2022 (5) TMI 1080 - AT - Income Tax

Exemption u/s 11 / 10(23C)(vi) - Condonation of delay in filing application - Period of limitation - application of the assessee for grant of approval under section 10(23C)(vi) rejected - HELD THAT - Hon'ble Madras High Court in the case of All Angels Educational Society 2016 (8) TMI 156 - MADRAS HIGH COURT while considering the issue whether the ld. CIT(Exemption) has power to condone the delay in filing application for grant of approval under section 10(23C) or not, has considered the judgments of Hon'ble Supreme Court in the case of State of U.P. -vs.- Harish Chandra 1996 (4) TMI 121 - SUPREME COURT as well as Union of India -vs.- Kirloskar Pneumatic Co. Limited 1996 (5) TMI 87 - SUPREME COURT and held that where there is no provision to empower the statutory authority to condone the delay, than the authority cannot condoned. The adjudicating authorities under the Income Tax Act are quasi judicial authorities. They can grant approval with retrospective effect if such mechanism is provided in the Act. There is no such provision nor there is any power to condone the delay after considering the reasonable reasons. A reasonable cause can be taken into cognizance for condoning the delay, if such provision is provided in the Act while considering any issue for adjudication. Therefore, considering the above proposition, we are of the view that ld. CIT(Exemption) has rightly rejected the application of the assessee for grant of approval under section 10(23C)(vi) of the Income Tax Act. All these three appeals are rejected.

Summary

Issues involved:
- Delay in filing applications for grant of approval under section 10(23C)(vi) of the Income Tax Act
- Power of the Chief Commissioner of Income Tax to condone delay in granting approval for earlier years under section 10(23C)
- Interpretation of relevant provisions of section 10(23C)(vi) and its provisos

Detailed analysis:
1. The judgment addresses the issue of delay in filing applications for approval under section 10(23C)(vi) of the Income Tax Act. The Commissioner of Income Tax (Exemption) rejected the applications as time-barred, citing the turnover of the institute and the absence of a capable person to apply during the President's illness. The law of limitation was strictly construed, leading to the rejection of the applications.

2. The legal representatives presented arguments based on relevant case laws, such as the judgments of the Orissa High Court and the Madras High Court. The Madras High Court held that if there is no provision empowering the statutory authority to condone the delay, then the authority cannot do so. The Andhra Pradesh High Court and the Orissa High Court also examined the absence of statutory provisions to condone delays under section 10(23C)(vi).

3. The judgment delves into the interpretation of section 10(23C)(vi) and its provisos, emphasizing the absence of a mechanism to grant approval with retrospective effect or to condone delays after considering reasonable reasons. The adjudicating authorities are bound by the provisions of the Act and can only consider reasonable causes if provided for in the legislation. In this context, the Chief Commissioner of Income Tax was deemed to have rightly rejected the applications for approval under section 10(23C)(vi).

4. Ultimately, the tribunal dismissed all three appeals, affirming the decision of the Commissioner of Income Tax to reject the applications for approval under section 10(23C)(vi) due to the time-barred nature of the filings. The judgment underscores the importance of adhering to statutory provisions and limitations in seeking approvals under the Income Tax Act.