TULU KOOTA AIROLI,MUMBAI vs. ITO-EXMP WARD 2(4), MUMBAI

The Ld. AddL/JCIT(A) erred in confirming in not allowing the exemption claimed w/s. 11 of the Income Tax Act, 1961 amounting to Rs. 24,15,938/- without considering the merits of the case. That filing of Audit report in Form No.10B is 2 Tulu Koota Airoli AY 2018-19

Through ground no.1, assessee is contesting on the denial of condonation of delay in filing the first appeal by the ld. Addl./JCIT(A). Fact of the matter is that there was a delay of 1977 days in filing the first appeal. Assessee had filed its return of income on 14.08.2018, reporting total income at Rs.3,06,536/-. The said return was processed u/s. 143(1) by Central Processing Centre, Bengaluru (CPC) by issuing intimation, dated 26.09.2019. Claim of the assessee is that, said intimation was sent through email, however, it remained un-noticed, since its trustee, who was managing the affairs of the assessee was undergoing serious medical and personal difficulties during the relevant period. Assessee being a charitable trust, its managing committee changes every two years and hence the necessary compliance in this respect of the intimation remained pending. It was only when a notice for adjustment of refund for Assessment Year 2024-25 was issued on 07.01.2025, whereby it was proposed to adjust the refund of that year against the outstanding demand for the year under consideration that assessee came to know about the outstanding demand which had arisen on account of intimation issued u/s.143(1). Thereafter, immediate necessary actions were undertaken of engaging a tax professional and filing the first appeal. These reasons were explained in the first appellate proceedings for condonation of delay, which were negated and the appeal was dismissed as not maintainable in view of section 249(2) without dealing on the merits of the case. 4. Assessee is a registered charitable trust with the main object of promoting and providing educational aid to students, medical aid to needy and relief of the poor. Return of the assessee was processed u/s.143(1) on 26.09.2019 wherein exemption claimed u/s.11 and 12 were denied on account of delay in filing Form 10B. Claim of the 3 Tulu Koota Airoli AY 2018-19

From the above, we note that trigger point for the assessee as claimed by it for taking up filing of appeal was the intimation issued by CPC, Bengaluru, proposing to adjust the refund for Assessment Year 2024-25 against the outstanding demand for Assessment Year 2018- 19. Copy of the said intimation is placed on record in the paper book. Assessee has also submitted a screen shot from the e-portal of the Department which mentions about processing the refund adjustment, vide communication made u/s.245 of the Act. Assessee has taken all the necessary steps immediately for filing the appeal on this trigger event, explaining by way of an affidavit for non-receipt of the intimation which was originally issued on 26.09.2019, which remained un-noticed by the assessee for the reasons stated in the above paragraphs.

To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.

1. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: "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 out 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 common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, 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 non-deliberate 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 judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 6.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under:

We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach.

In light of the above and for the just decision of the controversy, it is incumbent upon us to condone the delay. Thus, taking the circumstances holistically, we condone the delay of 1977 days in filing the first appeal before the ld. CIT(A).

In the given set of fact, having condoned the delay at the first appellate stage, we remit the matter back to the file of ld. CIT(A) for denovo meritorious adjudication by taking in to consideration Form 10B filed by the assessee. We also direct the assessee to be diligent in making all its submissions, so as to comply with the notices for the hearing for effective and expeditious disposal of the appeal. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by it. Accordingly, grounds raised by the assessee are allowed for statistical purposes.

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