Santiban Rural Innovation & Supporting Vocational Institute, Purulia V. CIT, Asansol, Asansol

ITA 1285/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59602 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 30-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: P K ROY
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 12; 12A; 12AA

Judgement Text

ITA NO. 1284 AND 1285 /KOL /20 11 ASSESSMENT YEAR : - PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) , AND SHRI N VIJAYKUMARAN (JUDICIAL MEMBER) I.T.A. NO. : 1284 AND 1285 / KOL . / 2011 ASSESSMENT YEAR S SANTIBAN RURAL INNOVATION AND SUPPORTING VOCATIONAL INSTITUTE .APPELLANT VILLAGE : SANTIBAN, P.O. : JABLA DISTRICT PURALIA, PIN CODE : 723128 [ PAN : AAFAS2996B] VS. COMMISSIONER OF INCOME TAX, ASANSOL RESPONDENT PARMAR BUILDING, 54 G T ROAD (WEST) ASANSOL 723 128 APPEARANCES BY: P K ROY , FOR THE APPELLANT S K ROY , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : FEBRUARY 0 8 , 2012 DATE OF PRONOUNCING THE ORDER : FEBRUARY 17 , 2012 O R D E R PER PRAMOD KUMAR: 1. THESE TWO APPEALS PERTAIN TO THE SAME ASSESSEE, INVOLVE INTERCONNECTED ISSUES AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFORE, BOTH OF THESE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. BOTH OF THESE APPEALS ARE TIME BARRED BY A PERIOD OF 335 DAYS, BUT THE ASSESSEE APPELLANT HAS MOVED A PETITION PRAYING FOR CONDONATION OF DELAY AND, ACCORDINGLY, TAKING UP THE MATTER ON MERITS. IT IS STATED THAT ITA NO. 1284 AND 1285 /KOL /20 11 ASSESSMENT YEAR : - PAGE 2 OF 6 THE ASSESSEE APPELLANT IS LOCATED IN A REMOT E RURAL AREA WHERE NORMAL LIFE IS DISTURBED BY ANTI SOCIAL ELEMENTS , DEPRIVING PEOPLE OF A FREE MOVEMENT. IT IS MAINLY FOR THIS REASON, AND FOR THE REASON THAT THE ASSESSEE WAS FINDING IT DIFFICULT TO FOLLOW UP WITH THE COMMISSIONER, THAT THE ASSESSEE HA S SOUGHT CONDONATION OF DELAY. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RATHER DUTIFULLY OPPOSED THE CONDONATION PETITION. HAVING REGARD TO ALL THE RELEVANT FACTORS, INCLUDING THE FACTOR THAT THE ASSESSEE IS A NON BUSINESS ASSESSEE LOCATED I N A RATHER REMOTE VILLAGE IN A DISTURBED AREA, WE CONDONE THE DELAY AND PROCEED TO TAKE UP THE MATTER ON MERITS. 3. WE WILL FIRST TAKE UP ITA NO. 1284/KOL/ 2011. 4. ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS OF APPEAL, THE ONLY GRIEVANCE OF THE ASSESSEE IS AGAINST LEARNED COMMISSIONERS DECLINING THE REGISTRATION SOUGHT BY THE ASSESSEE UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 5. ON 25 TH FEBRUARY 2010, THE ASSESSEE FILED AN APPLICATION, ALONGWITH INTER ALIA MEMORANDUM OF ASSOCIATION, CERTIFICATE OF REGISTRATION, AND ANNUAL REPORT FOR THE FINANCIAL YEAR 2008 - 09, SEEKING REGISTRATION UNDER SECTION 12 AA OF THE ACT. IN THE COURSE OF HEARING ON THIS APPLICATION BY THE COMMISSIONER, THE ASSESSEE ALSO PRODUCED BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AS REQUISITIONED BY THE LEARNED COMMISSIONER. IT WAS NOTICED BY THE COMMISSIONER THAT THE ASSESSEE HAS PAID HONORARIUM OF R S 28,000 TOWARDS MASTER TRAINER HONORARIUM AND RS 31,500 TOWARDS PROGRESSIVE FARMERS HONORARIUM, BUT THEN THE PERSONS WHO HAVE BEEN PAID THESE AMOUNTS HAVE DONATED IT BACK TO THE ASSESSEE INSTITUTION. ON THESE FACTS, AND OBSERVING THAT IN VIEW OF THE ABO VE FACTS AND CIRCUMSTANCES OF THE CASE, THE GENUINENESS OF THE ACTIVITY AS REFLECTED IN THE STATEMENT OF ACCOUNTS IS DOUBTFUL, LEARNED COMMISSIONER REFUSED THE ITA NO. 1284 AND 1285 /KOL /20 11 ASSESSMENT YEAR : - PAGE 3 OF 6 REGISTRATION UNDER SECTION 12 AA(1)(B)(II). THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE U S. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 7. WE CONSIDER IT APPROPRIATE TO REPRODUCE THE STATUTORY PROVISION UNDER SECTION 12 AA, WHICH IS AS FOLLOWS: PROCEDURE FOR REGISTRATION. 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A ) OR CLAUSE (AA) OF SUB - SECTION (1)] OF SECTION 12A , SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFT ER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITI NG REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT : PROVIDED THAT NO ORDER UNDER SUB - CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF COMMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB - SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PROCEED WITH SU CH APPLICATIONS UNDER THAT SUB - SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUSE (B) OF SUB - SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A ) OR CLAUSE (AA) OF SUB - SECTION (1)] OF SECTION 12A . ITA NO. 1284 AND 1285 /KOL /20 11 ASSESSMENT YEAR : - PAGE 4 OF 6 ( 3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB - SECTION (1) OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996)]] AND SUBSEQUENTLY THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB - SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONA BLE OPPORTUNITY OF BEING HEARD. 8. A PLAIN READING OF THE ABOVE STATUTORY PROVISION SHOWS THAT WHILE EXAMINING WHETHER OR NOT IS IT A FIT CASE FOR GRANT OF REGISTRATION, THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT OBJECTS OF THE APPLICANT INSTITUTION AND GENUINENESS OF ITS ACTIVITIES. WE HAVE NOTED THAT THE LEARNED COMMISSIONER DID NOT HAVE ANY ISSUES SO FAR AS OBJECTS OF THE ASSES SEE INSTITUTION WERE CONCERNED, AND THE ONLY REASON FOR WHICH THE REGISTRATION WAS DECLINED WAS THAT THE PERSONS WHO WERE GIVEN REMUNERATION HAD DONATED THOSE AMOUNTS TO THE ASSESSEE INSTITUTION. WE ARE UNABLE TO FIND LEGALLY SUSTAINABLE MERITS IN THIS APP ROACH. JUST BECAUSE THE PERSONS WHO WERE GIVEN THE HONORARIUM HAVE DONATED THOSE AMOUNTS BACK TO THE ASSESSEE INSTITUTION DOES NOT, BY ITSELF, VITIATE GENUINENESS OF THE ACTIVITIES. IT IS NOT THE CASE OF THE COMMISSIONER THAT THE PAYMENTS WERE BOGUS OR THA T NO ACTIVITIES WERE CARRIED OUT, OR THERE IS ANYTHING ELSE TO INDICATE THAT ACTIVITIES ARE NOT GENUINENESS. THE FACT OF RECIPIENTS OF HONORARIUM HAVING DONATED BACK THESE AMOUNTS TO THE ASSESSEE INSTITUTION, IN OUR HUMBLE UNDERSTANDING, DOES NOT IN ANY M ANNER SHOW THAT THE ACTIVITIES OF THE ASSESSEE INSTITUTION ARE NOT GENUINENESS. LEARNED COMMISSIONER WAS APPARENTLY SWAYED BY THE CONSIDERATIONS WHICH WERE NOT GERMANE TO THE LEGAL FRAMEWORK IN WHICH THE MATTER WAS BEING EXAMINED, ITS WORTH NOTING THAT THE LEARNED COMMISSIONER HAS USED THE EXPRESSION DOUBTFUL TO DESCRIBE HIS TAKE ON GENUINENESS OF ASSESSEES ACTIVITIES, AND NOT REJECTED THEM AS NOT ITA NO. 1284 AND 1285 /KOL /20 11 ASSESSMENT YEAR : - PAGE 5 OF 6 GENUINENESS STRAIGHTAWAY, BUT EVEN THESE DOUBTS, IN OUR CONSIDERED VIEW, WERE ILL CONCEIVED , SINCE APPLICA TION OF HONORARIUM RECEIVED BY THE TRAINERS CANNOT BE DETERMINATIVE OF THE GENUINENESS OF ITS ACTIVITIES AS A WHOLE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE LEARNED COMMISSI ONER TO GRANT REGISTRATION UNDER SECTION 12 AA TO THE ASSESSEE APPELLANT. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 9. ITA NO. 1284/KOL/2011 IS, THEREFORE, ALLOWED. 10. AS REGARDS ITA NO. 1285/KOL/2011, THE ONLY GRIEVANCE RAISED BY THE ASSESSEE IS AG AINST DECLINING EXEMPTION UNDER SECTION 80G, BUT THE ONLY REASON ASSIGNED BY THE LEARNED COMMISSIONER, FOR DECLINING THIS EXEMPTION , IS THE FACT THAT THE ASSESSEE WAS DECLINED REGISTRATION UNDER SECTION 12 AA. NOW THAT WE HAVE DIRECTED THE LEARNED COMMISSI ONER TO GRANT REGISTRATION UNDER SECTION 12AA, THE VERY FOUNDATION OF DECLINING EXEMPTION UNDER SECTION 80 G CEASES TO BE SUSTAINABLE IN LAW. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASSESSEE AGAINST DECLINING EXEMPTION UNDER SECTION 80 G. LEARNED COMMI SSIONER IS, ACCORDINGLY, DIRECTED TO CONSIDER THE APPLICATION FOR GRANT OF EXEMPTION UNDER SECTION 80 G, IN ACCORDANCE WITH THE LAW AND IN THE LIGHT OF OUR ABOVE OBSERVATIONS. 11. ITA NO. 1285/ KOL/ 2011 IS ALSO ALLOWED. TO SUM UP, BOTH THE APPEALS ARE ALLOWED IN THE TERMS INDICATED ABOVE. P RONOUNCED IN THE OPEN CO URT TODAY ON 17 TH FEBRUARY , 2012. SD/XX SD /XX N VIJAYKUMARAN PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, THE 17 TH DAY OF FEBRUARY, 2012 ITA NO. 1284 AND 1285 /KOL /20 11 ASSESSMENT YEAR : - PAGE 6 OF 6 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT( A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA