PADMASHRI ANNASAHEB JADHAV BHARTIYA SAMAJ UNNATI MANDAL, BHIWADI, MUMBAI V. CIT II, THANE

ITA 563/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3286 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-04-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR RAJEEV HARIT
• Assessee Lawyers: H N MOTIWALLA
• Keywords: Question of law
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE S/SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.563/MUM/2012 ( / ASSESSMENT YEAR: 2003-04) PADMASHRI ANNASAHEB JADHAV BHARTIYA SAMAJ UNNATI MANDAL C/O. H.N.MOTIWALLA & CO. 508, SHARDA CHAMBERS, 33 , NEW MARINE LINES, MUMBAI - 400020 / VS. COMMISSIONER OF INCOME TAX II, THANE ./ ./ PAN/GIR NO. : AAATP2888F ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI H. N. MOTIWALLA DEPARTMENT BY: DR. RAJEEV HARIT (CIT - DR) / DATE OF HEARING: 17.03.2016 /DATE OF PRONOUNCEMENT: 10.06.2016 ! / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL AGAINST THE ORDER DATED 08.12.20 11 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-II, THANE [HER EINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2003-04 WHE REIN THE APPLICATION MOVED BY THE ASSESSEE U/S.12AA OF THE INCOME TAX AC T, 1961( IN SHORT THE ACT) HAS BEEN ORDERED TO BE DISMISSED. ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 2 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE TRUS T HAS APPLIED FOR THE REGISTRATION U/S.12AA OF THE ACT BY FILING THE APPL ICATION ON 18.04.2011. THE TRUST WAS CREATED ON 08.06.1948 AND WAS REGISTE RED UNDER BOMBAY PUBLIC TRUST ACT, 1950. THE NOTICE DATED 12.01.200 9 WAS ISSUED TO THE ABOVE TRUST, WHERE A SERIOUS ALLEGATION OF FINANCIA L MISAPPROPRIATION BY THE TRUSTEES WAS REFERRED TO ALONG WITH EXTRACT OF SPECIAL AUDITORS BOOKS CONDUCTED BY HONBLE CHARITY COMMISSIONER, MU MBAI, WHERE THE AUDITORS QUANTIFIED MISAPPROPRIATION AND SIPHON ING OF THE FUNDS BY THE ERSTWHILE TRUSTEES TO THE TUNE OF RS.43.21 CROR ES. THEREFORE, THE REGISTRATION WAS WITHDRAWN VIDE ORDER DATED 21.01.2 009. THE TRUSTEES HAVE NOT FILED THE APPEAL AGAINST THE SAID ORDER. THEREAFTER THE TRUSTEES HAD FILED AN ANOTHER APPLICATION FOR REGISTRATION U /S.12AA OF THE ACT WITHOUT GIVING THE EARLIER REFERENCE, THEREFORE, TH E SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AND AFTER THE RECEIPT OF THE NOTICE, THE ASSESSEES REPRESENTATIVE APPEARED AND FILED THE LE TTER DATED 14.11.2011 REFERRING THE CERTAIN FACTS OF THE TRUST. THEREAFT ER, CIT(A) CONSIDERED THE MATTER ON THE POINT OF THAT WHETHER THE REGISTRATIO N GRANTED U/S.12AA OF THE ACT W.E.F. 01.04.1998 SHOULD BE CONTINUED ON AC COUNT OF MISAPPROPRIATION OF THE FUND OF RS.43.21 CRORES OR NOT. THEREAFTER, THE REGISTRATION WAS WITHDRAWN BY THE VIRTUE OF ORDER D ATED 21.01.2009. THE APPELLANT DID NOT FILE THE APPEAL. THEREAFTER, TH E PRESENT APPLICATION FOR REGISTRATION U/S.12AA OF THE ACT WAS FILED. THE MA IN CONTENTION OF THE ASSESSEE IS THAT THE TAINTED TRUSTEES HAVE BEEN REM OVED AND NEW TRUSTEES HAVE BEEN APPOINTED HEADED BY SHRI VIJAY P. JADHAV, SON OF LATE SHRI ANNASAHEB JADHAV, FOUNDER OF THE TRUST THEREFORE, T HE TRUST IS REQUIRED TO BE REGISTERED U/S.12AA OF THE ACT. BUT THE CIT(A) DISMISSED THE ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 3 APPLICATION ON THE GROUND OF THAT THE NEW TRUSTEES WERE APPOINTED PRIOR TO THE DATE ON WHICH THE ORDER OF WITHDRAWING THE R EGISTRATION WAS PASSED I.E. PRIOR TO 21.01.2009 AND GRANTING OF THE REGISTRATION U/S.12AA OF THE ACT IS TANTAMOUNT TO OVER-RIDE OF THE ORDER OF CANCELLATION PASSED BY THE CIT(A). ONCE THE TRUST HAS BEEN FOUND MISA PPROPRIATING OF FUNDS BY THE TRUSTEES THEN THE TRUST BECOMES INELIG IBLE FOR GRANT OF REGISTRATION U/S.12AA OF THE ACT IN SUBSEQUENT YEAR S AS WELL. IT HAS ALSO BEEN HELD THAT THE APPELLANT SHOULD FILE AN APPEAL AGAINST ORDER DATED 21.09.2009, THEREFORE THE PRESENT APPLICATION WAS D ISMISSED. FEELING AGGRIEVED THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 2. THE APPELLANT HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX, II, THANE ERRED IN NOT GRANTING THE REGISTRATION UNDER SECTION 12A(1)(AA) OF THE ACT VIDE ITS ORDER DATED DECEMBER 08, 2011, PARTICULARLY WHEN, THE APPELLANT TRUST HAD FILED ITS APPLICATION FOR REGISTRATION ON APRIL 18, 2011, AND THE SAID ORDER OUGHT TO HAVE BEEN PASSED ON OR BEFORE OCTOBER 31, 2011. THEREFORE, THE SAID ORDER IS BAD-IN-LAW, ILLEGAL AND AB-INITIO-VOID. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE SAID LEARNED COMMISSIONER OF INCOME TAX HAS ALSO ERRED IN REFUSING THE REGISTRATION ONLY ON THE GROUND THAT THE REGISTRATION WAS WITHDRAWN VIDE HIS ORDER DATED SEPTEMBER 21, 2009 WITHOUT APPRECIATING THE FACT THAT THE REGISTRATION WAS WRONGLY WITHDRAWN UNDER SECTION 12AA(3), PARTICULARLY WHEN IT WAS GRANTED UNDER SECTION 12A OF THE ACT ON MARCH 21, 2000. ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 4 ISSUE NO.1:- 3. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS A RGUED THAT THE ASSESSEE MOVED AN APPLICATION ON 18.04.2011, THEREF ORE, THE AUTHORITY WAS UNDER OBLIGATION TO PASS THE ORDER ON OR BEFORE 31.10.2011 BUT THE AUTHORITY PASSED THE ORDER ON 08.12.2011 AFTER THE EXPIRY OF SIX MONTHS THEREFORE THE APPLICATION IS LIABLE TO BE MANDATORI LY ALLOWABLE IN VIEW OF THE LAW SETTLED IN CIVIL APPEAL NO.1478 OF 2016 DEC IDED ON 16.02.2016 IN CASE OF COMMISSIONER OF INCOME TAX, KANPUR & ORS . VS. SOCIETY FOR THE PROMN. OF EDN. ALLAHABAD (SUPREME COURT) AND IN VIEW OF THE LAW SETTLED IN SOCIETY FOR THE PROMOTION OF EDUCATION, ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS. COMMISSIONER OF INC OME TAX, CENTRAL, KANPUR [2008] 171 TAXMAN 113 (ALLAHABAD HI GH COURT) AND IN VIEW OF THE INSTRUCTION NO.16/2015 [F.NO.197/38/201 5-ITA.1] DATED 06.11.2015. ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFUTED THE SAID CONTENTIONS AND ARGUED THAT IF NO DECISION WAS TAKEN BY THE AUTHORITY ON THE APPLICATION U/S. SECTION 12AA( 2) OF THE ACT WITHIN THE PERIOD OF SIX MONTHS THEN IN THIS EVENTUALITY T HE ORDER CANNOT BE TREATED AS PASSED IN VIEW OF THE LAW SETTLED IN T.C .(A) NO. 1183 OF 2010, COMMISSIONER OF INCOME TAX VS. KARIMANGALAM ONRIYA PENGAL SEMIPU AMAIPU LTD. AND CIVIL APPEAL NO. 8003 OF 2002 BHAVN AGAR UNIVERSITY VS. PALITANA SUGAR MILL PVT. LTD. & ORS AND 206 II OLR 75 ORISSA HIGH COURT IN CASE SRIKHETRA, A.C.BHAKTI-VEDANTA VS. THE ASSISTANT COMMISSIONER OF INCOME TAX. 3.1 KEEPING IN VIEW OF THE ARGUMENTS ADVANCED BY TH E PARTIES AND PERUSING THE RECORD CAREFULLY, IT IS NOT IN DISPUTE THAT THE APPELLANT FILED ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 5 AN APPLICATION ON 18.04.2011 WHICH HAS BEEN DECIDED ON 08.12.2011 AFTER THE EXPIRY OF SIX MONTHS. ON APPRAISAL OF TH E JUDGEMENT PASSED BY THE HONBLE SUPREME COURT IN CASE OF COMMISSIONER OF INCOME TAX, KANPUR & ORS. VS. SOCIETY FOR THE PROMN. OF EDN., A LLAHABAD, WE FIND THAT CLARIFICATION IS THERE BUT THE QUESTION OF LAW HAS BEEN LEFT OPEN BY THE HONBLE SUPREME COURT. THE QUESTION ARISE IN T HIS CASE IS THAT THE APPELLANT MOVED AN APPLICATION BEFORE THE AUTHORITY ON 18.04.2011 COULD BE DEEM TO BE SANCTION / ALLOWED AFTER THE EX PIRY OF SIX MONTHS OR NOT. THE ORISSA HIGH COURT HAS HELD IN CASE SRIKHE TRA, A.C.BHAKTI- VEDANTA (SUPRA) THAT THE PERIOD OF SIX MONTHS HAS P ROVIDED IN SUB SECTION 2 TO SECTION 12AA OF THE ACT IS NOT MANDATO RY. IT WAS ALSO OBSERVED THAT WHEN THE PUBLIC DUTY IS PERFORMED BY THE PUBLIC AUTHORITY, THE TIME LIMIT WHICH IS GRANTED BY THE STATUE IS NO RMALLY NOT MANDATORY BUT IS DIRECTORY IN THE ABSENCE OF ANY CLEAR STATUT ORY INTENT TO THE CONTRARY. THE MADRAS HIGH COURT ALSO HELD IN CASE OF COMMISSIONER OF INCOME TAX VS. KARIMANGALAM ONRIYA PENGAL SEMIPU AM AIPU LTD.(SUPRA) THAT THERE IS NO ACADEMIC OR DEEMED REG ISTRATION IF APPLICATION FILED U/S.12AA WAS NOT DISPOSED OFF WIT HIN THE STIPULATED PERIOD OF SIX MONTHS. THE HONBLE SUPREME COURT I N CASE OF BHAVNAGAR UNIVERSITY VS. PALITANA SUGAR MILL PVT. L TD. (SUPRA) HAS OBSERVED THAT THE PROVISION OF STATUTE RELATE TO TH E PERFORMANCE OF A PUBLIC DUTY SHOULD DIRECTORY. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FILING A N APPLICATION U/S.12AA OF THE ACT ON 18.04.2011 CANNOT BE DEEMED TO BE REGISTERED OF TRUST ON EXPIRY OF TIME LIMIT OF THE PERIOD OF SIX MONTHS U/S.12AA OF THE ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 6 ACT. THEREFORE, IN VIEW OF THE SAID CIRCUMSTANCES WE INCLINED TO HOLD TO DECIDE THE ISSUE IN FAVOUR OF THE REVENUE AGAINST T HE ASSESSEE. ISSUE NO.2:- 4. ACCORDING TO ISSUE NO.2 THE CONTENTION OF THE AS SESSEE IS THAT THE REGISTERING AUTHORITY HAS DECLINED THE APPLICATION OF THE APPELLANT ON THE GROUND THAT THE EARLIER REGISTRATION WAS WITHDRAWN VIDE HIS ORDER DATED 21.09.2009 AND THE SAME WAS NOT GOT RENEWED. THE F ACTUAL SITUATION IS NOT IN DISPUTE THAT THE APPELLANT TRUST WAS CREATED ON 08.06.1948 AND WAS REGISTERED UNDER BOMBAY PUBLIC TRUST ACT, 1950. TH E REGISTRATION OF THE TRUST WAS CANCELLED ON ACCOUNT OF SERIOUS ALLEGATIO N OF FINANCIAL MISAPPROPRIATION BY THE TRUSTEES. THE ALLEGATION A GAINST THE TRUSTEES ARE IN CONNECTION WITH THE MISUSING OF TRUST FUNDS TO T HE TUNE OF RS.43.21 CRORES. THEREFORE, THE REGISTRATION GRANTED WAS WI THDRAWN BY VIRTUE OF ORDER DATED 21.09.2009. THE PRESENT APPLICATION HA S BEEN LINKED BY THE AUTHORITY WITH THE EARLIER REGISTRATION OF THE TRUS T OF THE ASSESSEE AND ON ACCOUNT OF ADMITTED FACT OF MISAPPROPRIATION OF FUN DS BY THE TRUSTEE, THE PRESENT APPLICATION HAS BEEN DISMISSED. IT WAS ALS O SAID THAT THE APPELLANT CAN MOVE AN APPLICATION FOR THE RESTORATI ON OF EARLIER REGISTRATION. THE APPLICATION WAS NOT TREATED BY TH E AUTHORITY ON MERITS. IF THE VIEW THAT THE REVENUE IS ENDORSED THEN NO DO UBT THE APPLICANT HAS NO OPTION TO MOVE AN APPLICATION FOR THE REGISTRATI ON OF THE TRUST. SO FAR AS RESTORATION OF EARLIER REGISTRATION IS CONCERNED THE SAME IS SEEMS TO BE DELAYED BEING TIME BARRED AS THE REGISTRATION WAS W ITHDRAWN ON 21.01.2009 AND NOW THE YEAR 2016 IS RUNNING. SO FA R AS THE MISAPPROPRIATION OF THE FUND OF RS.43.21 CRORES IS CONCERNED, THE SAME ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 7 HAS NO CONNECTION WITH THE PRESENT APPLICATION, MOR E SO WHERE THE TRUST CLAIMS TO HAVE SEVERED ALL RELATIONS WITH, AS WELL AS INITIATED CRIMINAL PROCEEDINGS AGAINST, THE DEFAULTER TRUSTEES, SINCE REMOVED. NO DOUBT ACCORDINGLY THE LEGAL REMEDY CAN ALSO BEEN TAKEN BY THE APPELLANT AS WELL AS THE REVENUE BUT THE RIGHT OF THE APPELLANT IS NOT LIABLE TO BE CURTAILED ON ACCOUNT OF RESTORATION OF EARLIER REG ISTRATION. CONSIDERATION OF APPLICATION U/S.12AA OF THE ACT AND TO GO THROUG H THE OBJECT OF THE TRUST AND OTHER VERIFICATION REQUIRED UNDER LAW HA S NOT BEEN DONE BY THE AUTHORITY. IN BRIEF THE APPLICATION MOVED BY THE A PPELLANT U/S.12AA OF THE ACT HAS NOT BEEN EXAMINED AND DISCUSS ON MERIT. THEREFORE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE AUTHORITY DATED 08.12.2011 IN QUESTION IS WRONG AND AGAINST LAW AND FACTS AND NOT LIABLE TO BE SUSTAINED IN THE EYES OF LAW. WE, THEREFORE, SET A SIDE THE ORDER IN QUESTION AND DIRECT THE AUTHORITY CONCERNED TO DECI DE THE MATTER AFRESH IN ACCORDANCE WITH LAW, ISSUING DEFINITE FINDINGS O F FACT AFTER ALLOWING THE APPELLANT AN OPPORTUNITY TO PRESENT ITS CASE BE FORE HIM . 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2016 SD/- SD/- (SANJAY ARORA) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 10 TH JUNE, 2016 MP MP MP MP ITA NO.563/MUM/2012 ASSESSMENT YEAR: 2003-04 8 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. / BY ORDER, ) $ //TRUE COPY// / ! ' (DY./ASSTT. REGISTRAR) # $ , % & / ITAT, MUMBAI