2002 (7) TMI 815 - AT - Income Tax

Summary

Issues Involved:
1. Timeliness of the application for registration under section 12A(a) of the Income-tax Act.
2. Condonation of delay in filing the appeals.
3. Granting of registration to the Trust with effect from 31st January 1997.

Detailed Analysis:

1. Timeliness of the Application for Registration:
The appellant trust was constituted on 31st January 1997 and registered with the Assistant Charity Commissioner on 27th February 1997. The trust filed its application for registration under section 12A(a) of the Income-tax Act on 11-7-2000, which was beyond the prescribed time limit. The Commissioner of Income-tax, Rajkot, granted registration effective from 1-4-2000 but rejected the application for the period from 31st January 1997 to 31st March 2000.

2. Condonation of Delay in Filing the Appeals:
The appeals filed by the assessee were time-barred by 79 and 117 days. The assessee contended that the trustees were uneducated and lacked experience in trust matters. The managing trustee was posted 80 km away and was unable to manage the affairs promptly. The delay was attributed to bona fide lapses due to the trustees' lack of knowledge and control over the situation. The Tribunal considered whether sufficient reasons existed for the delay in filing the appeal and the application under section 12A(a).

3. Granting of Registration to the Trust with Effect from 31st January 1997:
The Tribunal noted that the courts and quasi-judicial bodies could condone delays if sufficient cause was shown. The expression "sufficient cause" should be liberally construed to advance substantial justice, as per various Supreme Court judgments. The Tribunal found that the trustees' educational and social backgrounds justified their lack of awareness regarding the legal complexities of the Income-tax Act. The trust had not engaged in any significant activities except for receiving donations and opening a bank account. The Tribunal concluded that the delay was due to a bona fide mistake and not mala fide intentions.

The Tribunal also observed that the Commissioner had not provided the assessee with an opportunity to be heard before rejecting the application, which was a procedural lapse. The Tribunal quashed the Commissioner's order dated 16th May 2001 and directed the Commissioner to grant registration to the assessee effective from 31-1-1997. The delay in filing the appeal was condoned, and the appeals were allowed on merits.