Baddi Barotiwala Nalagarh Development ... vs Assessee

Himachal Pradesh. The assessee stated that the aims and 2

objects fall under the definition of public charitable purpose.

The learned Commissioner of Income Tax considering the

material on record granted registration under section 12AA of

the Act to the assessee authority for assessment year 2008-09

only. However, for assessment year 2009-10 and subsequent

assessment years, the learned Commissioner of Income Tax

was of the view that the objects of the assessee authority

cannot be considered to be charitable purposes because of the

amendment in section 2(15) of the Act, which is effective from

assessment year 2009-10 onwards. The learned Commissioner

of Income Tax, therefore, held that for assessment year 2009-

10 and subsequent assessment years, the assessee does not

qualify for being considered as a charitable organization

hence, does not qualify for registration under section 12AA of

the Act.

3. The assessee being aggrieved against the impugned order

rejecting the registration application under section 12AA of

the Act from assessment year 2009-10 and subsequent

assessment years filed the present appeal before the Tribunal.

4. In Column No.9 of appeal papers in Form No.36, the

assessee has mentioned "17.11.2008" as the date of

communication of the order appealed against. However, the

appeal is filed in the office of the Tribunal on 17.10.2014.

Thus it was time barred by 2192 days (approximately six

years). The assessee filed an application for condonation of

delay. The learned counsel for assessee referring to the

application for condonation of delay in filing the appeal has 3

submitted that the assessments for assessment years 2010-11

and 2011-12 were concluded on 19.3.2013 and 31.1.2014

respectively. These assessment orders were assailed before

the appellate authority. Later on, when the applicant

brought the entire record for the purpose of filing the appeals

against the regular assessments came to know that vide

impugned order dated 17.11.2008 the application for

exemption has been partly allowed for assessment year 2008-

09 only and the order had not been assailed till date. It is

further stated that the assessee was acting under advice and

the assessee was informed that the cause of action for

challenging the impugned order would arise when the appeals

against the assessment orders were decided. The learned

counsel for assessee, therefore, submitted that the assessee

was under the bonafide belief for not filing the appeal before

the Tribunal. Therefore, the delay may be condoned.

5. On the other hand, the learned D.R for the Revenue

strongly objected to the condonation of delay in filing the

appeal before the Tribunal beyond the period of limitation and

submitted that the assessee has failed to explain the

sufficient cause for not filing the appeal within the period of

limitation. The learned D.R for the Revenue submitted that

when the assessee was aware of the fact that no registration

is granted to the assessee for the assessment year 2009-10

and subsequent assessment years, the orders should have

been challenged before the Tribunal during the period of

limitation. The registration order under section 12AA of the 4

Act has no connection with the passing of the regular

assessments. The learned D.R for the Revenue, therefore,

submitted that since there is no sufficient cause explained in

not filing the appeal within the period of limitation, therefore,

the appeal of the assessee may be dismissed being time

barred. Apart from the above arguments, the learned D.R for

the Revenue submitted that the issue is covered against the

assessee by the order of I.T.A.T., Chandigarh Bench in the

case of Punjab Urban Planning & Development Authority Vs.

CIT, 103 TTJ 988, in which on similar facts registration under

section 12AA of the Act was rejected. The learned D.R for the

Revenue also relied upon the decision of Hon'ble Jammu &

Kashmir High Court in the case of Jammu Development

Authority Vs. Union of India in ITA No.164/2012, in which on

identical facts the appeal of the assessee has been dismissed

and the order has been confirmed by the Hon'ble Supreme

Court in the matter of Jammu Development Authority Vs.

Union of India vide order dated 21.7.2014. Copy of this order

is also placed on record.

6. We have considered the rival submissions and perused

the material on record. It is not in dispute that after passing

the impugned order, the same was served immediately upon

the assessee. According to the impugned order, registration

was refused to the assessee under section 12AA of the Act for

the assessment year 2009-10 and subsequent assessment

years. The assessee, however, availed benefit of impugned

order till assessment year 2008-09. Therefore, it was within 5

the knowledge of the assessee that no registration under

section 12AA of the Act have been granted to the assessee for

the assessment year 2009-10 and subsequent assessment

years. The assessee, however, claimed in the application for

condonation of delay that as per legal advice the assessee was

advised that cause of action for challenging the impugned

order would arise when the appeals against the respective

assessment orders were decided. This argument is without

any substance and is rejected because it is well settled law

that the registration under section 12AA of the Act to the

trust or institution is a condition precedent for granting relief

under section 11 of the Act. We are fortified in our view by

the judgment of Hon'ble Supreme Court in the case of U.P.

Forest Corporation & Another Vs. DCIT, 297 ITR 1 (SC).

Since there was no registration granted under section 12AA of

the Act to the assessee for assessment year 2009-10 and

subsequent assessment years, therefore, no relief under

section 11 could have been granted to the assessee in regular

assessments for assessment years 2010-11 and 2011-12 as is

claimed by the learned counsel for assessee. The assessee

despite service of the impugned order way back in November,

2008 was sleeping over its right to challenge the said order

before the Tribunal. When the assessee has been advised

that the impugned order could challenged when regular

appeals for subsequent assessment years are decided, would

clearly indicate that the assessee was well aware of the

consequences of the impugned order. As per settled law when

no registration is granted under section 12AA of the Act to the 6

assessee for assessment year 2009-10 and subsequent

assessment years, there was no question of making claim of

exemption from income under section 11 of the Act for any

subsequent assessment years either in the regular

assessments or in the consequential appeals filed before the

learned CIT (Appeals). Thus the assessee failed to explain

any sufficient cause for not presenting the appeal within the

period of limitation before the Tribunal. Sufficient cause

would mean a cause which is beyond the control of the

assessee. Sufficient cause means which prevents the

assessee acting under normal circumstances without

negligence or inaction or want of bonafide. When the assessee

was aware of the consequences of the impugned order that its

income would not be exempt under section 11 of the Act from

assessment year 2009-2010 onwards, the assessee should not

have waited for filing of the appeal in the matter. It is a

clear case of negligence or inaction or want of bonafide. The

conduct of the assessee clearly speak against the assessee

itself that the assessee deliberately did not file the appeal

within the period of limitation.

7. It would be appropriate to refer to some judicial

pronouncements on the issue of delay in filing the appeal. In

the case of Hind Development Corpn. Vs. ITO (1979) 118 ITR

873, the Hon'ble Calcutta High Court held that a T ribunal can

c o n d o n e t h e d e l a y i f t h e r e wa s s u f f i c i e n t c a u s e f o r t h e d e l a y i n

the submission of the appeal. In the case of Vedabai alias

Vijayanatabai Baburao Patil Vs. Shantaram Baburao Patil 7

(2002) 253 ITR 798 (SC) where it was held that wh i l e

exercising discretion under section 5 of the Limitation Act,

1963, to condone delay f or sufficient cause in not f iling the

appeal wi t h i n the period prescribed, Court should adopt a

pragmatic approach. A d i s t i n c t i o n m u s t b e m a d e b e t we e n a

c a s e wh e r e t h e d e l a y i s i n o r d i n a t e a n d a c a s e wh e r e t h e d e l a y

is of a f ew days. The Court observed that whereas in the

f o r me r c o n s i d e r a t i o n o f p r e j u d i c e t o t h e o t h e r s i d e wi l l b e a

relevant f actor and calls f or a more cautious approach. In the

latter case no such consideration may arise and such a case

deserves a liberal approach. Now in the present case delay is

not of few days but of 2192 days (approximately six years).

Besides, there is absolutely no valid explanation/reason for

the delay. In the case of CIT Vs. Ram Mohan Kabra (2002)

257 ITR 773, the Hon'ble Punjab & Haryana High Court has

h e l d t h a t wh e r e t h e L e g i s l a t u r e s p e l l s o u t a p e r i o d o f l i m i t a t i o n

a n d p r o v i d e s f o r p o we r t o c o n d o n e t h e d e l a y a s we l l , s u c h

delay can only be condoned only for suff icient and good

reasons supported by cogent and proper evidence. It is settled

principle of law th at provis ions relating to the specif ied period

o f l i m i t a t i o n m u s t b e a p p l i e d wi t h t h e i r r e g o u r a n d e f f e c t i v e

consequences. In this case delay f or f iling the appeal late f or

only a f e w days was not condoned. In the case of Asstt. CIT

Vs. Taggas Industries Development Ltd. (2002) 80 ITD 21

(Cal.), Tribunal, Calcutta Bench, Calcutta did not condone the

delay for filing the appeal late by 13 days because the delay

was not due to sufficient cause.

8

8. The Hon'ble Supreme Court in the recent decision in the

case of Office of the Chief Master General & Others Vs. Living

Media India Ltd. & Another, 348 ITR 7 (SC) held as under :

"Held, dismissing the applications, the Department h a d i t s e l f me n t i o n e d i n i t i s af f i d a v i t a n d wa s a wa r e o f t h e d a t e o f t h e j u d g me n t o f t h e D i v i s i o n B e n c h o f t h e H i g h Court as September, 11, 2009. Even, according to the deponent, its counsel had applie d f or the certif ied copy of t h e j u d g me n t o n l y o n J a n u a r y 8 , 2 0 1 0 , a n d t h e c o p y wa s r e c e i v e d b y t h e D e p a r t me n t o n t h e v e r y s a me d a y . There was no explanation f or not applying f or certif ied copy of t h e j u d g me n t o n S e p t e mb e r 1 1 , 2 0 0 9 , o r a t l e a s t wi t h i n a reasonable time. T he f act re main s th at the certif ied copy w a s a p p l i e d f o r o n l y o n J a n u a r y 8 , 2 0 1 0 , i . e . , af t e r a p e r i o d o f n e a r l y f o u r mo n t h s . Neither the Department nor the person in-charge had f iled an explanation f or not applying for the certif ied copy wi t h i n the prescribed period. T h e o t h e r d a t e s m e n t i o n e d i n t h e af f i d a v i t c l e a r l y s h o we d t h a t t h e r e wa s d e l a y a t e v e r y s t a g e a n d t h e r e w a s n o e x p l a n a t i o n a s t o wh y s u c h d e l a y h a d o c c a s i o n e d . The Department or the person concerned had not evinced diligence in prosecuting the matter to the court by taking appropriate steps. The persons concerned we r e we l l a wa r e o r c o n v e r s a n t wi t h t h e i s s u e s i n v o l v e d i n c l u d i n g the prescribed period of limitation for taking up the m a t t e r b y wa y o f f i l i n g a s p e c i a l l e a v e p e t i t i o n i n t h e S u p r e me Court. In the absence of plausible and acceptable explanation, the delay could not be condoned m e c h a n i c a l l y me r e l y b e c a u s e t h e G o v e r n me n t o r a wi n g o f t h e G o v e r n me n t w a s a p a r t y b e f o r e t h e c o u r t . T h o u g h i n a m a t t e r o f c o n n d o n a t i o n o f d e l a y wh e n t h e r e wa s n o g r o s s negligence or deliberate inaction or l a c k o f b o n af i d e , a liberal concession had to be adopted to advance s u b s t a n t i a l j u s t i c e , i n t h e f a c t s a n d c i r c u ms t a n c e s , t h e claim on account of impersonal machinery and inherited 9

b u r e a u c r a t i c me t h o d o l o g y o f m a k i n g s e v e r a l n o t e s c o u l d not be accepted in vie w of the modern technologies being u s e d a n d a v a i l a b l e . C o n s i d e r i n g t h e f a c t t h a t t h e r e wa s no proper explanation off ered by the Department f or the d e l a y e x c e p t m e n t i o n i n g o f v a r i o u s d a t e s , t h e D e p a r t me n t had f ailed to give acceptable and cogent reasons suff icient to condone such a huge delay.

BY THE COURT : Unless government bodies, their a g e n c i e s a n d i n s t r u me n t a l i t i e s h a v e r e a s o n a b l e a n d a c c e p t a b l e e x p l a n a t i o n f o r t h e d e l a y a n d t h e r e wa s bona f ide eff ort, there is no need to accept the usual e x p l a n a t i o n t h a t t h e f i l e wa s k e p t p e n d i n g f o r s e v e r a l months or years due to considerable degree of procedural red-tape in the process. G o v e r n me n t D e p a r t me n t s a r e u n d e r a s p e c i a l o b l i g a t i o n t o e n s u r e that they perf orm their duties wi t h diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benef it for G o v e r n me n t D e p a r t m e n t s . T h e l a w s h e l t e r s e v e r y o n e u n d e r t h e s a me l i g h t a n d s h o u l d n o t b e s wi r l e d f o r t h e b e n e f i t o f a f e w. The law of limitation binds everybody i n c l u d i n g t h e G o v e r n me n t . "

9. Thus relying on the above judgments and considering the

facts of the case, we hold that the assessee failed to explain

that the delay in filing the appeal was due to sufficient cause.

Therefore, the delay in filing the appeal should not be

condoned.

10. The learned D.R for the Revenue also referred to the

order of the I.T.A.T., Chandigarh Bench in the case of Punjab

Urban Planning & Development Authority (supra), the decision

of Hon'ble Jammu & Kashmir High Court in the case of

Jammu Development Authority Vs. Union of India (supra) and 10

as confirmed by the Hon'ble Supreme Court on merits in

which on identical facts no relief have been granted to the

assessee. However, since the appeal of the assessee is time

barred, therefore, there is no need to discuss the judgments

in detail.

11. In view of the above discussion, we hold that the

appeal of the assessee is time barred and is accordingly

dismissed.

12 In the result, the appeal filed by the assessee is

dismissed in limine.

Order pronounced in the open court on this 16th day of

March, 2015.

Sd/- Sd/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated : 16 t h March, 2015

*Rati*

Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.

Assistant Registrar, ITAT, Chandigarh