ITAT Ahmedabad Condones 388-Day Delay In Appeal, Cites Poor Advice From Tax Consultant

The Income Tax Appellate Tribunal (ITAT) at Ahmedabad has recently condoned a 388-day delay in filing an appeal by an educational institution.

The tribunal found that the delay was caused by inadequate legal advice from its previous tax consultant and a bona fide belief that no further compliance was required.

A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary set aside orders of the Commissioner of Income Tax (Appeals) passed through the National Faceless Appeal Centre (NFAC).

The appellate authority had dismissed the appeals of Shree Nathubhai Sa Vjibhai Desai College of Education for Assessment Years 2018-19 and 2019-20 as time-barred. The tribunal directed the appellate authority to decide the appeals on merits.

Holding that the delay deserved to be condoned, the tribunal observed,

"We hold that in the present case Assessee was prevented by reasonable cause from filing appeal before the Learned CIT(A) within the prescribed time."

The institution challenged the dismissal of its appeals, contending that it had filed an application seeking condonation of delay. It argued that its previous tax consultant failed to properly represent it during the assessment proceedings and did not keep it informed about developments in the case.

Recording the explanation furnished by the institution, the tribunal noted,

"The previous tax consultant engaged by the Assessee neither made proper representation before the Assessing Officer nor kept the Assessee informed about the assessment proceedings."

The institution also submitted that it was under a bona fide belief that no further compliance was necessary because the relevant receipts had already been accounted for and offered to tax by Kheralu Trust. It further cited difficulties in obtaining access to the e-filing portal.

After examining the record, the tribunal found that the appellate authority had proceeded on an incorrect understanding that no application seeking condonation of delay had been filed. It noted that the affidavit supporting the condonation request had been executed well before the appeal was dismissed.

The tribunal also observed that the Department could not controvert the fact that the appellate authority had dismissed the appeal on the mistaken assumption that no condonation application had been filed.

Referring to the Supreme Court's decision in Collector of Land Acquisition v. Mst. Katiji, the tribunal reiterated that substantial justice should prevail over technical considerations.

The tribunal observed, "When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred."

Holding that the explanation furnished by the institution constituted reasonable cause, the tribunal condoned the 388-day delay for AY 2018-19 and the 18-day delay for AY 2019-20.

It restored both matters to the Commissioner of Income Tax (Appeals) for fresh adjudication. The tribunal directed that the institution be given a reasonable opportunity for hearing.

The tribunal clarified that it had not expressed any view on the merits of the dispute. It further clarified that all rights and contentions of the institution remain open.