2008 (9) TMI 195 - HC - Income Tax

Educational institution It filed an application for exemption u/s 10(23C)(vi) with another application for condonation of delay in presenting the application under section 10(23C) (vi) - Chief Commissioner refused to entertain and admit the application made u/s 10(23C)(vi) on the ground that it was filed belatedly & statute does not vest any power with him to condone the delay held that there is no provision in IT Act to condone delay in filing application u/s10(23C)(vi)

Summary

Issues Involved:
1. Whether the Chief Commissioner of Income-tax (CCIT) is justified in not entertaining the petitioner's application for exemption under section 10(23C)(vi) of the Income-tax Act due to late filing.
2. Whether the CCIT has the power to condone the delay in filing the application for exemption.

Detailed Analysis:

Issue 1: Justification of CCIT in Not Entertaining Late Application
The petitioner, a registered trust running an educational institution, filed an application for exemption under section 10(23C)(vi) for the financial year 2006-07 on May 31, 2007, accompanied by a request for condonation of delay. The CCIT refused to entertain the application, citing it was filed beyond the statutory deadline and that he lacked the authority to condone such delay.

Issue 2: Power to Condon Delay
The petitioner argued that the CCIT erroneously held that he had no power to condone the delay and should have admitted the application on its merits. The petitioner cited various court decisions to support the argument that statutory authorities can condone delays if there is no explicit prohibition.

However, the respondent countered that the statute explicitly provides a time limit for filing such applications and does not grant the CCIT the power to condone delays. The power to condone delays lies with the Central Board of Direct Taxes (CBDT) under section 119(2)(b) of the Income-tax Act.

Court's Consideration:
The court examined the relevant provisions of section 10 of the Income-tax Act and rule 2CA(1) of the Income-tax Rules, 1962, which require applications for exemption to be filed within the financial year preceding the assessment year. The court noted that the Income-tax Act is a self-contained statute with specific provisions for condonation of delay in filing appeals and revisions but no such provision for applications under section 10(23C)(vi).

The court referred to the Finance Bill, 2006, which introduced a time limit for such applications and intentionally did not include a provision for condonation of delay. The legislative intent was clear that applications for exemption must be filed within the stipulated time.

The court also cited several Supreme Court rulings, including Singh Enterprises v. CCE, which held that statutory authorities cannot condone delays beyond the period explicitly allowed by the statute.

Conclusion:
The court concluded that the CCIT, being a statutory authority, cannot exceed the powers granted by the statute and cannot condone delays in the absence of explicit provisions. The court emphasized that it cannot issue directions contrary to statutory provisions or legislative intent.

Final Judgment:
The court dismissed the writ petition, upholding the CCIT's decision not to entertain the late application for exemption. The court found no merit in the petitioner's request to direct the CCIT to consider the application for condonation of delay. The judgment was agreed upon by both judges involved in the case.