BHAGWAN MAHAVEER JAIN CHARITABLE TRUST,BANGALORE vs. THE DEPUTY COMMISSIONER OF INCOME TAX, (CPC), BANGALORE

The facts relating to the case are stated in brief. The assessee is a charitable trust. It filed its returns of income for AY 2014-15 and 2015-16 respectively on 06-08-2015 and 06-08-2016. Both the returns of income were processed u/s 143(1) of the Act. The assessee had claimed deduction u/s 11(2) of the Act for accumulation of income in both the years. The deduction claimed in AY 2014-15 and 2015-16 respectively was Rs.13,80,682/- and Rs.19,28,063/-. The above said claim was not allowed while processing return of income on the reasoning that the assessee has not complied with the conditions prescribed in that section. The assessee filed appeals before Ld CIT(A) for both the years with considerable delay. The appeal filed for AY 2014-15 was delayed by four years and one month. The appeal filed for assessment year 2015-16 was delayed by three years and eleven months. The Ld CIT(A) took the view that the assessee has failed to prove beyond any shadow of doubt that it had acted diligently and was not guilty of negligence. Accordingly, he dismissed both the appeals without condoning the delay. Aggrieved, the assessee has filed these appeals before the Tribunal.

The Ld A.R submitted that the assessee had uploaded appeal forms for filing appeals before Ld CIT(A) for both the years along with the petitions seeking condonation of delay. The assessee, thereafter, received communication from Ld CIT(A) for both the years. The communication for AY 2014-15 was dated 07/08/2021 and it read as under:- “Please refer to your Appeal application filed vide Acknowledgement No.. dated 05-10-2020 filed on e-filing portal. Your appeal application has been verified and is found to be in order. Therefore, the same is admitted. The appeal No. allocated to your case is NFAC/2013-14/10011521. Please communicate through e-proceeding of Appeal proceedings created against the appeal number under login id of your e-filing portal account.” The Ld A.R submitted that similar communication dated 06-09-2021 was received for AY 2015-16 also and appeal number allocated for that year was NFAC/2014-15/10014558. Accordingly, the assessee was under the bonafide belief that the delay in filing appeals have been condoned.

Accordingly, during the course of appellate hearing, the assessee submitted arguments on merits only. However, the Ld CIT(A) again proceeded to examine the issue of delay and dismissed the appeal without condoning the delay. The Ld A.R submitted that the said action of the Ld CIT(A) amounts to review of his own decision, which is not legally permitted.

The Ld A.R further submitted that the assessee was not keeping idle after receipt of the intimations u/s 143(1) for both the years. She submitted that the assessee filed online rectification petitions on after the receipt of intimations. The assessee received certain communications from CPC in response to the rectification petitions. Subsequently, the assessee filed rectification applications manually before the ITO 4(2)(1). However, immediately within a short period, the jurisdiction of the assessee was transferred to Exemption ward. Thereafter, the assessee filed grievance petitions online. Thereafter the assessee also filed Form no.10. Thus, the assessee was following alternative remedy to get its grievance redressed. However, since there was no response from the department, the assessee was advised to file appeals before ld CIT(A) and accordingly, the appeals were filed before Ld CIT(A). The Ld A.R submitted that the rectification petitions filed manually as well as grievance petitions filed online are still pending. Accordingly, the Ld A.R submitted that there was reasonable cause in filing appeals belatedly before Ld CIT(A).

The Ld D.R, on the contrary, submitted that the communications issued by the office of Ld CIT(A) after filing of appeals have only acknowledged the receipt of appeal papers. Since all the required documents have been filed by the assessee, the communication has stated that the application is found to be in order and admitted. This communication cannot be considered to be a judicial order that has decided the issue of condonation of delay. He submitted that there is no mention in the above said communications that the delay has been condoned. Accordingly, he submitted that it cannot be presumed that the Ld CIT(A) has condoned the delay after applying his mind, since the matter of condoning delay involves judicial process. Accordingly the Ld D.R submitted that the Ld CIT(A) has rightly considered the petition filed by the assessee in his appellate order.

With regard to the delay, the Ld D.R submitted the Ld CIT(A) has given finding that the assessee has failed to show that it has acted diligently and was not guilty of negligence. With regard to the submission of Ld A.R that the assessee was following alternative remedy, the Ld D.R submitted that the assessee is giving new explanations now.

I heard the parties and perused the record. I have also gone through the petition filed by the assessee before ld CIT(A), which is extracted by Ld CIT(A) in his order. The crux of the petition is that the returns of income were uploaded online along with the audit report u/s 10B of the Act. Uploading of Form 10 online for accumulation of income u/s 11(2) of the Act became mandatory from 1.4.2016 only. Hence the online uploading was not mandatory for the two years under consideration. The assessee was under bonafide impression that Form No.10 has been duly filed. The above said explanations were not appealing to Ld CIT(A) and hence he has dismissed the appeals without condoning the delay.

From the submissions made before me, I notice that the assessee, before filing these appeals, has filed rectification applications and grievance petitions for both the years for redressing its grievance. The Ld A.R filed a date chart giving the steps taken by the assessee in a chronological manner. I notice that the assessee was not keeping idle, but was pursuing alternative remedy for getting is grievance redressed. Since no response was forthcoming to the petitions filed, the assessee has been advised to file appeals before Ld CIT(A) belatedly.

By placing reliance on the communications received from Ld CIT(A) intimating that the appeal papers are in order and the appeal is admitted, the Ld A.R contended that, once the appeal is admitted, the delay is deemed to have been condoned. However, the Ld D.R submitted that the said communication is acknowledgement of appeal papers and allotment of an appeal number. He submitted that the matter of condonation of delay has to be adjudicated by way of judicial process. Accordingly, the Ld D.R submitted that it cannot be deemed that the delay has been condoned on the basis of the above said communication. There appears to be merit in the contentions of Ld D.R. In the Income tax Appellate Tribunal also, the appeal filed belatedly is acknowledged and appeal number is allotted. However, a defect memo shall be issued pointing out the delay. The regular bench hearing the appeal shall decide the matter of condoning delay in the regular judicial process, after hearing both the parties. I notice that the procedure adopted by ITAT supports the contentions of Ld D.R. In my view, in the facts of the present case, this controversy is not required to be decided for the reasons discussed infra.

I noticed that the assessee was pursuing alternative remedies to get its grievances redressed. As stated earlier, the Ld A.R has filed a date chart describing the action taken by the assessee chronologically. Accordingly, I am of the view that there was reasonable cause for the assessee in filing appeal belatedly, since the grievance of the assessee was not redressed in the alternative remedies pursued by the assessee. According to the assessee the rectification petitions filed manually and the grievance petitions filed online are still pending to be responded. Hence the assessee has been advised to file appeals before Ld CIT(A), even though there was considerable delay in filing them. Accordingly, I am of the view that there was reasonable cause for the assessee in filing these appeals belatedly. However, I notice that the assessee has filed the manual rectification petitions and grievance petitions in the February 2018 and April, 2018 respectively. However, the appeals have been filed before Ld CIT(A) only in October, 2020. The case of the ld A.R was that the assessee was waiting for replies against the rectification petition and grievance petition. Thus, it appears that the assessee may also be considered to be lethargic.

In the matter of condoning the delay, the Hon’ble Supreme Court has held in the case of Mst Katiji that the technical considerations may be deserted for the cause of justice. Accordingly, on a conspectus of the matter, I am of the view that the delay in filing appeals may be condoned subject to payment of cost by the assessee. Accordingly, I impose a cost of Rs.5,000/- (Rupees five thousand) for each of the assessment years, i.e., Rs.10,000/- in total, which shall be paid to the credit of the Income tax department as other fees within one month from the date of receipt of this order. Subject to the payment of above cost, I condone the delay in filing the appeals before Ld CIT(A) for these two years under consideration.

Since the Ld CIT(A) has not adjudicated the appeals on merits, I restore all the issues urged on merits to his file for adjudicating them after affording adequate opportunity of being heard.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.