2024 (5) TMI 1300 - AT - Income Tax

Condonation of Delay - appeal was delayed by 506 days - sufficient cause of delay explained or not? - as submitted delay was due to the receiver not opening the email containing the order. The Chartered Accountant discovered the rejection while checking the ITBA portal for the assessment order - HELD THAT - The assessee has filed the appeal after an inordinate delay of 506 days. The reason given is that while checking fate of the assessment order, the CA also checked the status of application for registration and found that the application has been rejected. It means that the assessee was primarily concerned about the fate of assessment order. The CA also checked the fate of the application filed for registration while checking the assessment order. It is thus crystal clear that after filing the application, it had remained inactive and negligent. There was no due diligence on the part of the assessee. This fact shows the lackadaisical attitude of the assessee towards the registration of the trust and subsequent follow up action indulging filing of appeal. Such casual, indifferent and lackadaisical approach towards the order of rejection of registration cannot constitute sufficient cause within the meaning of section 253(5) of the Act. In view of the above facts and respectfully following the authoritative precedents cited supra, we refuse to condone the delay, requested by the assessee. Since, delay has not been condoned, it becomes academic in nature to discuss the merit of the case.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Rejection of the application for registration of trust u/s 12AB.

Summary:

Condonation of Delay:
The appeal was delayed by 506 days. The assessee-trust filed an affidavit stating the delay was due to the receiver not opening the email containing the order. The Chartered Accountant discovered the rejection while checking the ITBA portal for the assessment order. The assessee argued that there was no malafide intention and cited CBDT Circular No.7/2024, which extended the time limit for filing applications for registration u/s 12A till 30.06.2024. The Ld. AR relied on several judicial precedents to support the condonation of delay.

The Ld. CIT-DR opposed the condonation, arguing that the reasons provided did not constitute "sufficient cause" as per section 253(5) of the Act. The delay was attributed to negligence and lack of diligence by the assessee. The Ld. CIT-DR relied on the Supreme Court judgment in Majji Sannemma @ Sanyasirao vs. Reddy Sridevi & Ors., which emphasized that negligence and lack of due diligence are not sufficient grounds for condonation.

The Tribunal, after considering the submissions, found that the assessee was negligent and inactive in pursuing the application and filing the appeal. The Tribunal referred to several Supreme Court judgments, including P. K. Ramachandran vs. State of Kerala & Anr., Basawaraj vs. Special Land Acquisition Officer, and others, which stressed that "sufficient cause" cannot be liberally interpreted if negligence or inaction is attributed to the party. The Tribunal concluded that the reasons provided by the assessee did not constitute "sufficient cause" and refused to condone the delay.

Rejection of Application for Registration u/s 12AB:
Since the delay was not condoned, the Tribunal did not discuss the merits of the case regarding the rejection of the application for registration u/s 12AB. However, the Tribunal noted that the assessee could seek appropriate relief under the benevolent Circular No.7/2024 from the Ld. CIT(E).

Conclusion:
The appeal filed by the assessee was dismissed due to the refusal to condone the delay. The assessee was advised to seek relief under the CBDT Circular from the Ld. CIT(E).