SPS Educational and Welfare Society, Ghaziabad V. DCIT, CPC , Banglore

ITA 2676/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0743 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside
• Section: 154; 143(1)

Judgement Text

Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 2676/Del/2019 (Assessment Year: 2015-16) SPS Educational and Welfare Society, 206-207, Ansal Satyam, RDC, Ghaziabad Vs. DCIT-CPC, Bangalore (Appellant) (Respondent) PAN: AAQTS2096E Assessee by : Shri Akhilesh Kumar, Adv Revenue by: Shri Abhishek Kumar, Sr. DR Date of Hearing 04/08/2022 Date of pronouncement 31/08/2022 O R D E R PER ANUBHAV SHARMA, J. M.: 1. The present appeal has been preferred by the Assessee against the order dated 15.01.2019 of Ld. CIT(A), Ghaziabad (hereinafter referred as Ld. First Appellate Authority) arising out of an appeal before it against the assessment order dated 24.10.2016 passed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the AO, ld. DCIT-CPC, Ghaziabad (hereinafter referred as the Ld. AO). 2. Brief facts of the case are that the assessee is a society running an educational Institution under the name and style of Indraprastha Public School. The Income tax return for A.Y. 2015-2016 was filed on 25.03.2016. Assessee claims that in Part A -GEN (Personal Information) of ITR-7 it was clearly mentioned that this society is exempt u/s 10(23C)(iiiad). Further in Page | 2 Para B of other details it is also mentioned that it is eligible for exemption u/s 10(23C((iiiad) as its aggregate annual receipts is below Rs. 1 crore (i.e. Rs. 8553876/-). Further in reply to a question in Part C of other details of ITR-7 It is clearly mentioned that the society is not registered u/s 12A. Due to certain inbuilt default in the software used for filing of return (MDA Software), the amount of Rs. 8553876/- was automatically shown in column no 7 which was neither filled in by the assessee nor intended to do so. It is stated that this column pertains to society registered u/s 12A/12AA. After filing return on 25.03.2016, CPC issued notice s u/s 139(9) which was finally replied on 06.12.2016. The above return was treated as invalid return on 10.03.2017. So the assessee has again filed its original ITR for A.Y. 2015- 2016 on 30.03.2017. Meanwhile CPC processed the above invalid return suo moto on 27.03.2017 which in fact came to the knowledge of the assessee only after 30.03.2017. The Ld. CPC has not taken any action against the return filed on 30.03.2017 hence assessee opted to file application u/s 154 on 26.08.2017 against the order passed u/s 143(1) for an invalidated return. In fact the society has gross receipts of Rs. 8553876/- against which Rs. 8227530/- was used for educational purpose leaving behind a surplus of Rs. 326346/- only which is exempt u/s 10(23C)(iiiad). But the CPC has processed the return u/s 143(l)(a) of the Income tax Act 1961 by treating the whole receipts of Rs. 8553876/- as income of the assessee and levied a huge demand of tax of Rs. 3268230/- which is erroneous and is liable to be deleted. Through the rectification application filed u/s 154 of the Income Tax Act 1961 on dated 26.08.2017, a fresh xml file duly correcting the mistakes apparent from the records was filed wherein it is clearly mentioned that the income of the trust is exempt u/s 10(23C)(iiiad) of the Income Tax Act 1961 being an educational institution solely for educational purpose gross receipts of which does not exceed Rs. 1 crore but that application was summarily rejected by the CPC Bangalore and order of rejection was received by the assessee on 16.02.2018. 3. However, the ld CIT(A) dismissed the appeal of the Assessee with the following order held as under:- Page | 3 “2.1 Admittedly, the appellant received the order u/s 143(1) on 01.11,2016. Thus, there is unjustifiable delay of more than 1 year in filing the appeal. It is also noted that appellant preferred application u/s 253(5) which is not maintainable before undersigned. Condonation of delay is not a matter of right since appellant has failed to show reasons of delay on fast day of limitation and thereafter for each day, it is felt that appellant has not acted with reasonable diligence in prosecuting the appeal. Reliance in this regard is placed on decision in the case of Rankak & Ors, Vs Rewa Coalfields ltd. AM 1962 SC 361, JCIT vs Tractors & Farm Equipments Ltd. (1TAT, Chennai-TM) 104 ITD 149, Madhu Dadha vs ACIT (Mad) 317ITR 458. Considering above facts and circumstances this appeal preferred by the appellant is treated as non-est being defective.” 4. The Assessee is in appeal before Tribunal raising following grounds of appeal:- “1. Because, order of Ld. CIT(A) is bad in law and is against the facts and circumstances of the case. 2 Because, Ld. CIT(appeals) erred in not condoning the delay which was fully explained supported with the affidavits of Ld. AR/assessee , hence Ld. Lower Authority failed to exercise discretion judicially 3 Because, Ld. CIT(Appeals) failed to appreciate that assessee had pursued the alternative remedy to file petition u/s 154 against the intimation u/s 143(1) under the legal advice of regular AR and after its rejection appeal is filed, as such delay is with sufficient cause.” 4 Because, Ld. CIT(A) failed to appreciate that in the order u/s 143(1) while CPC reflected receipt of society correctly but utilization is reflected nil despite the fact that in ITR downloaded from Deptt. site utilization is duly reflected with Nil income clearly proving the mistake. 5. Therefore, it is very respectfully prayed that this court may kindly be pleased to set aside the order under question with the direction deemed fit to CIT(A) to hear matter on merits.” 5. Heard and perused the record. The Ld. Counsel for the Assessee relied upon the judgments/ orders of the Hon’ble Allahabad High Court in the case of Subhash Malik Vs. CIT, Meerut (2010) 325 ITR 243, M/s. Bangalore Metro Rail Corporation Ltd Vs. DCIT, Bangalore in ITA No. 1111/bang/2019 to contend that the ld. CIT(A) has been harsh to apply the stringent provision of limitation without taking into consideration the Page | 4 merit of the ground. Ld DR however, stood with the findings of ld tax authorities below. 6. Appreciating the matter on record and the submissions it is apparent from the findings of the ld CIT(A) that said Appellate Authority was of the view that the Assessee was unable to cite explanation of every day of delay. In the case in hand the Assessee is a registered society acting through it’s office bearers and the Assessee filed before the ld CIT(A) an affidavit of the Manager of the society explaining the circumstances of delay and also the CA looking after the affairs of the company had also filed an affidavit. 7. It can be appreciated that the Assessee’s claim is primarily is of wrong advice in choosing the forum under law to contest the assessment order. The bench is of considered opinion that in case of society or other incorporated entities a decision to contest any order of authorities, has to be examined and decision to contest has taken following a procedure. The stringent laws of limitation require liberal interpretation. In the case in hand apparently the ld CIT(A) has not gone at all into discussing the grounds which were submitted and with the cursory observations the appeal has been dismissed barred by limitation. In fact it appears that at the time of adjudication of the appeal also none from the Assessee was present. The ends of the justice require condonation of delay and giving an opportunity to contest the assessment on merits. 8. In the result the ground no 1 is allowed and appeal of the Assessee is allowed for statistical purpose. The impugned order is set aside with direction to the Ld CIT(A) to decide the grounds of assessee on merits, after reasonable opportunity of hearing. Order pronounced in the open court on 31/08/2022. -Sd/- -Sd/- (ANIL CHATURVEDI) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31/08/2022 A K Keot Copy forwarded to Page | 5 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi