2024 (9) TMI 1331 - AT - Income Tax

Trust's 506-day delayed appeal dismissed due to negligent attitude toward section 12AB registration application follow-up

ITAT Surat dismissed the appeal filed by a trust with 506 days delay. The trust's application for registration under section 12AB(1)(b)(ii)/12A was ... Delay in filing the appeal - assessee has filed the appeal after a delayed of 506 days - Registration of Trust u/s 12AB(1)(b)(ii)/ 12A denied - HELD THAT:- The reason given is that while checking status of the assessment order, the CA also checked the status of application for registration and found that the application has been rejected. It means that the assessee was primarily concerned about the fate of assessment order. The CA also checked the status of the application filed for registration while checking the assessment order. It is thus crystal clear that after filing the application, it has remained inactive and was negligent. There was no due diligence on the part of the assessee. This fact shows the lackadaisical attitude of the assessee towards the registration of the trust and subsequent follow up action indulging filing of appeal. Such casual and lackadaisical approach towards the order of rejection of registration cannot constitute “sufficient cause” within the meaning of section 253(5) of the Act. In view of the above facts and respectfully following the authoritative precedents cited supra, we refuse to condone the delay, requested by the assessee. Since, delay has not been condoned it becomes academic in nature to discuss the merit of the case. Assessee appeal dismissed. Issues Involved:1. Condonation of delay in filing appeals.2. Rejection of the application for registration of Trust under section 12AB(1)(b)(ii) / 12A of the Income-tax Act.3. Applicability of CBDT Circular No.7/2024 for extending the time limit.Detailed Analysis:Issue 1: Condonation of Delay in Filing AppealsThe appeals were delayed by 534-535 days. The assessee-trusts attributed the delay to the non-opening of the email containing the rejection order and the subsequent discovery of the order by their Chartered Accountant while checking the ITBA portal. The assessee argued that there was no malafide intention and that the delay was not intentional, citing the benevolent CBDT Circular No.7/2024, which extended the time limit for filing applications for registration.The Revenue opposed the condonation, arguing that the reasons provided did not constitute 'sufficient cause' under section 253(5) of the Act. The Revenue cited the Supreme Court's decision in Majji Sannemma @ Sanyasirao vs. Reddy Sridevi & Ors., emphasizing the necessity of due diligence and the absence of negligence.The Tribunal found that the primary reason for the delay was the Chartered Accountant's discovery of the rejection order while checking the assessment order status. The Tribunal held that such a general reason did not constitute 'sufficient cause' and highlighted the assessee's negligence and lack of diligence. The Tribunal referenced multiple Supreme Court decisions, including P. K. Ramachandran vs. State of Kerala & Anr., which underscored that the law of limitation must be applied rigorously and that negligence or lack of bona fides cannot justify condonation of delay.Issue 2: Rejection of the Application for Registration of TrustGiven the refusal to condone the delay, the Tribunal did not delve into the merits of the case regarding the rejection of the application for registration under section 12AB(1)(b)(ii) / 12A of the Income-tax Act. The Tribunal noted that discussing the merits would be academic since the appeals were dismissed on the preliminary issue of delay.Issue 3: Applicability of CBDT Circular No.7/2024The assessee also requested consideration of the CBDT Circular No.7/2024, which extended the time limit for filing applications for registration under section 12A till 30.06.2024. The Tribunal stated that the assessee is at liberty to make an application and seek appropriate relief as per the Circular from the Ld. CIT(E). The Ld. CIT(E) was directed to examine the application in accordance with the law and the CBDT Circular.Conclusion:The Tribunal dismissed all three appeals due to the failure to condone the delay in filing. The Tribunal emphasized the necessity of due diligence and the absence of negligence, referencing authoritative precedents to support its decision. The assessee was advised to seek relief under the CBDT Circular from the Ld. CIT(E).Order Pronounced:The appeals filed by the assessees in ITA Nos. 404/SRT/2024, 401/SRT/2024, and 403/SRT/2024 were dismissed. The order was pronounced on 22/05/2024 in the open court.