THE COMMISSIONER OF INCOME -TAX vs. M/S CHITRADURGA URBAN DEVELOPMENT AUTHORITY

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ITA/539/2013HC KarnatakaKAHC01050833201305 January 2015Bench: B.VEERAPPA,N.KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the application for condonation of delay. The Court reasoned that if an order of the Tribunal was in accordance with law and accepted by higher authorities, a subsequent change in the Tribunal's view in other cases cannot be a ground for condoning a substantial delay. Accepting such a contention would render the limitation provisions ineffective and undermine the finality of orders. The Court found no merit in the Revenue's application for condonation of delay. Consequently, as the delay condonation application was dismissed, the appeal itself was also dismissed. The Court did not decide on the merits of the ITAT's order regarding Section 12AA registration.

What were the facts?

The Revenue, represented by the Commissioner of Income-tax, Davangere, filed an appeal before the High Court of Karnataka challenging an order passed by the Income Tax Appellate Tribunal (ITAT), Bangalore. The ITAT's order, dated August 14, 2008, directed the Commissioner of Income-tax to grant registration under Section 12AA of the Income-tax Act to the assessee, M/s. Chitradurga Urban Development Authority, from the assessment year 2003-2004 onwards. The Revenue's appeal was filed with a significant delay of 1807 days. The affidavit supporting the delay condonation application stated that the Commissioner initially accepted the ITAT's order but recommended an appeal regarding the retrospective grant of registration. However, the Chief Commissioner did not accept this recommendation, and the order attained finality. The appeal was filed in 2012 to maintain consistency with later ITAT decisions that held Urban Development Authorities were not entitled to Section 12AA registration.

What were the issues?

1. Whether the delay of 1807 days in filing the appeal should be condoned, considering the reasons provided by the Revenue. This is a question of mixed law and fact, turning on the interpretation of principles governing condonation of delay under the Income Tax Act, 1961. Assessee's Arguments: The judgment does not record any arguments from the assessee regarding the delay condonation. Revenue's Arguments: The Revenue contended that the appeal was filed to maintain consistency and equal treatment with subsequent ITAT decisions in 2012, which held that Urban Development Authorities are not entitled to registration under Section 12AA of the Act. They argued that the initial acceptance of the ITAT order by the Chief Commissioner was based on the understanding at that time, and the later decisions necessitated filing this appeal to rectify the inconsistency.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 5th DAY OF JANUARY 2015

PRESENT

THE HON’BLE MR. JUSTICE N.KUMAR AND THE HON’BLE MR. JUSTICE B.VEERAPPA

I.T.A. NO.539/2013

BETWEEN :

1.

The Commissioner of Income-tax, Park View Building, No.284/1, 4th Main, P.J. Extension, Davangere – 577 002.

2.

The Commissioner of Income-tax, Park View Building, No.284/1, 4th Main, P.J. Extension, Davangere – 577 002. ...APPELLANTS

(By Sri.K.V.Aravind, Adv.)

AND :

M/s. Chitradurga Urban Development Authority, Kelagote, Chitradurga. …RESPONDENT

(By Sriyuths.A.Shankar & M.Lava, Advs.) . . . .

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This I.T.A. is filed under Section 260A of the Income Tax Act, 1961, arising out of order dated 14.08.2008 passed in ITA No.1207/Bang/2007 praying to : (i) formulate the substantial questions of law stated therein,

(ii) Allow the appeal and set-aside the order passed by the Income Tax Appellate Tribunal, Bangalore in I.T.A. No.1207/Bang/2007 dated 14.08.2008 and confirm the order passed by the Appellate Commissioner confirming the order passed by the Commissioner of Income Tax, Davangere.

This I.T.A. coming on for orders, this day, N.Kumar J., delivered the following:

JUDGMENT

This appeal is preferred by the Revenue challenging the order passed by the Tribunal dated 14th August, 2008 directing the Commissioner of Income-Tax to grant registration under Section 12AA of the Income- Tax Act to the assessee, from the assessment year 2003-2004 onwards.

2.

There is a delay of 1807 days in preferring this appeal. Hence, an application is filed to condone the

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delay. The affidavit filed in support of the application discloses that the order passed by the Tribunal on 14.08.2008 was accepted by the Commissioner of Income-tax, but he recommended for preferring an appeal in respect of that portion of the order granting registration retrospectively from the year 2003-2004. However, the Chief Commissioner of Income-tax did not accept the said recommendation and accepted the order of the Tribunal in its entirety. Thus, the said order attained finality. It is only in the year 2012, in number of cases, when the Tribunal held that the Urban Development Authorities are not entitled to registration under Section 12AA of the Act, in order to maintain consistency and equal treatment, the present appeal is filed.

3.

If the order of the Tribunal was in accordance with law and accepted by the Chief Commissioner of Income-Tax, merely because in the subsequent years in

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some of the cases, the Tribunal took a different view, cannot be a ground for condoning the delay in preferring the appeal. If such a contention is accepted, the provision regarding limitation would loose its efficacy and there would not be any finality to these orders. As in the normal course, we find the higher authorities do lay down law reversing the earlier judgments. That cannot be a ground for condoning the delay. Therefore, we do not find any merit in this application.

Hence, the application filed for condonation of delay is dismissed. Consequently, appeal is also dismissed.

Sd/- JUDGE

Sd/- JUDGE

SPS

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