Condonation of delay granted for charitable trust due to internal mismanagement; ex-parte dismissal set aside for fresh adjudication ensuring natural justice.

ORDER

PER OM PRAKASH KANT, AM

These two appeals by the Assessee, a public charitable trust, are directed against the separate orders of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”], dated 09.12.2024 and 28.11.2024, for the Assessment Years (AY) 2010-11 and 2011-12, respectively. Since the appeals involve a common factual matrix and identical legal grievances, they were heard together and are being disposed of by this consolidated order.

2. At the threshold, we address the issue of delay in filing both the appeal, a delay of 307 days (AY 2011-12) and 273 days (AY 2010-11). The Assessee has moved an application for condonation of delay, supported by a detailed affidavit. The Assessee’s main explanation is an incident of internal mismanagement and a breach of fiduciary duty by the erstwhile management. The Assessee-Trust contends that the former Secretary and certain Trustees were embroiled in financial irregularities and failed to apprise the Board of the ongoing proceedings or the receipt of the impugned orders. It was only after a systemic overhaul—involving the removal of the erring officials and the appointment of a new Board—that the current management discovered the adverse orders during a forensic audit. The assessee has filed identical affidavit for both the years except change in number of days. For ready reference, the relevant part of the affidavit filed by the assessee in A.Y. 2011-12 is reproduced as under:

“3. I am filing the present Affidavit for the limited purpose of explaining and seeking condonation of delay of 307 days in filing the captioned Appeal before this Hon'ble Tribunal. The Appeal has been preferred against the order dated 28 November 2024 ('Impugned Order') passed by the Ld. CIT(A), National Faceless Appeal Centre ('Ld. CIT(A), NFAC'). The Impugned Order is challenged on various grounds, as set out in detail in the Appeal.

STATEMENT OF FACTS

4. The brief facts leading up to the filing of this Affidavit are set out as follows:

a. The Assessee is a public charitable trust and is registered under the Bombay Public Trust Act, 1950. The Assessee has been engaged in undertaking religious and charitable activities for numerous decades.

b. For the AY 2011-12, an assessment order dated 11 December 2018 (Assessment Order') was passed u/s 144 r.w.s 147 of the Income-tax Act, 1961 ('Act') making an addition of Rs. 1,61,01,000/- (Rupees one crore sixty-one lakhs and one thousand).

c. An appeal, in Form No. 35, was duly filed with the Ld. CIT(A), against T the Assessment Order, on 16 January 2019. Further to the same, notices AR for hearing in the CIT(A) Appeal were purportedly issued in and around March 2024 and October 2024. However, such notices were neither brought to the notice of the Trustees of the Assessee by the erstwhile Secretary, Mr. ShashankGulgule nor were the issues discussed in the meetings conducted by the board of the Assessee.

d. Owing to the conduct of the erstwhile Secretary, the Assessee remained unrepresented at the time of hearing and hence, could not effectively pursue and prosecute the appeal before the Ld. CIT(A), NFAC. Resultantly, the appeal was decided ex-parte by the Ld. CIT(A), NFAC against the Assessee and the Impugned Order was passed confirming the addition made in the Assessment Order.

e. Although the Impugned Order was passed towards the end of November 2024, since the official communications, correspondences and related affairs were being handled by the erstwhile Secretary, the Trustees of theAssessee were not informed and remained unaware of the Impugned Order.

f. During such period