SHREE KUND KUND KAHAN PARIWAR YUVAK MANDAL TRUST,RAJKOT vs. THE ITO EXEMPTION WARD 1, RAJKOT, RAJKOT

The appeal filed by the assessee, before this Tribunal, was barred by limitation by 3809 days before the ld CIT(A), therefore, ld CIT(A), dismissed the appeal of the assessee on account of delay and did not adjudicate the appeal of the assessee on merit, therefore, assessee is in appeal before the Tribunal. The Ld. Counsel for the assessee submitted a petition for condonation of delay, citing the reasons for delay before the learned CIT (A) which is reproduced below: “1. We filed the return of income for AY 2013-14 on 09.10.2013, declaring a total income of Rs. NIL after claiming exemption u/s 11 of the Act. We are a registered trust holding registration under section 12A of the Income Tax Act, 1961 and we have been allowed the exemption u/s 11 in all the preceding and succeeding years.

The Intimation order u/s. 143(1) for A.Y. 2013-14 was passed on 28.11.2014, raising a demand of Rs. 3,39,030/-. In this intimation, the exemption u/s 11 claimed by us was disallowed on a technical ground of the non-mentioning of particulars of registration under section 12A in the income tax return.

The above intimation was immediately forwarded by our trustee to our then tax consultant for doing the needful. The trustees, not being much conversant with the procedures under the Income Tax Act, were thoroughly dependent upon the tax consultant. The trustees were under the bona fide impression that the tax consultant would have done the needful in the matter.

Unfortunately, at the relevant time, we were involved in a fee-related dispute with the said tax consultant, and therefore, he did not take any corrective measures. Consequently, we could neither file any rectification nor any appeal against the aforesaid intimation.

The said dispute persisted for 2 to 3 years. By the time the dispute was resolved, the tax consultant had lost track of the above intimation and the outstanding demand arising therefrom.

When our refunds for AY 2018-19 and AY 2019-20 were not received, we approached the tax consultant and he assured us that the refunds would be received by us in due course. To cover up his lapse, he did not inform us that the refunds were adjusted against the demand for A.Y. 2013-14 against which he did not initiate any actions whatsoever. Given the relatively small refund amounts (not exceeding Rs. 15,000/-), we continued to rely on his assurances.

Recently, during a consultation with a senior Chartered Accountant for an unrelated matter, we casually mentioned the pending refunds. Upon his request, we provided the e-filing portal credentials (which we obtained from our tax consultant). The senior Chartered Accountant investigated and discovered that the refunds for AYs 2018-19, 2019-20, 2020-21, and 2023-24 were adjusted against the demand for AY 2013-14.

We then requested the senior Chartered Accountant to find out the cause of the demand. From the e-filing portal, he downloaded the intimation u/s 143(1) and matched the same with the return of income and informed us that the exemption u/s 11 was denied which resulted in a demand for A.Y. 2013-14. At this juncture, we first time came to know about the demand for A.Y. 2013-14.

Then, we contacted the tax consultant, showed him the intimation u/s 143(1) and sought his clarification. At this juncture, he admitted his lapse. Upon our request to immediately take corrective actions, he filed a rectification request under section 154 to our Jurisdictional Assessing Officer (ITO (Exemption), Ward-1, Rajkot) on 22.01.2025, seeking rectification of the intimation order u/s 143(1) dated 28.11.2014.

However, the above rectification request was rejected as more than four financial years had elapsed since the date of the impugned intimation order.

We therefore again approached the senior chartered accountant firm for a possible remedy under the law. They advised us to file an appeal with a prayer for condonation of delay, Accordingly, under his guidance, this appeal is being filed by us.

We understand the appeal is belated by more than 10 years. However, we respectfully submit that the Hon'ble Supreme Court has clearly laid down the legal position that in the matter of condonation of delay, the cause of the delay and not the length of delay should be considered. In this regard, we rely upon the relevant portion of the Hon'ble Supreme Court judgment in the case of Mool Chandra Vs. Union of India & ANR. (Civil Appeal Nos. 8435 - 8436 Of 2024) wherein it was held as under:

The delay was neither willful nor due to any negligence on our part. It was purely unintentional and arose due to circumstances beyond our control, as detailed above. We, therefore, pray that our case deserves sympathetical considerations.

We humbly pray Your Honour to kindly take a liberal view in our case, as we are a charitable trust working solely for the welfare of society.

We humbly submit that substantial justice should prevail over procedural technicalities, particularly considering, that we are a charitable trust governed by section 12A of the Act and acting in good faith. We therefore earnestly pray Your Honour to kindly condone the delay in filing the appeal in the interest of justice.

The courts and tribunals have consistently held that in the matter of condonation of delay, a pragmatic and liberal approach should be taken. The Supreme Court also held the same in the case of Investment Trust v. Ujagarsingh that unless mala fides or gross negligence is evident, delays should be condoned, and appeals should not be dismissed solely on technical grounds of delay and they should be ordinarily decided on merits.

We may humbly submit that the rejection of the appeal on the ground of delay would be very harsh as the delay was on account of reason beyond our control. We have taken utmost care in ensuring that the period of delay is reduced to the maximum possible extent. In this regard, We may quote the following observation of M. P. High Court in the case of Steel Ingots (86) Taxmann 440).

The Hon'ble Gujarat HC has also considered this aspect of condonation of delay in case of Gujarat State Fertilizers & Chemicals Ltd. (283 ITR 149) and held that...

In this regard, the reliance is also placed on the following decisions of the Hon'ble Jurisdictional Rajkot ITAT wherein Hon'ble ITAT considered the fact that the delay in appeal filing was not attributable to the assessee but due to the incompetence of the tax consultant, for which the assessee should not suffer. On this reasoning, the ITAT condoned the delay in appeal filing: ➤ Pravinbhai Karshanbhai Rathod (ITA No.289/RJT/2025 decision dated 15.05.2025). ➤ Chitravad Sayunkta Vividh Karyakari Sahkari Mandall Ltd. (ITA No. ITA No.180/RJT/2025 decision dated 16.05.2025)

In view of the above facts and judicial pronouncements, we humbly request Your Honour to kindly condone the delay and admit our appeal on merits and oblige. For this act of kindness, we shall remain obliged forever.”

Shri D. M. Rindani, learned Counsel for the assessee argued that in the above petition for condonation of delay, before learned CIT(A), the assessee had explained the sufficient cause and the reasons for delay. Therefore, delay should be condoned in the interest of justice and matter may be restored back to the file of the jurisdictional assessing officer (JAO) to adjudicate the issue afresh, within three months.

On the other hand, Ld. DR for the revenue submitted that such huge delay should not be condoned. In this case no "sufficient cause" was shown by the appellant to explain the huge/unreasonable delay in filing of appeal. Rather, this is a clear case of deliberate inaction or negligence on the part of the appellant. Period of delay is a factor to be considered while considering a delay condonation application, since the law assists those that are vigilant with their rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the State and the litigant. The general rule of the law of limitation is that an extension shall not be granted if there is no sufficient cause or cogent ground for the condonation of delay, the onus of proving which lies on the appellant as clearly laid down in the judicial pronouncements by the highest Court of Law.As the assessee was totally negligent and hence the appeal of the assessee should be dismissed.

I have gone through the sequence of the events explained by the Ld. Counsel for the assessee and noted that assessee was exercising alternative remedy also before the lower authorities and at the same time, assessee has invested the time in filing the application under Right to Information Act before the income tax authorities and these sequence of events clearly explain that assessee was not negligent in his approach. I note that delay is not on account of negligence of the assessee and it seems to me, after going through the above events that the assessee had explained the sufficient cause to condone such delay for that I rely on the following judgments: (i) Concord of India Insurance Co. Ltd. vs Nirmala Devi And Ors (1979) 3 SCR 694 (SC), wherein it was held that advice given by the members of the legal profession may sometimes be wrong even as pronouncement of question of law by Courts are some times wrong. An amount of latitude is expected in such cases for, to err is human and lay men, as litigants are, may legitimately lean on expert counsel in legal as in other departments. The Court must of course see whether in such cases there is any taint of mala fides or element of recklessness. If neither is present, legal advice honestly sought and actually given must be treated as sufficient cause for condoning the delay.

I note that the reasons given in the affidavit for condonation of delay were convincing and these reasons would constitute reasonable and sufficient cause for the delay in filing this appeal. I also note that the events explained by the assessee clearly show that assessee was not negligent in his approach. Having heard both the parties and after having gone through the affidavit as well the delay condonation, application, as noted above, I am of the considered opinion that in the interest of justice, the delay deserves to be condoned. I, accordingly, condone the delay of 3809 days before ld.CIT(A).

Since, I have condoned the delay in filing the appeal before ld. CIT(A), and also noted that Ld. CIT(A) did not adjudicate the issue on merit and dismissed the appeal of the assessee on account of delay, therefore I am of the view that an opportunity should be given to the assessee to plead his case before the jurisdictional assessing officer (JAO ), on merit. Hence, I set aside the order of the Ld. CIT(A) and remit the issue back to file of the jurisdictional assessing officer (JAO). I therefore, restore this lis back to the jurisdictional assessing officer (JAO) for afresh adjudication on merits within four months from the date of receipt of this order, with a liberty to the assessee to prove his case by producing sufficient evidence/material to the satisfaction of the jurisdictional assessing officer (JAO). For statistical purposes the appeal of the assessee is allowed.

In the result, appeal filed by the assessee is allowed for statistical purposes, in above terms.