Muthukattil charitable trust, Kannur V. CIT, Kannur

ITA 57/COCH/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65049 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 29-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: SAJI K THOMAS
• Keywords: Charitable institution; Reasonable cause
• Section: 80G

Judgement Text

1 ITA NO.57/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 57/COCH/2012 MUTHUKATTIL CHARITABLE TRUST VS C.I.T., KANNUR MUTHUKATTIL HOUSE MADAMBAM POST SREEKANDAPURAM, KANNUR PAN : AAATM7074L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAJI K THOMAS RESPONDENT BY : SMT. SUSAN GEORGE VARGHESE DATE OF HEARING : 15-11-2012 DATE OF PRONOUNCEMENT : 21-12-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX, KANNUR DATED 26-02-2009 REFUSING TO GRANT APPROVAL U/S 80G OF THE ACT. 2. THERE IS A DELAY OF 1025 DAYS IN FILING THE APPE AL. THE TAXPAYER SUBMITS THAT THE APPLICATION FILED BY THE TAXPAYER WAS DISMISSED BY THE COMMISSIONER ON 26-02-2009. THEREFORE, THE TAXPAYE R FILED ANOTHER 2 ITA NO.57/COCH/2012 APPLICATION BEFORE THE COMMISSIONER OF INCOME-TAX W HICH WAS ALSO DISMISSED AS NOT MAINTAINABLE. APPEAL WAS FILED AG AINST THAT SUBSEQUENT ORDER OF THE COMMISSIONER BEFORE THIS TRIBUNAL IN I TA NO.49/COCH/2010. THIS TRIBUNAL, BY AN ORDER DATED 21-10-2011 DISMISS ED THE APPEAL OF THE TAXPAYER ON THE GROUND THAT THE ORDER PASSED ON 26- 02-2009 BECAME FINAL; THEREFORE, THE TAXPAYER HAS TO FILE THE APPEAL AGAI NST THE ORDER OF THE COMMISSIONER DATED 26-02-2009. HENCE, ACCORDING TO THE TAXPAYER, THE DELAY OCCURRED WHICH WAS BEYOND THE CONTROL OF THE TAXPAYER. ACCORDING TO THE LD.REPRESENTATIVE, THE TAXPAYER UNDER A WRONG N OTION PURSUED THE REMEDY BEFORE A WRONG FORUM BY FILING ANOTHER APPLI CATION INSTEAD OF FILING APPEAL BEFORE THIS TRIBUNAL WHICH CAUSED THE DELAY IN FILING APPEAL BEFORE THIS TRIBUNAL. THEREFORE, IT WAS SUBMITTED THAT TH ERE WAS A REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. 3. ON THE CONTRARY, THE LD.DR SUBMITTED THAT THE DE LAY IS ENORMOUS; THEREFORE, THE TAXPAYER CANNOT CLAIM THAT THERE WAS A REASONABLE CAUSE IN NOT FILING THE APPEAL IN TIME. ACCORDING TO THE LD .DR, THE APPEAL FILED BY THE TAXPAYER AFTER 1025 DAYS FROM THE DUE DATE IS NOT M AINTAINABLE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT AFTER DISMISSAL OF THE ORIGINAL APPLICATION BY THE COMMISSIONER OF INCOME- TAX, THE TAXPAYER, INSTEAD OF FILING APPEAL BEFORE THIS TRIBUNAL, HAS FILED ANOTHER APPLICATION BEFORE THE COMMISSIONER OF INCOME-TAX. THAT APPLIC ATION WAS ALSO DISMISSED BY THE COMMISSIONER. THE TAXPAYER HAS FI LED APPEAL BEFORE THIS 3 ITA NO.57/COCH/2012 TRIBUNAL IN ITA NO.49/COCH/2010 AGAINST THE SUBSEQU ENT ORDER OF THE COMMISSIONER OF INCOME-TAX. THIS TRIBUNAL IN ITS O RDER DATED 21-10-2011 FOUND THAT SINCE THE ORDER DATED 26-02-2009 PASSED BY THE COMMISSIONER OF INCOME-TAX IN ORIGINAL APPLICATION BECAME FINAL THE APPEAL FILED BY THE TAXPAYER ON THE ORDER OF THE COMMISSIONER OF INCOME -TAX ON THE SECOND APPLICATION FILED BY THE TAXPAYER IS NOT MAINTAINAB LE. ACCORDINGLY, THE APPEAL WAS DISMISSED. AFTER THE RECEIPT OF THE ORD ER OF THE TRIBUNAL DISMISSING THE APPEAL, THE TAXPAYER, ON 29-02-2012 HAS FILED THE PRESENT APPEAL. THEREFORE, IT IS OBVIOUS THAT THE TAXPAYER WAS PURSUING ON OR THE OTHER REMEDY CONTINUOUSLY AND THERE WAS NO INACTION OR NEGLIGENCE ON THE PART OF THE TAXPAYER. OF COURSE, INSTEAD OF FILING APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER DATED 26-02-2009 PASSED BY THE CO MMISSIONER OF INCOME-TAX, THE TAXPAYER FILED ANOTHER APPLICATION BEFORE THE COMMISSIONER OF INCOME-TAX WHICH WAS ALSO REJECTED AND THE TRIBUNAL CONFIRMED THAT ORDER OF THE COMMISSIONER OF INCOME- TAX BY OBSERVING THAT THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX ON 26-02-2009 WAS FINAL. IN THESE FACTUAL CIRCUMSTANCES, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THERE WAS A REASONABLE CAUSE ON THE PA RT OF THE TAXPAYER WHICH PREVENTED IT FROM FILING THE APPEAL BEFORE TH IS TRIBUNAL IN TIME. THE TAXPAYER WAS NOT SLEEPING OVER THE MATTER. IN FACT , THE TAXPAYER HAS TAKEN ALL THE EFFECTIVE STEPS, PERHAPS MIGHT BE BEFORE A WRONG FORUM. BUT WE FIND THAT THE CIRCUMSTANCES NARRATED ABOVE WOULD ALSO CO NSTITUTE A REASONABLE CAUSE WHICH PREVENTED THE TAXPAYER FROM FILING THE APPEAL IN TIME BEFORE THIS TRIBUNAL. ACCORDINGLY WE CONDONE THE DELAY OF 1025 DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL. 4 ITA NO.57/COCH/2012 5. NOW COMING TO THE MERIT OF THE APPEAL, THE LD.RE PRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE COMMISSIONER OF INCOME- TAX(A) HAS REJECTED THE APPLICATION FOR APPROVAL U/S 80G OF THE ACT ON THE GROUND THAT THE TRUST WAS ESTABLISHED WITH AN OBJECT FOR A PARTICULAR COM MUNITY. WHEN IT WAS POINTED OUT BY THE COMMISSIONER OF INCOME-TAX, ACCO RDING TO THE LD.REPRESENTATIVE, A RESOLUTION WAS PASSED BY THE B OARD OF DIRECTORS TO EXTEND THE BENEFIT TO ALL COMMUNITIES. ON A QUERY FROM THE BENCH, WHEN THE TRUST DEED WAS AMENDED ENABLING THE TRUST TO EX TEND THE BENEFIT TO ALL THE COMMUNITIES, THE LD.REPRESENTATIVE FOR THE TAXP AYER VERY FAIRLY SUBMITTED THAT THE TRUST DEED WAS NOT AMENDED; BUT, BY WAY OF A RESOLUTION, THE BOARD OF DIRECTORS DECIDED TO EXTEN D THE BENEFIT TO ALL THE COMMUNITIES. 6. ON THE CONTRARY, THE LD.DR SUBMITTED THAT THE TA XPAYER CONFINED ITS OBJECT ONLY TO CHRISTIAN COMMUNITY. THEREFORE, THE TAXPAYER IS NOT ENTITLED FOR APPROVAL U/S 80G OF THE ACT. REFERRING TO SECT ION 80G(5)(III) OF THE ACT, THE LD.DR SUBMITTED THAT THE BENEFIT SHOULD NOT BE RESTRICTED TO ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE AND IT SHOU LD BE OPEN TO ALL COMMUNITIES IRRESPECTIVE OF THE RELIGION, CASTE OR CREED. THEREFORE, ACCORDING TO THE LD.DR, THE COMMISSIONER OF INCOME- TAX(A) HAS RIGHTLY REJECTED THE APPLICATION FOR APPROVAL U/S 80G OF TH E ACT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRUS T DEED PROVIDES THAT THE 5 ITA NO.57/COCH/2012 BENEFITS WILL BE PROVIDED PREFERABLY FOR THE BENEFI T OF THE CHRISTIANS. THEREFORE, IN THE MAIN OBJECT ITSELF, A PREFERENCE IS SHOWN TO A PARTICULAR COMMUNITY. WHEN IT WAS POINTED OUT BY THE COMMISSI ONER OF INCOME-TAX, THE TAXPAYER CLAIMED THAT A RESOLUTION WAS PASSED T O EXTEND THE BENEFIT TO ALL SECTIONS OF THE SOCIETY IRRESPECTIVE OF THE REL IGION, CASTE, CREED AND RACE. BUT THE FACT REMAINS IS THAT THE MAIN OBJECT IN THE TRUST DEED REMAINS AS IT IS WITHOUT ANY CHANGE. WHEN THE OBJECT OF THE TRUST A S PER THE TRUST DEED DOES NOT ENABLE THE TAXPAYER TO PERFORM ITS ACTIVIT Y TO ALL SECTIONS OF THE PEOPLE IRRESPECTIVE OF RELIGION, CASTE, CREED OR RA CE, A MERE RESOLUTION PASSED WOULD NOT OVERRULE THE OBJECT CONTAINED IN T HE TRUST DEED. THIS TRIBUNAL, THEREFORE, IS OF THE CONSIDERED OPINION T HAT THE OBJECT CONTAINED IN THE TRUST DEED WOULD PREVAIL OVER THE SUBSEQUENT RESOLUTION. THEREFORE, THE PROVISIONS OF SECTION 80G(5)(III) WOULD COME IN TO OPERATION. ACCORDINGLY, THE TAXPAYER IS NOT ENTITLED FOR APPRO VAL U/S 80G OF THE ACT. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE TAXPAYER IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DECEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 21 ST DECEMBER, 2012 PK/- 6 ITA NO.57/COCH/2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH