Tribunal allows future years' tax exemption despite late filing, sets new precedent

The Tribunal upheld the rejection of the application for approval under Section 10(23C)(vi) for A.Y. 2018-19 due to late filing. However, it directed the Commissioner of Income-Tax (Exemption) to consider the application for subsequent years starting from A.Y. 2019-20, following precedents allowing consideration of delayed applications. The appeal was partly allowed, denying condonation for A.Y. 2018-19 but instructing consideration for future assessment years, ensuring the assessee's application is reviewed despite the initial delay.

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Issues Involved:
1. Rejection of the application for approval under Section 10(23C)(vi) of the Income Tax Act, 1961 due to late filing.
2. Consideration of the application for subsequent assessment years due to the delay in the decision by the Commissioner of Income-Tax (Exemption).

Detailed Analysis:

1. Rejection of the Application for Approval under Section 10(23C)(vi) due to Late Filing:
The assessee society, established with the primary objective of imparting education, filed an application in Form No. 56D on 25.04.2019 with the Commissioner of Income-Tax (Exemption), Bhopal, seeking approval under Section 10(23C)(vi) of the Income Tax Act for the Assessment Year (A.Y.) 2018-19. According to the sixteenth proviso to Section 10(23C) as amended by the Finance (No.2) Act, 2009, the application should have been filed by 30.09.2018. The Commissioner of Income-Tax (Exemption) rejected the application on the grounds that it was filed beyond the prescribed period. The Commissioner drew support from judicial pronouncements and concluded that the application was not maintainable due to the delay.

The Tribunal reviewed the grounds of appeal and noted that the Commissioner of Income-Tax (Exemption) was not vested with any power under the Act to condone the delay in filing the application. This view is supported by the judgments of the Hon'ble High Court of Madras in the case of All Angels Educational Society Vs. Chief CIT and other similar cases. Consequently, the Tribunal upheld the Commissioner's decision to reject the application for A.Y. 2018-19 due to the delay.

2. Consideration of the Application for Subsequent Assessment Years:
The assessee contended that the delay in the Commissioner's decision on the application for A.Y. 2018-19 precluded them from filing an application for the subsequent assessment year, A.Y. 2019-20, within the stipulated time. The Tribunal found merit in this argument. It was observed that the assessee's application for A.Y. 2018-19 was pending until 30.09.2020, thus preventing the filing of a new application for A.Y. 2019-20 by the deadline of 30.09.2019.

The Tribunal referred to similar cases, such as the Hon'ble High Court of Madras in All Angels Educational Society and the Hon'ble High Court of Bombay in Sanjay Ghodawat University, where the courts had directed the authorities to consider delayed applications for the subsequent assessment year. Following these precedents, the Tribunal directed the Commissioner of Income-Tax (Exemption) to consider the assessee's application for approval under Section 10(23C)(vi) as filed for the immediate succeeding year, A.Y. 2019-20, and onwards.

Conclusion:
The Tribunal partly allowed the appeal. While the request to condone the delay for A.Y. 2018-19 was declined, the Tribunal remanded the matter to the Commissioner of Income-Tax (Exemption), Bhopal, with instructions to treat the application as filed for A.Y. 2019-20 and subsequent years. This decision ensures that the assessee's application for exemption is considered for future assessment years despite the initial delay.

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