KUVEMPU SMARAKA VIDYA KENDRA TRUST,BENGALURU URBAN vs. INCOME TAX OFFICER(EXEMPTION), WARD-1, BANGALORE, UNITY BUILDINGS, BANGALORE
What did the Tribunal hold?
The Tribunal condoned the delay of 245 days, finding sufficient cause. It then remitted the entire issue back to the CIT(A)/NFAC for a fresh adjudication on merits, emphasizing the need for a reasonable opportunity of being heard to the assessee.
What were the facts?
The assessee trust filed an appeal before the ITAT after a delay of 245 days due to personal and medical crises faced by their tax consultant. The CIT(A)/NFAC had dismissed the appeal ex-parte without adjudicating on merits.
What were the issues?
Whether the delay in filing the appeal should be condoned and whether the ex-parte dismissal by the CIT(A)/NFAC without adjudicating on merits warrants a remand.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 18.2.2025 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1073383709 (1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.
The assessee has raised the following grounds of appeal:-
Ex-parte Order Violation of Natural Justice
The learned CIT(A) erred in dismissing the appeal ex-parte for non- prosecution without adjudicating the grounds on merits, thereby violating principles of natural justice
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 2 of 11 2. Failure to Discharge Statutory Duty
The learned CIT(A) failed to discharge the statutory duty cast under section 250(6) by no/ passing a reasoned order dealing with the issues raised by the Appellant 3. Erroneous Computation of Income The authorities below erred in computing taxable income by treating Joan receipts obtained for purchase of assets as income, which is factually and legally unsustainable, 4. Incorrect Denial of Section 11 Exemption The learned Assessing Officer erred in denying exemption under section despite the Appellant having applied its income towards charitable purposes and being entitled to statutory accumulation of 15%. 5. Ignoring Application of Income The authorities failed to appreciate that the income actually earned was fully utilized towards the objects of the Trust and did not result in any taxable surplus.
Mechanical Assessment
The assessment has been framed mechanically without appreciating the nature of receipts utilization of funds, and audited financial statements placed on record. 7. Appeal Dismissed Without Merits The dismissal of appeal by the learned CIT(A) without adjudication on merits has resulted i grave prejudice to the Appellant. 8. Beyond Scope of Limited Scrutiny (CASS) The learned Assessing Officer has erred in law and on facts in disallowing depreciation claim by the appellant. despite the scrutiny being initiated under CASS exclusively for verification o "Receipts of the Trust". The said disallowance, being outside the scope of the limited scrutiny and without converting the case into complete scrutiny in accordance with law, is without jurisdiction and liable to be deleted.
General
The Appellant craves leave to add, amend, alter or withdraw any ground at the time of hearing.
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 3 of 11 3. At the outset, as noted by the Registry, there is a delay of 245 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee drew our attention on a petition for condonation of delay dated 31.12.2025 filed along with an affidavit sworn before the notary public stating therein the reasons for the delay, which are reproduced below for ease of reference and record:
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On going through the above application for condonation of delay, we find that the assessee could not file the appeal within the prescribed period for the reason that the appeal proceedings before the ld. CIT(A)/NFAC coincided with an extraordinary personal crisis faced by the assessee’s tax consultant, whose wife was suffering from serious brain-related medical issues, requiring continuous treatment during November, December, culminating in brain surgery in January, 2025 followed by prolonged post-operative care. Further, the assessee’s consultant himself was also not well and
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 7 of 11 had admitted into hospital (Manipal Hospitals, Malleswaram), and after discharge he was under rest. During this period, the consultant was under severe mental trauma and medical stress, rendering him incapable of attending professional matters effectively. The consultant could not check the status of the appellate proceedings and it culminated into the passing of the ex- parte order by the ld. CIT(A)/NFAC. The assessee being a charitable trust with limited technical knowledge, was bona fide dependent on the professional guidance. Hence, the ld. A.R.submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits.
On the contrary the ld. D.R. vehemently objected for granting the condonation of delay and submitted that the assessee even did not file any reply during the appellate proceedings despite being provided with several opportunities before the ld. CIT(A)/NFAC, which clearly demonstrate the callous attitude of the assessee.
We have perused the details filed by the assessee to justify the delay and we are satisfied that there is no malafide intention on the part of the assessee in filing the appeal belatedly and the assessee has demonstrated sufficient/reasonable cause for the delay in filing the appeal before us. It is to be noted that u/s 253(5) of the Act, the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing these appeals within the prescribed time. We have gone through the
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 8 of 11 reasons explained by the assessee in which the assessee contended that his consultant was under severe mental trauma and medical stress due to the brain surgery of his wife in January, 2025 and the consultant himself was also not well and had admitted into hospital and after discharge he was under rest. Due to the above reason, the consultant was incapable of attending professional matters effectively. Further, the consultant could not check the status of the appellate proceedings and it culminated into the passing of the ex- parte order by the ld. CIT(A)/NFAC. The assessee being a charitable trust with limited technical knowledge, was bona fide dependent on professional guidance and accordingly prayed to condone the delay.
6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
(2) 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 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, commonsense and pragmatic manner.
(4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate delay. (5) 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.
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 9 of 11 (6) It must be grasped that the 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.
6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority. 6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.
6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 10 of 11 there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 245 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 245 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.
Now having condoned the delay, we take note of the fact that due to the reasons cited above in the condonation application, the assessee could not represent his case before the ld. CIT(A)/NFAC despite being provided 6 number of opportunities before the ld. CIT(A)/NFAC. We also take note of the fact that the ld. CIT(A)/NFAC after condoning the delay of 236 days in filing the appeal before the ld. CIT(A)/NFAC, dismissed the appeal as the assessee had not filed any reply during the appellate proceedings despite being provided with several opportunities and accordingly held that no interference is called for in the AO’s assessment order. We also observed that while passing the appellate order, the ld. CIT(A)/NFAC had not adjudicated the case on the merits also. This being so, in the interest of justice, equity and fair play and as requested by the ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT(A)/NFAC to decide afresh on merit of the case in accordance with law. Needless to say,
ITA No.3150/Bang/2025 KuvempuSmarakaVidya Kendra Trust, Bengaluru Page 11 of 11 reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to cooperate with the appellate proceedings and submit all the necessary documents/records/information/evidence to substantiate its claim. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 6th July, 2026
Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member
Bangalore, Dated 6th July, 2026. VG/SPS
Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Bangalore.
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