The Punjab Building & Other Construction Workers Welfare Board, Chandigarh V. CIT I, Chandigarh

ITA 296/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77135 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 26-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Assessee Lawyers: RAKESH MARWAHA
• Keywords: Bonafide belief; Condonation of delay
• Section: 12A; 12AA; 6; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.296/CHD/2014 ASSESSMENT YEAR : 2010-11 THE PUNJAB BUILDING & OTHER VS THE COMMISSIONER OF INCOME TAX-I CONSTRUCTION WORKERS WELFARE BOARD, CHANDIGARH. 17 BAYS BUILDING, SECTOR 17, CHANDIGARH. PAN : AAALP0698P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH MARWAHA RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 15.05.2014 DATE OF PRONOUNCEMENT : 30.06.2014 ORDER PER SUSHMA CHOWLA, JM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX-I, CHANDIGARH DATED 25.0 8.2010 RELATING TO ASSESSMENT YEAR 2010-11 AGAINST THE ORDER PASSED UN DER SECTION 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : I) THAT THE ORDER OF LD. CIT-I, CHANDIGARH REJECTIN G THE APPELLANT REQUEST FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME T AX ACT, 1961 IS BAD IN LAW AND ON THE FACTS. II) THAT THE LD. CIT-I CHANDIGARH HAS REJECTED THE REQUEST FOR REGISTRATION UNDER SECTION 12AA WITHOUT GIVING SUFF ICIENT OPPORTUNITY TO THE APPELLANT. III) THAT THE LD. CIT-I, CHANDIGARH HAS COM PLETELY IGNORED THE PURPOSE AND OBJECTS FOR WHICH THE TRUST WAS FORMED AS DETAI LED IN THE DOCUMENTS ATTACHED WITH THE FORM FOR REGISTRATION. IV) THAT THE LD. CIT-I CHANDIGARH HAS FAILE D TO APPRECIATE THE NATURE OF CHARITABLE ACTIVITIES PROPOSED TO BE CARRIED OUT BY THE TRUST AS DETAILED IN THE TRUST DEED FILED ALONG WITH THE APPLICATION FOR REGISTRATION. 2 3. THE PRESENT APPEAL FILED BY THE ASSESSEE BEFORE THE TRIBUNAL WAS FILED AFTER A DELAY OF 1244 DAYS. THE PRELIMINARY ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO CONDONATION OF DELAY IN FI LING THE APPEAL BELATEDLY BEFORE THE TRIBUNAL. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE COMMISS IONER OF INCOME TAX-I CHANDIGARH PASSED ORDER UNDER SECTION 12AA OF THE A CT ON 25.08.2010. THE SAID ORDER WAS RECEIVED BY THE ASSESSEE ON 30.08.20 10. THE APPEAL WAS FILED BEFORE THE TRIBUNAL ON 26.03.2010 I.E. AFTER A DELA Y OF 1244 DAYS. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY WHICH IS PLACED AT PAGES 1 TO 21 OF THE PAPER BOOK. THE REASON FOR TH E DELAY IN FILING THE PRESENT APPEAL WAS ATTRIBUTED TO THE ADVICE OF THE TAX CONSULTANT AND A PRAYER WAS MADE FOR CONDONING THE DELAY OF 1244 DAYS IN FI LING THE APPEAL BEFORE THE TRIBUNAL. AN AFFIDAVIT OF THE DY. SECRETARY OF THE ASSESSEE BOARD WAS ALSO FILED WHICH IS AVAILABLE ON RECORD. 5. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE APPLICATION FOR REGISTRATION UNDER SECTION 12A WAS FILED THROUGH TH E COUNSEL AND AS PER HIS LEGAL ADVICE, WHICH IS PLACED AT PAGE 30 OF THE PAP ER BOOK, PRESENT APPEAL WAS FILED. IT WAS FURTHER POINTED OUT BY THE LD. A R FOR THE ASSESSEE THAT THE BOARD CONSTITUTES OF PETTY WORKERS AND THE HUGE DEM AND CREATED IN THE CASE AFTER REJECTION OF THE REGISTRATION UNDER SECTION 12AA OF THE ACT COMPELLED THE ASSESSEE TO FILE APPEAL THOUGH AFTER A DELAY. 6. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE APPLICATION UNDER SECTION 12A OF THE ACT WAS MOVED W.E.F. 01.04.2009 WHICH WAS REJECTED ON 25.08.2010 AS THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT. IT WAS FURTHER POINTED OUT BY THE LD. DR FOR THE REVEN UE THAT THE ASSESSEE HAS FAILED TO FILE ANY EXPLANATION FOR THE DELAY BETWEE N THE YEARS 2010 TO 2012. THE ASSESSEE THEN MOVED ANOTHER APPLICATION BEFORE COMMISSIONER OF INCOME TAX UNDER SECTION 12AA OF THE ACT AND REGIST RATION WAS GRANTED VIDE 3 ORDER DATED 14.03.2012 W.E.F. 01.04.2011 AGAINST WH ICH YEAR APPEAL WAS PENDING BEFORE THE TRIBUNAL. THE LD. DR FOR THE RE VENUE STRESSED THAT THE ASSESSEE HAD WAIVED HIS RIGHT TO CONTEST THE ORIGIN AL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX AS THEY HAD MADE ANOTHER APPLICATION FOR THE NEXT YEAR PURSUANT TO WHICH REGISTRATION HAD BEEN G RANTED TO THE ASSESSEE. THE LD. DR FOR THE REVENUE FURTHER POINTED OUT THAT AS ON 14.03.2012, THE ASSESSEE WAS AWARE THAT THE REGISTRATION WAS GRANTE D W.E.F. 01.04.2011 AND STILL NO APPEAL WAS FIELD AGAINST THE ORIGINAL YEAR OF DISMISSAL OF REGISTRATION AND THE ASSESSEE WOKE UP ONLY WHEN DEMAND WAS CREAT ED AGAINST THE ASSESSEE. 7. IN REJOINDER, LD. AR FOR THE ASSESSEE POINTED OU T THAT AGAINST THE ORDER GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT DATED 14.03.2012, ONE OF THE GROUNDS RAISED IN THE APPEAL FILED BEFORE TH E TRIBUNAL IS THAT REGISTRATION SHOULD BE GRANTED FOR EARLIER YEARS AN D IT IS ONLY WHEN THE COUNSEL WAS CHANGED, THE STEP WAS TAKEN TO FILE AN APPEAL AGAINST THE ORIGINAL ORDER OF DISMISSAL OF REGISTRATION UNDER S ECTION 12A OF THE ACT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE BOARD WAS CREAT ED ON 30.04.2009 AND HAD APPLIED FOR REGISTRATION UNDER SECTION 12A OF THE A CT IN FORM NO. 10A ON 31.03.2010. THE ASSESSEE FAILED TO SUBMIT ANY DETA ILS REGARDING CHARITABLE ACTIVITIES CARRIED ON BY IT AND THE ACCOUNTS OF THE ASSESSEE WERE FOUND TO BE NOT AUDITED. FURTHER THE ASSESSEE FAILED TO APPEAR BEFORE THE COMMISSIONER OF INCOME TAX AND IN VIEW THEREOF, THE APPLICATION OF THE ASSESSEE BOARD SEEKING REGISTRATION U/S12A WAS REJECTED VIDE ORDER PASSED U/S12AA OF THE ACT DATED 25.08.2010. THE PLEA OF THE ASSESSEE VI DE THE APPLICATION MOVED FOR CONDONATION OF DELAY AND ALSO IN THE AFFIDAVIT FILED WAS THAT THE ASSESSEE BOARD WAS ADVISED BY TAX CONSULTANT THAT FRESH APPL ICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT SHOULD BE FILED AND TH E SAME WAS FILED ON 30.09.2011. THE COMMISSIONER OF INCOME TAX VIDE OR DER DATED 14.03.2012 4 GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT W .E.F. 01.04.2011. A REPRESENTATION WAS MADE TO THE COMMISSIONER OF INCO ME TAX-I CHANDIGARH TO ALLOW REGISTRATION FOR THE PRIOR PERIOD, WHICH WAS REJECTED VIDE LETTER DATED 22.08.2012. THE BOARD THEREAFTER FILED AN AP PEAL BEFORE THE TRIBUNAL AGAINST LETTER DATED 22.08.2012 AND ORDER DATED 14. 03.2012. TWO APPEALS WERE FILED BY THE ASSESSEE, ONE ON 10.09.2012 AGAIN ST LETTER DATED 22.08.2012 AND OTHER ALSO ON 10.09.2012 AGAINST ORD ER PASSED UNDER SECTION 12AA OF THE ACT ON 14.03.2012. BOTH THE SAID APPEA LS, AS POINTED OUT BY THE LD. AR FOR THE ASSESSEE WERE PENDING FOR DISPOSAL B EFORE THE TRIBUNAL. HOWEVER, WHILE COMPLETING THE ASSESSMENT FOR ASSESS MENT YEARS 2010-11 AND 2011-12, HUGE ADDITIONS WERE MADE DUE TO NON-REGIST RATION U/S12A OF THE ACT. BECAUSE OF THE SAID DEMANDS RAISED FOR THE RE SPECTIVE TWO YEARS, THE ASSESSEE CLAIMED TO HAVE TAKEN ADVICE FROM A DIFFER ENT TAX CONSULTANT IN THE MATTER WHO IN TURN ADVISED THE ASSESSEE TO FILE AN APPEAL AGAINST THE ORDER DATED 25.08.2010 OF THE COMMISSIONER OF INCOME TAX- I, CHANDIGARH REJECTING THE APPLICATION FOR REGISTRATION UNDER SE CTION 12A OF THE ACT. THE PRESENT APPEAL IN VIEW THEREOF, WAS FILED AFTER A D ELAY OF 1244 DAYS. 9. THE MOOT ISSUE RAISED IN THE APPEAL IS THE MAINT AINABILITY OF THE APPEAL WHERE THE APPEAL HAS BEEN FILED AFTER A DELA Y OF 1244 DAYS. UNDER THE PROVISIONS OF INCOME TAX ACT, THE APPEALS BEFORE TH E TRIBUNAL ARE TO BE FILED WITHIN 60 DAYS FROM THE RECEIPT OF THE ORDER APPEAL ED AGAINST. FROM THE PERUSAL OF THE RECORDS, SEQUENCE OF EVENTS IS AS UN DER : 30.04.209 ASSESSEE BOARD WAS CREATED. 31.03.2010 APPLICATION MOVED FOR REGISTRATION UNDER SECTION 12A. 25.08.2010 APPLICATION FOR REGISTRATION REJECTED BY THE CIT-I FOR FAILURE TO AUDIT THE ACCOUNTS FOR YEAR ENDING 31.03.2010 AND FOR NON-APPEARAN CE BEFORE THE CIT. 26.09.2011 ACCOUNTS OF THE BOARD AUDITED. 30.09.2011 ASSESSEE MOVED FRESH APPLICATION FOR REGISTRATION UNDER SECTION 12A. 5 14.03.2012 REGISTRATION WAS GRANTED VIDE ORDER UNDER SECTION 12AA OF THE ACT BY THE CIT-I W.E.F. 01.04.2011. 07.05.2012 REPRESENTATION WAS MADE TO CIT-I TO GR ANT REGIS- TRATION FROM 30.4.2009 I.E. DATE OF CONSTITUTION OF THE BOARD. 22.08.2012 THE CIT-I REJECTED REPRESENTATION OF T HE ASSESSEE TO GRANT REGISTRATION FROM 30.04.2009. 03.09.2012 ASSESSEE BOARD WAS ADVISED BY THE TAX CONSULTANT BY LETTER DT. 03.09.2012 TO FILE APP EAL BEFORE THE TRIBUNAL AGAINST ORDER DT. 14.03.201 2 AND LETTER DT. 22.08.2012. 10.09.2012 TWO APPEALS WERE FILED BY THE ASSESSEE BEFORE THE TRIBUNAL, WHICH ARE STILL PENDING. -- ASSESSMENT FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12 WERE COMPLETED MAKING ADDITIONS IN THE HANDS OF THE ASSESSEE. -- THAT DUE TO THE HUGE DEMANDS, ADVICE WAS TAKE N FROM NEW COUNSEL. 26.03.2014 AS ADVISED BY THE NEW COUNSEL, APPEAL WAS FILED AGAINST THE FIRST ORDER OF REJECTION BY T HE CIT-I. 26.03.2014 APPEAL WAS FILED AFTER DELAY OF 1244 DAYS. 10. IN THE FACTS OF THE PRESENT CASE, THE ACCOUNTS OF THE ASSESSEE BOARD FOR THE ASSESSMENT YEAR 2010-11 WERE FINALIZED AND AUDI TED ON 26.09.2011 PURSUANT TO WHICH ANOTHER APPLICATION UNDER SECTION 12A OF THE ACT WAS FILED BEFORE THE COMMISSIONER OF INCOME TAX, CHANDIGARH O N 30.09.2011 AND REGISTRATION WAS GRANTED UNDER SECTION 12AA OF THE ACT VIDE ORDER DATED 14.03.2012. THE SAID REGISTRATION WAS GRANTED W.E. F. 01.04.2011. HOWEVER, NO REGISTRATION WAS GRANTED FOR THE EARLIER PERIOD BY THE COMMISSIONER OF INCOME TAX-I AND THE REPRESENTATION MADE BY THE ASS ESSEE WAS REJECTED ON 22.08.2012. THE ASSESSEE, THEREAFTER WAS ADVISED BY THE TAX CONSULTANT TO FILE AN APPEAL BEFORE THE TRIBUNAL AGAINST BOTH THE ORDERS I.E. ORDER DATED 14.03.2012 AGAINST THE ORDER REFUSING TO GRANT REGI STRATION UNDER SECTION 12A 6 OF THE ACT AND ALSO AGAINST THE LETTER DATED 22.08. 2012 REJECTING THE REPRESENTATION MADE FOR GRANTING THE REGISTRATION F ROM AN EARLIER PERIOD. THE ASSESSEE HAS FILED TWO APPEALS ON 10.09.2012 BEFORE THE TRIBUNAL I.E. ITA NOS. 924 & 925/CHD/2012 WHEREIN THE ASSESSEE CLAIMS TO HAVE RAISED AN ISSUE FOR GRANT OF REGISTRATION RETROSPECTIVELY W.E .F. 30.04.2009 INSTEAD OF 01.04.2011. THE CLAIM OF THE ASSESSEE BEFORE US IS THAT THE SAID ISSUES WERE RAISED AS PER THE LEGAL ADVICE GIVEN BY THE TAX CON SULTANT, COPY OF WHICH IS PLACED AT PAGE 30 OF THE PAPER BOOK AND THE ASSESSE E BOARD UNDER THE BONAFIDE BELIEF RAISED GROUNDS OF APPEAL BEFORE THE TRIBUNAL TO DIRECT THE COMMISSIONER OF INCOME TAX-I CHANDIGARH TO GRANT RE GISTRATION RETROSPECTIVELY. THE SAID STAND OF THE ASSESSEE WA S ON THE ADVICE OF HIS REGULAR TAX CONSULTANT AND WAS CLAIMED TO HAVE BEEN BONAFIDELY MADE UNDER WHICH PRAYER WAS MADE BEFORE THE TRIBUNAL TO DIRECT THE COMMISSIONER OF INCOME TAX-I CHANDIGARH TO GRANT REGISTRATION RETRO SPECTIVELY W.E.F. 30.04.2009. ADMITTEDLY AFTER THE AMENDMENT TO SECT ION 12AA OF THE ACT, THE COMMISSIONER OF INCOME TAX WHILE GRANTING REGIS TRATION TO A TRUST, ASSOCIATION OR BOARD AND PASSING ORDER UNDER SECTIO N 12AA OF THE ACT, CAN GIVE SUCH REGISTRATION ONLY FROM THE DATE OF MAKING THE APPLICATION AND NOT FOR ANY PERIOD PRIOR TO THEREFROM. THE PLEA OF TH E ASSESSEE BEFORE US WAS THAT IT WAS ACTING ON THE ADVICE OF ITS TAX CONSULT ANT AND WAS NOT AWARE OF THE SAID PROVISIONS OF THE ACT. IN THE ENTIRETY O F THE SAID FACTS AND CIRCUMSTANCES, THE ASSESSEE PRAYED THAT THE DELAY I N FILING THE PRESENT APPEAL BE CONDONED AND THE MATTER BE RESTORED BACK TO THE COMMISSIONER OF INCOME TAX-I TO DECIDE THE SAME IN ACCORDANCE WITH LAW. T HE PRESENT APPEAL WAS FILED BY THE ASSESSEE AFTER A FURTHER GAP OF ABOUT 2 YEARS ON 26.03.2014 FROM THE DATE OF REFUSAL BY THE COMMISSIONER OF INCOME T AX AGAINST THE REQUEST TO GRANT REGISTRATION RETROSPECTIVELY. 11. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD WAS THAT WHEN THE REGULAR ASSESSMENT FOR ASSESSMENT YEAR 2010-11 WAS COMPLETED ON 7 23.11.2012 AND THEREAFTER THE REGULAR ASSESSMENT WA S COMPLETED FOR ASSESSMENT YEAR 2011-12 ON 26.12.2013, ADVICE OF AN OTHER CONSULTANT WAS SOUGHT WHO AFTER EXAMINING THE ENTIRE FACTS AND LEG AL POSITION ADVISED TO BOARD THAT THE CORRECT COURSE OF ACTION WAS TO FILE AN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER DATED 25.08.2010. IN TH E TOTALITY OF THE ABOVESAID FACTS AND CIRCUMSTANCES WHERE THE ASSESSEE ADMITTED LY WAS ACTING ON THE ADVICE OF THE TAX CONSULTANT AND BECAUSE OF THE MUL TIPLICITY OF THE PROCEEDINGS AND UNDER THE BONAFIDE BELIEF THAT THE COMMISSIONER OF INCOME TAX HAD THE POWER TO GRANT REGISTRATION RETROSPECTI VELY, WHICH WAS ALLOWABLE UNDER THE PRE-AMENDED PROVISIONS OF THE ACT, IT CAN NOT BE SAID THAT THE ASSESSEE WAS NOT PREVENTED BY SUFFICIENT CAUSE IN N OT FILING THE APPEAL IN TIME. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANC ES AND ACTING ON THE ADVICE OF ITS TAX CONSULTANT AND THEREAFTER ACTING ON THE ADVICE OF THE CHANGED TAX CONSULTANT, WE FIND MERIT IN THE APPLICATION MOVED BY THE ASSESSEE FOR CONDONATION OF DELAY AND THE DELAY OF 1244 DAYS IN THE PRESENT CASE IS CONDONED. HOWEVER, SINCE THE ISSUE WAS DISMISSED I N-LIMINE BY THE COMMISSIONER OF INCOME TAX-I CHANDIGARH AS THE ASSE SSEE HAD FAILED TO APPEAR BEFORE THE AUTHORITY, WE DIRECT THE ASSESSEE TO APPEAR BEFORE COMMISSIONER OF INCOME TAX-I CHANDIGARH AND FURNISH COMPLETE INFORMATION AND THE COMMISSIONER OF INCOME TAX-I CH ANDIGARH SHALL DECIDE THE ISSUE OF GRANT OF REGISTRATION UNDER SECTION 12 A OF THE ACT IN ACCORDANCE WITH LAW. REASONABLE OPPORTUNITY OF HEARING SHALL BE GIVEN TO THE ASSESSEE. AS WE ARE SETTING ASIDE THE ISSUE BACK TO THE COMMI SSIONER OF INCOME TAX, WE ARE NOT ADJUDICATING THE ISSUE RAISED ON MERITS. ADMITTING THE APPEAL OF THE ASSESSEE AND CONDONING THE DELAY IN FILING THE PRESENT APPEAL BEFORE THE TRIBUNAL, WE SET ASIDE THE ISSUE ON MERITS TO T HE FILE OF COMMISSIONER OF 8 INCOME TAX-I, CHANDIGARH. THE GROUNDS OF APPEAL RA ISED BY THE ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH JUNE,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR IT AT,CHD.