The court emphasized a liberal approach to applications for condonation of delay, permitting an appeal despite procedural delays in submitting required documentation.

आदशे /ORDER

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 20.07.2022, for assessment year 2020-21.

2. This appeal is time barred by 788 days. The assessee has filed an affidavit citing reasons for delay in filing of appeal. The relevant extract of the affidavit giving reasons causing delay in filing of appeal are reproduced herein below:-

“1. The Appellant Trust had filed the Return of Income for the above year on 30.09.2020, declaring Total income at Rs. Nil. The assessment for the above year was completed as per Intimation/Order under Section 143 (1) of the Act dated 30.11.2021 and income was assessed at Rs. 10,47,069/-, resulting into demand of Rs. 1,59,140/- The Appellant filed an appeal against the said Intimation Order.

2. The Appellant Trust is regularly assessed to tax in the status of A.O.P./Charitable Trust and has regularly filed Form No.10B whenever required and the Return of Income in ITR - 7 in earlier years, as also in subsequent years, within prescribed time without any default. Statement giving details of the Return of Income for last three preceding Assessment Years and subsequent Assessment Year is enclosed and marked as Annexure "1".

3.(i) The Appellant Trust had not filed the Form 10B in respect of the above year as the total income of the Trust (Rs. 47,069/-) without giving the effect to the provisions of Section 11 and Section 12 of the Act, did not exceed the basic exemption limit not chargeable to income-tax as explained herein after.

(ii) During the Financial Year ended 31% March, 2020, the Appellant Trust had earned Interest Income of Rs. 47,069/- and had applied the same to the charitable objects of the Trust by granting donations for charitable activities at Rs. 45,000/-. The Appellant Trust had also received a sum of Rs. 10,00,000/- as donation towards the Corpus of the Trust, as per the specific direction of the concerned Doner, (Letter enclosed as Annexure "2"). Considering the said donation as a capital receipt, the Appellant had Total Income of Rs.47,069/ - only which is below the exemption limit even without considering the provisions of Section 11 of the Act. Accordingly, the provisions of Section 12A(b) read with Rule 17B were considered to be not applicable and the Audit Report under Section 12A(b) i.e. Form No. 10B was not obtained and was not furnished though the accounts of the Appellant Trust were duly audited by a firm of practicing Chartered Accountants.

4. The CPC has resorted to denial of benefits of Section 11 of the Act without affording any opportunity of being heard to the Appellant. No show cause notice or a communication under Section 143 (1)(a) of the Act was issued nor any explanation was sought from the Appellant. The Commissioner of Income Tax (Appeals) - NFAC, dismissed the appeal of the Appellant vide Appellate Order dated 20th July, 2022.

5. The CBDT has subsequently issued a Circular No. 16/2022 requiring assessees to approach the CIT(Exemption)/PCIT (Exemption) for condonation of delay in filing the Audit Report in Form No. 10-B. Accordingly, the Appellant had filed a Petition for Condonation of Delay on 13/07/2022 Subsequently, in response to the application for Condonation of Delay filed by the Appellant, a letter asking for details and documentary evidences was received from the CIT (Exemptions) on 3r August, 2022. The response to the letter was furnised by the Appellant on 16t August, 2022. However, since the submission of the said response, no further communication has been received by the Appellant till date.

6. It may kindly be