The Springer Education Foundation, Gorakhpur V. CIT (E), Lucknow

ITA 10/VNS/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0885 (ITAT-VARANASI)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-10-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 12-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Period of limitation; Condonation of delay; Set aside
• Section: 119(2)(b); 195; 13; 10(23C)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH, VARANASI (Through Virtual Hearing) BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 10/VNS/2020 Assessment Year: 2018-19 The Springer Education Foundation, B-3, Industrial Area, Gorakhnath, Nakha Gorakhpur, 273015, U.P. v. Commissioner of Income Tax (Exemption) 05 th Floor, T.C./46V, Vibhuti Khand, Gomti Nagar Lucknow-226010, U.P. PAN:AAFAT5887N (Appellant) (Respondent) Assessee by: None Revenue by: Shri R.K. Vishwakarma, CIT DR Date of hearing: 11.10.2022 Date of pronouncement: 13.10.2022 O R D E R PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No.10/VNS/2020 for assessment year 2018-19, is directed against order dated 30.10.2019 (Order No. ITBA/EXM/S/EXM15/2019-20/1019562994(1)) passed by learned Commissioner of Income Tax (Exemption), Lucknow (hereinafter called "the CIT(E)”) dismissing application filed under Section 10(23C)(vi) of the Income-tax Act, 1961 (hereinafter called “the Act”). We have heard ld. CIT-DR through Virtual Court through Virtual hearing mode, while none appeared on behalf of assessee when this appeal was called for hearing before Division Bench nor any adjournment application was filed on behalf of the assessee.Even on earlier occasions, when this appeal was called for hearing before Division Bench, none appeared on behalf of the assessee, but however on earlier occasions, adjournment application’s were moved which stood allowed by Division Bench. The Division Bench decided to adjudicate this appeal filed by the assessee after hearing ld. CIT-DR and pursuing material on record. ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 2 2. The grounds of appeal raised by assessee in memo of appeal filed with Income Tax Appellate Tribunal, Varanasi (hereinafter called “the tribunal”), reads as under: “1. That the order under appeal is contrary to law and facts of the case. 2. That the ld. CIT- Exemption is not justified and correct in rejecting the application filed by the appellant on 27.10.18 for grant of exemption u/s 10(23C)(vi), on ground of alleged delay in filing application. 3. That on whole facts, circumstance of the case and materials on record, the ground taken by the ld. CIT- Exemption for rejection of application filed by the appellant on 27.10.18 for grant of exemption u/s 10(23C)(vi) is not correct and justified. 4. That the rejection of application filed by the appellant on 27.10.18 for grant of exemption u/s 10(23C)(vi) for F.Y. 17-18 and subsequent year/s, by the ld. CIT- Exemption is not justified and correct when there has been sufficient reason for alleged delay in filing the application, so far as it relates to F.Y. 17-18 (A.Y. 18-19). 5. That the ld. CIT- Exemption is not justified and correct in not considering the application on 27.10.18 for grant of exemption u/s 10(23C)(vi) on merits. 6. That on the whole facts, circumstances of the case and materials on record, the ld. CIT-Exemption has, while rejecting application filed on 27.10.18 for grant of exemption u/s 10(23C)(vi), erred in not considering this application for exemption for subsequent year/s on merits. 7.That on the whole facts, circumstances of the case and materials on record, the ld. CIT Exemption is not justified and correct in not allowing the application filed on 27.10.18 for grant of exemption u/s 10(23C)(vi) for the year/s subsequent to F.Y. 17- 18 when this application, so far as it relates to subsequent year/s, is within prescribed time and also as per law. 8. That the application filed on 27.10.18 filed for grant of exemption u/s 10(23C)(vi), so far as it relates to subsequent year/s, deserves to allowed when all the conditions for grant of exemption u/s 10(23C)(vi) for subsequent year/s are fulfilled in the case. 9. That the ld. CIT- Exemption deserves to be directed to grant the exemption certificate u/s 10(23C)(vi).” 3. The brief facts of the case are that the assesse society filed an application in Form No. 56D for registration under Section 10(23C)(vi) of the 1961 Act on 27 th October, 2018 with Commissioner of Income Tax (Exemptions), Lucknow. Before proceeding further, it will be pertinent to mention here itself that the ld. CIT(E) has referred to in its order that the application filed by the assessee is for financial year 2018-19( assessment year 2019-20), while the assessee has stated in Form No. 36 filed with ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 3 tribunal, at para 1 of Appeal details , that the assessee filed an application for financial year 2017-18 (assessment year 2018-19) . This is a disputed fact. Since, the application in Form No. 56D for grant of registration u/s 10(23C)(vi) or continuance thereof , is required to be made on or before 30 th September of the relevant assessment year from which exemption is sought and the application having being filed on 27.10.2018 which is held to be belated by ld. CIT(E) , it can be presumed that the assessee as is contending in Form No. 36, had filed an application in Form No. 56D on 27.10.208 for financial year 2017-18(assessment year 2018-19) , but in any case this is a disputed fact which will be required to be verified by ld. CIT(E) in set aside remand proceedings as we will see later in this order that we are setting aside and restoring the matter back to the file of ld. CIT(E) . Henceforth, we will proceed on the assumption that the application in Form No. 56D was filed by assessee on 27.10.2018 seeking registration u/s 10(23C)(vi) for financial year 2017-18(assessment year 2018-19) . Proceeding further , the Ld. CIT(Exemption) called for a report of the AO along with comments of the Joint Commissioner of Income Tax (Exemption), Lucknow which were duly submitted. The Ld. CIT(Exemption) , Lucknow issued notice to the assessee calling for the information from assessee, which was submitted. It was observed by Learned CIT(Exemption) that the assessee has filed Form No. 56D belatedly on 27 th October, 2018 for financial year 2018-19(sic. financial year 2017-18) which should have been filed on or before 30 th September, 2018 , and there are no power vested with Learned CIT (Exemption) to condone the delay. Hence the application filed by the assessee in Form No. 56D on 27.10.2018 for grant of registration u/s 10(23C)(vi)was rejected by Learned CIT(Exemption) , by holding as under: ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 4 “3. It has been noticed that that application u/s 10(23C)(vi) of the IT Act in From No. 56D was belatedly filed on 27.10.2018 for the F.Y. 2018-19(sic. F.Y.2017-18) which should have been filed on or before 30 th September, 2018. The delay is not condonable and belated application is liable to be rejected, in the light of following legal position. (i) The 14 th proviso to Section 10(23C) introduced w.e.f. 01.06.2006 vide Finance Act, 2006 as amended by Finance (No.2) Act, 2009 w.r.e.f. 1.4.2009 states as under: “....... Provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the purpose of grant of exemption or continuance thereof, such application shall be made on or before the 30 th day of September of the relevant assessment year from which the exemption is sought.......” Considering the afore-mentioned proviso, the application should have been filed on or before 30th September 2018 for claiming the exemption from the F.Y. 2018-19(sic. F.Y.2017-18), but the same was filed on 27.10.2018 i.e. beyond the prescribed time period as enshrined in the Act. Hence, on this ground alone, the application of the society is liable to be rejected. (ii) The issue of condonation of delay was examined by Hon'ble Orissa High Court in the case of Roland Educational and Charitable Trust Vs. CCIT & others ((2009)309 ITR 50], in the judgment dated 17.09.2008. Hon'ble High Court in this case observed as below, "while providing period of limitation for presenting application for grant of exemption u/s 10(23C)(vi) before the CCIT, the legislature has not made any provision for condonation of delay in presentation of such application as has been provided for filing of first appeal, second appeal, appeal to High Court and revision." In the above case, the Hon'ble High Court distinguished the judgment of same court on Padam Shree Krutrath Acharya Institute of Engineering & Technology Vs. CCIT High Court of Orissa (309 ITR 13). (iii). Hon'ble High court Andhra Pradesh in the case of RRM Education Society Vs. CCIT (2012) 20 taxmann 269 (AP) following the decision of Roland Educational and charitable Trust Vs. CCIT Others observed as under; "In as much as the Fourteenth proviso does not empower the CCIT to condone the delay in filing the application, the order passed by him, rejecting the petitioners application for the assessment year 2008-09 on the ground that was belated, cannot be faulted." (iv) In a similar case of Sant Baba Sunder Singh Canadian Charitable Trust, Barnala Vs CBDT (2010) 195 taxmann 88 (Punj. & Har), the issue of rejection of claim for grant of exemption for application filed after the prescribed period had been considered by Hon'ble High Court of Punjab and Haryana. The Court observed as under: "It is conceded position that the assessee-petitioner has filed the application on 23.09.2008 seeking exemption u/s 10(23C)(vi) in respect of assessment year 2008-09, which could have been filed during the financial year 2007-08, i.e. on or before 31.03.2008. It is thus, evident that the application by the assessee-petitioner has been filed after the prescribed period and the CCIT has rightly rejected the same being not maintainable." ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 5 (v) Reliance is also placed on recent judgment of High Court of Allahabad in the case of ID Education Society Vs. PCCIT [2015] 56 taxmann.com 68 (Allahabad) on the same issue, wherein it was held: "5. In view of the principle of law which has been laid down in the aforesaid decision, there is no basis or foundation in the submission that the delay in filing the application for an exemption under section 10(23C)(vi) of the Act beyond the statutory date of September 30, 2013, should have been condoned. As a matter of fact, the court is informed that the petitioner has already filed an application under section 10(23C)(vi), though for the assessment year 2014-15." 6. The decision of a Division Bench of the Orissa High Court in Padmashree Krutarth Acharya Institute of Engg. & Technology v. Chief CIT [2009] 309 ITR 13 (Ori.); merely directed the Chief Commissioner to consider an application for condonation of delay in filing an application. The Division Bench had carefully directed that whether delay should be condoned or not, should be decided by the Commissioner. Hence, the decision will not help the case of the petitioner.” 4. From the foregoing, it is clear that the assessee did not apply for the exemption within the stipulated time under the Act. In view of above discussion, the application does not satisfy the condition prescribed for grant of exemption u/s 10(23C)(vi) of the IT Act, 1961 and hence the application for the exemption filed on 27.10.2018 by the assessee society, seeking issuance of exemption certificate u/s 10(23C) (vi) of the IT act, 1961 from F.Y. 2018-19(sic. F.Y.2017- 18) onwards is hereby rejected. 4. Aggrieved by rejection of the registration sought by assessee u/s 10(23C)(vi) by order dated 30.10.2019 passed by ld. CIT(E), the assessee has now filed an appeal before the tribunal. None appeared on behalf of the assessee when this appeal was called for hearing before Division Bench , nor any adjournment application was filed . The notices were sent to the assessee by e-mail/speed-post which have not returned back. The assessee is consistently not appearing before Division Bench even on earlier occasions when this appeal was called for hearing before Division Bench, although adjournment applications were filed on behalf of the assessee. The Division Bench decided to adjudicate this appeal on merits after hearing Learned CIT DR and pursuing material on record . The Learned CIT DR submitted before the DB that the assessee’s application in Form No. 56 was filed belatedly, on 27 th October, 2018 which ought to have been filed on 30 th September, 2018 for ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 6 seeking registration u/s 10(23C)(vi) for financial year 2017-18 .The Learned CIT DR submitted that power to condone delay vests with CBDT. Thus, prayers were made to dismiss this appeal or else the same can be restored to the file of ld. CIT(E) to consider the same on merit for subsequent assessment years. 5. We have considered contentions of ld. CIT DR and perused the material on record. We have observed that the assessee filed an application in form No. 56D on 27.10.2018 for grant of registration u/s 10(23C)(vi) of the 1961 Act for the financial year 2017-18 . The application as per law prevailing at the relevant time is to be filed on or before 30.09.2018. Thus, the application filed by assessee in Form No. 56D on 27.10.2018 seeking registration u/s 10(23C)(vi) for financial year 2017-18 is clearly an belated application . There is no provision in the 1961 Act empowering ld. CIT(E) to condone the delay. The power to condone the delay vests with CBDT by virtue of provisions of Section 119(2)(b) of the 1961 Act. Reference is drawn to the judgment and order of Hon’ble Bombay High Court in the case of Sanjay Ghodawat University , Kolhapur v. CIT(E), Pune, reported in (2021) 124 taxmann.com 6(Bombay), wherein Hon’ble Bombay High Court held as under: “27. Therefore, there is no provision for extension of the limitation period or for condonation of delay in filing the application for grant of exemption under section 10(23C)(vi) of the act by the Commissioner of Income-tax (Exemption) To that extent respondent No. 1 was justified in rejecting the application for the assessment year 2019- 20. However, as per the version of the respondents themselves the application for exemption of the petitioner was not confined to assessment year 2019-20 only. It was an application for grant of exemption from the assessment year 2019-20 onwards. While respondent No.1 was correct in rejecting the application for the assessment year 2019-20 as being time-barred, it certainly fell in error in not considering the said application for subsequent ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 7 assessment years i.e. for assessment year 2020-21 and onwards. Because even if the application was filed on 31-10-2019 which was belated for the assessment year 2019-20, it was before the prescribed date for the subsequent assessment year i.e. assessment year 2020-21 and thereafter as it had been filed much before the cut of date of 30-9-2020. 28. That apart, we feel that even at this stage petitioner may approach CBDT under section 119(2)(b) seeking a special order to respondent No. 1 to condone the delay in filing the application for exemption under section 10(23C)(vi) of the Act for the assessment year 2019-20, there being admitted delay of 31 days in filing the application for the said assessment year, and thereafter to deal with the said application/claim on merit in accordance with law.” Thus, we are of the considered view that ld. CIT(E) rightly rejected the application of the assessee for grant of registration u/s 10(23C)(vi) of the 1961 Act, as the application in form no. 56D was filed belatedly by the assessee on 27.10.2018 for seeking registration u/s 10(23C)(vi) of the 1961 Act , for the financial year 2017-18, as the power vested only with CBDT u/s 119(2)(b) of the 1961 to condone the delay. There is one more aspect, the assessee has claimed that the application in Form No. 56D on 27.10.2018 was filed on 27.10.2018 for seeking registration u/s 10(23C)(vi) for not only financial year 2017-18 , but also for subsequent years too, while the ld. CIT(E) has observed that the aforesaid application was filed by assessee only for one financial year2018-19(sic. financial year 2017-18). The copy of application in Form No. 56D filed by the assessee on 27.10.2018 is not produced before us. Thus, whether the application was filed merely for one year as contended by ld. CIT(E) in its order or for financial year 2017-18 and subsequent years too as contended by assessee, is again a disputed fact, which requires to be verified by ld. CIT(E). If that be so as contended by the assessee that the application in Form No. 56D was filed for financial year 2017-18 and ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 8 subsequent years, then ld. CIT(E) was right in rejecting the same for financial year 2017-18 as the application being belated application, while the ld. CIT(E) ought to have dealt with application for the assessee for subsequent years, as per law. Thus, we are restoring the matter back to the file of ld. CIT(E) for fresh adjudication , in accordance with directions as per our order. The ld. CIT(E) will first verify two disputed facts as are referred to in this order, before proceeding to adjudicate the issues on merit in accordance with law. We Order accordingly. 6. Thus, the appeal filed by assessee in ITA no. 10/Vns/2020 for ay: 2018-19 is allowed for statistical purposes, in the manner indicated above. Order pronounced through Virtual Court through virtual hearing on 13.10.2022 at Allahabad, U.P. Sd/- Sd/- [VIJAY PAL RAO] [RAMIT KOCHAR] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13/10/2022 KD Azmi Copy forwarded to: 1. Appellant – The Springer Education Foundation,B3 Industrial Area, Gorakhnath, Nakha, Gorakhpur-273015, U.P. 2. Respondent –Commissioner of Income Tax(Exemption), Lucknow, U.P. 3. The ld. CIT-DR, ITAT, Varanasi, U.P. 4. CIT, Varanasi,U.P. 5. The Guard File ITA No.10/VNS/2020 Assessment Year: N.A. The Springer Education Foundation, Gorakhpur v. CIT(Exemption), Lucknow 9 Date Initials Original dictation pad is enclosed at the end of file 1. Draft dictated on: 11.10.2022 Sr. PS/PS 2. Draft placed before author: 12.10.2022 Sr. PS/PS 3. Draft proposed & placed before the second member: 10.2022 JM/AM 4. Draft discussed/approved by Second Member: 10.2022 JM/AM 5. Approved Draft comes to the Sr. PS/PS: 10.2022 Sr. PS/PS 6. Order pronounced on: 10.2022 Sr. PS/PS 7. File sent to the Bench Clerk: 10.2022 8. Date on which file goes to the Head Clerk: 10.2022 Sr. PS/PS 9. Date on which file goes to AR 10.2022 10. Date of dispatch of Order: 10.2022 11. Date of Uploading 10.2022 Sr. P.S.