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Facts
The assessee, a trust registered under Section 12AA of the Income Tax Act, had its income determined at Rs.52,80,352/-, rejecting its claim for exemption under Section 12AA due to improper filing. The assessee's subsequent appeal to the Ld. CIT(A) was dismissed as time-barred due to a 42-day delay in filing.
Held
Citing Supreme Court precedents on condonation of delay under Section 5 of the Limitation Act, the ITAT observed that the delay was due to the tax consultant's negligence, which was beyond the assessee's control. The tribunal held that rules of limitation should not destroy rights and remitted the case back to the Ld. CIT(A) for fresh adjudication on merits, after condoning the delay.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal solely on the grounds of a 42-day delay in filing, without considering the merits of the assessee's claim for exemption under Section 12AA of the Income Tax Act.
Sections Cited
250, 143(1), 12AA, 5 (Limitation Act)
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Income Tax Appellate Tribunal, “C” BENCH KOLKATA
Before: Shri Pradip Kumar ChoubeyShri Rakesh Mishraand
order
: October 24, 2025 ORDER
Per Pradip Kumar Choubey, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 20.03.2025 of the Commissioner of Income Tax (Appeal), ADDL/JCIT(A) Agra [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
Brief facts of the case of the assessee are that the assessee is a trust registered u/s 12AA of the Act. In the case of the assessee, the income of the assessee was determined at Rs.52,80,352/- as against nil income returned by the assessee by passing an intimation u/s 143(1) of the Act thereby rejecting the claim of exemption u/s 12AA of the Act on the ground that the assessee failed to file the said exemption properly in the column of income tax return.
Netra Pradeep Rural Eye Trust 3. Aggrieved by the said intimation order, the assessee preferred appeal before the ld. CIT(A) but failed to succeed as the appeal of the assessee was dismissed by the ld. CIT(A) as barred by limitation of 42 days in filing the appeal.
Being aggrieved and dissatisfied, the assessee is in appeal before us. The ld. AR challenges the impugned order of the ld. CIT(A) thereby submitting that there was only a delay of 42 days in filing the appeal before the ld. CIT(A) was occurred due to negligence of the then tax consultant and the assessee is ignorant in dealing of tax matter and the said delay was beyond the control of the assessee. The ld. AR prays that the matter may be remitted back to the file of the ld. CIT(A) upon direction to pass a fresh order after condoning the said delay.
The ld. DR supports the impugned order but did not raise any objection for remitting the appeal of the assessee before the ld. CIT(A).
Upon hearing the submissions of the counsels of the respective parties, we have gone through impugned order passed by the ld. CIT(A) and find that the ld. CIT(A) dismissed the appeal of the assessee solely on the ground of delay of 42 days without dealing the appeal on merit. We find from an affidavit of Shri Ashok Kr. Mukherjee on behalf of the assessee that the said trust is engaged on voluntary medical service specially eye related issues and the said trust is also registered under Balagar Gram Panchayat which is approved by Govt. of West Bengal and the trust is carrying out charitable purposes and the said delay was due to negligence of the then tax consultant which was beyond the control of the assessee.
In this context, we have perused the several decisions of the Hon'ble Apex Court and find that in Shakuntala Devi Jain v. Kuntal Netra Pradeep Rural Eye Trust Kumari [AIR 1969 SC 575], this Court reiterated the following classic statement from Krishna vs. Chathappan [1890 ILR 13 Mad 269]:
"... Section 5 gives the courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words `sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant."
In N.Balakrishnan v. M.Krishnamurthy [1998 (7) SCC 123], this Court held:
"It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court.
Netra Pradeep Rural Eye Trust The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice...... Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly.
A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice.”
Keeping in view the order of the ld. CIT(A) and considering the facts and circumstances of the case, we are inclined to restore the appeal of the assessee to the file of the ld. CIT(A) for fresh consideration after affording opportunity to the assessee of hearing and the ld. CIT(A) will pass a reasoned order in accordance with law. The assessee is directed to fully cooperate in the remand proceedings.
In the result, the appeal of the assessee is allowed for statistical purposes.
Kolkata, the 24th October, 2025.