Bombay High Court Says ITAT Took 'Pedantic Approach', Condones 1,797-Day Delay in Income Tax Appeals

The Bombay High Court has set aside an Income Tax Appellate Tribunal (ITAT) order refusing to condone a 1,797-day delay in appeals filed by Uttar Bhartiya Education Society.

Holding that the trust's explanation for the delay deserved due consideration, the court condoned the delay and restored the appeals for a decision on merits.

A division bench of Justice G.S. Kulkarni and Justice Aarti Sathe held that the tribunal had adopted a "pedantic approach" while rejecting the charitable trust's plea for condonation of delay. It found that the trust had explained the reasons for the delay before both the Commissioner of Income Tax (Appeals) and the ITAT.

The court observed, "In the facts of the present case, we are of the considered view that the ITAT, by the impugned order dated 30th January 2026, has adopted a pedantic approach. The record indicates that the Appellant–Assessee had explained the reasons for the delay before both the CIT(A), NFAC as well as the ITAT. In our considered opinion, such reasons assigned for the delay deserved due consideration in the facts and circumstances of the present case. We are, therefore, in agreement with the submissions advanced by the learned counsel appearing on behalf of the Appellant–Assessee that the delay in filing the appeals deserve to be condoned and the matter ought to be heard and decided on its own merits."

Uttar Bhartiya Education Society is a public charitable trust that runs government-aided schools and a junior college. It claimed exemption as a 100% government-aided educational institution under Section 10(23C)(iiiab) of the Income Tax Act.

According to the trust, its Chartered Accountant inadvertently claimed exemption under Section 11 instead of Section 10(23C)(iiiab) while filing its income tax return. As a result, the required Form 10B was not furnished. The exemption was denied while processing the return, resulting in a tax demand of ₹82.19 lakh.

The trust filed appeals before the Commissioner of Income Tax (Appeals) after a delay of 1,797 days. It contended that the effective delay would reduce to 987 days after excluding the period covered by the Supreme Court's COVID-19 limitation orders. The Commissioner refused to condone the delay, holding that no sufficient cause had been shown. The ITAT upheld that decision.

Before the High Court, the trust argued that the delay was bona fide and arose from an inadvertent error by its Chartered Accountant. It also contended that the tribunal had failed to adopt the correct approach while considering its application for condonation of delay. According to the trust, this deprived it of an opportunity to establish its entitlement to the exemption on merits. The Revenue maintained that the delay remained unexplained and that the tribunal had rightly declined to condone it.

Relying on the Supreme Court's decision in Inder Singh v. State of Madhya Pradesh, the High Court held that the tribunal ought to have given due consideration to the the trust's explanation. 

The High Court quashed the ITAT's order, condoned the delay, and restored the appeals to the Commissioner of Income Tax (Appeals) for adjudication on their merits.

For Appellant (Assessee): Pankaj Toprani, along with Mrs. Krupa Jinit Shah.

For Respondents (Revenue): Prathmesh Bhosle.