2020 (10) TMI 745 - AT - Income Tax

Condonation of delay - delay of 404 days in filing the appeal - HELD THAT - While considering the condonation of delay, what is to be seen is whether the interest of the Revenue will stand protected even while recognizing the right of the Assessee to exercise the statutory remedies available to the Assessee and that the statutory right of an appeal cannot be made redundant by dismissing the application for condonation of delay and rejecting the appeal on technical grounds. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be referred. In view of the above, the delay of filing this appeal is condoned. Grant of recognition u/s.10(23C)(vi) - Claim denied as Assessee has not furnished relevant materials before the authorities below. We find that there is a lapse on the part of the Assessee - HELD THAT - Keeping in view the Assessee status for which it was established mainly to discharge various important aspects on medical education, we are of the opinion that one more opportunity should be given to the Assessee to substantiate his case before the CIT (Exemptions). - we set aside the order passed by the CIT (Exemptions) and we remit the issue back to CIT (Exemptions) to examine the entire issue afresh and decide in accordance with law. Appeal filed by the Assessee is allowed for statistical purpose.

Summary

Issues:
Delay in filing the appeal condonation, Merits of the case - exemption u/s.10(23C)(vi) of the Income Tax Act, 1961.

Delay in filing the appeal condonation:
The appeal was filed with a delay of 404 days, and the Assessee, a State University, explained the delay due to the office in-charge's difficulty in understanding the order. The Assessee, being a University created by a State Act, sought condonation of delay to challenge the order rejecting recognition under section 10(23C)(vi) of the Income Tax Act, 1961. The Assessee's Affidavit detailed the circumstances leading to the delay, emphasizing the lack of professional advice and understanding of the consequences. The Departmental Representative opposed condonation, but the Tribunal, considering substantial justice, condoned the delay to protect the Assessee's statutory right of appeal.

Merits of the case - exemption u/s.10(23C)(vi) of the Income Tax Act, 1961:
The Assessee, a medical university established under the Tamil Nadu Act 37 of 1987, applied for exemption under section 10(23C)(vi) by filing Form No.56D. The Commissioner of Income Tax (Exemptions) rejected the exemption, citing non-submission of relevant materials for verification. Despite the lapse on the Assessee's part, the Tribunal recognized the university's critical role in medical education and granted another opportunity to substantiate its case. The Tribunal set aside the Commissioner's order, remitting the issue for fresh consideration with a directive for the Assessee to provide all necessary information promptly. The appeal was allowed for statistical purposes, emphasizing the importance of the Assessee's status and the need for a fair opportunity to present its case.

In conclusion, the Tribunal's judgment addressed the delay in filing the appeal and the merits of the case regarding exemption under section 10(23C)(vi) of the Income Tax Act, 1961. The decision balanced technical considerations with substantial justice, highlighting the Assessee's statutory right to appeal. The Tribunal recognized the Assessee's role in medical education, granting a second chance to present relevant information for consideration.