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Facts
The assessee, an Agriculture Produce Market Committee, claimed exemption under Section 10(26AAB) for AY 2018-19. The return was filed late, and the exemption was denied by CPC due to technical faults and improper filing. The CIT(A) also did not allow the exemption, leading to this appeal.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging a reasonable cause. While the assessee claimed it had consistently received exemption, the necessary details to prove the nature of its activities were not filed before the lower authorities. Therefore, the issue was remitted back to the CIT(A) for fresh examination.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the assessee is eligible for exemption under Section 10(26AAB) given the lack of sufficient documentation before lower authorities.
Sections Cited
10(26AAB), 250, 154, 5, 143(1), 11, 12, 10(23C(iv))
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of assessee pertaining to the assessment year 2018-19 is directed against the order dated 08.02.2024 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Rectification Order dated 02.01.2020 passed u/s.154 of the Act.
Registry has informed that there is delay of 253 days in filing the appeal before this Tribunal. Ld. Counsel for the assessee referring to the condonation application submitted that the assessee deals with various problems of farmers. The email and mobile numbers was of the office bearers connected with the tax matters but they had no knowledge of passing the orders. The income of the assessee is exempt u/s.10(26AAB) of the Act and it was denied by CPC due to technical faults in filing the return. The delay in filing the appeal is not intentional and therefore it is prayed that the delay be condoned.
I have heard the rival submissions and gone through the averments made in the condonation application. Hon’ble courts in plethora of judgments observed that when consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards ‘sufficient cause’ to condone the delay. The Court considering an application under section 5 of the Limitation Act may also look into the prima facie merits of an appeal. A liberal approach may be adopted when some plausible cause for delay is shown. Hon’ble Supreme Court in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condoned delay of 1537 days sub-serving the cause of justice. It was held so while observing that the appeal filed by the appellant with a delay was unintentional, much less due to any deliberate laches, and was well-explained by the State before the High Court. Hon’ble Court further held that in cases where the merits are significant, a more liberal approach may be adopted to allow for the examination of the case on its merits. Having gone through the averments made in the condonation application and considering the ratio laid down by the Hon’ble Court in the case of Inder Singh (supra), I am of the view that there was ‘reasonable cause’ which prevented the assessee in filing the appeal within the stipulated time. I therefore condone the delay of 253 days and admit the appeal for adjudication.
Though the assessee has raised as many as 7 grounds of appeal, the sole grievance is that ld.CIT(A) erred in not allowing the claim of exemption u/s.10(26AAB) of the Act at Rs.44,56,331/-.
5. On merits of the case, Ld. Counsel for the assessee requested for remitting the issue to the file of ld.CIT(A) on the ground that certain details including Income and Expenditure/Profit and Loss Account and the details of gross receipts and the nature of expenditure incurred by the assessee evidencing that the assessee is working as Agriculture Produce Marketing Committee could not be filed before ld.CIT(A) and the same need to be examined. He also referred to the paper book running into 104 pages which includes audited balance sheet, by laws of APMC with registration certificate. He also stated that assessee has been consistency claiming exemption u/s.10(26AAB) of the Act which has been allowed by the income-tax authorities in the past as well as in future and the returns have been processed u/s.143(1) of the Act.
On the other hand, ld. Departmental Representative supported the orders of the lower authorities and also stated that assessee has filed the belated return and therefore the exemption u/s.10(26AAB) claimed by the assessee cannot be allowed to the assessee.
I have heard the rival contentions and perused the record placed before me. I observe that the assessee furnished the return of income for A.Y. 2018-19 on 06.10.2018, however, the due date of filing the return was 31.08.2018. In the return, assessee has claimed exemption u/s.10(26AAB) of the Act at Rs.44,56,331/- but apparently it seems that assessee has not filed the return properly as the amount has been mentioned against the column for Aggregate of income referred to in sections 11, 12 and 10(23C(iv) etc. which are mainly relevant to the assessees’ who are registered u/s.12 of the Act. Due to this mistake, CPC denied the claim. Assessee filed the rectification application u/s.154 of the Act but failed to succeed. When the assessee approached ld.CIT(A) by way of filing the appeal, Ld.CIT(A) has examined the details filed by the assessee which included balance sheet but the other details which could prove the nature of activity carried out by the assessee including audited Income and Expenditure Account/Profit and Loss account remained to be filed. I observe that the assessee is registered as Agriculture Produce Market Committee (APMC) and certificate of it being registered is available on record. Income and Expenditure Account filed by the assessee during the course of hearing also indicates that major receipts are from Market Fee which have been received for working as APMC. I also notice that certain details which are necessary for examining the claim of exemption u/s.10(26AAB) remained to be filed before ld.CIT(A). I note that assessee did not furnish these details before ld.CIT(A) and for the first time these details are filed before this Tribunal. Considering these facts, I deem it appropriate to remit the issues raised on merits to the file of ld.CIT(A).
Assessee is at liberty to file all the requisite details proving the nature of activities carried out by the assessee and ld.CIT(A) shall afford reasonable opportunity of hearing and examine the claim of exemption u/s.10(26AAB) made by the assessee in light of my observations and decide in accordance with law. Assessee is directed to update email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 07th day of July, 2025.