SHREE COIMBATORE GUJARAT SAMAJ,COIMBATORE vs. DCIT (EXEMPTION) COIMBATORE, COIMBATORE

The Additional /Joint Commissioner of Income Tax (Appeals)-2, Surat erred in not considering that the delay in filing the appeal was beyond the control of the appellant and that the appellant should not be made to suffer due to the fault of the Chartered Accountant.

The ld. AR Shri Varun Ranganathan, Advocate submits that there is a delay of only 1520 days in filing the appeal before the First Appellate Authority excluding the period between 15.03.2020 and 28.02.2022. He argued that the said delay was explained in detail in the accompanying affidavit and referred to para 6 to 8 of the said affidavit. He submits that there was a dispute between the Members of the Samaj and erstwhile office bearers in conducting elections for office of the Samaj between 19.03.2018 to 27.01.2022. He argued that the erstwhile office bearer did not disclose anything about the order passed by the CPC. There was no Annual General Meeting conducted from September, 2019 to 2021 and the said dispute for elections got resolved only when the Registrar of Co- operative Societies passed an order on 27.01.2022 permitting to conduct elections for the office of the Samaj for the period 2021-2024 and referred to page 3 of the paper book. Despite the election is being conducted, the newly elected office bearers assumed office from 27.01.2022 to 30.05.2022. He submits that there were multiple layers of litigation before the Hon’ble High Court and the Hon’ble Supreme Court. The said litigation was finally resolved by order dated 01.06.2022 in SLP No. 9731- 9732/2022 of Hon’ble Supreme Court. The newly elected members were not aware of the order passed under section 143(1) of the Income Tax Act, 1961 [“Act” in short] until October, 2022. Further he submits that the Chartered Accountant did not cooperate with the assessee in providing Form 10B. He referred to para 5 of the decision of the Hon’ble High Court of Madras in the case of S. Subramanian & Co. V. ITO & Anr in WP(MD) Nos. 5763 & 5764 of 2024 dated 27.03.2024 placed at page 33-37 of the paper book and argued that the Hon’ble High Court remitted back to the Assessing Officer in the interest of justice by holding that the assessee cannot be held responsible for the acts/omission of the Chartered Accountant.

The ld. DR Shri K. Rohan Raj, Addl. CIT submits that the assessee failed to show sufficient cause in explaining the delay of 2250 days. He drew our attention to para 4.1 of the impugned order and submits that the intimation under section 143(1) of the Act was passed on 21.02.2018 and the assessee required to file appeal in Form 35 before the ld. CIT(A) within 30 days. But, the assessee filed the appeal before the ld. CIT(A) on 04.06.2024 and vehemently argued that the delay is of 2250 days, but not 1520 days. He submits that there was no material in the paper book showing sufficient cause for the abnormal delay of 2250 days. Burden lies on the assessee to explain reasons for the delay on day-today basis. While referring to the submissions of the ld. AR, that newly elected members were not aware of the order passed under section 143(1) of the Act until October, 2022, the ld. DR argued that the above submission of the ld. AR has no basis without any supporting material. He argued vehemently that the assessee filed the delay condonation petition very casually and it cannot be taken into consideration at all. He referred to para 4 & 5 of the impugned order and argued that the ld. CIT(A) has given due consideration for the reasons as stated in Col. 15 of Form 35 and recorded reasons, which requires to be taken into account by this Tribunal. He submits that the decision of the Hon’ble High Court of Madras in the case of S. Subramanian & Co. (supra) is not applicable. The ld. DR argued that the order of the ld. CIT(A) is correct and pleaded to reject the ground raised by the assessee.

Heard both the parties and perused the material available on record. We note that the assessee is a Society registered under Societies Registration Act and got approval under section 12A and 80G of the Act. As rightly pointed out by the ld. DR, which is not disputed by the ld. AR that intimation under section 143(1) of the Act was passed on 21.02.2018, wherein, the exemption under section 11 of the Act was denied. The assessee, aggrieved by the denial of exemption under section 11 of the Act, filed an appeal on 04.06.2024 by stating the delay is of only 1520 days, taking the support of the decision of the Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation, reported in [2022] 441 ITR 722 (SC). We note that the reasons stated by the assessee are identical to the reasons taken before us vide written submissions dated 03.12.2024. We find that the Addl/JCIT(A)-2 Surat reproduced the said reasons in pages 3 & 4 of the impugned order. According to the first appellate authority, the delay is not 1520 days, but, 2250 days, which is clear from para 4.1 of the impugned order.

Now, we shall examine the reasons explained by the assessee before the ld. CIT(A) with reference to 2250 days delay. For better understanding, the reasons stated by the assessee before the ld. CIT(A) are reproduced herein below: The reason for the delay in filing an appeal against the order dated 21/02/2018 is because the erstwhile office bearers who were holding the office from 2018-2021 did not disclose anything about the order u/s. 143(1) of the Income Tax Act, 1961 dated 21/02/2018 to the other Government Body Members and also in the Annual General Body Meeting. Further, there was no Governing Body meeting conducted in 2019-2021. Additionally, there was a dispute between the erstwhile office bearers and the members of the Samaj regarding conducting elections for the posts of the office bearers/Governing Body. The dispute was solved only after the Registrar of Societies passed an order dated 27/01/2022 to conduct elections. Even after the elections, the newly elected Governing Body Members for the period 2021-2024 were not permitted to assume office. The newly elected Governing Body Members assumed office only after the intervention of the Hon’ble Supreme Court vide its order dated 30/05/2022 in SLP Nos. 9731,9732/2022, the newly elected member took charge on 1st June 2022. The newly elected members came to know about the order in the month of October, 2022, through the Income Tax Portal. Immediately, the newly elected Treasurer contacted the erstwhile Chartered Accountant and enquired about the order dated 21/02/2018. It was only at that time the newly elected Governing Body members came to know that the erstwhile Chartered Accountant failed to file Form 10B for the relevant assessment year. The office bearers made several attempts to obtain the Audit report in Form 10B. However, the erstwhile Chartered Accountant did not cooperate. After repeated attempts, the erstwhile Chartered Accountant filed the Audit Report in Form 10B only on 16th April, 2024. This is the reason for the delay.

On perusal of the same, we note that the assessee stated that the erstwhile office bearers during 2018-2021 did not inform passing of intimation order under section 143(1) of the Act to the newly elected Governing Body Members and there was no Governing Body meeting conducted in 2019-2021. This reason, in our opinion, is not sufficient as the assessee did not give specific period of which the Governing Body meetings were held, tenure of erstwhile office bearers, tenure of new office bearers, etc. Further, it is also confronted to the ld. AR that the tax matter would be taken care of by the Tax Professionals, but not the office bearers, but, we find no reasonable explanation by the ld. AR in this regard. Further the dispute between the erstwhile office bearers relating to conduct of election was resolved by the Registrar of Societies vide order dated 27.01.2022 and we find that the ld. AR did not bring any evidence showing that when the proceedings before the Registrar of Co- operative Societies were initiated, which resulted in passing of order on 27.01.2022 permitting to conduct election for the office of assessee for the period 2021 to 2024. Further, there was no reason explained to the period from 2022 to 2024 to show that the newly elected office bearers were not permitted to enter office premise. In this regard, we refer to the decision of the Hon’ble Supreme Court dated 30.05.2022 in SLP Nos. 9731, 9732/2022, where, it is noted that newly elected members took charge in pursuance of order of the Hon’ble Supreme Court. We find no reasons were explained from 30.05.2022 to 04.06.2024. On careful reading of para 5 of the decision of the Hon’ble High Court of Madras in the case of S. Subramanian & Co. V. ITO & Anr. (supra), we note that the facts, therein, are entirely different to the facts on hand, wherein, the Hon’ble High Court was pleased to remit back to the Respondent Assessing Officer for passing order afresh on a contention that the assessee therein was unaware of the notice sent through e-mail ID. In the present case, as discussed above, it is not the case of non-receipt of notices, but, however, on the contention that no cooperation from the Chartered Accountant. Therefore, the ratio of Hon’ble High Court of Madras in the case of S. Subramanian & CO. v. ITO & Anr., (supra) is not applicable.

We find time and again, the Hon’ble Supreme Court has reminded that the concept of “liberal approach”, “justice oriented approach”, “substantial justice” should not be employed to frustrate or jettison the substantial law of limitation. Having keeping in mind, we find in the present case, the length of delay is definitely a relevant matter that this Tribunal must take into consideration while considering the reasons explained before the ld. CIT(A) as well as argued by the ld. AR before us. It is an established principle where an appeal presented with abnormal delay, beyond limitation, the assessee has to explain as to what is the reasonable cause, which really prevented the assessee to approach this Tribunal within the time. As we discussed above, where we held no sufficient cause was given by the assessee for the delay from 22.03.2018 till the date of filing of appeal before the ld. CIT(A). Therefore, since the assessee failed to give sufficient cause for not filing the appeal in time, we hold that the assessee’s reasons for the inordinate delay cannot be interpreted liberally, therefore, due to lack of bonafide, we find no infirmity in the order passed by the first appellate authority and it is justified. Thus, ground Nos. 5 & 6 raised by the assessee are dismissed.

In view of our decision in confirming the impugned order in holding that the appeal of the assessee is invalid and not maintainable under limitation and dismissing the same in limine, other grounds raised in Form 36 become academic and accordingly dismissed as infructuous. Thus, all the grounds raised by the assessee are dismissed.

In the result, the appeal filed by the assessee is dismissed. Order pronounced on 26th February, 2025 at Chennai.