2017 (4) TMI 565 - AT - Income Tax

Condonation of delay - Cancellation of registration of assessee charitable trust u/s 12A - Held that - In the first affidavit dated 9th July, 2012, the assessee Trust states that it became aware of the formalities to be carried out after consulting the tax consultants and consequently the appeal was filed late. In the second affidavit which is notarized on 07.05.2016, the assessee pleads reason of ignorance of the provisions relating to filing of appeal and further solemnly states that it had no guidance of the tax consultant. It has also solemnised that accounts were audited by the Chartered Accountant but he does not much deal with the cases relating registration u/s 12A etc. In the third affidavit which is notarized on 23.12.2016, the assessee changes its stand and states that it had forwarded the papers to Ramesh C. Shinde who was advocate looking after the Civil matters of the assessee and matters before the Charity Commissioner that arises under the Bombay Public Trust Act and Societies Registration Act. The assessee has changed its stand of availability of the consultant from one affidavit to the last one. - Decided against assessee.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Cancellation of registration of the assessee as a charitable trust under section 12A of the Income Tax Act, 1961.

Issue-Wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The primary issue addressed in this judgment is the condonation of a 253-day delay in filing the appeal by the assessee. The assessee provided multiple affidavits explaining the reasons for the delay. Initially, the assessee claimed ignorance of the provisions relating to filing an appeal and the Income Tax Act. The affidavits stated that the trustees were involved in medical professions and were unaware of the legal formalities required. They also mentioned that the order was handed over to an advocate who did not deal with tax matters, leading to the delay. However, the Tribunal found inconsistencies in the affidavits and noted that the assessee had the services of Chartered Accountants for auditing purposes, indicating the availability of professional guidance. The Tribunal referred to various judgments, including those by the Hon'ble Supreme Court, emphasizing the need for a pragmatic approach in condoning delays. Despite this, the Tribunal concluded that the assessee failed to establish a sufficient cause for the delay and dismissed the condonation application, resulting in the dismissal of the appeal.

2. Cancellation of Registration as a Charitable Trust:
The substantive issue was the cancellation of the assessee's registration as a charitable trust under section 12A of the Income Tax Act, 1961, by the Commissioner of Income Tax-I, Nashik. The Commissioner had issued a show cause notice to the assessee, alleging that the trust was carrying on activities of a Blood Bank on a commercial basis, which was against the provisions of section 2(15) of the Act. Consequently, the registration granted to the assessee under section 12A was canceled. The assessee contested this cancellation, arguing that the activities were charitable in nature and not commercial. However, since the Tribunal dismissed the appeal on the preliminary issue of delay, it did not address the merits of the cancellation of registration.

Conclusion:
The Tribunal's judgment primarily focused on the procedural aspect of the delay in filing the appeal. The assessee's failure to provide a consistent and convincing explanation for the delay led to the dismissal of the condonation application and, consequently, the appeal itself. The substantive issue of the cancellation of the trust's registration under section 12A was not adjudicated due to the dismissal on procedural grounds. The judgment underscores the importance of adhering to procedural timelines and providing credible reasons for any delays in legal proceedings.