Nirman Foundation Charitable Trust, Ahmedabad V. The Dy. Director of Income Tax (Exmp.), Ahmedabad

ITA 1759/AHD/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5762 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 19-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Recovery proceedings; Charitable institution; Principle of natural justice; Period of limitation; Reasonable cause; Condonation of delay; Cancellation of registration; Set aside
• Section: 143(3); 12A; 12AA; 201; 264

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ./ITA NO. 1759/AHD/2017 ( / ASSESSMENT YEAR : 2010-11 ) NIRMAN FOUNDATION CHARITABLE TRUST OPP. SABRI APARTMENT B/H. INDRAPASTHA BUNGALOWS VASTRAPUR, AHMEDABAD-380057 / VS. THE DY.DIT (EXEMPTIONS) AHMEDABAD ./ ./ PAN/GIR NO. : AABTN 0243 R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ASEEM L. THAKKAR, AR / RESPONDENT BY : SHRI S.K. DEV, SR.DR / DATE OF HEARING 05/11/2018 !'# / DATE OF PRONOUNCEMENT 12 /12/2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)XXI, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-X XI/406/11-12 DATED 11/02/2014 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 25/02/2013 RELEVANT TO ASSESSMENT YEAR (AY) 2009-1 0. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN PASSING AN EX-PARTE ORDER CONFIRMING THE ADDITIO NS MADE BY ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 2 - THE A.O. WITHOUT GIVING REASONABLE OPPORTUNITY OF B EING HEARD TO THE APPELLANT WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND LAW HENCE THE SAME BEING ILLEGAL AND BA D IN LAW REQUIRES TO BE CANCELLED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THE FACT THAT THE APPELLANT HAS ALR EADY COMPLIED WITH THE NOTICES ISSUED AND FILED AN ADJOU RNMENT APPLICATIONS ON VARIOUS DATES. 3. WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALTERNATI VE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN CONFIRMING THE ADDITION OF RS.1,40,30,000/- MADE BY THE DY.DIRECTOR OF INCOME TAX (EXEMPTION) BEING AN AMOU NT OF CORPUS DONATION ON THE GROUND OF CANCELLATION OF RE GISTRATION OF TRUST U/S.12AA OF THE I.T.ACT, 1961 IN EARLIER Y EAR FOR WHICH THE MATTER WAS PENDING BEFORE THE HONBLE ITAT, AHM EDABAD AT THE RELEVANT POINT OF TIME. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE DY.DIREC TOR OF INCOME TAX (EXEMPTION) BEING AN AMOUNT OF REPAYMENT OF TERM LOAN OF RS.1,30,25,866/- AS APPLICATION OF INCOME A S PER PROVISION OF THE LAW. 2. AT THE OUTSET, WE NOTE THAT THERE WAS A DELAY OF 1166 DAYS IN FILING THE APPEAL BY THE ASSESSEE. THERE WAS CONDONATION PETIT ION FILED BY THE ASSESSEE DATED 15 TH JULY 2017. THE CONTENTS OF THE APPLICATION READ AS UNDER: DATE: 15 JULY 2017 TO ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 3 - THE ASST. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH, AHMEDABAD. SUB: REQUEST FOR THE CONDONATION OF DELAY IN THE FILING OF APPEAL IN THE CASE OF NIRMAN FOUNDATION CHARITABLE TRUST FOR A.Y.2010-11 - REG. SIR, - IN CONNECTION WITH THE ABOVE IT IS SUBMITTED AS UND ER: 1. THE ASSESSEE TRUST HAD FILED RETURN OF INCOME ON 31.3.2011 DECLARING TOTAL DEFICIT OF RS.(-)7,31,950/- AFTER CLAIMING EXEMPTIO N TO THE EXTENT OF RS.2,84,60,112/-. THE ASSESSMENT CAME TO BE COMPLET ED U/S. 143(3) VIDE ORDER DATED 25.02.2013. WHILE COMPLETING THE ASSESSMENT, AN ADDITION OF RS. 1,40.30,0007- HAD COME TO BE MADE ON THE GROUND THA T THE TRUST WAS NOT ELIGIBLE FOR DEDUCTION U/S.11(L)(D) OF THE ACT. ACC ORDINGLY, CORPUS DONATION U/S. LL(L)(D) OF THE ACT CAME TO BE DISALLOWED AND WAS A DDED TO THE TOTAL INCOME. 2. IT MAY BE POINTED OUT THAT THE EXEMPTION CANE TO BE DISALLOWED ON ACCOUNT OF THE FACT THAT THE REGISTRATION OF THE TR UST U/S. 12AA OF THE ACT HAD BEEN CANCELLED BY DIT(E), .AHMEDABAD VIDE ORDER DAT ED 16.03.2011. THE MATTER WAS PURSUED BEFORE THE HON'BLE 1TAT AND APPE AL WAS FILED AGAINST THE CANCELLATION OF THE REGISTRATION U/S. 12AA OF THE A CT. THE HON'BLE TRIBUNAL VIDE ORDER DATED 20.6.2014 SET ASIDE THE ISSUE OF REGIST RATION TO THE D1T(E), AHMEDABAD. THE LEI. DIT(E), AHMEDABAD VIDE ORDER DA TED 16.10.2015 HAD GRANTED REGISTRATION U/S. 12AA OF THE ACT. IN THE M EANTIME THE ASSESSMENT OF THE ASSESSEE TRUST CAME TO BE COMPLETED ON 25.2.201 3. ONLY ON ACCOUNT OF THE WITHDRAWAL OF REGISTRATION U/S. 12AA, IN THE INTERV ENING PERIOD ADDITION CAME TO BE MADE IN THE CASE OF THE ASSESSEE TRUST. 3. THE ASSESSEE TRUST IN THE MEANTIME HAD PR EFERRED AN APPEAL BEFORE THE CIT(A)-XX1, AHMEDABAD. VARIOUS ADJOURNMENTS WERE S OUGHT FOR ON THE GROUND THAT EXEMPTION U/S.11(1)(D) HAS COME TO BE C ANCELLED ONLY ON ACCOUNT OF WITHDRAWAL OF REGISTRATION U/S. 12AA OF THE ACT. THIS MATTER WAS PENDING BEFORE THE HON'BLE ITAT AND THEREFORE TILL THIS ISS UE WAS FINALLY ADJUDICATED, THE APPELLATE PROCEEDINGS BE KEPT PENDING. THE APPE AL HOWEVER CAME TO BE DISMISSED VIDE ORDER DATED 11.2.2015 I.E. PRIOR TO THE ORDER BEING SET ASIDE BY ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 4 - THE HON'BLE ITAT. THE ASSESSEE TRUST HAD ENGAGED A CHARTERED ACCOUNTANT WITH REGARDS THE MATTER PENDING BEFORE THE INCOME T AX DEPARTMENT WHO WAS ASSISTED BY OUR ACCOUNTANT SHRI ASHISH BHAVSAR. THE TRUSTEES HAD ASSIGNED THIS RESPONSIBILITY TO THE ABOVE REFERRED PERSONS AND WE RE NOT ACTIVELY INVOLVED IN THE LITIGATION MATTER. 4. THIS ORDER WAS DULY SERVED UPON THE ACCOU NTANT MR. ASHISH BHAVSAR IN MARCH, 2014 AND WHO HAD LEFT THE SERVICES AND WAS N OT ENGAGED WITH THE TRUST AT THAT POINT OF TIME. HE HAD NOT INTIMATED EITHER THE MANAGING TRUSTEE OR OTHER TRUSTEES OR ANY RESPONSIBLE PERSONS OF THE TRUST WI TH REGARD TO THE RECEIPT OF SUCH ORDER BY HIM. THEREFORE, THE ASSESSEE TRUST O R ITS TRUSTEES WERE NOT AWARE OF THE OUTCOME OF THE APPEAL OR THE RECEIPT OF SUCH ORDER WITH THEIR EX EMPLOYEE SHRI ASHISH ESHAVSAR. 5. IT MAY NOT BE OUT OF PLACE TO POINT OUT THAT ON ACCOUNT OF CANCELLATION OF REGISTRATION, THE ASSESSEE TRUST HAD BEEN EMBROILED IN LITIGATION FOR VARIOUS ASSESSMENT YEARS AND MULTIPLE AUTHORITIES COMMENCIN G FROM AY 2008-09 TO 2012-13. THE APPEALS HAD BEEN FILED AT VARIOUS S TAGES INCLUDING BEFORE THE LD. CIT(A) / ITAT. IN THE MEANTIME, THE ASSESSEE TRUST WAS IN RECEIPT OF RECOVERY NOTICE FOR AY 2010-11. THE MATTER WAS IM MEDIATELY LOOKED INTO AND IT WAS AT THAT POINT OF TIME, WE REALIZED THAT THE APPEAL FILED FOR A.Y.2010-11 HAD ALREADY BEEN DECIDED AND THE ORDER IN QUESTION WAS ALREADY SERVED ON THE EX EMPLOYEE SHRI ASHISH BHAVSAR. ON ENQUIRY, SHRI ASHISH BHAVSAR ACCEPTED THIS OMISSION ON HIS PART AND HANDED OVER THE ORDER IN THE MONTH OF JULY, 2017. IMMEDIATELY ON PRIORITY BASIS, ALL EFFORTS HAD BEEN MADE TO FILE APPEAL. 6. WE ARE ENCLOSING COPY OF AFFIDAVIT FROM SHRI ASHISH BHAVSAR. EX- ACCOUNTANT ON WHOM THE ORDER WAS SERVED AND WHO FAI LED TO COMMUNICATE THE SAME AND HAND OVER TO THE TRUST. WE ARE ALSO ENCLOSING AFFIDAVIT OF THE MANAGING TRU STEE SHRI ASHISH DESAI NARRATING THE CIRCUMSTANCES ON ACCOUNT OF WHICH THE RE WAS DELAY IN FLING OF THE APPEAL. 7. IT IS RESPECTFULLY SUBMITTED THAT THE ASS ESSEE TRUST IS RUNNING SCHOOL WHERE MORE THAN 3000 CHILDREN ARE STUDYING. EVEN TH E REVENUE HAS SUBSEQUENTLY ACCEPTED THE ACTIVITIES OF THE TRUST A S BEING CHARITABLE IN NATURE. THE ASSESSEE TRUST HAS BEEN VISITED WITH HUGE TAX L IABILITY WHICH HAS NOT BEEN LITIGATED FURTHER ONLY ON ACCOUNT OF THE NEGLIGENCE OF THE FORMER EMPLOYEE ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 5 - THOUGH THE MATTER HAS NOW BEEN DECIDED IN THE FAVOU R OF THE ASSESSEE TRUST. IT IS ALSO WORTHWHILE TO NOTE THAT THE ASSESSEE TRUST IS EMBROILED IN LITIGATION FOR VARIOUS ASSESSMENT YEARS. THIS IS ONE SOLITARY INST ANCE OF APPEAL OF APPEAL NOT HAVING BEEN FILED BY THE ASSESSEE TRUST. IN ALL THE REMAINING YEARS, THE ASSESSEE TRUST HAD BEEN VERY VIGILANT IN THE DISCHARGE OF IT S DUTIES AND ENSURE THE TIMELY COMPLIANCE AND OTHER FORMALITIES. THE ASSESSEE TRUS T HAS BEEN ONLY VISITED WITH SUCH HUGE TAX LIABILITY ON ACCOUNT OF THE PRESUMPTI ON AT THAT POINT OF TIME THAT REGISTRATION U/S. 12AA HAS BEEN CANCELLED. IF THE T OTALITY OF THE CIRCUMSTANCES ARE LOOKED INTO, THE REGISTRATION U/S. 12AA HAS BEE N GRANTED SUBSEQUENTLY AND ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S. 11/13/14. 8. THERE BEING A REASONABLE CAUSE FOR THE DE LAY IN FLING OF APPEAL WHICH WAS AN INNOCENT OMISSION AND THERE WAS NO ULTERIOR MOTIVE OR MALA FIDE SINCE NOTHING HAD TO BE GAINED BY NOT FILING THE APPEAL O N TIME, IT IS REQUESTED THAT THE DELAY OF 1166 DAYS MAY KINDJY BE CONDONED. THANKING YOU, YOURS FAITHFULLY, FOR NIRMAN FOUNDATION CHARITABLE TRUST NIRMAN FOUNDATION CHARITABLE TRUST 3. THE MANAGING TRUSTEE OF THE ASSESSEE TRUST HAS ALSO FILED THE AFFIDAVIT VIDE DATED 15 TH JULY 2017. THE EXTRACT OF THE AFFIDAVIT IS REPRODU CED AS UNDER: AFFIDAVIT I, ASHISH J. DESAI, ADULT, INDIAN INHABITANT, RESID ING AT B. NO. 12, RIVERA 30 BUNGLOWS, OPP. SHIVALIK ARCADE, NEAR AUDA GARDEN, P RAHLADNAGAR, SATELLITE, AHMEDABAD - 380015, MANAGING TRUSTEE OF THE TRUST N IMTAN FOUNDATION CHARITABLE TRUST OF AHMEDABAD DO HEREBY SOLEMNLY ST ATE AND DECLARE ON OATH AS UNDER: - THAT I WAS A MEDICAL DOCTOR WHO WITH A VIEW TO IMPA RT AND SPREAD EDUCATION SET UP THE AFORESAID CHARITABLE TRUST, BEING A EDUC ATIONAL INSTITUTION FOR THE BENEFIT OF PUBLIC AT LARGE. THAT THE TRUST NIRMAN F OUNDATION CHARITABLE TRUST OF AHMEDABAD IS ASSESSED TO TAX UNDER PAN- AABTN024 3R WITH THE DD1T (EXEMPTION), OFFICER, AHMEDABAD. THAT THE TRUST HAD EMPLOYED ONE MR. ASHISH ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 6 - BHAVSAR FOR THE ACCOUNTING AND TAXATION WORK OF THE TRUST WHO WAS RENDERING SERVICES TILL APRIL. 2014. THAT IN THE CASE OF AFORESAID TRUST ASSESSMENT FOR ALL THE YEARS FROM ASSESSMENT YEAR 2008-09 TO 2012-13 WERE COMPLETED M AKING ADDITIONS FOR THE CORPUS DONATIONS U/S. 1L(1)(D) OF THE ACT ON THE G ROUND THAT THE REGISTRATION OF THE TRUST HAS BEEN CANCELLED IN EARLIER YEARS DENYI NG THE EXEMPTIONS U/S.L2AA OF THE I.T.ACT, 1961. THAT THE REGISTRATION OF THE TRUST U/S 12AA CAME TO BE WITHDRAWN VIDE ORDER DATED 16.03.20! 1 AS A CONSEQU ENCE OF WHICH THE CLAIM OF EXEMPTION U/S 11/12/13 CAME TO BE WITHDRAWN. THE ASSESSEE TRUST HAD FILED AN APPEAL BEFORE THE H ON. ITAT, AHMEDABAD BENCH WITH REGARDS THE CANCELLATION OF REGISTRATION U/S 12AA OF THE ACT. THE HON. TRIBUNAL HAD VIDE ORDER DATED 20.06.2014 SET A SIDE THE ISSUE OF REGISTRATION U/S 12AA TO THE FILE OF THE DI(EXEMPTI ON), AHMEDABAD. THE LD. DI(EXEMPTION), AHMEDABAD VIDE ORDER DATED 1 6.10.2015 HAD GRANTED REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE TR UST. IN THE MEANTIME ASSESSMENT WAS COMPLETED FOR VARIOU S YEARS COMPRISING A.Y.2008-09 TO 2012-13 IN THE CASE OF THE ASSESSEE TRUST WHERE THE CLAIM OF EXEMPTION U/S 12AA CAME TO BE WITHDRAWN. APPEALS WE RE FILED AGAINST THE AFORESAID ORDER WHICH WERE PENDING AT VARIOUS STAGE S AND AUTHORITIES I.E. LD.CIT(A) OR HON. TRIBUNAL. RECENTLY I WAS IN RECEIPT OF NOTICE INTIMATING THE OUTSTANDING DEMAND FOR THE RECOVERY OF TAX FOR A.YR.2010-11. I IMMEDIATELY CON TACTED THE THEN ACCOUNTANT SHRI ASHISHBHAI BHAVSAR TO ASCERTAIN THE STATUS OF THE APPEAL FILED. HE ON INQUIRY INTIMATED THAT THE CIT(A) HAS PASSED AN ORD ER EX PARTE ORDER DTD.L 1/02/2014 DISMISSING THE APPEAL OF THE AFORESAID TR UST AND THE ORDER HAD BEEN RECEIVED BY HIM WHICH HE FORGOT TO INFORM EITHER ME OR ANY OTHER TRUSTEES OR ANY RESPONSIBLE PERSON OF THE SAID TRUST. THAT ON MY REQUEST HE HAS GIVEN COPY OF THE ORDER P ASSED BY THE CIT(A) TO ME IN THE MONTH OF JULY. 2017. ON RECEIPT OF THE SAME, I AS A MANAGING TRUSTEE OF THE SAID TRUST APPROACHED, OUR CHARTERED ACCOUNTANT AND HAVE DECIDED TO FILE AN APPEAL BEFORE THE HON'BLE INCOME TAX APPELLATE T RIBUNAL. ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 7 - THAT FOR THE EARLIER YEARS I.E. A.YRS.2008-09 & 200 9-10 THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD HAS SET ASIDE THE ORDERS TO THE ASSESSING OFFICER AND SUBSEQUENTLY, REGISTRATION U/S. 12AA OF THE ACT HAS BEEN GRANTED BY THEM TO THE AFORESAID TRUST. FOR THE VARIOUS YEA RS WHICH ARE SUBJECT TO LITIGATION APPROPRIATE RELIEF HAS ALSO BEEN GRANTED TO THE ASSESSEE TRUST ON ACCOUNT OF THE GRANTING OF THE REGISTRATION U/S 12A A OF THE ACT. ON ACCOUNT OF THE NEGLIGENCE OF THE FORMER ACCOUNTA NT WHO WAS HANDLING THE TAX MATTERS AS WELL AS MULTIPLICITY OF THE PENDING PROCEEDINGS AT VARIOUS LEVELS AND ALSO CARRYING A BONAFIDE IMPRESSION THAT THE AP PEALS HAVE BEEN FILED THE TRUST WAS UNABLE TO FILE AN APPEAL BEFORE THE HON'B LE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD FOR A.YR.2010-11 IN TIME. THAT THIS AFFIDAVIT IS MADE IN SUPPORT OF THE APPLI CATION FOR THE CONDONATION OF DELAY IN FILING AN APPEAL BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD AGAINST THE ORDER PASSED U/S.!43(3) OF TH E I.T.ACT,1961. THE ABOVE FACTS ARE TINE AND CORRECT TO THE BEST OF MY KNOWLEDGE, INFORMATION AND BELIEF. 4. THE ASSESSEE ALSO FILED THE AFFIDAVIT OF THE TH EN ACCOUNTANT VIDE DATED 15 TH JULY 2017 WHO WAS WORKING WITH THE ASSESSEE DURING THE RELEVANT TIME. THE EXTRACT OF THE AFFIDAVIT IS REPRODUCED AS UNDER: AFFIDAVIT I, ASHISH BHAVSAR, ADULT, INDIAN INHABITANT, RESID ING AT C-318, SHABRI APARTMENT, OPP. NIRMAN SCHOOL, VASTRAPUR, AHMEDABAD 380 015 AS ACCOUNTANT OF THE TRUST NIRMAN FOUNDATION CHARITABL E TRUST OF AHMEDABAD DO HEREBY SOLEMNLY STATE AND DECLARE ON O ATH AS UNDER:- THAT 1 WAS WORKING AS ACCOUNTANT AND LOOKING AFTER THE TAXATION WORK OF THE TRUST NIRMAN FOUNDATION CHARITABLE TRUST OF AHM EDABAD WHICH IS ASSESSED TO TAX AM ASSESSED TO TAX UNDER PAN- AABTN 0243R WITH THE DDIT (EXEMPTION), OFFICER, AHMEDABAD. ' ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 8 - THAT IN THE CASE OF AFORESAID TRUST ASSESSMENT FOR A.YR.2010-11 HAD BEEN COMPLETED VIDE ORDER DTD.25/02/2013 PASSED U/S.!43( 3) OF THE I.T.ACT,1961 BY MAKING AN ADDITION OF RS.1,40,00,00 0/- BEING AN AMOUNT OF CORPUS DONATION HOLDING THAT THE TRUST IS NOT EL IGIBLE FOR DEDUCTION U/S.11(1 )(D) OF THE L.T.ACT, 1961 AS CLAIMED BY IT . THAT BEING AGGRIEVED BY THE AFORESAID ORDER PASSED U/S.L43(3) THE L.T.ACT, 1961 THE SAID TRUST HAD PREFERRED AN APPEA L BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) -XXI, AHMEDABA D ON 18/03/2013. THAT THE CIT(A) HAS PASSED AN ORDER EX PARTE ORDER DTD. 11/02/2014 DISMISSING THE APPEAL OF THE AFORESAID TRUST. THAT THE SAID ORDER WAS RECEIVED BY ME ON 14/03/2014 ; AND WAS LYING WITH M E. THEREAFTER, AS I HAD DECIDED TO LEAVE THE WORK OF SAID TRUST I T FOR GOT TO INFORM THE TRUSTEES OR ANY RESPONSIBLE PERSON OF THE SAID TRUS T ABOUT THE SAID APPELLATE ORDER. THAT THEREAFTER ON BEING CONTACTED BY THE TRUSTEES OF THE SAID TRUST IN THE MONTH OF JULY, 2017 ABOUT THE STATUS/PENDENCY OF A FORESAID APPEAL BEFORE CIT(A)-XXI, AHMEDABAD I INFORMED THEM THAT THE SAID APPEAL HAS ALREADY BEEN HEARD EX PARTE AND THE ORDER WAS LYING WITH ME. I WAS NOT AWARE ABOUT THE FURTHER REMEDY WHICH CAN BE TAK EN AGAINST THE SAID APPELLATE ORDER. THAT ON THE REQUEST OF TRUSTEES OF THE AFORESAID TR UST 1 HAVE GIVEN COPY OF THE SAID ORDER TO THEM IN THE MONTH OF JULY, 201 7 AS THEY REQUIRED FOR FILING AN APPEAL BEFORE HIGHER AUTHORITY. THAT IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE SAID TRUST WAS UNABLE TO FILE AN APPEAL BEFORE THE HIGHER AUTHORIT Y IN TIME. THAT THIS AFFIDAVIT IS MADE IN SUPPORT OF THE APPLI CATION FOR THE CONDONATION OF DELAY IN FILING AN APPEAL BEFORE THE HONBLE INCOME TAX ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 9 - APPELLATE TRIBUNAL. AHMEDABAD AGAINST THE ORDER PAS SED U/S. 143(3) OF THE L.T.ACT, 1961. THE ABOVE FACTS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE, INFORMATION AND BELIEF. SD/- (ASHISH BHAVSAR) 5. IN VIEW OF ABOVE THE LD. AR FOR THE ASSESSEE BE FORE US SUBMITTED THAT THE DELAY IN FILING THE APPEAL OCCURRED DUE TO UNAV OIDABLE SITUATION. THEREFORE THE DELAY IN FILING THE APPEAL SHOULD BE CONDONED. 6. ON THE OTHER HAND, THE LD. DR OPPOSED TO CONDONE SUCH INORDINATE DELAY. 7. WE HAVE PERUSED THE RECORDS AND HEARD THE R IVAL SUBMISSIONS OF BOTH THE SIDES. THERE WAS A DELAY OF 1166 DAYS IN F ILING THE APPEAL BY THE ASSESSEE BEFORE US. IN THE CONDONATION PETITION IT WAS EXPLAINED THAT THE ORDER OF LD. CIT-A WAS RECEIVED BY THE THEN ACCOUNT ANT WHO WAS ASSISTING TO THE CA ENGAGED BY THE ASSESSEE. HOWEVE R THE ACCOUNTANT FAILED TO SUPPLY THE SAID ORDER TO THE ASSESSEE. TH US THE DELAY OCCURRED IN FILING THE APPEAL. THE ASSESSEE AND THE ACCOUNTANT FILED THE AFFIDAVIT WHICH HAS BEEN CITED IN THE EARLIER PARA TO EXPLAIN THE DELAY IN FILING THE APPEAL AND ACCORDINGLY PRAYED FOR CONDONATION OF DE LAY. NOW THE CONTROVERSY ARISES FOR OUR ADJUDICATION WHETHER THE ACCOUNTANTS FAILURE TO ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 10 - SUPPLY THE ORDER OF THE LD. CIT-A IS REASONABLE AND SUFFICIENT CAUSE FOR CONDONING THE DELAY. 8. IN THIS REGARD WE NOTE THAT THE HONBLE MADR AS HIGH COURT IN THE CASE OF SREENIVAS CHARITABLE TRUST V. DY. CIT REPOR TED IN 280 ITR 357 HAS HELD THAT : 3. THE SUPREME COURT IN VEDABAI V. SHANTARAM BABURAO PATIL [2002] 253 ITR 798 HELD AS UNDER : 'IN EXERCISING DISCRETION UNDER SECTION 5 OF THE LI MITATION ACT THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MU ST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHEREAS IN THE FORMER CASE THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR SO THE CASE CALLS FO R A MORE CAUTIOUS APPROACH BUT IN THE LATTER CASE NO SUCH CONSIDERATION MAY AR ISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NO HARD AND FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PR IME IMPORTANCE.' (P. 799) 4. THE CALCUTTA HIGH COURT IN CIT V. ORISSA CONCRETE & ALLIED INDUSTRIES LTD. [2003] 264 ITR 186 HELD AS UNDER : '. . .WHAT IS REALLY INDICATED IN THE VARIOUS DECIS IONS CITED AND IN SECTION 5 OF THE LIMITATION ACT ITSELF, IS THAT A LITIGANT WO ULD BE REQUIRED TO EXPLAIN WHY THE APPEAL AND/OR APPLICATION COULD NOT BE FILE D WITHIN THE PERIOD PRESCRIBED BY LIMITATION AND EXPLAIN THE DELAY FOR SUCH PERIOD FOR THE PURPOSE OF LINKING UP THE CIRCUMSTANCES WHICH HAD C AUSED THE DELAY DURING THE PERIOD OF LIMITATION AND THEREAFTER.' (P. 192) 5. RECENTLY, THE ALLAHABAD HIGH COURT IN GANGA SAHAI RAM SWARUP V. ITAT [2004] 271 ITR 512 HAS TAKEN THE VIEW THAT LIB ERAL VIEW OUGHT TO HAVE BEEN TAKEN BY THE AUTHORITY AS THE DELAY WAS ONLY O F A VERY SHORT PERIOD AND THE APPELLANT WAS NOT GOING TO GAIN ANYTHING FROM I T. ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 11 - 6. APPLYING THE RATIO LAID DOWN BY THE APEX COURT AS WELL AS VARIOUS HIGH COURTS, WE FIND, IT IS STATED IN THE PETITION FILED BY THE ASSESSEE FOR CONDONATION OF DELAY THAT THE ORDER COPY WAS MISPLA CED AND THEREAFTER IT WAS FOUND AND SENT TO COUNSEL FOR PREPARING THE APP EAL AND THEN, THE APPEAL WAS PREPARED AND FILED BEFORE THE TRIBUNAL A ND IN THAT PROCESS, THE DELAY OF 38 DAYS OCCURRED. AS HELD BY THE APEX COUR T, NO HARD AND FAST RULE CAN BE LAID DOWN IN THE MATTER OF CONDONATION OF DE LAY AND THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH AND THE COURTS SH OULD EXERCISE THEIR DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIN D THAT IN CONSTRUING THE EXPRESSION 'SUFFICIENT CAUSE' THE PRINCIPLE OF ADVA NCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE AND THE EXPRESSION 'SUFFICIE NT CAUSE' SHOULD RECEIVE A LIBERAL CONSTRUCTION. WE ARE, THEREFORE, OF THE O PINION THAT THE APPELLATE TRIBUNAL OUGHT TO HAVE CONDONED THE DELAY IN FILING THE APPEAL, CONSIDERING THE REASONS GIVEN BY THE ASSESSEE FOR THE DELAY. 9. FROM THE ABOVE IT IS CLEAR THAT THE EXPRESSIO N 'SUFFICIENT CAUSE' SHOULD BE INTERPRETED TO ADVANCE SUBSTANTIAL JUSTIC E. THEREFORE, ADVANCEMENT OF SUBSTANTIAL JUSTICE IS THE PRIME FAC TOR WHILE CONSIDERING THE REASONS FOR CONDONING THE DELAY. 10. WE ALSO NOTE THAT THE CASE ON MERIT IS IN FA VOUR OF THE ASSESSEE. BUT THERE IS A TECHNICAL DEFECT IN THE APPEAL SINCE THE APPEAL WAS NOT FILED WITHIN THE PERIOD OF LIMITATION. THERE WAS THE AFFI DAVIT FILED BY THE ASSESSEE FILED EXPLAINING THE REASONS FOR THE DELAY IN FILING THE APPEAL BEFORE US. HOWEVER, THE REVENUE HAS NOT FILED ANY C OUNTER-AFFIDAVIT TO DENY THE ALLEGATION MADE BY THE ASSESSEE. 11. IT IS ALSO IMPORTANT TO NOTE THAT HONBLE S UPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V. MST. KATIJI AND O RS. (167 ITR 471) LAID ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 12 - DOWN CERTAIN PRINCIPLES FOR CONSIDERING THE CONDONA TION PETITION FOR FILING THE APPEAL WHICH ARE REPRODUCED HEREUNDER: (1) ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE (2) REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN AT THE VERY THRESHOLD AND CAUSE OF JUSTICE B EING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST T HAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. (3) 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY , EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMONSENSE AND PRAGMATIC MANNER. (4) WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO N ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERV ES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJ USTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. (5) THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DE LIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MA LA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT , HE RUNS A SERIOUS RISK. (6) IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS BU T BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 12. FROM THE ABOVE JUDGMENT OF THE HONBLE APEX COURT, WE NOTE THAT THE SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED RA THER THAN DECIDING THE MATTER ON THE BASIS OF TECHNICAL DEFECT. 13. WE ALSO NOTE THAT THERE IS NO ALLEGATION FR OM THE REVENUE THAT THE APPEAL WAS NOT FILED WITHIN THE DELIBERATELY. THERE FORE, WE ARE INCLINED TO PREFER SUBSTANTIAL JUSTICE RATHER THAN TECHNICALITY IN DECIDING THE ISSUE. ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 13 - WE ALSO FIND THAT IF WE REJECT THE APPLICATION OF T HE ASSESSEE FOR CONDONING THE DELAY THEN IT WOULD AMOUNT TO LEGALIS E INJUSTICE ON TECHNICAL GROUND WHEREAS THE TRIBUNAL IS CAPABLE OF REMOVING INJUSTICE AND TO DO JUSTICE. 14. IF THE DELAY IS NOT CONDONED, IT WOULD AMOU NT TO LEGALISING AN ILLEGAL ORDER WHICH WOULD RESULT IN UNJUST ENRICHME NT ON THE PART OF THE STATE BY RETAINING THE TAX RELATABLE THERETO. UNDER THE SCHEME OF CONSTITUTION, THE GOVERNMENT CANNOT RETAIN EVEN A S INGLE PIE OF THE INDIVIDUAL CITIZEN AS TAX, WHEN IT IS NOT AUTHORISE D BY AN AUTHORITY OF LAW. THEREFORE, IF WE REFUSE TO CONDONE THE DELAY, THAT WOULD AMOUNT TO LEGALISE AN ILLEGAL AND UNCONSTITUTIONAL ORDER PASS ED BY THE LOWER AUTHORITY. THEREFORE, IN OUR OPINION, BY PREFERRING THE SUBSTANTIAL JUSTICE, THE DELAY OF 2819 DAYS HAS TO BE CONDONED. 15. THE NEXT CONTROVERSY ARISES WHETHER THE DEL AY OF 1166 DAYS WAS EXCESSIVE OR INORDINATE. THERE IS NO QUESTION OF AN Y EXCESSIVE OR INORDINATE WHEN THERE WAS REASONABLE CAUSE WHICH PR EVENTED THAT ASSESSEE IN FILING THE APPEAL. AS SUCH WE NEED TO C ONSIDER THE CAUSE FOR THE DELAY AND NOT THE LENGTH OF THE DELAY. ACCORDIN GLY IN OUR CONSIDERED VIEW WHEN THERE WAS A REASONABLE CAUSE, THE PERIOD OF DELAY MAY NOT BE RELEVANT FACTOR. WE FIND SUPPORT FROM THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. K.S.P. SHAN MUGAVEL NADAI AND ORS REPORTED IN 153 ITR 596 WHEREIN IT WAS HELD AS UNDER : ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 14 - SINCE IN THIS CASE THE ASSESSEE HAD BEEN PROSECUTI NG OTHER REMEDIES, THE TIME TAKEN BY THOSE PROCEEDINGS SHOUL D NATURALLY BE TAKEN WHILE DETERMINING THE QUESTION WHETHER THE AS SESSEE HAD SUFFICIENT CAUSE FOR NOT PRESENTING THE APPEAL IN T IME. THEREFORE, THE REVENUE WAS NOT RIGHT IN SUBMITTING THAT THE AP PEAL FILED UNDER SECTION 17 WAS AN APPEAL AGAINST THE ORIGINAL ORDER OF ASSESSMENT UNDER THE ACT, WHICH WAS PASSED ABOUT 20 YEARS AGO, AS IT WAS EVIDENT THAT THE APPEAL WAS AGAINST AN ORDER OF REJ ECTION OF RELIEF BY THE ASSESSING AUTHORITY. THUS, THOUGH THE TRIBUN AL'S VIEW THAT THERE WAS NO QUESTION OF LIMITATION IN SUCH CASES, WAS NOT CORRECT YET THE AAC WAS RIGHT IN CONDONING THE DELAY AND EN TERTAINING THE APPEAL. 17. FROM THE ABOVE WE NOTE THAT THE HONBLE MADR AS HIGH COURT IN THE ABOVE CASE WAS PLEASED TO CONDONE DELAY FOR 20 YEAR S APPROXIMATELY BY HOLDING THAT THERE WAS SUFFICIENT AND REASONABLE CA USE ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE PERIO D OF LIMITATION. 18. THE DELAY IN THE INSTANT CASE IS JUST OF 1 166 NUMBER OF DAYS WHICH CANNOT BE CONSIDERED TO BE INORDINATE OR EXCESSIVE IN COMPARISON TO THE DELAY OF 7330 DAYS APPROXIMATELY. 19. IN VIEW OF THE ABOVE WE ARE OF THE OPINION THAT WHEN THERE IS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN T HE PERIOD OF LIMITATION, THE DELAY HAS TO BE CONDONED IRRESPECTIVE OF THE DU RATION/PERIOD OF THE DELAY. IN THIS CASE, THE NON-FILING OF AN AFFIDAVIT BY THE REVENUE FOR OPPOSING THE CONDONATION OF DELAY ITSELF IS SUFFICI ENT FOR CONDONING THE DELAY OF 1166 NUMBER OF DAYS. THUS, WE CONDONE THE DELAY OF 1166 DAYS ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 15 - IN FILING THE APPEAL AND PROCEED TO HEAR THE APPEAL ON MERIT FOR THE ADJUDICATION. NOW WE PROCEED TO ADJUDICATE THE MATTER ON MERIT: 20. THE ONLY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LEARNED CIT-A ERRED IN CONFIRMING THE ORDER OF THE AO BY SU STAINING THE ADDITION OF 1,40,30,000.00 ON ACCOUNT OF CANCELLATION OF REGIS TRATION OF TRUST UNDER SECTION 12AA OF THE ACT. 21. AT THE OUTSET IT WAS NOTICED THAT THE ORDER PASSED BY THE LD. CIT(A) IS EX-PARTE. IN THE SIMILAR FACTS AND CIRCUMSTANCE S, THE ITAT IN THE OWN CASE OF THE ASSESSEE IN ITA NO. 2743/AHD/2015 PERTA INING TO THE ASSESSMENT 2011-12 VIDE ORDER DATED 15 TH JUNE, 2018 RESTORED THE MATTER TO THE LD. CIT (A) FOR FRESH ADJUDICATION ON MERIT. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: 5. WE HAVE ALSO NOTICED THAT THE IMPUGNED ORDER IS PASSED EX-PARTE. AS NOTICED IN THE CIT(A)S ORDER, NOTICE WAS SERVED TH ROUGH CHARTERED ACCOUNTANT BUT THEN, AS IS THE CONTENTION OF THE AS SESSEE, THE CHARTERED ACCOUNTANT DID NOT DEAL WITH THE MATTER IN INTELLIG ENT MANNER AND HAD THEREFORE EVENTUALLY DISENGAGED BY THE ASSESSEE. W E HAVE ALSO BEEN ASSURED BY THE ASSESSEE THAT GIVEN ANOTHER OPPORTUNITY OF P RESENTING HIS CASE BEFORE THE LEARNED CIT(A) HE WILL SCRUPULOUSLY ENSURE EARL Y DISPOSAL OF THE APPEAL ON MERITS AND SHALL NOT RESORT TO ANY DILATORY TACTICS . 6. LEARNED DEPARTMENTAL REPRESENTATIVE ALSO DOES NO T OPPOSE THE MATTER BEING REMITTED TO THE FILE OF THE LEARNED CIT(A) FO R FRESH ADJUDICATION. IN VIEW OF THE ABOVE DISCUSSION AND BEARING IN MIND ENTIRET Y OF THE CASE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF LEARN ED CIT(A) FOR FRESH ADJUDICATION ON MERITS. ITA NO.1759/AHD/2017 NIRMAN FOUNDATION CHARITABLE TRUST VS. DY.DIT (E) ASS T.YEAR 2010-11 - 16 - 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JUNE, 2018. 22. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT , WE RESTORE THE ISSUE TO THE FILE OF LD. CIT-A FOR FRESH ADJUDICATION IN ACCORDANCE TO THE PROVISIONS OF LAW. HENCE THE GROUND OF APPEAL OF TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 12 /12/2018 SD/- SD/- (MS.MADHUMITA ROY) (WASEEM AH MED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 12/12/2018 &.., .(.. / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-XXI, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, / ITAT, AHMEDABAD