INDIAN POLLUTION CONTROL ASSOCIATION,DELHI V. DCIT, EXEMPTION 1(2), DELHI

ITA 5117/DEL/2024

AI Insights

The case involves the Indian Pollution Control Association, which appealed against the order of the Ld. CIT(A)/NFAC, Delhi, dated 03.10.2024. The appeal was initially dismissed due to a delay in filing, which the assessee argued was caused by the COVID-19 pandemic and was exempted by a Supreme Court order. The primary issues in dispute included the treatment of Rs. 1,81,16,952 as income from incidental activities, which exceeded 20% of total receipts, and the charging of excess interest under sections 234A and 234B of the Income Tax Act. The ITAT found merit in the assessee's arguments regarding the delay and the need for a substantive hearing on the merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31015 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: SACHIT JOLLY; .; ABHYUDAY
• Keywords: Opportunity of being heard; Reasonable cause; Period of limitation; Time period of passing order
• Section: 142(1); 12A; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘C’’ : NEW DELHI) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No. 5117/Del/2024 Asstt. Year : 2018-19 INDIAN POLLUTION CONTROL VS. NATIONAL E-ASSESSMENT ASSOCIATION, CENTRE, DELHI 450/1/B-1, STREET NO. 14-A, C/O DCIT/ACIT VISHWAS NAGAR, EXEMPTION 1(2), DELHI SHAHDARA, DELHI (PAN: AAAT12775A) (Appellant) (Respondent) Appellant by :Sh. Sachit Jolly, Sr. Adv., Sh. Abhyuday Shankar Bajpai, Adv, and Sh. Aditya Rathore, Adv. Respondent by :Shri Dayainder Singh Sidhu, CIT(DR) Date of Hearing 24.02.2025 Date of Pronouncement 12.03.2025 ORDER PER SHAMIM YAHYA, AM : This appeal has been filed by the Assessee against the order dated 03.10.2024 passed by the Ld. CIT(A)/NFAC, Delhi on the following grounds:- i) That on the facts and circumstances of the case and in the law, the order dated 03.10.2024 passed by NFAC dismissing the appeal due to delay in filing of the appeal, without even giving an opportunity of being heard to the appellant is against the principles of natural justice, is bad in law and is liable to be quashed. ii) That, on the facts and circumstances of the case and in law, the NFAC has grossly erred in dismissing the appeal filed by the appellant on account of being filed beyond the period prescribed under the Act, without considering the Circular No. 10 of 2021 dated 25.5.2021 issued by the CBDT, wherein the limitation period for filing of the appeal before the CIT(A) was extended till further 2 | P a g e orders by the Hon’ble Supreme Court, is bad in law and is liable to be quashed. iii) That, on the facts and circumstances of the case and in law, the NFAC has erred in failing to adjudicate the addition of Rs. 1,81,16,952/- without appreciating that the said amount represents the gross sales proceeds from recycled items, which activity is incidental to the main objective of the appellant and that such receipts were applied towards the objects of the appellant. iv) That on the facts and circumstances of the case and in laws, the NFAC has erred in failing to adjudicate the issue of charging excess interest aggregating to Rs. 16,72,572/- u/s. 234A and 234B of the Act. 2. The brief facts of the case are that the assessee, M/s Indian Pollution Control Association is registered u/s. 12A of the I.T. Act, 1961 filed its return of income for the AY 2018-19 on 31.10.2018 declaring ‘nil’ income. A new schedule AI was introduced in ITR-7 with effect from AY 2017-18. Receipts from main objects as well as incidental objects are required to be reported by the assessee. AO noted from the filed ITR-7, the assessee declared Rs. 2,46,08,691/- receipts from main objects and Rs. 1,81,16,952/- receipts from incidental objects respectively. AO noted that details of incidental activities not furnished by the assessee in compliance to the notice issued u/s. 142(1) of the Act and further issued reminders on 8,1,2021 and 3.2.2021 for compliance. The assessee failed to avail this opportunity. Thereafter, AO noted that objects of the assessee fall in category of general public utility. So it will be hit by proviso to 2(15) where income of commercial nature is more than 20% of total income. The total receipts from the incidental object is Rs. 1,81,16,952/- which is more than 20% of the total receipts of trust, which has been treated as the income of the assessee and brought to tax as AOP by assessing the total income at Rs. 1,81,16,952/-. Upon assessee’s appeal, Ld. CIT(A) noted that there is five months delay in filing the appeal, so he dismissed the appeal in limine. 3. Against the aforesaid order, assessee is in appeal before us. 3 | P a g e 4. We have heard both the parties and perused the records. Ld. Counsel for the assessee submitted that the delay was occurred during the covid period and there was an exemption granted by the Hon’ble Supreme Court in this regard. He further submitted that due to lack of coordination, assessee could not submit the same before the Ld. CIT(A). Upon careful consideration, we note that there was reasonable cause for the assessee for not appearing before the Ld. CIT(A). Ld. DR also fairly agreed to this proposition. Also there was Hon’ble Supreme Court’s order for the covid period wherein, delay was condoned. Accordingly, in the interest of justice, we condone the delay in dispute and remit back the issues in dispute to the file of the Ld. CIT(A). Ld. CIT(A) shall decide the issues on merits, in accordance with law, after giving adequate opportunity of being heard to the assessee. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced 12.03.2025. SD/- SD/- (SUDHIR KUMAR) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Bench "