Rotary Club of Palanpur Charitable Trust, Dist.Banaskantha V. The DIT(Exemption), Ahmedabad

ITA 740/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5734 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2010
• Assessment Year: misc
• Appeal Filed On: 27-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDANSR
• Assessee Lawyers: SHJRI TUSHAR HEMANI
• Keywords: Charitable institution; Retrospective amendment
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER DATE OF HEARING :9-7-2010 DRAFTED ON : 9-7-2010 ITA NO.740 /AHD/2008 ASSESSMENT YEAR : - ROTARY CLUB OF PALANPUR CHARITABLE TRUST,ROTARY HALL, MANSAROVAR ROAD, LAXMAN TEKRI, PALANPUR. VS. DIRECTOR OF INCOME TAX (EXEMPTION) 2 ND FLOOR, VASANT NATURE BUILDING,ASHRAM,ROAD, AHMEDABAD. PAN/GIR NO. : AAATR 1806 R (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHJRI TUSHAR HEMANI RESPONDENT BY: SHRI K.MADHUSUDAN,SR.D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION), AHMEDAB AD DATED 19- 11-2007. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE FOLLOWS :- 1. LD. DIT HAS ERRED IN LAW AND ON FACTS IN DENYIN G THE REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE APPELLANT WITH EFFECT FROM 29-04-1975.UNDER THE FACTS AND CIR CUMSTANCES OF THE CASE THE DIT OUGHT TO HAVE GRANTED THE REGIS TRATION UNDER SECTION 12AA OF THE ACT TO THE APPELLANT FROM ITS CREATION/ESTABLISHMENT. - 2 - 2. LD.DIT HAS ERRED IN LAW AND ON FACTS IN NOT APPR ECIATING THAT THE APPELLANT IS AN INSTITUTION UTILIZING ITS INCOME FOR THE PURPOSE OF GENERAL PUBLIC WELFARE AND ITS ACTIVITIE S ARE CHARITABLE IN NATURE AND THEREFORE, REGISTRATION U/ S 12A OF THE ACT OUGHT TO HAVE BEEN GRANTED TO HIM. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSES SEE APPLIED VIDE ITS APPLICATION DATED 28-5-2007 FILED BEFORE DIRECTOR O F INCOME TAX (EXEMPTION) ON 29-5-2007 FOR GRANT OF REGISTRATION UNDER SECTION 12A WITH RETROSPECTIVE EFFECT FROM 2-8-1975. THE DI RECTOR OF INCOME TAX (EXEMPTION) THOUGH GRANTED REGISTRATION UNDER S ECTION 12A TO THE ASSESSEE IN PURSUANCE TO THE ABOVE APPLICATION VIDE IMPUGNED ORDER, HOWEVER, THE DIRECTOR OF INCOME TAX (EXEMPTI ON) GRANTED SUCH REGISTRATION W.E.F. 1-4-2007 ONLY AND HAVE NOT GRANTED THE REGISTRATION FROM RETROSPECTIVE EFFECT AS APPLIED B Y THE ASSESSEE AND HAS REJECTED THE CONDONATION PETITION FILED BY THE ASSESSEE ON THE GROUND AS UNDER:- ALONG WITH FORM NO10A THE APPLICANT TRUST HAS STAT ED THAT IT HAD APPLIED FOR REGISTRATION U/S. 12A(A) ON 2-8-197 5 BUT COULD NOT GET THE REGISTRATION, AS THEY HAVE MERELY MADE AN APPLICATION AND NOT FOLLOWED UP FURTHER. THE REPLY GIVEN BY THE ASSESSEE TRUST FOR DELAY OF ABOUT 31 YEARS IS NOT A T ALL ACCEPTABLE AND SATISFACTORY. AFTER CAREFUL EXAMINAT ION OF THE FACTS OF THE CASE THE REASON STATED BY THE TRUST IS NOT FOUND TO BE SATISFACTORY IN VIEW OF THE FACT THAT FILING AN APP LICATION IS NOT SUFFICIENT, THE APPLICANT SHOULD HAVE OBTAINED THE REGISTRATION. THEREFORE, DELAY IN SUBMITTING OF APPLICATION CANNO T BE CONDONED. 4. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE ARGUED THAT DIRECTOR OF INCOME TAX (EXEMPT ION) REJECTED THE CONDONATION PETITION WITHOUT GIVING PROPER OPPORTUN ITY OF HEARING TO THE ASSESSEE AND WITHOUT APPRECIATING THE FULL FACT S AND CIRCUMSTANCES - 3 - OF THE CASE. IT IS OBSERVED THAT ASSESSEE APPLIED F OR REGISTRATION UNDER SECTION 12A AS EARLY AS ON 2-8-1975 WHICH HAS ALSO BEEN RECORDED BY THE DIRECTOR OF INCOME TAX (EXEMPTION) IN HIS ORDER . NO MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT T HE ABOVE APPLICATION OF THE ASSESSEE WAS REJECTED BY THE REV ENUE BY PASSING AN ORDER. IN ABSENCE OF ANY SUCH ORDER, IN OUR CONSIDE RED VIEW THE DIRECTOR OF INCOME TAX (EXEMPTION) WAS NOT JUSTIFIE D IN SHIFTING THE ONUS ON THE ASSESSEE. IN OUR CONSIDERED VIEW WHEN AN ASSESSEE FILED AN APPLICATION BEFORE AN AUTHORITY THEN IT IS THE D UTY OF THAT AUTHORITY TO PASS AN APPROPRIATE ORDER AGAINST THAT APPLICATI ON AND THERE IS NO POWER GIVEN UNDER THE ACT BY WHICH THE ASSESSEE CAN COMPEL THE AUTHORITY TO PASS THE ORDER. FOR NON PASSING OF TH E ORDER BLAME CANNOT BE FASTENED ON THE HEAD OF THE ASSESSEE BY S TATING THAT IT WAS THE DUTY OF THE ASSESSEE TO OBTAIN REGISTRATION. TH E ASSESSEE HAS DULY MADE THE APPLICATION FOR REGISTRATION AND THEREAFTE R IT WAS THE DUTY OF THE COMMISSIONER TO CONSIDER THE ASSESSEES APPLICA TION AND PASS AN APPROPRIATE ORDER IN RESPECT OF THE SAME. FURTHER, IT IS OBSERVED FROM PAGE NOS. 12 TO 32 OF THE PAPER BOOK THAT THE ASSES SEE IS REGULARLY FILING ITS INCOME TAX RETURNS FROM THE ASSESSMENT Y EAR 1976-77 TO 2007-08. THE ASSESSEES CONTENTION THAT BENEFIT OF SECTION 11 AND 12 REGULARLY CLAIMED BY IT IN ITS RETURN OF INCOME WAS CONSISTENTLY ALLOWED TO IT BY THE DEPARTMENT SINCE ASSESSMENT YE AR 1976-77 COULD NOT BE DISPUTED BY THE LEARNED DEPARTMENTAL REPRESE NTATIVE. THE ASSESSEE EXPLAINED THAT AS THE AMENDMENT WAS BROUGH T IN THE PROVISIONS OF SECTION12A BY THE FINANCE ACT 2007 WH EREBY CURTAILING THE POWER OF THE DIRECTOR OF INCOME TAX (EXEMPTION) TO GRANT REGISTRATION FROM EARLIER YEARS ON APPLICATION MADE ON OR AFTER 1-6- 2007 THEREFORE, THE ASSESSEE HAD AGAIN APPLIED FOR REGISTRATION ON - 4 - 29-5-2007 AS AN ABUNDANT PRECAUTION. 5. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VI EW AS THE ASSESSEE HAS MADE APPLICATION FOR REGISTRATION ON 2 -8-1975 THE DIRECTOR OF INCOME TAX (EXEMPTION) WAS NOT JUSTIFIE D IN REJECTING THE CONDONATION PETITION. HOWEVER, THE ISSUE WHICH HAS BEEN RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE BEFORE US I S THAT IT IS NOT PRACTICALLY POSSIBLE TO VERIFY THE ACTIVITIES OF TH E ASSESSEE WHICH WERE UNDERTAKEN AS BACK AS 31 YEARS AND THEREFORE, ORDER TO GRANT REGISTRATION NOW WITH EFFECT FROM 2-8-1975 WILL BE VERY DIFFICULT. WE ARE ALIVE TO THIS PRACTICAL DIFFICULTY OF THE DEPAR TMENT. IT IS OBSERVED THAT UNDER THE SCHEME OF THE INCOME TAX ACT, AN ASS ESSMENT CAN BE RE-OPENED ONLY BEFORE THE EXPIRY OF 6 YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR. THE ASSESSEE HAS CONTENDE D THAT BENEFIT OF PROVISIONS OF SEC. 11 AND 12 ARE ALREADY ALLOWED TO IT BY THE DEPARTMENT. IN THE CIRCUMSTANCES, IN OUR CONSIDERE D OPINION NO GRIEVANCE CAN BE THERE, IF THE REGISTRATION IS GRAN TED TO THE ASSESSEE WITH EFFECT FROM 1-4-2003. WE THEREFORE, RESTORE TH IS ISSUE BACK TO THE FILE OF THE DIRECTOR OF INCOME TAX (EXEMPTION) AND DIRECT HIM TO GRANT REGISTRATION TO THE ASSESSEE WITH EFFECT FROM 1-4-2003 AFTER VERIFICATION AS PER LAW. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED IN THE MANNER INDICATED ABOVE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AS ABOVE. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 16TH DAY OF JULY, 2010. SD/- SD/- (MUKUL SHRAWAT ) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER - 5 - AHMEDABAD; ON THIS 16TH DAY OF JULY, 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 9-7-2010 2. DRAFT PLACED BEFORE AUTHORITY 9-7-2010 3. DRAFT PROPOSED & PLACED JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE 9. DATE OF DISPATCH OF ORDER