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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 ..... nsidered and decided by him in consonance with the fact situation and the provisions of section 12A(2) r.w. second proviso to Section 12A(1)and its sub-clause (aa). A drastic amendment has been made curbing the power of condonation for registration covering the past years by addition of a proviso and sub-clause (aa) to Section 12A(1)(ii) and substitution clause (b) in the proviso w.e.f. 1.6.2007 by the Finance Act, 2007. Any application filed on or after 1.6.2007 is entitled to registration only for the F.Y during which registration is filed. Further, no merit in the appeal filed by the assessee, as the CIT has granted registration u/s 12AA w.e.f. A.Y 2009-10, having regard to the fresh application dated 14.4.2008, filed by the appellant. The issue involved in the rectification application filed by the assessee, before the CIT(A) is highly debatable much less the mistake apparent from record - Also the condonation of delay application of the assessee is dismissed in absence of proving 'sufficient cause' - against assessee. - IT Appeal Nos. 257, 258, 1094 & 1095 (Chd.) of 2011 - - - Dated:- 22-8-2012 - H.L. Karwa And Mehar Singh, JJ. A.K. Jindal for the Appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereby passing an order without allowing the appellant an opportunity to be heard and this action is against the principles of natural justice. 5. That on the facts and circumstances of the case and the propositions of law, ld. CIT has erred in not treating the application of the appellant filed on 1.12.2009 u/s 154 of the Act, as allowed as no order on that application was served on the appellant till 30.6.2010 and hence the application has to be treated as deemed allowed." ITA No. 1094/CHD/2011 for the A.Y 2007-08 4. In this appeal the assessee has raised the following grounds: "1. That the ld. CIT(A) has erred in law as well as on facts of the case in upholding the addition to the tune of Rs. 1,54,47,570.00 on account of interest on FDR and disallowance of expenditure incurred on 400th year Martyrdom which is illegal, arbitrary and unjustified. 2. That the Assessing 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 to the tune of Rs. 1,49,01,570.00. The appellant has applied for Registration u/s 12AA on 18.12.2006 the order for granting/refusing registration should have been passed on/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed, before the ld. CIT. The ld. 'AR' for the assessee also argued that rectification application dated 30.11.2009, pertains to the issue of granting registration u/s 12AA of the Act w.e.f. A.Y 2009-10 and not from A.Y 2007-08. The said rectification application was rejected by the ld. CIT vide order dated 4.12.2009. The ld. AR for the assessee referred to the facts as narrated in the said application for condonation of delay and placed reliance on the following decisions: 1. Suresh Shet v. Asstt. CIT [IT Appeal Nos. 1032 to 1034 of 2009, dated 28-7-2010] 2. Dr. (Mrs) Sudha S. Trivedi v. ITO [2009] 31 SOT 38 (Mum.) 3. Subhash Malik v. CIT [2010] 325 ITR 243. 4. People Education Economic Development Society (PEEDS) v. ITO [2006] 100 ITD 87 (Chennai)(TM) 8. On the other hand, the ld. DR for the revenue vehemently contended that there is no existence of sufficient cause for condonation of inordinate delay, in filing the appeal after a delay of 921 days. It was contended that the ld. CIT has passed valid order u/s12AA of the Act, in consonance with the relevant provisions of the Act and the facts of the case. He pleaded that delay of 921 days, in filing the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y 2009-10. 4. Since the registration had already been granted, the appellant could not immediately understood 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. On the above facts, the application of the appellant for condonation of delay in filing of the present appeal deserves to be allowed and the appeal of the appellant may be admitted. For this, the appellant submits as under: 1. That the appellant was advised by professionals that the grant of registration w.e.f. A.Y 2009-10 instead of A.Y 2007-08 is a mistake apparent from record rectifiable u/s 154 of the Act and application thereon was also filed on 1.12.2009. However order on that application was served only on 7.2.2011. Thereafter the appellant has filed the appeal within 60 days of service of order u/s 154. This was sufficient cause for not presenting the present appeal in time. 2. That on the facts, circumstances and legal position of the case, the application of the appellant for condonation of delay in filing of appeal deserves to be allowed. It is therefore, respectfully prayed that, in the interest of justice, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed to the Trustee by the ld. CIT. The appellant participated and cooperated in the subsequent proceedings. The appellant filed a letter dated 1.1.2008 received in the office of the ld. CIT dated 3.1.2008 enclosing a copy of the minutes of the meeting of the appellant as in evident from letter at page 3 of the paper book. The appellant vide letter dated 19.3.2008, filed amended coy of bye-laws as is evident from letter at page 4 of the paper book. Further, in continuation of letter dated 19.3.2008 the appellant filed notified copy of bye-laws of PHTB, as is evident from letter addressed to the ld. CIT as per page 5 of the paper book. The appellant filed another application for registration u/s 12A(a) of the Act at page 6 of the paper book and the same is reproduced hereunder: "Subject: Application for registration u/s 12A(a) of Income-tax Act, 1961. Sir, This is with reference to letter No. CIT/Chd-II/Tech/12A/194/1298 dated 22.6.2007 regarding the subject cited. Vide this letter, the only objection raised was regarding the dissolution clause in the bye-laws of the Trust. Meetings were held by our authorized representatives with you and necessary amendments were carried ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of limitation prescribed for seeking legal remedy rights accrue in favour of other side. (ii) Similarly the Hon'ble Supreme Court, in case of Balwant Singh v. Jagdish Singh AIR 2010 SC 3043 held as under - "We may state that even if the 'sufficient cause' has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the concerned party. The purpose of introducing liberal construction normally is to introduce the concept of 'reasonableness' as it is understood in its general connotation. The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. These principles "should be adhered to and applied appropriately depending on the facts and circumstances of a given case, Once a valuable right, as accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to, take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for the exercise of the discretionary jurisdiction vested in the court by Section 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration." (iv) The Hon'ble Supreme Court in the judgment Union of India v. Nripen Sarma AIR 2011 SC 1237 held - "We have gone through the contents of the petition. The delay occurred because of the respondents took their own sweet time to reach the conclusion whether the judgment should be appealed or not. It is not that they were prevented by any reason which is beyond their control to take such a decision in time. Even otherwise, on merits of the case also it does not appear to have any tenable ground of appeal. In the circumstances, we do not see any merits in this petition." 13. The case relied upon by the assessee are not applicable to the facts of the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 4.12.2009 passed by the CIT u/s 154 reveals that there was hardly any hope in success in the matter. The ld. CIT granted registration u/s 12AA of the Act, A.Y 2009-10, in terms of relevant provisions of Section 12A(2) of the Act which reads as under: "where application has been made on or after first day of June 2007 the provisions of section 11 12 shall apply in relation to the income of such person or institution from Assessment Year immediately following Financial Year in which such application is made. The provisions were inserted by the Finance Act, 2007 w.e.f. 1.6.2007." The assessee made original application on 18.12.2006 which was further substituted by another application in form No. 10 dated 15.4.2008, as is evident from relevant record in the case. In view of such a fact situation, the appellant construed that provisions of section 12A(2) of the Act are not applicable, to its case, as the application was filed originally for registration u/s 12A on 18.12.2006. However, the ld. CIT granted registration u/s 12AA of the Act in terms if new application filed for registration, on 15.4.2008. Therefore, the issue is highly debatable and the assessee cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter was refixed on 26.9.2003 v ld. CIT(A) decided the matter u/s 154 which was heard on 17th Jan., 2003 by order dated 20.10.2003 vi Appellate order served on 25.11.2003 vii 2nd appeal before Tribunal filed on 28.11.2003 In view of the above, the case cited by the appellant is not applicable to the present case. ( iv ) The appellant further placed reliance in the case of People Education Economic Development Society (PEEDS) ( Supra ). The fact situation of the case are entirely different and distinguishable as discussed above. In view of this, the decision relied upon by the assessee is not applicable to the facts of the present case. 14. A bare perusal of the relevant submissions made by the appellant and available records the following details, in the matter, are as under: i Order u/s 12AA of the Act passed by the ld. CIT 30.6.2008 /2.7.2008 ii Appeal against above order was filed by the appellant on 14.3.2011 iii Delay in filing the appeal against the order of CIT u/s 12AA of the Act 921 days iv Rectif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is a Government concern and situated at Chandigarh. The appellant has not taken any step to demonstrate due diligence and even reasonable care in the matter, in pursuing the matter, as contemplated under the Act. Such complete inaction and negligence, on the part of the appellant, cannot be construed as a 'sufficient cause', for condonation of delay. The condonation of delay for non-filing of appeal is to be considered in the light of the facts of the case and existence of sufficient cause or reasonable cause. In the absence of any reason, delay cannot be condoned and where there was actual negligence and inaction which led to in inordinate delay, the delay cannot be condoned as held in Dy. CIT v. Jaya Publications [2010] 123 ITD 53 (Chennai). 15. In the present case, the assessee has failed to explain the cause of delay, in filing the appeal. Therefore, it is evident that the appellant has adopted callous approach and demonstrated utter indifference in the matter. In such a fact situation, sufficient cause as contemplated u/s 253(5) of the Act does not exist. The assessee has failed to explain the reason, for the delay in filling the appeal, on the last date of lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of delay, in filing the appeal against the impugned order u/s 12AA has been rejected by the Bench, such appeals are also dismissed. ITA No. 258/CHD/2011 18. The assessee has filed an appeal against the order dated 4.12.2009 passed by the CIT u/s 154 of the Act. It would be pertinent to reproduce the contents of the said order passed by the CIT:- "ORDER U/S 154 OF THE INCOME-TAX ACT, 1961 The assessee, Punjab Heritage and Tourism Promotion Board, Sector 38, Chandigarh vide its letter dated 30.11.2009 has stated that order u/s 12AA of Income-tax Act, 1961 passed by this office on 30.6.2008 granting registration to it w.e.f. the A.Y 2009-10 is not correct. Registration was required to be allowed to it from the A.Y 2007-08. The assessee's submission was considered in the light of the facts of the case and the provisions of law applicable. The assessee society filed an application with this office on 18.12.2006 in the prescribed proforma requesting for grant of registration u/s 12A of the Income-tax Act, 1961 enclosing therewith a copy of bye-laws and "Income and Expenditure" statement. On perusal of "clause 26" of the bye-laws, it was noticed, that the 'dissolution' cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch. 18. (ii) A bare perusal of the provisions of section 154 of the Act clearly reveals that mistake apparent from record must be obvious and patent mistake and not something which can be established by a long drawn process of reasoning, on points on which there may be conceivably two opinions. A decision on merit on a debatable issue does not constitute mistake apparent from record u/s 154 of the Act. This legal proposition has been declared by the Hon'ble Apex Court, in T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). Apparent mistake of fact or law can be rectified u/s 154 of the Act. The provisions of section 154 of the Act cannot be interpreted to re-hear a case, decided on merit, for the purpose of reversal of the decision taken in the light of legal and factual matrix of the case. The assessee or the revenue is not entitled to seek review and reversal of the issues decided, in the order, on merit, in the guise of rectification application u/s 154 of the Act. In the present case there does not exist rectifiable mistake in the impugned order of the CIT. Therefore, in the absence of existence of foundational facts, in the present case, the provisions of section 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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