2010 (5) TMI 12 - HC - Income Tax

Delay in filing of an appeal condonation of delay - delay of 224days AO forget to proceed the file. Held that When the Assessing Officer was transferred on 17.06.2009 and he handed over the charge to the new officer, he was expected to bring it to the notice of his successor that the appeal in terms of the approval dated 23.02.2009 was required to be filed in this case. In any case, he must have handed over all the files to his successor, while relinquishing charge of the office held by him. The new incumbent was required to examine atleast urgent and time bound files, received by him from his predecessor. Had he done so, he would have come to know that the appeal required to be filed in this case had already been delayed and, therefore, he should immediately send the file to the office of the Senior Standing Counsel for the purpose of drafting the appeal. We, therefore, find it difficult to condone so much delay in filing of this appeal. Violation of conditions of section 13 There was absolutely no material before the Assessing Officer to show that the funds given to these NGOs/institutions were used for personal benefit of HCL Perot System or any of its Directors. Therefore, it cannot be said that the finding of fact recorded by Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal upholding genuineness of the donations is perverse, calling for intervention by this Court. No contravention of Section 13 of Income Tax Act having been made out and the genuineness of the donations having been accepted by Commissioner of Income Tax(Appeals) as well as by the Income Tax Appellate Tribunal, there is no ground for interference by this Court under Section 260A of Income Tax Act

Summary

Issues:
Delay in filing appeal for condonation, Exemption under Section 11 and 12 of Income Tax Act, Violation of Section 13 of Income Tax Act, Genuineness of donations to charity organizations.

Delay in Filing Appeal for Condonation:
The case involved an appeal against the order of the Income Tax Appellate Tribunal due to a delay of 224 days in filing the appeal. The appellant failed to provide a satisfactory explanation for the delay, which was attributed to the Assessing Officer's negligence in complying with time-bound orders. The court noted the lack of a system in the office of the Assessing Officer to ensure timely compliance with such orders. Despite the transfer of the officer, the delay was considered unjustifiable, leading to the dismissal of the appeal.

Exemption under Section 11 and 12 of Income Tax Act:
The Assessing Officer denied the benefit of exemption under Section 11 and 12 of the Income Tax Act to the assessee, alleging that donations were given for personal benefits. However, the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal found that the assessee had genuinely carried out activities in accordance with its objectives. The donations were made to charity organizations, and there was no evidence of personal benefit to the directors. The genuineness of the donations was upheld, and no violation of Section 13 of the Act was found.

Violation of Section 13 of Income Tax Act:
The Assessing Officer did not point out any violation of Section 13 of the Income Tax Act by the assessee. Both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal confirmed that the donations were made to genuine charity organizations engaged in social and charitable activities. There was no evidence to suggest that the donations were used for personal benefits, and the payments were made through account payee cheques. The court found no grounds for intervention as the genuineness of the donations was accepted.

Genuineness of Donations to Charity Organizations:
The organizations to which donations were made were genuine charity organizations, and confirmations were submitted for most of the donations. The Assessing Officer failed to provide any evidence connecting the directors of the donor company with the recipient organizations or indicating misuse of funds. The court upheld the findings of the lower authorities regarding the genuineness of the donations, emphasizing the lack of material to dispute the legitimacy of the transactions.

In conclusion, the court dismissed the appeal and the application for condonation of delay, as no substantial question of law arose for consideration. The judgments of the lower authorities regarding the exemption under the Income Tax Act and the genuineness of the donations to charity organizations were upheld, with no grounds for intervention by the court.