The ACIT, 1(1), V. M/s Aayushmati Education & Social Society,

ITA 449/IND/2007

• Counselvise Citation: 44922714 RSA 2007
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-02-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 08-08-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Assessee Lawyers: H P VERMA
• Keywords: Period of limitation; Competent authority; Time period of passing order
• Section: 143(3); 12A; 12AA; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C.SHARMA, ACCOUNTANT MEMBER PAN NO. : AAAAA3026D I.T.A.NO.449/IND/2007 A.Y. : 2004-05 ACIT, 1(1), BHOPAL M/S. AAYUSHMATI EDUCATION AND SOCIAL SOCIETY, VS BHOPAL APPELLANT RESPONDENT APPELLANT BY : SHRI KESHAVE SAXENA, CIT DR RESPONDENT BY : S/SHRI H.P. VERMA AND ASHISH GOYAL, ADVOCATES O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 21.5.2007 FOR THE ASSESSMENT YEAR 2 004-05, IN THE MATTE OF ORDER PASSED U/S 143(3) OF THE INCOME- TAX ACT, 1961. -: 2: - 2 2. THE ONLY GRIEVANCE OF THE REVENUE RELATES TO THE CIT(A)S ACTION IN DELETING ADDITION OF RS. 93.21 L AKHS BY ALLOWING EXEMPTION TO THE INCOME OF THE ASSESSEE SO CIETY UNDER PROVISIONS OF SECTION 10(23C)(VI) OF THE INCO ME-TAX ACT, 1961. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A SOCIETY W ITH THE MAIN OBJECT OF PROVIDING EDUCATION TO THE STUDE NTS. AS THE RECEIPT OF THE ASSESSEE WAS MORE THAN RS. 1 CRORE, IT WAS REQUIRED TO OBTAIN APPROVAL OF PRESCRIBED AUTHORITY FOR CLAIMING EXEMPTION U/S 10(23C)(VI) OF THE ACT. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT THE ASSESSEE HAS NOT BEEN GRANTED EXEMPT ION U/S 10(23C)(VI) OF THE ACT FOR THE YEAR UNDER CONSIDERA TION, THEREFORE, HE DECLINED CLAIM OF EXEMPTION IN RESPEC T OF EXCESS OF INCOME OVER THE EXPENDITURE AMOUNTING TO RS. 90, 31,280/-. BY THE IMPUGNED ORDER, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS APPLIED FOR APPROVAL U/S 10(23C)(VI) O F THE ACT ON 23.12.2004, BUT THE SAME HAS NOT BEEN GRANTED NOR D ECLINED EVEN AFTER LAPSE OF SO MUCH TIME, THEREFORE, HE DIR ECTED THE AO -: 3: - 3 TO ALLOW EXEMPTION OF THE INCOME OF THE SOCIETY U/S 10(23C)(VI) OF THE ACT. 5. AGGRIEVED BY THE ABOVE ORDER, THE REVENUE IS IN FUR THER APPEAL BEFORE US. 6. IT WAS CONTENDED BY THE LD. CIT DR THAT THE LD. CIT (A) HAS GOT NO POWER TO GRANT EXEMPTION U/S 10(23C)(VI) AND THE POWER LIES ONLY WITH THE COMPETENT AUTHORITY TO WHO M THE ASSESSEE HAS FILED FOR EXEMPTION U/S 10(23C)(VI) OF THE ACT. 7. ON THE OTHER HAND, IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE HAS FIL ED APPLICATION FOR REGISTRATION ON 23.12.2004 AND THE ASSESSEE HAS APPLIED 85 % OF ITS INCOME FOR CHARITABLE PURPO SES AS REQUIRED U/S 10(23C)(VI) THIRD PROVISO, BUT THE L D. CCIT DID NOT PASS ANY ORDER GRANTING OR REFUSING APPROVAL U/ S 10(23C)(VI). IT WAS FURTHER CONTENDED THAT AT THE R ELEVANT TIME, NO TIME LIMIT WAS PRESCRIBED U/S 10(23C) FOR GRANTI NG OR REFUSING THE APPROVAL AND NINTH PROVISO CAME INTO E XISTENCE ONLY ON 13.7.2006, WHICH IS APPLICABLE FOR APPLICAT IONS ON OR AFTER 13.7.2006, WHEREBY IT WAS PROVIDED THAT THE O RDER OF THE APPROVAL OR REFUSAL SHALL BE PASSED WITHIN ONE YEAR FROM THE -: 4: - 4 END OF THE MONTH IN WHICH APPLICATION IS MADE. IT W AS FURTHER SUBMITTED THAT WHERE THE LAW REQUIRES A PARTICULAR REQUIREMENT AND DOES NOT PRESCRIBE TIME LIMIT FOR D OING IT, IT SHOULD HAVE BEEN DONE WITHIN A REASONABLE TIME. VAR IOUS CASE LAWS WERE CITED IN SUPPORT OF ITS CONTENTION THAT I N THE ABSENCE OF ANY ACCEPTANCE OR REFUSAL WITHIN A REASONABLE TI ME, THE APPLICATION OF THE ASSESSEE SHOULD BE TREATED AS AC CEPTED. IN VIEW OF THESE JUDGEMENTS, THE LD. AUTHORIZED REPRES ENTATIVE CONTENDED THAT THE LD. CIT(A) WAS JUSTIFIED IN DIRE CTING THE AO TO ALLOW EXEMPTION U/S 10(23C)(VI), NOTWITHSTANDING THE FACT THAT NO ACTUAL EXEMPTION WAS GRANTED BY THE COMPETE NT AUTHORITY. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AN CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FIND FROM RECORD THAT RELEVANT FINANCIAL YEAR UNDER CONSIDERA TION ENDED ON 31 ST MARCH, 2004, WHEREAS THE ASSESSEE HAS ALLEGED TO APPLY REGISTRATION U/S 10(23C)(VI) ON 23.12.2004. THUS, EVEN APPLICATION FOR REGISTRATION WAS FILED MUCH AFTER T HE CLOSE OF THE RELEVANT ACCOUNTING YEAR FOR WHICH EXEMPTION WA S SOUGHT FOR. THE CONTENTION OF LD. AUTHORIZED REPRESENTATI VE WAS THAT -: 5: - 5 AMENDMENT IN SECTION 10(23C)(VI) BY THE FINANCE ACT , 2006, BY INSERTION OF NEW 14 TH PROVISO WAS INSERTED IN RESPECT OF EXEMPTION APPLIED ON OR AFTER 1 ST JUNE, 2006, WHICH PROVIDES FOR FILING OF APPLICATION FOR EXEMPTION BEFORE 30 TH DAY OF SEPTEMBER OF THE RELEVANT ASSESSMENT YEAR. HOWEVER, SINCE IN THE INSTANT CASE RELEVANT ASSESSMENT YEAR IS 2004-0 5, THE AMENDMENT BROUGHT BY THE FINANCE ACT, 2006, WAS NOT APPLICABLE TO IT AND, THEREFORE, MERELY ON THE GROU ND OF DELAY IN FILING THE APPLICATION, EXEMPTION CANNOT BE DECL INED. WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LD. AUTHORI ZED REPRESENTATIVE THAT 14 TH PROVISO WAS INSERTED IN SECTION 10(23C)(VI) FOR EXEMPTION MADE ON OR AFTER 1 ST JUNE, 2006, ACCORDINGLY, THE LIMITATION PERIOD FOR FILING THE A PPLICATION U/S 10(23C)(VI) AS PROVIDED UNDER THIS PROVISO CANNOT B E APPLIED FOR ASSESSMENT YEAR 2004-05, WHICH IS MUCH PRIOR TO THE AMENDMENT. 9. WE ALSO FOUND FROM THE RECORD THAT THE ASSESSEE HA D BEEN GRANTED REGISTRATION U/S 12A W.E.F. 1 ST APRIL, 2004. IT MEANS AT LEAST FROM 1 ST APRIL, 2004, THE ASSESSEE HAS BEEN RECOGNIZED AS AN EDUCATIONAL INSTITUTION ELIGIBLE F OR CLAIM OF -: 6: - 6 EXEMPTION U/S 10(23C)(VI). SINCE THE RELEVANT FINAN CIAL YEAR ENDS ON 31 ST MARCH, 2004, THEREFORE, REGISTRATION GRANTED U/S 12AA W.E.F. 1 ST APRIL, 2004, CANNOT BE GIVEN BENEFIT FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. 10. FURTHERMORE, NEITHER THE ASSESSEE NOR THE LD. CIT DR COULD BRING ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT ASSESSEES APPLICATION IS STILL PENDING WITH THE DE PARTMENT. THE ASSESSEE COULD NOT PRODUCE ANY LETTER FILED WIT H THE DEPARTMENT SUBSEQUENT TO THE FILING OF APPLICATION ASKING FOR ISSUE OF EXEMPTION CERTIFICATE NOR COULD SHOW ANY O BJECTION IF ANY RAISED BY THE DEPARTMENT OR ANY INFORMATION CAL LED BY THE DEPARTMENT FOR GRANT OF SUCH EXEMPTION. EVEN THE LD . CIT DR COULD NOT BRING ANY MATERIAL ON RECORD TO SUGGEST T HAT FOR NON- COMPLIANCE OF ANY DETAIL/INFORMATION, THE DEPARTMEN T HAS REFUSED THE APPROVAL U/S 10(23C)(VI) OF THE ACT. FR OM THE RECORD, IT IS NOT CLEAR AS TO WHETHER ANY SUCH APPL ICATION IS STILL PENDING BEFORE THE COMPETENT AUTHORITIES AND WHY HE HAS NOT ACTED UPON IT EVEN AFTER LAPSE OF SUCH A LONG P ERIOD. 11. IN VIEW OF THE ABOVE, WE RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) TO VERIFY THE FACTUAL POSITION W ITH REGARD TO THE -: 7: - 7 APPLICATION OF ASSESSEE PENDING BEFORE CCIT AND ACT ION TAKEN BY CCIT FOR GRANT OF APPROVAL U/S 10(23C)(VI), IF A NY, AND TO DECIDE THE ISSUE AFRESH. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON ______APRIL, 2011. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST APRIL, 2011. CPU* 204