Federation of Karnataka Timber Merchants & Saw Millers, Bangalore V. DIT, Bangalore

ITA 353/BANG/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8717 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 11-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R REDDY
• Assessee Lawyers: H N KHINCHA
• Keywords: Opportunity of being heard; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V.VASUDEVAN , JUDICIAL MEMBER A ND SHRI ABRAHAM P GEORGE , ACCOUNTANT MEMBER ITA NO. 353 / BANG/20 1 5 FEDERATION OF KARNATAKA TIMBER MERCHANTS & SAW MILLERS, NO.274/5, MYSORE MAIN ROAD, BANGALORE - 560026. APPELLANT PAN: AAACF 8372 R VS. DIRECTOR OF INCOME - TAX (EXEMPTIONS), BANGALORE. RESPONDENT APPELLANT BY: SHRI H.N.KHINCHA, CA. RESPONDENT BY: SHRI G.R.REDDY, CIT(DR) . DATE OF HEARING : 07 /01/201 6 DATE OF PRONOUNCEMENT: 08 / 01 /201 6 O R D E R PER N.V.VASUDEVAN , JM : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.9.2008 OF DIRECTOR OF INCOME TAX (EXEMPTIONS) HEREINAFTER REFERRED TO AS DIT(E) REJECTION APPLICATION FOR REGIS TRATION U/S.12A OF THE INCOME TAX ACT, 1961 (ACT). 2. THE ASSESSEE IS AN ASSOCIATION FORMED WITH THE OBJECTS OF PROMOTING AND DEVELOPING SAW MILLS, TIMBER TRADE AND OTHER ALLIED WOOD INDUSTRIES OR BUSINESS, TO PROVIDE FACILITIES FOR EXCHANGE OF ITA NO . 353 /BANG /201 5 FEDERATION OF KA RNATAKA TIMBER MERCHANTS & SAW MILLERS PAGE 2 INFORM ATION AND OPINION OF INTEREST OF TIMBER BUSINESS AND OTHER OBJECTS. THE ASSESSEE IS REGISTERED U/S.25 OF THE COMPANIES ACT, 1956. BY AN APPLICATION DATED 27.2.2008, THE ASSESSEE APPLIED FOR GRANT OF REGISTRATION OF THE ASSOCIATION U/S.12A OF THE ACT , AS AN INSTITUTION CARRYING ON CHARITABLE ACTIVITIES FOR GRANT OF EXEMPTION U/S.11 OF THE ACT. THE APPLICATION WAS FILED ON 4.3.2008 WITH THE DIT(E) AND HAD THE FOLLOWING ANNEXURE TO IT VIZ., FORM NO.10A, NAME AND ADDRESS OF DIRECTORS, NOTE ABOUT ACTIVITIES OF THE ASSESSEE, IT RETURNS FOR THREE YEARS, PROVISIONAL BALAN CE - SHEET FOR THE CURRENT FINANCIAL YEAR, PROVISIONAL PROFIT AND LOSS ACCOUNT FOR THE CURRENT FINANCIAL YEAR, COPY OF PAN CARD, BANK ACCOUNT DETAILS. 3. BY NOTICE DATE 16.5.2008 THE DIT(E) CALLED FOR CERTAIN DETAILS. MANY OF THE DETAILS WHICH WERE CALLED FOR WERE ALREADY GIVEN BY THE ASSESSEE AS ANNEXURE TO ITS APPLICATION FOR GRANT OF REGISTRATION. BY ANOTHER NOTICE DATED 18.8.2008 THE DIT(E) CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO W HY THE APPLICATION FOR REGISTRATION SHOULD NOT BE REJECTED FOR NON - FURNISHING OF DETAILS CALLED FOR EARLIER. THE ASSESSEE VIDE LETTER DATED 24.9.2008 GAVE DETAILS THAT WERE CALLED FOR BY THE DIT(E). 4. THE DIT(E) PASSED THE IMPUGNED ORDER DATED 30. 9.2008 IN WHICH HE OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED ALL THE DETAILS CALLED FOR. HE HELD THAT THE OBJECTS CLAUSE (A) TO (O) OF THE ASSESSEE WERE COMMERCIAL IN NATURE. THE DIT(E) ALSO OBSERVED ITA NO . 353 /BANG /201 5 FEDERATION OF KA RNATAKA TIMBER MERCHANTS & SAW MILLERS PAGE 3 THAT SINCE THE DETAILS CALLED FOR WERE NOT FURNISHE D AND THE GENUINENESS OF THE TRUST AND ALSO OF ITS OBJECTS AND ACTIVITIES OF THE TRUST CANNOT BE ASCERTAINED AND IN VIEW OF THE FACT THAT THE TIME FOR PASSING U/S.12AA(1)(B)(II) OF THE ACT WAS GETTING BARRED THE APPLICATION FOR GRANT OF REGISTRATION IS REJ ECTED, 5. AGGRIEVED BY THE ORDER OF THE DIT(E), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THERE IS A CONSIDERABLE DELAY OF ABOUT 6 YEARS IN FILING THE APPEAL BY THE ASSESSEE. THE REASON FOR THE DELAY HAS BEEN EXPLAINED BY THE ASSESSEE IN AN APP LICATION FOR CONDONATION OF DELAY DULY SUPPORTED BY AFFIDAVIT OF DEVJIBHAI H.PATEL, DIRECTOR OF THE ASSESSEE. THE ASSESSEE AFTER RECEIPT OF THE IMPUGNED ORDER FILED A REGULAR APPEAL BEFORE THE CIT(A) ON 29.12.2008. AN APPEAL AGAINST AN ORDER REJECTED AP PLICATION U/S.12A OUGHT TO BE FILED ONLY BEFORE THE INCOME TAX APPELLATE TRIBUNAL(ITAT). THE APPEAL SO FILED BY THE ASSESSEE WAS DISMISSED BY THE CIT(A) ON 8.1.2015 (SERVED ON THE ASSESSEE ON 11.2.2015) FOR THE REASON THAT THE ORDER AGAINST WHICH APPEAL W AS FILED BEFORE CIT(A) WAS NOT AN APPEALABLE ORDER BEFORE CIT(A) U/S.246A OF THE ACT. THEREAFTER, ON PROPER LEGAL ADVICE PROPER APPEAL WAS FILED BEFORE THE ITAT ON 11.3.2015. 6. WE ARE OF THE VIEW THAT THE DELAY IN FILING THE APPEAL IS OWING TO A R EASONABLE AND SUFFICIENT CAUSE. THE REASONS AS STATED IN THE APPLICATION FOR CONDONATION ARE TRUE AND THE INTEREST OF JUSTICE DEMANDS THAT THE ASSESSEE SHOULD NOT BE DENIED THE ITA NO . 353 /BANG /201 5 FEDERATION OF KA RNATAKA TIMBER MERCHANTS & SAW MILLERS PAGE 4 BENEFIT OF CHALLENGING THE VALIDITY OF AN ORDER BY FILING AN APPEAL, FOR TECHN ICAL REASONS. WE THEREFORE CONDONE THE DELAY IN FILING THE APPEAL. 7. AS FAR AS MERITS OF THE APPEAL ARE CONCERNED, WE FIND THAT MANY OF THE REQUIRED DETAILS HAD ALREADY BEEN FILED BY THE ASSESSEE BEFORE DIT(E). IT IS ONLY BECAUSE OF THE FACT THAT TH E TIME FOR PASSING ORDER ON THE APPLICATION U/S.12A OF THE ACT, WAS GETTING BARRED BY TIME, THE DIT(E) HAD PASSED THE IMPUGNED ORDER. WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE IMPUGNED ORDER OF THE DIT(E) SHOULD BE SET ASIDE AND THE DIT(E) S HOULD BE DIRECTED TO PASS A FRESH ORDER AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE THE DETAILS REQUIRED BY THE DIT(E) AND SUCH OTHER DETAILS AS HE MAY CALL FOR. THE DIT(E) WILL CONSIDER THE SAME AND AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, SHALL PASS NECESSARY ORDERS IN ACCORDANCE WITH LAW. 8. FOR STATISTICAL PURPOSE THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON THIS 08 TH DAY OF JANUARY, 2016 S D/ - S D/ - ( ABRAHAM P GEORGE ) ( N.V.VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER E KSRINIVASULU,SPS ITA NO . 353 /BANG /201 5 FEDERATION OF KA RNATAKA TIMBER MERCHANTS & SAW MILLERS PAGE 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE