Parth Pragati Mandal, Sabarkantha V. The ITO(Exemption), Palanpur

ITA 882/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3701 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-02-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 02-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S SHARMA
• Section: 12; 11; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I. T. A. No . 882/Ahd/20 23 ( नधा रण वष / As sess ment Year : 2018 -1 9) Par t h P ra ga t i M a n da l 19 , U m i ya P ar iv ar So c ie t y, V al a s a n a Ro ad , I da r , Sa bar k a nt h a – 38 3 4 30 , G uj ar a t बनाम/ Vs . T h e I n co me T a x O f f ic e r ( E xe mp tio n) P al a n pu r थायी लेखा सं./जीआइआर सं./P A N/ G I R N o . : A A B T P 4 3 5 3 N (Appellant) . . (Respondent) अपीलाथ ओर से /Appellant by : Shri Tej Shah, A.R. यथ क ओर से/Respondent by : Shri C S Sharma, Sr. DR D a t e o f H e a r i ng 21/02/2024 D a t e o f P r o n o u nc e me n t 23/02/2024 O R D E R PER Ms. MADHUMITA ROY - JM: Th e instan t app eal filed at th e instan ce of the asse ss ee is directed against the order dated 05. 09. 2023 passed by the National Faceles s App eal Centre (NFAC), Delhi, arising out of the order dated 13. 09. 20 21 passed by the AO, NFAC, Delhi, under Section 143(3) of the In co me Tax Act, 1961, (hereinafter r eferred to as ‘the Act’), raisin g a de man d of Rs. 2, 30,4 09/- fo r Assess ment Year 2018-19 , wh ereby and wh ereun der the ap peal filed by the ITA No. 882/Ahd/2023 [Parth Pragati Mandal vs. ITO(E)] A.Y.– 2018-19 - 2 – appellant sto od dis mis sed, since, the appellant failed to ju stify the delay in filing su ch appeal before the First Appellate Authority. 2. Th e brief facts le adin g to this case is this that th e app ellant, a tru st, registered und er Section 1 2A o f the Act vide Reg istration No. DIT/E/12AA/8 2/2008 -09 dated 21. 10 .2008 and is also entitled to exemption/deduction un der Section 11 & 12 of t he Act. The appellant is further having registered un der Section 80G(5 ) of the Act and its approv al vide Registration Nu mber DIT/E/8 0G(5)/949/08-2009 dated 19. 08. 2009. The main activity of the Tru st is to i mpart education p ro vided to th e poo r and needy peop le of the villages of different parts o f Gujarat clai med to have exe mpted un der th e Act and filing in co me tax retu rn every year clai min g exe mption du e to h aving activity as mention ed hereinabove. In the year u nder consideration, the appellan t filed its retu rn of inco me on 31. 10.2018 declaring total lo ss at Rs. 3, 80, 6 21/-. After clai min g deduction to wards application fo r charitable purpo se of a mou nt of Rs. 63, 55,375/-, out of this 15% o f to tal income amo unting of R s. 8 , 96, 21 3/- was disallowed by the Ld . AO du e to return was filed in For m No. 5 instead of For m No. 7. The AO, thus, considered th e app ellant as AOP and disallo wed accumulated set apa rt 15% of total inco me o f Rs. 8, 96, 2 13/- and added the same to the total in co me o f the appellant. He has furth er app lied the interest u nder S ection 234 B, 234C & 234D of th e Act. Against the same, th e app ellant prefer red app eal befo re th e First Ap p ellate Authority, admittedly, which was barred by li mitation for 313 day s. Su ch ap peal stood ITA No. 882/Ahd/2023 [Parth Pragati Mandal vs. ITO(E)] A.Y.– 2018-19 - 3 – dismi ss ed on the premise that the ap pellan t failed to sh ow “su fficient cause” which cou ld justify the delay which occurred fro m la st day o f f ilin g of appeal as per statutory prov ision of the Act. Need less to mention that the matter was n ot finalized b y the Ld . CIT(A) o n merit as appeal was not fo und to be maintainable. Hen ce, th e instant appeal before u s. 3. At the ti me o f h earing o f the in stan t appeal, the Ld. Counsel appearing for th e as sessee has draw n our atten tion to an affidav it affir med by one Mr. Bhup endrabhai K. Patel, the trustee, in sup port of the delay in filing the ap plicatio n before the First Appellate Autho rity in add itio n to the explanatio n already rendered by the ap pellant b efore the said au thority. The contents of th e affidav it is as und er: “ 1 . T h a t t h e a s s e s s m e n t o r d e r w a s p a s s e d u / s . 1 4 3 (3 ) o f I . T . a c t a n d w a s s e r v e d o n a s s e s s e s t o e m a i l i d a d d r e s s o f t h e Tr u s t . T h e s a i d a s s e s s m e n t o r d e r h a n d e d o v e r t o a s s i s t a n t a c c o u n t a nt f o r f u r t h e r a c t i o n f o r f i l i n g A p p e a l b e f o r e H o n o r a b l e C I T ( A ) . 2 . S u d d e n l y , t h e a s s i s t a n t a c c o u n t a n t w a s l e f t t h e j o b a n d w i t h o u t i n f o r m i n g t h e p e n d i n g m a t t e r f o r f i l i n g o f A p p e a l ag a i n s t t h e a s s e s s m e n t o r d e r . 3 . T h e T r u s t h a s r e c e i v e d d e m a n d n o t i c e f o r p a y m e n t a g a i n s t t h e d e m a n d o f a s s e s s m e n t o r d e r u / s . 1 4 3 ( 3 ) o f I . T . a ct . 4 . T h e a s s i s t a n t a c c o u n t a n t c o u l d n o t f i l e d A p p e a l a g a i n s t t h e a s s e s s m e n t o r d e r a n d I i m m e d i at e l y c o n n e c t e d t o T a x c o n s u l t a n t s f o r f i l i n g A p p e a l b e f o re H o n o r a b l e C I T ( A ) . 5 . T h e A p p e a l w a s f i l e d d e l a y o f 3 1 2 d a y s d u e t o a cc o u n t a n t f a u l t . 6 . T h a t t h e a s s e s s e s i s a T r u s t a n d c a r r i e d o n e d u ca t i o n a c t i v i t y i n s m a l l v i l l a g e a t p l a c e I d a r . T h e T r u s t i s a l s o h a v in g r e g i s t e r u n d e r t h e 1 2 A A o f I . T. a c t a n d a l s o h a v i n g 8 0 G a p p r o v a l. S o , T r us t I n c o m e i s t o t a l l y e x e m p t e d u n d e r t h e I n c o m e T a x A c t. ITA No. 882/Ahd/2023 [Parth Pragati Mandal vs. ITO(E)] A.Y.– 2018-19 - 4 – 7 . T h e d e l a y o f f i l i n g A p p e a l b e f o r e H o n o r a b l e C I T ( A ) d u e t o f a u l t o f a c c o u n t a n t a n d n o t i n f o r m p r o p e r l y t o m e a n d a l s o le f t t h e j o b w i t h o u t a n y i n t i m a t i o n a b o u t p e n d i n g w o r k s . 8 . T h a t , I h a d n o i n t e n s i o n t o j e o p a r d i z e t h e i n t e re s t o f t h e r e v e n u e b y d e l a y i n g t h e f i l i n g o f t h e A p p e a l s . 9 . T h a t y o u r g o o d s e l f i s e m p o w e r e d u / s . 2 4 9 ( 3 ) o f t h e A c t t o c o n d o n e d e l a y i n f i l i n g A p p e a l . ” 4. Th e app ellant further filed a salary slip dated 17. 04. 2017 in respect o f th e sai d e mplo yee being the A ssi stan t Accountant who left th e assessee witho ut infor ming the pen ding matter for filing o f appeal ag ainst th e order pass ed b y the Ld. AO. We have carefully considered the conten ts of the affid avit affirmed by the trustee and th e sup porting docu ment being the salary slip as mention ed hereinabove justifying that th e Assistant Accountant was in fact with the app ellan t who was initially handed over that assess ment ord er for further action of filing appeal before the Ld . CIT(A), which seems to be genu in e and could b e treated as ‘su fficient cau se’ justi fy ing the delay occurred in preferring th e ap peal before th e First App ellate Autho rity. In that v iew of the matter, we having been satis fied with the ‘sufficient caus e’ shown by the appellant in no t being able to file the ap peal in time before the First Appellate Authority, which in fa ct ough t to have been considered in its proper perspective by the Ld. CIT(A), condo ne th e delay in prefer ring the appeal before the Firs t Appellate Autho rity. 5. So far as th e merit o f the matter is con cerned, we find that as th e app ellant is a trust req uires to file return o f inco me in ITR-7 and needs to claim the 1 5% set apart un der Section 11(1)(a) of the ITA No. 882/Ahd/2023 [Parth Pragati Mandal vs. ITO(E)] A.Y.– 2018-19 - 5 – Act instead of fili ng ITR-5 wh ich was no t as per the p ro vision of IT Act to claim ben efit o f exemption un der Section 11 & 12 of the Act. A bare appreciation of the reply filed by th e ap pellan t before th e Ld. AO, o ne cannot overlook sig ht of the fact that the appellant conceded that b y mi stake the appellant filed ITR-5 in stead of ITR-7 as h aving a charitab le tru st. However, the sa me was not considere d b y th e Ld. AO an d ord er was passed treating th e same as AOP u pon mak ing d isallo wan ce of accu mulated set apart 15% of to tal inco me. We find that th e ap pellan t is a registered trust under Section 12AA o f the Act , entitled to exe mption/d eduction u nder Sectio n 1 1 & 12 of th e Act an d also having reg istration under Section 80G(5 ) of the Act. Neither it was p ointed out by th e Rev enue that the ap pellan t ev er made a mi stake in filing ITR-5 instead of ITR-7 as per provision of law. Th erefore, it could be co nstrued as genuine and inadv ertent mi stake by the appellant in filing ITR-5 instead o f I TR-7 as a trust which needs to be considered in its proper prospective, particularly taking in to consideration the activities rend ered b y the appellant trust h aving social impact. We also note th at h ad the appellant filed ITR-7 in stead of ITR-5, the appellant would have been allowed dedu ction under the Act by the Ld. AO a s clai med fo r. Having regard to this particular fa ct and circu mstan ces of the matter, we find it fit and p roper to give a further chance to appellant to get the relief as clai med for by re manding the issue to th e file o f th e Ld . AO. Ho wever, as the appellant already filed ITR-5 in stead of ITR-7, we also gr ant liberty to the ap pellan t to apply befo re th e concerned authority bein g th e Bo ard under ITA No. 882/Ahd/2023 [Parth Pragati Mandal vs. ITO(E)] A.Y.– 2018-19 - 6 – Section 119(2)(b ) of the Act fo r ap proval to file ITR-7 within 15 days fro m the d ate of pas sing of this order. Th e Ld. AO is al so directed to k eep the assess ment pr oceeding in abeyance till the finalization of such app lication to be made b y the ap pellant before th e CBDT for a maxi mu m period of 8 mo nths and then to finalize th e issue ulti matel y strictly in acco rd ance with law up on givin g an opportunity of bein g h eard to the ap pellan t and upon considering th e ev idence on record an d any other ev idence which the app ellant may choose to file at the time o f hearin g o f the matt er. The ld. AO, is, th erefore, directed to pass a reasoned order co mplying all th e for malities indicated herein above. 6. In th e result, appeal prefer red b y the appellant is allowed fo r statistical p urposes. This Order pronounced on 23/02/2024 Sd/- Sd/- (WASEEM AHMED) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/02/2024 S. K. SINHA True Copy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. "वभागीय &त&न ध, आयकर अपील)य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड/ फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad