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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI RAJESH KUMAR & SHRI RAM LAL NEGI
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the assessee against the order dated 11.07.2016 of the Director Income Tax (Exemption) [hereinafter referred to as the DIT(E) relevant to assessment year 2009-10.
The assessee has raised the following grounds of appeal: “1. The Appellant Trust, being aggrieved by the order dated 11.7.2016 received on 16.8.2016 passed by CIT (A), Mumbai 1, in Appeal No. CIT(A)-I/E-I (94)/2013-14 for the Assessment Year 2009-10, prefers this appeal on the grounds, amongst other, each of which is without prejudice to the others, which are set out herein in Statement of Facts/Memorandum of appeal.
2 ITA No.5414/M/2016 M/s. Brihan Mumbai Kreeda Ani Lalit Kala Pratisthan 2. The Ld. CIT (A) Mumbai 1, erred in law in dismissing the appeal filed by the Appellant Trust on technical ground of limitation without appreciating the facts and circumstances of the case & denying the condonation of delay of 21 months in filing appeal before CIT (A)-l.
The Ld. CIT (A) Mumbai, erred in law in denying substancial justice to the Appellant Trust by not considering & apprising the merits in proper perspective and dismissing the appeal as not admitted.
The Appellant craves leave to add, to amend, to alter or to rescind any of the above grounds.
The assessee has challenged the order of Ld. CIT(A) on the ground that Ld. CIT(A) has dismissed the appeal on technical ground that appeal is barred by limitation by denying the condonation of delay of 21 months in filing the appeal before the Ld. CIT(A).
The facts in brief are that the assessee filed return of income on 8.12.2009 declaring an income of Rs. 42,78,127/-.the assessee trust was registered as charitable organization with DIT(E) , Mumbai u/s 12A of the Act vide registration No. TR./27679 dated 14.06.1990 and with Charity Commissioner Mumbai vide registration no. E-11894. The ld DIT(E) passed order under section 12AA(3) of the Act withdrawing/cancelling registration of the trust for A.Y. 2009-10 on 23.12.2011 after issuing show cause notice to the assessee vide letter No.DIT(E)/ITO (HQ)/Withdrawal/26/2011-12 dated 14.10.2011 calling upon the assessee as to explain as to why the registration granted should not be withdrawn by invoking the provisions of section 12AA(3) of the Act. The ld AO on the basis of said withdrawal/cancellation of registration of the trust, denied the benefit of section 11 of the Act to the assessee by passing the order u/s 143(3) of the Act dated 26.12.2011. The said order was received by the assessee in the month of December, 2011
3 ITA No.5414/M/2016 M/s. Brihan Mumbai Kreeda Ani Lalit Kala Pratisthan and appeal was to be filed within 30 days from the date of receipt of the order. However, the appeal was filed on 31.10.2013 which is delayed by 21 months. The Ld. CIT(A) dismissed the appeal of the assessee by not condoning the delay of 21 months by holding as under: “5. Submission of the appellant has carefully been considered. However, it is noted that the appellant is claiming ignorance of the Law in this regard. However, this contention of the appellant is not acceptable since it is assisted by the Chartered Accountants who are well aware of the procedures. This is evident from the fact that during the course of assessment proceedings the case was represented by the Chartered Accountant.
It is also noted that in this case registration u/s. 12A was rejected by the DIT(Exemptions) against which also the appellant filed appeal which was delayed by 618 days. However, Hon'ble ITAT vide order dated 20.11.2015 have rejected the appellant's petition for condonation of delay. The Hon'ble ITAT have observed on page 18 of the order that "it is not the case that the assessee is a layman and not aware about the procedure of technicalities of law.
In view of the facts and legal position as discussed above, the delay in filing appeal is not condoned resulting into the non-admission of appeal.”
The Ld. Counsel of the assessee submitted before Bench that Ld. CIT(A) dismissed the appeal in lumini by not condoning the delay of 21 months by ignoring the facts that trust is genuinely and truly engaged in the charitable activities and is being manned and managed by the people who are holding a very responsible public positions such as mayor, municipal commissioner and leader of opposition etc. and also by eminent persons in the field of sports and cultural affairs and also brought to the notice of the Bench the order of the Jurisdictional Hon’ble Bombay High Court in ITA No.1429 of 2006 dated 29.03.2019 passed against the order of tribunal wherein the assessee has raised the substantial question of law of “whether in the facts and circumstances of the case the Income Tax Appellate Tribunal was right in law in not condoning the delay
4 ITA No.5414/M/2016 M/s. Brihan Mumbai Kreeda Ani Lalit Kala Pratisthan in filing the appeal before the Tribunal” which was decided by the Court in favour of the assessee by condoning the delay subject to deposit of Rs.50,000/-. The Ld. A.R. therefore prayed before the Bench that since the issue of condonation of delay has been decided by the Hon’ble Bombay High Court in favour of the assessee, the impugned appeal pending before the Tribunal may be set aside to the file of the Ld. CIT(A) to decide the issue on merits.
The Ld. D.R. on the other hand, relied on the order of Ld. DIT(E).
After hearing both the parties and perusing the material on record including the decision of Hon’ble Bombay High Court in ITA No.1429 of 2016 dated 19.03.2019, we observe that the Hon’ble Bombay High Court has condoned the delay and directed the Tribunal to decide the issue on merit. The relevant paras are reproduced below: “6. In the present case, the delay in filing the Appeal before the Tribunal is considerable. However, while examining the question whether such delay should be condoned or not, in addition to entertaining whether sufficient cause is made out or not, we are also looking at the possible fallout of the Appeal not being entertained by the Tribunal on merits. In this context, the Assessee has filed an Affidavit suggesting that the earlier Chartered Accountant had given an opinion that no Appeal was needed to be filed. It was upon being correctly advised later on by the new Chartered Accountant, that the Assessee decided to file Appeal before the Tribunal. Additionally, we notice that cancellation of registration granted under Section 12A of the Act would deprive the Assessee of the benefits under Section 11 of the Act for all times to come. When the Assessee filed a fresh application for registration under Section 12A of the Act, the Commissioner rejected the same by an order dated 28/02/2014 on the ground that once the registration is cancelled, there is no provision under the Act enabling the Assessee to file fresh application for registration. What would, therefore, emerge is that by virtue of the order of a Director of Income Tax cancelling the registration of the Assessee, the Assessee would not be entitled to the benefits under Section 11 for all times to come.”
5 ITA No.5414/M/2016 M/s. Brihan Mumbai Kreeda Ani Lalit Kala Pratisthan 8. We observe from the order of the Hon’ble Bombay High Court that the delay was condoned in the larger public interest and the Tribunal was directed to decide the issue on merits. Once the issue of condonation of delay in assessee own is decided by the Hon’ble High Court , the bench is bound by the said decision of the Hon’ble court as the same ratio has to be applied . We are, therefore, respectfully following the decision by the Hon’ble Bombay High Court in ITA No.1429 of 2016 dated 19.03.2019 as stated hereinabove, are inclined to condone the delay and restore the issue back to the file of the Ld. CIT(A) to decide the issue on merits after affording the reasonable opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 31.05.2019.
Sd/- Sd/- (Ram Lal Negi) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Dated: 31.05.2019 * Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [ By Order
Dy/Asstt. Registrar, ITAT, Mumbai.