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2022 (8) TMI 1229 - AT - Income TaxCondonation of delay - Granting exemption u/s. 12A - Order granting Registration u/s. 12AA(1)(b) passed by the ld. CIT-1, Baroda was challenged by the assessee by filing this appeal with a delay of 1379 days - HELD THAT - It is seen from record, the assessee Trust was created as on 16.03.1996 and registered with the Charity Commissioner, Registrar of Societies, Baroda. The assessee s claim of its application filed in Form No. 10A on 20.09.1996 was not acted upon by the Ld. PCIT for granting exemption u/s. 12A(a) - The assessee seems to have made reminders on 01.11.2001, 12.10.2002, 10.04.2003 but thereafter no action from the assessee in pursuing its registration u/s.12A(a) - It was based on application dated 23.06.2014 filed by the assessee, Registration u/s. 12AA was granted by the PCIT on 12.11.2014 with effect from the assessment year 2015-16. As it can be seen from the letter dated 13.07.2022 produced by the D.R. which clearly states that there is no mention above application dated 13.09.1996 made by the assessee. As noted from records, the assessee has changed its address of the Trust and also informed to the department. But it is seen that the assessee has not pursued the matter immediately after filing its application and moved with the CIT office after a long period of time. Memorandum of Trust is not before us, however the main object of the assessee Trust is to render services to Exporters and Importers. It is not acceptable that how the assessee Trust is so negligent in not claiming its legal rights. It is appropriate to quote at this stage the legal maxim VIGILANTIBUS, NON. DORMIENTIBUS, JURA SUBVENIUNT which means, law will help only those who are vigilant. Law will not assist those who are careless of his/her right. Only those persons, who are watchful and careful of using his/her rights, are entitled to the benefits of law. Thus law confers rights on persons who are vigilant of their rights. We find that the assessee Trust is not vigilant in its legal rights. Amendments taken place in section 12A which is applicable up to 30.05.2007 and section 12AA which is applicable up to 31.03.2021 and present section 12AB applicable from01.04.2021. Considering the various amendments taken place in the Act, the assessee s contention of granting exemption u/s. 12A cannot be given retrospectively. The claim of exemption being a beneficial provision, the assessee ought to have acted upon and followed up with the Authorities in the manner known to law. Having kept silent for such a long period, the assessee is not eligible for the retrospective benefit. Appeal filed by the assessee with a delay of 1379 days and with a delay of 1023 days are not condoned for not adducing sufficient and reasonable cause and therefore the appeals are dismissed in limine. Assessing the Trust as Association of Person in the absence of registration granted u/s. 12AA - As the assessee has not registered u/s. 12AA of the Act during the assessment year 2012-13 A.O. was correct in assessing the assessee as on AOP, we don t find any infirmity in the order passed by the Ld. CIT(A). Therefore the appeal filed by the assessee is hereby dismissed.
Issues Involved:
1. Delay in filing appeals. 2. Grant of registration under Section 12AA of the Income Tax Act. 3. Assessment of the Trust as an Association of Persons (AOP) due to lack of registration under Section 12AA. Issue-Wise Detailed Analysis: 1. Delay in Filing Appeals: The appeals were filed with significant delays: ITA No. 32/Ahd/2019 with a delay of 1379 days and ITA No. 1775/Ahd/2017 with a delay of 1023 days. The primary reason cited for the delay was that the Trust was not properly advised by their then consultant and the trustees were unaware of the provisions related to registration under Section 12A(a) and the filing of appeals. The Tribunal noted that the reasons provided were inadequate and did not justify the inordinate delays. The Trust's lack of diligence in following up on their legal rights was highlighted, referencing the legal maxim "Vigilantibus non dormientibus jura subveniunt," which means that the law assists those who are vigilant with their rights. Consequently, the delays were not condoned, and the appeals were dismissed in limine. 2. Grant of Registration under Section 12AA: The Trust applied for registration under Section 12A(a) on 20.09.1996, but there was no response from the CIT's office. Subsequent reminders were sent in 2001, 2002, and 2013. Eventually, the CIT granted registration on 12.11.2014, effective from the Assessment Year 2015-16, based on an application dated 23.06.2014. The Trust argued that the registration should be effective from the date of the original application in 1996. However, the Tribunal found that there was no record of the 1996 application in the CIT's office and emphasized that the Trust had not pursued the matter diligently over the years. The Tribunal cited the case of CIT vs. Hemla Trust, which emphasized that ignorance of law is no excuse and stressed the necessity of timely action for beneficial provisions like Section 12A. The Tribunal concluded that the Trust was not entitled to retrospective registration from 1997-98. 3. Assessment of the Trust as an Association of Persons (AOP): For the Assessment Years 2010-11 and 2012-13, the Trust was assessed as an AOP due to the absence of registration under Section 12AA. The assessment orders were confirmed by the CIT(A), and the Trust filed appeals against these orders. The Tribunal upheld the CIT(A)'s decision, noting that the Trust was not registered under Section 12AA during the relevant years, and therefore, the AO correctly assessed the Trust as an AOP. The Tribunal referenced the Supreme Court's decision in UP Forest Corporation vs. DCIT, which held that registration under Section 12AA is a condition precedent for claiming exemption under Section 11. Consequently, the disallowances made by the AO were confirmed, and the appeals were dismissed. Conclusion: All the appeals filed by the Assessee were dismissed due to the inordinate delays in filing and the lack of sufficient cause for condonation. The Tribunal emphasized the necessity of vigilance in pursuing legal rights and the importance of timely action to benefit from provisions like Section 12A. The Trust's failure to secure timely registration under Section 12AA resulted in its assessment as an AOP for the relevant years.
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