2015 (1) TMI 1483 - HC - Income Tax

Application of filling petition u/s 10(23C) (vi) delayed - condonation of delay - application for relaxation of time in filing the petition under Section-10(23C) (vi) rejected - HELD THAT - As Income Tax Act is most complicated piece of legislation. The assessee-society is exclusively engaged for the promotion of Hindi language, so amendment was not known to assessee. In the instant case, the assessee-society was already enjoying the benefit under Section-10(22) of the Income Tax Act and was under bona-fide belief that exemption is continuing. The assessee was totally ignorant about the amendment and department is not supposed to take the advantage of the ignorance of the assessee as per CBDT Circular No. 14 (XL-35)/1955 dated 11 April, 1955. In the circumstances mentioned above, we set-aside the impugned order and condone the delay with a direction to the competent authority to pass afresh order on merit for the above mention assessment years at the earliest, preferably within a period of four months soon after receiving the certified copy of this order.

Summary

Issues:
Assessment of exemption under Section-10(23C) (vi) for multiple years, rejection of application for relaxation of time, genuine hardship, ignorance of amendment, condonation of delay.

Analysis:
The petitioner challenged the order rejecting the application for relaxation of time in filing the petition under Section-10(23C) (vi) for various assessment years. The petitioner's counsel argued that the society was previously registered and exempted under relevant sections until a new amendment came into force, requiring a fresh application for exemption. The society, under a bona-fide belief of continuous exemption, only applied for exemption and condonation of delay after receiving a notice under Section-148. The department's counsel contended that there was no genuine hardship justifying the delay condonation. The Court noted the complexity of the Income Tax Act and the society's exclusive engagement in promoting Hindi language, which led to ignorance of the amendment. Referring to a CBDT Circular, the Court emphasized that the department should not take advantage of the assessee's ignorance.

The Court, considering the circumstances, set aside the impugned order and directed the competent authority to pass a fresh order on merit for the mentioned assessment years within four months of receiving the certified copy of the judgment. Consequently, the writ petition was allowed, granting relief to the petitioner.