Kabirpanthi Gadi Vs ITO (ITAT Ahmedabad)
Form 9A Was Late, but Justice Need Not Be: Ahmedabad ITAT Condoned 1,876-Day Delay & Revived ₹2.01-Crore Exemption Claim u/ss 11(1) & 249(3)
Summary:
Return & Form 9A Filed Belatedly
The assessee was a charitable trust. Its return for AY 2019-20 was filed belatedly u/s 139(4) on 23.06.2020. Form 9A, by which the trust exercised its option regarding deemed application of income under clause (2) of Explanation 1 to s.11(1), was also filed on the same date along with the return.
The assessee explained that the trustees were very old & that its accountant was also an elderly person suffering from health problems. The accountant was affected during the Covid period & was unable to complete the accounts, audit & return-filing work within the prescribed time.
The CPC processed the return & issued an intimation u/s 143(1) on 26.08.2020. It denied the trust’s exemption relating to deemed application of income solely because Form 9A had not been furnished within the due date prescribed u/s 139(1). This resulted in a substantial disallowance of ₹2,01,00,000.
Appeal Filed Nearly Five Years Later
The assessee challenged the intimation before the NFAC only on 14.11.2025. There was thus a delay of 1,876 days, or slightly more than five years, in filing the first appeal.
Along with the appeal, the assessee filed an affidavit seeking condonation of delay. It explained that the trustee was an old & uneducated person who was entirely dependent upon the accountant for preparation of accounts, completion of audit & filing of the return.
The regular accountant was himself elderly & suffered from serious health issues. He subsequently died due to ill-health. Following his death, the trustees were unaware that an adjustment had been made through the intimation u/s 143(1) or that an appeal was required to be filed against such adjustment. The trust came to know of the legal consequences only much later, when it contacted another tax advisor. Acting upon the new advisor’s guidance, the appeal was ultimately filed.
CIT(A) Refused to Condon the Delay
The Additional/Joint CIT(A), Pune, considered the application for condonation but held that the assessee had failed to establish sufficient cause for the delay of 1,876 days. He consequently refused to condone the delay.
Since the appeal itself was treated as barred by limitation, the CIT(A) did not examine the trust’s entitlement to exemption u/s 11 or the consequences of belated filing of Form 9A. The appeal was dismissed in limine, leaving the substantive disallowance of ₹2.01 crore untouched.
The assessee approached the Tribunal contending that the delay in filing Form 9A was only a procedural default & that a legitimate exemption could not be denied merely on that technical ground. It further contended that the delay in filing the appeal occurred due to the age, lack of education & dependence of the trustees upon their accountant, coupled with the disruption caused by Covid & the accountant’s subsequent death.
Technical Default Resulted in Denial of Entire Exemption
No one appeared for the assessee at the time of hearing before the Tribunal. An adjournment application was filed stating that the counsel engaged by the assessee was suffering from high fever & was unable to appear. Nevertheless, the Tribunal examined the material available on record, including the affidavit reproduced in the CIT(A)’s order.
The Tribunal noticed that the assessee’s entire exemption claim had been denied merely because Form 9A was filed after the due date. Significantly, Form 9A had been filed along with the belated return on 23.06.2020 & was, therefore, already available with the CPC when the intimation u/s 143(1) was issued on 26.08.2020.
Thus, it was not a case where the statutory option had never been exercised or where Form 9A was unavailable when the return was processed. The controversy arose only because the form had not been filed within the time specified u/s 139(1).
Delay Condoned—Merits Restored to the AO
Considering the nature of the claim & the circumstances surrounding the delay, the Tribunal accepted the assessee’s explanation. It found that the trust was prevented from filing the appeal largely because its trustees were unaware of the disallowance & because the regular accountant, upon whom they depended, had died.
The Tribunal also took note of the disproportionate consequence of the procedural breach—the complete denial of an exemption claim of ₹2.01 crore without examination on merits.
Accordingly, the delay was condoned & the matter was restored to the Jurisdictional AO for adjudicating the exemption claim on merits, in accordance with law & the available judicial precedents. The Tribunal did not itself decide whether the belated Form 9A must ultimately be accepted; it merely reopened the door for a proper merits-based adjudication.
The assessee’s appeal was therefore allowed for statistical purposes.
Author’s Comments
The decision reinforces the principle that rules of limitation are intended to ensure orderly administration of justice, not to permanently bury a substantial claim where a credible explanation exists. A delay of 1,876 days is undoubtedly enormous, but its length alone cannot be decisive; the real enquiry is whether the explanation is bona fide & whether refusal to condone would produce manifest injustice.
At the same time, the order grants the assessee only a second opportunity, not an automatic exemption. The trust must still establish before the AO that its claim u/s 11 is legally sustainable despite the delayed Form 9A. In short, the Tribunal removed the procedural lock—the assessee must now prove that the claim behind the door deserves admission.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, AHMEDABAD
1. The present appeal has been filed by the assessee against the order of the Ld. Addl/Joint Commissioner of Income Tax (Appeals)-2, Pune, (hereinafter referred to as “CIT(A)”), dated 27.03.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2019-20.
2. The assessee’s appeal was filed belatedly before the NFAC. The delay was of nearly five years as the intimation u/s. 143(1), which was under challenge, was passed on 26/08/2020 and the appeal was filed on 14/11/2025. The assessee had sought condonation of delay before the NFAC and filed an affidavit stating that the circumstances that led to the delay.
3. In the statement of facts filed before the NFAC, the assessee, a Charitable Trust, stated that the return for Asst. year 2019-20 was filed belatedly u/s. 139(4) on 23/06/2020 because the Trustee of the assessee Trust were very old and so was the Accountant who was also affected by Corona Virus and therefore unable to complete the audit of the trust in time. The assessee field its return of income and Form 9A on 23/06/2020, the intimation u/s. 143(1) was issued on 26/08/2020 disallowing the claim for exemption on account of deemed application of income for charitable purposes as per clause (2) of Explanation 1 to Section 11(1). The amount of disallowance was Rs.2,01,00,000/- and the only reason for the disallowance was that the Form No. 9A was furnished late.
4. In appeal, the Ld. ADDL/JCIT- (Appeals)-2, Pune discussed the issue of condonation of delay quite elaborately and held that the delay of 1876 days in filing of appeal was not condoned, as no sufficient cause was shown by the assessee. Since the delay was not condoned, the Ld. CIT(A) did not deal with the merits of the appeal and treated the appeal as dismissed in limine.
5. The assessee has preferred the present appeal against this order on the following two grounds:
1. The Learned CIT(A) has erred in not decide the appeal on merits, since the disallowance is only on technical reasons for not filing the Form No. 9A within time limit as provided u/s. 139(1), it is procedural delay and for that legitimate claim should not be denied.
2. The Learned CIT(A) has erred in dismiss our appeal on the ground of Delay in filing of appeal by not condoning the delay. He also erred in not appreciating the facts that the Trustee is aged and illiterate also corona period was there and hence the delay is happened.
6. At the time of hearing, no one appeared on behalf of the assessee. There is an application dated 24/08/2026 seeking adjournment on the ground that the Counsel engaged by the assessee was having high fever and unable to appear. The affidavit filed by the assessee seeking condonation of delay has been reproduced in the impugned order. The Trustee of the assessee has claimed to be an old and uneducated person who was dependent on the Accountant for the preparation of accounts, audit and filing of return. The said accountant was also an elderly person having health issues at the relevant time, which resulted in delay in finalization of accounts and filing of return. Subsequently, the said accountant died out of ill-health and as a result of his death, the Trustees had no information about intimation u/s. 143(1) and the need for filing an appeal. It was much later that the assessee contacted another advisor and based on his advice filed the appeal.
7. When seen in the context of the claim and its disallowance in the intimation u/s. 143(1), we notice that the assessee’s claim has been denied for a technical breach of filing Form 9A after the due date of filing of return. The said Form, however was filed along with the return and was available with the CPC on the date of the intimation u/s. 143(1) of the Act.
8. In this view of the matter, we are inclined to accept the assessee’s plea for condonation of delay on the ground that the claim for exemption has been disallowed in the entirety and the assessee was prevented from filing an appeal largely due to ignorance of the fact that the disallowance have been made, and the death of its regular Accountant. We are therefore inclined to restore the matter to the file of JAO for adjudication on merits of the claim in accordance with law and available judicial precedents.
9. In the result, the appeal of the Assessee is treated as allowed for statistical purpose.
This Order is pronounced on 31/08/2026
