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Facts
The assessee, a charitable trust, had its approval under Section 80G of the Income Tax Act cancelled by the CIT(Exemption). The assessee appealed this order, but there was a delay of 99 days in filing the appeal before the ITAT.
Held
The Tribunal condoned the 99-day delay in filing the appeal, citing the principles of substantial justice over technicalities, and accepted the explanation that the delay was due to issues with the chartered accountant. The case was remitted back to the CIT(E) for fresh consideration.
Key Issues
Whether to condone the significant delay in filing the appeal and whether to remit the case for fresh consideration by the CIT(E) regarding the 80G approval.
Sections Cited
80G, 12AB(1)(b), 253(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
Assessment Year: NA Shri Guru Gajadandeshwara Charitable Trust 1 Devarabhupur Post Devabhupur CIT (Exemption) Lingasugur Vs. Ward-1 Raichur 584 139 Kalburgi Karnataka PAN NO : AAZTS9450P APPELLANT RESPONDENT Appellant by : Sri Ramanagowda S Gowdari, A.R. Respondent by : Sri Sridhar E., D.R. Date of Hearing : 15.05.2025 Date of Pronouncement : 30.07.2025 O R D E R
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT (Exemption) dated 26.9.2024 vide DIN & Order No. ITBA/EXM/F/EXM45/2024-25/1069118346(1) cancelling the approval u/s 80G of the Act of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised the following grounds of appeal:
At the outset, the ld. A.R. of the assessee submitted that there is a delay of 99 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention to an affidavit in original dated 1.5.2025 for condonation of delay sworn before the notary public which are reproduced below for ease of reference and convenience:
On going through the affidavit for condonation, we find that the assessee could not file the appeal within time since the assessee’s regular CA Basavaraj Sajjan, due to time barring tax Shri Guru Gajadandeshwara Charitable Trust, Raichur Page 6 of 10 audit & Return filing works had delayed in entrusting the case to a new legal consultant to file an appeal before the ITAT. Thereafter the steps were taken to engage an authorized representative who could file and represent the case before this Tribunal. The ld. A.R. also 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 is very callous in approach in filing the appeal before this Tribunal.
We have perused the details filed by the assessee to justify the delay and we are satisfied that there is sufficient cause on the part of the assessee in filing the appeal belatedly 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 appeals 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 cause explained by the assessee in which the assessee alleged that his regular Chartered Accountant, due to tax audit and time barring I. Tax Return filings, had delayed in entrusting the case to a new legal consultant to file an appeal before the ITAT. Thereafter steps were taken to engage an authorized representative who can file and represent the appeal before this Tribunal which cause a delay of 99 days. 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)
Shri Guru Gajadandeshwara Charitable Trust, Raichur Page 7 of 10 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. (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 Shri Guru Gajadandeshwara Charitable Trust, Raichur Page 8 of 10 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 of the delay. When there was a sufficient 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, 99 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 99 days must be condoned and accordingly we condone the delay and admit the appeal for adjudication.
Now Brief facts of the case are that the assessee is formed by way of deed of trust dated 10.6.2020. The assessee trust has been granted registration u/s 12AB(1)(b) of the Act on 26.9.2024 from assessment year 2022-23 to 2026-27 vide Unique Registration No. AAZTS9450P24BL01. Further, the assessee trust had been granted provisional approval under clause (iv) of 1st proviso to sub- section (5) of section 80G of the Act on 14.10.2021 with effect from 14.10.2021 to assessment year 2024-25. Thereafter, the assessee Trust filed form no.10AB. dated 31.3.2024 for final approval u/s 80G(5) of the Act and accordingly, the assessee was granted opportunity of being heard vide notices dated 25.7.2024 and 14.8.2024, wherein the assessee was required to appear before CIT(Exemptions) along with documents/details however the assessee has not responded. The ld. CIT(E) is of the view that since the assessee was mandated to submit necessary documents to prove the genuineness of the activities of the Trust or institution and fulfillment of all the conditions laid down in clauses (i) to (v) of section 80G of the Act and as the assessee has not responded and failed to appear before CIT(Exemptions), the ld. CIT(E) rejected the form No.10AB dated 31.3.2024 for approval u/s 80G of the Act.
Aggrieved by the order of ld. CIT(Exemption), the assessee has filed the present appeal before this Tribunal.
At the time of hearing, both the parties fairly conceded that the assessee could not represent its case before the ld. CIT(Exemption). Further, ld. A.R. of the assessee vehemently submitted that one more opportunity may be granted before the ld CIT(E) as the assessee is already registered u/s 12AB(1)(b) of the Act on 26.9.2024. Being so, in the interest of justice and fair play and as requested by the AR of the Assessee, we deem it fit & proper to remit the entire issue in dispute to the file of ld. CIT(E) for fresh Shri Guru Gajadandeshwara Charitable Trust, Raichur Page 10 of 10 consideration and to decide the same in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to cooperate with the proceedings before the ld. CIT(E) and file relevant documents/ evidences/ submissions/ information/Financials/Reports etc which would be required by the ld. CIT(Exemption) for granting approval U/s 80G. We clarify that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.