2014 (6) TMI 779 - AT - Income Tax

Recalling of the order - Condonation of delay Delay of 1757 days earlier ITAT without addressing the issue of delay has disposed of the appeals on merits. - Held that - The assessee has explained that the belated filing of appeal was due to the fact that relevant papers were misplaced by one of the office staff and the appeals could be filed only after the papers were traced out - there is sufficient cause for condoning the delay - the assessee trust is created by the Government of Andhra Pradesh for the benefit of the archakas - so far as the object of the trust is concerned, there is no doubt with regard to the charitable nature of such object as the DIT(E) has himself granted registration u/s 12A of the Act, prospectively thus, the delay needs to be condoned, as otherwise, the assessee trust would be deprived of substantial justice Delay condoned. Grant of registration u/s 12A of the Act Prospectively or from the date of creation of the Trust Held that - Following AP Endowments Archakas and other Employees Welfare Fund Trust, Versus Director of Income-tax (Exemption) -I, Hyderabad 2012 (11) TMI 337 - ITAT, HYDERABAD - the authorities who are in the knowledge of things have not advised the assessee regarding the person to whom the application should have made nor did they forward the application to the correct authority, leading to the delay in filing of application to the correct authority by the assessee - the assessee was pursuing the matter with CBDT and the Central Government - the earlier order of the Tribunal was recalled due to technical reasons and not for any error of judgment or error in decision making process, hence, the conclusion drawn by the bench still holds good - the delay in filing application for registration before DIT(E) is condoned and the matter is remitted back with a direction to consider assessee s claim for grant of registration u/s 12A of the Act from the date of creation of trust Decided in favour of Assessee.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Grant of registration under section 12A of the Income Tax Act from the date of creation of the trust.
3. Denial of exemption under section 11 of the Income Tax Act for assessment years 2004-05 and 2005-06 due to absence of registration under section 12A.

Issue-Wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee trust filed an appeal with a delay of 1757 days, explaining that the delay was due to misplacement of relevant papers by office staff. The Tribunal acknowledged that there was a delay in filing the appeal but considered the reasons provided by the assessee. The Tribunal referred to the principles laid down by the Hon'ble Supreme Court in the case of Collector of Land Acquisition v/s. Mst. Katiji and others, AIR 1987 SC 1353, which emphasized that the term "sufficient cause" should be interpreted flexibly to ensure substantial justice. The Tribunal concluded that the delay was not deliberate but due to circumstances beyond the control of the assessee, and thus, condoned the delay, admitting the appeal for hearing.

2. Grant of Registration Under Section 12A from the Date of Creation of the Trust:
The DIT(E) had granted registration under section 12A prospectively from 01.04.2006, rejecting the assessee's request for registration from the date of creation of the trust on 27.09.1998. The Tribunal, in an earlier round of litigation, had condoned the delay in filing the application for registration and directed the DIT(E) to consider granting registration from the date of creation of the trust. The Tribunal reiterated that the delay in filing the application for registration was due to the assessee's bona fide belief and actions, including approaching the wrong authorities. The Tribunal found that the delay was not due to negligence or deliberate intent. Consequently, the Tribunal directed the DIT(E) to consider the assessee's claim for registration under section 12A from the date of creation of the trust.

3. Denial of Exemption Under Section 11 for Assessment Years 2004-05 and 2005-06:
For the assessment years 2004-05 and 2005-06, the assessee had filed returns claiming exemption under section 11, which were initially accepted. However, upon noticing that the trust was granted registration under section 12AA with effect from 01.04.2006, the Assessing Officer reopened the assessments and denied the exemption. The CIT(A) upheld the denial, stating that in the absence of registration under section 12A for the relevant periods, the Assessing Officer was justified. However, the CIT(A) noted the Tribunal's earlier order condoning the delay and remitting the matter back to the DIT(E). The Tribunal, in the present appeals, set aside the CIT(A)'s orders and remitted the matter back to the Assessing Officer to decide afresh after the DIT(E) passes the necessary order regarding the effective date of registration under section 12A.

Conclusion:
The Tribunal allowed all four appeals for statistical purposes, directing the DIT(E) to reconsider the effective date of registration under section 12A from the date of creation of the trust and remitting the matter back to the Assessing Officer to re-evaluate the exemption claims under section 11 for the assessment years 2004-05 and 2005-06 based on the DIT(E)'s decision.