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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. RAVISH SOOD & Dr. M. L. MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. RAVISH SOOD, JUDICIAL MEMBER AND Dr. M. L. MEENA, ACCOUNTANT MEMBER ITA No. 118/(Asr)/2020 Assessment Year: 2017-18
Dera Swami JagatGiri Trust, Vs. CIT Exemption, Guru Ravi DassChownk,Dhangu Chandigarh Peen,Patankot- 145001[AAATD4801G]
(Appellant) (Respondent)
Appellant by : Shri P. N . Arora, Advocate Respondent by: Shri Sunil Gautam, CIT(D.R.)
Date of Hearing: 24.12.2021 Date of Pronouncement: 21.02.2022
ORDER Per Dr ML Meena; AM The captioned appeal by the assessee is directed against the order of CIT exemption challenging rejection of its application for condonation of delay under section 192 (2)(b) of the income tax act. The assessee has raised the following grounds of appeal: –
That the Learned C.I.T. (Exemptions), Chandigarh, has erred on facts as well as on law in passing order u/s 12A(1)(b) of the IT Act, 1961, in which the registration has been refused u/s 12A. 2. That the Ld. CIT(E) has grossly erred in not condoning the delay and the worthy CIT(E) should have condoned the delay in view of CBDT Circular No.10/2019 dated 22/05/2019 and Circular No. 28/2019 dated
2 ITA No.118 /(Asr)/20 27/09/2019 by taking a judicial view wherein the time limit for condoning the delay was extended to 31/03/2020 and the application for condonation of delay was duly filed on 02/03/2020 which was within the extended time limit i.e. before 31/03/2020. 3. That the Ld CIT(E) failed to appreciate that vide Circular No.6/2020 F. No. 197/55/2018-ITA-1 dated 19/02/2020 CBDT has authorized the CIT(E) to admit such belated application for condonation of delay in filing the return of income Form No 10B. The CIT(E) failed to appreciate that this trust was genuine and he should have allowed the registration considering all the facts and material available on record. 4. That the CIT(E) did not appreciate that the audit report was duly uploaded. 5. That the CIT(E) did not appreciate that the audit report was prepared by the CA dated 22/02/2018 and on the basis of which the return was filed on 21/03/2018. The mistake crept in the office of the CA M/s P.P. Arora & Co. for uploading the belated audit report and the Ld. CIT(E) did not appreciate that the assessee cannot be penalized for the mistake of the counsel. As such the delay should have been condoned by the Ld. CIT(E) in view of the above said referred Board’s Circular. 6. That the CIT(E) did not appreciate that audit report dated 22/02/2018 was upload and was duly filed with the department. Thus in view of CBDT Circulars the CIT(E) should have condoned the delay in the interest of natural justice as there was reasonable and sufficient cause for not filing the audit report in time. 7. That the CIT(E) did not appreciate that the power of condonation of delay was duly given to the CIT(E). The CIT(E) failed to appreciate that the trust is carrying on charitable activities. As such the delay should be condoned and the worthy CIT(E) failed to appreciate that for the mistake of counsel the assessee cannot be penalized. This view finds support from various judicial authorities in which it was held that the mistake of the counsel is a good and reasonable cause. 8. That the Ld. CIT(E) should have condoned the delay in the interest of natural justice as the delay was condoned under the same and similar circumstances in the immediately preceding year. As such the delay in submitted the audit report should have been condoned when the trust is genuine and charitable in nature and have fulfilled all the conditions laid down under the law.
3 ITA No.118 /(Asr)/20 9. That it is prayed that the exemption u/s 12A may kindly be allowed in the interest of natural justice. 10. That any other ground of appeal which may be argued at the time of hearing of the appeal. 2. Briefly, the facts of the case are thatin this case,assessee filed application for condonation of delay under section 192 (2)(b) of the income tax act; that the assessee filed return on 21/03/2018, vide Acknowledgement Receipt No.473220961210318(APB, Pg. 5) but Audit Report in Form No.10B was not filed within the stipulated period under the Act.The PCIT exemption stated that CBDT circular no 10/2019 date 22/05/2019 authorizes to condone the delay in filling of audit report in Form No 10B but not in case where audit report in Form 10B has been obtained after which does not fall in purview of the above circular issued by the CBDT. Accordingly,he rejected the present application dated 03/03/2020 for condonation of delay by observing as under: –
“2 As per the submission made by the applicant Income tax return for the AY 2017-2018 was filed on dated 21/03/2018 vide acknowledgement number 473220961210318 but audit report in form no 10B was not filed by the assessee within time stipulated under the act 1961 The applicant was mentioned in application that staff of the council of the assessee forgo to upload the audit report on E filing portal subsequently audit report in form 10B for the AY 2017-2018 was uploaded on 18/02/2020 3 It is noticed from the submission of the applicant that audit report for the finical year 2016-2017 relevant to assessment year 2017- 2018 was signed on 22/02/2018 I e after due date of filling ITR u/s 139(1) of the Income Tax Act 1961 Hence , It is evident from the submission of the applicant that assessee failed to obtain audit report in Form 10B before the due date of filling of Income Tax
4 ITA No.118 /(Asr)/20 Return The relevant para regarding conditions for applicability of section 11 and 132 is reproduced as under :- where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds 5 fifty] thousand rupees in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub- section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form. duly signed and verified by such accountant and setting forth such particulars as may be prescribed 4 The matter has been examined After considering the submission made by the applicant assessee in the application It is clear that the assessee failed to obtain audit report Form no 10B before due dated of filling Income tax return u/s 139(1) of the IT ACT 1961 The circular no 10/2019 date 22/05/2019 authorizes to condone the delay in filling of audit report in Form No 10B but not in case where audit report in Form 10B has been obtained after not fall in purview of the above circular issued by the CBDT present application OF THE ASESEE FOR CONDATON OF DELAY U/S 192(2)B IS HEREBY REJECTED.” 3. The learned AR for the assessee submitted that the CIT exemption Chandigarh has refused to condone the delay in filing application in form number 10 B for the assessment year 2017 – 18 without hearing the petition for condonation of delay on merits with the support of written submission which reads as under:
This is an appeal preferred by the assessee against the order of the Learned CIT(Exemptions), Chandigarh wherein the worthy CIT(E) has refused to condone the delay in filing Form No.10B for the AY 2017- 18 without hearing and without giving proper opportunity of being heard. In this connection a copy of the petition for condonation of
5 ITA No.118 /(Asr)/20 delay is available on Page No.3 & 4 of the paper-book. The brief facts of this case are as under:- In this case, the assessee filed return on 21/03/2018, vide Acknowledgement Receipt No.473220961210318. A copy of the same is available on Page No.5 of the paper-book. But Audit Report in Form No.10B was not filed within the stipulated period under the Act. In this connection, it is relevant to point out that an application for condonation of delay was duly filed and the following facts were made very clear to the Ld. CIT(E) and the brief facts of the case are as under:- (i) That admittedly the trust return was filed on 21/03/2018. [Refer Page No.5 of the paper-book] (ii) That the audit report in Form No.10B for the AY 2017-18 [Refer Page No.8 to 19 of the paper-book] was duly uploaded on 18/02/2020 [Refer Page No.7 of the paper-book]. [2] (iii) That it is clear from the computation of income [Refer Page No.6 of the paper-book] that the return was filed on the basis of audit report dated 22/02/2018. It was specifically mentioned in the computation of income as under:- “(As per Audit Report dated 22-02-2018 by M/s P.P. Arora & Associates Chartered Accountants) Aggregate of Income referred to in sections 11 and 12 derived excluding Voluntary Contribution 7337939” Thus the Ld CIT(E) should not have doubted the audit date because the audit report is also dated 22/02/2018 which was also uploaded with the department on 18/02/2020 i.e. before 31/03/2020. (iv) That the Ld. CIT(E) miserably failed to appreciate that no reasonable opportunity of being heard was ever allowed before rejecting the application for condonation of delay which is against the principle of natural justice.
6 ITA No.118 /(Asr)/20 (v) That it is pertinent to point out that the same Ld CIT(E) has condoned the delay in the case of the present appellant in connection with AY 2016-17. A copy of the order is available on Page No.44 of the paper-book. Further acknowledgment receipt with regard to uploading of Audit Report on 18/02/2020 along-with copy of ITR relating to AY 2016-17 is enclosed herewith. [Refer Page No.45 & 46 of the paper-book]. It is relevant to point out that the audit report in connection with AY 2017-18 was also uploaded on 18/02/2020. [Refer Page No.7 of the paper-book] (vi) That the worthy CIT(E) should have condoned the delay in view of Board’s Circular No.10/2019 dated 22/05/2019 and Circular No.6/2020 dated 19/02/2020, copies of which are enclosed herewith and are available at Page No.20 to 27 of the paper-book. It is further relevant to point out that the Board’s Circular is binding on all the authorities working under the Board, which please note. The department has to be consistent in their stand. Under the same and similar circumstances, they have condoned the delay in connection with AY 2016-17 and it is prayed that in connection with AY 2017-18 the delay should have been condoned when the facts are identical. [2A] (vii) That it is further relevant to point out that if there is any delay on the part of the Auditor (Counsel) of the assessee in uploading the audit report, that itself constituted the reasonable cause and the assessee cannot be penalized for the mistake of staff of the counsel. It has been held by many authorities including Amritsar Bench in the case of Bhagwati Colonizers that the assessee cannot be penalized for the mistake of the staff of counsel. A copy of the judgment is available on Page No.28 to 43 of the paper-book. In this connection, your kind attention is invited to Para 16 on Page No.13 of the Judgment [Refer Page No.40 of the paper-book] it was observed as under:-
“16. An assessee usually engages a counsel to advise him and also to deal with legal matters and hence, in the normal circumstances, an assessee fully places his reliance on the counsel, due to domain expertise possessed by the Counsel. In that situation, generally the assessee should not be put in trouble for the mistake, if any, committed by a counsel. The following observations made by Hon’ble Supreme Court in the case reported in AIR 1971 Ker. 211 @ 2015 support the above said view:-
7 ITA No.118 /(Asr)/20 The law is settled that mistake of counsel may in certain circumstances be taken into account in condoning delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. It is always a question whether the mistake was bonafide or was merely a device to cover an ulterior purpose such as latches on the part of the litigant or an attempt to save limitation in an underhand way……………….” (viii) That the trust is carrying on charitable activities including religious activities. The trust is a genuine trust and as such the delay should have been condoned in the interest of natural justice. It is, therefore, very respectfully prayed that the delay may kindly be condoned and the appeal of the appellant may kindly be accepted. 4. Per contra, the Ld. CIT(DR)stands by the impugned order.
Heard. Admittedly the assessee filed return on 21/03/2018, vide Acknowledgement Receipt No.473220961210318 (APB, Pg.5)but Audit Report in Form No.10B was not filed within the stipulated period under the Act, although, the audit report in Form No.10B for the AY 2017-18 [APB, Pg. No.8 to 19] was duly uploaded on 18/02/2020 [APB, Pg.7]. The Ld. AR argued that the CIT(E) did not appreciate the facts that the audit report was prepared by the CA dated 22/02/2018 and on the basis of which the return was filed on 21/03/2018. Thus, the mistake crept in the office of the CA, M/s P.P. Arora & Co. in uploading the audit report and therefore, the Ld. CIT(E) was not justified in penalizing the assesseefor the mistake of the counsel.
The Ld. AR referred to the computation of income [APB, Pg.6] and contended that the return was filed on the basis of audit report dated 22/02/2018which was also uploaded with the department on 18/02/2020 i.e. before 31/03/2020 and therefore, the Ld CIT(E) should not have doubted the audit dated 22/02/2018.
8 ITA No.118 /(Asr)/20 7. It is pertinent to mention that on similar facts, the Ld CIT(E) has condoned the delay in the case of the present appellant in connection with just previous Assessment Year 2016-17 (APB, Pg.44) where copy of acknowledgment receipt with regard to uploading of Audit Report on 18/02/2020 along-with copy of ITR pertaining to Assessment Year 2016-17 is filed on record [APB, Pg..45 & 46]. It is relevant to focus that the audit report in connection with AY 2017-18 under consideration was also uploaded on 18/02/2020. [APB, Pg.7].
It is abundantly clear that the CBDT circular no 10/2019 date 22/05/2019 authorizes the Ld. CIT(E) to condone the delay in filling of audit report in Form No 10Band these circulars are binding on the department authorities.Thus, the ld. CIT(E) not fair and justified in observing that the audit report in Form 10B has been obtained afterwhich do not fall in purview of the above circular in respect of the assessment year under appeal and further against the principle of consistency being in contradiction toits own decision to the previous assessment year 2016-17 where the delay in filling of audit report in Form No 10B has been condoned on aforesaid identical facts.
In the case of “Bhagwati Colonizers”,the Coordinate Bench, observed that the assessee cannot be penalized for the mistake of the staff of counsel (APB, Pg.28 to 43)book. The relevant Para 16 on Page No.13 is reproduced as under:-
“16. An assessee usually engages a counsel to advise him and also to deal with legal matters and hence, in the normal circumstances, an assessee fully places his reliance on the counsel, due to domain expertise possessed by the Counsel. In that situation, generally the assessee should not be put in trouble for the mistake, if any, committed by a counsel. The
9 ITA No.118 /(Asr)/20 following observations made by Hon’ble Supreme Court in the case reported in AIR 1971 Ker. 211 @ 2015 support the above said view:- The law is settled that mistake of counsel may in certain circumstances be taken into account in condoning delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. It is always a question whether the mistake was bonafide or was merely a device to cover an ulterior purpose such as latches on the part of the litigant or an attempt to save limitation in an underhand way……………….”
In the above, we find merit in the contentions of the assessee and the grievance of the assesseeis accepted as genuine. Accordingly, we hereby condoned the delay in filing the applicationby the appellant society.
The other grounds no. 1 and 9 raised by the appellant did not emanates from the impugned order and hence not adjudicated.
In the result, the appeal of the assesse society is allowed in the terms indicated as above.
Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Ravish Sood) (Dr. M. L. Meena) Judicial Member Accountant Member Date: 21.02.2022 DOC* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T
By Order