Sri Kanyaka Parameswari Varthaka Sangam, Ganapavaram V. The ITO, Rajahmundry

ITA 218/VIZ/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6223 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SONAWAL
• Keywords: Condonation of delay
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 2 18 / VIZ /201 7 SRI KANYAKA PARAMESWARI VARTHAKA SANGAM , D.NO. 7 - 12/13, MAIN ROAD, GANAPAVARAM, W.G. DISTRICT. V S . ITO (EXEMPTIONS) , RAJAHMUNDRY . PAN NO. AAATS 4841 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM, FCA . DEPARTMENT BY : SHRI D.K. SONAWAL, CIT DR DATE OF HEARING : 2 1 / 0 7 /201 9 . DATE OF PRONOUNCEMENT : 07 / 0 8 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX ( EXEMPTIONS ) , HYDERABAD , DATED 21 /0 6 /201 6 , WHEREBY APPLICATION FOR REGISTRATION U/SEC. 12A HAS BEEN REJECTED. 2. THERE IS A DELAY OF 233 DAYS IN FILING THE APPEAL. THE ASSESSEE HAS FILED A CONDONATION APPLICATION ALONG WITH AFFIDAVIT AND MEDICAL CERTIFICATE . THE ASSESSEE TRUST HAS COME INTO EXISTENCE IN THE YEAR 1957 AND HAS BEEN FILING TAX RETURNS REGULARLY AND CLAIMING EXEMPTION OF ITS INCOME. 2 ITA NO. 218/VIZ/2017 ( SRI KANYAKA PARAMESWARI VARTHAKA SANGAM ) WHEREAS, MENTIONING OF THE REGISTRATION NUMBER GRANTED BY THE INCOME TAX DEPT. U/S.12AA OF THE I.T.ACT HAS BECOME MANDATORY AND AS THE SOCIETY HAS MISPLACED THE REGISTRATION CERTIFICATE, IT HAS BEEN ADVISED BY ITS TAX CONSULTANT TO APPLY FOR A FRESH CERTIFICATE. ACCORDINGLY, SKPVS APPLIED FOR REGISTRATION U/S.12AA OF THE I. T.ACT BY FILING FORM NO.1 0A & 10G G ON 18 T H MARCH'15 BEFORE THE COMMISSIONER OF INCOME TAX(EXEMPTIONS) HYDERABAD. WHEREAS, THE LEARNED CIT(E) REJECTED THE REGISTRATION VIDE HIS ORDER DT.281H SAPT'15 FOR THE REASON THAT THE WINDING UP CLAUSE OF THE SOCIETY HAS NOT BEEN PROPERLY DRAW N IN THE MEMORANDUM OF ASSOCIATION OF THE SOCIETY. THE SOCIETY ON THE ADVICE OF THE TAX CONSULTANT ' AFTER RECTIFYING THE WINDING UP CLAUSE, ONCE AGAIN APPLIED FOR REGISTRATION U/S.12AA ON 31ST DEMBER, 15 BEFORE THE CIT(E) HYDERABAD. THIS TIME THE LEARNED CIT(E) VIDE HIS ORDER DT.21ST JUNE'16 REFUSED REGISTRATION STATING THAT THE OBJECTS OF THE TRUST ARE IN THE NATURE OF MUTUAL BENEFIT OF THE MEMBERS. AFTER RECEIPT OF THE SECOND ORDER THE SOCIETY H A S APPROACHED THE DEPT. BRINGING INTO ITS NOTICE THAT IT HAS BEEN FILING TAX RETURNS FOR THE LAST TWO DECADES CLAIMING EXEMPTION, THE DEPARTMENTAL AUTHORITIES INFORMED ONLY COURSE AVAILABLE IS TO APPROACH APPELLATE AUTHORITIES IF IT HAS GRIEVANCE. THE DEVELOPMENT ARISING OUT OF THE REFUSAL OF REGISTRATION WAS P UT UP BEFORE THE COMMITTEE MEMBERS OF SOCIETY IN THE COMMITTEE MEETING HELD ON DT.28.07.2016 AND THE FUTURE COURSE OF ACTION TO BE TAKEN. THE MEMBERS SUGGESTED TO CONTACT THE AUDITOR NOT KNOWING THAT THERE IS TIME LIMIT FOR FILING THE AP PEAL. WHEN CONTACTE D THE AUDITOR S OFFICE INFORMED THAT THE CA IS NOT AVAILABLE TILL DT.15.08.2016. ON BEING APPROACHED, OUR AUDITOR SRI CA D.VISWANATH EXPLAINED THAT SINCE THERE ARE TWO ADVERSE ORDERS OF CIT(E) REFUSING REGISTRATION DT.28 - 09 2015& DT.21 - 06 - 2016,HE IS UNABLE TO KNOW WHICH ORDER SHOULD BE APPEALED AGAINST. HOWEVER, HE SUGGESTED TO CONSULT SENIOR CHARTERED ACCOUNTANT C. SUBRAHMANYAM IN THIS MATTER. BUT IN THE MEANWHILE I MET WITH AN ACCIDENT BY SLIPPING IN THE BATHROOM SPRAINING MY ANKLE AND ADVISED BY DO CTOR FOR BED REST AND IT TOOK ONE MONTH TO RECOVER. IN THIS SITUATION I HAVE FORGOTTEN THE MATTER. THE SAME WAS REALIZED WHILE DISCUSSING THE ACCOUNTS FOR F.Y.2016 - 17 IN COMMITTEE MEETING HELD IN THE 1 ST WEEK OF APRIL'17 THAT THE APPEAL WAS NOT FILED. 3 ITA NO. 218/VIZ/2017 ( SRI KANYAKA PARAMESWARI VARTHAKA SANGAM ) IM MEDIATELY WE APPROACHED SRI C.SUBRAHMANYAM CHARTERED ACCOUNTANT ON 1TH APR'17 WHO INFORMED THAT THE FILING OF APPEAL SHOULD BE WITHIN 60 DAYS FROM THE DATE OF RECEIPT OF THE ORDER. TO THIS I INFORMED THAT THE EVENTS THAT HAVE HAPPENED AS ABOVE CAUSING DELAY. HE INFORMED THAT SINCE THERE IS HUGE DELAY AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY IN FILING THE APPEAL IS TO BE FILED BEFORE THE HON'BLE BENCH FOR ITS CONSIDERATION AND CONDONATION OF DELAY IF IT IS SATISFACTORY. IN VIEW OF THE FACT THAT I SUFFERED INJURY TO MY ANKLE CAUSING BED REST OUR TAX CONSULTANT COULD NOT A DVISE IMMEDIATELY WHICH ORDER PASSED BY CIT(E) U/S.12AA(1)(B)(II) SHOULD BE APPEALED, AS WE ARE IGNORANT OF THE TAX LAWS & PROVISIONS OF THE APPEAL IT COULD NOT BE FILED WITHIN THE STIPULATED DATE. AS APPEAL IS FILED WITH A DELAY OF 233 DAYS THE HON'BLE BE NCH IS REQUESTED TO CONDONE THE DELAY IN THE INTEREST OF JUSTICE AND ADMIT THE APPEAL FOR ITS DISPOSAL ON - MERITS. F R O M T H E A B O V E , W E FIND T HERE IS A SUFFICIENT CAUSE IN NON - FILING OF THE APPEAL IN TIME. TH EREF ORE , IT IS A FIT CASE TO CONDONE THE DELAY. ACCORDINGLY, DELAY IS CONDONED. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A TRUST HAS FILED AN APPLICATION IN FORM 10A ON 31/12/2015 SEEKING REGISTRATION U/SEC. 12AA OF THE INCOME TAX ACT, 1961 (HEREI NAFTER REFERRED TO AS 'ACT'). THE MAIN OBJECTS OF THE ASSESSEE - TRUST ARE AS UNDER: - 1. TO DEVELOP MORAL, SOCIAL, ECONOMICAL AND POLITICAL AWARENESS AMONG MEMBERS AND GENERAL PUBLIC. 2. TO ESTABLISH LIBRARY FACILITY FOR THE DEVELOPMENT OF KNOWLEDGE AMONG MEMBERS AND GENERAL PUBLIC. 3. TO ESTABLISH SCHOOLS TO IMPART EDUCATION IN THE FIELD OF SMALL SCALE INDUSTRIES FOR THE BENEFIT OF MEMBERS AND GENERAL PUBLIC. 12 . TO CORRESPOND WITH THE GOVERNMENT AND TRADE UNIONS OF THIS COUNTRY AND OTHER COUNTRIES ABOUT THE DIFFICULTI E S 4 ITA NO. 218/VIZ/2017 ( SRI KANYAKA PARAMESWARI VARTHAKA SANGAM ) AND TO AVOID SUCH DIFFICULTIES IN TRADE IN RESPECT OF TRADERS AND MEMBERS OF THE TRUST. 13. TO EXPLAIN AND COMMUNICATE THE OPINION AND DETAILS OF THE BILLS, ACT S , COMMUNIQUES, ORDINANCES ISSUED/ PASSED BY THE GOVERNMENT IN RESPECT O F TRADE. TO TAK E NECESSARY MEASURES ON THE LOSSES RESULTANT IN RESPECT OF SUCH BILLS, ACTS. TO DISCUSS WITH THE GOVERNMENT TO PASS NEW BILLS, WHICH ARE USEFUL TO THE TRADERS. TO GIVE SUGGESTIONS TO THE TRADERS TO CONDUCT THEIR BUSINESS IN ACCORDANCE WIT H THE LAW. 14. TO OBSERVE THAT THE MEMBERS OF THE TRUST, IN THEIR OWN BUSINESS ENTITIES, NOT TO DEVELOP ANY UNHEALTHY COMPETITION, VIZ., BLACK MARKETING, BAD HABITS ETC. AMONG THEMSELVES. IF SO, ACTION SHOULD BE TAKEN AGAINST THEM AND TO ENCOURAGE GOOD HA BITS AMONG THEMSELVES. THE LD.CIT(E) BY CONSIDERING THE ABOVE OBJECTS OF THE TRUST, HE CAME TO A CONCLUSION THAT THE TRUST IS CREATED FOR MUTUAL BENEFITS OF THE TRUSTEES & MEMBERS , THEREFORE, REJECTED THE REGISTRATION SOUGHT U/SEC. 12AA OF THE ACT. 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 5 . LD. AR HAS SUBMITTED THAT THE ASSESSEE TRUST WAS CR E ATED IN THE YEAR 1915 IN A BUILDING , WHICH IS DONATED BY PHILANTHROPIST RAJA VENKATADRI APPARAO . AS ON DATE, CHARITABLE ACTIVITIES ARE CONDUCTING IN THE SAME BUILDING . IT IS ALSO SUBMITTED THAT SOME OF THE PORTION OF THE BUILDING HAS BEEN GIVEN FOR RENT AND RECEIPTS THEREON ARE UTILIZ ING FOR CHARITABLE ACTIVITIES. IN THE YEAR 1957, THE ASSESSEE GOT REGISTERED UNDER THE RE GISTRATION OF SOCIETIES ACT AND IN THE YEAR 1970, THE ASSESSEE GOT REGISTERED WITH THE 5 ITA NO. 218/VIZ/2017 ( SRI KANYAKA PARAMESWARI VARTHAKA SANGAM ) INCOME - TAX . FROM 1970 ONWARDS, THE ASSESSEE GETTING EXEMPTION U/SEC. 11 AND ALSO CONTINUING CHARITABLE ACTIVITIES . IN THE YEAR 2015 , THE ASSESSEE HAS APPLIED FOR REGISTRATION U/SEC. 12A FOR THE REASON THAT THE OLD CERTIFICATE WAS MISSING AND IN THE RECENT SYSTEM , UNLESS REGISTRATION IS GIVEN COMPU T ER IS NOT ACCEPTING THE RETURN OF INCOME. THEREFORE, A FRESH APPROVAL FOR 12A IS APPLI ED AND THE LD.CIT(E) WITHOU T CONSIDERING THE ACTIVITIES CARRIED BY THE ASSESSEE, REJECTED THE REGISTRATION U/SEC. 12A. THE ASSESSEE ALSO FILED VARIOUS DETAILS IN RESPECT OF ACTIVITIES CARRIED WHICH WAS POINTED OUT FROM THE PAPER BOOK AT PAGE NOS. 31 TO 33 & 3 8 AND SUBMITTED THAT THE ASSESSEE HAS INCURRED CERTAIN AMOUNTS TOWARDS CHARI TA BLE ACTIVITIES AND SUBMITTED THAT REGISTRATION U/SEC. 12A MAY BE GRANTED. 6 . ON THE OTHER HAND, LD.DR RELIED ON THE ORDER OF THE LD.CIT(E). 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIA L AVAILABLE ON RECORD AND ORDER OF THE LD.CIT(E) . 8 . FROM THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE IS AN OLD TRUST. FROM THE OBJECTS OF THE TRUST, IT IS CLEAR THAT THE ASSESSEE IS EXISTED TO UNDERTAKE CERTAIN CHARITABLE ACTIVITIES . FROM THE PAPER BOOK AT PAGE NOS. 31 TO 33 & 38 , IT IS VERY CLEAR THAT THE ASSESSEE HAS INCURRED CERTAIN EXPENDITURE FOR FREE EDUCATION, CULTURAL DEVELOPMENT EXPENSES, HEALTH & HYGIENE 6 ITA NO. 218/VIZ/2017 ( SRI KANYAKA PARAMESWARI VARTHAKA SANGAM ) AWARENESS EXPENSES , C HALIVENDRAM & PURE DRINKING WATER SUPPLY EXPENSES AND AN NADANAM EXPENSES . FROM THE ABOVE, IT IS CL E AR THAT THE ASSESSEE INCURRED CERTAIN EXPENDITURE TOWARDS CHARI T ABLE ACTIVITIES, THEREFORE, WE FIND TH A T LD.CIT(E) WITHOUT LOOKING INTO THE ACTIVITIES CARRIED BY THE ASSESSEE, SIMPLY DENIED THE REGISTRATION BY OBSERVING THAT IT IS ONLY A MUTUAL BENEFIT OF THE MEMBERS . WE FIND THAT THE LD.CIT(E) IS NOT CORRECT IN DE N YING THE REGISTRATION U/SEC. 12A OF THE A CT. IN OUR OPINION, WHEN THE ASSESSEE IS INCURRING CERTAIN EXPENDITURE TOWARDS CHARITABLE ACTIVITIES, IT CANNOT BE SAID THAT IT IS MUTUAL BENEFIT ASSOCIATION, THEREFORE THE ORDER PASSED BY THE LD.CIT(E) IS CANCELLED AND THE REGISTRATION U/SEC. 12AA TO THE TRU S T IS GRANTED. THUS, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. INSOFAR A S 80G IS CONCERNED, IT IS OPEN TO THE ASSESSEE TO FILE A FRESH APPLICATION BEFORE THE LD.CIT(E). IN TURN, THE LD. CIT(E) IS DIRECTED TO CONSIDER THE SAME IN ACCORDANCE WITH LAW. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 7 T H DAY OF AUGUST , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 7 T H AUGUST , 201 9 . VR/ - 7 ITA NO. 218/VIZ/2017 ( SRI KANYAKA PARAMESWARI VARTHAKA SANGAM ) COPY TO: 1. THE ASSESSEE SRI KANYAKA PARAMESWARI VARTHAKA SANGAM, D.NO.7 - 12/13, MAIN ROAD, GANAPAVARAM, W.G. DISTRICT. 2. THE REVENUE ITO(EXEMPTIONS), RAJAHMUNDRY. 3. THE CIT(E), HYDERABAD. 4. THE D.R . , VISAKHAPATNAM. 5. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.