Prashanth Memorial Trust, Hyd, Hyderabad V. DIT (Exemptions), Hyd, Hyderabad

ITA 277/HYD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5994 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-03-2016
• Assessment Year: misc
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NARASAMMA
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution; Reasonable cause; Condonation of delay
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.277 & 278/HYD/2015 PRASHANTH MEMORIAL TRUST, HYDERABAD. PAN AACTP0847L VS. THE DIT (EXEMPTIONS), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. S. NARASAMMA DATE OF HEARING : 0 9 . 03 .201 6 DATE OF PRONOUNCEMENT : 16 . 03 .201 6 ORDER PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE ASSESSEES APPEALS AGAINST THE REJECTION OF ASSESSEES APPLICATION FOR REGISTRATIO N UNDER SECTION 12AA AS WELL AS UNDER SECTION 80G OF THE I. T. ACT, 1961. 2. AT THE OUTSET, IT IS NOTICED THAT THERE IS A DE LAY OF 719 DAYS IN FILING OF THE APPEALS BEFORE THE TRI BUNAL. ALONG WITH THE APPEALS, THE ASSESSEE HAS ALSO FILED AN APPLICATION SEEKING CONDONATION OF DELAY. IN THE APPLICATION, IT IS STATED THAT THE ASSESSEE IS A CH ARITABLE TRUST CREATED WITH THE MAIN OBJECT OF ADVANCING LIT ERACY AND EDUCATION IN SUCH SUBJECTS AS THE TRUSTEES MAY THINK 2 ITA.NO.277 & 278/HYD/2015 PRASHANTH MEMORIAL TRUST, HYDERABAD. FIT AMONG THE PUBLIC AND EXTEND AND GRANT FINANCIAL HELP TO THE POOR, DESERVING AND NEEDY PERSONS AND ESTABL ISHING AND CONDUCTING LIBRARIES, SCHOOLS, COLLEGES, INSTIT UTIONS ETC., IT IS STATED THAT THE ASSESSEE TRUST IS REGIS TERED WITH THE DISTRICT REGISTRAR, HYDERABAD ON 28.01.2012 AND THE ASSESSEE HAS FILED APPLICATIONS IN FORMS NO.10A AND 10G BEFORE THE DIT(E), HYDERABAD ON 17.07.2012 SEEKING REGISTRATION UNDER SECTION 12AA AND UNDER SECTION 8 0G OF THE I.T. ACT. THE DIT(E) PASSED AN ORDER ON 29.01.2 013 REFUSING THE REGISTRATION BOTH UNDER SECTIONS 12AA OF THE ACT AS WELL AS 80G OF THE I.T. ACT. IT IS FURTHER S TATED THAT ONE OF THE TRUSTEES, JUSTICE S. ANANDA REDDY WAS LO OKING AFTER THE AFFAIRS OF THE TRUST AND RETIRED FROM THE JUDICIAL SERVICE DURING THE MONTH OF OCTOBER, 2012 AND SUBSEQUENTLY WAS APPOINTED AS THE LOKAYUKTA FOR THE STATE OF ANDHRA PRADESH. SUBSEQUENTLY, HE WAS ALSO ENTRUSTED WITH THE ARBITRATION MATTERS BY THE HONB LE HIGH COURT AND THEREFORE, HE WAS NOT IN A POSITION TO CLOSELY MONITOR THE MATTERS OF THE TRUST AT THAT PO INT OF TIME AND THAT THE ORDER OF THE DIT(E) REJECTING THE REGISTRATION UNDER SECTION 12AA AND 80G OF THE ACT WAS RECEIVED DURING THE ABSENCE OF JUSTICE ANANDA REDDY AND THEREFORE, IT ESCAPED HIS ATTENTION. IT IS STATED T HAT AFTER COMPLETION OF THE ASSIGNMENTS GIVEN BY THE HONBLE HIGH COURT TOWARDS THE END OF FEBRUARY, 2015 ONLY THE TRUSTEE, JUSTICE ANANDA REDDY WAS ABLE TO FIND OUT TIME FOR THE ACTIVITIES OF THE SOCIETY AND WHILE SORTING OUT THE ACCUMULATED PAPERS IN THE SECOND WEEK OF MARCH, 201 5, 3 ITA.NO.277 & 278/HYD/2015 PRASHANTH MEMORIAL TRUST, HYDERABAD. THE ORDER OF THE DIT(E) COME TO HIS NOTICE AND IMME DIATELY THEREAFTER, THE APPEAL WAS PREPARED ON 18.03.2015 A ND FILED BEFORE THE TRIBUNAL ON 19.03.2015. IT IS SUBM ITTED THAT RECKONING THE DATE OF THE ORDER 29.01.2013 AS THE DATE OF SERVICE, THE DELAY OF 719 DAYS WAS COMPUTED AND THE ASSESSEE PRAYED THAT THE DELAY BE CONDONED. 3. THE LD. COUNSEL FOR THE ASSESSEE, REITERATED THE SUBMISSIONS MADE BY THE TRUSTEE IN THE APPLICAT ION FOR CONDONATION OF DELAY. THE LD. D.R., HOWEVER, OP POSED THE CONDONATION OF DELAY. ON 06.08.2015, THE MATTER HAD COME UP FOR HEARING AND THE LD. D.R. HAD OBJECTED T O THE CONDONATION OF DELAY STATING THAT THE ORDER HAS BEE N SERVED ON THE TRUSTEE I.E., JUSTICE ANANDA REDDY. I N ORDER TO ENABLE THE DEPARTMENT TO VERIFY THE RECORDS, THE MATTER WAS ADJOURNED TO 18.11.2015. HOWEVER, THE LD. D.R. COULD NOT PRODUCE THE SAID DETAILS ON 18.11.2015 AN D ALSO ON FURTHER DATES OF HEARING I.E., ON 23.02.2016, 29.02.2016, 08.3.2016. ON 09.03.2016 I.E., TODAY, T HE LD. D.R. HAS FILED AN APPLICATION SEEKING ADJOURNMENT A GAIN FOR VERIFICATION OF THE RECORDS. HOWEVER, SINCE SUF FICIENT TIME HAS BEEN GRANTED TO THE REVENUE TO VERIFY AND PRODUCE THE RECORDS WITH REGARD TO SERVICE OF NOTIC E ON SHRI JUSTICE ANANDA REDDY IN PERSON, AND THE REVENU E HAS NOT BEEN ABLE TO COMPLY WITH THE DIRECTION OF T HIS TRIBUNAL, WE ARE NOT INCLINED TO GRANT ANY FURTHER TIME. THEREFORE, THE REQUEST FOR ADJOURNMENT WAS DECLINED . SINCE THE LD. D.R. HAS NOT BEEN ABLE TO REBUT THE 4 ITA.NO.277 & 278/HYD/2015 PRASHANTH MEMORIAL TRUST, HYDERABAD. CONTENTIONS OF THE ASSESSEE WITH ANY EVIDENCE TO TH E CONTRARY, WE ARE INCLINED TO ACCEPT THE CONTENTIONS OF THE ASSESSEE AS REASONABLE CAUSE FOR CONDONING THE DELA Y OF 719 DAYS IN FILING OF BOTH THE ABOVE APPEALS. 4. COMING TO THE MERITS OF THE CASE, WE FIND THAT THE LD. DIT(E) HAS REFUSED THE REGISTRATION UNDER S ECTION 12AA AS WELL AS APPROVAL UNDER SECTION 80G OF THE I .T. ACT ON THE GROUND THAT IN THE TRUST DEED, THERE IS NO M ENTION ABOUT THE DURATION AND THE IRREVOCABLE NATURE OF TH E TRUST AND FURTHER THAT THERE IS NO CLAUSE FOR DISSOLUTION OF THE TRUST. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOR GRANTING REGISTRATION U NDER SECTION 12AA AS WELL AS APPROVAL UNDER SECTION 80G OF THE ACT, THERE IS NO REQUIREMENT UNDER LAW TO HAVE A CL AUSE MENTIONING IRREVOCABLE NATURE OF THE TRUST. FURTHER HE HAS ALSO DRAWN OUR ATTENTION TO THE TRUST DEED TO DEMON STRATE THAT THERE IS A CLAUSE FOR DISSOLUTION OF THE TRUST AND ALSO FOR DISTRIBUTION OF THE ASSETS IN THE CASE OF SUCH DISSOLUTION. THEREFORE, ACCORDING TO HIM, THE LD. D IT(E) HAS NOT PROPERLY APPRECIATED THE CONTENTS OF THE TR UST DEED BEFORE REJECTION OF ASSESSEES APPLICATION. 5. THE LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE DIT(E). 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE DIT(E) HAS NOT PROPERLY APPRECIATED THE CONTENTS OF THE TRUST DEED 5 ITA.NO.277 & 278/HYD/2015 PRASHANTH MEMORIAL TRUST, HYDERABAD. PARTICULARLY THE CLAUSE FOR DISSOLUTION OF THE TRUS T. THEREFORE, IN VIEW OF THE SAME, WE SET ASIDE THE OR DERS OF THE DIT(E) AND DIRECT HIM TO RECONSIDER THE APPLICA TION OF THE ASSESSEE IN ACCORDANCE WITH LAW. 7. IN THE RESULT, APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16.03.2016. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 16 TH MARCH, 2016 VBP/- COPY TO : 1. PRASHANTH MEMORIAL TRUST, (PRASHANTH CHARITABLE TRUST), HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD. 3. ADIT(E) - II , HYDERABAD 4. D.R. ITAT A BENCH, HYDERABAD. 5 . GUARD FILE