Noorul Islam Centre for Higher Education, Kanyakumari V. CIT, Madurai

ITA 392/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73839 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 24-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2013
• Court: TRIBUNAL
• Keywords: Period of limitation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 392/MDS/2013 NOORUL ISLAM CENTRE FOR HIGHER EDUCATION, 10/47A, HAJI MANZIL, KOLLANVILAI, THUCKALAY, TAMIL NADU-629 175 [PAN: AAAAN 5265 H] ( !% /APPELLANT) VS THE COMMISSIONER OF INCOME TAX-I, BIBIKULAM MADURAI-625 002 ( &'!% /RESPONDENT) / APPELLANT BY : SHRI K.M.V. PANDALAI, ADVOCATE / RESPONDENT BY : SHRI ANIRUDH RAI, CIT-DR / DATE OF HEARING : 24-03-2014 / DATE OF PRONOUNCEMENT : 28-03-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING THE ORDER OF COMMISSIONER OF INCOME TAX-I, MADURAI DATED 08-10-2010 PASSED U/S.80G(5)(VI) OF THE INCOME TAX ACT, 1961 I.T.A. NO. 392/MDS/13 :- 2 -: (HEREIN AFTER REFERRED TO AS THE ACT). THE APPEA L HAS BEEN FILED WITH A DELAY OF 785 DAYS. THE ASSESSEE HAS FILED A N APPLICATION SUPPORTED BY AN AFFIDAVIT FOR CONDONATION OF DELAY. IN THE AFFIDAVIT, THE REASONS HAVE BEEN CITED FOR THE DELAY IN FILING OF THE PRESENT APPEAL. 2. SHRI K.M.V.PANDALAI, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER WAS PASSED BY THE COMMISSIONER OF INCOME TAX-I ON 08-10-2010, WHICH W AS SUBSEQUENTLY MODIFIED BY CORRIGENDUM ON 15-11-2010. THE ASSESSEE HAD PRAYED FOR GRANT OF APPROVAL U/S.80G W .E.F. ASSESSMENT YEAR (AY) 2008-09. HOWEVER, VIDE IMPUGN ED ORDER, WHICH WAS SUBSEQUENTLY MODIFIED, THE REGISTRATION W AS GRANTED W.E.F. AY.2011-12. THE ASSESSEE FILED APPLICATION FOR RECTIFICATION U/S.154 ON 03-12-2012. THE SAID APPLICATION FOR RE CTIFICATION OF THE ORDER WAS DISMISSED BY THE COMMISSIONER OF INCO ME TAX ON 15-02-2013. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE APPROACHED THE TRIBUNAL IN APPEAL. THE LIMITATION FOR FILING OF APPEAL HAD COME TO AN END ON 09-01-2011. SINCE THE ASSESSEE I.T.A. NO. 392/MDS/13 :- 3 -: PURSUED THE WRONG REMEDY OF FILING RECTIFICATION PE TITION WHICH WAS DISMISSED ON 15-02-2013, THE ASSESSEE IMMEDIATELY T HEREAFTER FILED AN APPEAL ON 04-03-2013. HENCE, THE DELAY OF 784 DAYS IN FILING OF THE APPEAL. 3. ON THE OTHER HAND, SHRI ANIRUDH RAI, APPEARING O N BEHALF OF THE REVENUE VEHEMENTLY OPPOSED THE PETITION FOR CON DONING DELAY. THE LD.DR SUBMITTED THAT THERE HAS BEEN INO RDINATE DELAY IN FILING OF THE APPEAL. THE ASSESSEE HAS NOT BE A BLE TO SUFFICIENTLY EXPLAIN THE REASON FOR FILING RECTIFIC ATION PETITION U/S.154 BEFORE THE COMMISSIONER OF INCOME TAX AFTER TWO YEARS. THE LD.DR PRAYED FOR THE DISMISSAL OF THE APPEAL ON THE GROUND OF LIMITATION. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES ON THE GROUND OF LIMITATION. THE ASSESSEE HAS SOUGHT REGISTRATION U/S.80G W.E.F. AY. 2008-09. THE APPLICATION FOR GRANT OF REGISTRATION WAS FILED BY THE ASSESSEE ON 11-10-2007. HOWEVER, THE COMMISSIONER OF INCOME TA X GRANTED REGISTRATION TO THE ASSESSEE W.E.F. AY.2011-12. TH E AR OF THE I.T.A. NO. 392/MDS/13 :- 4 -: ASSESSEE HAS SUBMITTED THAT ASSESSEE WAS UNDER BONA FIDE IMPRESSION THAT THIS IS A MISTAKE APPARENT FROM REC ORD WHICH CAN BE RECTIFIED BY FILING AN APPLICATION U/S.154. THE LIMITATION FOR FILING RECTIFICATION PETITION U/S.154 IS FOUR YEARS. THE IMPUGNED ORDER WAS PASSED ON 08-10-2010. THE ASSESSEE FILED RECTI FICATION PETITION ON 03-12-2012 I.E., WITHIN THE PERIOD OF L IMITATION. THE RECTIFICATION PETITION WAS DISMISSED ON 15-02-2013 AND THE PRESENT APPEAL WAS FILED BY THE ASSESSEE ON 04-03-2 013. SINCE THE ASSESSEE HAD ADOPTED WRONG REMEDY FOR THE REDRE SSAL OF ITS GRIEVANCE, THERE IS A SUFFICIENT REASON FOR FILING THE APPEAL BEYOND THE PERIOD OF LIMITATION. 5. THE HONBLE SUPREME COURT OF INDIA IN THE CASE O F RAM NATH SAO VS. GOBARDHAN SAO REPORTED AS 2002(3) SCC 195 HAS HELD AS UNDER: THUS IT BECOMES PLAIN THAT THE EXPRESSION 'SUFFICI ENT CAUSE' WITHIN THE MEANING OF SECTION 5 OF THE ACT OR ORDER 22 RULE 9 OF THE CODE OR ANY OTHER SIMILAR PROVISION SHOULD R ECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL J USTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS I MPUTABLE TO A PARTY. IN A PARTICULAR CASE WHETHER EXPLANATION F URNISHED WOULD CONSTITUTE 'SUFFICIENT CAUSE' OR NOT WILL BE DEPENDANT I.T.A. NO. 392/MDS/13 :- 5 -: UPON FACTS OF EACH CASE. THERE CANNOT BE A STRAITJA CKET FORMULA FOR ACCEPTING OR REJECTING EXPLANATION FURN ISHED FOR THE DELAY CAUSED IN TAKING STEPS. BUT ONE THING IS CLEA R THAT THE COURTS SHOULD NOT PROCEED WITH THE TENDENCY OF FIND ING FAULT WITH THE CAUSE SHOWN AND REJECT THE PETITION BY A S LIPSHOD ORDER IN OVER JUBILATION OF DISPOSAL DRIVE. ACCEPTA NCE OF EXPLANATION FURNISHED SHOULD BE THE RULE AND REFUSA L AN EXCEPTION MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. O N THE OTHER HAND, WHILE CONSIDERING THE MATTER THE COURTS SHOUL D NOT LOSE SIGHT OF THE FACT THAT BY NOT TAKING STEPS WITHIN T HE TIME PRESCRIBED A VALUABLE RIGHT HAS ACCRUED TO THE OTHE R PARTY WHICH SHOULD NOT BE LIGHTLY DEFEATED BY CONDONING D ELAY IN A ROUTINE LIKE MANNER. HOWEVER, BY TAKING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MATTER THE EXPLANATION FURNIS HED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABL E POINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE, CAUSING ENO RMOUS LOSS AND IRREPARABLE INJURY TO THE PARTY AGAINST WHOM TH E LIS TERMINATES EITHER BY DEFAULT OR INACTION AND DEFEAT ING VALUABLE RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT . WHILE CONSIDERING THE MATTER, COURTS HAVE TO STRIKE A BAL ANCE BETWEEN RESULTANT EFFECT OF THE ORDER IT IS GOING T O PASS UPON THE PARTIES EITHER WAY. IN VIEW OF THE WELL SETTLED LAW AND THE FACT THAT S UFFICIENT CAUSE FOR DELAY IN FILING OF THE APPEAL HAS BEEN SHOWN, THE D ELAY OF 785 I.T.A. NO. 392/MDS/13 :- 6 -: DAYS IN FILING OF THE APPEAL IS CONDONED. THE APPE AL IS ADMITTED TO BE HEARD ON MERITS. 6. THE BRIEF FACTS OF THE CASE ARE, THAT THE ASSESS EE IS A CHARITABLE SOCIETY REGISTERED UNDER THE TAMIL NADU SOCIETIES REGISTRATION ACT, 1975. THE ASSESSEE HAD FILED A N APPLICATION FOR GRANT OF APPROVAL U/S.80G(5)(VI) BEFORE THE COM MISSIONER OF INCOME TAX ON 11-10-2007 ALONG WITH AN APPLICATION FOR REGISTRATION U/S.12AA OF THE ACT. REGISTRATION U/S .12AA WAS GRANTED TO THE ASSESSEE ON 18-02-2008. THE COMMISS IONER OF INCOME TAX VIDE ORDER DATED 30-04-2008, REJECTED TH E APPLICATION OF THE ASSESSEE FOR APPROVAL U/S.80G(5) AS PRE-MATU RE AS WELL AS ON MERITS. AGGRIEVED AGAINST THE ORDER OF COMMISSIONER OF INC OME TAX, THE ASSESSEE APPROACHED THE HONBLE MADRAS HIG H COURT, MADURAI BENCH IN WRIT PETITION. THE HONBLE HIGH C OURT VIDE ORDER DATED 11-12-2009, ALLOWED THE WRIT PETITION AND REM ITTED THE MATTER BACK TO COMMISSIONER OF INCOME TAX TO CONSID ER THE APPLICATION OF THE ASSESSEE U/S.80G(5). ON THE DIR ECTIONS OF THE HONBLE HIGH COURT, THE COMMISSIONER OF INCOME TAX, I.T.A. NO. 392/MDS/13 :- 7 -: RE-CONSIDERED THE CASE OF THE ASSESSEE AND ALLOWED THE APPROVAL OF EXEMPTION U/S.80G(5) W.E.F. AY.2010-11. THEREAFT ER, THE COMMISSIONER OF INCOME TAX MODIFIED HIS EARLIER ORD ER DATED 08- 10-2010 AND GRANTED REGISTRATION BY ISSUING CORRIGE NDUM DATED 15-11-2010 GRANTING APPROVAL U/S.80G EFFECTIVE FROM AY.2011-12. THE ASSESSEE FILED PETITION U/S.154 BEFORE COMMISS IONER OF INCOME TAX SUBMITTING THAT THE APPLICATION WAS FILE D FOR REGISTRATION ON 11-10-2007 SEEKING REGISTRATION W.E .F. AY.2008-09 WHEREAS COMMISSIONER OF INCOME TAX HAS GRANTED REGI STRATION W.E.F. AY.2011-12. THE ASSESSEE SOUGHT RECTIFICATI ON OF THE MISTAKE AND SOUGHT INITIAL APPROVAL FROM AY.2008-09 ONWARDS. THE COMMISSIONER OF INCOME TAX VIDE ORDER DATED 15- 01-2013, DISMISSED THE PETITION OF THE ASSESSEE FILED U/S.15 4 OBSERVING THAT THERE IS NO MISTAKE APPARENT FROM THE RECORDS. THE ASSESSEE HAS NOW COME IN APPEAL BEFORE THE TRIBUNAL IMPUGNING TH E ORDER OF THE COMMISSIONER OF INCOME TAX DATED 08-10-2010 SUB SEQUENTLY MODIFIED VIDE CORRIGENDUM DATED 15-11-2010. 7. THE LD.AR SUBMITTED THAT THE COMMISSIONER OF INC OME TAX HAS ERRED IN GRANTING APPROVAL W.E.F. AY.2011-12, W HEREAS THE I.T.A. NO. 392/MDS/13 :- 8 -: APPLICATION FOR GRANT OF APPROVAL WAS MADE ON 11-10 -2007. AFTER THE MATTER WAS REMANDED BY THE HONBLE MADRAS HIGH COURT, MADURAI BENCH TO COMMISSIONER OF INCOME TAX, NO FRE SH MATERIAL WAS EITHER SOUGHT BY THE COMMISSIONER OF INCOME TAX OR FURNISHED BY THE ASSESSEE. THE COMMISSIONER OF INC OME TAX WHILE DECIDING THE APPLICATION RELIED ON THE MATERI AL WHICH WAS ALREADY AVAILABLE ON RECORD, RELATABLE TO PERIOD UP TO 31-03-2008. THE LD.AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX OUGHT TO HAVE GRANTED REGISTRATION W.E.F. AY.2008-09 ON T HE BASIS OF APPLICATION AND MATERIAL WHICH WAS CONSIDERED BY HI M IN GRANTING THE REGISTRATION W.E.F. AY.2011-12. 8. ON THE OTHER HAND, THE LD.DR VEHEMENTLY SUPPORTE D THE ORDER OF COMMISSIONER OF INCOME TAX AND SUBMITTED T HAT THE APPROVAL HAS TO BE GRANTED W.E.F. FIRST DAY OF AY F OLLOWING THE YEAR IN WHICH THE APPLICATION IS MADE. THE HONBLE HIGH COURT REMITTED THE MATTER BACK TO THE COMMISSIONER OF INCOME TAX V IDE ORDER DATED 11-12-2009. THE COMMISSIONER OF INCOME TAX P ASSED THE ORDER AFTER THE RECEIPT OF THE ORDER OF THE HONBLE HIGH COURT AND ACCORDINGLY GRANTED REGISTRATION W.E.F. AY.2011-12. THE DR I.T.A. NO. 392/MDS/13 :- 9 -: PRAYED FOR THE DISMISSAL OF THE APPEAL OF THE ASSES SEE BEING DEVOID OF ANY MERIT. 9. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE EXAMINED THE IMPUGNED ORDER. IT IS AN ADMITTED FACT THAT THE CO MMISSIONER OF INCOME TAX HAS GRANTED THE REGISTRATION U/S.80G(5) TO THE ASSESSEE ON AN APPLICATION DATED 11-10-2007. INITI ALLY THE APPLICATION OF THE ASSESSEE WAS REJECTED BY THE COM MISSIONER OF INCOME TAX, AFTER THE MATTER WAS REMANDED BACK BY T HE HONBLE MADRAS HIGH COURT, THE COMMISSIONER OF INCOME TAX, RE-CONSIDERED THE SAME APPLICATION AND GRANTED APPR OVAL W.E.F. AY.2011-12. WHILE RE-CONSIDERING THE APPLICATION, T HE COMMISSIONER DID NOT SEEK ANY FRESH MATERIAL. 10. WE ARE OF THE CONSIDERED OPINION THAT THE COMMI SSIONER OF INCOME TAX HAS ERRED IN GRANTING REGISTRATION W.E.F . AY.2011-12. SINCE THE APPLICATION WAS MADE IN 2007 AND THE COMM ISSIONER OF INCOME TAX CONSIDERED THE SAME APPLICATION AFRESH O N THE DIRECTIONS OF THE HONBLE HIGH COURT WITHOUT SEEKIN G FRESH I.T.A. NO. 392/MDS/13 :- 10 - : EVIDENCE, THE COMMISSIONER OF INCOME TAX OUGHT TO H AVE GRANTED REGISTRATION W.E.F.2008-09 ITSELF. IN VIEW OF THE ABOVE FACTS, WE MODIFY THE IMPUGNED ORDER AND DIRECT THE COMMISSIONER OF INCOME TAX TO GRANT APPROVAL TO THE ASSESSEE U/S.80G(5) W.E.F.AY.2008-09. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 28 TH MARCH, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VI KAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 28 TH MARCH, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR