TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 214
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....of justice;" 2. The facts giving rise to this writ-application may be summarised as under : 3. The writ-applicant is a public charitable trust. The writ-applicant seeks to challenge the order passed by the respondent no.2 dated 19th August 2019 under Section 119(2)(b) of the Income Tax Act, 1961 (for short, 'the Act 1961'), rejecting the application filed by the writ-applicant for condonation of delay in filing the Form no.10B of the Act 1961 for the Assessment Year 2016-17. The writ-applicant also seeks to challenge the rectification order dated 12th February 2020, wherein the respondent no.2 rejected the rectification application. 4. It is the case of the writ-applicant that being a public charitable trust, it is registered with the Charity Commissioner as well as with the Income Tax authorities under Section 12A of the Act 1961 past more than 30 years. The books of accounts of the writ-applicant are being audited regularly and the return of income is also filed without any issues. For the Assessment Year 2016-17, the due date for filing the return of income was extended from 30th September 2016 to 17th October 2016 vide order under Section 119 of the Act 1961 dated 9th Septem....
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....ication also came to be rejected. 11. Being dissatisfied with the two orders referred to above passed by the respondent no.2, the writ-applicant is here before this Court with the present writ-application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 12. Mr. B.S. Soparkar, the learned counsel appearing for the writ-applicant vehemently submitted that the impugned orders passed by the respondent no.2 are patently errorneous in law. According to Mr. Soparkar, the respondent no.2 ought to have appreciated that it was a bonafide mistake on the part of the trustees who believed that it was the Auditor who was obliged to upload all the required documents without any follow-up action on their part. Mr. Soparkar would submit that it was only after the exemption was disallowed and demand was raised that the issue came to the knowledge of the writ-applicant. It is argued that the delay in electronically filing was caused due to the circumstances beyond the control of the writ-applicant. 13. It is also pointed out that the writ-applicant filed the report immediately upon having come to know that the audit report could not be uploaded in accordance with law. 14. Mr. Soparkar would submit....
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....of the Act can be issued as the time limit for passing the assessment order under Section 143(3) of the Act has also expired. She would argue that even after the writ-applicant is allowed to upload the Form no.10B along with the audit report, the veracity thereof is required to be ascertained. It will also have to be ascertained, whether the writ-applicant is eligible to the benefits/exemption under Section 11 of the Act. She would submit that the time limit as aforesaid has expired. 20. In the last, Ms. Bhatt submitted that if ultimately this Court is convinced that sufficient cause has been assigned by the writ-applicant for the purpose of condonation of delay, then this Court may clarify that despite the time period having expired, it shall be open for the department to issue notice under Section 143(2) of the Act or Section 142(1) of the Act, as the case may be. 21. In such circumstances referred to above, Ms. Bhatt prays that there being no merit in this writ-application, the same may be rejected. ANALYSIS : 22. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, ....
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.... 30.9.2012 26-30 (9) Given the above, the lapse occurred only for one year and that too on account of oversight. Therefore, it is urged that relief u/s.11 may kindly not be denied on account of a hyper-technical lapse. (10) To support the above, an affidavit is attached (Page No.31 to 32). (11) In the matter, reliance is placed on the following decisions. Sr.No. Citation Name Brief Summary 1 46-DTR-302 (Mumbai 'E') Sir Kikabhai Premchand Trust Non-filing of audit report with return -Assessee's chartered accountant having filed an affidavit affirming that he has conducted the audit of assessee's accounts and issued audit report in Form No.10B which was not filed along with the return due to oversight, provisions of s.12A(1)(b) stand complied with and assessee is entitled to exemption under s.11. 2. 42-SOT-403 (Mumbai) Sir Kikabhai Premchand Trust Assessee had not filed audit report in Form No.10B along with return of income. Along with return of income, assessee had filed report of auditor which was required to be given under Bombay Public Trust Act, 1950. On facts, assessee's plea that report in Form No.10B, which was similar to....
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....firming on solemn above facts of the case. It has also relied upon the Judgement of ITAT, Mumbai Bench 'E' rendered in the case of ITO, Mumbai v. Shri Kikabhai Premchand Trust (2010)42 SOT 403 (Mum.) submitting that the facts are squarely applicable to the facts of its case. The assesse was granted one more opportunity of being heard, vide this office letter dated 26.12.2018 to procuce documentary evidence to substantiate its claim. However, in response thereto, the assessee, vide letter dated 09.01.2019 sought adjournment of the hearing. Acceding to the request of the applicant, another letter was issued on 05.04.2019 to submit documentary evidence to present its case. The Trustee and Secretary namely Shri Parimal Desai attended on 18.04.2019 and stated that it relied on its earlier submission filed on 13.11.2018. 3. The reply of the assessee is carefully examined in light of CBDT's circular no.10/2019 dated 22.05.2019. In para 4(ii) of the said circular, it has been emphasized that the Commissioner shall satisfy himself that the assessee was prevented by reasonable cause from such belated application in filing Form no. 10B within the stipulated time. After going through the sub....
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....tion for making the legal compliances. Thus, the sole condition applicable to the facts of the case mentioned in circular no. 10/2019 does not get fulfilled. Thus the reason cannot be taken as 'Genuine Hardship' which prevented it from timely compliance. Further, the case law relied upon by the applicant i.e. ITO(E) (11)(1), Mumbai vs Sir Kikabhai Premchand Trust rendered by ITAT, Mumbai Bench 'E' is not applicable to the facts of the case as in the above case. 7. Having gone through the above facts, I am of the opinion that the assessee has not shown any genuine hardship on account of which the lapse occurred. It has merely passed on the blame on the auditors that too without any supporting evidences. By assigning any work to any extemal agency the onus of statutory duty does not get shifted. As per provisions of section 12A(1)(b) of I.T. Act, the assessee should have ensured that the audit report duly signed by the accountant, as defined in Explanation below sub-section (2) of section 288 of the Act, is submitted alongwith the return of income on time. As the lapse is on the part of the assessee without any genuine cause, there is no reason for which Condonation can be granted.....
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....has failed to point out as to how there is mistake apparent from records which may be rectified under Section 154 of the I.T. Act. 4. It is relevant to note that the Hon'ble Supreme Court in the case of T.S.Balaram, ITO vs. Volkart Bros (1971) 82 ITR 40 (SC) held that "a mistake apparent on the record" must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. Further, 'mistake' means commission that is not designed and which is obvious and something which has two opinions or which is debatable as has been held in the case of CIT vs. Lakshmi Prasad Lahkar (1996) 220 ITR 100 (GAU). 5. After considering the submissions of the assessee and on perusal of documents on file it is seen there is no apparent mistake in the records, with regard to the order dated 19.8.2019, passed under section 119(2)(b) of the Income Tax Act, 1961, which requires rectification. Therefore, the application for rectification is rejected." 26. Mr. Soparkar, the learned counsel is right in his subm....
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....pra), this court has held that the expression "genuine hardship" used in section 119(2)(b) of the said Act should be construed liberally, particularly in matters of entertaining of applications seeking condonation of delay. This court was pleased to observe as under (page 228 of 323 ITR): "The phrase 'genuine hardship' used in section 119(2) (b) should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular dated October 12, 1993. The Legislature has conferred the power to condone delay to enable the authorities to do substantive justice to the parties by disposing of the matters on the merits. The expression 'genuine' has received a liberal meaning in view of the law laid down by the apex court referred to hereinabove and while considering this aspect, the authorities are expected to bear in mind that ordinarily the applicant, applying for condonation of delay does not stand to benefit by lodging its claim late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold an cause of justice being defeated. As against this, when delay is condoned the highest that can ....
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....inion, the petitioner was neither lethargic nor lacking in bona fides in making the claim beyond the period of limitation, which should have a relevance to the desirability and expedience for exercising such power. Before proceeding further we may caution that undoubtedly such powers are not to be exercised in routine manner to extend limitation provided by the Act for various stages. We are conscious that such routine exercise of powers would neither be expedient nor desirable, since the entire machinery of tax calculation, processing of assessment and further recoveries or refunds, would get thrown out of gear, if such powers are routinely exercised without considering its desirability and expedience to do so for avoiding genuine hardship. In the present case, however, considering special facts, we are of the opinion that the Commissioner ought to have exercised such powers. It is true that the Appellate Commissioner recorded that the petitioner did not remain present in the appellate proceedings. However that by itself would not take away the petitioner's case for genuine hardship nor contrary to what is vehemently contended before us by the counsel for the Revenue, convince....
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....on of law. (See Priyanka Overseas (P) Ltd. & Anr. Vs. Union of India & Ors. 1991 Suppl.(1)SCC 102, para 39, Union of India & Ors. Vs. Maj.Gen.(Retd.) Madan Lal Yadav (1996)4 SCC 127 at 142, paras 28 and 29, Ashok Kapil Vs. Sana Ullah (dead) & Ors. (1996) 6 SCC 342 at 345, para 7, Sushil Kumar vs. Rakesh Kumar (2003) 8 SCC 673 at 692, para 65, first sentence, Kusheshwar Prasad Singh vs. State of Bihar & Ors. (2007) 11 SCC 447, paras 13, 14 and 16)." 28. Section 119 of the Act is couched in very wide terms. The same is quoted below for ready reference : Instructions to subordinate authorities: "119. (1) the Board may, from time to time, issue such orders, instructions and directions to other income- tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board: xxx xxx xxx (2) Without prejudice to the generality of the foregoing power:- (a) xxx xxx xxx (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or s....
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....if it considers it desirable or expedient so to do for avoiding genuine hardship in any case.....", not only gives wide powers to the Board, but confers upon it a obligation to consider facts relevant for condonation of delay as well as the merit of the claim simultaneously. If the claim of exemption or other claim on merits is eminently a fit case for making such claim, it should not normally be defeated on the bar of limitation, particularly, when the delay or the time period for which condonation is sought is not abnormally large. It will of course depend upon the facts of the each case, where such a time period or the merit of the claim deserves such exercise of discretion in favour of the assessee under Section 119(2)(b) of the Act or not and therefore, no straight jacket formula or guidelines can be laid down in this regard. However, such orders passed by the Central Board of Direct Taxes being a quasi-judicial order is always open to judicial review by the higher constitutional courts. If the good conscience of the Courts is pricked, even though such orders rejecting the claims on the bar of limitation may appear to be prima facie tenable, the Courts may exercise their juris....
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.... been substantiated by independent material. In the circumstances of the case, the petitioner, in our opinion, was able to show bonafide reasons why the refund claim could not be made in time. 9. The statute or period of limitation prescribed in provisions of law meant to attach finality, and in that sense are statutes of repose; however, wherever the legislature intends relief against hardship in cases where such statutes lead to hardships, the concerned authorities - including Revenue Authorities have to construe them in a reasonable manner. That was the effect and purport of this court's decision in Indglonal Investment & Finance Ltd. (supra). This court is of the opinion that a similar approach is to be adopted in the circumstances of the case." 31. Having given our due consideration to all the relevant aspects of the matter, we are of the view that the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, the respondent no.2 might be justified in denying the exemption under Section 12 of the Act by rejecting such condonation application, but an assessee, a public charitable trust past 30 yea....