A.C. Educational Welfare Society, Mohali V. CIT-II, Chandigarh

ITA 800/CHANDI/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3669 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR GULSHAN RAJ
• Keywords: Reasonable cause; Condonation of delay
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 800/CHD/2014 ASSESSMENT YEAR : 2013-14 A.C. EDUCATIONAL WELFARE SOCIETY, VS. THE CIT-II, VILL.LOHGARH, ZIRAKPUR CHOWK, CHANDIGARH MOHALI PAN NO. AAAA7124J (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PARIKSHIT AGGARWAL, C A RESPONDENT BY : DR. GULSHAN RAJ, CIT DR DATE OF HEARING : 21.05.2018 DATE OF PRONOUNCEMENT : 14. 08. 2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE APPLI CANT-SOCIETY A.C. EDUCATIONAL WELFARE SOCIETY, MOHALI AGITATING THE REJECTION OF THE APPLICATION OF THE APPLICANT- SOCIETY FOR REGIS TRATION U/S 12AA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') BY TH E COMMISSIONER OF INCOME TAX-II, CHANDIGARH (HEREIN REFERRED TO AS CIT) VIDE ORDER DATED 23/24-7-2013. 2. THE APPEAL IS TIME BARRED BY THE LIMITATION PERI OD OF 350 DAYS. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON TH E APPLICATION FOR CONDONATION OF DELAY WHICH IS ACCOMPANIED WITH THE AFFIDAVIT DATED 12.9.2014 OF SHRI A.C. AGANIHOTRI, THE THEN PRESIDE NT OF ASSESSEE SOCIETY, WHEREIN, IT HAS BEEN DEPOSED THAT BEING PR ESIDENT OF THE ITA NO. 800/CHD/2014- A.C. EDUCATIONAL WELFARE SOCIETY, MOHALI 2 SOCIETY, HE ONLY USE TO TAKE CARE OF THE MATTERS RE LATING TO THE TAXATION OF THE SOCIETY BUT DUE TO HIS ILLNESS HE C OULD NOT FILE THE APPEAL IN TIME. THE DELAY WAS ON ACCOUNT OF HIS IL LNESS AS HE WAS SUFFERED FROM END STAGE RENAL DISEASE DURING THE PE RIOD AND HE HAD TO GO FOR DIALYSIS TWICE A WEEK DUE TO THE SAID REASON , HE COULD NOT ATTEND THE MATTER RELATING TO THE TAX AFFAIRS OF TH E ASSESSEE SOCIETY. THE LD. COUNSEL HAS FURTHER INVITED OUR ATTENTION T O THE ANOTHER AFFIDAVIT MOVED BY THE PRESENT DIRECTOR OF THE SOCI ETY DATED 24.4.2018 NAMELY SHRI SAURABH AGANHOTRI, WHEREIN, I T HAS BEEN DEPOSED THAT EARLIER THE TAX MATTER WAS USED TO BE HANDLED BY THE THEN PRESIDENT OF THE SOCIETY SHRI A.C. AGANIHOTRI, HOWEVER, DUE TO HIS ILLNESS HE COULD NOT ARRANGE TO FILE THE APPEAL IN TIME. FURTHER, THAT SHRI A.C. AGANIHOTRI, THE THEN PRESIDENT OF T HE SOCIETY SUBSEQUENTLY DIED DUE TO CHRONIC KIDNEY DISEASE. A COPY OF THE DEATH CERTIFICATE OF SHRI A.C AGANIHOTRI IS ALSO PL ACED ON THE FILE. RELIANCE HAS ALSO BEEN PLACED ON THE MEDICAL RECOR D OF SHRI A.C. AGANIHOTRI, THE THEN PRESIDENT OF THE SOCIETY. 3. THE LD. DR, ON THE OTHER HAND, HAS SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX. 4. CONSIDERING THE ABOVE SUBMISSIONS OF BOTH THE RE PRESENTATIVES, WE FIND THAT THE ASSESSEE SOCIETY HAS DEMONSTRATED A REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. IN VIEW OF THIS , THE DELAY, IF ANY, IN FILING THE APPEAL IS HEREBY CONDONED AND WE PROCEED TO HEAR THE MATTER ON MERITS. ITA NO. 800/CHD/2014- A.C. EDUCATIONAL WELFARE SOCIETY, MOHALI 3 5. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE IMPUGNED ORDER OF THE LD. CIT, WHEREIN, THE R EASONS OF REJECTION OF APPLICATION OF THE APPLICANT SOCIETY H AS BEEN MENTIONED THAT THE ASSESSEE SOCIETY HAD USED THE FUNDS FOR TH E PERSONAL NEEDS OF THE FAMILY MEMBERS OF THE PRESIDENT OF THE SOCIETY ALSO FOR THE STAFF OF THE SOCIETY. FURTHER, IT WAS ALSO NOTED THAT TH E ASSESSEE SOCIETY HAD BEEN PAID HEFTY SALARY TO ONE OF ITS EMPLOYEE. FURTHER IT HAS BEEN NOTED THAT THOUGH THE ASSESSEE WAS ASKED TO EX PLAIN IN THIS RESPECT, HOWEVER, THE ASSESSEE SOCIETY FAILED TO G IVE ANY SATISFACTORY REPLY. THE LD. COUNSEL FOR THE ASSESSEE IN THIS RES PECT HAS SUBMITTED THAT, IN FACT, THE MEMBERS OF THE SOCIETY HAD TAKEN LOAN IN THEIR INDIVIDUAL CAPACITY FROM THE BANK WHICH WAS GIVEN T O THE SOCIETY AS SUCH AND THE SAID LOAN AMOUNT WAS FURTHER PAID BY T HE ASSESSEE SOCIETY TO THE MEMBERS TO BE FURTHER PAID BACK TO T HE BANK FROM WHERE THE LOANS WERE OBTAINED. THE LOAN AMOUNT WAS SQUARED OFF ON THE DATE OF APPLICATION. FURTHER, THE QUERIES IN TH IS RESPECT WERE RAISED BY THE LD. CIT ONLY ON 19.7.2013 WHEREAS THE ORDER WAS PASSED ON 23.7.2013 AND NO OPPORTUNITY WAS GRANTED TO THE ASSESSEE SOCIETY TO PRESENT ITS CASE AND FURNISH THE NECESS ARY EXPLANATION. 5. IN VIEW OF THE ABOVE SUBMISSIONS OF THE LD. COUN SEL FOR THE ASSESSEE, IN OUR VIEW, THE ASSESSEE SOCIETY IS RE QUIRED TO BE GIVEN PROPER OPPORTUNITY TO GIVE THE NECESSARY EXPLANATIO N ABOUT THE QUERIES RAISED BY THE LD. CIT . THE IMPUGNED ORDER OF THE LD. CIT(E) IS, THEREFORE, SET ASIDE AND THE MATTER IS RESTORE D TO THE FILE OF THE ITA NO. 800/CHD/2014- A.C. EDUCATIONAL WELFARE SOCIETY, MOHALI 4 CIT FOR DECISION AFRESH ON MERITS, AFTER GIVING P ROPER OPPORTUNITY TO THE APPLICANT SOCIETY TO PRESENT ITS CASE / EXPLAN ATION. THE LD. CIT IS DIRECTED TO DECIDE THE APPLICATION OF THE APPLIC ANT SOCIETY WITHIN 6 MONTHS FROM THE DATE OF RECEIPT OF COPY OF THIS ORD ER. 6. THE APPEAL OF THE APPLICANT - ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.08.2018 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 14.08.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR