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TMI Blog2024 (12) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... pur Division on 23-8-2004, submitted application in Form No. 10A for provisional registration under Section 12A of the Income Tax Act, 1961 (for short, 'the IT Act') on 2-12-2022 and the Commissioner of Income Tax (Exemption), Bhopal on 9-12-2022, issued order in favour of the appellant in Form No. 10AC granting provisional registration under Section 12A of the IT Act. After getting provisional registration, on 25-9-2023, the appellant Society submitted application in Form No. 10AB for permanent registration under Section 12A of the IT Act. After due opportunity of hearing having been afforded to the parties including the appellant Society, on 19-2-2024, finally, the CIT(E) rejected the application for registration under Section 12A of the IT Act which was communicated to the appellant on 2-3-2024. The order dated 2-3-2024 was appealable before the Income Tax Appellate Tribunal under Section 253 of the IT Act within 60 days from the date of receipt of copy of the order, but it is the case of the appellant that on the wrong advise of his counsel, he has reapplied for registration under Section 12A of the IT Act, however, on account of long pendency of the same, the appellant decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter, the present appeal deserves to be allowed and after condoning the delay, the ITAT be directed to decide the appeal on merits. 5. Mr. Ajay Kumrani, learned counsel appearing on behalf of Mr. Amit Chaudhari, Standing Counsel for the Income Tax Department / Revenue, would submit that since the order rejecting the application for permanent registration was appealable under Section 253 (1) of the IT Act, remedy was to file appeal under the said provision which has not been availed by the appellant Society right in time, therefore, the cause shown by the appellant Society for not preferring appeal within the stipulated period cannot be said to be the sufficient cause and as such, the ITAT has rightly rejected the application for condonation of delay and consequently, the appeal has also been rightly dismissed. 6. We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record with utmost circumspection. 7. Undisputedly, the appellant's application under Section 12A of the IT Act for permanent registration was rejected after due enquiry by order dated 19-2-2024 which was communicated to the appellant on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Commissioner or a Principal Director General or Director General or a Principal Director or Director under section 263 or under section 272A or an order passed by him under section 154 amending any such order; or" 9. Similarly, sub-sections (3) and (5) of Section 253 of the IT Act state as under: - "(3) Every appeal under sub-section (1) or sub-section (2) shall be filed within sixty days of the date on which the order sought to be appealed against is communicated to the assessee or to the Principal Commissioner or Commissioner, as the case may be: Provided that in respect of any appeal under clause (b) of sub-section (1), this sub-section shall have effect as if for the words "sixty days", the words "thirty days" had been substituted. (5) The Appellate Tribunal may 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." 10. A careful perusal of sub-section (5) of Section 253 of the IT Act would show that the ITAT is empowered to admit an appeal after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court has held that Section 5 of the Limitation Act gives the courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words 'sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant. 17. In Collector, Land Acquisition, Anantnag (supra)1, the Supreme Court has held that the legislature has conferred the power to condone delay by enacting Section 5 of the Indian Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on 'merits'. In paragraph 3 of the report it has been held as under: - "3. The legislature has conferred the power to condone delay by enacting Section 5 of the Indian Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on 'merits'. The expression "sufficient cause" employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammelled by the conclusion of the lower court. 10. The reason for such a different stance is thus: The primary function of a court is to adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptance of the explanation. While condoning the delay, the Court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compensate the opposite party for his loss." 19. Thereafter, in the matter of State of Haryana v. Chandra Mani and others (1996) 3 SCC 132, their Lordships of the Supreme Court have held that the court should decide the matters on merits unless the case is hopelessly without merit. It has been observed as under: - "11. ... The expression "sufficient cause" should, therefore, be considered with pragmatism in justice-oriented approach rather than the technical detection of sufficient cause for explaining every day's delay. The factors which are peculiar to and characteristic of the functioning of the governmental conditions would be cognizant to and requires adoption of pragmatic approach in justice-oriented process. The court should decide the matters on merits unless the case is hopelessly without merit. ..." 20. In the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given a total go by in the name of liberal approach. 21.10. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation. 21.11. (xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation. 21.12. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. 21.13. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude. 22. To the aforesaid principles we may add some more guidelines taking note of the present day scenario. They are: 22.1. (a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of Section 253 (5) of the IT Act. The rejection of application for condonation of delay has serious civil consequences upon the status of the Society, as by rejection of the application of the appellant Society, the Society would not be able to claim tax exemption under the provisions contained in Sections 11 & 12 of the IT Act, and that too in absence of counter-affidavit filed by the Revenue opposing the application for condonation of delay supported by affidavit. The ITAT ought to have condoned the delay in preferring the appeal as there is no allegation that delay in filing the appeal is mala fide or it is deliberate, rather it is bona fide based on wrong advise of his counsel to reapply for registration. 24. In that view of the matter, the order impugned dated 20-9-2024 passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur in ITA No. 304/RPR/2024 is set aside and delay of 55 days in preferring the appeal is hereby condoned. The appeal is restored to its original number to the file of the ITAT. The matter is remitted to the ITAT for considering and deciding the appeal afresh on merits within three months from the date of receipt of a copy of this order. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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