Bhavnesh Saini, Judicial Member - This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax, Shimla dated 17.11.2008 under section 12AA of the Income Tax Act, 1961.
2. Briefly, the facts are that the assessee, a Government Body filed registration application in prescribed form for grant of registration under section 12AA of the Income Tax Act, 1961 before the learned Commissioner of Income Tax, Shimla. The assessee authority has been constituted as a special area development authority vide notification of the Government of Himachal Pradesh. The assessee stated that the aims and objects fall under the definition of public charitable purpose. The learned Commissioner of Income Tax considering the material on record granted registration under section 12AA of the Act to the assessee authority for assessment year 2008-09 only. However, for assessment year 2009-10 and subsequent assessment years, the learned Commissioner of Income Tax was of the view that the objects of the assessee authority cannot be considered to be charitable purposes because of the amendment in section 2(15) of the Act, which is effective from assessment year 2009-10 onwards. The learned Commissioner of Income Tax, therefore, held that for assessment year 2009-10 and subsequent assessment years, the assessee does not qualify for being considered as a charitable organization hence, does not qualify for registration under section 12AA of the Act.
3. The assessee being aggrieved against the impugned order rejecting the registration application under section 12AA of the Act from assessment year 2009-10 and subsequent assessment years filed the present appeal before the Tribunal.
4. In Column No. 9 of appeal papers in Form No.36, the assessee has mentioned "17.11.2008" as the date of communication of the order appealed against. However, the appeal is filed in the office of the Tribunal on 17.10.2014. Thus it was time barred by 2192 days (approximately six years). The assessee filed an application for condonation of delay. The learned counsel for assessee referring to the application for condonation of delay in filing the appeal has submitted that the assessments for assessment years 2010-11 and 2011-12 were concluded on 19.3.2013 and 31.1.2014 respectively. These assessment orders were assailed before the appellate authority. Later on, when the applicant brought the entire record for the purpose of filing the appeals against the regular assessments came to know that vide impugned order dated 17.11.2008 the application for exemption has been partly allowed for assessment year 2008-09 only and the order had not been assailed till date. It is further stated that the assessee was acting under advice and the assessee was informed that the cause of action for challenging the impugned order would arise when the appeals against the assessment orders were decided. The learned counsel for assessee, therefore, submitted that the assessee was under the bona fide belief for not filing the appeal before the Tribunal. Therefore, the delay may be condoned.
5. On the other hand, the learned D.R for the Revenue strongly objected to the condonation of delay in filing the appeal before the Tribunal beyond the period of limitation and submitted that the assessee has failed to explain the sufficient cause for not filing the appeal within the period of limitation. The learned D.R for the Revenue submitted that when the assessee was aware of the fact that no registration is granted to the assessee for the assessment year 2009-10 and subsequent assessment years, the orders should have been challenged before the Tribunal during the period of limitation. The registration order under section 12AA of the Act has no connection with the passing of the regular assessments. The learned D.R for the Revenue, therefore, submitted that since there is no sufficient cause explained in not filing the appeal within the period of limitation, therefore, the appeal of the assessee may be dismissed being time barred. Apart from the above arguments, the learned D.R for the Revenue submitted that the issue is covered against the assessee by the order of I.T.A.T., Chandigarh Bench in the case of Punjab Urban Planning & Development Authority v. CIT [2006] 156 Taxman 37 (Mag.), in which on similar facts registration under section 12AA of the Act was rejected. The learned D.R for the Revenue also relied upon the decision of Hon'ble Jammu & Kashmir High Court in the case of Jammu Development Authority v. Union of India in ITA No.164/2012, in which on identical facts the appeal of the assessee has been dismissed and the order has been confirmed by the Hon'ble Supreme Court in the matter of Jammu Development Authority v. Union of India vide order dated 21.7.2014. Copy of this order is also placed on record.
6. We have considered the rival submissions and perused the material on record. It is not in dispute that after passing the impugned order, the same was served immediately upon the assessee. According to the impugned order, registration was refused to the assessee under section 12AA of the Act for the assessment year 2009-10 and subsequent assessment years. The assessee, however, availed benefit of impugned order till assessment year 2008-09. Therefore, it was within the knowledge of the assessee that no registration under section 12AA of the Act have been granted to the assessee for the assessment year 2009-10 and subsequent assessment years. The assessee, however, claimed in the application for condonation of delay that as per legal advice the assessee was advised that cause of action for challenging the impugned order would arise when the appeals against the respective assessment orders were decided. This argument is without any substance and is rejected because it is well settled law that the registration under section 12AA of the Act to the trust or institution is a condition precedent for granting relief under section 11 of the Act. We are fortified in our view by the judgment of Hon'ble Supreme Court in the case of U.P. Forest Corpn.v. Dy. CIT [2008] 297 ITR 1/[2007] 165 Taxman 533. Since there was no registration granted under section 12AA of the Act to the assessee for assessment year 2009-10 and subsequent assessment years, therefore, no relief under section 11 could have been granted to the assessee in regular assessments for assessment years 2010-11 and 2011-12 as is claimed by the learned counsel for assessee. The assessee despite service of the impugned order way back in November, 2008 was sleeping over its right to challenge the said order before the Tribunal. When the assessee has been advised that the impugned order could challenged when regular appeals for subsequent assessment years are decided, would clearly indicate that the assessee was well aware of the consequences of the impugned order. As per settled law when no registration is granted under section 12AA of the Act to the assessee for assessment year 2009-10 and subsequent assessment years, there was no question of making claim of exemption from income under section 11 of the Act for any subsequent assessment years either in the regular assessments or in the consequential appeals filed before the learned CIT (Appeals). Thus the assessee failed to explain any sufficient cause for not presenting the appeal within the period of limitation before the Tribunal. Sufficient cause would mean a cause which is beyond the control of the assessee. Sufficient cause means which prevents the assessee acting under normal circumstances without negligence or inaction or want of bona fide. When the assessee was aware of the consequences of the impugned order that its income would not be exempt under section 11 of the Act from assessment year 2009-2010 onwards, the assessee should not have waited for filing of the appeal in the matter. It is a clear case of negligence or inaction or want of bona fide. The conduct of the assessee clearly speak against the assessee itself that the assessee deliberately did not file the appeal within the period of limitation.
7. It would be appropriate to refer to some judicial pronouncements on the issue of delay in filing the appeal. In the case of Hind Development Corpn. v. ITO [1979] 118 ITR 873, the Hon'ble Calcutta High Court held that a Tribunal can condone the delay if there was sufficient cause for the delay in the submission of the appeal. In the case of Vedabai v. Shantaram Baburao Patil [2002] 253 ITR 798/122 Taxman 114 (SC) where it was held that while exercising discretion under section 5 of the Limitation Act, 1963, to condone delay for sufficient cause in not filing the appeal within the period prescribed, Court should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. The Court observed that whereas in the former consideration of prejudice to the other side will be a relevant factor and calls for a more cautious approach. In the latter case no such consideration may arise and such a case deserves a liberal approach. Now in the present case delay is not of few days but of 2192 days (approximately six years). Besides, there is absolutely no valid explanation/reason for the delay. In the case of CIT v. Ram Mohan Kabra [2002] 257 ITR 773/[2003] 132 Taxman 516, the Hon'ble Punjab & Haryana High Court has held that where the Legislature spells out a period of limitation and provides for power to condone the delay as well, such delay can only be condoned only for sufficient and good reasons supported by cogent and proper evidence. It is settled principle of law that provisions relating to the specified period of limitation must be applied with their regour and effective consequences. In this case delay for filing the appeal late for only a few days was not condoned. In the case of Asstt. CIT v. Taggas Industries Development Ltd. [2002] 80 ITD 21 (Cal.), Tribunal, Calcutta Bench, Calcutta did not condone the delay for filing the appeal late by 13 days because the delay was not due to sufficient cause.
8. The Hon'ble Supreme Court in the recent decision in the case of Office of the Chief Post Master General v. Living Media India Ltd. [2012] 348 ITR 7/207 Taxman 163/20 taxmann.com 347 held as under :
"Held, dismissing the applications, the Department had itself mentioned in it is affidavit and was aware of the date of the judgment of the Division Bench of the High Court as September, 11, 2009. Even, according to the deponent, its counsel had applied for the certified copy of the judgment only on January 8, 2010, and the copy was received by the Department on the very same day. There was no explanation for not applying for certified copy of the judgment on September 11, 2009, or at least within a reasonable time. The fact remains that the certified copy was applied for only on January 8, 2010, i.e., after a period of nearly four months. Neither the Department nor the person in-charge had filed an explanation for not applying for the certified copy within the prescribed period. The other dates mentioned in the affidavit clearly showed that there was delay at every stage and there was no explanation as to why such delay had occasioned. The Department or the person concerned had not evinced diligence in prosecuting the matter to the court by taking appropriate steps. The persons concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in the Supreme Court. In the absence of plausible and acceptable explanation, the delay could not be condoned mechanically merely because the Government or a wing of the Government was a party before the court. Though in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fide, a liberal concession had to be adopted to advance substantial justice, in the facts and circumstances, the claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes could not be accepted in view of the modern technologies being used and available. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, the Department had failed to give acceptable and cogent reasons sufficient to condone such a huge delay.
BY THE COURT : Unless government bodies, their agencies and instrumentalities have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months or years due to considerable degree of procedural red-tape in the process. Government Departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for Government Departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. The law of limitation binds everybody including the Government."
9. Thus relying on the above judgments and considering the facts of the case, we hold that the assessee failed to explain that the delay in filing the appeal was due to sufficient cause. Therefore, the delay in filing the appeal should not be condoned.
10. The learned D.R for the Revenue also referred to the order of the I.T.A.T., Chandigarh Bench in the case of Punjab Urban Planning & Development Authority (supra), the decision of Hon'ble Jammu & Kashmir High Court in the case of Jammu Development Authority (supra) and as confirmed by the Hon'ble Supreme Court on merits in which on identical facts no relief have been granted to the assessee. However, since the appeal of the assessee is time barred, therefore, there is no need to discuss the judgments in detail.
11. In view of the above discussion, we hold that the appeal of the assessee is time barred and is accordingly dismissed.
12. In the result, the appeal filed by the assessee is dismissed in limine.