first get the assessment order rectified and only subsequently, the trust could challenge the assessment order before the appellate forum. The affidavit filed by the assessee also suggested that the assessee trust was pursuing alternate remedy in good faith and without any malafide intention, also pursued to the legal advice the assessee could not file appeal against 143(3) order. In the circumstances we are of the view that the assessee was prevented with reasonable cause in not filing the appeal in time before the Ld. CIT(A).

5.

In the case of Zulfikar Abdul Rashid Khan, the Hon’ble Bombay High Court had considered almost identical situation and while condoning the delay of 1708 days held as under:

“3. It is the case of the appellant that he is carrying on business in sale of motor vehicles, its parts and accessories. A show cause notice dated 12 August, 2011 was issued to the appellant to show cause as to why penalty should not be imposed upon him under Section 112(b) of the Customs Act, 1962. The show cause notice was adjudicated by an Order-in-Original dated 24 July, 2014 passed by the adjudicating authority, whereby a penalty of Rs.2,00,000/- came to be imposed on the appellant. 4. The appellant had assailed the Order-in-Original in an appeal before the Commissioner of Customs (Appeals). The appellate authority by an order dated 16 March, 2016, rejected the appeal and by not interfering the Order-in- Original. It is the case of the appellant that under a bonafide belief, the appellant had approached the revisionary authority to challenge the said order passed by the Commissioner of Customs (Appeals). He filed the revision application against the said order before the revisional authority on 09 May, 2016. On 14 December, 2020, the revisional authority rejected the revision' application of the appellant on the ground that the revisional authority lacked jurisdiction to decide the revision application as the order passed by the Commissioner of Customs (Appeals) in appeal, was an order, which was appealable before the CESTAT. Disposing of the said revision application, an order came to be passed on 06 January, 2021. Thereafter the appellant immediately i.e. on 22 January, 2021 filed an appeal against the order in appeal before the CESTAT, along with an application praying for condonation of delay of the time spent by the appellant before the wrong forum i.e. the revisional authority. 5. The CESTAT, however, by the impugned order dated 19 July, 2022, dismissed the interim application filed by the appellant praying for condonation of delay on the sole ground as noted by us above. Copy of the order was received by the appellant on 12 August, 2022 and thereafter the appellant has approached this Court in the present proceedings by challenging the interim orders passed by the CESTAT. 6. Mr. Pathak, learned counsel for the appellant in assailing the impugned order would contend that the sole ground, as set out in the impugned order to reject the appellant's delay condonation application, is completely untenable considering the facts of the case. It is submitted that the CESTAT has not taken into consideration that the appellant was bonafide pursuing the revision application before the revisional authority and in these circumstances, certainly, considering the settled principles of law, that Section 14 of the Limitation Act would save the limitation, in the appellant pursuing the appropriate remedy of an appeal before the CESTAT. Thus, according to Mr. Pathak, the tribunal could not have rejected the interim applications filed by the appellant for condonation of delay without examining such clear facts as brought out on record. It is submitted that a serious prejudice is caused to the appellant also for the reason that the said order is passed ex-parte and without granting an opportunity of hearing to the appellant. In supporting such contentions, Mr. Pathak has placed reliance on a decision of the co-ordinate Bench of this Court in Harjeet Singh Makkar Vs. Union of India¹. Mr. Pathak would also bring to our notice that in similar circumstances, the CESTAT in the proceedings of Shailesh D. Rediji Vs. Commissioner of Customs (Prev.), Customs Defect Appeal Diary No. 870332021, condoned the delay of 2004 days. He has also placed reliance on another decision of the CESTAT in Taufeeq Abdul Rasheed Qureshi Vs. Commissioner of Customs (Preventive), being Miscellaneous Order No. M/85468/2021 dated 21 October, 2021 in which delay of 1657 days was condoned in similar circumstances. 7. On the other hand, Mr. Kantaria, learned counsel for the respondents, while opposing the proceedings, would not dispute that on the only reasoning as set out in the impugned order, the appellant's applications are rejected by the CESTAT. Analysis:- 8. Having heard learned counsel for the parties and having perused the record, we are of the clear opinion that there is much substance in the contentions as urged on behalf of the appellant.

9.

At the outset, it is also required to be noted that the impugned order passed by the CESTAT was passed in the absence of the appellant as seen from the appearance as noted in the impugned order. 10. It is also required to be noted that assailing the order in appeal passed by the Commissioner of Customs (16 March, 2016), the appellant being under a bonafide belief, had approached the revisional authority, by filing a revision application on 09 May, 2016 which came to be rejected after a period of almost more than 4 years i.e. on 14 December, 2020. In assailing the orders passed by the Commissioner (Appeals), the appellant was not sleeping over his rights. The revisional authority was however of the opinion that the revision proceedings as filed by the appellant were not maintainable, as the appropriate remedy for the appellant was to file an appeal before the CESTAT. In this view of the matter, the revisional authority disposed of the revisional proceedings, permitting the appellant to avail of the remedy of an appeal before the CESTAT. Thus the position is that the appellant's challenge to the order passed by the Commissioner of Customs (Appeals) has remained to be adjudicated, as such challenge could only be adjudicated before the appropriate forum having jurisdiction namely the CESTAT. 11. In the above circumstances, when a litigant like the appellant bonafide adopts a remedy which is not appropriate remedy, Section 14 of the Limitation Act would certainly come to the aid of such litigant. Section 14 of the Limitation Act reads thus:- "14. Exclusion of time of proceeding bona fide in court without jurisdiction.- (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.

Explanation. For the purposes of this section, - (a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted; (b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding; (c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction." (emphasis supplied) 12. The object and purpose of Section 14 of the Limitation Act is that the litigant ought not to suffer by a delay is caused in bonafide and in good faith pursuing the proceedings against orders which adversely affect the litigant before a wrong forum. It is in these circumstances, the law would provide that the proceedings would be required to be held maintainable by the delay being condoned by application of Section 14, so that the litigant is not kept away from the doors of the appropriate forum, on the ground that the proceedings are time barred. If the doors of the appropriate forum are closed on such ground, it would amount to travesty of justice and defeating the very right of a party to approach the proper forum as also rendering the object of Section 14 of the Limitation Act otiose. 13. In our opinion, this is a fit case where the appellant having pursued the revisional proceedings and that too bonafide and in good faith, as it is not a case of the revenue that there was any other intention on the part of the appellant in pursuing the revision proceedings the delay in filing the appeal ought to have been condoned by the CESTAT. Thus, these factual circumstances being quite apparent, as also the clear position of applicability of Section 14 of the Limitation Act, to the facts of the case was completely overlooked by the CESTAT, in adjudicating the interim application filed by the appellant, in dismissing the appellant's interim applications on the meager reasoning as noted by us above. 14. Mr. Pathak would be justified in placing reliance on the decision of a co- ordinate Bench of this Court in similar circumstances referring to the decision of the Supreme Court in Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Ors.2 had allowed the writ petition by setting aside the orders of the tribunal and directing that the appeal of the appellant in the said case to be decided on its own merits. We also note that the tribunal in similar cases namely Shailesh D. Rediji Vs. Commissioner of Customs (Prev.) (supra) as also in Taufeeq Abdul Rasheed Qureshi Vs.

Commissioner of Customs (Preventive) (supra), had considered such legal position and in the circumstances, had allowed the interim applications. 15. We accordingly answer the questions in favour of the appellant and against the Revenue in terms of the above discussion.” 6. Thus, respectfully following the said decision, we condone the delay of 2226 days in filing the appeal by the assessee before the Ld. CIT(A).

7.

Since, the appeal of the assessee was disposed of by the Ld. CIT(A) holding that the same is time barred and not decided the appeal on merits, in the interest of justice we restore this appeal to the file of the Ld. CIT(A) for adjudicating the issues on merit after providing adequate opportunity to the assessee.

8.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 17/07/2026

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 17/07/2026 Kunal Copy to: The Watch Tower Bible and Tract Society of India The Arcade at Brigade Orchards, Brigade Orchards Spinal Road, Devanahalli- 1 562110, Karnataka

Asst. Commissioner of Income-tax (Exemption) Circle-2, Income Tax Office, 6th floor, MTNL Bldg Cumbala Hill, Peddar Road, 2 Mumbai-400026, Maharashtra

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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