ITAT Restores Delayed Appeal in Charitable Trust Exemption Dispute:

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restored to the Commissioner of Income Tax (Appeals) an appeal filed by a charitable trust after observing that the assessee's request for condonation of delay deserved proper consideration and that substantial justice should prevail over technicalities. The Bench comprising Judicial Member Anikesh Banerjee and Accountant Member Om Prakash Kant allowed the appeal of Sharadabai Charitable Trust for statistical purposes.

The assessee, a registered charitable trust, filed its return of income for AY 2018-19 declaring nil income after claiming exemption under Section 11 of the Income Tax Act. While processing the return under Section 143(1), the Centralised Processing Centre denied the exemption and assessed the trust's income at Rs.29.34 lakh solely on the ground that Form 10B had not been filed along with the return. Although the trust subsequently filed Form 10B, it was beyond the prescribed due date.

The assessee challenged the intimation before the Commissioner of Income Tax (Appeals) along with a petition seeking condonation of a delay of 342 days. It explained that the delay occurred due to the ill-health and subsequent demise of the Managing Trustee, the nationwide COVID-19 lockdown, and the inability of the remaining senior citizen trustees to attend to legal proceedings. However, the CIT(A) rejected the condonation request and dismissed the appeal.

Before the Tribunal, the assessee contended that the delay had been sufficiently explained and that its appeal had been dismissed without granting an effective opportunity to pursue the condonation application.

“Considering the facts of the case and interest of substantial justice, we deem it appropriate to restore the matter to the Ld. CIT(A).”

The Tribunal observed that the CIT(A) had taken note of the reasons furnished by the assessee but nevertheless rejected the appeal on the ground of limitation. It held that the assessee's application seeking condonation of delay required proper consideration and that the matter should be decided after granting a reasonable opportunity of hearing.

The Bench directed the assessee to file an affidavit along with an appropriate application for condonation of delay before the CIT(A). It further directed the appellate authority to examine the request in accordance with law by adopting a lenient approach and to pass a reasoned and speaking order after hearing the assessee.

“The Ld. CIT(A) is directed to consider the assessee’s application for condonation of delay in accordance with law in lenient approach and pass a reasoned and speaking order.”

Clarifying that it had expressed no opinion on the merits of the claim for exemption under Section 11, the Tribunal restored the matter to the file of the CIT(A) for fresh adjudication in accordance with law. The appeal was accordingly allowed for statistical purposes.