Hindustan Chamber of Commerce, CHENNAI V. DIT, CHENNAI

ITA 670/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6357 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-08-2017
• Assessment Year: misc
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDIPCIT
• Assessee Lawyers: G SEETHARAMAN
• Keywords: Opportunity of being heard; Period of limitation; Reasonable cause; Condonation of delay
• Section: 12A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.670/MDS./2017 M/S.HINDUSTAN CHAMBER OF COMMERCE , GREAMS DUGAR, SOUTH WING, V FLOOR, NO.149, GREAMS ROAD, CHENNAI 600 006. VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI -600 034. [PAN AAACH 2185 E ] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.G.SEETHARAMAN, C.A ! /RESPONDENT BY : MR.SAILENDRA MAMIDI,PCIT, DR ' # $% / DATE OF HEARING : 10 - 08 - 2017 &' ( $% / DATE OF PRONOUNCEMENT : 23 - 08 - 2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI-34 DATED 15.12.2011 CANCELLING THE EXEMPTION U/S.12AA OF THE INCOME-TAX ACT,1961. 2. AT THE OUTSET, IT WAS NOTICED THAT THERE WAS A DELAY OF 1857 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNAL. TH E ASSESSEE FILED AN ITA NO.670/MDS./2017 :- 2 -: AFFIDAVIT DATED 20 TH MARCH, 2017 FOR CONDONATION OF DELAY OF 1918 DAYS. SHRI G.SEETHARAMAN, THE LD.AUTHORISED REPRESENTATIV E OF ASSESSEE SUBMITTED THAT THE ASSESSEE FILED A WRIT PETITION B EFORE THE MADRAS HIGH COURT CHALLENGING THE CORRECTNESS OF THE IMPUG NED ORDER OF DIRECTOR OF INCOME-TAX (EXEMPTIONS). THE WRIT PETI TION WAS ADMITTED AND STILL IT IS PENDING FOR ADJUDICATION. ACCORDING TO AUTHORIZED REPRESENTATIVE OF ASSESSEE, RIGHT PROCEDURE IS TO F ILE AN APPEAL BEFORE THE TRIBUNAL AND NOT TO FILE WRIT PETITION BEFORE T HE MADRAS HIGH COURT. THEREFORE, THE ASSESSEE FILED THIS APPEAL BEFORE TH E TRIBUNAL. SINCE THE ASSESSEE WAS PROSECUTING THE WRIT PETITION, THE RE WAS A DELAY OF 1918 DAYS IN FILING THE APPEAL, THEREFORE, THE DELA Y MAY BE CONDONED. 3. ON THE CONTRARY, SHRI SAILENDRA MAMID, LD. DEPA RTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE ADMITTED LY FILED A WRIT PETITION AND THE SAME IS PENDING FOR ADJUDICATION. THEREFORE, THE ASSESSEE INTENTIONALLY FAILED TO FILE THE APPEAL BE FORE THIS TRIBUNAL. HENCE, THERE WAS NO REASONABLE CAUSE ON THE PART OF THE ASSESSEE IN NOT FILING THE APPEAL IN THE PRESCRIBED TIME. 4. WE HAVE HEARD THE LD. REPRESENTATIVE FOR THE AS SESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE. AS RIGHTLY SU BMITTED BY THE LD. ITA NO.670/MDS./2017 :- 3 -: REPRESENTATIVE FOR THE ASSESSEE, THE ORDER OF DIREC TOR OF INCOME-TAX (EXEMPTIONS), CHENNAI VIDE ORDER DATED 15.12.2011 I S APPEALABLE BEFORE THIS TRIBUNAL. MOREOVER, THE ASSESSEE IS VI GILANT IN PROSECUTING THE MATTER. THE ASSESSEE FILED A WRIT PETITION PROM PTLY AND PROSECUTING THE SAME CONTINUOUSLY. STILL, THE WRIT PETITION FIL ED BEFORE THE HIGH COURT IS PENDING FOR ADJUDICATION. THEREFORE, WE F IND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE T HIS TRIBUNAL WITHIN A PERIOD OF LIMITATION. THEREFORE, WE CONDONE THE DEL AY AND ADMIT THE APPEAL. 5. NOW COMING TO THE MERIT OF THE APPEAL, THE DIRE CTOR OF INCOME-TAX (EXEMPTIONS) CANCELLED THE REGISTRATION GRANTED TO THE ASSESSEE U/S.12AA(3) OF THE ACT WITH EFFECT FROM 01 .04.2009. WE HAVE GONE THROUGH THE PROVISIONS OF THE SECTION 12AA(3) OF THE ACT, WHICH READS AS FOLLOWS:- (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A AS IT STOOD BEFORE ITS A MENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996) AND SUBS EQUENTLY THE PRINCIPAL COMMISSIONER OR COMMISSIONER IS SATISFIED THAT THE ITA NO.670/MDS./2017 :- 4 -: ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GEN UINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN O RDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTIT UTION : PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHA LL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A R EASONABLE OPPORTUNITY OF BEING HEARD. IT IS OBVIOUS FROM THE ABOVE PROVISION THAT WHEN TH E TRUST OR INSTITUTION WAS FOUND TO BE NOT GENUINE OR NOT BEIN G CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE TRUST OR INSTITUT ION, THE PRINCIPLE COMMISSIONER OF INCOME-TAX OR COMMISSIONER, AS THE CASE MAY BE, MAY CANCEL THE REGISTRATION. 5.1 IN THIS CASE, IT IS NOBODYS CASE THAT THE AS SESSEE-TRUST IS NOT A GENUINE ONE OR IT IS NOT CARRYING OUT ITS ACT IVITY IN ACCORDANCE WITH ITS OBJECTS. THEREFORE, THE CANCELLATION OF RE GISTRATION BY THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI IS NOT JUSTIFIED. THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS ALSO PLACED REL IANCE ON THE ORDER OF TRIBUNAL IN THE CASE OF M/S.MADRAS CHAMBER OF C OMMERCE AND INDUSTRY VS. ACIT IN ITA NO.879 & 880/MDS./2016 VID E ORDER DATED 05.02.2016 AND ALSO CBDT CIRCULAR NO.21 OF 2016 DAT ED 27 TH MAY, ITA NO.670/MDS./2017 :- 5 -: 2016. SINCE IT IS NOT THE CASE OF THE REVENUE THAT THE ACTIVITIES OF THE ASSESSEE-TRUST ARE NOT CARRIED OUT IN ACCORDANCE WI TH THE OBJECTS OF THE TRUST, WE ARE UNABLE TO UPHOLD THE ORDER OF THE DIR ECTOR OF INCOME-TAX (EXEMPTIONS). ACCORDINGLY, THE SAME IS QUASHED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED. ORDER PRONOUNCED ON 23 RD AUGUST, 2017, AT CHENNAI. SD/ - SD/ - ( ) (S. JAYARAMAN) ! /ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) # ! /JUDICIAL MEMBER ) # / CHENNAI * / DATED: 23 RD AUGUST, 2017. K S SUNDARAM $,- .-($ / COPY TO: 1 . / APPELLANT 3. ' /$ () / CIT(A) 5. -2 $34 / DR 2. ! / RESPONDENT 4. ' /$ / CIT 6. 56 7# / GF