TaxTMI 
TaxTMI 
2014 (9) TMI 42
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....e said petition inter-alia as follows- "In this regard the appellant submits that upto the assessment year 2002-03, the income of the appellant, HMDA was claimed as exempt under S.10(20A) of the I.T. Act and, therefore, it did not file any application for obtaining registration u/s. 12AA of the I.T. Act. The said provision was amended with effect from 1.4.2002 and was made applicable to the assessment year 2003-04 and onwards. The appellant was entitled to claim exemption u/s. 10(23C)(iv) of the I.T. It also made an application on 28.5.2007 before the Chief Commissioner of Income-tax Hyderabad-I for approval u/s. 10(23C)(iv) of the I.T. Act. It was under the bonafide belief that recognition under us. 10(23C) would be accorded to the institution. Further, the learned DIT(Exemption) in his letter dated 20.9.2007, mentioned that the applicant could have, utilised the amendment introduced by the new clause in Sec.36(1)(vii) of the I.T. Act to mitigate its sufferings due to omission of Sec.10(20A) of the Act instead of making feeble attempts to secure Registration u/s. 12AA of the I.T. The assessee was under the bonafide belief that it could claim exemption u/s. 36(1)(xii) of the ....
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....tter should be looked in proper perspective, and condoning the delay, appeal of the assessee should be decided on its merits. 4. The learned Authorised Representative for the assessee while pleading for condonation of delay orally as well as through the written submission filed subsequent to the date of hearing submitted that the assessee is an authority created by the State Government to discharge sovereign and regulatory functions of the State Government and is in fact carrying out such functions as the agent of the State Government. In this context, the learned Authorised Representative for the assessee relied on the GO(Ms) No.85 dated 28.2.2011 issued by the Municipal Administration & Urban development Department of the Government of Andhra Pradesh. It was submitted that earlier the assessee was enjoying exemption from payment of income tax in respect of its income under S.10(20A) of the Act. However, the said provision was deleted from the statute as a result of amendment made to the Income-tax Act, by the Finance Act, 2002 with effect from assessment year 2003-04. It was therefore, contended that since the assessee was enjoying exemption for a long period of 27 years, and ....
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....ears after the order dated 20th September, 2007, in none of the assessments so made, there was explicit rejection of the deduction under S.36(1)(xii) in as much as the returns of income for all those years were filed prior to 20th September, 2007 and the assessee did not make such claim in the returns of income filed prior to that Director of Income-tax (Exemption). It is further submitted that the receipt of sale consideration of land and 85% of the development charges are not taxable as the said receipts do not belong to the assessee. In that view of the matter, the assessee was not claiming deduction under S.36(1)(xii) of the Act. Assessee made a claim for deduction under S.36(1)(xii) of the Act, for the first time in the appeals filed before this Tribunal only by way of alternative claims, with the main claim of the assessee being that it is acting as agent and is not a taxable entity. However, by way of communication dated 24th August, 2011 addressed to the counsel for the assessee representing the case before the Tribunal, the Asstt.. Commissioner of Income-tax Circle 10(1) informed that the revenue was proposing to raise additional grounds in their appeals before the Tribuna....
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....th its consultants, and took a decision to pursue all the available remedies simultaneously. It was submitted that except for the bona fide belief that hardship on account of omission of S.10(20A) is mitigated by insertion of S.36(1)(xii), there was no reason for the assessee not to have preferred an appeal before the ITAT against the order dated 20.9.2007 rejecting the application under S.12AA of the Act. It was submitted that the assessee could not have gained anything by not preferring appeal, and there was no mala fide intention behind it. It was submitted that the assessee was diligently pursuing all other issues by filing appeals before the CIT(A) and ITAT. It is only with regard to choice between deduction under S.36(1)(xii) and exemption under S.10(23C)(iv) that the assessee was not in a position to arrive at a decision in the absence of knowledge of intricacies of these provisions. It was submitted that the assessee is a wholly owned government body and it was administered by the employees of Government of Andhra Pradesh, who have come on deputation. The officers or the employees of the organization need the knowledge of income-tax, only when they are on deputation to the ....
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....sioner of Income-tax was not challenged in any manner, and it became final. It is stated that the averment that the assessee was under bona fide belief that the registration under S.10(23C) of the Income Tax Act would be accorded to the institution, cannot be countenanced for the reason that the said order rejecting the application under S.10(23C) became final in the manner set out above. It is further submitted that even though an application under S.154 of the Act was filed on 5.11.2012 purporting to seek rectification in the order of the Chief Commissioner of Income-tax, the same stood rejected by the proceedings dated 3.12.2012. It is mentioned that the said application of the assessee filed on 5.11.2012 was not maintainable in law since the same was filed after expiry of four years from the date of the service of the order of the Chief Commissioner of Income-tax on 21.5.2008. In any event, it is stated that the petitioner, being a statutory authority, is being manned by Senior Officers and Executives and it is also advised by a versatile and reputed Chartered Accountant, even while making application under S.12AA of the Act. Therefore, it is pleaded that there is absolutely no....
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....Counsel distinguishing each of the decisions relied upon by the learned counsel for the assessee, submitted that only because the assessee is a Government undertaking, it will not stand on a different footing or a different treatment cannot be meted out to it. The learned Senior Standing Counsel submitted that none of the decisions relied upon by the assessee set out any principle of law, which could be applied uniformly bereft of the distinguishing factual position. 12. In support of the above contentions, the learned Senior Standing Counsel for the Department relied on the decisions of Post Master General and Others V/s. Living Media India Ltd. and Anr. (2012) 3 Supreme Court Cases 563. 13. The learned Authorised Representative for the assessee in his rejoinder to the submissions made by the learned Senior Standing Counsel submitted that at the time of omission of S.10(20A) from the statute book, alternative benefit was also made available in the following manner- (a) Some of the receipts meant for development do not represent the income of the assessee (b) Exemption under S.11 of the Act (c) Exemption under S.10(23C) of the Act. (d) Deduction under S.36(1)(xii)....
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....lowance of deduction under S.36(1)(xii) does not arise. It was submitted that the claim of deduction under S.36(1)(xii) was only raised by the assessee by way of an additional ground in the appeal field before the ITAT. In this context, it cannot be said that there was no bona fide belief, on the part of the assessee that the hardship caused due to omission of S.10(20A) would stand mitigated by deduction under S.36(1)(xii). 14. The learned Authorised Representative for the assessee submitted that if the totality of facts and circumstances are taken into consideration, it would be crystal clear that there were valid reasons for the assessee for not filing the appeal initially against the order passed by the Director of Income-tax (Exemption). The learned Authorised Representative for the assessee submitted that it is not a fact that because of huge tax demand, the assessee was forced to file the present appeal. The learned Authorised Representative for the assessee submitted that if the assessee's case is considered in the light of the decisions relied upon by him, the reason for the delay has to be accepted as valid and it becomes a fit case for condonation of delay. The learned....
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....se sub-sections. Sub-section (3) of S.253 prescribes the limitation of sixty days for filing of the appeal from the date of receipt of the order sought to be appealed against. Sub-section (5) of S.253 however, confers a discretion on the Tribunal to admit an appeal beyond the period of limitation if it is satisfied that there is sufficient cause for not presenting the appeal within the prescribed period. In this context the expression "sufficient cause" assumes importance. In the light of the aforesaid statutory provision, let us examine the facts of the present case and thereafter decide whether there is sufficient cause to condone the delay. Undisputedly, there is a delay of 1804 days in presenting the appeal before the Tribunal. The cause of delay as explained in the delay condonation petition are as under- i) After omission of S.10(20A) from the Income-tax Act, the assessee had applied for registration under S.12AA of the Act as well as made an application before the Chief Commissioner for seeking approval under S.10(23C)(iv). ii) After rejection of its application for registration under S.12AA of the Act, the assessee was under bona fide belief that it is eligible for cl....
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....efore us is that its counterpart Visakhapatnam Urban Development Authority was granted registration under S.12AA of the Act, vide order dated 31.7.2006. 17. As can be seen from the reasons shown in the delay condonation petition as well as the submissions made before us, the basic contention of the assessee is to the effect that since the assessee was enjoying exemption for a pretty long period, it had no occasion to get exposed to various provisions of the Income-tax Act and it being completely new to the provisions of the Act, it was not in a position to follow the effect of various provisions of the Act, will have on its income. Such contention of the assessee is prima facie unacceptable. As already been reiterated earlier, after withdrawal of exemption under S.10(20A), the assessee itself came forward and filed returns of income declaring income. Therefore, the assessee had no doubt that its incomes were taxable. Thereafter, the assessee applied for registration under S.12AA of the Act on 15.3.2007. In the compliance made to Director of Income-tax (Exemption)'s query, the assessee in its letter dated 28.5.2007, a copy of which is placed at page 4 of the paper-book, submitted....
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....not pursue the issue of rejection of its application for registration under S.12AA, by preferring appeal against the order of the Director of Income-tax (Exemption). It is submitted that when the assessee's counsel received the communication dated 24.8.20-11, it became aware that the department is also against grant of deduction under S.36(1)(xii) to the assessee, and hence, steps were taken for filing the present appeal. We would like to observe that this reason was originally not shown in the delay condonation petition but was argued in the course of hearing before us. Be that as it may, we are not aware in what context and under what circumstances the ACIT Circle 10(1), Hyderabad issued the letter dated 24.8.2011 to the assessee's counsel, but a perusal of the said letter, a copy of which was placed before us by the learned Authorised Representative, in no way conveys that earlier the department was in favour of allowing deduction under S.36(1)(xii) to the assessee. Even assuming this reason to be correct for a moment, still, after receiving the above communication dated 24.8.2011 in the month of August, 2011 itself, the assessee filed the present appeal only on 30th October, 20....
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....n impression that the assessee was exploring other possibilities for getting exemption under the Act, and when the assessee failed in its attempt in getting exemption under any other provision of the Act, it reverted back to its claim for exemption under S.11 of the Act, as it dawned upon the assessee that it may be the only avenue open before it for getting exemption. Hence, steps were taken for filing of appeal before the Tribunal. 19. Having dealt with the factual aspects of the issue, we will now examine the applicability of the decisions relied upon by the learned counsel for the assessee to the facts of the present case. However, we have to bear in mind that the ratio laid down in a judgment has to be read in the context in which they appear, since each case depends on its own facts. In the case of Collector, Land Acquisition V/s. Mst.Katiji (supra), the Hon'ble Supreme Court held that to condone or not to condone is not the only question, but the court has to apply the same standard in applying the 'sufficient cause' test to all the litigants regardless of their personality. Though the Hon'ble Court was of the view that the expression 'sufficient cause' employed by the le....
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....nce there cannot be any mala fide intention in not filing the appeal in time, and hence the delay merits condonation. Here again, at the cost of repetition, we would like to observe that the Hon'ble Court did not lay down the law that even in the absence of sufficient cause delay is to be condoned. The learned Authorised Representative for the assessee has put much emphasis on the decision of the Hon'ble Supreme Court in the case of CIT V/s. West Bengal Infrastructure Development Finance Corporation Ltd. (supra), wherein the Hon'ble Supreme Court held as under- "Looking to the amount of tax involved in this case, we are of the view that the High Court ought to have decided the matter on merits. In all such cases where there is delay on the part of the Department, we request the High Court to consider imposing costs, but certainly it should examine the cases on merits and should not dispose of cases merely on the ground of delay, particularly when huge stakes are involved." It is evident from the above that the decision rendered in that case was based on 'looking to the amount of tax involved' in that case, and the ratio laid in that case cannot said to have an universal appli....
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....epartment on the very same day. There is no explanation for not applying for the certified copy of the impugned judgment on 11.9.2009 or at least within a reasonable time. The fact remains that the certified copy was applied for only on 8-1-2010 i.e. after a period of nearly four months. 26. In spite of affording another opportunity to file better affidavit by placing adequate material, neither the Department nor the person-in-charge has filed any explanation for not applying the certified copy within the prescribed period. The other dates mentioned in the affidavit which we have already extracted, clearly show that there was delay at every stage and except mentioning the dates of receipt of the file and the decision taken, there is no explanation as to why such delay had occasioned. Though it was stated by the department that the delay was due to unavoidable circumstances and genuine difficulties, the fact remains that from day one the Department or person/persons concerned have not evinced diligence in prosecuting the matter to this Court by taking appropriate steps. 27. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved....