Condonation of 536-Day Delay in Appeal Allowed for Trust Due to Clerk’s Error and Trustees’ Age/Lack of Tech Savvy

Condonation of 536-Day Delay in Appeal Allowed for Trust Due to Clerk’s Error and Trustees’ Age/Lack of Tech Savvy

Issue:

Whether a delay of 536 days in filing an appeal against an ex parte order rejecting registration under Section 12AB and exemption under Section 80G should be condoned, given that the delay was caused by a clerk’s failure to inform the trustees about the order, and considering the trust’s long history, genuine objects, regular filings, and the advanced age and lack of email familiarity of the trustees.

Facts:

The assessee-trust filed an appeal challenging an ex parte order issued by the Commissioner (Exemptions), which rejected its petition for registration under Section 12AB and exemption under Section 80G of the Income-tax Act, 1961. There was a significant delay of 536 days in filing this appeal. The assessee attributed the delay to a clerk-in-charge of the trust who had downloaded the Commissioner (Exemptions)’s order to the registered email address but failed to hand it over to the trustees. The delay was only discovered when the Board of Trustees inquired about the status of the trust’s registration, at which point the clerk admitted his inadvertent mistake of not informing them about the order.

Decision:

Yes, the delay in filing the appeal was condoned, and the file was remitted back to the Commissioner (Exemptions) to decide the issue of registration and exemption on merits. The decision was based on several factors: the trust being very old with genuine objects, regular filing of income tax returns, and the fact that the trustees were aged individuals not conversant with email communication.

Key Takeaways:

• Liberal Approach to Condonation of Delay: Courts generally adopt a liberal approach when considering applications for condonation of delay, especially when a genuine and reasonable cause for the delay is demonstrated.
• Circumstances Beyond Assessee’s Control: The inability of aged trustees to manage email communications effectively, coupled with a clerical error of an employee, was considered a sufficient cause for the delay, falling outside the direct control of the trust’s governing body.
• Merits of the Case: The fact that the trust was old, had genuine objects, and regularly filed returns indicated a prima facie case that deserved to be heard on its merits, rather than being dismissed on a procedural ground.
• Justice Over Technicality: This ruling underscores the principle of prioritizing substantial justice over strict adherence to technicalities, particularly when it prevents a party from presenting its case.
• Remand for Merits: When condonation of delay is granted, the matter is typically remanded back to the original authority for a decision on the substantive issues (in this case, registration and exemption) after providing a proper opportunity of hearing.