Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PER S. BALAKRISHNAN, Accountant Member :
This appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-2, Guntur [CIT (A)] in dated 10/02/2020 arising out of the order passed U/s. 143(3) of the Act for the AY 2016-17.
2 2. At the outset, it is noticed from the record that there is a delay of 192 days in filing the appeal before the Tribunal. With respect to the delay, the Ld. AR drew our attention to the petition filed by the assessee seeking condonation of delay, wherein the reasons were explained. For the sake of reference, the relevant portion of the petition for condonation of delay is extracted herein below:
“The said order was served on 20/02/2020. The period of 60 days for filing the appeal before the Hon’ble ITAT ended on 20/04/2020. In the meantime, the Govt. of India declared Lockdown in the country due to Corona Pandemic and all the Government Offices and private establishments remained closed with effect from 25/03/2020. The lock down was extended from time to time. Though the unlockdown process started with effect from 18/5/2020 in a phased manner, many restrictions like physical distance, etc., were imposed. The inter- state movement of public was not allowed. The Advocate of the assessee is stationed at Hyderabad whereas the petitioner is functioning at Guntur in Andhra Pradesh. In the midst of such restrictions, the appellant could consult the Advocate in the last week of October, 2020 when the inter-state borders were opened for public and got the appeal prepared. The appeal papers were sent by Registered Post vide postal receipt No.RN1719119491N dated 26/10/2020 in the Registry of the Hon’ble ITAT, Visakhapatnam and the same was delivered on 29/10/2020. There is a delay of 192 days in filing the appeal……”
After hearing the submissions of the Ld. AR as well as on perusal of the contents of the condonation petition filed by the assessee, we are of the view that the assessee was prevented by a 3 reasonable and sufficient cause in filing the appeal belatedly before the Tribunal with a delay of 192 days. Therefore, in our view, this is a fit case for condoning the delay and hence we hereby condone the delay of 192 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits.
Brief facts of the case are that the assessee is carrying activities related to seed certification in the State of Andhra Pradesh. For the AY 2016-17, the assessee filed its e-return of income on 7/7/2017 admitting NIL income after claiming exemption U/s. 11 of the Income Tax Act, 1961. The case was selected for scrutiny under CASS and accordingly notices U/s. 143(2) and 142(1) of the Act were served on the assessee along with questionnaire. In response, the assessee furnished its information electronically. During the assessment proceedings, it was verified that the assessee was registered U/s. 12A of the Act by the Director of Income Tax (Exemptions), Hyderabad vide order dated 01/01/2004 however, the registration was cancelled by the DIT(E), Hyderabad vide order dated 30/04/2012. The Ld. AO further observed that the assessee society is not running for a charitable purpose as the same has been for the purpose of profit, generating substantial surplus out of fee etc., received
4 which clearly indicated that the activities are in the nature of Trade/Business/Commerce and the value of gross receipts during the AY 2016-17 is Rs. 9,36,89,498/- and therefore the assessee society falls within the ambit of the amended provisions of section 2(15) of the Act. The Ld. AO also observed that the as per the DIT(E), Hyderabad the assessee-society lost its character as a charitable organization within the meaning of section 2(15) of the Act and therefore the registration was cancelled U/s. 12AA(3) of the Act w.e.f 1/4/2009. The Ld. AO further observed that the Writ Petition filed by the assessee society was dismissed by the Hon’ble AP High Court vide WP No. 31640 of 2011, dated 17/12/2012 by upholding the order of the Ld. DIT(E), Hyderabad.
Thus, the Ld. AO concluded that the assessee-society’s activities do not fall within the ambit of objects which qualify for exemption U/s. 11(1) r.w.s 2(15) of the Act and therefore denied the exemption claimed U/s. 11 of the Act. Accordingly, the Ld. AO completed the assessment U/s. 143(3) of the Act and determined the assessed income at Rs. 26,09,113/- and made the addition on account of excess income over expenditure.
Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A).
5 5. On appeal, the Ld. CIT(A) after discussing the issue, upheld the action of the Ld. AO by holding that the Ld. AO has rightly denied the exemption claimed by the assessee U/s. 11 of the Act while brining the excess income over the expenditure to the tax.
Aggrieved by the order of the Ld. CIT(A), the assessee failed an appeal before this Tribunal.
In the first round of proceedings, the case was taken up for hearing but due to non-appearance of the assessee, the Tribunal passed ex-parte order vide its order in (AY 2016-17), dated 19/04/2022. However, the assessee filed a Miscellaneous Application stating the reasons prevented the assessee for non-appearance on the date of hearing before the Tribunal. Considering the submissions of the assessee, the Tribunal recalled the ex-parte order passed vide its order in MA No. 24/Viz/2022 (AY 2016-17), dated 13/10/2022. Thus, this appeal is taken up for adjudication in the second round of proceedings.
The assessee has raised the following grounds of appeal:
“1. The order of the Ld. CIT(A) is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in rejecting the exemption U/s. 11 of the Act holding that the appellant is not a charitable organization within the meaning of 6 section 2(15) of the Act without considering the fact that the activities carried on by the appellant are charitable in nature.
3. The Ld. CIT(A) ought to have held that the appellant is entitled for exemption U/s. 10(23C)(vi) of the Act.
4. The Ld. CIT(A) ought to have considered that the services rendered by the appellant are to provide quality seeds to the agriculturists and to improve productivity of the yield.
The Ld. CIT(A) ought to have considered the fact that the appellant is an organization established by the Government specifically for providing advantage to the agriculturists in supplying the quality seeds and therefore ought to have held that the exemption U/s. 11 is available for the appellant.
6. Any other ground that may be urged at the time of hearing.”
Before us, at the outset, the Ld. AR drawn our attention to the decision of the Hon’ble Supreme Court in Civil Appeal No. 21762 of 2017, dated 19/10/2022 in the case of Assistant Commissioner of Income Tax (Exemptions) vs. Ahmedabad Urban Development Authority and Others, wherein the assessee is also one of the Respondents, and submitted that the assessee’s (Andhra Pradesh State Seed Certification Agency) SLP (C)15547/2013 was allowed in favour of the assessee by the Hon’ble Apex Court. The Ld. AR therefore pleaded that the since the Hon’ble Apex Court has allowed the assessee’s SLP in its 7 favour, the assessee’s appeal before the Hon’ble Tribunal may be allowed in favour of the assessee.
Per contra, the Ld. DR relied on the orders of the Ld.
Revenue Authorities.
We have heard both the parties and perused the material available on record as well the orders of the Ld. Revenue Authorities. It is fact that the assessee was registered U/s. 12A of the Act by the Director of Income Tax (Exemptions), Hyderabad vide order dated 01/01/2004 however, the registration was cancelled by the DIT(E), Hyderabad vide order dated 30/04/2012.
It is also a fact that initially, the Writ Petition filed by the assessee society was dismissed by the Hon’ble AP High Court vide WP No. 31640 of 2011, dated 17/12/2012 by upholding the order of the Ld. DIT(E), Hyderabad. As submitted by the Ld. AR, we have also gone through the decision of the Hon’ble Sureme Court, a copy of the decision is placed on record, in the Civil Appeal No. 21762 of 2017, dated 19/10/2022 in the case of Assistant Commissioner of Income Tax (Exemptions) vs. Ahmedabad Urban Development Authority and Others (supra) wherein the SLP (C)15547/2013 filed by the assessee was allowed in its favour.
Therefore, respectfully following the decision of the Hon’ble
8 Supreme Court (surpa), we are of the considered view that the assessee is entitled for approval / exemption U/s. 10(23C)(vi) of the Act and accordingly, we direct the Ld. Revenue Authorities to allow the assessee’s claim of exemption U/s. 11 of the IT Act, 1961. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed. Pronounced in the open Court on the 21st April, 2023.