2024 (7) TMI 710 - AT - Income Tax

Denial of registration u/s. 12A(1)(ac)(iii) and approval u/s. 80G(5)(iii) - HELD THAT - A perusal of the record would indicate that the assessee-Trust came into existence on 24.01.1956. It was granted registration u/s 12A on 15.11.2000. Thus, it is an old Trust after the change in the scheme of assessment of Charitable Institution effected by way of Finance Act, 2020-21 w.e.f. 1st April, 2020. The assessee has applied for grant of registration u/s. 12A(1)(ac)(iii) and approval u/s. 80G(5)(iii) afresh. A perusal of the impugned orders would reveal that these applications of the assessee have been dismissed for want of prosecution. This dismissal of the applications for want of prosecution is being considered one of the reasons for condoning the delay in filing the appeals. We have gone through the impugned orders, which are very brief. We find that the CIT sent notices to the assessee for submitting supporting evidence but the notices remained uncompiled with and accordingly CIT (Exemption) has rejected the applications of the assessee. On due consideration of the impugned orders, we are of the view that ends of justice would meet if we give one more opportunity to the assessee. We set aside the impugned orders and restore the applications of the assessee for grant of registration under section 12A(1)(ac)(iii) and approval u/s 80G(5)(iii) of the Income Tax Act. The ld. CIT(Exemption) is directed to decide them on merit and not on account of any technical reasons. Appeals of the assessee are allowed for statistical purposes

Summary

Issues:
1. Condonation of delay in filing appeals against orders of the Commissioner of Income Tax (Exemption).
2. Interpretation of the expression "sufficient cause" in Section 253 of the Income Tax Act.
3. Dismissal of applications for want of prosecution and its impact on condonation of delay.
4. Restoration of applications for grant of registration under section 12A(1)(ac)(iii) and approval under section 80G(5)(iii) of the Income Tax Act.

Issue 1: Condonation of Delay
The appeals were filed 126 and 123 days beyond the stipulated time. The Tribunal considered the reasons provided by the assessee for the delay, citing a communication gap between the Society and the Tax Consultant. The Tribunal referred to the provision in Section 253 allowing admission of appeals after the relevant period upon showing sufficient cause. It highlighted that the term "sufficient cause" is interpreted liberally by the courts to ensure substantial justice. Noting Supreme Court precedents, the Tribunal emphasized that delay should not result in meritorious matters being dismissed, and every day's delay must be explained without a pedantic approach.

Issue 2: Interpretation of "Sufficient Cause"
The Tribunal referenced the Indian Limitation Act and judicial decisions to explain the liberal interpretation of "sufficient cause." It highlighted that the rule of limitation aims to prevent dilatory tactics without destroying parties' rights. The Tribunal emphasized that the courts should consider every explanation for delay with a justice-oriented approach and should not presume deliberate delay unless there are reasonable grounds to think so.

Issue 3: Dismissal for Want of Prosecution
The Tribunal noted that the applications for registration and approval were dismissed for want of prosecution, contributing to the delay in filing the appeals. Upon reviewing the impugned orders, it found that the assessee failed to comply with notices from the Commissioner for submitting supporting evidence, leading to the rejection of the applications. The Tribunal decided to give the assessee another opportunity, setting aside the impugned orders and directing the Commissioner to decide on the applications' merits rather than technical reasons.

Issue 4: Restoration of Applications
The Tribunal allowed both appeals for statistical purposes, restoring the applications for grant of registration and approval under relevant sections of the Income Tax Act. It emphasized that the decisions should be based on merit and not technicalities, aiming to meet the ends of justice. The Tribunal's order granted the assessee another chance to pursue the applications and receive a fair evaluation.

In conclusion, the Tribunal's judgment focused on the liberal interpretation of "sufficient cause" for condonation of delay, the importance of substantial justice, and providing opportunities for parties to present their cases on merit.