The Malout Institute of Management & information Technology, Malout V. The Income Tax Officer (Exemption), Amritsar.

ITA 605/ASR/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8797 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-10-2016
• Assessment Year: misc
• Appeal Filed On: 24-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DIPANSHU JAIN
• Keywords: Principle of natural justice; Condonation of delay; Capital expenditure
• Section: 143(3); 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 605(ASR)/2015 ASSESSMENT YEAR:......... THE MALOUT INSTITUTE OF MANAGEMENT & INFORMATION TECHNOLOGY, NEW GRAIN MARKET COMPLEX, G. T. ROAD MALOUT (PUNJAB) PAN:AAALM0207B VS. CIT(EXEMPTIONS) CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. GURJEET SINGH (CA) & SH. DIPANSHU JAIN (ADV.) RESPONDENT BY: SH. RAHUL DHAWAN (DR) DATE OF HEARING: 18.10.2016 DATE OF PRONOU NCEMENT: 16.01.2017 ORDER PER N. K. CHOUDHRY (JM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (EXEMPTION), CHANDIGARH, DATED 30.10.2015. 2. THE ASSESSEE HAS RAISED THE SOLE GROUND OF APPEAL. BECAUSE THE ORDER U/S 12AA IS BEING CHALLENGED ON FACTS & LAW, SINCE NOT GRANTING THE EXEMPTION W.E.F.11.08.1998 I N ACCORDANCE WITH THE TRUE & CORRECT INTERPRETATION TO THE PROVI SIONS OF PROVISO TO SECTION 12A(2) INTRODUCED W.E.F. 01.10.2014 HAVING PURPOSIVE & RETROSPECTIVE APPLICATION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIE TY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 VI DE REGISTRATION I TA NO. 605(ASR)/2015 2 NO.643 OF 1998-99 APPROVED BY THE GOVT. OF PUNJAB V IDE MEMO NO.5/9/98-ITE(1)/4881 DT. 11.08.1998. THE MEMORANDU M & ARTICLE OF ASSOCIATION AND RULES HAVE BEEN APPROVED AND FRAMED UN DER THE PERVASIVE, ADMINISTRATIVE, FINANCIAL, FUNCTIONAL & DEE P CONTROL ON THE SUPERVISION, MANAGEMENT OF THE GOVT. OF PUNJAB. THE APPELLANT IS DISPENSING EDUCATION EDUCATIONAL ACTIVI TIES TO NUMBERS OF STUDENTS BELONGING TO DIFFERENT SEGMENTS OF THE SOCIETIES IN VARIOUS PROFILES HAVING BEEN INVOLVED IN THE INSTITU TION AND ALSO GIVEN EMPLOYMENT TO 245 PERSONS OF THE SOCIETIES WHO ARE TEACHI NG AND NON- TEACHING STAFFS. THE DIRECTOR, TECHNICAL EDUCATION & INDU STRIAL TRAINING HAS ALSO GRANTED EXEMPTION TO THE ASSESSEE AND ALSO APPROV ED BY THE GOVT. OF PUNJAB FOR GETTING GRANT IN AID OF RS.13,35,00,000/ - {RS.13.35 CRORES} FOR THE PURPOSE OF PURCHASE OF LAND & MAKING BUILDING THEREON FOR DISPENSING EDUCATION & EDUCATIONA L ACTIVITIES. THE ASSESSEE IS CHARGING FEES FROM THE STUDENTS IN ACCORDANCE WITH RATES CIRCULATED BY PUNJAB TECHNICAL UNIVERSITY, JALANDHAR (PU NJAB). THE EXEMPTION U/S 10(23)(VI) DT. 27.09.2012, WAS ALSO ALLOWED TO THE ASSESSEE VIDE NOTIFICATION NO.152/CCIT/ ASR/2012- 13/1837 WITH EFFECT FROM A.Y. 2011-2012. THE ASSESSEE HAS ALSO APPLIED FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT AND ALSO FILED APPLICATION PRAYING FOR CONDONATION I TA NO. 605(ASR)/2015 3 OF DELAY IN THE REGISTRATION AND EXEMPTION U/S 12AA O F THE INCOME TAX ACT. THE LD. CIT(EXEMPTION) VIDE ORDER DATED 13 TH OCTOBER, 2015 GRANTED THE EXEMPTION TO THE ASSESSEE WHICH WOULD BE APP LICABLE FROM ASST. YEAR 2016-17, HOWEVER, DECLINE TO ACCEPT THE APPL ICATION OF THE ASSESSEE FOR CONDONATION OF DELAY IN FILING THE APPLICATI ON U/S 12AA R.W SUB-SEC 2 OF SEC. 12A. THE ORDER PASSED BY THE LD. C IT(EXEMPTION) IS REPRODUCED HEREIN BELOW. ORDER U/S-12AA OF THE I.T.ACT, 1961 DATED 30.10.2015 AN APPLICATION U/S 12AA WAS FILED BY THE APPLICANT ON 06.4.2015 FOR GRANT FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 19 61. 2. THE APPLICANT SOCIETY HAS FURNISHED THE COPY OF THE DEED DULY CERTIFIED. IT WAS EXAMINED WITH REFERENCE TO OBJECTS OF THE SOCIE TY AND GENUINENESS OF CHARITABLE ACTIVITIES. 3. REGISTRATION U/S 12AA IS HEREBY GRANTED TO T HE ASSESSEE TRUST ON FOLLOWING CONDITIONS:- (I) IF THERE IS ANY CHANGE IN THE RULES AND BYLAWS OF THE TRUST, THE SAME MAY BE INTIMATED TO THIS OFFICE IMMEDIATELY. (II) THE TRUST WILL NOT ENGAGE IN ANY OF THE ACTIVITIES WHICH ARE NOT COVERED U/S 2 (15) OF I. T. ACT, 1961. (III) THE TRUST WILL HAVE TO NECESSARILY FILE THE RETURN OF INCOME U/S 139(4A) OF I.T. ACT BEFORE THE DUE DATE IN FORM NO. ITR 7 ALONG WITH THE AUDIT REPORT. (IV) THIS CERTIFICATE DOES NOT GIVE ANY EXEMPTIONS TO T HE TRUST FROM INCOME TAX AUTOMATICALLY. THE ASSESSING OFFICER WIL L EXAMINE THE CONDITIONS FOR EXEMPTIONS U/S 11,12,12A (B) & 13 OF THE ACT FOR EVERY YEAR. - 4. IF THE TRUST DOES NOT FULFIL THE CONDITIONS MENT IONED ABOVE THE APPROVAL GRANTED THROUGH THIS ORDER WILL BE WITHDRAWN. I TA NO. 605(ASR)/2015 4 5. THE TRUST SHALL APPLY AT LEAST 85% OF THE INCOME DERIVED FROM THE PROPERTY HELD BY THE TRUST FOR CHARITABLE OR RELIGI OUS PURPOSE DURING THAT YEAR AS PER THE CONDITION LAID DOWN U/S 11(1) OF I.T. ACT. 6. THE TRUST SHALL INFORM THE CONCERNED ASSESSING OFFI CER IN WRITING IN FORM NO.10 BEFORE THE DUE DATE FOR FILING OF INCOME TAX RETURN IN CASE 85% OF THE INCOME DERIVED FROM THE PROPERTY HELD BY THE TRUST DURING THAT YEAR WAS NOT APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSE AS PER THE CONDITION LAID DOWN U/S 11(2) OF I.T. ACT. 7. THE TRUST WILL INVEST ITS SURPLUS AS PER THE CON DITIONS LAID DOWN U/S 11(5) OF I. T. ACT. 8. THE APPLICATION WAS FILED IN FINANCIAL YEAR 2015 -16 AND AS SUCH THE APPROVAL U/S 12AA WILL BE APPLICABLE FOR ASSESSMENT YEAR 2016-17 AND ONWARDS UNTIL WITHDRAWN BY CIT(EXEMPTION), CHANDIGARH. THE APPLICATION OF THE ASSESSEE REGARDING CONDONATION OF THE DELAY FOR FIL ING THE APPLICATION U/S 12AA IS NOT ACCEPTED UNDER SUB SECTION 2 OF SECTION 12A. THE REGISTRATION U/S 12AA HAS BEEN ENTERED AT SERI AL NO.513 OF THE REGISTER OF APPROVAL MAINTAINED IN THIS OFFICE. SD/- (AMRESH SINGH) COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH 4. FEELING AGGRIEVED BY THE SAID ORDER PASSED BY THE LD. CIT(EXEMPTION), THE ASSESSEE PREFERRED THE INSTANT APPE AL ONLY ON THE SOLE GROUND MENTIONED IN PARA NO.2 OF THIS ORDER. 5. AT THE OUTSET, THE ASSESSEE ARGUED THAT THE LD. CIT(EXEM PTION) DID NOT GRANT THE EXEMPTION W.E.F 11.08.1998 IN ACCOR DANCE WITH TRUE AND CORRECT INTERPRETATION OF THE PROVISIONS OF PROVISO 2 OF SEC.12A(2) INTRODUCED W.E.F 1 ST OCTOBER, 2014 WHICH IS HAVING PURPOSIVE AND RETROSPECTIVE APPLICATION. FURTHER, THE LD. AR ALSO DR AWN OUR ATTENTION TO THE APPLICATION FILED BY THE ASSESSEE FOR CONDONATION OF DELAY IN FILING OF REGISTRATION AND EXEMPTION U/S 12A OF THE I .T. ACT. FOR THE I TA NO. 605(ASR)/2015 5 SAKE OF BREVITY AND CONVENIENCE, APPLICATION OF THE ASSESSE E IS REPRODUCED HEREIN BELOW. REF.NO.:MIMIT/LEGAL/2015/471 DATE:23 FEBRUARY,2015 THE INCOME TAX OFFICER (EXEMPTION) WARD, AMRITSAR, ROOM NO.20, AAYAKAR BHAWAN, MAQBOOL ROAD, AMRITSAR (PUNJAB) SUBJECT: APPLICATION PRAYING FOR GRANTING CONDONATIN OF DELA Y IN THE REGISTRATION & EXEMPTION U/S 12AA OF I NCOME ACT, 1961 . 1. THE APPLICANT IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 VIDE REGISTRATION NO. 643 OF 1998-99 APPROVED BY THE GOVERNMENT OF PUNJAB VIDE MEMO NO. 5/9/98-ITE(L)/4881 DT. 11.0 8.1998.THE MEMORANDUM & ARTICLE OF ASSOCIATION AND RULES TOO H AVE BEEN APPROVED AND FRAMED UNDER THE PERVASIVE, ADMINISTRATIVE, FIN ANCIAL, FUNCTIONAL & DEEP CONTROL ON THE SUPERVISION, MANAGEMENT OF THE GOVT, OF PUNJAB & WHICH STATE GOVT. ITSELF HAS ESTABLISHED & PROMOTED THE SOCIETY AS 100% INDEPENDENT AUTONOMOUS INSTITUTION. IT IS EXEMPT U/ S 10(23C)(VI) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) U PTO A.Y. 2011 - 12 . 2. THE EXEMPTION TOO GRANTED FROM DIRECTOR, TECHNICAL EDUCATION & INDUSTRIAL TRAINING PUNJAB THROUGH LETTER NO.2976/E CC/S-2/2003 AT 19.09.2003. 3. THE RETURN OF INCOME WAS FILED FOR A.Y. 2007-08 AT AN AMOUNT OF RS.1,08,99,225/- THE RETURNED INCOME (SUPRA) ACCEPT ED & THE ASSESSMENT PROCEEDINGS CONCLUDED AT NIL INCOME THRO UGH THE ORDER U/S 143(3) 25.11.2009. 4. FOR THE A.Y. 2009-10 THE RETURN OF INCOME WAS FILED AT AN AMOUNT OF NIL INCOME & WHICH HAS BEEN PROCESSED U/S 143(1) OF THE ACT AT THE RETURNED INCOME AND THE ASSESSMENT COMPLETED THROUGH ORDER U /S 143(3) AT AN AMOUNT OF RS. 3,67,47,180/- WHILE MAKING THERE IN C ERTAIN DISALLOWANCES & ADDITIONS THROUGH ORDER DT, REGISTRATION & EXEMPT ION U/S 12AA OF INCOME TAX ACT, 1961.29.07.2011 . 5. THE APPLICANT; AS APPROVED BY THE GOVT OF PUNJAB (S UPRA) VIDE MEMO NO. 5/9/98-ITE(L)/4881 IS THE WHOLE & SOLE BASIS FOR GI VING (SUPRA) GRANT IN AID FOR RS. 13,35,00,000/- (RS. 13.35 CRORES) RECEI VED FROM STATE OF PUNJAB FOR THE PURPOSE OF PURCHASE OF LAND & MAKING BUILDING THEREON FOR DISPENSING EDUCATION & EDUCATIONAL ACTIVITIES . 6. CHARGING FEES FROM STUDENTS IN ACCORDANCE WITH THE RATES CIRCULATED BY THE PUNJAB TECHNICAL UNIVERSITY, JALANDHAR (PUNJAB) . THE REVISION PROCEEDINGS (28.10.2011) (SUPRA) WERE DROPPED THROU GH ORDER DT. 23.03.2012 . 7. THERE WAS INITIATION OF REVISION PROCEEDINGS FOR A. Y. 2008-09 THROUGH THE ISSUANCE OF NOTICE U/S 263(1) FOR REVISING THE ASSE SSMENT ORDER U/S 143(3) DT.23.09.2010 WHEREBY THE BASIS SET UP BEING FOR DENYING THE CLAIM FOR CAPITAL EXPENDITURE & ACCUMULATION OF 15% DT. 16.10.2012. IN CONSEQUENCE TO HAVING CONSIDERED THE WRITTEN PLEADI NGS (SUPRA), THE REVISION PROCEEDINGS AGAIN DROPPED FOR A.Y. 2008-09 DT. 15.11.2012. I TA NO. 605(ASR)/2015 6 8. ON DT. 15.03.2013 THE RETURN OF INCOME FOR THE A.Y. 2010-11 FILED ON DT. 20.09.2010 DECLARING NIL INCOME & WHIC H HAS BEEN PROCESSED ON THE RETURNED U/S 143(1) OF THE ACT. TH E CASE SELECTED FOR SCRUTINY PROCEEDINGS THROUGH THE ISSUANCE & SERVICE OF NOTICE U/S 143(2) OF THE ACT. FINDING OF FACT RECORDED QUA THE ATTEND ANCE TO THE 'PROCEEDINGS' AND ADDITIONALLY PRODUCING BOOKS OF A CCOUNTS ALONGWITH THE SUPPORTING BILLS, VOUCHERS & OTHER NECESSARY EVIDEN CES AND WHICH ALL HAVE BEEN CHECKED TOO BY THE RESPONDENT A.O. THERE BEING FINDING OF FACT RETURNED QUA 'EXAMINATION OF THE ACTIVITIES BEING C HARITABLE' AND THE APPLICANT HAVING BEEN PROMOTED, FINANCED BY THE GOV T. OF PUNJAB. THE RETURNED INCOME ACCEPTED AT NIL AMOUNTS AND THE ASS ESSMENT CONCLUDED WHILE RETURNING AFORESAID FINDINGS U/S 143(3). 9. THUS THE HUMBLE PRAYER IS FOR KINDLY CONDONING THE DELAYED FILING OF APPLICATION FOR GRANTING THE REGISTRATION W.E.F FRO M 11.08.1998 WHEN THE APPLICANT HAS BEEN REGISTERED (SUPRA) & THE REASONS FOR CONDONING THE DELAY ARE EXPLAINED BELOW:- (I) THE PLEADING IS THAT WHEN THE PROVISIONS OF SECTION 5 OF THE LIMITATION ACT, 1963 ARE APPLIED THE ESSENTIALS ARE NAMELY: A. SHOWING SUFFICIENT CASUE B. COMING WITH BONAFIDE C. DELAY EXPLAINED (II) THE CONDONATION PROVISIONS ARE TO BE CONSTRUED LIB ERALLY, (III) LIMITATION STATUTE IS FOR EFFECTUATING A BENEFICIA L PUBLIC PURPOSES AND PREVENTING THE OPPRESSION. (IV) IT IS A POSITIVE LAW TO DECREASE LITIGATION AND DI SCOURAGE , DISHONEST DEFENCES . (V) ENSHRINED IN THE MAXIM 'INTEREST REIPULICAE UT SIT FINIS LITION' MEANING THEREBY IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PART TO LITIGATION. (VI) THE SCHEME IS FOR THE PROPER ADMINISTRATION OF JUS TICE. (VII) IT IS A LAW OF PROCEDURE WHICH TAKES WITHIN IT'S AMBIT AND SCOPE THE NEED TO ACT EXPEDITIOUSLY WHEREBY THE LAW OF LIMITATION IN 'STRIETO SENSE' IS NOT THE LAW OF PROCEDURE SIMPLIC ITOR. (VIII) SUFFICIENT CAUSE TO RECEIVE LIBERAL INTERPRETATION . (IX) SETTLED PRINCIPLE OF LAW THAT THE COURTS TO PASS S UCH DIRECTIONS WHICH WOULD HELP IN AVOIDING UNNECESSARY LITIGATION OR WHERE THE ROOT CAUSE OF THE LITIGATION CAN BE SO MANAGED AS TO RED UCE THE BURDEN OF JUSTICE DELIVERY SYSTEM. (X) POWER TO CONDONE DELAY IS FOR DOING SUBSTANTIAL JU STICE TO THE LITIGANT. 10. EVEN FURTHER THE APPLICANT HUMBLY PRAYS FOR THE GRANT OF REGISTRATION & EXEMPTION WITH CONDONATION OF DELAY ON THE FOLLOW ING GROUNDS:- A. BECAUSE THE STATE UNDER ARTICLE 12 R.W. ARTICLE 41 OF THE CONSTITUTION IS HAVING PERVASIVE, ADMINISTRATIVE, F INANCIAL, FUNCTIONAL & DEEP CONTROL ON THE SUPERVISION, MANAG EMENT OF THE PETITIONER SOCIETY, WHILE UNDERTAKING ACTIVITIE S SOLELY COVERED IN SCHEDULE 7 LIST III ENTRY 25 & 28 R.W. S CHEDULE 7 LIST! ENTRY 82 OF THE CONSTITUTION, HENCE THE APPLI CANT BEING THE INSTRUMENTALITY- OF THE STATE UNDER ARTICLE 12 OF THE CONSTITUTION, WHILE CARRYING A CONDUCTING THE CHARI TABLE ACTIVITIES & THE APPLICANT IS NOT UNDERTAKING ANY PROFITABLE O R PERSONAL ACTIVITIES FOR PROFITEERING & NEITHER HAVING ANY SU CH INTENTION OF WHATSOEVER KIND EXCEPT AND SOLELY, WHOLLY CARRYING EDUCATION & EDUCATIONAL ACTIVITIES FOR THE PUBLIC AT LARGE IN L ARGER PUBLIC I TA NO. 605(ASR)/2015 7 INTEREST, TO ALL SEGMENTS OF THE SOCIETY & THE DETERMINATIVE TEST FOR THE APPLICANT BEING AN INSTR UMENTALITY OF THE STATE, THE RELIANCE IS BEING PLACED UPON PRINCI PLE OF LAW IN THE CASE OF RAMANA DAYARAM SHELLY VS. INTERNATIONAL AIRPORT AUTHORITY OF INDIA, (1979) 3 SCC 489 AND WHICH PRINCIPLES OF LAW HAVE BEEN NOTICED SUBSEQUENTLY IN THE CASE O F BALMER LAWRIE & CO. LTD. VS. PARTHASARATHI SEN ROY (20.1.3) 8 SCC 345 PARA 15. .........................15. THE COURT ALSO CONSIDE RED TH CASE OF RAMANA DAYARAM SHELLY V. INTERNATIONAL AIRPORT AUTHORITY O F INDIA & ORS. AIR 1979 SC 1628, WHEREIN IT WAS HELD THAT A CORPOR ATION CAN BE SAID TO HE AN INSTRUMENTALITY OR AGENCY OF THE GOVERNMEN T THEREIN UNDER CERTAIN CONDITIONS, AND THE SAME ARE SUMMARISED BEL OW: (1) ONE THING IS DEAR THAT IF THE ENTIRE SHARE CAPITAL OF THE CORPORATION IS HELD INI GOVERNMENT, IT WOULD GO A LONG WAY TOWARDS INDICATING THAT THE CORPORATION IS AN INSTRUMENTALITY OR AGENCY OF GOVERNMENT. (2) WHERE THE FINANCIAL ASSISTANCE OF THE STATE IS SO MUCH AS TO MEET ALMOST ENTIRE EXPENDITURE OF THE CORPORATION, IT WO ULD AFFORD SOME INDICATION OF THE CORPORATION BEING IMPREGNATED WIT H GOVERNMENTAL CHARACTER. (3) IT MAY ALSO BE A RELEVANT FACTOR WHETHER THE CORPO RATION ENJOYS MONOPOLY STATUS WHICH IS STATE-CONFERRED OR STATE-P ROTECTED. (4) EXISTENCE OF DEEP, AND -PERVASIVE STATE CONTROL MA Y AFFORD AN INDICATION THAT THE CORPORATION IS A STATE AGENCY O R INSTRUMENTALITY. (5) IF THE FUNCTIONS OF THE CORPORATION ARE OF PUBLIC I MPORTANCE AND CLOSELY RELATED TO GOVERNMENTAL JUNCTIONS, IT WOULD BE A RE LEVANT FACTOR IN CLASSIFYING THE CORPORATION AS AN INSTRUMENTALITY O R AGENCY OF GOVERNMENT. (6) SPECIFICALLY, IF A DEPARTMENT OF GOVERNMENT IS TRA NSFERRED TO A CORPORATION, IT WOULD BE A STRONG FACTOR SUPPORTIVE OF THIS INFERENCE OF THE CORPORATION BEING AN INSTRUMENTALITY OR AGENCY OF GOVERNMENT...................... AND WHEREIN ON THE DISPUTE BETWEEN BALMER LAWRIE & THE EMPLOYEE, THE CLAIM OF THE BALMER LAWRIE FOR TERMIN ATING THE SERVICE OF THE EMPLOYEE WAS REJECTED WHILE DISPOSIN G OFF THE APPEAL & WHILE CONSIDERING THE VARIOUS PRINCIPLES O F LAW QUA THE STATE ACTIVITIES BEING MULTIFARIOUS AND WHICH A RE CONTRIBUTING TOWARDS THE STATE'S WELFARE, AIMING AT THE BENEFITS OF ITS SUBJECT, HELD BALMER LAWRIE, A COMPANY COVERED UNDER ARTICLE 12 OF THE CONSTITUTION WHICH IN THE SAID CASE WAS AMENABLE TO WRIT JURISDICTION OF THE 1 LIG H COURT THE COURT FURTHER HELD., 'PARA 28 IN ORDER TO DETERMINE WHETHER THE APPELLANT COMPANY IS AN AUTHORITY UNDER ARTICLE 12 OF THE CONSTITUTION, WE HAVE CONSIDERED FACTORS LIKE THE FORMATION OF THE APPELLANT COMPANY, ITS OBJECTIVES, FUNCTIONS, ITS MANAGEMENT AND CONTROL, THE FINANCIA L AID RECEIVED BY IT, ITS FUNCTIONAL CONTROL AND ADMINISTRATIVE CONTROL, THE EXTENT OF ITS DOMINATIO N BY THE GOVERNMENT, AND ALSO WHETHER THE CONTROL OF THE GOVERNMENT OVER IT IS MERELY REGULATORY, AND HAVE COME TO THE CONCLUSION THAT: THE CUMULATIVE EFFECT OF I TA NO. 605(ASR)/2015 8 ALL THE AFORESAID FACTS IN REFERENCE TO A PARTICULAR COMPANY I.E. THE APPELLANT, WOULD RENDER IT AS AN AUTHORITY AMENABLE TO THE WRIT JURISDICTION O F THE HIGH COURT.' B. BECAUSE THE APPLICANT HEREIN IS UNDER THE MANAGE MENT OF THE STATE UNDER ARTICLE 12 & SECONDLY THE OWNERSHIP, POSSESSI ON AND ENJOYMENT OF THE MOVEABLE, IMMOVEABLE PROPERTIES AR E WITH THE SOCIETY UNDERTAKING ACTIVITIES APPROVED IN ACCORDAN CE WITH THE PROVISIONS OF THE SOCIETIES REGISTRATION ACT, 1860 (SUPRA) AND FOR THE PUBLIC AT LARGE BEING DOMINANT OBJECT. 11. THUS THE HUMBLE PRAYER IS FOR KINDLY CONDONI NG THE DELAVED FILING OF THE APPLICATION U/S 12AA IN THE INTEREST OF SUBSTANTIAL JUSTICE SINCE ON THE TRUE & CORRECT INTERPRETATION TO THE PROPOSITION THAT THE STATE UN DER ARTICLE 12 R.W. ARTICLE 41 OF THE CONSTITUTION HAVING PERVASIVE, ADMINISTRATIVE, FINA NCIAL, FUNCTIONAL & DEEP CONTROL ON THE SUPERVISION, MANAGEMENT OF THE APPLICANT SOC IETY, WHILE UNDERTAKING ACTIVITIES SOLELY COVERED IN SCHEDULE 7 LIST 111 EN TRY 25 & 28 R.W. SCHEDULE 7 LIST I ENTRY 82 OF THE CONSTITUTION, WHEN THERE IS NONE PE RSONAL, PROFITABLE INTENTION IN THE CONDUCT OF SUCH ACTIVITY. 12. THE GROUNDS OF APPEAL ARE BEING RAISED SEPARAT ELY. SD/- APPELLANT PRINCIPAL MALOUT INSTITUTE OF MANAGEMENT & INFORMATION TECHNOLOGY, MALOUT (ESTD. BY GOVT. OF PUNJAB) IT WAS FURTHER STATED AS WELL AS ALSO FORMING PART OF TH E FORM NO.36 THAT THE ASSESSEE THROUGH APPLICATION FOR CONDONAT ION OF DELAY DATED 23 RD MARCH, 2015 RAISES 14 DIFFERENT PRINCIPLES OF LAW ON TH E SUBJECT EXPLAINING THE CONCEPT OF CONDONATION OF DELAY, HOWEVER, THE LD. CIT(EXEMPTION) FAILED TO CONSIDER ANY OF THE GRO UNDS RAISED BY THE ASSESSEE WHILE PASSING THE IMPUGNED DECLINING THE CONDONAT ION OF DELAY. IT WAS FURTHER SUBMITTED THAT THE LAW IS WELL SETTLED O N THE SUBJECT THAT THE ADJUDICATING AUTHORITY IS REQUIRED TO PASS SPEAKING ORDER AS IT IS A BURDEN DUTY UPON IT. THE ASSESSEE FURTH ER SUPPORT HIS CONTENTION BY REFERRING THE JUDGMENT OF JURISDICTIONAL HIGH COURT I TA NO. 605(ASR)/2015 9 PASSED IN THE CASE OF CIT VS. VIKAS CHEMI GUM INDIA (2005)276 ITR 0032, CONCLUDING PART OF THE JUDGMENT IS REPRODUCED HEREIN B ELOW. 10. THE REQUIREMENT OF RECORDING OF REASONS AND COMMUNICATION THEREOF HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PROCEDURE. THE NECESSITY OF GIV ING REASONS FLOWS FROM THE CONCEPT OF RULE OF LAW WHICH CONSTIT UTES ONE OF THE CORNERSTONES OF OUR CONSTITUTIONAL SET UP. THE ADMINISTRATIVE AUTHORITIES CHARGED WITH THE DUTY TO ACT JUDICIALLY CANNOT DECIDE THE MATTERS ON CONSIDERATI ONS OF POLICY OR EXPEDIENCY. THE REQUIREMENT OF RECORDING OF REASONS BY SUCH AUTHORITIES IS AN IMPORTANT SAFEGUARD TO EN SURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARIT Y, CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERAT IONS AND MINIMIZES ARBITRARINESS IN THE DECISION-MAKING PROC ESS. ANOTHER REASON WHICH MAKES IT IMPERATIVE FOR THE QU ASI- JUDICIAL AUTHORITIES TO GIVE REASONS IS THAT THEIR ORDERS ARE NOT ONLY SUBJECT TO THE RIGHT OF THE AGGRIEVED PERSONS TO CHALLENGE THE SAME BY FILING STATUTORY APPEAL AND REVISION BU T ALSO BY FILING WRIT PETITION UNDER ART. 226 OF THE CONSTITU TION. SUCH DECISIONS CAN ALSO BE CHALLENGED BY WAY OF APPEAL U NDER ART. 136 OF THE CONSTITUTION OF INDIA. THE HIGH COURTS H AVE THE POWER TO ISSUE WRIT OF CERTIORARI TO QUASH THE ORDE RS PASSED BY A QUASI-JUDICIAL AUTHORITY/TRIBUNAL. LIKEWISE, IN A PPEAL, THE APEX COURT CAN NULLIFY SUCH ORDER/DECISION. THESE P OWERS CAN BE EFFECTIVELY EXERCISED BY THE SUPERIOR COURTS ONL Y IF THE ORDER UNDER CHALLENGE CONTAINS REASONS. IF SUCH ORDER IS CRYPTIC AND DEVOID OF REASONS, THE COURTS CANNOT EFFECTIVELY EX ERCISE THE POWER OF JUDICIAL REVIEW, AND WE CANNOT COUNTENANCE A SITUATION IN WHICH THE ADMINISTRATIVE AUTHORITIES V ESTED WITH THE POWER TO DECIDE THE RIGHTS OF THE PARTIES MAY S TULTIFY THE POWERS OF THE COURT SIMPLY BY NOT RECORDING REASONS IN SUPPORT OF THEIR DECISIONS AND/OR BY REFRAINING FRO M COMMUNICATING SUCH REASONS TO THE AFFECTED PERSON. THIS IS THE REASON WHY THE COURTS HAVE INSISTED ON RIGOROUS COMPLIANCE OF THE REQUIREMENT OF RECORDING OF REASO NS AND COMMUNICATION THEREOF BY EVERY QUASI-JUDICIAL AUTHO RITY. FURTHER, IT WAS CONTENDED THAT THE HONBLE APEX COUR T IN THE CASE OF CHANDAN IMPEX PVT. LTD. VS. COMMISSIONER OF CUSTOMS, NE W DELHI (2011) 7 SC 289 CLARIFIED THE POSITION QUA PASSING THE REASONED ORDER. THE CRUX OF THE DECISION IS REPRODUCED HEREIN BE LOW. I TA NO. 605(ASR)/2015 10 ....... IN STATE OF ORISSSA V. DHANIRAM LUHAR THIS COURT, WHILE REITERATING THAT REASON IS THE HEARTB EAT OF EVERY CONCLUSION, AND WITHOUT THE SAME IT BECOMES LIFELES S, OBSERVED THUS: 8.....RIGHT TO REASON IS AN INDISPENSABLE PART OF A SOUND JUDICIAL SYSTEM; REASONS AT LEAST SUFFICIENT TO IND ICATE AN APPLICATION OF MIND TO THE MATTER BEFORE COURT. ANO THER RATIONAL IS THAT THE AFFECTED PARTY CAN KNOWN WHY THE DECISI ON HAS GONE AGAINST HIM. ONE OF THE SALUTARY REQUIREMENTS OF NATURAL JUSTICE IS SPELLING OUT REASONS FOR THE ORDER MADE; ... THE LD. AR ALSO RAISED MANY GROUNDS AND SUBMITTED THAT THE INTERPRETATION OF THE AMENDED PROVISIONS OF PROVISO -2 OF SEC.12A(2) INTRODUCED W.E.F 1 ST APRIL,2014 HAS TO BE CONSTRUED LIBERALLY AND TO BE APPLIED RETROSPECTIVELY. FURTHER THE LD. AR RELIED UP ON MANY JUDGMENTS PASSED BY THE VARIOUS BENCHES OF ITAT IN SUPPORT OF ITS CAS E. 6. ON THE OTHER HAND , THE LD. DR STRONGLY ARGUED THAT THE LAW IS AS ENUMERATED BY AMENDMENT OF PROVISO IS VERY MUCH CLEAR W ITH REGARD TO THE EFFECTIVENESS AND ITS APPLICABILITY WHICH HAS TO BE GIVEN EFFECT PROSPECTIVELY. FURTHER IT WAS SUBMITTED BY THE LD. AR THAT THERE WAS NO ASSESSMENT PROCEEDING PENDING QUA ASSESSEE BEFORE THE ASSESSING OFFICER AT THE TIME OF GRANT OF EXEMPTION U/S 12AA BY THE LD. CIT(EXEMPTION) AND THEREFORE, FIRST PROVISO TO SUB-SECT ION 2 OF SEC.12A IS NOT APPLICABLE AND FURTHER THE APPLICATION H AS BEEN MADE AFTER 1 ST JUNE, 2007, THEREFORE, RELIEF SOUGHT BY THE ASSESSEE W ITH REGARD TO CONDONATION OF DELAY IS NOT PERMISSIBLE SINCE C LAUSE(A) OF I TA NO. 605(ASR)/2015 11 SUB-SECTION (1) OF SEC. 12A IS NO LONGER IN OPERATION AFTER 1 ST JUNE, 2007. THERE IS NO PROVISION WHICH EMPOWER THE COMMISSIO NER TO GRANT REGISTRATION WITH EFFECT FROM DATE FORMATION OF TRUST /INSTITUTIONS. FURTHER, IT WAS ALSO ARGUED BY THE LD. DR THAT THE C ASES RELIED UPON BY THE ASSESSEE DOES NOT APPLY IN THE CASE OF ASSESSEE BECAUSE NO PROCEEDINGS WITH REGARD TO THE ASSESSMENT YEAR WAS PEND ING BEFORE THE ASSESSING OFFICER. IT WAS FURTHER ARGUED BY THE LD. DR THAT AS PER THE F INANCE ACT (2) 2014, SOME OF THE AMENDMENTS HAVE TAKEN PLACE RETR OSPECTIVELY FOR EXAMPLE I.E. AMENDMENT TO SEC.116 HAS BEEN APPLIE D RETROSPECTIVELY W.E.F 1 ST JUNE 2013 AS PER LAW CLAUSES AND PROCEEDINGS, BUT NOT TO THE PROVISIONS OF FINANCE ACT (2) 2014, IT I S CLEAR THAT LEGISLATURE WAS FULLY AWARE OF THE AMENDMENT WHICH A RE TO BE APPLIED RETROSPECTIVELY AND WHICH ARE TO BE APPLIED PROSPECTIVEL Y. FURTHER, IN THE EXPLANATORY NOTE ALSO, THERE IS CLEAR MENTIONING T HAT THE AMENDMENT WOULD TAKE EFFECT FROM 1 ST JULY, 2014, HENCE, THERE IS NO INTENTION OF ITS RETROSPECTIVE APPLICATION. FURTHER, IT WAS SUBMITTED THAT THE HONBLE APEX COUR T IN THE CASE OF CIT VS. VATIKA TOWNSHIP (SC), CONSIDERED THE ASPECTS OF APPLICATION FROM RETROSPECTIVE AND/OR PROSPECTIVE EFFECTS AND OBSERVED AS UNDER: I TA NO. 605(ASR)/2015 12 (A) VARIOUS RULES GUIDING HOW LEGISLATION HAS TO B E INTERPRETED, ONE ESTABLISHED RULES IS THAT UNLESS A CONTRARY INTENTION APPEARS, LEGISLATION IS PRESUMED NOT TO B E INTENDED TO HAVE A RETROSPECTIVE OPERATION. (B) INTENTION OF LEGISLATURE WAS TO MAKE IT PROSPEC TIVE IN NATURE. THIS PROVISO CANNOT BE TREATED AS DECLARATO RY /STATUTORY OR CURATIVE IN NATURE. FURTHER, THE LD. DR RELIED UPON THE JUDGMENT TITLED R. S. NAYAK VS A. R. ANTULAY, 16 FEBRUARY, 1984 DECIDED BY HONBLE APEX COURT, IN WHICH IT WAS RULED THAT IF THE WORDS OF STATUTE ARE CLEAR AND UNAMBIGUOUS, IT IS PLAINEST DUTY OF THE COURT TO GIVE EFFECT TO THE NA TURAL MEANING OF THE WORDS USED IN THE PROVISIONS. THE QUESTION O F CONSTRUCTION ARISES UPON ONLY IN THE EVENT OF AN AM BIGUITY OF THE PLAIN MEANING OF THE WORDS USED IN THE STATUTE WOULD BE SELF DEFEATING. FINALLY IT WAS ARGUED BY THE LD. DR THAT IT IS WELL SE TTLED LAW THAT THE DECISIONS OF THE HONBLE COURTS ARE NOT TO BE APPL IED IN THE ABSTRACT, BUT ARE TO BE APPLIED TO THE FACTS OF THE CASE. 7. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERED THE RIVAL SUBMISSIONS OF THE PART IES AS THE ASSESSEE HAS RAISED SOLE GROUND OF APPEAL WITH REGARD TO THE APPLICATION OF THE AMENDMENT TO PROVISO OF SEC.12A (2) WHICH WAS INTRODUCED W.E.F., 1 ST OCTOBER, 2014. THE LD. AR RAISED SPECIFIC ISSUE WITH REGARD TO THE NON CONSIDERATION AND NON DECISION ON THE APPLICATION FOR CON DONATION OF DEALY FILED BY THE ASSESSEE BEFORE THE LD. CIT(EXEMPTIO N), AS IT WAS I TA NO. 605(ASR)/2015 13 EMPHASIZED THAT IN PRINCIPLE OF LAW THE ADJUDICATING AUTHORITY IS SUPPOSED TO PASS A REASONED ORDER, WHICH IN THE INSTANT CASE , THE LD. CIT(EXEMPTION) FAILED TO DO SO. WE HEREBY OBSERVED T HAT ALTHOUGH BOTH THE PARTIES HAVE ARGUED EXTENSIVELY THEIR CASE IN LENGTH ON MERITS AS WELL, HOWEVER, THERE IS NO OBSERVATION OF LD. CIT(E XEMPTION) WHILE DECIDING THE APPLICATION FOR CONDONATION OF DELAY, WH ICH GOES TO THE ROOT OF THE CASE AND ALSO SHOWS NON-APPLICATION OF MIND. IT REFLECTS FROM THE RECORD THAT BY FILING AN APPLICATION FOR CON DONATION OF DELAY, THE ASSESSEE RAISED MANY ISSUES AND GROUNDS IN SUPPORT OF ITS CASE, HOWEVER, THE LD. CIT(EXEMPTION) DECLINED SIMPLY BY ME NTIONING THAT THE APPLICATION OF THE ASSESSEE REGARDING CONDONATION OF DELAY FOR FILING OF APPLICATION U/S 12AA IS NOT ACCEPTED UNDER SUB- SECTION 2 OF SEC.12A. WE ARE IN AGREEMENT WITH THE SUBMISSIONS RAISED BY THE LD. AR THAT REASON IS THE HEART BEAT OF EVERY CONCLUSION AND WI THOUT THE SAME, IT BECOMES LIFE LESS. RIGHT TO REASON IS INDISPENSABL E PART OF THE SOUND JUDICIAL SYSTEM, REASONS AT LEAST SUFFICIENT TO INDICA TE AN APPLICATION OF MIND TO THE MATTER BEFORE THE COURT. ANOTHER RATIONAL IS THAT THE AFFECTED PARTIES WOULD KNOW, WHY THE DECISION HAS GONE AGAINST HIM. ONE OF THE STATUTORY REQUIREMENT OF TH E NATURAL JUSTICE IS SPELLING OUT REASONS OF THE ORDER MADE. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE FEEL IT APPROPRIATE TO RESTRICT OURSELVES TO TOUCH THE MERIT OF THE CASE AND I N THE INTEREST I TA NO. 605(ASR)/2015 14 OF JUSTICE, IT WOULD BE PROPER AND APPROPRIATE TO DIR ECT THE LD. CIT(EXEMPTION) TO DECIDE AFRESH THE APPLICATION FOR CON DONATION OF DELAY AS FILED BY THE ASSESSEE ON MERITS. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES AND THE PARTIES ARE AT LIBERTY FOR RAISING GROUNDS AND ARGUMENTS BEFORE THE LD. CIT(E) IN SUPPORT OF THE IR CASE. ORDER PRONOUNCED IN THE OPEN COURT ON 16.0 1. 2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16.01.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER