Bilimora Vibhag Anavil Mandal Vs Income Tax Department CIT (Exemption) (ITAT Surat)
The Surat Bench of the Income Tax Appellate Tribunal, Surat Bench allowed the appeals of Shree Bilimora Vibhag Anavil Mandal (a charitable trust) for AYs 2014-15 and 2015-16, condoned an extraordinary delay of 2974 days (about 8 years), and set aside the order of the CIT(A)/NFAC, restoring the matter for fresh adjudication on merits.
The appeals arose from intimations issued u/s 143(1) by CPC Bengaluru, wherein the CPC:
- disallowed ₹28.19 lakh of revenue expenditure incurred for objects of the trust,
- taxed the entire gross receipts @ 30% without allowing the basic exemption limit of ₹2.50 lakh,
- added corpus donations of ₹11.77 lakh as income, and
- denied carry forward/adjustment of earlier years’ deficit and capital expenditure, primarily on the ground that the trust was not registered u/s 12A for the relevant years.
The CIT(A) dismissed the appeals in limine, refusing to condone the delay on the reasoning that the intimation u/s 143(1) was received on the same day and that the assessee had not acted with due diligence. Consequently, no issues were examined on merits.
Before the Tribunal, the assessee explained that:
- it is a small charitable trust located in a semi-rural area,
- staff lacked technical awareness of e-mail/portal communications,
- the intimation u/s 143(1) was never received physically, and
- the issue came to light only upon receipt of a demand notice in 2024, after which the appeal was promptly filed.
The ITAT held that length of delay is irrelevant once sufficient cause is shown, and that courts must prefer substantial justice over technicalities. Relying extensively on Collector, Land Acquisition v. Mst. Katiji (SC) and CIT v. K.S.P. Shanmugavel Nadai (Madras HC), the Tribunal observed that even delays of 20 years have been condoned where bona fide reasons existed. The absence of any allegation of mala fides or deliberate delay also weighed with the Tribunal.
On merits (prima facie), the ITAT noted that:
