M/s Akmalia Welfare Trust, Srinagar V. The Commissioner of Income Tax (J&K), Jammu Tawi (J&K)

ITA 676/ASR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9651 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 20-07-2016
• Assessment Year: misc
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ABDUL RASHID DULLOOCA
• Keywords: Charitable institution; Condonation of delay
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.676(ASR)/2014 PAN: AAETA0769Q M/S. AKMALIA WELFARE TRUST VS. COMMISSIONER OF INCO ME TAX MIRZA KAMIL SAHAB CHOWK, JAMMU. HAWAL, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.ABDUL RASHID DULLOO,CA RESPONDENT BY: SH. RAHUL DHAWAN, DR DATE OF HEARING: 20/07/2016 DATE OF PRONOUNCEMENT: 01/08/2016 ORDER PER A.D. JAIN, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (J&K), JAMMU, DATED 31.0 7.2014, REFUSING THE REGISTRATION OF THE INSTITUTION U/S 12AA((B)(II ) OF THE INCOME TAX ACT, 1961, ALLEGEDLY, ON THE BASIS OF MISGIVINGS. 2. THE DEPARTMENT HAS MOVED AN APPLICATION FOR ADJO URNMENT, WHICH STANDS REJECTED. 2. AT THE TIME OF HEARING, IT WAS NOTICED THAT THER E IS A DELAY OF 36 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED AN APPLICATION DATED 31.10.2014 FOR CONDONATION OF DEL AY, WHICH READS AS UNDER: ITA NO.676/ASR/2014 2 APPLICATION FOR CONDONATION OF DELAY MAY IT PLEASE YOUR HONOUR; I, GHULAM NABI KAMLI S/O MR. ABDUL SALAM KAMLI R/O MIRZA KAMIL SAHAB CHOWK, HAWAL, SRINAGAR RESPECTFULLY BEG , PRAY AND HUMBLY SUBMIT AS UNDER: 1. THAT I AM THE APPELLANT IN THE AFOREMENTIONED A PPEAL AND SUBMIT THAT I KNOW THE FACTS OF THE CASE. 2. THAT THE ABOVE APPEAL IS MADE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (J&K) REFUSING THE REGISTRATION OF THE AKMALIA WELFARE TRUST, HAWAL, SRINAGAR UNDER SECTION 12A OF THE INCOME TAX ACT,19 61 AS A RELIGIOUS AND CHARITABLE INSTITUTION. 3. THAT THE SAID APPEAL OUGHT TO HAVE BEEN FILED O N OR BEFORE 1 ST OCTOBER, 2014 BUT AN UNPRECEDENTED FLOOD RAVAGED ALMOST WHOLE VALLEY OF KASHMIR PARTICULARLY SRINAGAR CITY ON 7 TH SEPTEMBER,2014 LEAVING THE PEOPLE OF THE VALLEY DEVASTATED AND UNABLE TO RECOUP TILL LATE OCTOBER,2014 WHICH RESULTED IN THE DELAY OF 30 DAYS IN FILING THE SAID APPEAL WHICH DELAY THEREFORE, WAS N OT DUE TO MY DEFAULT BUT DUE TO CIRCUMSTANCES BEYOND M Y CONTROL. 4. THAT I HAVE FILED A SEPARATE AFFIDAVIT ALONG WI TH THIS PETITION FOR CONDONATION OF DELAY OF 30 DAYS. 5. THAT THIS HONORABLE BENCH OF THE INCOME TAX APP ELLATE TRIBUNAL ON SCRUTINIZING THE FACTS AND CIRCUMSTANCE S OF THIS APPLICATION MAY PLEASE CONSTRUE THE FACTS AND CIRCUMSTANCES AS ' SUFFICIENT CAUSE' FOR CONDONING THE DELAY. 6. THAT THE FACTS AND CIRCUMSTANCES ELUCIDATED IN THIS APPLICATION INVOLVES THE QUESTION OF SUBSTANTIAL JU STICE WHERE DELAY OF 30 DAYS DESERVES TO BE CONDONED IN T HE OVERALL INTEREST OF JUSTICE. HOWEVER, ON THE OTHER HAND, IF THE CONDONATION OF DELAY IS DENIED IT WOULD SERIOUS LY UNDERMINE THE CAUSE OF JUSTICE RESULTING IN THE MISCARRIAGE OF JUSTICE FOR THE APPELLANT. VERIFICATION ITA NO.676/ASR/2014 3 I, GHULAM NABI KAMLI S/O MR. ABDUL SALAM KAMLI R/O MIRZA KAMIL SAHAB CHOWK, HAWAL, SRINAGAR DO HEREBY VERIFY THAT THE CONTENTS FROM PARAGRAPHS 1 TO 6 ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BEIIEF, THE REST OF THE CONTENTS ARE BASED ON LEGAL ADVICE, WHI CH I BELIEVE TO BE TRUE. AFFIRMED AT SRINAGAR, THIS THE 31 ST DAY OF OCTOBER, 2014. 3. THE ASSESSEE HAS ALSO FILED AN AFFIDAVIT DATED 3 1 ST OCTOBER, 2014, STATING THEREIN THAT THE ASSESSEE COULD NOT FILE APPEAL IN TIME DUE TO UNPRECEDENTED FLOOD, WHICH RAVAGED ALMOST THE WHOLE VALLEY OF KASHMIR, PARTICULARLY SRINAGAR CITY, ON 7 TH SEPT., 2014, LEAVING THE PEOPLE OF THE VALLEY DEVASTATED AND UNABLE TO RECOUP TILL LATE OC TOBER, 2014, WHICH RESULTED IN THE DELAY OF 36 DAYS IN FILING THE APP EAL BEFORE THE TRIBUNAL. HE FURTHER SUBMITTED THAT THE DELAY WAS NOT ATTRIBU TABLE TO THE ASSESSEE, BUT IT WAS DUE TO THE CIRCUMSTANCES BEYOND THE CO NTROL OF THE ASSESSEE. 3. THE LD. DR DID NOT OPPOSE THE PETITION OF THE RE VENUE FOR CONDONATION OF DELAY. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE FACTS OF THE CASE. THE EXPLANATION SUBMITTED BY THE ASSESSE E THAT THE DELAY OF 36 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL DUE TO UNPRECEDENTED FLOOD IN SRINAGAR, WHICH RESULTED IN DELAY IN FILIN G THE APPEAL, IS FOUND TO BE SUFFICIENT AND THE DELAY WAS BONAFIDE AND WAS NO T A DELIBERATE AND INTENTIONAL DELAY. ITA NO.676/ASR/2014 4 4.1. IN VIEW OF THE FACTS ON RECORD AND THE EXPLANA TION SUBMITTED BY THE REVENUE, THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL IS CONDONED AND THE APPEAL OF THE ASSESSEE IS ADMITTED FOR ADJU DICATION. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED AN APPLICATION IN FORM NO.10 FOR REGISTRATION UNDER SECTION 12-AA OF THE INCOME TAX AC, 1961. IN ORDER TO VERIFY THE GENUINENESS OF THE OBJ ECTIVES AND THE ACTIVITIES BEING CARRIED OUT BY THE TRUST, THE AO W AS ASKED TO CONDUCT ENQUIRIES AND FURNISH A REPORT. THE ITO CONCERNED F URNISHED HIS REPORT ON 14.07.2014, BUT THE LD. CIT, NOT SATISFIED ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE INSTITUTION/TRUST, REFUSED TO GRANT REGISTRATION TO THE SOCIETY/TRUST IN TERMS OF THE PROVISIONS OF SECTION 12AA(B)(II) OF THE INCOME TAX ACT, 1961, OBSERVING AS FOLLOWS: 2.2. ACCORDINGLY, A NOTICE DATED 02-07-2014 WAS SEN T TO THE GENERAL SECRETARY OF THE TRUST/SOCIETY CALLING FOR BOOKS OF ACCOUNTS, DETAILS OF ACTIVITIES OF THE TRUST/SOCIETY, COPIES OF RETURNS OF INCOME FILED AND DETAILS OF EXPENDITURE INCURRED ON THE CH ARITABLE ACTIVITIES. THE CASE WAS FIXED FOR HEARING ON 14-07- 2014 AT SR INAGAR. ON 14.07.2014 THE COUNSEL OF ASSESSEE SH. ABDUL RASHID DULLA, CA ALONG WITH SH. GHULAM NABI KAMILI ATTENDED THE PROC EEDINGS AND REQUESTED FOR ADJOURNMENT. SUBMISSIONS FILED HAVE B EEN PLACED ON RECORD AND THE CASE WAS FINALLY FIXED FOR HEARING O N 28.07.2014 AT JAMMU. ON 28.07.2014, THE COUNSEL OF THE ASSESSEE S H. ABDUL RASHID DULLA, CA FILED WRITTEN REPLY ALONG WITH COP IES OF RETURNS FILED FOR THE ASSESSMENT YEAR 2011-12, 2012-13 AND 2013-1 4 PLACED ON RECORD. ON VERIFICATION OF INCOME AND EXPENDITURE I T HAS BEEN SEEN THAT THE ASSESSEE HAS CLAIMED EXCESS OF INCOME OVER EXPENDITURE IN LAKHS OF RUPEES FOR THE ASSESSMENT YEARS 2011-12, 2 012-13 AND 2013-14. AS PER DOCUMENTS FILED BY THE ASSESSEE IT IS SEEN THAT THE TRUST HAS BEEN CREATED ON 20.06.2012 AND HAS OBTAIN ED PERMANENT ACCOUNT NUMBER AND ALSO FILED RETURNS OF INCOME FOR THE ASSTT. YEARS 2011-12, 2012-13 AND 2013-14. THE ASSESSEE HAS FILE D ONLY INCOME AND EXPENDITURE FOR THE YEAR ENDING 31.03.2011, 31. 03.2012 AND 31.03.2013 BUT NO BOOKS OF ACCOUNT AND OTHER DOCUME NTS HAVE BEEN ITA NO.676/ASR/2014 5 MAINTAINED FOR THESE ASSESSMENT YEARS. IN THE ABSENCE OF BOOKS OF ACCOUNT AND OTHER DOCUMENTS IT IS NOT POSSIBLE TO V ERIFY THE GENUINENESS OF THE CASE. I AM LEFT WITH NO ALTERNAT IVE BUT THE DECIDE THE APPLICATION OF THE APPLICANT ON THE BASIS OF IN FORMATION BROUGHT ON RECORD. 2.3. IN ORDER TO SATISFY MYSELF ABOUT THE GENUINENE SS OF THE ACTIVITIES OF THE TRUST/ INSTITUTION, THE APPLICANT WAS SPECIFICALLY ASKED TO PRODUCE THE BOOKS OF ACCOUNTS ALONG WITH T HE ACCOMPANYING VOUCHERS. ALTHOUGH, THE APPLICANT HAS CLAIMED TO HAVE CONDUCTED CERTAIN ACTIVITIES, YET THESE ARE N OT VERIFIABLE AS NO BOOKS OF ACCOUNTS AND ACCOMPANYING VOUCHERS WERE PR ODUCED BEFORE ME , MOREOVER, THE ASSESSING OFFICER HAS ALSO NOT RECOMMENDED THE CASE FOR REGISTRATION KEEPING IN VI EW DISCREPANCIES AS NOTICED BY HIM DURING THE COURSE OF ENQUIRY CARR IED OUT BY HIM. THUS, I AM UNABLE TO RECORD MY SATISFACTION WITH RE GARD TO THE GENUINENESS OF ACTIVITIES OF THE INSTITUTION/ TRUST AS REQUIRED BY VIRTUE OF THE AFORE-MENTIONED PROVISIONS OF SECTION 12AA OF THE I. T. ACT, 1961. 3. TAKING INTO CONSIDERATION ALL THE ABOVE FACTS OF THE CASE AND ALSO THE REPORT OF THE INCOME-TAX OFFICER, IT IS NO T POSSIBLE TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY/TR UST THEREFORE, I REFUSE TO REGISTER THE SOCIETY/TRUST IN TERMS OF TH E PROVISIONS OF SECTION 12AA(B)(II) OF THE INCOME TAX ACT, 1961. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT, WAS NOT JUSTIFIED IN IGNORING THE FINDINGS OF THE AO ABOUT THE EXISTENCE AND VERIFICATION OF BOOKS OF ACCOUNT AND REFUSING THE R EGISTRATION OF THE INSTITUTION UNDER SECTION 12AA(B)(II) OF THE ACT. H E FURTHER SUBMITTED THAT THE LD. CIT ASKED THE ASSESSEE TO FILE RETURNS OF I NCOME, WHICH THE ASSESSEE DID AFTER PAYING THE DUE TAX. HOWEVER, THE LD. CIT REJECTED THE APPLICATION FOR REGISTRATION, FOR THE REASON OF NON -MAINTENANCE OF BOOKS OF ACCOUNT, WHEREAS THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS WERE ACTUALLY PRODUCED BY THE ASSESSEE BEFORE THE AO, WH O EVEN MADE AN INQUIRY IN THE MATTER. THE LD. COUNSEL STATED THAT THE LD. CIT FAILED TO POINT OUT EVEN A SINGLE COGENT REASON, WHICH FORMED THE GROUND FOR ITA NO.676/ASR/2014 6 REJECTION OF REGISTRATION APPLICATION; AND THAT THE LD. CIT ASSERTED THAT ALTHOUGH THE ASSESSEE HAS CLAIMED TO HAVE CONDUCTED CERTAIN ACTIVITIES, YET THE SAME WERE NOT VERIFIABLE, AS NO BOOKS OF AC COUNT AND ACCOMPANYING VOUCHERS WERE PRODUCED BEFORE HIM, AS OBSERVED BY THE LD. CIT IN PARA 2.2. OF HIS ORDER. THE ASSESSEES C OUNSEL SUBMITTED THAT THE ASSESSEE-TRUST HAD AND IS MAINTAINING BOOKS OF ACCOUNT AND THESE BOOKS OF ACCOUNT WERE DULY PRODUCED BEFORE THE JURI SDICTIONAL ITO, WHO WAS MAKING INQUIRY AS PER DIRECTIONS OF THE LD. CIT . 6.1. THE LD. COUNSEL SUBMITTED THAT THE ITO CONCERN ED, AFTER MAKING ENQUIRIES, HAD CONFIRMED IN HIS REPORT THAT THE AI MS AND OBJECTIVES OF THE TRUST ARE VERY MUCH CHARITABLE AND THE ACTIVITI ES OF THE TRUST HAD BEEN FOUND TO BE IN LINE WITH THESE CHARITABLE PURP OSES, BUT HE DID NOT RECOMMEND THE CASE FOR GRANT OF REGISTRATION U/S 12 AA OF THE ACT, NOT ON THE GROUND OF ABSENCE OF BOOKS OF ACCOUNT, OR OTHER DOCUMENTS, BUT ON THE GROUND THAT THE ASSESSEE HAD SURPLUSES, THOUGH BELOW 15% OF THE GROSS RECEIPTS BUT, IN THE ABSENCE OF REGISTRATION, THE ASSESSEE HAD TO FILE RETURNS OF INCOME FOR ALL THESE ASSESSMENT YEARS AN D PAY THE TAX ON THE SURPLUSES UNDER LAW, WHICH THE ASSESSEE TRUST HAD N OT DONE. ACCORDING TO THE LD. COUNSEL, THIS NEGATES THE OBSERVATION OF THE LD. CIT THAT THE ACTIVITIES CONDUCTED BY THE TRUST WERE NOT VERIFIAB LE, SINCE THE BOOKS OF ACCOUNT WERE NOT MAINTAINED BY THE TRUST. THE LD. C OUNSEL PLEADED THAT SINCE THE EXISTENCE OF THE BOOKS OF ACCOUNT HAS BEE N PROVED, THE TAXES ITA NO.676/ASR/2014 7 HAVING BEEN PAID, THE LD. CIT(A) MAY BE DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE TRUST U/S 12AA(B)(II) OF THE ACT. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE IMP UGNED ORDER. 8. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, IN THE INTEREST OF JUSTICE, WE DE EM IT APPROPRIATE TO REMIT THE MATTER TO THE LD. CIT, FOR VERIFICATION O F THE GENUINENESS OF THE ASSESSEES BOOKS OF ACCOUNT AND OTHER DOCUMENTS, AS REQUIRED FOR GRANT OF REGISTRATION UNDER SECTION 12AA(B)(II) OF THE AC T AND TO THEREAFTER DECIDE MATTER AFRESH, IN ACCORDANCE WITH LAW, ON AF FORDING DUE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. TH E ASSESSEE SHALL, NO DOUBT, COOPERATE IN THE FRESH PROCEEDINGS BEFORE TH E LD. CIT AND WILL PRODUCE THE RELEVANT BOOKS OF ACCOUNT AND OTHER DOC UMENTARY EVIDENCE FOR GRANT OF REGISTRATION OF THE TRUST. 9. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/08/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 01/08/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:AKMALIA WELFARE TRUST, SRINAGAR. 2. THE DCIT, JAMMU. 3. THE CIT 4. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER