Loading judgment…
No AI summary yet for this case.
O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT(Exemptions) Bangalore dated 21.9.2024 vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/1068938915(1) rejecting approval u/s 80G of the Income Tax Act, 1961 (in short “The Act).
The assessee has raised the following grounds of appeal:
At the outset, there is a delay of 61 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee drawn our attention to the application for the condonation of delay filed along with an affidavit in original dated 30.1.2025, which are reproduced below for ease of reference and convenience:-
Bangalore Medical College Alumni Association, Bangalore Page 7 of 12 4. On going through the above, we find that due to the multiplicity of registration proceeding with the name of the assessee being similar, there was confusion with respect to the compliances before the ld. CIT(E). Further, considering the nature of activities and the organizational structure of assessee, there was a delay in taking internal approvals after consulting the professionals due to which there is a delay of 61 days in filing the appeal before this Tribunal.
Before us, the ld. A.R. of the assessee vehemently submitted that if the delay is not condoned, the assessee trust would be put to great hardship and irreparable injury and on the other hand, no hardship or injury would be caused to the revenue if condonation of delay is allowed and accordingly prayed that such unintended delay may be condoned and the appeal may be admitted for adjudication.
Ld. D.R. on the other hand, submitted that the appeal may be dismissed in limine as the delay was substantial and it is only due to the negligence of the assessee.
We have heard the rival submissions and perused the materials available on record. It is to be noted that u/s 253 (5) of the Act, the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exist a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on the part of the assessee in not filing this appeal within the prescribed time. On going through the reason for delay as stated in the affidavit it cannot be said that the assessee is very callous in its approach in filing the appeal before us.
Bangalore Medical College Alumni Association, Bangalore Page 8 of 12 7.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
(2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner.
(4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
7.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to Bangalore Medical College Alumni Association, Bangalore Page 9 of 12 legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.
7.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.
7.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 61 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay.
7.5 In view of the above we are condoning the short delay of 61 days in filing the appeal before us and accordingly admit the appeal for adjudication.
Now brief facts of the case are that on receipt of application in form 10AB dated 5.3.2024 for approval u/s 80G(5) of the Act, the assessee was granted opportunity of being heard vide notices dated 10.7.2024 and 13.8.2024, wherein the assessee was required to appear before the ld. CIT(E) along with the necessary documents/details to prove the genuineness of the activity of the trust and fulfillment of all the conditions as laid down in clauses (i) to (v) of section 80G of the Act. In the present case, as the assessee neither responded to any of the notices nor appeared before the ld. CIT(E) and submit the necessary details/documents called for, the application filed in form 10AB dated 5.3.2024 for approval u/s 80G of the Act is rejected and accordingly approval is also cancelled by the ld. CIT(E).
Aggrieved by the order of ld. CIT(E), the assessee has filed the present appeal before this Tribunal.
Before us, ld. A.R. of the assessee submitted that the assessee is a charitable trust operating under the name & style of Bangalore Medical College Alumni Association (BMC Alumni Association). Further, the AR of the assessee vehemently submitted that the rejection order of approval had been passed by the ld. CIT(E) under the incorrect name “Bangalore Medical College”. The ld. A.R. of the assessee also submitted that additionally another entity namely “Bangalore Medical College Development Trust” which is a separate trust associated with Bangalore Medical College was also involved in the parallel section 80G proceedings before the Bangalore Medical College Alumni Association, Bangalore Page 11 of 12 same ld. CIT(E). The ld. CIT(E) issued identical notices to both i.e. the BMC Development Trust and the BMC Alumni Association in connection with the proceedings u/s 80G of the Act bearing the same notice date & due date. The BMC Development Trust have been successfully granted registration u/s 80G of the Act. The AR also drew our attention that in the course of section 80G proceedings, the notice was erroneously issued in the name of Bangalore Medical College instead of Bangalore Medical College Alumni Association thereby leading to confusion and procedural irregularity and accordingly prayed that one more opportunity may be granted before the ld. CIT(E) to represent its case.
Ld. D.R. on the other hand relied on the order of ld. CIT(E) however admitted that the order has been passed in the name of Bangalore Medical College and not in the name of assessee trust.
We have heard the rival submissions and perused the materials available on record. On going through the order of ld. CIT(E), we find that the assessee could not respond to notices and submit necessary documents to prove the genuineness of the activity of the trust and fulfillment of all the conditions laid down in clauses (i) to (v) of section 80G of the Act and accordingly, the ld. CIT(E) has rejected the application filed in form 10AB dated 5.3.2024 for approval u/s 80G of the Act.
12.1 Further, as rightly contended by the ld. A.R. of the assessee, the order of rejection passed by the ld. CIT(E) is in the name of “Bangalore Medical College” and not in the name of the Assessee trust “Bangalore Medical College Alumni Association”. Further, ld. A.R. of the assessee drawn our attention that in the course of 80G proceedings before ld. CIT(E), the notices were also erroneously issued in the name of Bangalore Medical College instead of Bangalore Medical College Alumni Association, Bangalore Page 12 of 12 Bangalore Medical College Alumni Association, thereby leading to confusion and procedural irregularity. This being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we deem it fit & proper to remit the entire issues in dispute to the file of ld. CIT(E) to decide afresh in accordance with law after giving reasonable opportunity of being heard to the assessee. The assessee is also directed to produce all the documents/records/information/financials/reports in support of its claim or as required by ld. CIT(E) for proper adjudication. It is ordered accordingly.