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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SMT.ANNAPURNA GUPTA
आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद �यायपीठ आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण अहमदाबाद �यायपीठ अहमदाबाद �यायपीठ ‘SMC’ अहमदाबाद। अहमदाबाद �यायपीठ अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER and 488/Ahd/2024 Asstt.Year :2013-14 and 2015-16 Chamanlal Shantaben Parekh & ITO, Ward-(1) Rohini Suketu Parekh Public Vs Exemption Charitable Trust, 64, 6th Floor, Ahmedabad. Swapnalok Apartments Nr.Nursery, Ellisbridge Ahmedabad. PAN : AAATC 2331 E (Applicant) (Responent) : Shri Deepak R. Shah, AR Assessee by : Shri Atul Pandey, Sr.DR Revenue by सुनवाई क� तारीख/Date of Hearing : 30/07/2024 घोषणा क� तारीख /Date of Pronouncement: 23/08/2024 आदेश आदेश/O R D E R आदेश आदेश
Both the appeals pertain to the same assessee and are filed against separate orders of the ld.Commissioner of Income Tax Appeal Addl/JCIT(A), Udaipur passed under section 250 of the Income Tax Act, 1961 of even date i.e. 17.01.2024 pertaining to Asst.Year 2013-14 and 2015-16 respectively.
The issues raised in both the appeals, it was common ground, are identical. The ld.counsel for the assessee pointed out that the issue related to adjustment made to the income of the assessee in the intimation made under section 143(1) of the Act and 488/Ahd/2024 2 for both the years i.e. Asst.Year 2013-14 and 2015-16, denying the exemption claimed by the assessee of its income applied for charitable purposes in terms of section 11 of the Act.
The ld.counsel for the assessee drew our attention to the facts of the case pointing out that in Asst.Year 2013-14, the assessee had returned income from other sources of Rs.5,57,465/- and had showed application of the same to the charitable purposes to the tune of Rs.10,59,092/-. Thus, treating the entire income as exempt. However, the claim of benefit of application to charitable purpose was denied and the entire income returned from other sources of Rs.5,57,465/- was treated as taxable.
In Asst.Year 2015-16, it was pointed out that while the assessee had returned income from other sources of Rs.32,126/- and from voluntary contributions of Rs.18,16,000/-, it had shown application of income for charitable purpose to the tune of Rs.17,66,534/- and had applied /set part income for specified purposes amounting to Rs.81,592/-. In effect entire income of Rs.18,48,126/- was claimed as exempt, applied for charitable purposes, under section 11 of the Act. In the intimation made u/s 143(1) of the Act the assessee was denied the benefit of exemption and the entire income of Rs.18,48,126/- treated taxable.
The ld.counsel for the assessee contended that the ld.CIT(A) dismissed the appeal filed by the assessee for both the years as non-maintainable on account of substantial delay in filing of the and 488/Ahd/2024 3 appeal, being eight years and five months for the Asst.Year 2013- 14 and six years and one month in the appeal of the assessee for Asst.Year 2015-16.
The contention of the ld.counsel for the assessee before me was that the ld.CIT(A) has done so without even dealing with the bona fide reasons put forth by the assessee for the delay. He drew our attention in this regard to the submissions made before the ld.CIT(A), placed before me in PB filed for both impugned years, and which he pointed out was identical for both the years. He drew our attention to PB page no.2 file for Asst.Year 2013-14, explaining the reasons for the delay as under:
“Appeal is late by 8 years 6 months and 11 days as the appeal is filed on 26-05-2023 but intimation of the order was issued on 15/11/2014. The reasons for delay are as under. 3.1 On receipt of intimation, rectification was made on 29/12/2014 by mentioning 12AA registration number. 3.2 As per e-filing website of income tax, rectification rights are transferred with AST since 3 Feb, 2015. 3.3 No response of rectification is received till date and so as per advice of legal counsellor, appellant has preferred to file appeal against intimation u/s 143(1) with a request to condone delay. 3.4 The delay is due to not processing of rectification application by IT department and so appellant has no other remedy except to file appeal against intimation u/s 143(1). 3.5 Delay is due to reasonable cause and appellant is not in any beneficial situation under any proceeding and not deliberately on account of culpable negligence or on account of mallafied intention. Appellant does not stand to benefit by resorting to delay on the contrary in fact runs a risk. So, pray of appellant is made for condonation of delay and for considering the appeal on merit after pointing out above cause is and 488/Ahd/2024 4 sufficient cause. Your honour may kindly appreciate that there was no ill motive behind not filling appeal in time. The copy of following documents are submitted in Paper book to substantiate the facts for delay occurred. i. Copy of Ack of rectification made on 29-12-2014. ii. Copy of evidence for showing rectification rights are transferred with AST since 3 Feb, 2015.
Referring to the above the ld.counsel for the assessee contended that the fact of the matter leading to the delay in filing appeal to the Ld.CIT(A) was that after receipt of intimation under section 143(1) of the Act the assessee had filed an application to the AO u/s 154 of the Act seeking rectification of the adjustment made therein. The same, he stated, was filed immediately on receipt of the intimation made under section 143(1) of the Act which was made on 15.11.2014 and the rectification application was filed by the assessee on 29.12.2014. He contended that till date the rectification application had not been dealt with/disposed of by the AO despite the income tax portal reflecting the rectification rights being transferred to AST since 3-2-2015. He contended that the delay therefore was attributable to the reason that the rectification application of the assessee was not processed, and there was no other remedy except to file appeal against the intimation made under section 143(1) of the Act. The ld.counsel for the assessee contended that the assessee does not benefit in any way by not filing appeal, and the action taken by the assessee immediately on passing of the intimation under section 143(1) of the Act by filing rectification applications shows that there was not laxity on the part of the assessee also. The ld.counsel for the assessee contended that that the ld.CIT(A)’s order contains no reason for rejecting this and 488/Ahd/2024 5 bonafide explanation of delay given by the assessee. He pointed out that the ld.CIT(A) simply noted the quantum of delay in filing appeal, and went on to hold that the same could not be condoned, and thus dismissed the appeal of the assessee as non- maintainable.
The ld.DR was unable controvert this contention of the ld.counsel for the assessee that the ld.CIT(A) had dismissed the assessee’s appeal as non-maintainable by not condoning the delay in filing of the appeal before him without dealing with the reasons given by the assessee for the delay.
Considered in the light of the above admitted facts, I am of the view that the matter needs reconsideration at the end of the ld.CIT(A).
The reasons attributed for the delay by the assessee palpably appear to be reasonable, since the assessee had taken action swiftly against intimation made under section 143(1) of the Act by fling an application seeking rectification of the same under section 154 of the Act, and the said application having not been disposed of till date, and the assessee in turn waiting for disposal of the same, there was a substantial delay in filing of the appeal before the ld.CIT(A). Both the appeals, therefore, need to be restored back to the ld.CIT(A) first to deal with the assessee’s application seeking condonation of delay, and thereafter to deal with the merits of the case , in case the appeal is held maintainable by the Ld.CIT(A). Ld.CIT(A) is directed to pass a speaking order. and 488/Ahd/2024 6 9. During the course of hearing before us, the ld.counsel for the assessee pointed out that in the intimation made under section 143(1) for Asst.Year 2015-16, initially the assessee had received a defect notice under section 139(9) of the Act relating to the return of income filed by the assessee, pointing out that the assessee has failed to mention its registration number under section 12AA of the Act. The ld.counsel for the assessee contended that the registration number was intimated to the Department in response to the notice under section 139(9) of the Act dated 16.11.016; that despite the assessee having cured the defect, the return was processed under section 143(1) without considering the response of the assessee and the exemption claimed under section 11 of the Act of Rs.18,48,126/- was not allowed. He further pointed out that for subsequent Asst.Year 2016-17, the assessee’s return was processed under section 143(3) of the Act by way of regular assessment and noting that the assessee was duly registered under section 12AA of the Act, the total income returned by the assessee claiming exemption of its entire income was accepted. Copy of the order was placed before the Tribunal.
The ld.counsel for the assessee contended that despite the fact of the assessee having been granted registration under section 12AA of the Act and the said fact being on the record of the Department, the assessee has been denied the benefit of exemption under section 11 of the Act in both the intimation made section 143(1) of the Act for Asst.Year 2013-14 and 2015- and 488/Ahd/2024 7 11. He pleaded that this fact be considered by the ld.CIT(A) while adjudicating the present appeal, if restored for reconsideration
We have noted the facts, as pointed out by the ld.counsel for the assessee of the assessee of being granted registration under section 12AA of the Act by the Department. The ld.CIT(A) is directed to take note of the same, and consider it while dealing with the assessee’s appeal against intimation under section 143(1) of the Act denying the benefit of exemption of its income under section 11 of the Act.
In the result, both the appeals of the assessee are allowed for statistical purpose.
Order pronounced in the Court on 23rd August, 2024 at Ahmedabad.
Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 23/08/2024