ITAT Restores Education College’s Tax Appeals, Says Technical Delays Should Not Defeat Substantial Justice : Ahmedabad ITAT Condones 388-Day Delay, Directs CIT(A) to Hear Appeals on Merits

June 22, 2026 : In a significant ruling reinforcing the principle that procedural technicalities should not override substantive justice, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has set aside orders of the Commissioner of Income Tax (Appeals) [CIT(A)] that had dismissed two income tax appeals of Shree Nathubhai Sa Vjibhai Desai College of Education, Gujarat, solely on the ground of limitation. The Tribunal condoned delays of 388 days for Assessment Year 2018-19 and 18 days for Assessment Year 2019-20, directing the appellate authority to decide both appeals on their merits after providing the assessee a fair opportunity of hearing.

The order was delivered by the Ahmedabad Bench comprising Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary while deciding ITA Nos. 523/AHD/2026 and 798/AHD/2026 concerning Assessment Years 2018-19 and 2019-20. The Tribunal pronounced its judgment on 22 June 2026 after hearing the parties on 9 June 2026.

The dispute arose after the National Faceless Appeal Centre (NFAC), acting as the CIT(A), dismissed the college’s appeals against reassessment orders passed under Sections 147, 144 and 144B of the Income Tax Act, 1961 for AY 2018-19 and under Sections 147 and 144 for AY 2019-20. The appellate authority held that the appeals were filed beyond the prescribed limitation period and declined to entertain them.

Before the Tribunal, the educational institution argued that the CIT(A) had committed a factual and legal error by observing that no application for condonation of delay had been filed. According to the assessee, applications seeking condonation of delay as well as applications for admission of additional evidence under Rule 46A of the Income Tax Rules had in fact been submitted. The assessee explained that due to inadequate legal advice from its previous tax consultant, lack of access to the income tax e-filing portal, and delayed knowledge of the assessment order, it could not file the appeals within time.

The college further contended that it was under the bona fide belief that the disputed income had already been accounted for and offered to tax by Kheralu Taluka Uttar Vibhag Kelavani Mandal (Kheralu Trust). Since the Revenue had accepted taxation of that income in the trust’s hands, the institution argued that the additions made in its own assessment amounted to double taxation. The assessee also relied upon the Gujarat High Court decision in Sardar Vallabhbhai Patel Education Society v. Income Tax Officer, reported in 446 ITR 278, to support its case on merits.

The Income Tax Department opposed the appeals and supported the orders of the CIT(A). It argued that the assessee had remained non-compliant during assessment proceedings and had itself indicated in the memorandum of appeal that there was no delay in filing the appeal. The Department maintained that the assessment additions were based on the material available on record.

After examining the record, the Tribunal found that the appellate authority had overlooked the applications seeking condonation of delay and admission of additional evidence. It observed that the affidavit supporting the delay condonation request had been executed well before the appeals were dismissed and that the assessee had offered a reasonable explanation for the delay. The Tribunal accepted that the previous tax consultant had neither properly represented the assessee before the Assessing Officer nor kept it informed about the assessment proceedings, resulting in delayed knowledge of the assessment order and subsequent delay in filing appeals.

Relying upon the landmark Supreme Court judgment in Collector, Land Acquisition v. Mst. Katiji & Others (AIR 1987 SC 1353), the Tribunal reiterated that courts should adopt a liberal approach while considering applications for condonation of delay. Quoting the principle laid down by the Supreme Court, the Bench emphasized that “substantial justice should prevail over technical considerations” and that refusing to condone delay may prevent a deserving litigant from obtaining adjudication on merits.

The Tribunal observed that the CIT(A) proceeded on an incorrect assumption that no condonation application had been filed and dismissed the appeals without confronting the assessee regarding the alleged defect. It held that the delay was sufficiently explained and that no advantage could have accrued to the assessee by filing the appeals belatedly. Consequently, the Tribunal condoned the delays, set aside both appellate orders, and restored the matters to the CIT(A) for fresh adjudication. It also directed the assessee to provide correct email and postal addresses and to monitor proceedings through the Income Tax Business Application (ITBA) Portal.

Importantly, the Tribunal clarified that it had not expressed any opinion on the merits of the tax additions or the allegation of double taxation. Instead, it left all factual and legal issues open for consideration by the CIT(A), who must now decide the appeals afresh after granting the assessee a reasonable opportunity of hearing and considering the additional evidence filed under Rule 46A.

The ruling carries wider significance for taxpayers facing delayed appeals, particularly in cases involving technical glitches, inadequate professional advice, or procedural lapses. It reinforces the judicial approach that appellate authorities should examine whether a genuine cause exists for delay rather than rejecting appeals solely on technical grounds. The decision also serves as a reminder that natural justice requires litigants to be given a fair opportunity before their statutory right of appeal is denied.

Case Reference: Shree Nathubhai Sa Vjibhai Desai College of Education v. Income Tax Officer, Ward-1