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Facts
Tansa Trust, a charitable trust, violated Section 13(1)(d) read with Section 11(5) and thus did not claim benefits under Section 11. Instead, it claimed deductions under Chapter VI-A for donations, which CPC Bangalore denied. The appellant filed an appeal against the 143(1) intimation with a significant delay, which the CIT(A) refused to condone, believing a rectification petition under Section 154 was already rejected.
Held
The ITAT found that the CIT(A) erroneously concluded that the rectification petition under Section 154 was rejected, as the intimation merely stated it was transferred to the jurisdictional AO for technical reasons and that a subsequent rectification application was still pending. The Tribunal held that the appellant had good and sufficient reasons for the delay, as it was genuinely pursuing another remedy. Therefore, the ITAT condoned the delay and directed the CIT(A) to hear the appeal on merits.
Key Issues
1. Whether the CIT(A) was justified in not condoning a significant delay in filing an appeal against an intimation under Section 143(1). 2. Whether the rectification petition under Section 154 was genuinely pending or already rejected, impacting the reasonable cause for delay.
Sections Cited
143(1), 1961, 12A(a), 13(1)(d), 11(5), 11, Chapter VI-A, 80-G, 80-GGA, 35AG, 154
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Income Tax Appellate Tribunal, DELHI BENCHES : H : NEW DELHI
Before: SHRI G.S. PANNU, HON’BLE & SHRI ANUBHAV SHARMA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.1704/Del/2021 Assessment Year: 2014-15 Tansa Trust, Vs ACIT (CPC), C/o Bajaj Auto Limited, Post Bag No.2, Electronic City B-60/61, Naraina Industrial Area, Post Office, Phase II, Bangalore. New Delhi – 110 028. Pragun Finance Pvt. Ltd. PAN: AAATT0504A (Appellant) (Respondent) Assessee by : Ms Vasanti Patel, CA & Shri M.A. Gohel, CA Revenue by : Shri Amit Katoch, Sr. DR Date of Hearing : 27.03.2024 Date of Pronouncement : 30.05.2024
ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Assessee against the order dated 23.09.2021 of the Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No.CIT(A), Delhi-17/10040/2019-20 arising out of the appeal before it against the order dated 14.01.2016 passed u/s 143(1) of the Income Tax Act,
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1961 (hereinafter referred as ‘the Act’), by the ACIT, CPC, Bangalore (hereinafter referred to as the Ld. AO). 2. The assessee in appeal raising the following grounds:- “1. The learned Commissioner of Income-tax (Appeals) [CIT (A)] has erred in not admitting the appeal of the Appellant on the alleged ground that there was no reasonable cause made out by the Appellant to condone the delay in filing of the Appeal. 2. The learned CIT(A) erred in confirming the denial of Deduction claimed by the Appellant for a sum of Rs. 24,72,966/- under Chapter VI-A /Section 80GGA read with Section 35AC of the Act in respect of donation paid to eligible trusts without dealing with the Grounds of appeal of the appellant.”
Heard and perused the record. 4. The relevant facts are that appellant is a charitable trust registered under Section 12A(a) of the Act. The appellant trust has held shares in certain companies of Bajaj Group leading to violation of the provisions of Section 13(1) (d) read with Section 11(5) of the Act. Accordingly, the Appellant did not claim benefits of Section 11 in the Return of Income filed for the above year. The Appellant claimed deduction under Chapter VI-A of the Act under Section 80-G/80-GGA read with Section 35AG of the Act for the donations paid to eligible trusts/institutions having valid registration/exemption certificates. While processing the Return of Income for the above year, CPC Bangalore denied exemption under Chapter VI-A of the Act and assessed accordingly. The Appellant had furnished an application for rectification under Section 154 of the
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Act through e-filing account against this intimation and did not filed any appeal against this intimation under Section l43(l) of the Act.
4.1 In the meantime, the similar appeals filed against the order under section 154 of the Act, in case of other Trust of the group got dismissed. Accordingly, the Appellant was advised, notwithstanding the pendency of the rectification application, out of abundant precaution, to file an appeal against the Intimation under Section 143(1) of the Act with prayer for condonation of delay. Accordingly, the Appellant had filed an appeal against the above referred intimation under Section 143(1) of the Act before the CIT(Appeals) with a prayer for condonation of delay.
The learned CIT(Appeals) has dismissed the appeal by not condoning the delay in filing the appeal against the intimation under Section 143(1) of the Act for the above year, with following observation: “3. Decision: This appeal is filed on 17/05/2019 against the order under section 143(1) dated 14/01/2016 indicating substantial delay in filing of the appeal. In the appeal petition form 35, the appellant had mentioned the delay in filing the appeal and affidavit has been attached to explain for the reasons of delay on 1190 days in filling the appeal. It has been stated in the affidavit that the appellant had filed rectification petition under section 154 of the Act which was pending as on date of filing of appeal. It was further stated that in the case of associate Trust, the appeal preferred before the CIT (Appeal) against the rejection of section 154 application on similar issues got dismissed by the CIT (Appeal). While issues of filing appeal before the ITAT in the case of Associate Trust was being discussed, the appellant was asked by the consultant to prefer appeal against the intimation u/s 143(1) also. Based on these facts, it was claimed that the delay in filing appeal was neither deliberate nor intentional and accordingly, it was requested that the
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delay be condoned. The appellant has also relied on decision of RAK Ceramic UAE vs DCIT 176 ITD 294, apart from several other decisions on this issue. After going through the affidavit filed for condonation of delay of 1190 days in filling appeal against order u/s 143(1), the appellant has mentioned in the affidavit vide serial number 4 of affidavit dated 15/05/2019 that the rectification petition u/s 154 of the Act against the order u/s 143(1) of the Act was pending as on date (that is as on 15/05/2019). However, written submission dated 27/07/2020 vide para 1.6, the appellant mentioned that the order u/s 154 of the Act dated 14/03/2016 was received by the appellant and a copy of the same was also attached in the paper book submission at page number 27. This clearly brings out the fact that the appellant’s rectification petition u/s 154 of the Act against order u/s 143(1) dated 14/01/2016 was already discharged by the AO and rejected by the order dated 14/03/2016. Hence, the appellant’s contention in the affidavit vide serial number 4 regarding pendency of rectification of petition as on date of affidavit i.e. 15/05/2019 is an incorrect and false claim. The appellant had no further prosecution pending against either order u/s 143(1) or against order u/s 154 of the Act before any authority. Hence, the bonofide of delay in filling of appeal is not proved by the appellant. Even in the case law relied on by the appellant in the case of RAK ceramics, the Hon’ble ITAT Hyderabad Bench had condoned the delay on the ground that the assessee was bonofide exploring other legal action available to it. In the current case, after the order u/s 143(1) dated 14/01/2016 and rejection of rectification petition u/s 154 dated 14/03/2016, the appellant was not exploring any other legal option till the date of filling of the current appeal on 17/05/2019. Thus, it is a clear case where the bonofide of delay in filling of appeal after 14/03/2016 to till 19/05/2019 is not proved by the appellant. Accordingly, the request for condonation of delay of 1190 days in filling of appeal is hereby rejected. Therefore, this appeal is hereby dismissed on legal technicalities. 4. The Grounds of appeal raised by the appellant are hereby dismissed.”
Ld. DR has though supported the aforesaid findings of CIT(A), what Ld. AR has argued is that certain factual information duly available in the Paper- book has either not been properly considered or ignored/overlooked leading to dismissal of the appeal.
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We find that the basic conclusion of the learned CIT(Appeals) leading to the dismissal of the appeal is that the appellant’s rectification petition u/s 154 of the Act against order u/s 143(1) dated 14/01/2016 was already discharged by the AO and rejected by the order dated 14/03/2016. However, in Paper-book Page No. 27, is the copy of intimation under Section 154 of the Act whereby the application for rectification under Section 154 of the Act is allegedly rejected, for the following reasons; "On Verification, it is seen that there is no prima facie error in the order which you have sought to be rectified. There fore, your application for Rectification under Sec. 154 is rejected, for the following reasons(if any)" Your rectification request could not be considered at cpc for technical reasons. The rectification rights, in your case are being transferred to your assessing officer. Kindly contact your assessing officer for the same. The details of the jurisdictional assessing officer are available on the website http: / / www.incometaxindia.gov.in under services "know your jurisdictional AO.” 8. Considering the above directions contained in the order under Section 154 of the Act, the appellant has furnished the Application for Rectification under Section 154 of the Act dated 20.06.2016. The copy of same is available in Paper-book at Page No. 32 – 33. Since this application under Section 154 of the Act was pending as on the date of the affidavit in support of the prayer for condonation of delay, the appellant was fully justified in contending that the application for rectification under Section 154 of the Act is pending. In fact subsequently, the appellant has received an Intimation dated 19.03.2020 from the CPC saying that the Return of Income for the above year is transferred to the jurisdictional Assessing Officer for necessary action. The copy of same is
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available in Paper-book at Page No. 67. This justifies that condonation of delay the application supported with affidavit. It is also to be noted that the said Application for Rectification under Section 154 of the Act is still pending with the learned jurisdictional Assessing Officer. Thus we are of considered opinion that the delay in filing the appeal was for good and sufficient reasons as the appellant was pursuing another remedy with all bonafides.
In the light of the aforesaid, we are inclined to allow the ground no. 1. The CIT(A) shall condone that delay in filing the appeal and after giving, an opportunity of hearing on merits, decide the issue on merits.
The appeal is allowed for statistical purposes. Order pronounced in the open court on 30.05.2024. Sd/- Sd/- (G.S. PANNU) (ANUBHAV SHARMA) VICE PRESIDENT JUDICIAL MEMBER [[ Dated: 30th May, 2024. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi