2020 (2) TMI 461 - HC - Income Tax

Exemption u/s 11 - disallowing of the amount of accumulation made u/s.11(2) 11(1)(a) - E-filing of Form-10 - Petitioner-Trust not e-filed despite the shift from manual to e-filing and that the application for condonation of delay was made belatedly i.e., long after filing of Form-10 - HELD THAT - Form-10 seeking exemption under Section 11(2) of the Income Tax Act, 1961 was filed on 31.03.2016 and the application seeking condonation of delay was filed on 06.09.2018; it is a settled principle of law that when the claim is made belatedly, it is open to the claimant to offer explanation for the delay so brooked, subsequent to making the claim also vide Division Bench decision of this Court in the case of STATE OF KARNATAKA Vs. NAGAPPA 1985 (6) TMI 199 - KARNATAKA HIGH COURT in the absence of statutory intent to the contrary; although, a proceeding arising under a Tax Statute is bit different from the Court proceedings, that difference does not come in the way of treating the ratio of the said decision as a general norm to be followed by quasi-judicial authorities as well, as long as there is a provision for condoning the delay; b) the purported ground mentioned in the impugned order for rejecting petitioner s claim for exemption u/s.11(2) of the Act that he had not uploaded Form 10 by e-filing is fault some inasmuch as, the claim related to the Assessment Year 2015-16 when e-filing was not yet prescribed; even otherwise, the answering respondent could have instructed the petitioner to make e-filing of the claim so that the petitioner would have had a fair treatment at the hands of the respondent-authorities; thus, there is an error apparent on the face of the record; and, c) since admittedly, the exemption of the kind which the petitioner had sought for is granted for the subsequent Assessment Years, the respondent-authorities are not justified in rejecting petitioner s claim for exemption for the Assessment Year 2015-16 on the grounds purported in the impugned order. In the above circumstances, this writ petition succeeds in part; the impugned order having been quashed, the matter is remitted back to the answering respondents for consideration afresh, within a period of three months in accordance with law.

Summary

Issues:
Petitioner's claim for exemption under Section 11(2) of the Income Tax Act, 1961 rejected due to failure of e-filing and delay in seeking condonation.

Analysis:
The petitioner, a Trust registered under section 12A(a) of the Income Tax Act, 1961, filed Form-10 seeking exemption under Section 11(2) of the Act for the Assessment Year 2015-16. The application for condonation of delay in filing Form-10 was made long after the initial filing. The rejection of the claim was based on the grounds of non-e-filing and belated condonation request, which is challenged in the writ petition.

The Court considered the arguments presented by both parties and reviewed the petition papers. The Court acknowledged the settled principle of law that allows a claimant to offer an explanation for a belated claim, as long as there is a provision for condoning the delay. Referring to a Division Bench decision, the Court emphasized that the absence of statutory intent to the contrary permits such explanations, even in tax-related proceedings.

Regarding the rejection based on non-e-filing of Form-10, the Court found fault with the reasoning provided by the respondents. It was noted that e-filing was not mandatory for the relevant assessment year, and the respondents could have guided the petitioner on the correct procedure. The Court identified an error on the face of the record in this regard.

Additionally, since similar exemptions were granted for subsequent assessment years, the Court deemed the rejection of the petitioner's claim for the specific year unjustified. Consequently, the Court partially allowed the writ petition, quashed the impugned order, and remitted the matter back to the respondents for reconsideration within three months. The respondents were permitted to request necessary information from the petitioner for a thorough review, emphasizing that any delays in the process would not be tolerated. All contentions of the parties were kept open, and no costs were imposed in the judgment.