AI Insights
The case involves the Fatimabai Hajimiya Kokani Pvt. Trust, which appealed against the order of the CIT(A) that dismissed their appeal due to a significant delay in filing. The Trust argued that the delay was caused by a lack of communication from the Income Tax Department regarding the intimation order under section 143(1) of the Income Tax Act, 1961. The Tribunal considered the circumstances leading to the delay, including the Trust's regular filing of returns and the adjustment of refunds against the demand for A.Y. 2015-16. The Tribunal decided to condone the delay and remand the case back to the CIT(A) for a decision on the merits.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 316028 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-05-2025
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2015-2016
Judgement Text
" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2373/PUN/2024 Assessment Year : 2015-16 Fatimabai Hajimiya Kokani Pvt. Trust, 1327, Phule Market, Phalke Road, Nashik-422001 Maharashtra PAN : AAATF0994N Vs. ITO (Exemption), Ward-1, Nashik Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 28.05.2024 passed by Addl/JCIT(A)-1, Ahmedabad u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of the Intimation order dated 20.03.2017 passed u/s.143(1) of the Act. 2. Registry informed that there is delay of 107 days in filing the appeal before this Tribunal. Application for condonation of delay has been filed stating as under : “1. The appellate order u/s 250 of the Income Tax Act, 1961 passed by the CIT(Appeals), NFAC, Delhi in case of the above mentioned trust for A.Y.2015-16 was received by us through email on 28.05.2024. Upon receipt of the appellate order, I made enquiry Appellant by : Shri Sanket Joshi Respondent by : Mrs. Indira Adakil Date of hearing : 05.05.2025 Date of pronouncement : 15.05.2025 ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 2 regarding Counsels practicing before Hon'ble ITAT, Pune for filing further appeal. After enquiry, I approached the office of CA Sanket Milind Joshi at Nashik in the third week of July, 2024. However, CA Mr. Joshi was in Pune for Income Tax hearings at that time. Therefore, I handed over the appellate order to the employee of the Counsel, Mr. Shekhar Chhadidar at his Nashik Office for filing further appeal. I hereby state that the challan of Rs.5,230 towards appeal filing fees was also paid immediately on 16.07.2024 as per the instructions of staff of the Counsel. I was under a bona fide belief that the subsequent formalities of filing appeal shall be taken care of by the Counsel. 2. I hereby state that in the second week of November 2024, I visited the office of CA Sanket Joshi at Nashik to enquire the status of our income tax appeal since I had not received any notice of hearing. Only at that time, it came to our notice that the staff of the Counsel, had forgotten to intimate the Counsel regarding my visit for appeal work in the month of July 2024 and therefore, the appeal had remained to be filed although the challan was paid on 16.07.2024 itself. I wish to state that upon becoming aware of this fact, the appeal was drafted within a short period and the same was filed electronically on 15.11.2024. In view of the above facts, there was a delay of 111 days in filing the appeal for AY.2015-16 before Hon'ble ITAT. 3. I wish to state that the said delay was not intentional on my part and my intention to file appeal within time is evident from the fact that the challan towards appeal filing fees was paid on 16.07.2024 itself i.e. well within the time limit of 60 days. I hereby undertake to make timely compliance in income tax matters in future.” 3. We have heard both the sides and gone through the averments made in the condonation application. Hon’ble courts in plethora of judgments observed that 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. A liberal approach, may adopted when some plausible cause for delay is shown. Hon’ble Supreme Court in the case of Inder Singh ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 3 Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condoned delay of 1537 days sub-serving the cause of justice. It was held so while observing that the second appeal filed by the appellant was unintentional, much less due to any deliberate laches, and was well-explained by the State before the High Court. Hon’ble Court further held that in cases where the merits are significant, a more liberal approach may be adopted to allow for the examination of the case on its merits. Having gone through the averments made in the condonation application and considering the ratio laid down by the Hon’ble Court in the case of Inder Singh (supra), we are of the view that there was ‘reasonable cause’ which prevented the assessee in filing the appeal within the stipulated time. We therefore condone the delay of 107 days and admit the appeal for adjudication. 4. Brief facts of the case are that the assessee is a Private Trust claimed to be engaged in charitable activities providing Medical relief to the poor and for Educational Purposes. It furnished the return of income for A.Y. 2015-16 on 08.01.2016 declaring income of Rs.1,42,940/- and claimed refund of Rs.50,277/-. However, the said return was treated as invalid return u/s.139(9) of the Act by the CPC. Thereafter, assessee furnished another return on 20.03.2017 declaring same income and claiming same refund. However, the first return which was stated to be invalid by the CPC was processed u/s.143(1) of the Act on 27.03.2017 and the assessee’s claim of application of income for charitable purposes at Rs.3,79,402/- (expenses incurred during the year) was denied and income computed at Rs.52,234/-. Now the assessee challenged the said adjustment made by the ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 4 CPC in its order dated 27.03.2017 before ld.CIT(A) by filing the appeal on 09.02.2023 with a delay of 2115 days. Even though assessee pleaded before ld.CIT(A) explaining the said delay but ld.CIT(A) did not condone the delay observing that the assesee has been consistently furnishing the income tax returns from A.Y. 2016-17 to 2023-24 and therefore there is no plausible reason for not filing the appeal in time. 5. Now the assessee is in appeal before this Tribunal by raising the following grounds : “1. The learned CIT(A) erred in dismissing the appeal in limine without admitting the same on the ground that the appellant had not furnished a satisfactory explanation for the delay of 2115 days (including COVID period) in filing the appeal before the CIT(A) and therefore, the said delay could not be condoned. 2. The assessee submits that the intimation u/s 143(1) dated 27.03.2017 for A.Y.2015-16 was served by CPC only vide email dated 21.01.2023 and prior to that, the intimation u/s 143(1) was neither served through post/ email and it was also not downloadable from income tax portal and thus, the appeal filed on 09.02.2023 was within stipulated time limit of 30 days and hence, since there was no delay in filing the appeal before CIT(A), the appeal ought to have been adjudicated on merits. 3. The assessee submits that in the application filed for condonation of delay before CIT(A), the date of intimation u/s 143(1) i.e. 27.03.2017 was wrongly presumed to be the date of service of intimation u/s 143(1) without appreciating that mere uploading of intimation on income tax portal did not amount to service of notice upon the assessee and therefore, the period of limitation for filing appeal ought to have been considered from the date of communication of the intimation through email i.e. 21.01.2023. 4. The learned CIT(A) erred in not appreciating the law consistently laid down by Honorable Courts that no one should be deprived of adjudication on merits unless it is found that the litigant deliberately delayed filing of appeal, and in the absence of any material brought on record by the CIT(A) to show that the delay in filing the appeal was deliberate, the said delay ought to have been condoned on facts of the case. 5. The learned CIT(A) failed to appreciate that the intimation u/s 143(1) dated 27.03.2017 was passed in respect of non-est ITR dated 08.01.2016 filed in ITR-7 u/s 139(1) which was treated as ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 5 defective u/s 139(9) vide defect notice dated 26.02.2016 and thereafter, the assessee had filed a belated return u/s 139(4) on 20.03.2017 in ITR-5 and therefore, the intimation u/s 143(1) passed in pursuance of a non est return was also non-est in law and thus, the demand raised therein was certainly not enforceable and hence, a liberal view to avoid unauthorized collection of tax ought to have been taken while considering the question of condonation of delay. 6. Without prejudice to the above grounds, the learned CIT(A) erred in not appreciating that the CPC was apparently unjustified in taxing the entire gross receipts of Rs.5,22,341 as income of the appellant trust without allowing any deduction u/s 57 of Rs.3,79,401 towards expenditure incurred for the objects of the trust and hence, a liberal view to avoid miscarriage of justice ought to have been taken while considering the question of condonation of delay. 7. The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal.” 6. Ld. Counsel for the assesssee made detailed submissions explaining to delay in filing of appeal before ld.CIT(A) by making reference to the chronology of events, explaining the facts and the merits of the case along with case laws relied upon, he prayed for condoning the delay of 2115 days before ld.CIT(A) and restoring the issue on merits to the file of ld.CIT(A) for necessary adjudication. In support of delay, Ld. Counsel for the assessee submitted that it was not intentional delay and assessee would not have gained anything from delay in filing the appeal. To buttress this contention, he placed reliance on the following decisions : “1. Inder Singh vs. State of Madhya Pradesh (2025 Live Law (Supreme Court) 339 dated 21.03.2025 2. Venkatadri Traders Ltd. Vs. CIT (2001) 248 ITR 681 (Mad HC). 3. Vijay Vishin Meghani vs. DCIT (2017) 398 ITR 250 (Bom HC) 4. M.K. Hotels and Resorts Ltd. Vs. ACIT - ITA No.57/Asr/2021 order dated 01.03.2023.” ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 6 7. Further, Ld. Counsel for the assessee also submitted that even though the ld.CIT(A) has not passed a speaking order dealing with merits of the case, however, it has been consistently held by Hon’ble Courts that gross receipts cannot be taxed and the claim of expenditure should be allowed and for this purposes, he placed reliance on the judgment of Hon’ble Delhi High Court in the case of DDIT Vs. Petroleum Sports Promotion Board reported in 362 ITR 235 (Delhi HC) and the decision of Coordinate Bench, Hyderabad in the case of Sri Ramalingeswara Swamy Temple Vs. ADIT (Exemptions) reported in (2024) 159 taxmann.com 449 (Hyderabad Trib.). 8. Ld. Departmental Representative vehemently argued supporting the orders of the lowers authorities. 9. We have heard the rival submissions and perused the record placed before us. We note that assesseee filed the original return on 08.01.2016 which was initially found to be invalid by the CPC. Assessee furnished another return on 20.03.2017 which was belated but was a valid return. However, CPC rather than processing the valid return filed on 20.03.2017 has processed the previous return filed on 08.01.2016. Even the processing order of this return was not available on the income-tax portal. Copy of the screenshot is placed on page 8 of the paper book. Assessee was also unaware about passing of such intimation order u/s.143(1) of the Act. It is also noticed that after the filing of the return on 08.01.2016 Fatimabai Hajimiya Kokani, main trustee expired on 16.08.2016 and subsequent to that the valid return was filed on 20.03.2017. Since the order of processing of the ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 7 defective return was not appearing on income-tax portal assessee had no information about passing of the same. However, assessee trust has been filing the returns regularly for the subsequent years and also claimed the refund, the same was being adjusted against the demand for A.Y. 2015- 16. Affidavit in support of the same has also been placed on record. When the assessee’s refunds got adjusted against the refund due for A.Y. 2015-16 assessee requested ACIT, Circle- 1, Nashik to provide with a copy of intimation u/s.143(1) of the Act since it was not appearing on the income-tax portal. The details explaining these facts have been placed in the paper book running into 34 pages. At this juncture, assessee came to know that when the return for A.Y. 2015-16 was filed claiming refund, then how come the refund of the subsequent years are adjusted against the demand for A.Y. 2015-16. Based on this information assessee filed a letter dated 06.01.2023 before the ACIT, Circle-1, Nashik seeking copy of intimation order u/s.143(1) of the Act and after receiving the letter, ld. AO through its e-mail dated 21.02.2023 supplied the copy of intimation order u/s.143(1) to the assessee and immediately thereafter appeal before the ld.CIT(A) has been filed. 10. As regards the condonation of delay, we have gone through the order of this Tribunal in the case of M.K. Hotels and Resorts Ltd.(supra). Hon’ble Tribunal after considering the judgments of Hon’ble Supreme Court in the case of Senior Bhosale Estate (HUF) vs. ACIT reported in (2019) 112 taxmann.com 134 (SC), Shakuntala Devi Jain vs. Kuntal Kumari and others reported in AIR 1969 SC 575 and in the State of West Bengal Vs. Administrator reported in 1972 AIR ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 8 749, condoned the delay of 9 years and remitted the matter to the file of ld.CIT(A) to decide on merits as the ld.CIT(A) had dismissed the appeal in limine. While condoning the delay, Hon’ble Tribunal held that Revenue authorities failed to submit proof for any other mode of service of Intimation to the assessee. For the sake of brevity, we would like to reproduce the finding of Hon’ble Tribunal and the same reads as follows : “6. We heard the rival submission and relied on the documents available in the record. In fact, there is a delay of 9 years is a huge delay for adjudicating the appeal by the Id. CIT(A). But the assessee also submitted the \"reasonable cause\" for filing the appeal in delay. In fact, the revenue also not able to submit proof for any other mode of service of intimation to the assessee. However, through the E-mail there is huge confusion in relation to the service of intimation u/s 143(1) of the assessee. The assessee submitted the condonation of delay with an affidavit and also the Id. counsel respectfully relied on the order of Hon'ble Apex Court which are reproduced as below: Hon'ble Supreme Court in the case of Senior Bhosale Estate (HUF) v. ACIT [2019] 112 taxmann.com 134 (SC): Assessment Year: 2010-11 \"Held that where revenue did not expressly refute stand taken by assessee that they had no knowledge about passing of order of Tribunal, dated 29-12-2003, until June, 2008, assessee's delay of 1754 days in filing appeal before Bombay High Court against Tribunal order was to be condoned. The brief facts of the case were that assessee sought condonation of delay of 1754 days in filing appeals against order, dated 29-12-2003, passed by Tribunal. The assessee pleaded that it had no knowledge about passing of Tribunal's order, until it was confronted with auction notices in June, 2008, issued by competent authority, immediately upon which, assessee filed appeal with High Court. The High Court dismissed assessee's appeals holding that these were not fit cases in which inordinate delay of 1754 days in filing appeals deserved to be condoned. However, it was found that respondent revenue did not expressly refute stand taken by assessee that they had no knowledge about passing of order, dated 29-12-2003, until June, 2008. The Supreme Court held that unless that fact was to be refuted by the Revenue, question of disbelieving stand taken by assessee on affidavit, could not arise and for which reason, High Court should have shown sympathy to assessee by condoning delay in filing concerned appeal(s).\" ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 9 Hon'ble Supreme Court in the case of Shakuntala Devi Jain vs Kuntal Kumari And Ors. AIR 1969 SC 575, 1969 SCR 1006 \"We are inclined to accept the statement that she was under the bona fide impression that the certified copy was not ready, and that is why it was not supplied to her by the copying department. It is not a case where it is possible to impute to the appellant want of bona fides or such inaction or negligence as would deprive her of the protection of Section 5 of the Limitation Act. We are therefore inclined to allow her application under Section 5 and to condone the delay in re- filing the appeal with a certified copy of the order.\" Hon'ble Supreme Court in the case of State of West Bengal V Adm.1972 AIR 749 \"It is not possible to lay down precisely as to what facts or matters would constitute 'sufficient cause' under s. 5 of the Limitation Act. But those words should be liberally construed so as to advance substantial justice when no negligence or any inaction or want of bona fides is imputable to a party; that is, the delay in filing an appeal should not have been for reasons which indicate the party's negligence in not taking necessary steps which he could have or should have taken.\" 6.1 We find that the assessee has a sufficient cause for non- submission of the appeal within due time. The merit was also not considered in appeal stage as it is decided in limine. Therefore, we remit back the issue to the Id. CIT(A) and direct to pass the order on merits, denovo. Needless to say, the assessee should get a reasonable opportunity of hearing in set-aside proceeding.” 11. From going through the above order, we find that facts of the above case are identical and all these chronology of events of the instant case clearly indicate that the delay was not intentional and there were certain technical glitches on the income-tax portal. On one hand the original return filed by the assessee has been treated as defective and on the other hand CPC still processed the defective return filed on 08.01.2016 vide order dated 27.03.2017 eventhough the assessee has filed another valid return on 20.03.2017 and there being no information about processing of the return by CPC on income-tax portal. In the assessee’s case before us, intimation u/s.143(1) of the Act passed on 27.03.2017 and ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 10 Revenue authorities have failed to demonstrate that the said intimation order is served on the assessee. 12. Albeit we concur with the arguments putforth by the ld. Counsel for the assessee and the fact remains that in the past assessee has filed adjournment applications stating that it wants to opt to Vivad Se Vishwas Scheme but later on assessee has not opted for Vivad Se Vishwas Scheme. It is the prayer of the Ld. Counsel for the assessee that the issue on merits be remitted to the file of ld.CIT(A). Further, it is also a fact emanating from the impugned order that ld.CIT(A) has not dealt with merits of the case and the appeal was dismissed on account of delay in filing of the appeal by 2115 days. On the first look, the delay of 2115 seems to be large but when during the course of hearing before us Ld. Counsel for the assessee has explained each and every aspect which led to the inordinate delay along with submissions and documentary evidence. We therefore condone the delay in filing of appeal before ld.CIT(A). We also observe that in such type of cases costs are imposed on the assessee, however, in the instant case, assessee is a private charitable trust and is providing medical relief to the poor, therefore, we are not inclined to impose any costs on the assessee. 13. Considering the peculiar facts and circumstance of the case and in the larger interest of justice, we deem it proper to restore the issues on merits to the file of ld.CIT(A) for necessary adjudication. Assessee is directed to provide latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take unnecessary adjournment unless ITA No.2373/PUN/2024 Fatimabai Hajimiya Kokani Pvt. Trust 11 otherwise required for reasonable cause. Impugned order is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes. 14. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 15th day of May, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 15th May, 2025. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "
Other Referred Cases
Inder Singh Vs. State of Madhya Pradesh, Venkatadri Traders Ltd. Vs. CIT, Vijay Vishin Meghani vs. DCIT, M.K. Hotels and Resorts Ltd. Vs. ACIT, Senior Bhosale Estate (HUF) vs. ACIT, Shakuntala Devi Jain vs. Kuntal Kumari, State of West Bengal Vs. Administrator, DDIT Vs. Petroleum Sports Promotion Board, Sri Ramalingeswara Swamy Temple Vs. ADIT (Exemptions)
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