TaxTMI 
TaxTMI 
2021 (1) TMI 214
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.... further relief deemed just and proper be granted in the interest 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 Oc....
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....espondent no.2. However, vide order dated 12th February 2020, the rectification application 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 t....
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....hed. She would submit that the said date has elapsed. Similarly, according to Ms. Bhatt, no notice under Section 142(1) 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 ap....
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....10(23C) 8-11 2017-18 (iiiab) of the Act. Hence Form 10B was not required to be filed. 2016-17 17.10.2016 12-14 2015-16 30.09.2015 15-19 2014-15 29.9.2014 20-22 2013-14 29.9.2013 23-25 2012-13 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 Tru....
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....s of the Trust would have filed Form 10B for A.Y. 2016-17 on time. However, it was only on receipt of notice of demand from CRC, Bangalore that it realized that Form 10B has not been filed by its auditor. Applicant Trust has also filed an affidavit duly signed by one of its trustees namely Shri Parimal Gunvantlal Desai affirming 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....
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....unaccepted. Moreover, the assessee's activities are of high volume as is evident from the facts that in the year under consideration, the assessee has shown gross income of Rs. 3,85,99,831/- and amount applied towards charitable purposes in India was Rs. 3,82,80,458/-. This magnitude itself speaks that the trustees of the trust could have paid attention 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)....
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....8.2019, detailed reasons have been given as to why the case of assessee is not covered under 'reasonable cause' as per the requirements of para no.4(ii) of CBDT Circular No.10/2019 dated 22.5.2019. The submissions made by the assessee were duly considered in this order before rejecting assessee's contention (as is summarised in para no.7 of said order). The assessee 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.....
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.... mistake after the proceedings under the Act are dropped by the authorities concerned. The State is not entitled to plead the hyper technical plea of limitation in such a situation to avoid return of the amounts. Section 119 of the Act vests ample power in the Board to render justice in such a situation. The Board has acted arbitrarily in rejecting the petitioner's request for refund." 13. In the case of Sitaldas Motwani (supra), 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....
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.... Income Tax-III, (2013) 34 taxmann.com.61 (Gujarat), in relevant paragraph 16 of the said judgment, this Court held as under : "16. In our opinion, in the present case, there would be genuine hardship, if the time limit is not extended as otherwise, the entire claim of Rs. 17,84,323/- would be destroyed. The petitioner would neither get deduction in the assessment year 2005-06 nor in the year 2008- 09 as per then prevailing Section 40(a)(ia) of the Act. In our opinion, 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....
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....d pay the amount of interest levied. The ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. For the said purpose, another well-known principle, namely, a person cannot take advantage of his own wrong, may also have to be borne in mind. The said principle, it is conceded, has not been applied by the Courts below in this case, but we may take note of a few precedents operating in the field to highlight the aforementioned proposition 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, issu....
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.... forthcoming. Technically, strictly and literally speaking, the Board might be justified in denying the exemption from capital gains tax by rejecting such condonation application, but an assessee, who substantially satisfies the condition for availing such exemption should not be denied the same, merely on the bar of limitation, especially, when the legislature has conferred wide discretionary powers to condone such delay on the highest executive authority of the Central Board of Direct Taxes under the Act. 13. The general and wide powers given to the Board in this regard, "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....
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....ised as not bonafide. The court is of the opinion that an assessee has to take leave of its senses if it deliberately wishes to forego a substantial amount as the assessee is ascribed to have in the circumstances of this case. "Bonafide" is to be understood in the context of the circumstance of any case. Beyond a plea of the sort the petitioner raises (concededly belatedly), there can not necessarily be independent proof or material to establish that the auditor in fact acted without diligence. The petitioner did not urge any other grounds such as illness of someone etc., which could reasonably have 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 ....