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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per Bench:
The captioned two (2) appeals, first being 12AB and second being relating to approval u/s 80G, are filed by assessee against two (2) separate orders bearing DIN: ITBA/EXM/F/EXM45/2023-24/1055190757(1) and ITBA/EXM/F/EXM45/2023-24/1055190855(1), both dated 17.08.2023 and passed by learned Commissioner of Income-Tax (Exemption), Bhopal [“CIT(E)”] by which the assessee’s applications for grant of final registration u/s 12AB & final approval u/s 80G of Income-tax Act, 1961 [“the act”] have Page 1 of 19 & 83/Ind/2025 been rejected. The assessee has raised grounds as mentioned in Appeal Memos (Form No. 36).
Delay in appeals:
2. The registry has informed that there is a delay of 461 days in filing both of these appeals. Mr. Pranay Goyal, CA & AR for assessee submitted that the assessee has filed an application for condonation of delay supported by duly solemnised affidavit of assessee and a letter of previous counsel.
Referring to contents of same, Ld. AR submitted that the assessee is a trust engaged in carrying various types of activities for the welfare of society at large, children, women and elderly people. That, the assessee-trust is being run by persons who are involved in their respective occupations but at the same time having commitment for doing good for humanity. That, the assessee-trust was not aware of impugned orders having been passed by CIT(E) primarily due to the lack of understanding of technicalities of Income- tax law and also because of reliance on previous counsel who was a junior professional and failed to take care. That, neither the income-tax portal nor the email a/c was regularly checked and there was no physical service of notices of hearing and impugned orders. Ultimately, the assessee became aware of impugned orders on 12.12.2024. Immediately, the assessee appointed new (present) counsel to handle these matters. That, the assessee has submitted a letter of previous counsel ‘M/s Manish Saini & Co., Chartered Accountants’ in which the said counsel has acknowledged the lapse occurred in checking income-tax portal and email id at regular
Page 2 of 19 & 83/Ind/2025 intervals and thereby not becoming aware of impugned orders. Further, the previous counsel has also confirmed that during the course of periodic review of pending work of his clients conducted in his office in the month of December, 2024, the lapse came to his notice. Ld. AR submitted that the delay in filing of appeals has occurred in such circumstances and reasons.
Ld. AR very humbly submitted that there is no lethargy, negligence, mala fide intention or ulterior motive attributable to assessee in making delay and the assessee does not stand to derive any benefit whatsoever because of delay, rather the assessee is suffering because of delay. He submitted that the sole reason of delay is as explained in the condonation-application/ affidavit as supported by letter of previous counsel. He submitted that the assessee has explained “sufficient cause” for delay. He relied upon the landmark decision of Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 wherein the guiding principles for condonation of delay were laid down. He submitted that the assessee’s present case satisfies the principles set out by Hon’ble Supreme Court. He also referred a recent judgement of Hon’ble Supreme Court dated 21.03.2025 titled Inder Singh Vs. The State of Madhya Pradesh, Special Leave Petition (Civil) No. 6145 of 2024.
3. Per contra, Ld. DR for Revenue raised a strong objection. He submitted that the objective/activity of assessee-trust is charitable but the delay of 461 days in filing present appeals is ‘inordinate’. He submitted that the assessee is having benefit of counsels who are well-versed with Page 3 of 19 & 83/Ind/2025 technological systems and there was no reason to commit delay in filing present appeals. He contended that the reasoning of delay explained by assessee does not constitute ‘sufficient cause’. He submitted that the impugned orders also reveal that the CIT(E) has given multiple opportunities to assessee but it is the assessee who remained non-compliant. Therefore, in this situation, the assessee does not deserve any sympathy.
4. Ld. DR also filed a “Case Law Compilation” containing as many as 20 decisions of Hon’ble Supreme Court, Hon’ble High Courts and benches of ITAT and narrated the brief ratio/key holdings in those cases during hearing.
He contended that in those decisions, the Hon’ble Courts have rejected condonation request taking significant conclusions as under:
(i) The ‘length of delay’ is relevant meaning thereby ‘inordinate delay’ cannot be condoned.
(ii) The concepts such as ‘liberal approach’, ‘justice-oriented approach’,
‘substantial justice’ cannot be employed to jettison the law of limitation.
(iii) If the court finds that there has been ‘no negligence’ on the part of the applicant and the cause shown for delay does not lack bonafides, then it may condone the delay. If, on the other hand, the explanation given by the applicant is found to be ‘concocted or he is thoroughly negligent in prosecuting his cause’, then it would be a legitimate exercise of discretion not to condone the delay.
Page 4 of 19 & 83/Ind/2025 (iv) Delay cannot be condoned on ‘fanciful stories’.
(v) ‘Merit of case’ cannot be considered in dealing with condonation.
(vi) There is no general proposition that ‘mistake of counsel’ by itself is always a sufficient ground. It is always a question whether the mistake was bonafide or was merely a decision to cover an ulterior purpose such as laches on the part of the litigant or an attempt to save limitation in an underhand way.
5. In rejoinder, Mr. S.N. Goyal, Senior C.A. & AR, joined and submitted that the assessee-trust does not have any hesitation in admitting lapse on its part but the fact is that the technological systems adopted in present times like uploading of notices/orders on web portal or sending through e- mails, are still in nascent stage and many assessees are not equipped to deal these systems regularly. Further, the assessee is a charitable organization and it does not have privilege of paid manpower which a commercial entity would have. In fact, the persons managing the assessee- trust as well as the counsels are giving their time and support without any expectation of remuneration. He emphasized that the assessee is a charitable organization and serving for the cause of society and humanity, therefore the registrations/approvals u/s 12AB and 80G are very essential.
He submitted that in absence of registration, the activities of assessee will be frustrated; the assessee will die; and it will be detrimental to society.
Ultimately, with folded hands, he requested to condone delay, admit this Page 5 of 19 & 83/Ind/2025 appeal and save trust from hardship. He also offered that the assessee-trust shall abide by any direction or condition as may be given or imposed by bench.
We have considered rival submissions and pleadings made by learned Representatives of both sides orally and in writing and also considered the documents held on record to which our attention has been drawn.
Section 253(5) of the Act prescribes:
“(5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) of sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period.” Thus, the section 253(5) empowers the ITAT to admit an appeal after the expiry of prescribed time, subject of course that the ITAT is satisfied that there was a “sufficient cause” for not presenting appeal within prescribed time.
8. Further, in landmark judgement of Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387, which is subsequently followed by several judicial forums all over country, the Hon’ble Supreme Court has given the interpretation of “sufficient cause” and also enunciated guidelines to be followed by courts while dealing cases of condonation in following words:
“……The expression “sufficient cause” employed by the legislature is adequately elastic to enable the courts to apply the law in a Page 6 of 19 & 83/Ind/2025 meaningful manner which subserves the ends of justice - that being the life - purpose for the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:- “1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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.” [emphasis supplied]
9. Further, in recent judgement dated 21.03.2025 of Inder Singh Vs. The State of Madhya Pradesh, Special Leave Petition (Civil) No. 6145 of 2024, the Hon’ble Supreme Court has again held thus:
“FACTS:
On 14.12.2012, the appellant filed Civil Suit No.17-A/2013 (hereinafter referred to as the ‘suit’) before the learned Second Additional District Judge, Class-1, Ashoknagar, Madhya Pradesh (hereinafter referred to as the ‘Trial Court’) for declaration of title, possession and permanent injunction in respect of Land Survey No.8/1 having an area of 1.060 hectare (hereinafter referred to as the ‘suit property’) situated in Village Mohrirai, Tehsil and District Ashoknagar, contending that an order dated 30.08.1977 was passed in his favour, wherein he was allotted the suit property. Thereafter, by mistake, in Page 7 of 19 & 83/Ind/2025 place of the appellant’s name i.e., Inder Singh, Ishwar Singh’s name was wrongly recorded in the revenue records. Such mistake was rectified on an application filed by the appellant before the Additional Collector, Gwalior by order dated 24.08.1978. Pursuant thereto, the appellant obtained a loan from a bank for digging a well in the suit property. It is further averred in the suit that the respondent had declared the land in question to be ‘Government Land’, without any prior notice to the appellant.
The respondent-State countered the pleadings of the appellant before the Trial Court. The State contended that the entire area admeasuring 5.696 hectares of Land Survey No.1 was government land from the very beginning and the aforesaid land has been recorded as graze land, out of which, by order dated 14.09.2006 in Case No.15A6A/05-06 of the Tehsildar Ashoknagar, an area of 2.090 hectares land was reserved for the Youth Welfare Department and the remaining area of 3.606 hectares land for the Collectorate. It was denied that the appellant was ever in possession of the land.
The Trial Court dismissed the suit on 16.08.2013, following which the appellant filed Civil Appeal No.32A of 2015 before the Second Additional District Judge, Ashoknagar (hereinafter referred to as the ‘First Appellate Court’), which was allowed by order dated 01.10.2015, overruling the Trial Court’s judgment dated 16.08.2013. The First Appellate Court declared the appellant as the landlord of the suit property.
6. The respondent filed a Review Petition viz. Case No.92 of 2018 before the First Appellate Court, which was dismissed on the ground of delay on 30.09.2019, as the delay in filing the Review Petition was not explained with any sufficient cause from the respondent’s side. Aggrieved by the said order, the respondent, in August, 2020, filed the Second Appeal bearing No.1253 of 2020 along with I.A. No.2022/2020, seeking condonation of delay in filing the Second Appeal, in the High Court. The High Court by Impugned Order condoned the delay and ordered for listing the Second Appeal for hearing on admission as well as application for stay. SUBMISSIONS BY THE APPELLANT: 7. Learned counsel for the appellant submitted that the High Court had failed to deal with how ‘sufficient cause’ had been shown by the respondent for condoning the delay, more so when the respondent’s Review Petition before the First Appellate Court was also dismissed on the ground of delay as they did not provide any justification for filing the review after a delay of over two years. He contended that it is settled law that ‘sufficient cause’ means that the party should not have acted in a negligent manner or failed to exercise due diligence. Therefore, the appellant’s argument that the cause of delay was due to COVID-19 cannot be accepted, as the respondent failed to remain vigilant, since the cause of action arose much before the pandemic hit.
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With regard to the Impugned Order referring to the judgment in Sheo Raj Singh v Union of India, (2023) 10 SCC 531, where it has been observed that Courts must take a liberal approach regarding delays in appeals filed by the State, the learned counsel for the appellant drew the Court’s attention to Paragraphs no.17 and 22 of State of Uttar Pradesh v Satish Chand Shivhare And Brothers, 2022 SCC On Line SC 2151, wherein it was held: ‘17. The explanation as given in the affidavit in support of the application for condonation of delay filed by the Petitioners in the High Court does not make out sufficient cause for condonation of the inordinate delay of 337 days in filing the appeal under Section 37 of the Arbitration and Conciliation Act. The law of limitation binds everybody including the Government. The usual explanation of red tapism, pushing of files and the rigmarole of procedures cannot be accepted as sufficient cause. The Government Departments are under an obligation to exercise due diligence to ensure that their right to initiate legal proceedings is not extinguished by operation of the law of limitation. A different yardstick for condonation of delay cannot be laid down because the government is involved. xxx 22. When consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards ‘sufficient cause’ to condone the delay. The Court considering an application under Section 5 of the Limitation Act may also look into the prima facie merits of an appeal. However, in this case, the CIVIL APPEAL NO. OF 2025 Petitioners failed to make out a strong prima facie case for appeal. Furthermore, a liberal approach, may adopted when some plausible cause for delay is shown. Liberal approach does not mean that an appeal should be allowed even if the cause for delay shown is glimsy. The Court should not waive limitation for all practical purposes by condoning inordinate delay caused by a tardy lackadaisical negligent manner of functioning.’ 9. Learned counsel for the appellant further relied on the judgment in Pathapati Subba Reddy v Special Deputy Collector, 2024 SCC OnLine SC 513, wherein Paragraph no.26(v) states: ‘Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence.’ Hence, it was contended that this Court should not waive limitation, for all practical purposes, by condoning delay caused by the lackadaisical negligent manner of functioning of the respondent. It was urged that the appeal ought to be allowed and the Impugned Order be set aside. SUBMISSIONS BY THE RESPONDENT-STATE:
Page 9 of 19 & 83/Ind/2025
10. Learned counsel for the respondent submitted that out of the delay of 1537 days in filing the Second Appeal, around three years was consumed in filing the Review Petition before the First Appellate Court and after its eventual dismissal on 30.09.2019, by the time the filing process could begin for the Second Appeal, the COVID-19 pandemic arose and it could only get filed in August, 2020. Therefore, the delay caused in filing the Second Appeal was unintentional, much less due to any deliberate laches, and was well-explained by the State before the High Court. It was contended that hence, rightly the delay caused in filing of the Second Appeal was condoned. The respondent further submitted that since the suit property was important and valuable government land, this Court should sustain the Impugned Order as it would entail substantial justice being done to both parties by leading to the eventual disposal of the matter on merits. Reliance was placed on the case of State of Bihar v Kameshwar Prasad Singh, (2000) 9 SCC 94.
It was further submitted by the learned counsel for the respondent that the interpretation of the words ‘sufficient cause’ should be such that it is construed liberally. By referring to the decision in State of West Bengal v Administrator, Howrah Municipality, (1972) 1 SCC 366, the respondent contended that a liberal interpretation should specially be taken in the present case as the State has not been negligent in pursuing the remedies available to it under law. Moreoever, the submission was that COVID-19 not being an extraneous circumstance, the State should not be punished for the delay in filing the Second Appeal.
With regard to the facts of the case, the respondent points out that the Trial Court had initially dismissed the suit, inter alia, on the grounds that he did not place any documentary evidence reflecting his title and there were also instances of fraud played by the appellant as he had exchanged certain vital documents. It was urged that this was the reason why it was all the more important for the underlying matter to be heard on merits by the High Court. It was canvassed that the appeal should be dismissed and the Impugned Order be upheld. ANALYSIS, REASONING & CONCLUSION: 13. In the present case, the contentions of the appellant, on first blush appears to be attractive, in as much as the State cannot be given any undue indulgence as compared to an ordinary litigant, especially in matters of limitation. There is no doubt that all parties, whether or not State under Article 123 of the Constitution, are required to act with due diligence and promptitude. 14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation. 15. In the present case, the filing of the Review Petition before the First Appellate Court was with a delay of two years and four months and the Page 10 of 19 & 83/Ind/2025 Second Appeal before the High Court was delayed by about a year from the date of the dismissal of the Review Petition i.e., 30.09.2019. Pausing for a moment, it is necessary to indicate that in the present case, the dispute over title of a land is not between private parties, but rather between the private party and the State. Moreover, when the land in question was taken possession of by the State and allotted for public purpose to the Youth Welfare Department and the Collectorate and has continued in the possession of the State, the claim of the State that it is government land cannot be summarily discarded. We find, upon a perusal of the record, that the appellant had, in fact, filed an execution case for taking over possession of the land, which would demonstrate clearly the admitted position that he was not in possession thereof. Thus, the matter would, in our considered view, require adjudication on its own merits due to various reasons, inter alia, the fact that a new district has been formed after the initial claim of the appellant of being allotted the land in the years 1975-1976/1977-1978. Therefore, the delay of 1537 days reckoned from 01.10.2015 i.e. when the First Appellate Court decreed the suit, includes two years and four months delay in filing a Review Petition (which was itself dismissed on the ground of delay by the First Appellate Court) and of about a year thereafter for filing the Second Appeal before the High Court, in the peculiar facts and circumstances of the case, which, at the cost of repetition relate to land claimed by the State as government land and in its possession, persuade us to not interfere with the Impugned Order. Relevantly, initially the suit was dismissed by the Trial Court, which decision was reversed by the First Appellate Court.
The Court in Ramchandra Shankar Deodhar v State of Maharashtra, (1974) 1 SCC 317 held: ‘10. …There was a delay of more than ten or twelve years in filing the petition since the accrual of the cause of complaint, and this delay, contended the respondents, was sufficient to disentitle the petitioners to any relief in a petition under Article 32 of the Constitution. We do not think this contention should prevail with us. In the first place, it must be remembered that the rule which says that the Court may not inquire into belated and stale claims is not a rule of law, but a rule of practice based on sound and proper exercise of discretion, and there is no inviolable rule that whenever there is delay, the Court must necessarily refuse to entertain the petition. Each case must depend on its own facts. The question, as pointed out by Hidayatullah, C.J., in Tilokchand Motichand v. H.B. Munshi [(1969) 1 SCC 110, 116 :(1969) 2 SCR 824] “is one of discretion for this Court to follow from case to case. There is no lower limit and there is no upper limit .... It will all depend on what the breach of the fundamental right and the remedy claimed are and how the delay arose”.’ (emphasis supplied) 17. No doubt, Ramchandra Shankar Deodhar (supra) relates to a writ petition, but the statement of law laid down is clear. Sheo Raj Singh (supra) has also considered the impersonal nature of the functioning of the State, taking note of what was observed in State of Manipur v Kotin Lamkang, (2019) 10 SCC
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In A B Govardhan v P Ragothaman, (2024) 10 SCC 613, the Court considered as under: ‘37. In Collector (LA) v. Katiji [Collector (LA) v. Katiji, (1987) 2 SCC 107], the Court noted that it had been adopting a justifiably liberal approach in condoning delay and that “justice on merits” is to be preferred as against what “scuttles a decision on merits”. Albeit, while reversing an order of the High Court therein condoning delay, principles to guide the consideration of an application for condonation of delay were culled out in Esha Bhattacharjee v. Raghunathpur Nafar Academy [Esha Bhattacharjee v. Raghunathpur Nafar Academy, (2013) 12 SCC 649: (2014) 1 SCC (Civ) 713: (2014) 4 SCC (Cri) 450: (2014) 2 SCC (L&S) 595]. One of the factors taken note of therein was that substantial justice is paramount [Para 21.3 of Esha Bhattacharjee [Esha Bhattacharjee v. Raghunathpur Nafar Academy, (2013) 12 SCC 649: (2014) 1 SCC (Civ) 713: (2014) 4 SCC (Cri) 450: (2014) 2 SCC (L&S) 595]]. 38. In N.L. Abhyankar v. Union of India [N.L. Abhyankar v. Union of India, 1994 SCC OnLine Bom 574: (1995) 1 Mah LJ 503], a Division Bench of the Bombay High Court at Nagpur considered, though in the context of delay vis-à-vis Article 226 of the Constitution, the decision in Dehri Rohtas Light Railway Co. Ltd. v. District Board, Bhojpur [Dehri Rohtas Light Railway Co. Ltd. v. District Board, Bhojpur, (1992) 2 SCC 598] , and held that: (N.L. Abhyankar case [N.L. Abhyankar v. Union of India, 1994 SCC OnLine Bom 574: (1995) 1 Mah LJ 503], SCC OnLine Bom para 22) “22. … The real test for sound exercise of discretion by the High Court in this regard is not the physical running of time as such, but the test is whether by reason of delay there is such negligence on the part of the petitioner, so as to infer that he has given up his claim or whether before the petitioner has moved the writ court, the rights of the third parties have come into being which should not be allowed to be disturbed unless there is reasonable explanation for the delay.” (emphasis supplied) 39. The Bombay High Court's eloquent statement of the correct position in law in N.L. Abhyankar case [N.L. Abhyankar v. Union of India, 1994 SCC OnLine Bom 574: (1995) 1 Mah LJ 503] found approval in Municipal Council, Ahmednagar v. Shah Hyder Beig [Municipal Council, Ahmednagar v. Shah Hyder Beig, (2000) 2 SCC 48] and Mool Chandra v. Union of India [Mool Chandra v. Union of India, (2025) 1 SCC 625: 2024 SCC OnLine SC 1878]. 40. In the wake of the authorities abovementioned, taking a liberal approach subserving the cause of justice, we condone the delay and allow IA No. 16203 of 2019, subject to payment of costs of Rs 20,000 (Rupees twenty thousand) by the appellant to the respondent.’
Page 12 of 19 & 83/Ind/2025 (emphasis supplied) 18. Considering the above pronouncements and on an overall circumspection, we are of the opinion that the Second Appeal deserves to be heard, contested and decided on merits. However, a note of caution is sounded to the respondent to exhibit promptitude in like matters henceforth and in futuro, failing which the Court may not be as liberal.
Accordingly, the present appeal stands dismissed. The Impugned Order is upheld with the imposition of costs infra.
No order as to costs. I.A.s No.62432/2024 4 and 62433/20245 are allowed.
To offset, to some extent, the hardship of the appellant in pursuing his legal remedies, we deem it appropriate that costs of Rs.50,000/- (Rupees Fifty Thousand) be paid by the respondent to the appellant, subject to which the delay in filing the Second Appeal shall be treated as condoned. Let such payment be made within one month from today. Failure to do so shall entail peremptory dismissal of the Second Appeal.
Further, if the payment is made within the timeline stipulated above, the High Court is requested to take up the Second Appeal on priority and endeavour to dispose it of expeditiously.” [emphasis supplied] 10. Further, in a very recent judgement dated 01.04.2025 in Shri Neel Kumar Ajmera alias Nilesh Ajmera Vs. Pr. Commissioner of Income-tax, the Hon’ble Jurisdictional High Court of Madhya Pradesh has taken cognizance of Inder Singh (supra) and condoned a delay of 1797 days, holding as under:
“8. Heard the learned counsel for the parties.
The Supreme Court in the case of Inder Singh Vs. State of Madhya Pradesh reported in 2025 INSC 382 has held as under:
“There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”
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Similarly, the Supreme Court in the case of Mool Chandra (supra), has held as under:
“It is not the length of delay that would be required to be considered while examining the plea for condonation of delay, it is the cause for delay which has been propounded will have to be examined. If the cause for delay would fall within the four corners of “sufficient cause”, irrespective of the length of delay same deserves to be condoned. However, if the cause shown is insufficient, irrespective of the period of delay, same would not be condoned.”
11. In the aforesaid case, the Supreme Court has further held as under:
“if negligence can be attributed to the appellant, then necessarily the delay which has not been condoned by the Tribunal and affirmed by the High Court deserves to be accepted. However, if no fault can be laid at the doors of the appellant and cause shown is sufficient then we are of the considered view that both the Tribunal and the High Court were in error in not adopting a liberal approach or justice oriented approach to condone the delay.”
12. In view of the aforesaid pronunciation of law as well as after going through the reasons assigned for delay in filing the appeal, this Court is of the considered opinion that although a delay cannot be condoned without sufficient cause but the merits of the case cannot be discarded solely on the technical grounds of limitation. A liberal approach should be taken in condoning delays when the limitation ground undermines the merits of the case and obstructs substantial justice.
13. Hence, this Court finds that the appellant has been able to put forth “sufficient cause” for the delay in filing the appeal before ITAT.
Accordingly, the order dated 23.08.2024 passed by the Income Tax Appellate Tribunal, Indore Bench, Indore in is hereby set aside.
15. The delay in filing an appeal before the ITAT is hereby condoned.
16. The matter is remanded back to Income Tax Appellate Tribunal, Indore Bench, Indore and it is directed that the appeal shall be decided afresh in accordance with law on merits after affording reasonable opportunity of hearing to both the parties.
With aforesaid direction, the present ITA is hereby allowed.”
11. Ld. DR for revenue has filed a compilation of various judicial precedents against condonation of delay and narrated the brief ratio/key
Page 14 of 19 & 83/Ind/2025 holdings in those decisions. We agree that there are judicial precedents on both sides i.e. granting condonation as well as rejecting. But at the same time, we also find that every decision or judgement by court rests on the facts. So far as the approach of Court is concerned, broadly the courts are ‘liberal’ and apply ‘justice-oriented approach’ in dealing condonation matters and this approach is loudly profounded by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji (supra). The Courts are, however, required to take caution to evaluate as to whether the delay was bonafide or was there any malafide intention to cover an ulterior purpose or a deliberate attempt to save limitation in an underhand way. In present case, the assessee has filed an affidavit of trustee and also a confirmatory letter of previous counsel explaining that the delay had occurred because of not being able to see the notices/order on portal of department and the email sent by department. Further, it is also represented that there was no physical service of notices/order upon assessee. The previous counsel’s letter gives a further confirmation that ultimately when there was periodical review of pending matters of clients carried out in his office, at that time the impugned order came to the knowledge. These are the factual aspects averred by trustee in an affidavit and also supported by previous counsel’s confirmatory letter and we find no basis or reason to reject the same. There is also nothing on record to show that the assessee had an ulterior motive or there was an attempt to save limitation in an underhand way. The assessee is a charitable entity and knows the importance of getting registration/
Page 15 of 19 & 83/Ind/2025 approval u/s 12AB/80G because without registration/approval, it cannot carry out activities and will suffer and die. That apart, we are also conscious that if the delay is condoned, it will not grant automatic registration/ approval to assessee. As would be seen in subsequent para, we are ultimately restoring these matters to CIT(E) for re-consideration. Therefore, the condonation of delay and thereafter restoration at CIT(E) level will only result in giving an opportunity to assessee to represent it’s cases before CIT(E) and ultimately it would be the CIT(E) who will have full freedom to consider assessee’s case on merit and take a decision whether to grant registration/approval or not. Therefore, the condonation of delay and restoration of matter will not prejudice revenue in any manner. The Hon’ble Supreme Court has, in Collector, Land Acquisition Vs Mst. Katiji (supra), held that whenever ‘substantial justice’ and ‘technical considerations’ are opposed to each other, the cause of ‘substantial justice’ must be preferred by adopting a ‘justice-oriented approach’. The same tune has again been followed by Hon’ble Supreme in recent decision dated 21.03.2025 of Inder Singh (supra) and by Hon’ble Jurisdictional High Court of Madhya Pradesh in recent decision dated 01.04.2025 of Shri Neel Kumar Ajmera (supra). Respectfully following the same and having regard to the facts of case as discussed above, the present case deserves condonation. Further, even if there be two views in the matter of condonation, the courts must grant condonation. Therefore, we are inclined to condone the delays in present appeals and we do so.
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12. One can, however, say that the assessee, even if a charitable entity, must have utmost promptness and diligence in dealing statutory matters but this element is lacking to some extent in present matters. The Ld. DR has also made a strong mention that the CIT(E) gets a limited time to pass orders in the matters of registrations/approvals and always remains fully burdened with workload. The restoration of matters by appellate forums, adds much burden on him. Therefore, to make the assessee more alert in dealing statutory matters and also to offset the efforts of revenue, we impose a cost of Rs. 2,500/- in each case to be paid by assessee to Income-tax Department by way of appropriate challan. The assessee shall produce copies of paid challans to CIT(E).
Merit:
On merit of cases, we find that there had been non-compliances of notices which led the CIT(E) to pass ex-parte orders. That apart, the CIT(E) has also noted that the assessee selected wrong Clause (ii) of section 12A(1)(ac) in the application filed for grant of registration u/s 12AB. Ld. AR submitted that uptill 31.03.2021, the law prescribed a single type of mechanism for registrations/approvals but from 01.04.2021, the law has undergone a total change which is referred to as ‘new regime of registration’ in practical/professional circles whereby and whereunder different types of situations and clauses have been prescribed. He submitted that there are numerous cases throughout country wherein either the trusts/professionals have not understood the correct clauses or there was a difference of opinion
Page 17 of 19 & 83/Ind/2025 as to the applicable clause and same thing has happened in present assessee’s case also. He submitted that the assessee is ready to make all submissions before CIT(E) and also submit a rectified application to CIT(E) during proceeding, if the CIT(E) so desires. Therefore, the present matters must be remanded to CIT(E) for a fresh adjudication after hearing assessee.
14. Ld. DR for revenue submitted that it was not a case of ‘scrutiny- assessment’ by department. It is the assessee who filed applications to CIT(E) seeking registration/approval, therefore the assessee must have been diligent in prosecution. He submitted that there is no infirmity in the order of CIT(E). He submitted that restoration of cases to CIT(E) increases unnecessary burden upon CIT(E). He opposed assessee’s prayer for restoration.
We have considered rival submissions of both sides. We have already dealt all facts of case including the claim of Ld. DR that the restoration of case increases burden upon CIT(E). We have also imposed a suitable cost upon assessee to offset the revenue’s efforts. After due consideration of facts and with the objective of imparting substantial justice to assessee, we are inclined to give one more opportunity to assessee and accordingly, restore these matters to CIT(E) for fresh adjudication. The CIT(E) shall give necessary opportunity of hearing to assessee and pass appropriate orders uninfluenced by his earlier orders. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by CIT(E) and do not seek unnecessary adjournments failing which the CIT(E) shall be Page 18 of 19 & 83/Ind/2025 at liberty to pass appropriate orders in accordance with law. Ordered accordingly.
16. Resultantly, these appeals are allowed for statistical purpose.
Order pronounced in open court on 27/10/2025