The Supreme Court refused to condone the delay of the income tax department in filing a Special Leave Petition ( SLP ) due to insufficient cause. The SLP arose from the impugned final judgment and order passed by the Delhi High Court that upheld the exemption under the Income Tax Act, 1961 allowed by the Income Tax Appellate Tribunal ( ITAT ) considering activity carried by a charitable trust.
Professional Assistance for Development Action, the assessee is engaged in activities for the upliftment of the poor, providing training and skill development of the poor in the rural areas in the backward districts of the states like, Bihar, Jharkhand, Orissa, Madhya Pradesh, Chhattisgarh and West Bengal etc. The assessee gets grants from Central and State Governments and donations from various organisations like, ‘Gate Foundation’ etc.
The assessee has been allowed the benefit of exemption under section 11 of the Act continuously up to the assessment year 2010-11. The assessee has been denied said exemption by the Assessing Officer invoking the proviso to section 2(15) of the Act. On further appeal, the CIT(A) allowed the exemption under section 11 of the Act with all consequential benefits.
The Income Tax Dept, being aggrieved by the Order of the CIT(A), preferred an appeal before the ITAT. The ITAT upheld the decision of the CIT(A) holding that the assessee is not engaged in any trade, commerce or business and thus proviso of section 2(15) is not attracted to the case of the assessee.
The ITAT also noted that the assessing officer has not brought on record any evidence which would suggest that the activities of the assessee had been carried out with profit motive. The Revenue could not controvert the fact that the assessee has not charged any fee from the clients except the cost of the project incurred. The High Court upheld the order of ITAT.
Justice Pamidighantam Sri Narasimha and Justice Prasanna Bhalachandra Varale observed that there is no reason to condone the inordinate delay in filing the Special Leave Petition(s) as the explanation sought to be provided, does not constitute sufficient cause.
The Court dismissed the SLP on the grounds of delay.
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