LIONS CLUB OF JUHU SERVICE FUND,MUMBAI vs. ITO EXEM - 1(4), MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE HON’BLE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 7397/MUM/2025 िनधा�रण वष�/Assmt. Year: 2015-16) ITO EXEM - 1(4) LIONS CLUB OF JUHU SERVICE FUND ROOM NO.612, MTNL TEL. EX. BUILDING, GROUND FLOOR 1 SVKM CUMBALLA HILLS, BOYS HOSTEL BUILDING ,LION JUHU MARG JUHU PEDDER ROAD, MUMBAI Vs. SCHEME VILE PARLE(W) 400 026. MUMBAI 400056, MUMBAI- MUMBAI-400026, 400056, MAHARASHTRA MAHARASHTRA (अपीलाथ� Appellant) (��थ� Respondent) Permanent Account Number of AAATL1381K Assessee: िनधा�रती �ारा/Assessee represented by: Shri Vimal Punmiya, CA राज� व �ारा/Revenue represented Shri Surendra Mohan, Sr. DR by:

सुनवाई की तारीख / Date of conclusion of hearing: 24-Mar-2026 घोषणा की तारीख / Date of pronouncement: 08.06.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the assessee is against the order of ld. Commissioner of Income Tax, Appeal vide DIN: ITBA/APL/S/250/2025- 26/1081000756(1) dated 22.09.2025 passed against the intimation issued by the Centralized Processing Centre (CPC) of the Department, Bengaluru u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to the Act) dated 22.10.2016, for Assessment Year 2015-16.

1) On the facts and circumstances of case and law the Ld CIT(A) is not justifies in rejecting the condonation of delay in filing the appeal filed by the assessee even though they have filed an affidavit for the condonation of delay. 2) On the facts and circumstances of case and law the Ld CIT(A) erred in confirming the disallowing the claim of assessee of accumulation of income u/s 11(2) of the Income Tax Act,1961 by CPC, without assigning any reason for the said non-allowance while processing return of income under section 143(1) of the Act. 3) The Learned AO erred on facts and in law in not appreciating the provisions of section 143(1)(a)(ii) which permits adjustment of an incorrect claim, if such claim is apparent from any information in the return. 4) The Learned AO erred on facts and in law in making adjustment without giving intimation as required First proviso to Section 143(1)(a). 5) The Learned AO erred on facts and in law a) not allowing the deduction u/s.11(2) though it was appearing in the Part B-TI of the return of Income while processing the return of income. b) In not considering the accumulation u/s.11 (2) though the same was appearing in the audited Income & Expenditure account and Balance Sheet of the Appellant. c) in not transferring the file to the Jurisdictional ITO for assessing the correct income and choosing to make adjustment to the total income 6) Without prejudice to the above, the learned A.O. has erred in not allowing the statutory 15 percent accumulation without any requirement as regards the filing of Form No.10. 7) The appellant craves leave to add further grounds OR to amend OR alter the existing grounds of appeal on OR before the date of hearing.

2.1. Assessee has also raised additional grounds contesting on condoning delay in filing Form-10 which was caused due to genuine hardship. In this regard, relevant facts are already on record and the issue goes to the root of the matter and therefore, assessee prayed for its admission. There being no objection from the other side on confrontation of this, the same is admitted for adjudication. The additional ground so raised is as under: “On the facts and circumstances of the case and in law. Ld. CIT(E) erred in not condoning the delay in filing Form-10 where the delay was caused due to genuine hardships.”

3.1 . Even in this matter before us, the issue is more on ld. CIT(A) not condoning the delay in filing the first appeal against the intimation issued u/s. 143(1) for 1143 days but at the same time deciding the appeal on merits considering the interest of justice.

3.2. We do not find it relevant to put all the details relating to various proceedings undertaken by the assessee before several authorities/fora mentioned above, as they do not have any direct bearing so as to contribute to the adjudication being undertaken now.

4.1. Assessee after failing in various steps and measures taken to remedy its shortcomings before various authorities and fora, preferred an appeal before the ld. CIT(A) against the intimation u/s. 143(1) with a delay of 1143 days. Assessee explained its case in detail for the delay which has been reproduced in the first appellate order. Ld. CIT(A) after taking into cognizance of the detailed submissions, held that the reasons given by the assessee for condoning the delay are not sufficient cause and hence, not condonable. However, despite holding so, he proceeded to deal with the merit of the case considering the interest of justice. Relevant para in this regard from the first appellate order is extracts below for ready reference. “Keeping in view of the fact, the appellant has not given any solid reason for delay in filing the appeal as the appeal filed against order u/s 154 on 01.02.2018 was decided vide order dated 10.01.2019 and appellant still filed the present appeal on 11.01.2020 le, almost after one year Hence this appeal is not condonable but in the interest of justice this appeal is decided accordingly on merit.”

4.2. We find that on one hand, ld. CIT(A) holds that the delay is not condonable resulting into the appeal as not maintainable in terms of provisions to section 249, however, on the other hand, he goes on to deal with the merits of the case by taking cognizance of the submissions made by the assessee to give his finding that the competent authority, i.e., ld. CIT(E) has not condoned the delay in filing of Form-10 and therefore, the grounds of appeal in this regard are dismissed. He thus, dismissed the appeal filed by the assessee.

4.3. On this factual matrix and approach adopted by the ld. CIT(A) while dealing with the merits of the case, the delay in filing the first appeal gets condoned once the matter is dealt meritoriously. For this, we draw our force from the decision of Hon'ble High Court of Bombay in the case of Stride Multitrade Pvt. Ltd. vs. ACIT [2021] 133 taxmann.com 282 (Bom). Hon’ble Court held that dismissal of appeal by ld. CIT(A) in limine, after having issued notices, fixing the dates of hearing, by calling submissions on the grounds of appeal is not valid. In the present case before us, it on even much better footing, wherein ld. CIT(A) after dismissing of appeal in limine by holding it as not maintainable had proceeded to deal on the merits of the case and decide the issue holding it against the assessee. Hence, such an action of ld. CIT(A) is liable to be set aside.

5.1. To draw our force in this regard, we make a useful reference to the decision of Hon'ble jurisdiction High Court of Bombay in the case of St. Anne’s School vs. CIT(E) [2025] 180 taxmann.com 183 (Bom) which held that where assessee-trust filed Form No. 10 for accumulation under section 11(2) with a delay due to inadvertence of its Chartered Accountant despite trustees having signed and resolved accumulation in paper format, and delay was attributed to newly introduced e-filing requirement, rejection of condonation application under section 119(2)(b) without appreciating reasonable cause or evidence was improper and delay ought to be condoned.

5.2. Similar view was taken by the Hon'ble Court in it’s another case in St. Anne’s Church vs. CIT(E) [2025] 178 taxmann.com 16 (Bom) wherein also it held on similar lines that where assessee-trust uploaded Form No. 10 on Income Tax portal with delay of 522 days and Commissioner refused to condone said delay in filing Form Nay 10, since assessee-trust would suffer grave hardship if delay was not condoned and exemption was denied to it only on this count, delay in filing Form No. 10 was to be condoned.

5.3. There is plethora of judicial precedents of various Hon'ble High Courts and by several Coordinate Benches of ITAT dealing with similar issue and taking a liberal approach of condoning the delay to advance the object of charitable exemption, considering the such delay as a procedural irregularity and not an illegality.

Sd/- Sd/- (Anikesh Banerjee) (Girish Agrawal) Judicial Member Accountant Member Dated: 08 June, 2026 MP, Sr.P.S Copy to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asst.Registrar) ITAT, Mumbai