Substantial Justice Prevails over Technicalities: ITAT Condones 133-Day Delay for Apollo Education Trust [Read Order]

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a 133-day delay in filing appeals Apollo Education Trust, emphasizing that substantial justice should prevail over technicalities  and remitted the case back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication.

Apollo Education Trust,the appellant-assessee,was a Public Charitable Trust registered under Section 12A of the Income Tax Act, 1961, operating an educational institution for over two decades.

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The case of the assessee began due to the belief that income had escaped assessment, leading to a notice under Section 148 issued on 30.03.2021. The assessee responded to subsequent notices. The assessing officer concluded the assessment on 22.03.2022, making additions of Rs. 1,29,94,308 for advance fees received and Rs. 16,12,390 for unexplained credits under Section 68 of the act.

The assessee, aggrieved by the assessing officer's order under Section 147 read with Section 144, filed an appeal before the CIT(A) on 01.09.2022, with a 133-day delay. Reasons for the delay were submitted on 19.04.2024. The CIT(A)dismissed the appeals on 24.04.2024, not condoning the delay and failing to address the issues on merit. The assessee then filed appeals before the tribunal.

The assessee's counsel submitted that a professional consultant failed to inform the assessee about the assessment order due to miscommunication. After receiving a penalty notice on 25.08.2022, the assessee discovered that the appeal had not been filed in time. A new professional was hired, and the appeal was filed on 01.09.2022, with a 133-day delay.

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The counsel of the assessee argued that the delay was due to a reasonable cause and not intentional. The Commissioner dismissed the appeal without considering the reasons. The assessee requested the Tribunal to condone the delay and hear the appeals  on its merits.

The tribunal reviewed the submissions and noted that the representative argued the assessee had no malafide intention in filing the appeals late. Under Section 253(5) of the Act, the Tribunal could admit appeals beyond the limitation period if sufficient cause was shown.

The bench reviewed the reasons provided by the assessee for the delayed appeals. It referenced the Supreme Court's judgment in Concord of India Insurance Company Ltd. v. Smt. Nirmala Devi, which stated that “the mistake of the counsel may in certain circumstances be taken into account in condoning the delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground”.

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The tribunal emphasized that when substantial justice and technical considerations conflict, substantial justice should prevail. The Revenue did not file a counter-affidavit denying the allegations made by the assessee, nor did they claim that the appeal was deliberately not filed.

Therefore, the appellate tribunal decided to condone the 133-day delay. It referenced the case of People Education & Economic Development Society, reinforcing that substantial justice should take precedence over technicalities. The Madras High Court in CIT v. K.S.P. Shanmugavel Nadai also supported this view, stating that reasonable causes for delay should be considered without rigid rules.

The Madras High Court in the Sreenivas Charitable Trust case ( 280 ITR 357 ) held that courts should adopt a pragmatic approach in condoning delays, focusing on advancing substantial justice, and interpreting "sufficient cause" with a liberal perspective.

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The two-member bench comprising Keshav Dubey ( Judicial Member ) and Laxmi Prasad Sahu ( Accountant Member ) condoned the 133-day delay in filing the appeals and remitted the case to the CIT(A) for a fresh decision, resulting in all appeals being partly allowed.

To Read the full text of the Order CLICK HERE

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