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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM &DR. A.L.SAINI, AM
आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2015-16, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals) [in short “the ld. CIT(A)”] National Faceless Appeal Centre, Delhi (in short “the NFAC”), dated 29.05.2021.
The grounds of appeal raised by the assessee are as follows: “1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of income-tax (Appeals), National Faceless Appeal Centre has erred in not condoning the delay in filing of appeal against intimation order passed u/s 143(1) of the Act and dismissing the appeal in limine by passing order u/s 250 of the I.T. Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned Asst. CIT, (CPC) while issuing intimation order u/s 143(1) of the Act has erred in determining total income of assessee at Rs.3,70,850/- by disallowing expenses of Rs.3,70,850/- on the ground that registration u/s 12AA of the Act is applicable from A.Y. 2019-20 and not from A.Y.2013-14. The learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has erred in confirming the above action.
ITA No.117/SRT/2021 A.Y. 15-16 Moeen Memorial Welfare Trust
On the facts and circumstances of the case as well as law on the subject, the Ld. Dy. CIT (CPC) should make addition of only net income of the trust i.e. excess of income over expense can be taxed under the I.T. Act. 4. On the facts and circumstances of the case as well as law on the subject, the learned Dy. CIT, (CPC) while issuing intimation u/s 143(1) of the Act has erred in taxing the income of the assessee trust at maximum marginal rate of 30% &also erred in not giving exemption of basic exemption limit. 5. On the facts and circumstances of the case as well as law on the subject, adjustment u/s 143(1) can be made only in respect of arithmetical /apparent mistake in the return of income. Addition in respect of debatable issues, adjustment u/s 143(1) (a) can never be made. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
At the outset, Shri Sapnesh R Sheth, Learned Authorized Representative (AR) for the assessee, invites our attention to the order dated 31.01.2022 in ITA No.100/SRT/2021 in assessee’s own case and pointed out that the issue of the assessee’s present appeal for A.Y 2015-16 is squarely covered by the above said order. Therefore the matter should be remitted back to the file of Ld. NFAC / Ld. CIT(A) for fresh adjudication.
On the other hand, Ld. CIT-DR for the Revenue has also fairly agreed with the submissions of Ld. AR of the assessee. 5. We have heard both the parties and perused the materials available on record. We note that the issue raised by assessee in this appeal is squarely covered by the order of this Co-ordinate Bench of this Tribunal in assessee’s own case ITA No.100/SRT/2021 dated 31.01.2022 (supra) on identical and similar facts wherein the Tribunal has inter alia observed as follows: “3. At the outset, Shri Sapnesh R Sheth, Learned Authorized Representative (AR) for the assessee, begins by pointing out that during the appellate proceedings Ld. NFAC(Appeals), did not condone the delay of filing appeal and hence dismissed the appeal of assessee in limine. Learned AR for the assessee pleads that assessee has submitted a petition for condonation of delay before Ld. NFAC(Appeals), however, Ld. NFAC(Appeals) did not consider the facts and circumstances of the assessee, in right perspective. The Ld. AR further contends that assessee-trust is a genuine trust and subsequently registration u/s 12AA of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) has been granted in favour of assessee (vide assessee`s registration U/s 12AA on page no.17 to 19 of assessee`s paper book). Page | 2
ITA No.117/SRT/2021 A.Y. 15-16 Moeen Memorial Welfare Trust
Since, the assessee trust is running genuine charitable activities and that is why the assessee got registration under section 12AA of the Act, hence such genuine trust should be encouraged and should not be penalized for technical mistake. Therefore, Ld. AR submits that assessee-trust has furnished petition for condonation of delay, and explained the delay is a reasonable way. Therefore, he prays the Bench that delay in filing appeal before ld CIT(A) may be condoned. 4. On the other hand, Ld. CIT-DR for the Revenue submits that assessee has filed appeal before Ld.NFAC (Appeals) after knowing the fact that assessee-trust has been granted the registration u/s 12AA of the Act. Therefore, assessee has mala fide intention and want to take undue advantage, hence the petition of assessee for condonation of delay should not be entertained. This way, ld DR has strongly objected to the prayer for condonation of delay and submitted that the delay should not be condoned in these circumstances. 5. We have heard both the parties and perused the materials available on record. We note that Ld. NFAC(Appeals) did not condone the delay of assessee’s appeal even though assessee has submitted a petition for condonation of delay and justified the delay in reasonable way. The order of Ld. NFAC (Appeals) is reproduced below: “This is an appeal against the intimation u/s 143(1) issued by the CPC, Bangalore dated 28/11/2014. The intimation is claimed to have been received on 28/11/2014 but the appeal is filed on 05/10/2019, i.e. with delay of 04 years and 10 months which works out to 1764 days. Inform 35 the appellant has stated the reason for delay as under: “1. That the assessment order by intimation u/s 143(1) for AY 2013-14 was passed on assessee on 28-11-2014 and appeal was due to be filed on 28-12- 2014.The fact was come to know to the assessee by a call of demand. Before appeal before you, on the basis of fact and available documents, we tried other options like rectification online and applied to jurisdictional officer to delete the demand raised by the system but got no response. We file the appeal today against aforesaid order i.e. after due date. 2. Sir, you may appreciate that tax must be assessed on net profit (i.e. all the expenses for the object of the trust are allowable)In earlier years also expenses claimed were allowed. This time due to changes in system at CPC, total expenses were disallowed. This is not an exceptional case; system has disallowed the expenses in respect of other assessees also in the country. The tax liability created by the system is on total receipt and not on surplus after deduction of expenditure. This is against the principal of natural justice and against the spirit of the law. 3. That your goodself is empowered u/s 249(3) of the Act so condone delay in filing appeal. 2. It could be seen from the above that the appellant has no valid reason for such a huge delay. On one hand the appellant claims that he came to know about the order u/s 143(1) only when there was call for the demand but on the other hand it is fairly admitted in Form 35 that the demand notice has been served on 28/11/2014. It is evident that the appellant is not able to explain such a huge
ITA No.117/SRT/2021 A.Y. 15-16 Moeen Memorial Welfare Trust
delay on his part for filing this appeal. On these facts therefore, the delay is not condoned and the appeal is dismissed in limine. 3. Before parting, an observation on this appeal would be in order. From a perusal of the 143(1) order it is seen that the appellant had declared income from other sources at Rs.3,57,240 which was assessed as such by the CPC. In his return, the appellant claimed Rs.3,56,300 as being applied for charitable purposes. This was reduced to nil by the CPC. This is the only difference between the return and the intimation u/s 143(1).On an examination of the registration 12AA of the Act in case of the appellant, it is seen that the CIT (Exemption,) Ahmedabad has granted registration u/s 12AA to the appellant vide his order dated 18/09/2019 and is valid from AY 2019-20 onward. Naturally, this registration u/s 12AA would not apply to the present AY 2013-14 and as a result of which no deduction u/s 11 is admissible to the appellant. Therefore, on merits also, the action of the CPC is in order. In any case as the delay has not been condoned, the appeal is dismissed in limine.” 6. From the above order of Ld. NFAC (Appeals), it is vivid that although assessee has filed petition for condonation of delay and justified the delay also. However, Ld. NFAC (Appeals), did not condone the delay and dismissed the assessee’s appeal in limine. We are of the view that provisions of law have to be adhered strictly and that one cannot be allowed to act in leisure and make a mockery of enacted law, because law and provisions are laid down to benefit both sides of litigation. Be that as it may, we have to do justice and the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs Mst. Katiji and others, reported in 167 ITR 471, (1988 SC 897) (7) observed as follows: “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…………” 7. When we weigh these two aspects then the side of justice becomes heavier and casts a duty on us to deliver justice. We note that the reasons given in the affidavit for condonation of delay, which were filed before Ld. NFAC (Appeals), were convincing, and these reasons would constitute reasonable and sufficient cause for the delay in filing this appeal. Therefore, in the interest of justice, Ld. NFAC (Appeals), ought to have condoned the delay. 8. Considering the above facts and circumstances of the case, as narrated above, we are of the considered opinion that in the interest of justice, the delay deserves to be condoned. Thus, the delay in filing appeal before Ld. CIT(A) is condoned. Considering the fact that we have condoned the delay in filing appeal before Ld. CIT(A)/NFAC(Appeals), we noted that after dismissing the application for condonation of delay the Ld. CIT(A)/NFAC(Appeals) also dismissed in limine. Therefore, we deem it fit and proper to set aside the order of the Ld. NFAC (Appeals) on merit as well and remit the issue back to the file of Ld. NFAC (Appeals) to decide all the grounds of appeal on merits in accordance with law. Needless to say that before passing the order the Ld. CIT(A)/NFAC(Appeals) shall provide reasonable and proper opportunity to the assessee. The assessee is
ITA No.117/SRT/2021 A.Y. 15-16 Moeen Memorial Welfare Trust
also directed to provide all necessary information and evidence without any further delay.” 6. The Co-ordinate Bench of this Tribunal has condoned the delay based on the facts and circumstances in assessee’s own case (supra). Therefore respectfully following the binding precedent, we condone the delay in filing the appeal of assessee before Ld. NFAC/ Ld. CIT(A) and remit the issue back to the Ld. NFAC/Ld. CIT(A) for adjudication on merits in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29/03/2022 at the close of hearing.
Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 29/03/2022 Dkp Outsourcing Sr.P.S./*SS Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat