THE BOMBAY SAMACHAR RAHAT FUND, MUMBAI V. ITO (E)-1(1), MUMBAI

ITA 4124/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88063 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 15-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2010
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Keywords: Opportunity of being heard; Procedural lapse; Condonation of delay
• Section: 147

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 4124/M/2010 ( / ASSESSMENT YEAR : 2005 - 2006 ) THE BOMBAY SAMACHAR RAHAT FUND, READ HOUSE, SAYED ABDULLA B:RELVI ROAD, FORT, MUMBAI - 01. / VS. ITO (E) - 1(1), MUMBAI. ./ PAN : AAATT 0526 G ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PERCY PARDIWALLA / RESPONDENT BY : SHRI VIVEK BATRA, DR / DATE OF HEARING : 15.12.2014 / DATE OF PRONOUNCEMENT : 14. 01.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 21.5.2010 IS AGAINST THE ORDER OF THE CIT (A) - 1, MUMBAI DATED 31.12.2009 FOR THE ASSESSMENT YEAR 2005 - 2006. 2. IN THIS APPEAL ASSESSEE RAISED 9 GROUNDS IN TOTO AND THEY REVOLVE AROUND COUPLE OF ISSUES NAMELY (I) VALIDITY OF THE REOPENING OF THE ASSESSMENT AND (II) DECISION TAKEN BY THE CIT (A) IN TAXING THE DONATIONS COLLECTED BY THE ASSESSEE IN THE CONTEXT OF GUJARAT EARTH QUAKE. THE CBDT AND THE REVENUE AUTHORITIES REJE CTED THE CONDONATION OF DELAY IN FILING THE STATEMENTS IN FORM NO.10AA, WHICH IS SUBMITTED BY THE ASSESSEE BEFORE THE DUE DATE FOR FILING OF THE RETURN OF INCOME. 3. THE FIRST ISSUE RELATES TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT U/S 147 OF TH E ACT. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE HAS NOT PUT FORWARD ANY SPECIFIC ARGUMENT. THEREFORE, THE SAID ISSUE IS DISMISSED AS ACADEMIC. 4. REGARDING THE SECOND ISSUE ABOUT THE TAXING OF THE DONATIONS FOR FAILURE TO FILE THE FORM NO.10AA IN TIME I.E., 30.6.2004 LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CHURCHS AUXILIARY 2 FOR SOCIAL ACTION AND ANOTHER VS. DIRECTOR GENERAL OF INCOME TAX (EXEMPTIONS) [2010] 325 ITR 362 (DELHI) {W.P. (C) NO.1791 OF 2007 AND C.M.A.NOS.3292 OF 2007 AND 15279 OF 2008} AND ALSO IN THE CASE OF CARITAS INDIA VS. UNION OF INDIA AND ANOTHER {W.P. (C) NO.7481 OF 2009} AND MENTIONED THAT RENDITION OF ACCOUNTS WITHIN THE PRESCRIBED PERIOD IS NOT MANDATORY. THE RENDIT ION OF APPLICATION FOR CONDONATION OF DELAY IS NOT SUSTAINABLE. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE HELD PORTION OF THE SAID JUDGMENT WHICH READ AS UNDER: HELD, ALLOWING THE PETITIONS, THAT BEFORE PASSING SUCH AN ORDER, IT WAS NECESSA RY TO PROVIDE AN OPPORTUNITY OF BEING HEARD TO THE PETITIONER HEREIN. THE ORDER COULD BE SET ASIDE ON THIS GROUND ALONE. THE CONDITION REGARDING RENDITION OF ACCOUNTS BEFORE JUNE 30, 2004 IS DIRECTORY. THE APPLICATION FOR CONDONATION OF DELAY SHOULD NOT HAVE BEEN REJECTED ON THE GROUND THAT THERE WAS NO POWER TO CONDONE. THE ORDER WAS NOT VALID AND WAS LIABLE TO BE QUASHED. 5. FURTHER, LD COUNSEL FOR THE ASSESSEE ALSO FILED A COPY OF THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DIRECTO R OF INCOME TAX (EXEMPTION) VS. DIVYAJYOT FOUNDATION [2010] 321 ITR 53 (GUJ.) AND SUBMITTED THAT THE HONBLE HIGH COURT REITERATED THE LEGAL POSITION THAT FILING OF FORM NO.10AA BEFORE THE PRESCRIBED AUTHORITIES WITHIN THE TIME PRESCRIBED IS A DIRECTORY IN NATURE. HOWEVER, THE ASSESSEE SHOULD FILE THE SAME BEFORE THE COMPLETION OF THE ASSESSMENT. RELEVANT HELD PORTION OF THIS DECISION IS ALSO EXTRACTED AND PLACED AS UNDER: HELD, DISMISSING THE APPEALS, THAT THE CONCURRENT FINDING OF THE AUTHORITIES BELOW THAT THOUGH THE ASSESSEE HAD NOT SUBMITTED ITS ACCOUNTS IN FORM NO.10AA BEFORE THE PRESCRIBED AUTHORITY WITHIN THE GIVEN TIME THAT DID NOT JUSTIFY DISALLOWANCE OF THE CLAIM OF THE ASSESSEE UNDER SECTION 80G(5C) OF THE ACT, CALLED FOR NO INTERFERENCE. 6. FURTHER ALSO, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO ANOTHER JUDGMENT OF THE SAME HIGH COURT IN THE CASE OF CIT VS. GUJARAT OIL AND ALLIED INDUSTRIES 201 ITR 325 FOR IDENTICAL PROPOSITION I.E., THE AUDIT REPORT SHOULD BE FILED ALONG WITH THE RETURN OF INCOME. IT IS NOT MANDATORY CONDITIONS IF THE SAID AUDIT REPORT IS FILED AFTER THE RETURN OF INCOME WAS SUBMITTED TO BEFORE THE ASSESSMENT IS FRAMED SHOULD BE SEEN AS IN COMPLIANCE TO THE STATUTORY PROVISIONS. FURTHER, LD COUNSEL FOR THE ASSESS EE ALSO EXPLAINED THE REASONS FOR DELAY AND ANALYZED THE FACTS OF THE PRESENT CASE AD SUBMITTED THAT THE CBDT REJECTED THE CONDONATION REQUEST ON TECHNICAL GROUND THAT THE PROVISIONS OF SECTION 119 CANNOT BE INVOKED TO THE APPLICATION FOR CONDONATION OF DE LAY IN RESPECT OF FORM NO.10AA. 3 7 . ON THE OTHER HAND, LD DR RELIED HEAVILY ON THE ORDER OF THE ASSESSING OFFICER AND THE CIT (A). 8 . ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE LEGAL PROPOSITION ENUNCIATED BY THE HONBLE HIGH COURTS OF DELHI AS WELL AS GUJARAT, WE FIND THAT IN THE PRESENT CASE FORM NO.10AA WAS FILED BY THE ASSESSEE BEFORE MAKING OF THE ASSESSMENT. IN SUCH CIRCUMSTANCES DELAY IN FILING IS NOT WITHOUT ANY BONA FIDE REASONS. IN THESE FACTS, WE ARE OF THE OPINION THAT THE ABOVE MENTIONE D LEGAL PROPOSITIONS APPLY TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, FORM NO.10AA FILED BY THE ASSESSEE SHOULD BE ACCEPTED. 9 . HOWEVER, ON FULFILLING OF THE OTHER CONDITIONS THAT RELATE TO SPENDING OF THE DONATIONS ON RELIEF TO THE VICTIMS OF GUJARAT EARTHQUAKE AND NOT CARRY FORWARD OF THE UNSPENT DONATIONS ETC , WE FIND THE SAME WERE NOT EXAMINED BY THE LOWER AUTHORITIES. THEY MERELY TAXED THE DONATIONS BASED ON THE DELAY IN FILING THE IMPUGNED FORM NO.10AA WHICH ASSESSEE CALLS A PROCEDURAL LAPSE. A FTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT FOR LIMITED PURPOSE OF EXAMINING THE ABOVE CONDITIONS OF THE APPLICABILITY OF THE RELEVANT PROVISIONS, THE MATTER SHOULD BE REMANDED TO THE FILE THE ASSESSING OFFICER FOR FRESH ADJUDICATION. WE ORD ER ACCORDINGLY. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUN CED IN THE OPEN COURT ON 1 4 T H JANUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 4 .1.2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 4 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI