The Bombay High Court, in Uttar Bhartiya Education Society v. Principal Commissioner of Income Tax (Exemption) & Others, considered whether a substantial delay in filing statutory appeals before the Commissioner of Income Tax (Appeals) could be condoned where the assessee was a charitable educational institution claiming that the delay arose from bona fide mistakes and inadequate professional guidance.
The appeals concerned Assessment Years 2018–19 and 2019–20. The appellant was a public charitable trust registered under the Maharashtra Public Trusts Act, 1950 and the Societies Registration Act, 1860. It was also registered under Section 12A of the Income Tax Act, 1961 and operated Government-aided educational institutions.
For Assessment Year 2018–19, the trust filed its return declaring nil income. However, while processing the return under Section 143(1), the Income Tax Department assessed its income at approximately ₹1.88 crore and raised a tax demand of approximately ₹82.19 lakh. According to the trust, the exemption available under Section 10(23C)(iiiab) was not granted because the return had inadvertently claimed exemption under an incorrect statutory provision and the prescribed documentation was not furnished.
The appeal before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, was filed after a delay of 1,797 days. The assessee contended that, after excluding the period covered by the Supreme Court’s COVID-19 limitation extension orders, the effective delay was 987 days. The CIT(A) refused to condone the delay and dismissed the appeal as barred by limitation.
The Income Tax Appellate Tribunal affirmed the rejection of the appeal. It held that the assessee had not established sufficient cause for the prolonged delay and that explanations such as non-receipt of the intimation, lack of proper advice, the COVID-19 pandemic and the matter having slipped from the trustee’s attention did not justify condonation.
Income Tax: Condonation of Delay and Substantial Justice
The Bombay High Court held that the ITAT had adopted a pedantic approach while considering the request for condonation of delay. The Court observed that the assessee had placed reasons for the delay before the appellate authorities and that those reasons deserved proper consideration in the facts of the case.
The Court noted that the appellant was a non-profit educational institution and that its claim for exemption under Section 10(23C)(iiiab) had not been examined on merits. The refusal to condone the delay had the effect of preventing adjudication of the substantive claim solely on the ground of limitation.
Relying upon the Supreme Court’s decision in Inder Singh v. State of Madhya Pradesh, the High Court reiterated that although sufficient cause must exist for condonation of delay, a matter deserving examination on merits should not necessarily be defeated merely on a technical ground of limitation.
The Court emphasised that the exercise of discretion in delay matters depends upon the particular facts of each case. The passage of time alone is not decisive. The relevant consideration is whether the conduct reflects such negligence as would indicate abandonment of the claim, or whether rights of third parties have arisen during the intervening period.
ITAT Order Set Aside
The Bombay High Court quashed the ITAT order dated 30 January 2026 and allowed the substantial questions of law raised by the assessee. The delay in filing the appeals was condoned, and both appeals were restored to the file of the CIT(A) for adjudication on merits.
The Court did not decide whether the assessee was ultimately entitled to exemption under Section 10(23C)(iiiab). That issue was left open for determination by the first appellate authority after examining the facts, documents and applicable law.
Why Read This Judgment?
This judgment is relevant for Advocates, Chartered Accountants, Company Secretaries, Tax Consultants, corporate tax teams, charitable institutions and educational societies dealing with delayed statutory appeals. It explains that while limitation provisions remain important, appellate authorities must exercise discretion judiciously and avoid rejecting potentially meritorious claims through an excessively technical approach, particularly where the explanation for delay is bona fide and the substantive dispute has not been examined.