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TMI Blog2024 (5) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... ained and is a clear case of gross negligence. We find no reason to interfere in the matter and, accordingly, confirm the impugned order on this aspect. As assessee not registered u/s. 12AA was in furnishing the return per a wrong Form, i.e., ITR-7, applicable, inter alia, to a person in receipt of income from property held under trust - True, the assessee has not invoked the appropriate proceedings under the Act or moved the Hon'ble High Court under it s extraordinary jurisdiction, seeking issue of writ of prohibition or any other, restraining processing it s deficit return at a huge income, or being acted upon by the Revenue. Nevertheless, having not done so, we do not think that it is left without any remedy in law, i.e., under the Act. Why, even as observed by the Bench during hearing, could not it s representation before the AO, stated to be in August/September, 2018, or if undocumented, it s return/s filed of 11/9/2018, be regarded as a petition u/s. 154 of the Act, and the assessee s grievance sought to be addressed on that basis? No tax can be levied except by the authority of law (Article 265 of the Constitution of India), which we find as having been seriously violate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Income Tax (Appeals), Income Tax Department [CIT(A)], as not maintainable vide his separate orders dated 03.06.2022. 2. The brief facts of the case are that the assessee, a charitable trust working for the promotion of education, culture and philosophy in Thrissur district of Kerala since 2009, filed it s return of income belatedly on 24.12.2015 and 28.12.2015, claiming, as stated, loss at Rs. 4.64 lakhs and Rs. 6.43 lakhs respectively for the two successive years under reference. The same were processed under section 143(1) of the Income Tax Act, 1961 (the Act), raising demands, including interest, at Rs. 28.47 lakhs and Rs. 37.75 lakhs for the two consecutive years respectively. The assessee admittedly did not act thereon, stating that it was awaiting whatever that would mean; Sh. Jojo, the learned counsel for the assessee, being also unable to explain us the same, orders u/s. 143(3) of the Act. The communication regarding recovery of the outstanding demand was subsequently received on 28.05.2019 which, as stated, led to it, acting with alacrity, filing appeals, for both the years, with the ld. CIT(A) on 07.06.2019. And, therefore, with a delay of 3 years 2 mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cit), taking us through the same (PB pgs. 6-34). He, however, could not answer the question as to why; it being in receipt of Intimations on 16.03.2016 (for AY 2014-15) and 27.03.2017 (AY 2015-16), filed appeals with the first appellate authority only on 07.06.2019; it filing the returns in ITR 5 on 11.09.2018, i.e., 2 (1 ) years of receipt of the Intimation for AY 2014-15 (2015-16) and, further, applying for registration u/s. 12AA of the Act, again, only on 06.06.2019. 4. We have heard the parties, and perused the material on record, giving out careful consideration to the matter. 4.1 The first issue before us is if the assessee s appeal/s before the ld. CIT(A), being delayed by 3 years (2 years) and 2 months (2 months), is maintainable. In our clear view: not. No reason, much less plausible, even as the law provides for sufficient cause being shown and, further, over the period of delay, for it to be condoned, has been furnished, either before him, or even before us, for us to disturb his finding of it being a case of gross negligence. The assessee stating of having received demand notices on 29.05.2019 is false as the Intimations, which are by law deemed as notices of demand, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, giving full facts, including the name of the counsel and the advice rendered. This is particularly so as once an assessee, even if based on the advice of a counsel, not clarified, takes a conscious decision, adopting a particular course of action, the same cannot then be said to be a sufficient cause, intrinsic to which is the concept of being prevented from taking the otherwise desired course of action. 4.3 The two ingredients necessary for condoning the delay, which could only be the result of a positive, affirmative action, i.e., (a) proof of absence of negligence, and (b) proof of satisfactory level of diligence, are found completely missing in the instant case. It is apparent that the assessee is merely raising multiple pleas, de hors the facts of the case and law in the matter, in the hope that any one may work . It is only a plea made per Form 35, supported by affidavits, i.e., where so required by the first appellate authority, that can be taken cognizance by us as the second appellate authority reviewing his decision qua non-condonation of delay in further appellate proceedings. The delay, which extends to 26 months and 36 months for the two years respectively, is wholl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement measure by the Legislature, reserving a right to call for the same as and when required for the purposes of the Act. This is precisely what the AO was, exercising his enabling power, required to do in the instant case. The Board Circular No. 14(XL-35) of 1955, dated 11.04.1955 requires the AO to assist the tax payer in every reasonable way, particularly in the matter of claiming and securing relief, and in this regard, departmental officers should take initiative in guiding the tax payer where proceedings or other particulars before them indicates that some refund or relief is due to him. The Revenue cannot take advantage of the ignorance of the assessee as to his rights. Similar instructions stand issued by the Hon'ble Courts whenever such instances have come up before them for their consideration (Parekh Brothers v. CIT [1984] 150 ITR 105 (Ker);CIT v. K.N. Oil Industries [1983] 142 ITR 13 (MP)). It would in this context be relevant to reproduce from a recent decision by the Cochin Bench (Changanacherry Co-op. ARDB Ltd. v. ITO, in ITA 939/Coch/2022, dated 16/4/2024), wherein, again, the assessee was not allowed claim u/s. 80P due to the improper filling the return form, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remise of the foregoing is that the assessee should get a fair deal and, two, only tax exigible under law is to be levied/collected. The assessee, in our view, has filed the return u/s. 139(4A) in the correct form, i.e., Form-7. It is a charitable trust, even if, prior to it s registration on 10.12.2019, a private discretionary trust. Being a charitable institution, it s income is to be computed in the manner applicable therefor, and it returning income in Form 5, which is for returning business income, is surely incorrect, unless, perhaps, it is a case of business undertaking itself being the property held under trust, and the business incidental to the attainment of it s objects. Could, in any case, as afore-questioned, returning income in a wrong Form, or incorrectly, result in converting a loss into income? Clearly not, inasmuch as the same can only be in terms of provisions of the Act. The processing of return itself validates the same, i.e., of it being in the proper Form and, in the very least, of it being not an irrelevant consideration. Where the default in not filing the return in the prescribed Form is regarded as material, which we state to carry the argument to its log ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the ld. CIT(A) in view of the unexplained delay attending their filing, upholding their non-admission . So, however, regarding the assessee s representations/returns as petitions u/s. 154, as ought to be the case, the first appellate authority, enjoying co-terminus powers, was, in appeal, not constrained to issue proper directions to the AO, addressing the assessee s concerns. His failure to do so would not in turn restrain us from in further appeal issuing instructions thereto. That is, it was competent for him to in the proceedings before him issue such directions. Non-exercise of those powers, which we consider as incumbent on him to have, addressing the issue/s arising, cannot but be a subject matter of appeal before us. In this context we draw on the exhortation by the Apex Court in CIT v. Walchand Co. (P.) Ltd. [1967] 65 ITR 381 (SC), wherein it stands held that the Tribunal is to deal with and determine questions which arise out of the subject-matter of the appeal in the light of the evidence, and consistently with the justice of the case. Case law in the matter is legion. This, then, provides the legal basis for our deciding in the manner we have. We draw support from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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