M/s. Ghaziabad Development Authority, New Delhi V. CIT, Ghaziabad

ITA 455/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6884 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: misc
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL CHANDER SHARMA
• Keywords: Condonation of delay; Ignorance of law
• Section: 12A; 12AA; 154

Judgement Text

ITA NO. 455/D/16 PAGE 1 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 455/DEL/2016 GHAZIABAD DEVELOPMENT AUTHORITY C/O M/S RRA TAX INDIA, D-28, SOUTH EXTENSION, PART-1, NEW DELHI. AAALG0072C VS COMMISSIONER OF INCOME TAX, GHAZIABAD. ASSESSEE BY DR. RAKESH GUPTA, ADV. SH. SOMIL AGARWAL, ADV. REVENUE BY SH. SUNIL CHANDER SHARMA, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER DATED 29/09/2012 PASSED BY THE LD. COMMISSION ER OF INCOME TAX-GHAZIABAD GRANTING REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). DATE OF HEARING 28.07.2016 DATE OF PRONOUNCEMENT 20.09.2016 ITA NO. 455/D/16 PAGE 2 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY 2. THE ASSESSEE IS AN AUTHORITY CONSTITUTED UNDER T HE U.P. URBAN PLANNING AND DEVELOPMENT ACT, 1973. THE ASSESSEE WA S INITIALLY DENIED REGISTRATION U/S 12AA OF THE ACT BY THE LD. CIT VIDE ORDER DATED 08/08/2006 AND THE ASSESSEE PREFERRED AN APPE AL BEFORE THE ITAT. ITAT VIDE ITS ORDER DATED 31/01/2007 IN ITA NO. 2903/DEL/2006 DIRECTED THE LD. CIT TO GRANT REGISTR ATION. THE LD. CIT, HOWEVER, WHILE GIVING EFFECT TO THE ORDER OF T HE ITAT, GRANTED THE REGISTRATION W.E.F. 31/03/2003 AND NOT FROM 01/04/2 002 I.E. THE FIRST DAY OF THE PREVIOUS YEAR. SUBSEQUENTLY, THE ASSESSEE MOVED AN APPLICATION U/S 154 OF THE ACT SEEKING RECTIFICATIO N IN THE DATE FROM WHICH THE REGISTRATION U/S 12AA WAS TO BE EFFECTIVE . AN ORDER REJECTING ASSESSEES APPLICATION U/S 154 WAS PASSED BY THE LD. CIT ON 29/05/2015. THE ASSESSEE AGAIN APPROACHED THE I TAT CONTESTING THE REJECTION OF ITS RECTIFICATION APPLI CATION. HOWEVER, THE ITAT DISMISSED THE ASSESSEES APPEAL VIDE ORDER DAT ED 16/12/2015 IN ITA NO. 4009/DEL/2015 BY HOLDING THAT THE ASSESS EES APPEAL WAS NOT MAINTAINABLE BY MAKING THE FOLLOWING OBSERVATIO NS: 7. IN VIEW OF ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASS ED U/S 154 OF THE ACT TO THE ORDER U/S 12AA IS NOT MAINTAI NABLE. ITA NO. 455/D/16 PAGE 3 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY HOWEVER, THE ASSESSEE MAY FILE AN APPEAL AGAINST TH E ORDER PASSED U/S 12AA OF THE ACT BY THE COMMISSIONE R OF INCOME TAX IN COMPLIANCE TO THE DIRECTION OF THE TR IBUNAL WITH THE REQUEST OF CONDONATION OF DELAY. 2.1 NOW THE ASSESSEE HAS APPROACHED THE TRIBUNAL ON CE AGAIN AND HAS CHALLENGED THE ORDER U/S 12AA OF THE ACT DATED 29/09/2010 PASSED BY THE LD. COMMISSIONER OF INCOME TAX GHAZ IABAD AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE REGISTRATION U/S 12AA FROM 31.03.2003 INSTEAD O F 01.04.2002 WHICH IS MANDATE AS PER FIRST PROVISO TO SECTION 12A(1) OF THE INCOME TAX ACT, 1961. 2. THAT IN ANY VIEW OF THE MATTER AND IN ANY CASE, ACT ION OF LD. CIT IN NOT ALLOWING THE REGISTRATION U/S 12AA F ROM 01.04.2002 IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND LD. CIT HAS ERRED IN DISREGARDING THE ORDER OF HONBLE TRIBUNAL. 3. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJU DICE TO EACH OTHER. ITA NO. 455/D/16 PAGE 4 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT THERE W AS A DELAY OF 1875 DAYS IN FILING THE APPEAL. THE LD. AR SUBMITT ED THAT WHEN THE ASSESSEE HAD RECEIVED ORDER DATED 29/09/2010 PASSED BY THE LD. CIT, GHAZIABAD IN PURSUANCE TO THE ORDER OF THE ITA T, AN APPLICATION U/S 154 OF THE ACT WAS FILED BEFORE THE LD. CIT WEL L WITHIN TIME. THEREAFTER, AN ORDER REJECTING ASSESSEES APPLICATI ON U/S 154 WAS PASSED ON 29/05/2015. AGAINST THE SAID REJECTION, THE ASSESSEE HAD AGAIN FILED AN APPEAL BEFORE THE ITAT WITHIN TIME. THEREAFTER, AFTER THE DISMISSAL OF THE ASSESSEES APPEAL BY THE ITAT ON 16/12/2015, THE ASSESSEE HAS IMMEDIATELY FILED THIS APPEAL ON 2 9/01/2016. THUS, THE ASSESSEE HAD ACTED IN A BONA FIDE MANNER AND HAD PROCEEDED TO SEEK REDRESSAL OF ITS GRIEVANCES IN A BONA FIDE MANNER AND, THEREFORE, THE DELAY OF 1875 DAYS OUGHT TO BE CONDONED. ON MERITS, THE LD. AR DREW OUR ATTENTION TO PROVISO TO SECTION 12A (1) OF THE ACT AND SUBMITTED THAT IN VIEW OF THE MANDATE, THE REGISTRATION OUGHT TO HAVE BEEN GRANTED W.E.F. 01/04/2002 INSTEA D OF 31/03/2003 AND SUBMITTED THAT SUITABLE DIRECTIONS M AY BE ISSUED TO THE LD. CIT IN THIS REGARD. ITA NO. 455/D/16 PAGE 5 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY 4. THE LD. AR OPPOSED THE ASSESSEES PLEA FOR CONDO NATION OF DELAY AND EMPHASIZED THAT IGNORANCE OF LAW CANNOT B E AN EXCUSE AND ON MERITS, PLACED RELIANCE ON THE ORDER OF THE LD. CIT AND SUBMITTED THAT THE DATE FROM WHICH THE REGISTRATION HAS BEEN MADE EFFECTIVE IS CORRECT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIAL ON RECORD. AS FAR AS THE ISSUE OF CONDONA TION OF DELAY IS CONCERNED, IT IS A SETTLED LAW THAT THE COURTS AND THE QUASI-JUDICIAL BODIES ARE EMPOWERED TO CONDONE THE DELAY IF THE LI TIGANT SATISFIES THE COURT THAT THERE WERE SUFFICIENT REASONS FOR AV AILING THE REMEDY AFTER EXPIRY OF THE LIMITATION. SUCH REASONING SHO ULD BE TO THE SATISFACTION OF THE COURT. THE EXPRESSION SUFFICIENT CAUSE OR REASON AS PROVIDED IN SUB-SECTION (5) OF SECTION 253, SUBS ECTION (3) OF SECTION 249 OF THE INCOME TAX ACT, 1961 IS USED IN IDENTICAL TERMS IN THE LIMITATION ACT AND THE CPC. SUCH EXPRESSION HA S ALSO BEEN USED IN OTHER SECTIONS OF THE INCOME TAX ACT SUCH A S SECTIONS 274, 273, ETC. THE EXPRESSION SUFFICIENT CAUSE WITHIN THE MEANING OF SECTION 5 OF THE LIMITATION ACT AS WELL AS SIMILAR OTHER PROVISIONS AND THE AMBIT OF EXERCISE OF POWERS THERE UNDER HAV E BEEN THE ITA NO. 455/D/16 PAGE 6 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY SUBJECT-MATTER OF CONSIDERATION BEFORE THE HONBLE APEX COURT ON VARIOUS OCCASIONS. IN THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY AIR 1972 SC 749, THE HONBLE SUPREME COURT, WHILE CONSIDERING THE SCOPE OF EXPRE SSION SUFFICIENT CAUSE FOR CONDONATION OF DELAY, HAS HELD THAT THE SAID E XPRESSION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVA NCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO PARTY. 5.1 IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY AIR 1998 SC 3222, THERE WAS A DELAY OF 883 DAYS IN FILING AN APPLICATION FOR SETTING ASIDE THE EX PARTE DECREE FOR WHICH APPLICATION FOR CONDONATION OF DELAY WAS FILED. THE TRIAL COURT HA VING FOUND THAT SUFFICIENT CAUSE WAS MADE OUT FOR CONDONATION OF DE LAY CONDONED THE DELAY. HOWEVER, THE HONBLE HIGH COURT REVERSE D THE ORDER OF THE TRIAL COURT. THE HONBLE SUPREME COURT WHILE R ESTORING THE ORDER OF THE TRIAL COURT HAS OBSERVED IN PARAS 8, 9 AND 10 AS UNDER: 8. THE APPELLANTS CONDUCT DOES NOT ON THE WHOLE WARRANT TO CASTIGATE HIM AS AN IRRESPONSIBLE LITIGA NT. WHAT HE DID IN DEFENDING THE SUIT WAS NOT VERY MUCH FAR FROM WHAT A LITIGANT WOULD BROADLY DO. OF COURSE, IT MA Y BE SAID ITA NO. 455/D/16 PAGE 7 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY THAT HE SHOULD HAVE BEEN MORE VIGILANT BY VISITING HIS ADVOCATE AT SHORT INTERVALS TO CHECK UP THE PROGRES S OF THE LITIGATION. BUT DURING THESE DAYS WHEN EVERYBODY I S FULLY OCCUPIED WITH HIS OWN AVOCATION OF LIFE, AN OMISSIO N TO ADOPT SUCH EXTRA VIGILANCE NEED NOT BE USED AS GROU ND TO DEPICT HIM AS A LITIGANT NOT AWARE OF HIS RESPONSIB ILITIES, AND TO VISIT HIM WITH DRASTIC CONSEQUENCES. 9. IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A M ATTER OF DISCRETION OF THE COURT. SECTION 5 OF THE LIMITATI ON ACT DOES NOT SAY THAT SUCH DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WITHIN A CERTAIN LIMIT. LENGTH OF DELAY I S NO MATTER, ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITER ION. SOMETIMES DELAY OF THE SHORTEST RANGE MAY BE UNCONDONABLE DUE TO A WANT OF ACCEPTABLE EXPLANATIO N, WHEREAS IN CERTAIN OTHER CASES, DELAY OF A VERY LON G RANGE CAN BE CONDONED AS THE EXPLANATION THEREOF IS SATIS FACTORY. ONCE THE COURT ACCEPTS THE EXPLANATION AS SUFFICIEN T, IT IS THE RESULT OF POSITIVE EXERCISE OF DISCRETION AND N ORMALLY THE SUPERIOR COURT SHOULD NOT DISTURB SUCH FINDING, MUC H LESS IN REVISIONAL JURISDICTION, UNLESS THE EXERCISE OF DISCRETION WAS ON WHOLLY UNTENABLE GROUNDS OR ARBITRARY OR PER VERSE. BUT IT IS A DIFFERENT MATTER WHEN THE FIRST COURT R EFUSES TO CONDONE THE DELAY. IN SUCH CASES, THE SUPERIOR COU RT WOULD BE FREE TO CONSIDER THE CAUSE SHOWN FOR THE D ELAY AFRESH AND IN ITS OWN FINDING EVEN UNTRAMMELED BY T HE CONCLUSION OF THE LOWER COURT. ITA NO. 455/D/16 PAGE 8 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY 10. ** ** ** THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE TH E DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUST ICE. THE TIME-LIMIT FIXED FOR APPROACHING THE COURT IN D IFFERENT SITUATION IS NOT BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INTO A GOOD CAUSE. 5.2 THE HONBLE SUPREME COURT FURTHER OBSERVED THAT RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF T HE PARTIES. THEY ARE MEANT TO SEE THAT THE PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THE REMEDY PROMPTLY. THE HONBLE APEX COURT F URTHER OBSERVED THAT REFUSAL TO CONDONE THE DELAY WOULD RESULT IN F ORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPT ION THAT THE DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE . THE HONBLE SUPREME COURT IN SLP[CIVIL NO. 12980 OF 1986, DECID ED ON 19 TH FEB., 1987, IN THE CASE OF COLLECTOR, LAND ACQUISITION VS . MST. KATIJI (1987) REPORTED IN (2) SSC PAGE 107, HAS LAID DOWN THE FOL LOWING GUIDELINES: 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND ITA NO. 455/D/16 PAGE 9 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS W HEN DELAY IS CONDONED THE HIGHEST THEN CAN HAPPEN IS TH AT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING TH E PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE, WHY NOT EVERY HOURS DELAY, EVERY SECONDS DELAY. THE DOCTRINE MUST BE APPLIED ON A RATIONAL COMMONSENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO NS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SID E CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEIN G DONE BECAUSE OF A NON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAN D TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A S ERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO SO. 5.3 IN THE LIGHT OF THE ABOVE CITED JUDGMENTS, IF W E EXAMINE THE FACTS OF THE PRESENT CASE, IT IS APPARENT THAT ASSE SSEE HAS BEEN ITA NO. 455/D/16 PAGE 10 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY VIGILANT IN ITS APPROACH AND HAS NOT NEGLECTED THE INCOME TAX PROCEEDINGS. THE HONBLE APEX COURT IN THE CASE OF N. BALAKRISHNAN (SUPRA) HAS OBSERVED THAT THE LENGTH OF DELAY IS IM MATERIAL. THE ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITER IA FOR CONDONING THE DELAY. IN A GIVEN CASE, DELAY OF THE SHORTEST PERI OD OF TIME MAY BE UN-CONDONABLE DUE TO UNACCEPTABLE EXPLANATION, WHER EAS IN CERTAIN OTHER CASES, DELAY OF A LONG PERIOD CAN BE CONDONED IF THE EXPLANATION IS SATISFACTORY. IN EVERY CASE OF DELA Y, THERE MIGHT BE SOME OMISSIONS OR NEGLIGENCE ON THE PART OF THE ASS ESSEE BUT TO OUR MIND SUCH OMISSION/NEGLIGENCE HAS TO BE WEIGHED IN LIGHT OF FACTS AND CIRCUMSTANCES OF EACH CASE. IF THE NEGLIGENCE OR OMISSION IS A BY-PRODUCT OF A DELIBERATE ATTEMPT WITH MALA FIDE INTENTION FOR DELAYING THE PROCESS OF LITIGATION WHICH COULD GIVE SOME BENEFIT TO THE LITIGANT, THEN PROBABLY THE DELAY WOULD NOT DES ERVE TO BE CONDONED. HOWEVER, IF NO MALA FIDE CAN BE ATTRIBUTED TO THE DELAY, THE DELAY WILL BE CONDONABLE. THEREFORE, ON THE FA CTS OF THE PRESENT CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ASS ESSEE HAS BEEN ABLE TO DEMONSTRATE SUFFICIENT REASONS, IN THE SHAP E OF APPROACHING WRONG REMEDY, FOR FILING AN APPEAL BEFORE THE TRIBU NAL. THEREFORE, ITA NO. 455/D/16 PAGE 11 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY WE DEEM IT FIT TO CONDONE THE DELAY OF 1875 DAYS AN D ADMIT THE APPEAL. 5.4 AS FAR AS THE MERITS OF THE APPEAL ARE CONCERNE D, IT IS SEEN THAT ACCORDING TO THE NEWLY INTRODUCED PROVISIONS OF SECTION 12AA OF THE ACT THE PERSON IN RECEIPT OF THE INCOME SHOULD MAKE AN APPLICATION IN FORM NO. 10A FOR REGISTRATION OF THE TRUST OR IN STITUTION TO THE COMMISSIONER BEFORE THE EXPIRY OF A PERIOD OF ONE Y EAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT O F INSTITUTION, WHICHEVER IS LATER. HOWEVER, WHERE AN APPLICATION F OR REGISTRATION IS MADE AFTER THE EXPIRY OF THE AFORESAID PERIOD, THE PROVISIONS OF SECTIONS 11 AND 12 WILL APPLY FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION IF TH E COMMISSIONER IS, FOR REASONS TO BE RECORDED IN WRITING, IS SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION WITHIN THE AFORESAID PERIOD FOR SUFFICIENT REASONS. IF THE COMMISSIONER IS NOT SO SATISFIED, THE PROVISIONS OF SECTION 11 AND 12 WILL APPLY FROM 1ST DAY OF THE FINANCIAL YEAR IN WH ICH THE APPLICATION IS MADE. IN THE INSTANT APPEAL, IT IS UNDISPUTED TH AT THE ASSESSEE HAS BEEN GRANTED REGISTRATION. HOWEVER, THE REGISTR ATION HAS BEEN ITA NO. 455/D/16 PAGE 12 OF 12 GHAZIABAD DEVELOPMENT AUTHORITY GRANTED W.E.F. FROM THE LAST DAY OF THE FINANCIAL Y EAR 2002-03 WHEREAS THE SCHEME OF THE ACT ENVISAGES THAT THE RE GISTRATION SHOULD BE GRANTED FROM THE FIRST DAY OF THE FINANCIAL YEAR . WE FIND THE APPROACH OF THE LD. CIT CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT AND THEREFORE WE DIRECT THE LD. CIT TO MAKE SUI TABLE AMENDMENT IN THE REGISTRATION CERTIFICATE GRANTED TO THE ASSE SSEE U/S 12AA SO AS TO MAKE THE REGISTRATION EFFECTIVE FROM 1 ST APRIL, 2002. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.09.2016 SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA ) VICE PRESIDENT JUDICIAL MEMBER DATED: 20.09.2016 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI