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TMI Blog2012 (11) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. That on the facts and circumstances of the case and the propositions of law, ld. CIT was not justified in granting registration w.e.f. A.Y 2009-10 though no order refusing registration was passed on application dated 18.12.2006 till limitation date of 30.6.2007. The ld. CIT has erred in ignoring the fact that the proceedings which continued beyond prescribed period of 6 months allow deemed registration to the assessee." ITA No. 258/CHD/2011 3. In this appeal the assessee has raised the following grounds of appeal: "1. That on the facts and in the circumstances of the case and in law, the order dated 4.12.2009 passed by ld. CIT is bad in law and needs to be quashed. 2. That on the facts and circumstances of the case and the propositions of law, the grant of registration by ld. CIT in his original order w.e.f A.Y 2009-10 instead of A.Y 2007-08 is a mistake apparent from record and the respondent has erred in not allowing the application moved by the appellant u/s 154 of the Act. 3. That on the facts and circumstances of the case and the propositions of law, ld. CIT has erred in not allowing the application of the appellant, moved u/s 154 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has erred in law by not allowing deduction u/s 11 of the Income-tax Act, 1961 on account of interest earned on FDR/Saving Bank Account Interest to the tune of Rs. 4,62,40,874.00. The appellant has applied for Registration u/s 12AA on 18.12.2006, the order for granting/refusing registration should have been passed on/before 30.6.2007. In the absence of any such orders passed within the stipulated time, the appellant will be deemed to be registered u/s 12AA with effect from A.Y 2007-08 and was eligible for exemption u/s 11 during the A.Y 2008-09 and the interest was not taxable." 6. The assessee filed an application dated 14.3.2011 u/s 253(5) of the Act, for condonation of delay in filing the appeal against the order dated 2.7.2008 of the ld. CIT. The assessee filed appeal before the Bench, on 15.3.2011, against the order dated 2.7.2008, which was served on the appellant, on 7.7.2008. There is a delay of 921 days, as mentioned by the appellant, in the application for condonation of delay. The assessee stated in the application for condonation of delay that there is sufficient cause for not presenting the appeal in time as contemplated u/s 253(3) of the Act. 7. The ld. 'AR' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of the appeal in the case of Punjab Heritage and Tourism Promotion Board V. CIT-II in ITA No,. 257/CHD/2011 Hon'ble Bench, The appellant cited as subject above has filed an appeal before the Hon'ble Bench on 15.3.2011. This appeal is against the order dated 2.7.2008 of the respondent served on the appellant on 7.7.2008. There is delay of 921 days in filing of the present appeal. However, on facts of the case and situation, there is sufficient cause for not presenting the appeal in time and therefore, the present application/prayer for condonation of delay in filing of appeal may be allowed u/s 253(5) of the Act. Facts of the Case 1. The appellant is Board created as a Trust by State Government of Punjab. 2. The appellant applied for registration u/s 12AA of the Act vide application filed with respondent on 18.12.2006. The respondent issued a letter dated 22.6.2007 through which it objected to the dissolution clause in the trust deed of the appellant. However, no order granting or refusing registration was passed till 30.6.2007. The proceedings were continued even thereafter and the appellant duly participated and cooperated in the continued pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase refer to your application for registration u/s 12A(a) of the Income-tax Act, 1961 filed with office on 18.12.2006. 2. A perusal of the deed of declaration of the Board reveals that clause 26 dealing with the "Dissolution" is in violation of Section 11 of the Income-tax Act, 1961. Therefore, your application for registration u/s 12AA of the Income-tax Act, 1961 may not be considered favourably. It can only be considered on amendment of this clause and receipt of amended Rules and Regulations." (ii) The ld. CIT categorically pointed out to the assessee-appellant that a perusal of the deed of declaration of the Board reveals that Clause 26 dealing with the "Dissolution" is in violation of Section 11 of the Act. Therefore, the application for registration u/s 12A of the Act cannot be considered favourably. It can be considered on amendment of this clause and receipt of amendment of Rules and Regulations. Thus, it is evident that the ld. CIT has brought to the notice of the appellant, the fate of application made by the assessee u/s 12A of the Act. In view of this specific communication emanating from the office of ld. CIT(A), addressed to the appellant about the conditional consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period." 11. In this context it is pertinent to ascertain the meaning of expression 'sufficient cause' appearing in section 253(5) of the Act, as reproduced above. The proposition in the matter is well settled. The Hon'ble Delhi High Court in the case of Sudhir Kumar Anand v. Dr.Vijay Kumar Anand AIR 2012 Delhi 97 has held as under: "Limitation Act (36 of 1963) S.5 - Condonation of delay - "Sufficient cause" - Suit for declaration, partition and possession filed relying upon probate case filed earlier -After dismissal of probate case for non prosecution, plaintiff lost interest in matter - No valid explanation gives as to why no steps were taken for its restoration - Mere statement that relevant file was lost in some office or some confusion about Advocates appearing in matter, can not be treated as sufficient cause -Delay not condoned." 12 (i) The words "sufficient cause" for not making the application within the period of limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be dismissed. On the other hand, if the application is bona fide and based upon true and plausible explanations, as well as reflect normal behaviour of a common prudent, person on the part of the applicant, the Court would normally tilt the judicial discretion in favour of such an applicant. (iii) In the case of Ram Lal, Motilal & Chhotelal v. Rewa Coalfields Ltd. AIR 1962 SC 361 this Court took the view: "7. In construing Section 5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree-holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree holder by lapse of time should not be light heartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the Court to condone delay and admit the appeal. This discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18,36,602/-. Thus the net amount of addition for the Assessment Year 1997-98 was Rs. 27,54,903/-. The ld. CIT(A) has confirmed the addition of Rs. 45,91,505/- for the impugned Assessment Year, the Assessing Officer favourably acted upon the rectification petition filed by the assessee and excluded the amount of Rs. 27,53,903/- from the assessable income for the Assessment Year 1997-98. In the same scenario the assessee has further moved a rectification petition before the assessing authority in respect of impugned Assessment Year 1998-99 to give deduction by way or expenses to the extent of Rs. 18,36,602/- which was granted in the original ex-parte assessment. This rectification application was dismissed by the Assessing Officer. This order of rectification was upheld by the ld. CIT(A). The matter was taken to the Tribunal as well. Meanwhile the assessee filed an appeal against the order of ld. CIT(A) on the quantum proceeding itself. The said quantum appeal was dismissed. The assessee filed appeal before the Tribunal. It is in this context that the Tribunal condoned the delay in filing the appeal as the assessee had high hopes of success in the petition filed u/s 154 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had bonafide belief that relief would be allowed in the rectification proceedings. The fact situation of the case is different and distinguishable as discussed in detail in the preceding paragraphs. Therefore, the decision cited and relied upon by the appellant is not applicable to the facts of the present case. The appellant has not adduced any evidence that the appellant was wrongly advised by the counsel. (iii) Subhash Malik (supra) - The assessee placed reliance on the decision in the case of Subhash Malik (supra) wherein it was stated that the assessee exercised due diligence and was not lethargic in filing the appeal against the order dated 25.9.2002. Record of the case shows that the assessee had taken the matter with this counsel and the proceedings taken for rectification of CIT(A)'s order on his advice took a long time which resulted the delay in filing the appeal. It is under such circumstances the delay was condoned. The fact situation of the present case are entirely different and distinguishable and, hence, the case relied upon is not applicable to the facts of the present case. Sequence of events of the case relied upon proves the factum that the appellant exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009, whereby application u/s 154 of the Act was rejected on the same date i.e. 14.3.2011. The reason for such inordinate delay, for filing the appeal against the impugned order passed by the ld. CIT u/s 12AA is attributed to the non-understanding of the appellant of the difference of year of grant of registration w.e.f. A.Y 2009-10 as against allowable w.e.f. A.Y 2007-08. However, the exact text of the reason assigned by the appellant, for condonation of delay, in the said application as per clause 4 read "since registration had already been granted the appellant could not immediately understand and appreciate the issue of difference of year of grant of registration w.e.f A.Y 2009-10 as against allowable w.e.f. A.Y 2007-08." The assessee-appellant is situated in Chandigarh and the Tribunal is also located in Chandigarh. The appellant is a Punjab Government concern and is administered by competent persons and guided by Chartered Accountants, in its tax matters. It is inconceivable that the appellant took 921 days, to understand the simple fact that registration was granted w.e.f. A.Y 2009-10 by the ld. CIT u/s 12AA of the Act. In fact the assessee has not brought out any cause much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of filing of appeal. In other words, the whole of the delay must be explained, as held in Ram Lal, Motilal & Chhotelal's case (supra). It is also not the case where wrong advice has been tendered the ld. counsel of the appellant as no evidence has been filed in this regard. It is pertinent to mention here that delay is not attributed by the appellant, in the said application for condonation of delay, to the wrong advice by the counsel, as is evident from the text of the said application reproduced above. In view of above legal and factual discussions, we are of the considered opinion that there is no 'sufficient cause' for condonation of delay. Consequently, the impugned application for condonation of delay of appellant is dismissed. ITAs No. 1094 and 1095/CHD/2011 17. In view of the above findings given in ITA No. 257/CHD/2011, whereby application for condonation of delay, in filing appeal, has been rejected by the Bench, for the detailed reasons given in the matter, these appeals of the appellant, in ITAs No. 1094 and 1095/CHD/2011 for Assessment Years 2007-08 & 2008-09 are also dismissed. These appeals are dismissed, as the Assessing Officer and the ld. CIT has passed thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 12A(2) of Income-tax Act. There is no mistake apparent from record. The assessee's application for rectification of the above said order is thus rejected. Sd/- Commissioner of Income-Tax-II Chandigarh" 18. (i) A bare perusal of the factual matrix of the case reveals that the assessee filed an application, dated 18.12.2006, for grant of registration u/s 12A of the Act. The CIT, informed the assessee-appellant, vide letter dated 22.6.2007 that the impugned application of the appellant cannot be considered favourably. It can only be considered by an amendment to clause 26 of the deed of declaration of the Board dealing with "dissolution", being contrary to the provisions of section 11 of the Act. The assessee-appellant inter-alia filed fresh application for registration, u/s 12AA of the Act, on 15.4.2008, along with amended 'dissolution' clause. Accordingly the CIT granted registration u/s 12AA of the Act from A.Y 2009-10 and not from A.Y 2007-08, as claimed by the appellant in terms of provisions of section 12A(2) of the Act. The CIT rejected the rectification application vide order dated 4.12.2009, on the ground that having regard to the fact situation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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