M/S. GHAZIABAD DEVELOPMENT AUTHORITY,NEW DELHI vs. CIT, GHAZIABAD

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI

BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER

ITA No. 455/Del/2016 Ghaziabad Development Authority vs Commissioner of Income C/o M/s RRA TAX INDIA, Tax, D-28, South Extension, Part-1, Ghaziabad. New Delhi. AAALG0072C

Assessee by Dr. Rakesh Gupta, Adv. Sh. Somil Agarwal, Adv. Revenue by Sh. Sunil Chander Sharma, CIT DR

Date of Hearing 28.07.2016 Date of Pronouncement 20.09.2016

ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: This appeal has been preferred by the assessee against the

order dated 29/09/2012 passed by the Ld. Commissioner of Income

Tax-Ghaziabad granting registration u/s 12AA of the Income Tax

Act, 1961 (hereinafter called ‘the Act’).

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Planning and Development Act, 1973. The assessee was initially

denied registration u/s 12AA of the Act by the Ld. CIT vide order

dated 08/08/2006 and the assessee preferred an appeal before the

ITAT. ITAT vide its order dated 31/01/2007 in ITA No.

2903/Del/2006 directed the Ld. CIT to grant registration. The Ld.

CIT, however, while giving effect to the order of the ITAT, granted the

registration w.e.f. 31/03/2003 and not from 01/04/2002 i.e. the

first day of the previous year. Subsequently, the assessee moved an

application u/s 154 of the Act seeking rectification in the date from

which the registration u/s 12AA was to be effective. An order

rejecting assessee’s application u/s 154 was passed by the Ld. CIT

on 29/05/2015. The assessee again approached the ITAT

contesting the rejection of its rectification application. However, the

ITAT dismissed the assessee’s appeal vide order dated 16/12/2015

in ITA No. 4009/Del/2015 by holding that the assessee’s appeal was

not maintainable by making the following observations:

“7. In view of above discussion, we are of the view that the appeal filed by the assessee against the order passed u/s 154 of the Act to the order u/s 12AA is not maintainable.

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However, the assessee may file an appeal against the order passed u/s 12AA of the Act by the Commissioner of Income Tax in compliance to the direction of the Tribunal with the request of condonation of delay.”

2.1 Now the assessee has approached the Tribunal once again and

has challenged the order u/s 12AA of the Act dated 29/09/2010

passed by the Ld. Commissioner of Income Tax – Ghaziabad and has

raised the following grounds of appeal:

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1875 days in filing the appeal. The Ld. AR submitted that when the

assessee had received order dated 29/09/2010 passed by the Ld.

CIT, Ghaziabad in pursuance to the order of the ITAT, an application

u/s 154 of the Act was filed before the Ld. CIT well within time.

Thereafter, an order rejecting assessee’s application u/s 154 was

passed on 29/05/2015. Against the said rejection, the assessee had

again filed an appeal before the ITAT within time. Thereafter, after

the dismissal of the assessee’s appeal by the ITAT on 16/12/2015,

the assessee has immediately filed this appeal on 29/01/2016.

Thus, the assessee had acted in a bona fide manner and had

proceeded to seek redressal of its grievances in a bona fide manner

and, therefore, the delay of 1875 days ought to be condoned. On

merits, the Ld. AR drew our attention to proviso to Section 12A (1) of

the Act and submitted that in view of the mandate, the registration

ought to have been granted w.e.f. 01/04/2002 instead of

31/03/2003 and submitted that suitable directions may be issued

to the Ld. CIT in this regard.

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delay and emphasized that ignorance of law cannot be an excuse

and on merits, placed reliance on the order of the Ld. CIT and

submitted that the date from which the registration has been made

effective is correct.

material on record. As far as the issue of condonation of delay is

concerned, it is a settled law that the courts and the quasi-judicial

bodies are empowered to condone the delay if the litigant satisfies

the Court that there were sufficient reasons for availing the remedy

after expiry of the limitation. Such reasoning should be to the

satisfaction of the Court. The expression “sufficient cause or reason”

as provided in sub-section (5) of section 253, subsection (3) of

section 249 of the Income Tax Act, 1961 is used in identical terms in

the Limitation Act and the CPC. Such expression has also been

used in other sections of the Income Tax Act such as sections 274,

273, etc. The expression “sufficient cause” within the meaning of

section 5 of the Limitation Act as well as similar other provisions

and the ambit of exercise of powers there under have been the

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subject-matter of consideration before the Hon’ble Apex Court on

various occasions. In the case of State of West Bengal vs.

Administrator, Howrah Municipality AIR 1972 SC 749, the Hon’ble

Supreme Court, while considering the scope of expression “sufficient

cause” for condonation of delay, has held that the said expression

should receive a liberal construction so as to advance substantial

justice when no negligence or inaction or want of bona fide is

imputable to party.

5.1 In the case of N. Balakrishnan vs. M. Krishnamurthy AIR 1998

SC 3222, there was a delay of 883 days in filing an application for

setting aside the ex parte decree for which application for

condonation of delay was filed. The trial Court having found that

sufficient cause was made out for condonation of delay condoned

the delay. However, the Hon’ble High Court reversed the order of

the trial Court. The Hon’ble Supreme Court while restoring the

order of the trial Court has observed in Paras 8, 9 and 10 as under:

“8. The appellant’s conduct does not on the whole warrant to castigate him as an irresponsible litigant. What he did in defending the suit was not very much far from what a litigant would broadly do. Of course, it may be said Page 6 of 12 ITA No. 455/D/16 Ghaziabad Development Authority

that he should have been more vigilant by visiting his advocate at short intervals to check up the progress of the litigation. But during these days when everybody is fully occupied with his own avocation of life, an omission to adopt such extra vigilance need not be used as ground to depict him as a litigant not aware of his responsibilities, and to visit him with drastic consequences. 9. It is axiomatic that condonation of delay is a matter of discretion of the Court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation, whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the Court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior Court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first Court refuses to condone the delay. In such cases, the superior Court would be free to consider the cause shown for the delay afresh and in its own finding even untrammeled by the conclusion of the lower Court. Page 7 of 12 ITA No. 455/D/16 Ghaziabad Development Authority

5.2 The Hon’ble Supreme Court further observed that rules of

limitation are not meant to destroy the rights of the parties. They

are meant to see that the parties do not resort to dilatory tactics but

seek the remedy promptly. The Hon’ble Apex Court further observed

that refusal to condone the delay would result in foreclosing a suitor

from putting forth his cause. There is no presumption that the

delay in approaching the Court is always deliberate. The Hon’ble

Supreme Court in SLP[Civil No. 12980 of 1986, decided on 19th Feb.,

1987, in the case of Collector, Land Acquisition vs. Mst. Katiji (1987)

reported in (2) SSC page 107, has laid down the following guidelines:

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cause of justice being defeated. As against this when delay is condoned the highest then can happen is that a cause would be decided on merits after hearing the parties. 3. “Every day’s delay must be explained” does not mean that a pedantic approach should be made, why not every hour’s delay, every second’s delay. The doctrine must be applied on a rational commonsense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to so.

5.3 In the light of the above cited judgments, if we examine the

facts of the present case, it is apparent that assessee has been Page 9 of 12 ITA No. 455/D/16 Ghaziabad Development Authority

vigilant in its approach and has not neglected the Income Tax

proceedings. The Hon’ble Apex Court in the case of N. Balakrishnan

(supra) has observed that the length of delay is immaterial. The

acceptability of the explanation is the only criteria for condoning the

delay. In a given case, delay of the shortest period of time may be

un-condonable due to unacceptable explanation, whereas in certain

other cases, delay of a long period can be condoned if the

explanation is satisfactory. In every case of delay, there might be

some omissions or negligence on the part of the assessee but to our

mind such omission/negligence has to be weighed in light of facts

and circumstances of each case. If the negligence or omission is a

by-product of a deliberate attempt with mala fide intention for

delaying the process of litigation which could give some benefit to

the litigant, then probably the delay would not deserve to be

condoned. However, if no mala fide can be attributed to the delay,

the delay will be condonable. Therefore, on the facts of the present

case, we are of the considered opinion that the assessee has been

able to demonstrate sufficient reasons, in the shape of approaching

wrong remedy, for filing an appeal before the Tribunal. Therefore,

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we deem it fit to condone the delay of 1875 days and admit the

appeal.

5.4 As far as the merits of the appeal are concerned, it is seen that

according to the newly introduced provisions of section 12AA of the

Act the person in receipt of the income should make an application

in Form No. 10A for registration of the trust or institution to the

Commissioner before the expiry of a period of one year from the date

of the creation of the trust or the establishment of institution,

whichever is later. However, where an application for registration is

made after the expiry of the aforesaid period, the provisions of

sections 11 and 12 will apply from the date of the creation of the

trust or the establishment of the institution if the Commissioner is,

for reasons to be recorded in writing, is satisfied that the person in

receipt of the income was prevented from making the application

within the aforesaid period for sufficient reasons. If the

Commissioner is not so satisfied, the provisions of section 11 and 12

will apply from 1st day of the financial year in which the application

is made. In the instant appeal, it is undisputed that the assessee

has been granted registration. However, the registration has been

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granted w.e.f. from the last day of the financial year 2002-03

whereas the scheme of the Act envisages that the registration should

be granted from the first day of the financial year. We find the

approach of the Ld. CIT contrary to the provisions of the Income Tax

Act and therefore we direct the Ld. CIT to make suitable amendment

in the registration certificate granted to the assessee u/s 12AA so as

to make the registration effective from 1st April, 2002.

Order pronounced in the open court on 20.09.2016

Sd/- Sd/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER Dated: 20.09.2016 *Kavita Arora