M/s. Gayatri Charitable Trust, Ahmedabad V. The CIT-II, Baroda

ITA 3815/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8708 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-03-2010
• Assessment Year: misc
• Appeal Filed On: 05-10-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: U S BHATTIAR
• Keywords: Charitable institution; Retrospective amendment; Condonation of delay
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' (BEFORE S/SHRI D T GARASIA,JM AND A N PAHUJA,AM) ITA NO.3815/AHD/2007 M/S GAYATRI CHARITABLE TRUST, POST: DEBHARI, TALUKA: BALASINOR, DISTRICT: KAIRA [PAN:AABTG0370N] V/S THE COMMISSIONER OF INCOME-TAX-II, BARODA [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI U S BHATTI,AR REVENUE BY:- SHRI H N SINGH, DR O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE-TRUST AGAINST AN ORDER DATED 06-08-2007 U/S 12AA(1)(B)(I) READ WITH PROVIS O (II) TO SECTION 12A(A) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REF ERRED TO AS THE ACT] OF THE LD. CIT-II, BARODA, RAISES THE FOLLOW ING GROUNDS: 1 THE LEARNED CIT-II, BARODA ERRED IN LAW AND IN F ACTS IN NOT CONDONING THE DELAY IN FILING THE APPLICATION IN FORM NO.10A U/S 12A(A) OF THE INCOME-TAX ACT, 1961. 2 THE LEARNED CIT-II, BARODA FURTHER ERRED IN NOT A PPRECIATING THE REASONS SUBMITTED FOR THE DELAY IN FILING THE APPLICATION F OR REGISTRATION. IT IS THEREFORE PRAYED THAT THE DELAY IN FILING THE APPLI CATION MAY BE CONDONED AND THE REGISTRATION MAY BE GRANTED. 3 THE APPELLANT MAY BE ALLOWED TO ADD, AMEND, ALT ER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 2 FACTS, IN BRIEF, AS PER RELEVANT ORDER ARE THAT T HE ASSESSEE- TRUST CREATED ON 26-08-1986 WAS REGISTERED WITH AS SISTANT CHARITY COMMISSIONER, NADIAD ON 5.9.1986.HOWEVER, AN APPLIC ATION FOR REGISTRATION OF TRUST UNDER SECTION 12A OF THE ACT WAS FILED ONLY ON 30-03-2007 WITH A REQUEST TO GRANT REGISTRATION WIT H RETROSPECTIVE EFFECT FROM 5-09-1986. THE ASSESSEE TRUST ADDUCED THE FOLLOWING REASONS FOR DELAY IN SUBMITTING THE APPLICATION:- ITA NO.3815/AHD/2007 2 (A) TRUST WAS REGISTERED ON 05-09-1986 AND HAS STAR TED EDUCATIONAL INSTITUTIONS IN REMOTE AREA OF VIRPUR TALUKA, DIST: KHEDA & PANCHMAHAL TO IMPART EDUCATIO N AND TO PROVIDE RESIDENTIAL FACILITY TO NEEDY CHILDR EN OF THE AREA. (B) THE FOUNDER TRUSTEE LATE SHRI KISHORBHAI KARSHA NBHAI PATEL WAS SOCIAL WORKER ASSOCIATED WITH VARIOUS EDUCATIONAL CO-OPERATIVE AND LOCAL SELF GOVERNMENT INSTITUTIONS. (C) THOUGH HE WAS SOCIAL WORKER OF REPUTATION HE WA S NOT AWARE OF PROVISIONS OF INCOME TAX ACT REGARDING REGISTRATION OF TRUST. (D) FOUNDER TRUSTEE SHRI KISHORBHAI KARSANBHAI PATE L EXPIRED ON 11-11-2001 SUCCESSOR TRUSTEE SHRI KANUBHAI KISHORBHAI PATEL ALSO EXPIRED ON 02-01- 2006. THE DELAY IN FILING APPLICATION FOR REGISTRAT ION OF TRUST WAS DUE TO IGNORANCE OF TRUSTEE AND QUICK SUCCESSIVE DEATH OF TRUSTEES. 3 HOWEVER, THE LD. CIT REJECTED THE REQUEST OF THE ASSESSEE FOR RETROSPECTIVE REGISTRATION IN THE FOLLOWING TERMS: 2 THE APPLICATION HAS BEEN MADE BEYOND THE STATUTO RY PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST. TH E APPLICANT HAS REQUESTED FOR CONDONATION OF DELAY OF ABOUT 21 YEARS ON THE G ROUNDS THAT TRUSTEES WERE NOT AWARE OF THE PROVISIONS OF INCOME TAX ACT AND QUICK SUCCESSIVE DEATH OF TRUSTEES. THE REASONS GIVEN BY THE APPLICA NT ARE VAGUE AND GENERAL IN NATURE AND DO NOT CONSTITUTE SUFFICIENT MATERIAL FOR CONDONATION OF DELAY IN TERMS OF CLAUSE (I) OF THE PROVISO TO S ECTION 12A(A). THE REGISTRATION IS ACCORDINGLY GRANTED WITH EFFECT FRO M 01-04-2006. IN VIEW OF CLAUSE (II) OF THE PROVISO TO SECTION 12A(A), THE P ROVISIONS OF SECTION 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF THE TRU ST WITH EFFECT FROM 01-04- 2006 I.E. THE FIRST DAY OF FINANCIAL YEAR IN WHICH THE APPLICATION WAS MADE. 4 THE ASSESSEE IS NOW IN APPEAL BEFORE US. AT THE O UTSET, THE LD. AR ON BEHALF OF THE ASSESSEE WHILE INVITING OUR ATT ENTION TO THE DECISION DATED 8.2.2008 OF THIS TRIBUNAL IN THE CAS E OF M/S AMARDIP CHARITABLE TRUST IN ITA NO.3744/AHD/2007 CONTENDED THAT THE TRUST UNDER CONSIDERATION HAVING BEEN FOUNDED BY THE SAME PERSON SHRI ITA NO.3815/AHD/2007 3 KISHORBHAI KARSANBHAI PATEL AND THE DELAY IN SUBMI TTING THE APPLICATION ALSO HAVING BEEN DUE TO SIMILAR REASONS AS IN THE CASE OF AFORECITED DECISION, THE LD. CIT MAY BE DIRECTED T O REGISTER THE TRUST WITH RETROSPECTIVE EFFECT.THE LEARNED DR, ON THE OT HER HAND, WHILE RELYING UPON DECISION OF THE HONBLE GUJRAT HIGH CO URT IN CIT VS. GUJRAT MARITIME BOARD,289 ITR 139(GUJ) SUPPORTED TH E ORDER OF THE CIT. 5 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE DECISIONS RELIED UPON. AS IS APPA RENT FROM THE RELEVANT PROVISIONS OF SEC.12A OF THE ACT, STIPULATING THAT THE PERSON IN RECEIPT OF THE INCOME HAS TO MAKE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE THE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE I NSTITUTION, WHICHEVER IS LATER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTI ON 12AA. FIRST PROVISO TO SEC. 12A(1)(A) MENTIONS THAT WHERE AN APPLICATION FOR RE GISTRATION OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIOD AFORESAID, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE I NCOME OF SUCH TRUST OR INSTITUTION FROM THE DATE OF THE CREATION OF THE TRUST OR THE E STABLISHMENT OF THE INSTITUTION IF THE COMMISSIONER IS, FOR REASONS TO BE RECORDED IN WRITING, SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PERIOD AFORESAID FOR SUFFICIENT R EASONS . IN THE CASE UNDER CONSIDERATION, APPLICATION HAS BEEN MADE AFTER THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST. TH E APPLICANT TRUST IS ENTITLED TO REGISTRATION OF TRUST FROM THE DATE OF CREATION OF TRUST ONLY IF THE COMMISSIONER IS SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PERIOD AFORESA ID FOR SUFFICIENT REASONS. IN TERMS OF PROVISIONS OF SEC.12AA(1)(A) & (B) OF THE ACT, BEFORE REGISTERING THE TRUST OR REFUSING TO REGISTER , THE COMMISSIONER IS REQUI RED TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND GENUINENESS OF ITS ACTIVIT IES. IN THE PRESENT APPEAL THE ASSESSEE TRUST, ADMITTEDLY A CHARITABLE INSTITUTIO N, SOLELY EXISTING FOR PURPOSES OF ITA NO.3815/AHD/2007 4 EDUCATION, HAS SOUGHT REGISTRATION OF THE TRUST W. E.F. 5.9.1986.IN THIS CONNECTION LD. AR, WHILE RELYING UPON THE DECISION DATED 8.2.2 008 OF A CO-ORDINATE BENCH IN THE CASE OF M/SAMARDIP CHARITABLE TRUST IN ITA NO. 3744/AHD/2007, SUBMITTED THAT IN THAT CASE ALSO SAME FOUNDER TRUSTEE WAS IN VOLVED AND ON SIMILAR REASONS , HONBLE ITAT HAVE GRANTED REGISTRATION. HONBLE ITA T, IN THAT CASE,WHILE RELYING UPON THE DECISION DATED 22.11.2005 IN THE CASE OF K ACCHHI HAST KALA MAHAL MANDAL VS. CIT IN ITA NO. ITA NO.690/RJT/2005 (100T TJ(RAJKOT) 1112 HELD : WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL AVAILABLE ON RECORD. REASONS GIVEN BY THE ASSESSEE HAVE NOT BEEN DISPUTE D OR DOUBTED BY CIT. ONLY INFERENCE DRAWN IS REASONS GIVEN ARE VAGUE AND GENE RAL AND DO NOT CONSTITUTE SUFFICIENT CAUSE. IN OUR CONSIDERED VIEW, SUFFICIEN T CAUSE IS AN OBJECTIVE PROPOSITION AND HAS TO BE JUDGED ON THE REALITIES O F THE FACTS OF PARTICULAR CASE. IN THIS CASE, TRUST IS SITUATED IN RURAL AREA AND CARR IES OUT EDUCATIONAL WORK IN REMOTE VILLAGES. TWO TRUSTEES DIED IN SUCCESSION PUTTING T HE TRUST IN DIFFICULT SITUATION, IN OUR VIEW, THIS CAN BE SUFFICIENT CAUSE FOR RURAL PE OPLE WHO ARE NOT WELL VERSED WITH INTRICACIES OF LAW.IN VIEW, THEREOF AND TAKING SUPP ORT FROM RAJKOT BENCH JUDGMENT(SUPRA), WE HOLD THAT ASSESSEE-TRUST WAS PR EVENTED BY SUFFICIENT CAUSE IN FILING DELAYED APPLICATION UNDER SECTION 12A,DEL AY IS CONDONED AND REGISTRATION SHALL BE GRANTED RETROSPECTIVELY. 5.1 IN THE PRESENT CASE ALSO, THE CIT HAS NO T DISPUTED OR DOUBTED THE REASONS BUT THE ONLY INFERENCE DRAWN IS THAT THE RE ASONS GIVEN ARE VAGUE AND GENERAL AND DO NOT CONSTITUTE SUFFICIENT CASE. THIS WAY AN ADMITTEDLY CHARITABLE INSTITUTION ,SOLELY EXISTING FOR PURPOSES OF EDUCAT ION, WAS DENIED EXEMPTION ON TECHNICAL AND FLIMSY GROUNDS. IF FOR SOME GOOD REAS ONS EXEMPTION WAS DENIED; IT WOULD HAVE BEEN A DIFFERENT MATTER. THE RELIANCE ON THE DECISION IN THE CASE OF GUJRAT MARITIME BOARD(SUPRA) BY THE LD. DR IS TOTALLY MISPLACED, SINCE THE SAID DECISION WAS RENDERED ON DIFFERENT FACTS AND THE QUESTION OF RETROSPECTIVE REGISTRATION WAS NOT EVEN RAISED BEFORE THE HONBLE HIGH COURT. CONSIDERING THAT THE REASO NS GIVEN BY THE ASSESSEE TRUST IN THE PRESENT CASE ARE SIMILAR TO REASONS GI VEN IN THE CASE M/S AMARDIP CHARITABLE TRUST (SUPRA), RESPECTFULLY FOLLOWING TH E SAID DECISION , WE DIRECT THE COMMISSIONER TO GRANT REGISTRATION RETROSPECTIVELY IN TERMS OF PROVISIONS OF SEC. 12AA OF THE ACT. THUS, GROUND NO. 1 & 2 OF THE APP EAL ARE ALLOWED AS INDICATED ABOVE. ITA NO.3815/AHD/2007 5 6. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERMS OF RESIDUARY GROUND NO. 3, ACCORDINGLY, THIS GROUND IS DISMISSED. 7. IN THE RESULT, APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 26-03-2 010 SD/- SD/- (D T GARASIA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 26-03-2010 COPY OF THE ORDER FORWARDED TO : 1. M/S GAYATRI CHARITABLE TRUST, POST: DEBHARI, TALUKA : BALASINOR, DISTRICT: KAIRA 2. THE ACIT / ITO CONCERNED 3. CIT CONCERNED 4. DR, ITAT,B BENCH AHMEDABAD 5. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD