ITAT Condones Delay in Trust’s Appeal, Blames Missed Email for Deadline Lapse

The Income Tax Appellate Tribunal (ITAT), Surat Bench, recently delivered an important judgment that underscores the importance of communication vigilance in tax proceedings. The tribunal condoned a 52-day delay in filing an appeal by a charitable trust after finding that the lapse occurred due to the trustee’s failure to regularly check the official email and the Income Tax Business Application (ITBA) portal.

This decision emphasizes that justice should not be denied due to technical delays, especially when there is no deliberate intent to evade or ignore the legal process.

Background of the Case

The case involved Shah Manilal Motilal Khadayta Chhatralay and Bhuvan Mandal Gurjar Faliya, a trust whose registration application under Section 12A(1)(ac)(iii) of the Income-tax Act was rejected by the Commissioner of Income Tax (Exemption), Ahmedabad [CIT(E)] on June 27, 2024.

The rejection occurred because the trust failed to respond to two consecutive notices issued by the CIT(E), leading to an ex-parte order—a decision made in the absence of the trust’s representation.

Trust’s Argument Before ITAT

During the appeal, the trust’s authorized representative clarified that the managing trustee was unaware of the rejection order until October 2024, when their chartered accountant checked the ITBA portal. It was only then they realized their application had already been dismissed.

The appeal was promptly filed on October 18, 2024, resulting in a 52-day delay beyond the statutory deadline.

The trust argued that the delay was neither intentional nor negligent, and requested condonation, emphasizing that it had a strong case on merits. The representative assured the tribunal that the trust was ready to cooperate fully and submit all necessary documents if another opportunity was granted.

Revenue’s Response

The CIT–Departmental Representative (CIT-DR) supported the original order but did not oppose the matter being sent back to the CIT(E) for reconsideration. On the question of delay, the representative deferred to the tribunal’s discretion, acknowledging that the trust should be given a fair chance if justice demanded it.

Tribunal’s Observations

After hearing both sides, the ITAT Bench, comprising Pawan Singh (Judicial Member) and Bijayananda Pruseth (Accountant Member), concluded that the delay was not deliberate.

The tribunal stressed the principle of natural justice, which requires that every affected party be given a fair opportunity to present its case. The bench noted that the CIT(E) had decided the matter without the trust’s participation, and such ex-parte decisions could be reconsidered when reasonable cause for non-compliance is shown.

Consequently, the tribunal condoned the delay and set aside the CIT(E)’s order, restoring the trust’s registration application for a fresh hearing.

ITAT’s Final Directions

While granting relief, the ITAT also issued a cautionary note to the trust. It advised the trustees to remain vigilant, regularly monitor official communications, and avoid unnecessary adjournments in the future.

The bench reiterated that administrative convenience cannot override justice, and procedural lapses should not prevent a genuine taxpayer or charitable entity from being heard.

Conclusion

This ruling by the ITAT Surat Bench sends a clear message — technical delays or missed communications should not stand in the way of justice, provided there is no deliberate default.

Charitable organizations and trusts must, however, ensure that their official emails and ITBA portals are monitored regularly to avoid similar issues.

By condoning the delay and remanding the case for a fresh hearing, the tribunal reaffirmed the judiciary’s commitment to fairness and the principle of natural justice — that every party deserves an equal opportunity to be heard.