K.C.A. Charitable Trust, Kolkata V. CIT(Exemption), Kolkata

ITA 285/KOL/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7269 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 24-04-2024
• Assessment Year: misc
• Appeal Filed On: 12-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 80G

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA श्री राज े श क ु मार, ल े खा सदस्य एवं श्री प्रदीप क ु मार चौब े , न्याधयक सदस्य क े समक्ष Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.: 285/KOL/2024 Assessment Year: N.A. K.C.A. Charitable Trust...........................................................Appellant [PAN: AAETK 6583 A] Vs. CIT (Exemption), Kolkata......................................................Respondent Appearances: Assessee represented by: Miraj D. Shah, A/R. Department represented by: Abhijit Kundu, CIT (D/R). Date of concluding the hearing : April 25 th , 2024 Date of pronouncing the order : May 10 th , 2024 ORDER Per Pradip Kumar Choubey, Judicial Member: The instant appeal filed by the assessee is directed against the order passed by ld. Commissioner of Income-tax (Exemption), Kolkata [in short ld. ‘CIT(Exemption)’] in relation to registration applied u/s 80G of the Income Tax Act, 1961 (in brevity the ‘Act’) dated 17.04.2023. 2. Ld. Counsel for the assessee before entering into the merit of the appeal has submitted with regard to his condonation petition as appeal had been filed after a delay of 242 days. Ld. Counsel for the assessee submitted that the delay as alleged to be caused was under honest and bona fide belief as the assessee has availed the forum of ld. CIT (Exemption) thrice once after I.T.A. No.: 285/ KOL/2024 Assessment Year: N.A. K.C.A. Charitable Trust. Page 2 of 5 another for remedy as it was in the impression of the assessee that the relief shall be granted by ld. CIT (Exemption) and roughly when the application has been rejected on 20.11.2023 then on the advice of the Sr. tax advisor the assessee has filed the present appeal before the ITAT. The submission of the ld. Counsel for the assessee is that delay which is alleged to be caused was not intentional rather due to the honest and bona fide belief. Hence, prayed to admit the appeal by condoning the delay. He has cited a decision of the Hon'ble Apex Court in the case of N. Balakrishnan vs. M. Krishnamurthy reported in [1998] 7 SCC 123. 2.1. The ld. D/R did not raise much emphasis on the condonation petition of the assessee. 2.2. We have perused the application of the condonation petition and it appears to us that the assessee has filed an application u/s 80G of the Act which was rejected. The assessee again re-applied for the registration u/s 80G(5) of the Act which was also rejected. Ultimately this appeal has been filed. It is settled law by the Hon'ble Apex Court that the primary function of the Court is to adjudicate the dispute between the parties and to advance substantial justice. The expression ‘sufficient cause’ employed by the Legislature is adequately elastic to enable the Court to apply the law in a meaningful manner which subserves the ends of justice. The Hon'ble Apex Court in a catena of decisions has further held that ‘The Court should not adopt an injustice-oriented approach in rejecting the application of condonation of delay.’ 2.3. Keeping in view the principles of the law as well as facts enumerated by the assessee in his condonation petition, the petition u/s 5 of the Limitation Act is allowed, delay is condoned and the appeal is taken for hearing. 3. Ld. Counsel for the assessee challenged the impugned order of ld. CIT (Exemption) thereby submitting that ld. CIT (Exemption) has erred in rejecting the application of the assessee on the ground being wrong selection of the Section code. Ld. Counsel for the assessee submits that it was not in dispute that the assessee is a charitable Trust and provisional approval was granted I.T.A. No.: 285/ KOL/2024 Assessment Year: N.A. K.C.A. Charitable Trust. Page 3 of 5 under u/s 80G(5)(iv) of the Act on 31.12.2021 with effect from 31.12.2021 to AY 2024-25 in Form 10AC. It has further been submitted that income tax portal allowed the assessee to re-apply for the registration u/s 80G of the Act and the assessee filed an application on 25.10.2022 which was rejected vide order dated 17.04.2023 as this was made under an incorrect Section code. Ld. Counsel for the assessee further submits that the first application made by the assessee dated 31.03.2022 was u/s 80G(5)(iii) of the Act. However, in the rejection order, ld. CIT (Exemption) rejected it by referring to Clause (ii) of the second proviso to Section 80G(5) of the Act, this caused the confusion in the assessee’s mind and due to this there was incorrect selection of the sub- clause. The prayer of the assessee is to direct the CIT to treat his application u/s 80G(5)(iii) of the Act to reconsider the same. Ld. Counsel for the assessee has cited the decision of this Tribunal in the case of Friends of Kolkata vs. CIT (Exemption), ITA No. 105/KOL/2024 (ITAT, Kolkata). 4. On the other hand, ld. D/R supported the order of ld. CIT (Exemption). 5. We have perused the case of the assessee and find the following facts— a) That the assessee is a Charitable Trust formed by a deed of Trust on 25/08/2021. b) The said Trust applied for its registration under first proviso of u/s 80G (5) of the IT Act 1961 vide form 10A which was filed on 08-12-2021. c) That provisional approval was granted under clause (iv) of first proviso to u/s 80G (5) of the IT Act 1961 dated 31-12-2021 w.e.f. 31-12-2021 to AY 2024-2025 in Form 10AC. d) The said Trust applied for its registration under clause (iii) of first proviso to u/s 80G (5) of the IT Act 1961 vide form 10AB which was filed on 31-03-2022. e) The hearing of this application was fixed by a notice dated 03-09-2022 on 12-09-2022. The said application was rejected by an order clause (II) of second proviso to u/s 80G (5) of the IT Act 1961 dated 22-09-2022 on the grounds that the assessee did not produce the relevant documents and there was no compliance with the notice and thus the application was rejected. Hence this appeal has been preferred. I.T.A. No.: 285/ KOL/2024 Assessment Year: N.A. K.C.A. Charitable Trust. Page 4 of 5 f) The income tax portal allowed the assessee to re-apply for the registration u/s 80G of the Act and the assessee filed an application on 25-10-2022 which was rejected by an order on 17-04-2023 as this was made under an incorrect sub clause (ii) of first proviso to u/s 80G (5) of the IT Act 1961 dated 25-10-2022. 6. We have perused the cited decision of this Coordinate Bench, Kolkata and the same is reproduced herein below: “7. We are of the view that it is only a technical error. The Id. CIT(Exemption) ought to have looked into the matter on this aspect and call for a clarification from the assessee. Once he was seized of the matter and aware that the Trust was enjoying registration under section 80G under old regime, it fulfilled all other conditions, then on account of wrong mention of section (iii) instead of (i), in its application should have not been given much weightage for rejecting the application on technical grounds. Therefore, we set aside the impugned order and relegate this issue to the file of ld. CIT(Exemption) with a direction that application of the assessee be treated under clause (i) and it be decided on merit.” 7. Keeping in view the above facts as well as the order passed by this Tribunal, we are of the view that the present case is squarely covered with the decision in the case of Friends of Kolkata (supra). Accordingly, we set aside the impugned order and remand back this issue to the file of ld. CIT (Exemption) with a direction that application of the assessee should be treated under Clause -1 and to be decided on merit. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10 th May, 2024. Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 10.05.2024 Bidhan (P.S.) I.T.A. No.: 285/ KOL/2024 Assessment Year: N.A. K.C.A. Charitable Trust. Page 5 of 5 Copy of the order forwarded to: 1. K.C.A. Charitable Trust, 5 th Floor, Continental Chambers, 15A, Hemanta Basu Sarani, Dalhousie, Kolkata, West Bengal, 700 001. 2. CIT (Exemption), Kolkata. 3. CIT(A)- 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata