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Facts
The assessee, M/s. Bhagini Mandal, filed an appeal against the order of the CIT(A) which had dismissed their appeal due to a delay of five years in filing. The assessee claimed that they were unaware of the original order passed by CPC due to non-receipt of notices, and thus the delay was unintentional.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A) by adopting a liberal approach considering the reasonable cause shown by the assessee. The matter was then restored to the CIT(A) for adjudication on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, and if so, whether the assessee is eligible for exemption under Section 11 based on its earlier registration.
Sections Cited
11, 10(23C)(iiiad), 143(1), 12AA, 250, 12A, 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SM’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by M/s. Bhagini Mandal (“the assessee”), feeling aggrieved by the order passed by the Learned ADDL/JCIT (A)-2, Gurugram (“Ld. First Appellate Authority”), dated 16.01.2025 for the A.Y. 2018-19.
The assessee has raised the following grounds of appeal :
1. 3. The brief facts of the case are that, the assessee is a society registered under the Societies Registration Act, 1951, filed its return of income for the assessment year 2018–19 on 06.09.2018, declaring a total income of Rs.67,930/- after claiming deduction under section 11 of the Income Tax Act, 1961 (“the Act”) of Rs.3,57,405/-. The case of the assessee was processed by the Centralised Processing Centre (“CPC”) under section 143(1) of the Act on 21.05.2019, denying the deduction claimed under section 11 of the Act on the ground that the assessee had not furnished any details of registration under section 12A of the Act in the return of income. Accordingly, CPC determined the total income of the assessee at Rs.4,25,338/-.
4. Aggrieved by the order of CPC, the assessee filed an appeal before the Ld. CIT(A). There was, however, a delay of almost five years in filing the appeal before the Ld. CIT(A). The Ld. CIT(A) was not convinced with the reasons for the delay furnished by the assessee and accordingly declined to condone the delay. The appeal was, therefore, dismissed in limine.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. On the issue of delay in filing the appeal before the Ld. CIT(A), the Learned Authorised Representative (“Ld. AR”) submitted that the assessee never received the order passed by CPC under section 143(1) of the Act and was therefore unaware of the denial of deduction claimed under section 11 of the Act. The assessee first time became aware of the same upon receipt of a demand notice dated 07.10.2023 (page no.67 of the paper book). Immediately thereafter, the assessee filed a request letter before the Learned Assessing Officer (“Ld. AO”) dated 13.10.2023 and dated 06.06.2024, seeking a copy of the CPC order. The order of CPC was finally provided to the assessee on 07.06.2024, and immediately thereafter, on 04.07.2024, the assessee filed the appeal before the Ld. CIT(A). A copy of the affidavit explaining the reasons for the delay was also placed on record. The Ld. AR submitted that the delay on the part of the assessee was neither deliberate nor intentional and was solely due to the fact that the assessee was unaware of the CPC order until receipt of the demand notice. Accordingly, the Ld. AR prayed before the bench to condone the delay in filing of the appeal before the Ld. CIT(A).
6. On merits, the Ld. AR submitted that the assessee was registered under section 12A of the Act since 1980 and had been availing exemption under section 11 of the Act regularly. Although the original registration certificate could not be traced, the assessee placed reliance on an approval granted under section 80G of the Act by letter dated 20.03.1980 (page no. 65 of the paper book) , which demonstrated that registration under section 12A of the Act was in place since 1980, as registration under section 12A of the Act is a precondition for grant of approval under section 80G of the Act. The Ld. AR further submitted that in later years, the assessee applied for a duplicate registration certificate under section 12A of the Act but could not obtain it. Subsequently, the assessee applied afresh for registration under section 12A of the Act and was granted registration under section 12AA of the Act by order dated 13.12.2019 (page no. 69 of the paper book), which stated that the assessee was eligible for exemption under sections 11 and 12 of the Act with effect from the assessment year 2019–20. It was further submitted that since the order granting registration under section 12A of the Act was passed on 13.02.2019, and the order of CPC for the assessment year 2018–19 was passed later on 21.05.2019, the assessment for assessment year 2018– 19 was still pending and the registration ought to have been considered applicable for that year as well. Accordingly, the assessee prayed that the delay before the Ld. CIT(A) be condoned and the matter be adjudicated on merits, granting exemption under section 11 of the Act.
7. Per contra, the Learned Departmental Representative (“Ld. DR”) objected to the condonation of delay on account of the inordinate delay involved in filing the appeal before the Ld. CIT(A). With regard to the assessee’s letter dated 13.10.2023 requesting a copy of the CPC order, the Ld. DR submitted that no departmental acknowledgement is available on record for such letter. As for the letter dated 06.06.2024, although an acknowledgement exists, it contain reference to a letter dated 12.12.2023, for which no supporting evidence has been furnished by the assessee. On merits, the Ld. DR submitted that since the Ld. CIT(A) has not adjudicated the claim under section 11 of the Act, the matter, if the delay is condoned, may be restored to his file for fresh adjudication.
8. We have considered the rival submissions and perused the material available on record, including the affidavit explaining the delay and the correspondence with the revenue authorities for obtaining the CPC order. While deciding the issue of condonation of delay, it is a settled position of law, as held by various courts, that a judicial and liberal approach should be adopted while deciding the condonation of delay, when the assessee demonstrates reasonable cause. In the present case, although there is no departmental acknowledgement on the letter dated 13.10.2023, there is an acknowledgement on the letter dated 06.06.2024. Considering the overall facts, the principle of natural justice, and the charitable nature of the assessee’s activities, we are satisfied that the delay in filing the appeal before the Ld. CIT(A) was neither deliberate nor intentional, and was caused due to reasonable cause. Accordingly, we condone the delay in filing of the appeal before the Ld. CIT(A).
9. As far as the merits of the case is concerned, since the Ld. CIT(A) has not adjudicated the issue on merits, we restore the matter to his file with a direction to decide the claim of exemption under section 11 of the Act afresh after providing an adequate opportunity of being heard to the assessee and granting liberty to file all necessary evidence in support of the claim. Accordingly, the matter is restored to the file of the Ld. CIT(A) for fresh adjudication on merits.
In the result, the appeal of the assessee is allowed for statistical purposes.