2025 (5) TMI 1779 - AT - Income Tax

Condonation of delay - appeal was filed before the CIT(A) with a delay of 1268 days - appellant filed a petition seeking condonation of delay on the ground that the appellant was not aware of the intimation issued by the CPC and the delay is also caused due the death of the Tax Consultant - HELD THAT - Assessee petition could not establish as to how it was aware of this intimation issued by the CPC and how it had come to know of the intimation subsequently. Further it is no clear as to whether the said Chartered Accountant Mr. E.M. Sabu was handling the income tax matter of the appellant society. Whether the email ID of the Chartered Accountant was given to the Department. CIT(A) clearly stated that the intimation was served on the appellant society twice. Therefore the explanation offered by the appellant for the delay in filing the appeal before CIT(A) cannot said to be bona fide and therefore we are of he considered opinion that the CIT(A) was justified in refusing to condone the delay in filing the present appeal and dismissing the appeal. We find justification for the adjustment made by the CPC. The contention of the appellant that it had filed the return of income within the extended date by the CBDT cannot be accepted. The extension was only for belated and revised returns as evident from the circular F. No. 225/150/2020-ITA-II dated 30.09.2020 - Decided against assessee.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this appeal are:

(a) Whether the Commissioner of Income Tax (Appeals) was justified in refusing to condone the delay of 1268 days in filing the appeal against the order passed under section 143(1) of the Income Tax Act, 1961;

(b) Whether the appellant co-operative society was entitled to claim deduction under section 80P of the Income Tax Act for the Assessment Year 2019-20;

(c) Whether the intimation issued by the Central Processing Centre (CPC) disallowing the deduction under section 80P was valid, considering the appellant's contention regarding the extension of the due date for filing returns by the CBDT.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Justification for refusal to condone delay in filing appeal

Relevant legal framework and precedents: The Income Tax Act, 1961, mandates strict adherence to prescribed time limits for filing appeals. Courts and tribunals have consistently held that condonation of delay is discretionary and requires a bona fide explanation supported by evidence. Mere assertions without corroborative proof are insufficient to justify condonation.

Court's interpretation and reasoning: The appellant sought condonation of delay on two grounds: unawareness of the intimation issued under section 143(1) of the Act and the death of the Chartered Accountant handling the case. The CIT(A) refused condonation, citing absence of corroborative evidence to prove unawareness of the intimation and the demise of the tax consultant. The Tribunal examined the petition filed for condonation, noting that the appellant did not explain how it came to know of the intimation belatedly nor established that the deceased Chartered Accountant was responsible for handling the appellant's income tax matters or that his email ID was registered with the Department.

Key evidence and findings: The appellant produced a death certificate of the Chartered Accountant only before the Tribunal, not before the CIT(A). The CIT(A) had recorded that the intimation was served twice on the appellant society. No evidence was presented to rebut service of intimation or to demonstrate that the appellant had no knowledge of the intimation within the stipulated time.

Application of law to facts: The Tribunal held that the explanation for delay was not bona fide and lacked sufficient proof. The failure to establish a causal link between the death of the Chartered Accountant and the delay, or to show genuine ignorance of the intimation, weighed heavily against the appellant. The Tribunal concurred with the CIT(A) that the delay of over three years was inordinate and unjustified.

Treatment of competing arguments: The appellant's argument that the delay was due to reasons beyond its control was rejected as speculative and unsupported. The Tribunal emphasized the importance of timely compliance and the appellant's duty to monitor communications from the Department. The absence of evidence to demonstrate that the deceased Chartered Accountant was the sole custodian of tax matters or that the appellant had no alternative means to receive communications was fatal to the appeal.

Conclusions: The Tribunal upheld the CIT(A)'s refusal to condone delay and dismissed the appeal on this ground, affirming the principle that unexplained and excessive delay in filing appeals cannot be condoned without credible justification.

Issue (b): Entitlement to deduction under section 80P of the Income Tax Act

Relevant legal framework and precedents: Section 80P of the Income Tax Act provides deduction in respect of income earned by co-operative societies from specified activities, including providing credit facilities to members. Deduction is contingent upon compliance with procedural and substantive conditions, including timely filing of returns.

Court's interpretation and reasoning: The CIT(A) held that the appellant was not entitled to claim deduction under section 80P for AY 2019-20, primarily because the return claiming the deduction was filed after the due date prescribed under section 139(1). The Tribunal noted that the return was filed on 17.03.2020, beyond the original due date, and the deduction was disallowed accordingly.

Key evidence and findings: The appellant's return disclosed nil income after claiming a deduction of Rs. 60,48,915 under section 80P. The CPC processed the return under section 143(1) and disallowed the deduction solely on the ground of late filing.

Application of law to facts: The Tribunal observed that the statutory framework mandates adherence to due dates for claiming deductions. Since the return was not filed within the due date, the claim for deduction under section 80P was not permissible. The Tribunal did not find merit in the appellant's contention that the deduction was regularly allowed in earlier years, as each assessment year is to be considered independently.

Treatment of competing arguments: The appellant argued that the deduction was rightly claimable and that the delay was excusable. However, given the Tribunal's finding on delay and the statutory requirement for timely filing, these arguments were rejected.

Conclusions: The Tribunal affirmed the disallowance of deduction under section 80P due to non-compliance with the prescribed filing deadline.

Issue (c): Validity of intimation issued by CPC in light of CBDT's extension of due date

Relevant legal framework and precedents: The CBDT issued a circular extending the due date for filing revised returns for AY 2019-20 up to 30.11.2020. However, extension of due dates for original returns is governed separately and must be strictly construed.

Court's interpretation and reasoning: The appellant contended that the return was filed within the extended due date granted by the CBDT and thus the intimation disallowing the deduction was illegal. The Revenue clarified that the extension was only for filing belated and revised returns, not for original returns.

Key evidence and findings: The Tribunal examined the CBDT circular F. No. 225/150/2020-ITA-II dated 30.09.2020 and confirmed that the extension applied exclusively to revised returns, not to original returns filed beyond the due date under section 139(1).

Application of law to facts: Since the appellant filed the original return late and not a revised return within the extended period, the intimation issued by the CPC disallowing the deduction was valid and lawful.

Treatment of competing arguments: The appellant's reliance on the CBDT circular was misplaced as it did not apply to the facts of the case. The Tribunal rejected the argument that the intimation was illegal on this ground.

Conclusions: The Tribunal upheld the validity of the intimation issued by the CPC.

3. SIGNIFICANT HOLDINGS

"The explanation offered by the appellant for the delay in filing the appeal before the CIT(A) cannot said to be bona fide and therefore, we are of the considered opinion that the CIT(A) was justified in refusing to condone the delay in filing the present appeal and dismissing the appeal."

"The contention of the appellant that it had filed the return of income within the extended date by the CBDT cannot be accepted. The extension was only for belated and revised returns as evident from the circular F. No. 225/150/2020-ITA-II dated 30.09.2020."

Core principles established include the strict requirement of timely filing of appeals and returns under the Income Tax Act, the necessity of credible and corroborative evidence to justify condonation of delay, and the limited scope of CBDT's extension of due dates which does not extend to original returns unless specifically stated.

Final determinations: The Tribunal dismissed the appeal, upheld the CIT(A)'s refusal to condone delay, affirmed the disallowance of deduction under section 80P due to late filing, and validated the intimation issued by the CPC.