2014 (9) TMI 42 - AT - Income Tax

Condonation of delay Delay of 1804 days Sufficient cause - Rejection of application for registration u/s 12AA - Held that - There is no straight jacket formula to measure what constitutes sufficient cause. It depends upon the facts of each individual case - Condonation of delay is not a matter of empty formality - The assessee is required to show sufficient cause that the assessee was either bona fide or was prevented by sufficient cause from pursuing the remedy - The assessee has to establish that there was no negligence or inaction or want of bona fide and the right granted under law to challenge the order was not abandoned - the assessee was earlier enjoying exemption u/s10(20A), but after omission of the provision from 1.4.2002, the assessee itself started filing returns of income voluntarily declaring income for the assessment years 2003-04, 2004-05; and 2005-06 - Only on 15.3.2007, the assessee made an application for registration under S.12AA of the Act - The justification/reasons for making such application, as discovered from the order of the DIT(E) is that its counterpart Visakhapatnam Urban Development Authority was granted registration under S.12AA of the Act, vide order dated 31.7.2006. Belated filing of appeal is not just the only aberration or stand alone instance of lapse on the part of the assessee there were several instances which clearly demonstrate the casual and negligent approach of the assessee in dealing with issues pertaining to income-tax, which under the normal circumstances require greater attention - the assessee did not produce its books of account and information called for in spite of availing sufficient opportunity - the assessee is not only negligent in filing appeal before the Tribunal, but also in the matter of pursuing its application, before the DIT (E) for getting registration u/s12AA by producing the books of account and other information - it is quite certain that there is no reasonable cause for the delay, and the filing of the present appeal is only a knee jerk reaction of the assessee thus, it is not a fit case for condonation of delay - the plea of the assessee for condonation of delay is rejected Decided against Assessee.

Issues Involved:
1. Condonation of Delay in Filing the Appeal.
2. Bona Fide Belief and Pursuit of Alternative Remedies.
3. Ignorance of Law and Professional Advice.
4. Government Undertaking and Special Treatment.
5. Merits of the Grounds Raised by the Assessee.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The primary issue in this case is the condonation of a delay of 1804 days in filing the appeal by the assessee. The tribunal examined whether the delay was justified and whether there was sufficient cause for not presenting the appeal within the prescribed period. The tribunal emphasized that the law requires the assessee to show sufficient cause for the delay and that there was no negligence or inaction on their part. The tribunal found that the assessee failed to provide a reasonable explanation for the delay, noting that the assessee was aware of the rejection of their application for registration under S.12AA since 2007 but only filed the appeal in 2012. The tribunal concluded that the delay was not justified and dismissed the appeal as barred by limitation.

2. Bona Fide Belief and Pursuit of Alternative Remedies:
The assessee argued that the delay was due to a bona fide belief that they were eligible for deduction under S.36(1)(xii) and that registration under S.12AA was not necessary as they were pursuing registration under S.10(23C)(iv). The tribunal found this explanation to be unconvincing, noting that the assessee had professional advice and was aware of the provisions of the Income-tax Act. The tribunal also noted that the assessee did not take immediate remedial steps after the rejection of their application under S.10(23C)(iv) and waited for over four years to file a rectification petition.

3. Ignorance of Law and Professional Advice:
The assessee contended that they were not aware of the provisions of the Income-tax Act and were relying on professional advice. The tribunal rejected this argument, stating that the assessee, being a statutory authority, had access to qualified professionals and was well aware of the provisions of the Act. The tribunal emphasized that ignorance of law is not an excuse and that the assessee's conduct showed a lack of seriousness and diligence in pursuing their claims.

4. Government Undertaking and Special Treatment:
The assessee argued that being a government undertaking, they should be treated differently and that there was no mala fide intention in not filing the appeal on time. The tribunal rejected this argument, citing the Supreme Court's decision in the case of Chief Post Master General V/s. Living Media India Ltd., which held that government bodies are not entitled to special treatment in the matter of condonation of delay. The tribunal emphasized that the law of limitation applies to everyone equally and that there was no reasonable cause for the delay in this case.

5. Merits of the Grounds Raised by the Assessee:
Given the dismissal of the appeal on the grounds of limitation, the tribunal did not examine the merits of the grounds raised by the assessee. The tribunal concluded that the appeal was not maintainable due to the inordinate delay in filing and dismissed it in limine.

Conclusion:
The tribunal dismissed the appeal filed by the assessee due to an unreasonable delay of 1804 days in filing. The tribunal found that the assessee failed to provide a sufficient cause for the delay and that their explanations were unconvincing. The tribunal emphasized that ignorance of law is not an excuse and that government bodies are not entitled to special treatment in the matter of condonation of delay. The appeal was dismissed in limine as barred by limitation.

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