HARYANA STATE COUNCIL FOR SCIENCE INNOVATION AND TECHNOLOGY,PANCHKULA vs. DCIT, CIRCLE, PANCHKULA

In the present appeal Assessee has raised the following grounds:

There are number of supporting case -do-laws deciding substantive benefit/justice cannot be denied on technical grounds like that of delay in filing of appeal, allowing condonation of delay in filing of appeal where order not available thereby allowing such appeals to be heard on merits, that too, for intimation order having been issued purely on technical grounds by the Portal and not as an assessment order based on merits to satisfy principles of natural justice as well as case laws on non-taxability of specific purpose grants, including appellant own case clearly substantiating non-taxability of receipt; order, so issued, as unjust, uncalled for, which needs to be set aside, annulled and vacated. 9.The appellant craves leave to add, amend or delete any of the grounds of appeal and also to furnish additional evidence before or at the time of hearing of appeal/during the course of the appeal proceedings.

The assessee, Haryana State Council for Science and Technology (HSCST), is a government body established for the promotion of science and technology in the State of Haryana. It is not engaged in any commercial activity and does not earn taxable income; rather, it receives grants for specific purposes from the government. These grants, along with any interest earned thereon, are treated as funds for future utilization and not as income, and accordingly, the appellant has consistently filed its return declaring NIL income.

1 For the Assessment Year 2015–16, an intimation order under section 143(1) dated 29.03.2017 was issued by CPC, Bengaluru, wherein an addition of Rs. 11,58,26,733- was made by treating the utilization of grants as taxable income, resulting in a demand of Rs. 5,22,43,333. The assessee contended that this addition arose due to a technical error in the filing of the return. Although rectification requests and multiple submissions were made, the issue was not resolved. The assessee received the copy of the intimation order only

2 The Assessing Officer, through CPC processing under section 143(1), treated the gross receipts of Rs. 11,58,26,733/- (representing utilization of grants) as taxable income. The AO did not consider the nature of the receipts as specific purpose grants or the fact that such receipts had been consistently treated as non-taxable in earlier years. The addition was made mechanically based on the data available in the return, without granting an opportunity of being heard to the appellant and without considering its submissions or rectification requests. Consequently, a high-pitched demand was raised against the assessee.

Against the order of the Assessing Officer, assessee went in appeal before the Ld. CIT(A).

The CIT(A) primarily focused on the issue of delay in filing the appeal. It was observed that the appeal was filed after a delay of more than five years from the date of the intimation order. The CIT(A) held that the appellant failed to demonstrate “sufficient cause” for such an inordinate delay as required under section 249(3) of the Income Tax Act. The explanation regarding non-receipt of the order and technical issues was not found convincing.

1 Relying on legal principles and judicial precedents, the CIT(A) concluded that condonation of delay is not a matter of right and requires proper justification. Since the appellant could not satisfactorily explain the delay, the CIT(A) refused to condone the delay and dismissed the appeal as not maintainable, without going into the merits of the case.

Against the order of the Ld. CIT(A) the assessee preferred in appeal before us.

During the course of haring the Ld. AR argued that the assessee is a government organization engaged in non-commercial activities and receives only specific purpose grants, which are not taxable. It was emphasized that the same issue had already been decided in favour of the appellant in earlier years by Ld. CIT(A) and upheld by ITAT Chandigarh. The addition made by the AO was due to a technical error in the return filing and not based on the actual nature of receipts.

1 The Ld. AR further submitted that the assessee had been regularly filing rectification requests and replies to the department, but no proper consideration was given. The delay in filing the appeal occurred because the intimation order was not received earlier and was made available only in December 2022. Upon receiving the order, the appellant acted promptly. It was also argued that the AO passed the order without giving an opportunity of being heard, violating principles of natural justice. Therefore, the delay should be condoned and the appeal should be decided on merits.

Per contra, the Ld. DR supported the order of the Ld. CIT(A) and contended that the appellant had failed to file the appeal within the prescribed time limit of 30 days as per section 249(2). The delay of more than five years was substantial and could not be justified merely on the grounds of non-receipt of the order or technical issues.

1 The Ld. DR argued that the assessee did not provide sufficient evidence to establish that there was a reasonable cause preventing timely filing of the appeal. It was further submitted that the law requires strict compliance with limitation provisions and that condonation of delay is discretionary. Therefore, the Ld. CIT(A) was justified in dismissing the appeal as time-barred.

We have heard the rival submissions and perused the material available on record. The issue which has come up before us in the present appeal is that the learned CIT(A) has dismissed the appeal of the assessee on account of delay in filing the appeal and declined to condone the same. However, in the present proceedings before the Tribunal, we observe that the appeal filed by the assessee itself is also barred by limitation. It is noticed from the record that there is a delay of more than 55 days in filing the present appeal before the Tribunal. And no condonation application has been filed by the assessee for explaining the reason of delay.

1 It is an admitted position that the impugned order was passed on 15/12/2023 and the appeal has been filed only on 13/02/2024. There is thus a delay of more than 55 days. We further find that no application for condonation of delay supported by affidavit has been filed on record explaining day-to-day delay. Even during the course of hearing, no plausible or reasonable explanation substantiated with evidence has been furnished.

2 The Hon’ble Supreme Court in Esha Bhattacharjee vs. Managing Committee of Raghunathpur Nafar Academy (2013) 12 SCC 649 has held that though a liberal approach is required while considering condonation of delay, the same cannot be extended to cases of gross negligence, inaction or lack of bona fides. It has been further held that inordinate delay without sufficient cause cannot be condoned as a matter of right.

3 Further, in University of Delhi vs. Union of India, the Hon’ble Apex Court has reiterated that the law of limitation has to be applied with all its rigour and courts cannot condone delay in a routine manner in absence of a satisfactory explanation.

4 Similarly, in Delhi Metro Rail Corporation Ltd. vs. Tarun Pal Singh, the Hon’ble Supreme Court has held that where there is a gross and unexplained delay, the same cannot be condoned merely on equitable considerations and that the doctrine of limitation cannot be diluted.

5 Applying the aforesaid principles to the facts of the present case, we find that the delay of more than 55 days is not only inordinate but is also wholly unexplained. The explanation furnished by the assessee is vague and does not inspire confidence. The assessee has failed to demonstrate any sufficient cause preventing him from filing the appeal within the prescribed time.

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In the result, the appeal of the assessee is dismissed.

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File