Institute of Pharmacy & Technology, Cuttack V. CIT, Cuttack

ITA 300/CTK/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0788 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 18-11-2010
• Assessment Year: misc
• Appeal Filed On: 21-12-2009
• Court: TRIBUNAL
• Department Lawyers: P R MOHANTYSASWT ACHARYA ARS
• Assessee Lawyers: A K GAUTAMS K DASH DRS
• Keywords: Retrospective amendment; Reasonable cause; Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 300/CTK/2009 AND ITA NO .01/CTK/2011 / ASSESSMENT YEAR INSTITUTE OF PHARMACY & TECHNOLOGY, SALEPUR,DIST. CUTTACK 754 202 PAN: AAAT15092 C - - - VERSUS - COMMISSIONER OF IN COME - TAX, CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI A.K.GAUTAM/S.K.DASH, DRS / FOR THE RESPONDENT: / SHRI P.R.MOHANTY/SASWT ACHARYA, ARS / ORDER . . . , , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . T HESE TWO APPEALS ARE BY THE ASSESSEE AGAINST TWO DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME TAX. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A SOCIETY , REGISTERED UNDER SOCIETIES R EGISTRATION ACT, 1860 VIDE REGISTRATION NO.5226/371/1987 - 88 DT.19.11.1987. THE ASSESSEE - SOCIETY GOT APPROVAL FROM THE ALL INDIA COUNCIL FOR TECHNICAL EDUCATION, PHARMACY COUNCIL OF INDIA AND GOVT. OF ORISSA AFFILIATED TO BPUT, ROURKELA TO IMPART EDUCATION IN THE FIELD OF PHARMACY AND TECHNOLOGY BY OPENING A CAMPUS AT S A LIPUR TO ACHIEVE THE OBJECTS AS ENUMERATED IN ITS ARTICLES AND MEMORANDUM. THE ASSESSEE FILED AN APPLICATION DT.9.5.2006 AND AGAIN ON 12.12.2006 IN FORM NO.10A BEFORE THE COMMISSIONER OF INCO ME TAX SEEKING REGISTRATION U/S.12A OF THE INCOME - TAX ACT,1961 W.E.F. 19.11.1987 I.E., FROM THE DATE OF THE CREATION OF THE SOCIETY , ALONG WITH A PETITION FOR CONDONATION OF DELAY IN FILING THE SAID APPLICATION. THE LEARNED CIT, VIDE ORDER DT.12.9.2007, G RANTED REGISTRATION W.E.F. 1.4.2006. I.T.A.NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 2 HOWEVER, THE LEARNED CIT DISCUSSED NOTHING IN THE ORDER FOR GRANTING REGISTRATION W.E.F. 1.4.2006 VIDE ORDER DT.12.9.2007 WITHOUT MENTIONING ANYTHING REGARDING THE PRAYER TO CONDONE THE DELAY AND GRANT OF REGISTRATION W.E.F . 19.11.1987 NOR THERE IS ANYTHING MENTIONED ABOUT THE GENUINENESS OF THE SOCIETY AND ITS FUNCTIONING . THEREFORE, THE ASSESSEE AGAIN APPROACHED THE LEARNED CIT VIDE PETITIONS DT.4.9.2009 AND 9.9.2009 TO GIVE EFFECT OF THE REGISTRATION U/S.12A W.E.F. 19.11. 1987 BY CONDONING THE DELAY IN FILING THE APPLICATION IN FORM NO.10A, WHICH WERE DISMISSED BY THE LEARNED CIT VIDE HIS ORDER DT.5.10.2009. IT IS AGAINST BOTH THE ORDERS DT.12.9.2007 AND DT.5.10.2009 THAT THE ASSESSEE - SOCIETY HAS FILED THE PRESENT APPEALS HER E BEFORE THE TRIBUNAL. 3. AT THE OUTSET THE LEARNED AR OF THE ASSESSEE DID NOT PRESS THE APPEAL BEARING ITA NO.300/CTK/2009 AGAINST DISMISSAL OF PETITIONS FILED BY THE ASSESSEE U/S.154 OF THE INCOME - TAX ACT,1961 SINCE THE ISSUE IN BOTH THE APPEALS ARE COMM ON. THEREFORE, ITA NO.300/CTK/2009 FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 4. THE ASSESSEE HAS FILED THE APPEAL BEARING ITA NO.01/CTK/2011 BELATED BY 1147 DAYS ALONG WITH A PETITION FOR CONDONATION OF THE SAID DELAY. THE LEARNED DR OBJECTED TO S UCH PRAYER. 5. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE RECEIVED THE CERTIFICATE OF REGISTRATION U/S.12AA OF THE INCOME - TAX ACT,1961 ON 12.9.2007 GRANTING REGISTRATION W.E.F . 1.4.2006 INSTEAD OF THE PRAYER OF THE ASSESSEE TO GR ANT THE SAME W.R.E.F 19.11.1987 BUT WITHOUT GIVING ANY REASON FOR GRANTING REGISTRATION W.E.F. 1.4.2006. THEREFORE, THE ASSESSEE FILED FOR RECTIFICATION PETITIONS U/S.154 ON DIFFERENT TWO DATES, BOTH OF WHICH WERE DISMISSED BY THE LEARNED CIT ON 5.10.2009 AGAINST WHICH THE ASSESSEE FILED APPEAL BEARING ITA I.T.A.NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 3 NO. 300/CTK/2009, WHICH WAS IN TIME BUT THAT WAS NOT MAINTAINABLE UNDER LAW IN VIEW OF NO PROVISION FOR APPEAL AGAINST SUCH ORDERS AND HENCE, IT WAS DI SMISSED AS NOT PRESSED. AFTER DISMISSAL OF THE RECTIFICATION, THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL AGAINST THE ORIGINAL ORDER DT.12.9.2007. THE ABOVE FACTS WERE NOT DISPUTED BY THE LEARNED DR AT THE TIME OF HEARING. CONSIDERING THE ABOVE FACTS AND TAKING INTO ACCOUNT THAT THE LEARNED AR OF THE ASSESSEE DID NOT PRESS APPEAL BEARING ITA NO.300/CTK/2009, WE HOLD THAT THE DELAY IN FILING THE APPEAL BEARING ITA NO.1/CTK/2011 IS NOT INTENTIONAL OR DELIBERATE BUT DUE TO REASONABLE CAUSE , AS THE MANAGEMENT OF THE SOCIETY IS ENGAGED IN STARTING THE INSTITUTION AND THEREBY FULFILL THE OBJECTS OF THE OBJECT OF THE ASSESSEE - SOCIETY. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL BEARING ITA NO.1/CTK/2011 FOR HEARING. 6 . THE ONLY ISSUE IN APPEAL NO.01/CTK/ 2011 TO BE DECIDED HERE IS WHETHER THE REGISTRATION U/S.12A COULD BE GRANTED W.E.F. 19.11.1987 I.E., DATE OF CREATION OF THE SOCIETY BY CONDONING THE DELAY IN FILING THE APPLICATION IN FORM NO.12A, AS AGAINST 1.4.2006 GRANTED BY THE LEARNED CIT. 7 . THE LEA RNED AR OF THE ASSESSEE CONTENDED THAT THE LEARNED CIT SHOULD HAVE GRANTED REGISTRATION U/S.12A W.E.F. 19.11.1987 BY CONSIDERING THE SUBMISSIONS FOR THE DELAY IN FILING APPLICATION IN FORM NO.12A. HE FURTHER SUBMITTED THAT THE ASSESSEE SOCIETY HAS BEEN CAR RYING OUT THE OBJECT S OF THE SOCIETY THROUGHOUT THE PERIOD FROM 1987 TILL DATE WITHOUT ANY CHANGE IN THE SAME. THEREFORE, IT WILL BE ONLY A MATTER OF JUDICIAL PROPRIETY TO TREAT THE ASSESSEE AS A SOCIETY DULY REGISTERED WITH RETROSPECTIVE EFFECT. ON THE C ONTRARY, THE LEARNED CIT HAS GRANTED REGISTRATION W.E.F. 1.4.2006 ONLY BUT WITHOUT GIVING ANY REASON FOR REJECTING THE CLAIM OF THE ASSESSEE FOR REGISTRATION SINCE THE DATE OF ITS INCEPTION , I .E., FROM 19.11.1987. MORE PARTICULARLY THERE IS NO FINDING IN T HE ORDER DT.12.09.2007 OF THE CIT ABOUT THE I.T.A.NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 4 GENUINENESS OF THE SOCIETY OR ITS OBJECTS AND CARRYING OUT THE SAME BY THE MANAGEMENT OF THE SOCIETY. APART FROM THAT THERE IS NO OBSERVATION TO THE EFFECT THAT THE ASSESSEE SOCIETY IS GAINING ANY PROFIT BY RUNNI NG THE INSTITUTION ESTABLISHED BY IT. THE MAIN OBJECT OF THE SOCIETY IS TO GIVE EDUCATION IN TECHNICAL AND PHARMACY TO THE PEOPLE AT THE LOWEST POSSIBLE COST WITHOUT SACRIFICING THE QUALITY OF THE EDUCATION. ONCE, THE LEARNED CIT HAS NO DOUBT ABOUT THE GEN UINENESS OF THE SOCIETY OR ITS OBJECTS OR ABOUT THE PROFIT MOTIVE OF THE SOCIETY, THE LEARNED CIT OUGHT TO HAVE GRANTED THE REGISTRATION AS PRAYED FOR W.R.E.F. 19.11.1987. IN THAT VIEW OF THE MATTER, THE ORDER OF THE LEARNED CIT DT.12.09.2007 IS INVALID TO THE EXTENT OF COMMENCEMENT OF THE REGISTRATION OF THE SOCIETY. THEREFORE, THE LEARNED CITS ORDER IS NOT IN ACCORDANCE WITH LAW ON THE SUBJECT AND HENCE, IT IS NOT AT ALL SUSTAINABLE FOR LEGAL SCRUTINY AND THEREFORE, SOUGHT FOR A DIRECTION TO THE LEARNED CIT TO GIVE THE REGISTRATION TO THE ASSESSEE SOCIETY W.R.E.F. 19.11.1987. 8 . CONTRARY TO THIS, THE LEARNED DR MR. A.K.GAUTAM SUBMITTED THAT THE PROVISIONS U/S.12AA CLEARLY MANDATE THAT THE REGISTRATION IS TO BE GIVEN FROM THE YEAR WHEN THE APPLICATION IS F ILED. THEREFORE, THE ORDER OF THE LEARNED CIT IS WELL WITHIN THE LAW APPLICABLE THERETO AND HENCE, IT IS NOT SUSCEPTIBLE FOR ANY INTERFERENCE. 9 . ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE FACTS AND THE RELEVANT PROVISIONS OF LAW APPLICATION THERETO, WE ARE OF THE CONSIDERED VIEW THAT THE DEPARTMENT HAS NOT DOUBTED NEITHER THE GENUINENESS NOR THE ESTABLISHMENT RUN BY THE SOCIETY NOR THERE IS ANYTHING OBSERVATION REGARDING THE REJECTION OF THE PETITIONS PRAYING CONDONATION OF DELAY FLED BY THE ASSESSEE. ON THE OTHER HAND, IN THE ORDER DT.12.9.2007 THERE IS NO FINDING BY THE CIT THAT THE ASSESSEE HAS NOT FILED ANY DELAY CONDONATION PETITION NOR THERE IS ANY FINDING I.T.A.NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 5 THAT THE SOCIETY IS NOT GENUINE AND NOT CARRYING OUT THE OBJECTS OF THE ASSESSEE AND THE ASSESSEE IS MINTING MONEY IN THE GUISE OF SOCIETYS OBJECTS GIVING EDUCATION TO THE PEOPLE AT THE LOWEST REASONABLE CAUSE. THERE IS NO MENTION ALSO ABOUT THE MISAPPLICATION OF THE FUNDS RECE IVED BY THE ASSESSEE AT ANY POINT OF TIME SINCE ITS INCEPTION. NOR IT IS MADE OUT BY THE DEPARTMENT THAT THE ASSESSEE IS DIVERTING ITS FUNDS TO THE NON - OBJECTS OF THE SOCIETY. IN THAT VIEW OF THE MATTER , THE IMPUGNED ORDER OF THE LEARNED CIT GRANTING REGI STRATION FROM 1.4.2006 INSTEAD OF 19.11.1987 IS NOT AT ALL SUSTAINABLE FOR JUDICIAL SCRUTINY MORE SO IN THE ABSENCE OF ANY REASON OR FINDINGS REGARDING THE NON - WORKING OUT OF THE OBJECTS OF THE SOCIETY. MORE SO WHEN THERE IS NOTHING MADE OUT BY THE LEARNE D CIT TO REJECT THE CLAIM OF THE ASSESSEE FOR REGISTRATION W.E.F.19.11.1987 AS PRAYED FOR IN THE APPLICATION FILED BY THE SOCIETY, THEREFORE, UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER GRANTING RE GISTRATION W.E.F. 1.4.2006 IS HIGHLY UNSUSTAINABLE IN LAW AND THAT PORTION OF THE ORDER OF HEREBY ANNULLED AND THE AUTHORITY IS DIRECTED TO GRANT REGISTRATION W.R.E.F.19.11.1987 AS PRAYED FOR BY THE ASSESSEE. 10 . IN THE RESULT, ITA NO.300/CTK/2009 IS DISMIS SED AS NOT PRESSED AND ITA NO.01/CTK/2011 IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 15.02.2011 S D/ - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER. ( ) DAT E: 15 TH FEBRUARY, 2011 ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 6 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : INSTITUTE OF PHARMACY & TECHNOLOGY, SALEPUR,D IST. CUTTACK 754 202 2 / THE RESPONDENT: COMMISSIONER OF INCOME - TAX, CUTTACK. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY