Appeal details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 5490 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 9 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-02-2016
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
B
Assessment Year
misc
Appeal Filed On
09-04-2013
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST, KOTA. CUKE VS. THE COMMISSIONER OF INCOME TAX, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI PRAKUL KHURANA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI SUNIL MATHUR (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13.01.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 5/02/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER PASSED BY LD. CIT KOTA DATED 28.11.2007. THE GROUND RAISED BY THE ASSESSEE IS AS UNDER :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE ORDER DATED 28.07.2011 PASSED BY THE LD. COMMISSIONER OF INCOME-TAX, KOTA, UNDER SECTION 12AA OF THE INCOME TAX ACT, 196 1 DENYING THE REGISTRATION UNDER THE SAID SECTION IS BAD IN LAW, ILLEGAL AND VOID. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. COMMISSIONER OF INCOME TAX, KOTA HAS ERRED IN A. NOT GRANTING REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 TO THE APPELLANT TRUST ON FRIVOLOUS GROUN DS. 2 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. B. HOLDING THAT THE OBJECTS OF THE APPELLANT TRUST ARE NOT CHARITABLE IN NATURE IN VIEW OF THE PROVISIONS OF SECTION 2(15) O F THE INCOME TAX ACT, 1961 AND THAT ITS ACTIVITIES ARE PROFIT ORIENT ED. C. NOT GRANTING THE REGISTRATION BASED ON ALLEGED PROF ITABILITY OF THE APPELLANT TRUST AND NOT CONSIDERING THE STATUTORY O BJECTS FOR WHICH THE APPELLANT TRUST FUNCTIONS. D. GOING BEYOND THE SCOPE OF SECTION 12AA OF THE INCOM E TAX ACT, 1961 AND REJECTING THE APPLICATION ON THE GROUNDS W HICH WERE REQUIRED TO BE EXAMINED AT THE TIME OF MAKING ASSES SMENT OF THE APPELLANT BOARD. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. COMMISSIONER OF INCOME-TAX, KOTA HAS ERRED IN NOT C ONDONING THE DELAY IN FILING APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IS AN IMPROVEMENT TRUST SOUGHT REGI STRATION UNDER SECTION 12A OF THE IT ACT, 1961 VIDE FORM NO. 10A DATED 28.05.2007 . ALONG WITH THE SAID FORM, A LETTER OF EVEN DATE 28.05.2007 WAS ALSO ENCLOSED WH EREBY IT HAS BEEN MENTIONED THAT THE APPELLANT IS A DISTRICT BOARD AS SPECIFIED UNDE R SECTION 10(20)(III) OF THE IT ACT, HENCE IS EXEMPT FROM INCOME TAX. ON 28.03.2006, TH E AO WHILE PASSING THE ORDER FOR THE A.Y. 2003-04, HAS DISALLOWED THE CLAIM OF THE A PPELLANT UNDER THE AMENDED PROVISIONS OF SEC. 10(20) OF THE ACT. THE AO HAS OB SERVED AS UNDER :- IN VIEW OF THE ABOVE REFERRED DECISION IT IS CLEA R THAT UIT IS ALSO AN ENTITY EXCLUDED FROM THE EXEMPTION OF SECTION 10(20 ) AFTER THE ABOVE SAID EXPLANATION. HENCE, FROM THE ABOVE DISCUSSION IT IS CLEAR THAT URBAN IMPROVEMENT TRUST, KOTA IS NOT FALL WITHIN THE SCOP E OF SECTION 10(20) OF THE IT ACT AND IS LIABLE TO FILE HIS RETURN OF INCO ME. THE EXEMPTION UNDER CLAUSE (20) OF SECTION 10 WOULD, THEREFORE, NOT BE AVAILABLE TO UIT, ETC. DESPITE THE FACT THAT THEY MAY BE DEEMED TO BE TREA TED AS LOCAL AUTHORITIES UNDER ANY OTHER CENTRAL OR STATE LEGISL ATION. 3 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. SIMILAR ORDER WAS PASSED BY THE AO ON 30.11.2006 FO R THE A.Y. 2004-05. THE RELEVANT PARA IS MENTIONED HERE UNDER :- IN VIEW OF THE ABOVE REFERRED DECISION IT IS CLEA R THAT UIT IS ALSO AN ENTITY EXCLUDED FROM THE EXEMPTION OF SECTION 10(20 ) AFTER THE ABOVE SAID EXPLANATION. HENCE, FROM THE ABOVE DISCUSSION IT IS CLEAR THAT URBAN IMPROVEMENT TRUST, KOTA DOES NOT FALL WITHIN THE SC OPE OF SECTION 10(20) OF THE IT ACT AND IS LIABLE TO FILE ITS RETURN OF I NCOME. THE EXEMPTION UNDER CLAUSE (20) OF SECTION 10 WOULD, THEREFORE, NOT BE AVAILABLE TO UIT, ETC. DESPITE THE FACT THAT THEY MAY BE DEEMED TO BE TREA TED AS LOCAL AUTHORITIES UNDER ANY OTHER CENTRAL OR STATE LEGISL ATION. 3. THE APPELLANT HAD PREFERRED APPEAL AGAINST THE O RDERS PASSED BY THE AO FOR THE A.Y 2003-04 & 2004-05. THE LD. CIT (A) VIDE ORDER DATED 10.02.2010 HAS ALLOWED THE APPEAL OF THE APPELLANT AND HELD AS UNDER :- IN CONCLUSION, IN MY VIEW, BEING A SUBSET OF MUNI CIPAL COUNCIL, KOTA, IT PARTOOK THE CHARACTER OF AND DISCHARGES RESPONSIBIL ITIES OF A LOCAL AUTHORITY, TO WHICH SECTION 10(20) OF THE IT ACT, 1 961 IS FULLY AND SQUARELY APPLICABLE. IN COMPLETE NEGATION OF ALL THIS THOUGH AND, IN MY VIEW, THROUGH AN ODIOUS COMPARISON WITH THE DECISION IN CASE OF KRIS HI UTPADAN MANDI SAMITI OF UTTAR PRADESH AND A REDUNDANT REFERENCE T O THE GENERAL CLAUSES ACT, THE ASSESSING OFFICER CAME TO THE CONCLUSION T HAT THE UIT, KOTA WAS AN AJP, TO WHICH SECTION 10(20) OF THE IT ACT, 1961 WAS NOT APPLICABLE. THE COMPARISON WAS ODIOUS FOR THE ASSESSING OFFICER DID NOT SHOW HOW THE UIT IN KOTA IN RAJASTHAN WAS SIMILAR TO A KRISHI UT PADAN MANDI SAMITI OF UTTAR PRADESH. HIS REFERENCE TO THE GENERAL CLAUSES ACT IS REDUNDANT BECAUSE THE UIT, KOTA IS INDEED A LOCAL AUTHORITY W ITHIN THE MEANING OF SECTION 10(20) OF THE IT ACT, 1961. THE DECISION OF THE ASSESSING OFFICER TO TREAT THE APPELLANT AS AN AJP AND ALL ADDITIONS FLO WING FROM IT ARE NOT CONFIRMED. GROUNDS 1 TO 3 AND 5 TO 8 ARE ACCEPTED. 4 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. 4. AGAINST THE ORDER PASSED BY THE LD. CIT (A), REV ENUE HAS FILED APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 18.03.2011 IN ITA NO. 366 & 367/JP/2010 FOR THE ASSESSMENT YEARS 2003-04 & 04-05 HAS HELD AS UN DER :- CONSIDERING OUR DECISION IN THE CASE OF RAJASTHAN HOUSING BOARD, WE FEEL THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN HOLD ING THAT INCOME OF UIT IS EXEMPT U/S 10(20) OF THE ACT. THE LD. CIT (A) HAS NOT DECIDED OTHER ISSUES RAISED BEFORE HIM BY THE ASSESSEE BECAUSE TH E LD. CIT (A) WAS OF THE OPINION THAT INCOME OF THE ASSESSEE WAS EXEMPT U/S 10(20) OF THE ACT. SINCE WE ARE VACATING THE ORDER OF LD. CIT (A ) ON THE ISSUE OF LIABILITY OF EXEMPTION U/S 10(20) OF THE ACT, THEREFORE, OTHE R ISSUES ARE REQUIRED TO BE CONSIDERED AFRESH BY THE LD. CIT (A). ACCORDING LY THE APPEALS ARE RESTORED BACK ON THE FILE OF THE LD. CIT (A). 5. AGAINST THE ORDER PASSED BY THE TRIBUNAL, THE AP PELLANT FILED APPEAL BEFORE THE HONBLE RAJASTHAN HIGH COURT AND THE HONBLE HIGH C OURT HAS ADMITTED THE APPEAL VIDE ORDER DATED 23.05.2011. 5.1. AS MENTIONED HEREIN ABOVE, THE APPELLANT TRUST HAS SOUGHT REGISTRATION UNDER SECTION 12A OF THE IT ACT BY FILING THE APPLICATION ON 28.05.2007. THE APPLICATION OF THE TRUST WAS DISMISSED BY LD. CIT VIDE HIS ORDER DATED 28.11.2007 ON THE FOLLOWING REASONS :- IN FACT THE REASON FOR NOT APPLYING FOR THE REGIS TRATION APPEARS TO BE THAT EVEN THE UIT WAS CONSCIOUS OF THE VIEW THAT IT, BY NO STRETCH, COULD HAVE BEEN CALLED CHARITABLE INSTITUTION. IF AT ALL THE A PPLICANT UIT IS A CHARITABLE INSTITUTION STILL THE LAW CAN NOT COME TO ITS RESCU E AS IT CONSCIOUSLY SLEPT OVER ITS RIGHT FOR SEEKING REGISTRATION. THE APPLI CATION IN THE INSTANT CASE HAS BEEN MOVED ON 28.5.2007 THAT IS MORE THAN FOUR YEARS EVEN AFTER THE AMENDMENT IN THE ACT. THERE IS A PRESUMPTION OF KN OWLEDGE OF LAW MORE PARTICULARLY IN THE CASE OF AN INSTITUTION LIKE THE APPLICANT UIT, WHICH IS DULY COUNSELLED ABOUT VARIOUS DEVELOPMENTS TAKING P LACE IN LAW. 5 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. HENCE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE APPLICATION OF THE UIT IS REQUIRED TO BE REJECTED. 5.2. THE ORDER WAS PASSED BY LD. CIT ON 28.11.2007. HOWEVER, THE PRESENT APPEAL HAS BEEN PREFERRED BEFORE US ON 09.04.2013, ALONG W ITH AN APPLICATION FOR CONDONATION OF DELAY. IN THE SAID CONDONATION APPLICATION, IT H AS BEEN MENTIONED THAT THE APPELLANT TRUST WAS PURSUING THE REMEDY UNDER SECTION 10(20) OF THE ACT AS THE TRUST WAS UNDER BONAFIDE ASSUMPTION THAT THE TRUST BEING LOCAL BOD Y IS EXEMPT FROM TAX UNDER THE IT ACT. THE APPELLANT HAS SOUGHT CONDONATION OF DELAY IN PURSUING THE APPEAL BEFORE US. THE APPELLANT HAS FILED AN AFFIDAVIT OF THE ACCOUNT S OFFICER GIVING THE DETAILS FOR NOT FILING THE APPEAL IN TIME BEFORE US AND IN PARA 7 O F THE SAID AFFIDAVIT READS AS UNDER :- 7. THAT AT THE RELEVANT POINT OF TIME THE SEAT OF AO WAS VACANT FROM 2008 TO 2012 AND THE PERSON ON THE IMMEDIATE SUBORD INATE POSITION ALSO GOT FREQUENTLY CHANGED IN AS MUCH AS 12 PERSONS GOT CHANGED WITHIN THE SPAN OF 5 YEARS. 5.3. IT IS CONTENDED BY THE LD. COUNSEL FOR THE APP ELLANT THAT THERE IS A BONAFIDE MISTAKE IN PURSUING THE APPEAL BEFORE THE TRIBUNAL AND HE HAS SOUGHT TO EXPLAIN THE DELAY IN FILING THE APPEAL FROM THE ORDER DATED 28. 11.2007 TO 9.04.2013 ON THE BASIS OF AFFIDAVIT FILED ON 11.01.2016. 5.4. THE LD. D/R FOR THE REVENUE VEHEMENTLY OPPOSED THE APPLICATION AND HAS SUBMITTED THAT THE APPELLANT TRUST WAS NOT DILIGENT IN PURSUING THE REMEDIES BEFORE THE LD. CIT (A) AND ALSO BEFORE THE TRIBUNAL. 6 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. 5.4. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED TH E MATERIAL ON RECORD. IN OUR VIEW, THE AFFIDAVIT FILED BY THE ACCOUNTS OFFICER O F THE APPELLANT IS LACKING THE NECESSARY PARTICULARS AND HAS BEEN FILED IN A CASUAL MANNER. IN FACT, THE APPELLANT HAS SUBMITTED THAT THE POST OF ACCOUNTS OFFICER WAS LYING VACANT FROM 2008 TO 2012 AND THE IMMEDIATE SUBORDINATE POSITION WAS ALSO FREQUENTLY CHANGED AND AS SUCH IT WAS NOT POSSIBLE FOR THE APPELLANT TRUST TO PURSUE AND FILE APPEAL BEFORE THE TRIBUNAL. IN OUR VIEW, THE REASONING GIVEN BY THE ACCOUNTS OFFICER O F THE APPELLANT IS FAR FROM TRUTH AND ACTUAL POSITION. THE EXPLANATION IS INCORRECT ON TH E FACE OF IT AS THE APPELLANT HAS FILED THE APPEAL BEFORE THE HONBLE HIGH COURT IN THE YEA R 2011 AND BEFORE THAT THE A/R OF THE ASSESSEE HAD ALSO PARTICIPATED IN APPELLATE PRO CEEDINGS BEFORE THE TRIBUNAL. IN OUR VIEW, IF THE RESPONSIBLE PERSON IS AVAILABLE FOR PU RSUING THE LEGAL REMEDIES BEFORE THE HONBLE HIGH COURT AS WELL AS BEFORE THE TRIBUNAL, THEN THE PERSON SHOULD ALSO BE AVAILABLE TO FILE THE APPEAL AGAINST THE ORDER PASS ED BY LD. CIT (A) BEFORE US. WE FIND THAT THE APPELLANT DID NOT PURSUE THE MATTER SERIOU SLY AND THERE IS NO ALLEGATION FAR LESS ANY PROOF OF THE FACT THAT THE APPELLANT WAS PREVEN TED BY ANY CAUSE FAR LESS SUFFICIENT CAUSE FROM PREFERRING THE APPEAL WITHIN THE PRESCRI BED PERIOD OF LIMITATION. FURTHER, WE NOTICE THAT THE APPELLANT IS A STATUTORY BODY, HAVI NG THE PROVISION OF IN-HOUSE LEGAL ADVICER AND IS BEING ASSISTED BY THE COMPETENT LAWY ERS AND CHARTERED ACCOUNTANTS. THE APPELLANT HAD A COMPLETE OPPORTUNITY TO PURSUE THE LEGAL ISSUE BEFORE THIS TRIBUNAL IMMEDIATELY AFTER THE APPLICATION FOR REGISTRATION WAS REJECTED BY THE LD. CIT. HOWEVER, THE APPELLANT CHOOSE TO REMAIN SILENT AND HAVE NOT WISHED OR OPTED FOR AGITATING ITS 7 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. RIGHT OF APPEAL BEFORE THIS TRIBUNAL. IT IS NOT TH E CASE OF THE APPELLANT THAT THE APPELLANT WAS NOT AWARE OF THE FILING OF THE APPEAL BEFORE THIS TRIBUNAL. HOWEVER, THE APPELLANT HAD SPECULATED OF PREFERRING THE REMEDIES UNDER SECTION 10(20) EITHER BEFORE THE TRIBUNAL OR BEFORE HONBLE HIGH COURT. WE ARE OF THE OPINION THAT THE REASONS SHOWN BY THE APPELLANT CANNOT FALL WITHIN THE PARAM ETERS OF SUFFICIENT CAUSE SO AS TO CONFER THE APPELLANT THE BENEFIT OF CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THIS TRIBUNAL. THE REASONING NOT TO PURSUE THE REMEDIES BEFORE THE TRIBUNAL WAS A WELL THOUGHT DECISION AND WAS NOT ON ACCOUNT OF ANY OTHE R REASON. IF WE APPLY THE TEST OF A PRUDENT LITIGANT, IT CANNOT BE HELD THAT ONCE THE A PPLICANT CAME TO KNOW ABOUT THE DISMISSAL OF THE APPLICATION FOR REGISTRATION IT WI LL REMAIN SILENT FOR A LONG PERIOD OF MORE THAN 5 YEARS. IF WE ACCEPT THE CONTENTION OF THE A PPELLANT ON THE BASIS OF THE FACTUALLY INCORRECT AFFIDAVIT, AN UNSETTLING SITUATION WILL E MERGE AND THE PROCEEDINGS WILL BE TAKEN CASUALLY BY THE STATUTORY BODIES. THE LEGISLATIVE MANDATE IN STIPULATING A LIMITATION TO FILE AN APPEAL WITHIN THE PERIOD OF LIMITATION AND THE PROVISION FOR CONDONATION OF DELAY CANNOT BE PERMITTED TO BE MIS-USED BY STATUTORY AGE NCIES LIKE THE APPELLANT BEFORE US. THE APPELLANT BEING A STATUTORY BODY IS REQUIRED TO BE MORE CAREFUL AND PRUDENT IN PURSUING A LEGAL REMEDY. THE NON-FILING OF THE APPE AL IN TIME BEFORE THE TRIBUNAL SHOWS TOTAL LACK OF COORDINATION AND SLUGGISHNESS BY THE OFFICIALS OF THE APPELLANT. WE DEPRECATE THE SAME. IN OUR VIEW, THE ASSESSEE IS R EQUIRED TO EXPLAIN THE DELAY IN FILING THE APPEAL. THE ASSESSEE HAS FAILED TO SATISFY THE CONSCIOUS OF THIS TRIBUNAL THAT THE ASSESSEE WAS BONAFIDELY PURSUING ITS LEGAL REMEDIES , AND NOT FILING THE APPEAL IN TIME 8 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA. WAS BEYOND ITS CONTROL. THERE IS A HUGE DELAY OF 1 868 DAYS IN FILING THE APPEAL BEFORE US. WE DEEM IT INAPPROPRIATE TO CONDONE THE DELAY. ACCORDINGLY, WE HEREBY DISMISS THE APPLICATION FOR CONDONATION OF DELAY AND ACCORD INGLY THE APPEAL PREFERRED BY THE APPELLANT IS ALSO DISMISSED. NO ORDER AS TO COST. 6. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5/02/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 5/02/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- URBAN IMPROVEMENT TRUST, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- THE COMMISSIONER OF INCOME TAX, KOT A. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 378/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 9 ITA NO. 378/JP/2013 URBAN IMPROVEMENT TRUST VS. CIT KOTA.
