Sacred Trust Registered Vs ITO (ITAT Bangalore)
Bangalore ITAT: CIT(A) Cannot Rely on Portal Delivery Report Without Giving Assessee an Opportunity to Respond
The assessee, a charitable trust running educational institutions, declared nil income after claiming exemption under section 10(23C)(iiiad). However, while processing the return under section 143(1), CPC denied the exemption and computed taxable income at ₹13,06,552.
The CIT(A) treated the appeal as delayed by 2,120 days, relying upon a system-generated report showing that the intimation had been electronically delivered through the Income-tax portal on 11 May 2018. The assessee contended that the delay was only six days based on the date on which it became aware of or received the intimation.
The ITAT observed that the assessee was not given an opportunity to examine and respond to the system-generated delivery report relied upon by the CIT(A). Reliance on such material without confronting the assessee violated the principles of natural justice.
Accordingly, the Tribunal set aside the appellate order and restored the matter to the CIT(A) for fresh consideration of the condonation petition. It specifically directed that no information or document should be relied upon without first granting the assessee a reasonable opportunity of hearing. The appeal was allowed for statistical purposes.
The substantive issue concerning exemption under section 10(23C)(iiiad) was not decided on merits. 3
List of Cases Discussed / Relied Upon
- Sacred Trust Registered Vs ITO (ITAT Bangalore)
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The assessee has filed the present appeal against the impugned order dated 17/02/2026, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Ahmedabad, [“learned Addl./Joint CIT(A)”], for the assessment year 2016-17.
2. The Assessee has raised the following grounds of appeal: –
1) Article 265 read with Article 14 of the Constitution: The order of the learned Assessing Officer, insofar as it is prejudicial to the appellant, is contrary to law, violative of constitutional safeguards, opposed to equity, weight of evidence, probabilities, and the facts and circumstances of the case, and is therefore liable to be quashed.
2) Article 265 read with Article 14 of the Constitution: The learned Assessing Officer erred in issuing the impugned Order in violation of the principles of natural justice, without providing adequate opportunity of being heard, rendering the same arbitrary, unsustainable in law, and liable to be set aside.
3) Section 250: Condonation of Delay: The learned Commissioner of Income-tax (Appeals) erred in dismissing the appeal on the ground of delay in filing Form No. 35, without appreciating that the delay was neither intentional nor deliberate but was occasioned by bona fide and unavoidable circumstances beyond the control of the appellant. The appellant respectfully submits that, in the interest of substantial justice, the delay deserves to be condoned and the appeal ought to have been admitted and decided on merits.
4) Section 10(23C)(iiiad): Exemption of Income to Educational Institutions: The learned Assessing Officer erred in law and on facts in denying exemption under Section 10(23C)(iiiad) of the Income – tax Act, 1961, solely on the ground of delay in filing the return of income, without appreciating that such procedural lapse does not disentitle the appellant from claiming a substantive statutory exemption, particularly when the prescribed conditions are otherwise duly satisfied.
5) Section 10(23C)(iiiad): Exemption of Income to Educational Institutions: The learned Assessing Officer erred in law and on facts in failing to appreciate that the Trust operates three distinct educational institutions, each eligible for separate consideration under the Act. The learned Assessing Officer incorrectly aggregated the gross receipts of all three institutions and subjected the same to tax, without examining the eligibility of each institution independently, thereby vitiating the assessment.
3. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is a charitable trust. For the year under consideration, the assessee filed its return of income on 13/11/2011, declaring a total income of INR Nil after claiming exemption under section 10 of the Act. The return filed by the assessee was processed vide intimation dated 30/04/2018 issued under section 143(1) of the Act, computing the net income of the assessee at INR 13,06,552 without giving effect to the exemption u/s 10(23C) (iiiad) of the Act.
4. The learned CIT(A), after noting that the assessee has filed the appeal against the intimation issued under section 143(1) of the Act after a delay of 5 years, 9 months, and 29 days, dismissed the appeal on the ground of inordinate delay. In further appeal, the Tribunal restored the matter to the file of the learned CIT(A) for fresh consideration and directed the learned CIT(A) to examine the condonation application in accordance with law. Pursuant to the directions of the Tribunal, the assessee was granted another opportunity by the learned Addl./Joint CIT(A) to substantiate the delay. The learned Addl./Joint CIT(A), after taking into consideration the system- generated delivery report, as noted on page 8 of the impugned order, held that the intimation was electronically delivered to the appellant on 11/05/2018 through the Income-tax Department’s portal. Accordingly, the learned Addl./Joint CIT(A) rejected the contention of the assessee that the appeal was required to be filed by 23/03/2024, and as the appeal was filed on 29/03/2024, the same has resulted in a delay of merely 6 days. Thus, the learned Addl./Joint CIT(A) dismissed the appeal filed by the assessee on account of the delay of 2120 days in filing the appeal.
5. Having perused the submissions and perused the material available on record, at the outset, we find that the assessee was not given an opportunity to respond to the system generated delivery report placed reliance upon by the learned Addl./Joint CIT(A), whereby it was held that the intimation issued under section 143(1) of the Act was delivered to the assessee on 11/05/2018 through the Income-tax Department’s portal. Thus, we are of the considered view that a proper opportunity of hearing was not granted to the assessee before coming to the conclusion that there is a delay of 2120 days in filing the appeal by the assessee before the learned CIT(A). The Principles of Natural Justice demand that a proper opportunity be granted to the assessee before placing reliance on any document or report for rejecting the claim of the assessee. Accordingly, in the interest of justice and fair play, we restore the matter to the file of the learned CIT(A) for de novo adjudication and reconsideration of the assessee’s request for condonation of delay in filing the appeal. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the assessee. Further, we direct that no information/document be relied upon without granting the assessee a proper opportunity of hearing. With the above directions, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes.
6. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 19-Aug-2026.
