NFAC Failed to Obey Supreme Court Order while Dismissing Charitable Trust’s Appeal: Patna HC Imposes ₹10k Cost on Income Tax Department [Read Order]
Patna High Court set aside NFAC’s dismissal of a charitable trust’s tax appeal for ignoring Supreme Court and High Court directions on limitation, terming it gross negligence and imposing ₹10,000 cost on the Income Tax Department.
![NFAC Failed to Obey Supreme Court Order while Dismissing Charitable Trust’s Appeal: Patna HC Imposes ₹10k Cost on Income Tax Department [Read Order]](https://images.taxscan.in/h-upload/2025/07/08/2061356-failed-nfac-supreme-court-charitable-trust-appeal-taxscan.webp "NFAC Failed to Obey Supreme Court Order while Dismissing Charitable Trust’s Appeal: Patna HC Imposes ₹10k Cost on Income Tax Department [Read Order]")
The Patna HighCourt has set aside the dismissal of an income tax appeal after finding that the National Faceless Appeal Centre (NFAC) had completely ignored the judgments of the Supreme Court and the High Court regarding the limitation period for filing the appeal. The Court also imposed a cost of ₹10,000 on the Income Tax Department for “gross negligence”. Tax Planning For...
The Patna HighCourt has set aside the dismissal of an income tax appeal after finding that the National Faceless Appeal Centre (NFAC) had completely ignored the judgments of the Supreme Court and the High Court regarding the limitation period for filing the appeal. The Court also imposed a cost of ₹10,000 on the Income Tax Department for “gross negligence”.
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Happy Science Bodhgaya India is the petitioner, a registered charitable trust, who had filed their return for Assessment Year 2016–17 claiming exemption from tax.
However, after scrutiny under Section 143(2) of the Income Tax Act, 1961, the Assessing Officer raised a demand of ₹45,43,423. The trust challenged the assessment in CWJC No. 1778 of 2019, during which the High Court directed that if an appeal was filed within four weeks along with a petition for condonation of delay, the Appellate Authority should consider it on merits.
When the petitioner later approached the Supreme Court, the apex court upheld the High Court’s ruling but extended the time to file the appeal by another four weeks. The trust filed its appeal along with a limitation petition, which was within the time allowed.
Despite this, the NFAC later dismissed the appeal in limine, citing a delay of 137 days and stating that no petition for condonation of delay had been filed.
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The High Court bench consisting of Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey, in an oral judgement, held that the contention of the department was factually incorrect. The petitioner had filed its limitation plea, referencing both the High Court and Supreme Court orders. The dismissal order was passed without referring to or examining these binding directions.
The Court reiterated the conduct of the department that the act resulted in a gross case of dereliction in duty by the Appellate Authority, which has caused immense hardship to the petitioner by compelling him to once again approach this Court by way of a writ petition.
The Court directed the Commissioner of Income Tax (Appeals) to reconsider the appeal in light of the Supreme Court and High Court judgments, and to provide the petitioner an opportunity for a physical hearing.
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Additionally, the Court imposed a cost of ₹10,000 on the Department, to be paid within four weeks, leaving it open to recover the amount from the erring officer.
The petitioner was represented by Krishna Mohan Mishra along with Ashok Kumar and Prasoon Kumar, while Archana Sinha @ Archana Shahi, along with Alok Kumar and Richa Rajeev, represented the respondent
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