M/S.united Christmas Celebration Committee Charitable Trust,3/245, Durai Building,Near Railway Station, Nalloor,Marthandam - 629 165 v. The Income Tax Officer,Ward-I(1),Nagercoil

IN THE HIGH COURT OF JUDICATURE AT MADRAS Coram THE HONOURABLE MR. JUSTICE RAJIV SHAKDHERANDTHE HONOURABLE MR.JUSTICE R.SURESH KUMAR Tax Case Appeal No.886 of 2016 M/s.United Christmas Celebration Committee Charitable Trust,3/245, Durai Building,Near Railway Station, Nalloor,Marthandam - 629 165. .. Appellant Vs. The Income Tax Officer,Ward-I(1),Nagercoil. .. Respondent Prayer : The appeal filed under Section 260A of the Income TaxAct, 1961, against the order, dated 16.03.2016, passed in I.T.A.No.60/Mds/2016, on the file of the Income Tax Appellate Tribunal"C" Bench, Chennai. Preferred against the order of the Office ofthe Commissioner of Income Tax-I, Madurai-625 002 dated27/05/2011 made in C.No.464/03/2011-12/CIT-I preferred againstthe order in rejection the plea for registration under section12 AA of the Act and is filed to challenge the action of theIncome Tax Appellant tribunal in not condoving the delay of 1631days in filing the appeal before them while recording reversefindings and taking technical stand. 1. This is an appeal directed against the judgement of theIncome Tax Appellate Tribunal (in short 'the Tribunal') dated16.03.2016. https://hcservices.ecourts.gov.in/hcservices/ dismissed the appeal of the Assessee against the order of theCommissioner of Income Tax (in short 'the CIT'), dated27.05.2011. 2.1. The Tribunal refused to entertain the appeal of theassessee, only on the ground that, it was woefully delayed. Theperiod of delay involved being 1631 days, which, according tothe Tribunal, was solely attributable to the Assessee'snegligence and inaction, and, therefore, could not be condoned. 2.2. The Tribunal, consequently, did not go into the meritsof the matter. 3. Learned counsel for the Assessee says that the Assesseeis a charitable institution, and therefore, did not have thebest legal assistance available to it, on account of, paucity offunds. 3.1. Learned counsel submits that the Assessee had taken theassistance of a Chartered Accountant, who obviously, was unawareof the provisions of law, which provided for an appeal, againstthe order of the CIT, whereby, the petitioner's application forgrant of registration under Section 12AA of the Income Tax Act,1961 (in short 'the Act'), was rejected. 4. Mr.Narayanasamy, learned counsel for the Revenue,vigorously, opposes the appeal, mainly, on the ground that thecondonation of delay petition, which had been filed with theTribunal, was not supported by an affidavit of the Assessee.Learned counsel submits that there is, therefore, no reason forthis Court to intervene in the matter. 5. We have heard the learned counsel for the parties andperused the record. 6. There is no doubt that there has been an enormous delayin moving the appeal before the Tribunal. It also cannot bedisputed that the Assessee had not filed a petition forcondonation of delay, which was supported by an affidavit of theAssessee. The petition for condonation of delay, though, bearsthe signature of the counsel for the Assessee. Therefore, wewould have to assume, at this juncture, that what is stated inthe petition was based on instructions received from theAssessee. 6.1. A perusal of the petition for condonation of delaywould show, (as was contended before us by the learned counselfor the appellant), that the Chartered Accountant engaged in thematter, one, Mr.A.Johnson, FCA, was unaware of the fact that anappeal could be filed against the order of the CIT, post theamendment made in Section 253(1)(c) of the Act. 6.2. The reason, we have come to the conclusion that thecounsel for the Assessee would have taken instructions from theAssessee in preparing the petition for condonation of delay, is, https://hcservices.ecourts.gov.in/hcservices/ 6.1. A perusal of the petition for condonation of delaywould show, (as was contended before us by the learned counselfor the appellant), that the Chartered Accountant engaged in thematter, one, Mr.A.Johnson, FCA, was unaware of the fact that anappeal could be filed against the order of the CIT, post theamendment made in Section 253(1)(c) of the Act. 6.2. The reason, we have come to the conclusion that thecounsel for the Assessee would have taken instructions from theAssessee in preparing the petition for condonation of delay, is, https://hcservices.ecourts.gov.in/hcservices/ becuase, the name of the Chartered Accountant is mentioned inthe petition. Learned counsel could not have conjured up thename of the Chartered Accountant. There is nothing on record tosuggest that the Revenue refuted this averment made in thepetition. 6.3. Therefore, the matter has to be appreciated from adifferent angle, which is, can a litigant be prejudiced onaccount of, virtually, ignorance of law displayed, by aprofessional engaged by him, to prosecute his case before theappropriate forum. 7. The answer to this poser lies in the felicitousobservations of the Supreme Court in the case of : MotilalPadampat Sugar Mills V. State of U.P., AIR 1979 SC 621 -wherein, it accepted the dicta of Maule, J. and Lord Atkin, thatwhile ignorance of law is no excuse, (a maxim of different scopeand application), there is not and never has been a presumptionthat everyone knows the law. (See observations made in thisbehalf at page 629) : “...... 6. The claim of the appellant toexemption could be sustained only on the doctrine ofpromissory estoppel and this doctrine could not besaid to be so well defined in its scope and ambitand so free from uncertainty in its application thatwe should be compelled to hold that the appellantmust have had knowledge of its right to exemption onthe basis of promissory estoppel at the time when itaddressed the letter dated 25th June, 1970. In fact,in the petition as originally filed, the right toclaim total exemption from sales tax was not basedon the plea of promissory estoppel which wasintroduced only by way of amendment. Moreover, itmust be remembered that there is no presumption thatevery person knows the law. It is often said thatevery one is presumed to know the law, but that isnot a correct statement: there is no such maximknown to the law. Over a hundred and thirty yearsago, Maule, J., pointed out in Martindala v.Faulkner, (1846) 2 CB 706 "There is no presumptionin this country that every person knows the law: itwould be contrary to common sense and reason if itwere so". Scrutton, also once said: "It isimpossible to know all the statutory law, and notvery possible to know all the common law." But itwas Lord Atkin who, as in so many other spheres, putthe point in its proper context when he said inEvans v. Bartlem, 1937 AC 473 " ...... the fact isthat there is not and never has been a presumptionthat every one knows the law. There is the rule that ignorance of the law does not excuse, a maxim ofvery different scope and application." It is,therefore, not possible to presume, in the absenceof any material placed before the Court, that theappellant had full knowledge of its right toexemption so as to warrant an inference that theappellant waived such right by addressing the letterdated 25th June, 1970. We accordingly reject theplea of waiver raised on behalf of the StateGovernment. .......” (emphasis is ours) ignorance of the law does not excuse, a maxim ofvery different scope and application." It is,therefore, not possible to presume, in the absenceof any material placed before the Court, that theappellant had full knowledge of its right toexemption so as to warrant an inference that theappellant waived such right by addressing the letterdated 25th June, 1970. We accordingly reject theplea of waiver raised on behalf of the StateGovernment. .......” (emphasis is ours) 8. Besides this, there is another aspect of the matter,which is that, in dealing with issues, such as the one, we arefaced with, not only the period of delay has to be taken inaccount, but also the quality of explanation, the legalassistance, if any, sought and rendered to the litigant, and thedetriment that condonation of delay would cause to the opposingparty. These are aspects, if, looked at, closely, will enablethe Court to come to a conclusion as to whether the delay wasintentional and/or deliberate. 8.1. We find from the record that the Assessee, perhaps, didnot receive the best legal assistance in the matter. 8.2. Therefore, notwithstanding the fact that the period ofdelay is large, we are inclined to condone the delay, especiallyin the circumstances obtaining in the case, which is, that, ifthe Assessee were to succeed on merits, it could, hardly, besaid that it would cause detriment to the Revenue, in a matterinvolving grant of registration. 8.3. The Assessee has, ostensibly, been carrying oncharitable activities. This, of-course, would have to be decidedon merits, once, the Tribunal examines the claim made by theassessee in that behalf. 8.4. The CIT, as noted above, has rejected this claim, whichhas not been tested before the Tribunal on merits. 9. Therefore, for the foregoing reasons, we allow theappeal, and set aside the judgement of the Tribunal. The matteris remitted to the Tribunal for a decision on merits.10. Needless to say, the observations made hereinabove willnot impact the decision of the Tribunal on merits. 11. There shall, however, be no order as to costs. s/d- Assistant Registrar(CS-II) gg To 1. The Income Tax Officer, Ward-I(1), Nagercoil. 2. The Income Tax Appellate Tribunal "C" Bench, Chennai. "C" Bench, Chennai. +1cc to Mr.S.Sridhar, advocate SR.No.1476 +1cc to Mr.J.Narayanasamy, Advocate SR.No.14972 T.C.(Appeal) No.886 of 2016MSM(CO)GN(04/04/2017)