2015 (3) TMI 1273 - AT - Income Tax

Condonation of delay - Grant of registration under section 12AA denied - Held that - When the assessee has been advised that the impugned order could challenged when regular appeals for subsequent assessment years are decided would clearly indicate that the assessee was well aware of the consequences of the impugned order. As per settled law when no registration is granted under section 12AA to the assessee for assessment year 2009-10 and subsequent assessment years there was no question of making claim of exemption from income under section 11 for any subsequent assessment years either in the regular assessments or in the consequential appeals filed before the learned CIT (Appeals). Thus the assessee failed to explain any sufficient cause for not presenting the appeal within the period of limitation before the Tribunal. Sufficient cause would mean a cause which is beyond the control of the assessee. Sufficient cause means which prevents the assessee acting under normal circumstances without negligence or inaction or want of bonafide. When the assessee was aware of the consequences of the impugned order that its income would not be exempt under section 11 of the Act from assessment year 2009-2010 onwards the assessee should not have waited for filing of the appeal in the matter. It is a clear case of negligence or inaction or want of bona fide. The conduct of the assessee clearly speak against the assessee itself that the assessee deliberately did not file the appeal within the period of limitation. - Decided against assessee.

Summary

Issues:
- Registration under section 12AA of the Income Tax Act, 1961.
- Condonation of delay in filing the appeal before the Tribunal.
- Failure to explain sufficient cause for the delay.
- Legal implications of not filing the appeal within the period of limitation.

Analysis:
1. Registration under section 12AA:
The appeal was filed against the order of the Commissioner of Income Tax rejecting registration under section 12AA for assessment years 2009-10 and onwards. The Commissioner held that the objects of the assessee authority did not qualify as charitable purposes due to an amendment in section 2(15) of the Act. The Tribunal noted that registration under section 12AA is a condition precedent for granting relief under section 11 of the Act. Since no registration was granted for the relevant assessment years, the assessee could not claim exemption under section 11. The Tribunal emphasized that the assessee was aware of the consequences of the order but delayed challenging it, indicating negligence or lack of bona fide.

2. Condonation of Delay:
The assessee filed an application for condonation of delay, citing reasons such as waiting for the outcome of regular assessments for subsequent years before challenging the impugned order. However, the Tribunal rejected this argument, stating that the delay of approximately six years was not adequately explained. It highlighted that sufficient cause for delay should be beyond the control of the assessee, which was not the case here. Citing various judicial pronouncements, the Tribunal emphasized the need for valid reasons supported by proper evidence to condone delay in filing appeals.

3. Failure to Explain Sufficient Cause:
The Tribunal noted that the assessee's delay in filing the appeal was not justified by the reasons provided. It highlighted that the assessee's awareness of the registration status and the legal implications should have prompted timely action. The Tribunal stressed that negligence, inaction, or lack of bona fide were evident in the assessee's conduct, leading to the dismissal of the appeal.

4. Legal Implications of Not Filing Within Limitation:
Relying on previous judgments and considering the facts of the case, the Tribunal concluded that the delay in filing the appeal was not due to sufficient cause. It emphasized the importance of adhering to specified periods of limitation and the need for valid explanations to condone delays. The Tribunal dismissed the appeal as time-barred, citing the failure to meet the legal requirements for condonation of delay.

In conclusion, the Tribunal dismissed the appeal as time-barred due to the assessee's failure to provide a valid explanation for the delay in challenging the order rejecting registration under section 12AA for subsequent assessment years. The judgment underscores the importance of timely legal actions and the necessity of meeting legal requirements for condonation of delay in filing appeals.