Sri Kammatchi Amman Charitable & Educational Trust, Karaikudi V. ITO, Karaikudi

ITA 1410/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52037 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 05-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR
• Keywords: Reasonable cause
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER] I.T.A.NO.1410/MDS/2011 SRI KAMMATCHI AMMAN CHARITABLE & EDUCATIONAL TRUST 21/1, VELLAKUNDAR STREET KARIKUDI 630 001 VS THE INCOME TAX OFFICER WARD I(1) KARAIKUDI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.BASKAR, ADVOCATE RESPONDENT BY : SHRI SHAJI P. JACOB DATE OF HEARING : 2.11.2011 DATE OF PRONOUNCEMENT : 18.11.2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE-TRUST IS D IRECTED AGAINST THE ORDER OF THE LD. CIT-I, MADURAI, DATED 31.1.2011. 2. AT THE TIME OF HEARING IT WAS NOTICED THAT THIS APPEAL IS TIME BARRED BY 110 DAYS AND FOR THE CONDOANTION OF THI S DELAY, A PETITION HAS BEEN FILED STATING THEREIN THAT THE ORDER APPE ALED AGAINST WAS RECEIVED ON 16.2.2011 AND APPEAL WAS REQUIRED TO BE FILED ON OR ITA 1410/11 :- 2 -: BEFORE 18.4.2011 BUT INSTEAD IT HAS BEEN FILED ON 5 .8.2011, SO THERE IS A DELAY OF 110 DAYS IN FILING THIS APPEAL. THE REA SONS FOR THIS DELAY ARE STATED THAT THE TRUSTS IMPORTANT DECISIONS ARE TAKEN BY THE BOARD OF TRUSTEES, AND FOR THAT THE MATTER A MEETING WAS CON VENED ON 27.7.2011 AND FURTHER COURSE OF ACTION WAS DISCUSSE D. IN THAT MEETING ONLY IT WAS DECIDED THAT APPEAL AGAINST THE IMPUGNE D ORDER HAS TO BE FILED. THE REQUIRED PAPERS WERE RECEIVED BY THE DE PONENT, NAMELY, SHRI K.ANBANANTHAM SON OF SHRI KARUPPIAH, WHO IS ON E OF THE TRUSTEES, ON 3.8.2011 AND ULTIMATELY, APPEAL WAS FILED ON 5.8 .2011. IT HAS BEEN SUBMITTED THAT THE DELAY IS NEITHER WILLFUL NOR DEL IBERATE, BUT IT IS ONLY DUE TO THE REASONS STATED ABOVE. THE PETITION FOR CONDONATION IS DULY SUPPORTED BY A DULY SWORN AFFIDAVIT OF THE SAID DEP ONENT. 3. THE LD.DR, SHRI SHAJI P. JACOB HAS VEHEMENTLY CONT ESTED THE CONDOANTION OF DELAY ON THE PREMISE THAT VALID CAUS E MUCH LESS A REASONABLE CAUSE, WHICH CAN BE ELUCIDATED FROM THE PETITION AND THE AFFIDAVIT OF THE TRUSTEE, AND IN SUCH CASES, THE HO N'BLE JURISDICTIONAL HIGH COURT SAYS THAT THE DELAY CANNOT BE CONDONED. HE HAS RELIED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT R ENDERED IN THE CASE OF MADHU DADHA VS ACIT , 317 ITR 458. ON THE OTHER HAND, THE LD.AR , SHRI G.BASKAR HAS SUPPORTED THE PETITION AN D HAS STATED THAT THE TRUSTEES BEING NOT WELL VERSED WITH THE LEGAL P ROCEDURES WITH ITA 1410/11 :- 3 -: REGARD TO FILING OF APPEALS ETC AND SUCH IMPORTANT DECISIONS BEING NOT IN THE HANDS OF ANY ONE PERSON, IT WAS NECESSARY TO CONVENE A MEETING OF THE TRUSTEES. HE FURTHER STATED THAT CO NVENING OF MEETING OF TRUSTEES CONSUMES TIME, THEREFORE, THE DELAY IS BONAFIDE AND CAN BE ATTRIBUTED TO PROCEDURE OF AUTHORIZING TO FILE THE APPEAL. THIS DELAY IS NOT WILLFUL OR NEGLIGENT BUT DUE TO A REASONABLE CAUSE. 4. WE HAVE CONSIDERED THE RIVAL STANDS, BUT WE ARE GUI DED MAINLY BY THE DECISION OF HON'BLE SUPREME COURT RENDERED I N THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KATIJI & OTHERS (167 ITR 471), WHICH HAS ORDAINED IN UMPTEEN CASES THAT WHEN SUBSTANTIAL JUSTICE IS PITTED AGAINST PEDANTIC REASONS, THE FORMER SHOULD PREVAIL . RECENTLY, THE HON'BLE SUPREME COURT HAS REITERATED THE SAME PRINC IPLE WHILE DECIDING THE CASE OF IMPROVEMENT TRUST VS UJAGAR SI NGH (2010) 6SCC 786 (S.C) [SOURCE WWW.ITATONLINE.ORG ] BY OBSERVING THAT JUSTICE CAN BE DONE ONLY WHEN THE MATTER IS FOUGHT ON MERITS AND I N ACCORDANCE WITH LAW RATHER THAN TO DISPOSE IT OF ON SUCH TECHNICALI TIES AND THAT TOO AT THE VERY THRESHOLD. IT HAS STRONGLY LAID DOWN THE RULE OF LAW THAT UNLESS MALAFIDES ARE WRIT LARGE ON THE FACE OF IT D ELAY SHOULD BE CONDONED. IN THIS CASE, NO SUCH MALAFIDE IS EXHIB ITED. THE DELAY STANDS REASONABLY EXPLAINED. THE DECISION OF HON'B LE MADRAS HIGH COURT (SUPRA) IN A WAY, HELPS THE CASE OF THE ASSE SSEE/APPELLANT- ITA 1410/11 :- 4 -: TRUST. HENCE, BY FOLLOWING THE DICTUM OF THE ABOVE DECISIONS, WE CONDONE THIS DELAY AND ADMIT THE APPEAL. 5. ON MERITS, THE FACTS OF THIS CASE ARE THAT THE ASS ESSEE-TRUST HAD APPLIED FOR ITS REGISTRATION U/S 12AA OF THE AC T ON 12.8.2010 IN FORM NO.10A ALONGWITH A COPY OF THE TRUST DEED. TH E TRUST WAS CREATED ON 16.7.2010. THE OBJECTS OF THE TRUST ARE FOUND TO BE CHARITABLE IN NATURE BY THE LD. CIT BUT BECAUSE THE ACTIVITIES CARRIED ON BY THE TRUST WERE FOUNT TO BE NOT GENUINE ON THE BA SIS OF REPORT OBTAINED FROM LOWER AUTHORITIES, HE REFUSED TO REGI STER THE TRUST. NOW, THE ASSESSEE IS IN APPEAL BY RAISING THE FOLLOWING GROUNDS: 1. THE ORDER OF THE COMMISSIONER OF INCOME - TAX IS WR ONG, ILLEGAL AND OPPOSED TO FACTS AND CIRCUMSTANCES OF T HE CASE. 2. THE COMMISSIONER OF INCOME - TAX WENT WRONG IN HIS INTERPRETATION OF THE PROVISIONS OF SECTION 2 (15) OF THE INCOME - TAX ACT. HE ERRED IN PROCEEDING TO DISPOSE OF THE APPLICATION WITH PRE - CONCEIVED NOTIONS. 3. THE COMMISSIONER OF INCOME - TAX ERRED IN REJECTING THE APPLICATION MERELY BECAUSE THE TRUST HAD NOT COMMEN CED ITS ACTIVITIES, WHICH IS NOT A CONDITION PRECEDENT FOR REGISTRATION. HE FAILED TO NOTE THAT ALL DETAILS CA LLED FOR WERE PRODUCED. 4. THE LEARNED COMMISSIONER WAS NOT JUSTIFIED IN IGNOR ING THE ASSURANCE OF FINANCE MINISTER IN THE PARLIAMENT, WH ICH IS BINDING ON HIM AS HELD BY THE HON'BLE SUPREME COURT IN R & B FALCON (A) PTY. LTD. CIT 301 ITR 309 (SC) AND W AS ALSO NOT JUSTIFIED IN IGNORING THE BOARD CIRCULAR N O. 11 OF 2008 DATED 19 TH DECEMBER 2008, WHEN BOTH THE OBJECTS AND ACTIVITIES WERE CLEARLY CONSISTENT WITH THE EXP LANATION OF ITA 1410/11 :- 5 -: LAW IN THE BOARD CIRCULAR WHICH WAS BINDING ON HIM UNDER SECTION 119 OF THE ACT. 5. IN ANY EVENT THE CONCLUSION OF THE COMMISSIONER OF INCOME TAX IS HYPER TECHNICAL AND SUPERFLUOUS. 6. THE APPLICATION IS LIABLE TO BE ALLOWED AND REGISTR ATION U/S 12A GRANTED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT IS TRUE TH AT THE LD. CIT IS EMPOWERED TO EXAMINE THE OBJECTS OF THE TRUST TO TE ST ITS GENUINENESS BUT AT THE STAGE OF CONSIDERATION OF APPLICATION U/ S 12AA IN FORM 10A, AS PER THE UNIVERSAL VIEW TAKEN BY ALL JUDICIAL FOR UMS, WHEN ONCE THE OBJECTS OF THE TRUST ARE FOUND TO BE APPARENTLY CHA RITABLE IN NATURE, THE TRUST SHOULD BE GRANTED REGISTRATION U/S 12AA O F THE ACT. IN THIS CASE, AFTER CONSIDERING THE REASON GIVEN IN THE GRO UNDS OF APPEAL, WE ARE OF THE CONSIDERED OPINION THAT THE TRUST DESERV ES TO BE REGISTERED U/S 12AA OF THE ACT. THE LD. CIT HAS NOT CLEARLY SPELT OUT AS TO WHAT ACTIVITIES DONE BY THE TRUST ARE NOT IN CONSONANCE WITH ITS OBJECTS. THEREFORE, WE DIRECT THE LD. CIT TO GRANT REGISTRAT ION TO THE ASSESSEE- TRUST AS HAS BEEN CLAIMED. ACCORDINGLY, THE APPEAL STANDS ALLOWED. ITA 1410/11 :- 6 -: 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE-TRU ST STANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 18 TH NOVEMBER, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR