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TMI Blog2021 (2) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... 08.2019 rejecting application for condonation of delay u/s.119(2)(b) of the Act; (b) A writ of mandamus or any other writ, order or direction in the nature of mandamus directing the respondent to allow filing of Form 10 belatedly; (c) Pass any other order(s) as this Hon'ble Court may deem fit and more appropriate in order to grant interim relief to the petitioner; (d) Any other and further relief deemed just and proper be granted in the interest of justice; (e) To provide for the cost of this petition." 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 dated 26th 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.10 of the Act 1961 for the Assessment Year 2014-15. 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent, explaining the entire chain of events and requested to condone the delay. However, the application ultimately came to be rejected vide order dated 19th August 2019. 11. It appears from the materials on record that relying on the Circular No.273 dated 3rd June 1980 issued by the Central Board of Direct Taxes as the writ-applicant could not fulfil the conditions mentioned in the said Circular, vide order dated 26th August 2019, the application for condonation of delay came to be rejected. 12. Being dissatisfied with the order referred to above passed by the respondent, the writ-applicant is here before this Court with the present writ-application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 13. Mr.H.V.Vora, the learned counsel appearing for the writ-applicant vehemently submitted that the impugned order passed by the respondent is patently errorneous in law. According to Mr.Vora, the respondent 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.Vora would submit that it was only after the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the impugned order is quashed and the Form no.10 is ordered to be taken on record. According to her, as per the proviso to Section 142(2) of the Act, no notice can be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. 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 file the Form no.10 along with the return of income, 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. 21. 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent years itself. However the assessee has genuinely skipped to file Form 10 as per the provisions of the I.T. Act 1961 as the assessee during the period was massively involved in the activities of charitable, religious and educational purpose within the city as well as in the outskirts of the city. We would also like to state that in order to improve the conditions of the poor and the uneducated sector of the society, the Trust along with the Trustees themselves and the entire staff of the trust including the accounts and administration team were involved in such activities. We would like to state that the assessee had genuinely faced hardships and the intention of the assessee was not deliberate and malafide for not filing the form Form 10 as per the provisions of the I.T. Act 1961. However after coming to know the facts the assessee has filed Form 10 as per the provisions of the Act 1961 for the relevant assessment year on 11.02.2019. We are enclosing herewith the copy of Form 10 filed for your kind perusal. We would like to state that the income declared by the assessee while filing the return of income is correct and the refund claimed is also correct and genuine a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee trust was issued letter dated 2.4.2019 to show cause as to why the application for condonation should not be rejected as no genuine hardships is shown which prevented it from filing Form 10 on time. It was requested to file the reply on 15.4.2019. The AR of the assessee on 15.4.2019 filed written submission to the show-cause letter in Dak. In its reply it has reiterated the facts mentioned in the original application. Additionally it stated that the work of filing of Income Tax Return and other related forms were entrusted to a Tax consultant who did not file Form 10 due to ignorance. If condonation is not granted then it will lead to high demand resulting into shortfall of funds for achieving the objects of the trust and development of the society also. 3. On going through the records it has been noticed that the application has been filed by CNK & Associates LLP, Chartered Accountants, Vadodara for the assessee Trust and also the submission filed in Dak on 15.4.2019 in compliance to the notice issued by this office. However, no such authorization for and on behalf of the assessee Trust has been filed in favour of CNK Associates LLP, Chartered Accountants. Thus, technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey in the prescribed securities was due only to oversight. (c) That the trustees or the settler have not been benefited by such failure directly or indirectly. (d) That the trust agrees to deposit its funds in the prescribed securities prior to the issue of the Government sanction extending the time under section 11(2); and The assessee has not given such particulars and evidences to show that above conditions are duly fulfilled. Thus the pre-conditions of said circular does not get fulfilled. 6. In view of the above and after having considered the facts and in exercise of the powers conferred on me u/s 119(2)(b) of the Act, I hereby reject the application for condonation of delay in filing the Form No.10 for the A.Y. 2014-15." 27. Mr.Vora, the learned counsel is right in his submission that a fair and dispassionate view of the facts ought to have persuaded the respondent, who possesses wide discretion in the matter under Section 119 of the Act, to condone the delay and allow the assessee to avail the said exemption under Section 12 of the Act being a public charitable trust. 28. We should look into the position of law as regards the subject matter of this writ-applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 happen is that a cause would be decided on the merits after hearing the parties. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cious 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 us to hold that filing of revised return beyond limitation lacked bona fides." (iii) In the case of State of Jharkhand and others vs. Ambay Cements and another, (2005 Sales Tax Cases Vol.129). The relevant extract of the said judgment is quoted from the Head Note below for ready reference : "An exception or an exempting provision in a taxing statute should be construed strictly. If the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar & Ors. (2007) 11 SCC 447, paras 13, 14 and 16)." 29. 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 special order, authorize any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law:" 30. We may also refer to a decision of the Karnataka Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated 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 jurisdiction to set aside such orders and allow the claims on merits, setting aside the bar of limitation. 14. The present case is one of such nature, where the Court finds that the substantial conditions for claiming the exemption from capital gain tax stood satisfied and the prescribed investment was made by the assessee in the Bonds of the National Highways Authority, for the minimum lock-in period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases 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." 32. 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 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 years 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 authorities concerned. 33. We may also refer to the decision of this Court in CIT v. Gujarat Oil and Allied Industries Limited, (1993) 201 ITR 325 (Gujarat), wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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