GOONJ, NEW DELHI V. ITO, EXEMPTIONS WARD- 1(2), NEW DELHI

ITA 6947/DEL/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9451 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 31-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 11; 119(2)(b); 208

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI Before Sh. N. K. Choudhary, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 6945/Del/2018 : Asstt. Year : 2012-13 ITA No. 6946/Del/2018 : Asstt. Year : 2013-14 ITA No. 6947/Del/2018 : Asstt. Year : 2014-15 ITA No. 7248/Del/2019 : Asstt. Year : 2015-16 Goonj, J 93, Sarita Vihar, New Delhi-110076 Vs Income Tax Officer(Exemptions) Ward-1(2), New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAATG5219M Assessee by : Ms. Aprajita Sud, Adv. Revenue by : Ms. Sapna Bhatia, CIT DR Date of Hearing: 31.08.2022 Date of Pronouncement: 07.09.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals have been filed by the assessee against the orders of ld. CIT(A)-40, New Delhi, dated 06.08.2018 and 04.07.2019. 2. Since, the issues involved in these appeals are identical, they were heard together and being adjudicated by a common order. 3. In ITA No. 6945/Del/2018, following ground have been raised by the assessee: “1. That, on the facts and in circumstances of the case, the order of the Ld. Commissioner of Income Tax (Appeals) [CIT(A)] is bad in law. ITA Nos. 6945, 6946 & 6947/Del/2018 ITA No. 7248/Del/2019 Goonj 2 2. That, on the facts and circumstances of the case, the Ld. CIT(A) erred in rejecting the application filed by the Appellant under Rule 46A of the Income Tax Rules, 1962 for admitting additional evidence and thereby rejecting Form 10 filed before the LD. CIT(A). 3. That, on the facts and circumstances of the case, the Ld. C1T(A) erred in holding that the observations made in and the opinion of the Hon’ble Gujarat High Court in ‘Commissioner of Income Tax vs. Mayur Foundation (2005) 194 CTR Guj. 197’ are not applicable in the case of the Appellant, completely disregarding the bonafides of the Appellant’s organization and the fact that all funds received by it were admittedly utilized for its charitable purposes in the year of receipt or were actually in substance and in fact, accumulated and utilized for its charitable purposes well within the period of time provided under section 11 of the Income Tax Act, 1961. 4. That, on the facts and circumstances of the case, the Ld. CIT(A) erred in not considering the valid and subsisting provisions of the Circular No. 14 (XL-35) dated April 11, 1955 issued by the Central Board of Direct Taxes (CBDT) and its applicability to the Appellant’s case. 5. That, on the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the order of the Ld. Assessing Officer and on the basis of merely a technical and narrow reading of provisions of the Income Tax Act, 1961, maintaining the addition of Rs 1,24,67,763 to the income of the Appellant inspite of the fact that the said sum of Rs 1,24,67,763 has been admittedly utilized by the Appellant on its approved charitable purposes in subsequent years.” 4. The moot issue involved in these cases pertain to rejection of Form 10 filed before the ld. CIT(A). The assessee has filed additional evidences in the form of Form No. 10 has been rejected by the ld. CIT(A). The ld. CIT(A) confirmed the action of the Assessing Officer holding that the Form 10 has not been submitted by the appellant on or before the due date of filing of ITR. ITA Nos. 6945, 6946 & 6947/Del/2018 ITA No. 7248/Del/2019 Goonj 3 5. The Circular of the CBDT on this issue is as under: 163. Delay in filing application in Form No. 10 - Board’s order under section 119(2)(b) authorizing Commissioner to admit belated applications 1. Charitable and religious trusts are entitled to exemption from income-tax under section 11 after they fulfill the requirements enumerated in sections 11 to 13. These trusts are allowed to accumulate or set apart income derived by them from property held under trust provided they fulfill the conditions spelt out in section 11(2) read with rule 11 of the Income-tax Rules and Form No. 10. 2. Very often trusts are not able to file the application in Form No. 10 within the time allowed under section 139(1)/139(2) as extended by the Income-tax Officer. The Board is then approached by these trusts for condoning the delay for filing applications. The Board by virtue of the powers vested in it under section 119(2)( b) has been condoning the delay in individual cases after satisfying itself that certain conditions are satisfied. 3. With a view to expediting the disposal of applications filed by trusts for condoning the delay, the Board has passed a general order under section 119(2)(b) by which the Commissioners have been authorized to admit belated applications under section 11(2) read with rule 17. A copy of this order is enclosed. All applications for condoning the delay under section 11 (2) will, henceforth, be disposed of by the Commissioner in terms of the enclosed Order No. 120/57/80-IT(A-I), dated 3-6-1980 [Annex]. Circular : No. 273 [F. No. 180/57780-IT(A-I)], dated 3-6-1980. ANNEX - ORDER DATED 3-6-1980 REFERRED TO IN CLARIFICATION In exercise of the powers conferred under section 119(2)(6) of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby authorize the Commissioners to admit applications under section 11(2) read with rule 17 of the Income-tax Rules, 1962 from persons deriving income from property held under trust wholly for charitable or religious purposes for accumulation of such income to be applied for such purposes in India when the aforementioned applications are filed beyond ITA Nos. 6945, 6946 & 6947/Del/2018 ITA No. 7248/Del/2019 Goonj 4 the time stipulated. The Commissioners will, while entertaining such applications, satisfy themselves that the following conditions are fulfilled: (a) that the genuineness of the trust is not in doubt; (b) that the failure to give notice to the Income-tax Officer under section 11(2) of the Act and investment of the money in the prescribed securities was due only to oversight; (c) that the trustees or the settlor have not been benefited by such failure directly or indirectly; (d) that the trust agrees to deposit its funds in the prescribed securities prior to the issue of the Government sanction extending the time under section 11 (2); and (e) that the accumulation or setting apart of income was necessary for carrying out the objects of the trust. JUDICIAL ANALYSIS APPLIED IN - The above circular was applied in CIT v. Anjuman Moinia Fakharia [1994] 208 ITR 568 (Raj.), with the following observations: "From the circular issued by the Department dated June 3, 1980, and the judgment of the apex court referred to above, it can be considered that the requirement to prescribe (sic) the time-limit is only directory and not mandatory. Non-compliance within the stipulated time should not disentitle an assessee from the exemption to which he is otherwise entitled...." (p. 572). 6. We have gone through the entire factum and the arguments put forward both the parties and hereby hold that interest of justice would be well served if the assessee is allowed to produce/ submit the proof of “investments” made u/s 11(2) before the AO along with the evidences. The AO shall examine the “Fact of Investments” only (no further enquiries) and allow the same in computation of income. ITA Nos. 6945, 6946 & 6947/Del/2018 ITA No. 7248/Del/2019 Goonj 5 7. In the result, the appeals of the assessee are allowed. Order Pronounced in the Open Court on 07/09/2022. Sd/- Sd/- (N. K. Choudhary) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 07/09/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR