M/S JULLUNDER MODEL SCHOOL KMV MARG, JALANDHAR V. COMMISSIONER OF INCOME TAX ( EXEMPTIONS), CHANDIGARH

ITA 82/ASR/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1863 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 10-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(1); 10(23C)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DIVISION BENCH, AMRITSAR (VIRTUAL COURT) BEFORE: SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI R.L. NEGI, JUDICIAL MEMBER ITA NO. 82(ASR)/2020 (ASSESSMENT YEAR : 2017-18) M/S JULLUNDUR MODEL SENIOR SECONDARY SCHOOL, KMV MARG, TANDA ROAD, JALANDHAR. THE CIT(EXEMPTIONS), CHANDIGARH. ./PAN NO: AAAAJ3978M /ASSESSEE BY : SHRI Y.K.SUD, CA PRESENT FOR THE REVENUE: SMT.PRABH JOT KAUR, CIT / REVENUE BY : /DATE OF HEARING: 11.02.2021/23.02.2021 !' /DATE OF PRONOUNCEMENT: 24.02.2021 (HEARING THROUGH WEBEX) /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 30.07.2018 OF THE COMMISSIONER OF INCOME TAX(EXEMPTIONS),(IN SHORT CIT(E), CHANDIGARH, PASS ED U/S 10(23C)(VI) OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS ACT). ITA NO.82/ASR/2020 A.Y.2017-18 2 2. THERE IS A DELAY OF 471 DAYS IN FILING THE APPEA L. AN APPLICATION DATED 07-02-2020 HAS BEEN FILED BEFOR E US BY THE LD.COUNSEL FOR THE ASSESSEE SEEKING CONDONATION OF THE DELAY. THE CONTENTS OF THE SAME READ AS UNDER: SUB: APPLICATION FOR CONDONATION OF DELAY ASST . YEAR 2017-18 MOST RESPECTFULLY IT IS SUBMITTED AS UNDER: 1. THAT THE ORDER DATED 30.07.2018 U/S 10(23(VI) WAS RECEIVED BY THE ASSESSEE ON 28.06.2018. 2. 2. THAT APPEAL AGAINST THE ORDER WAS DUE TO BE FILE D ON OR BEFORE 27.10.2018 WHICH HAS BEEN FILED NOW ON 07.02.2020 WITH A DELAY OF 468 DAYS. 3. THAT THE APPELLANT RECEIVED THE ORDER IN HIS FAVOUR APPROVING THE EXEMPTION U/S 10(23C)(VI) BUT FAILED TO REALIZE THAT THE APPLICATION WAS MADE FOR ASST. YEAR 2017-18 ON 15.07.2017 BUT THE ORDER PASSED AFTER 1 YEAR BY CIT(EXEMPTION) ALLOWING THE EXEMPTION FROM ASST. YEAR 2018-19. 4. 4. THAT AFTER THE COMPLETION OF ASSESSMENT FOR ASST.YEAR 2017-18 IT WAS POINTED OUT BY THE ITO THAT THE EXEMPTION IS FROM ASST .YEAR 2018-19 AND HE DENIED THE EXEMPTION FOR ASST. YEAR 2017-18. THUS THE MATTER CAME INTO THE KNOWLEDGE OF THE ASSESSEE IN THE LAST WEEK OF JANUARY 2020 AND IMMEDIATELY THE ASSESSEE FILED A RECTIFICATION APPLICATION BEFORE CIT(EXEMPTIONS) AND ALSO AN APPEAL BEFORE THE HONBLE BENCH. 5. SINCE THE DELAY OF 468 DAYS IS BONAFIDE IT IS RESPECTFULLY PRAYED THAT THE SAME MAY KINDLY BE CONDONED. 3. REFERRING TO THE SAME, LD.COUNSEL FOR THE ASSES SEE CONTENDED THAT THE ORDER APPEALED AGAINST RELATED TO GRANT OF APPROVAL BY THE LD.CIT(E) FOR EXEMPTION OF ITS INCOME U/S 10(23C)(VI) OF THE ACT AND THE SOLITARY CHALLEN GE WAS ITA NO.82/ASR/2020 A.Y.2017-18 3 AGAINST NOT HAVING BEEN GRANTED APPROVAL FROM THE ASSESSMENT YEAR SOUGHT BY IT. HE CONTENDED THAT THE DELAY IN FILING APPEAL WAS BECAUSE IT BECAME AWARE OF THE SAID FACT OF NOT HAVING BEEN GRANTED APPROVAL FROM THE ASS ESSMENT YEAR SOUGHT BY IT, ONLY SUBSEQUENTLY. NARRATING T HE EVENTS LEADING TO THE SAME, LD.COUNSEL FOR THE ASSESSEE CO NTENDED THAT THE ASSESSEE HAD FILED AN APPLICATION FOR SEEK ING THE AFORESAID APPROVAL IN THE PRESCRIBED FORM 56D SPECI FICALLY STATING THEREIN THE GRANT OF EXEMPTION FROM FINANCI AL YEAR 2016-17, RELATING TO A.Y. 2017-18.HE POINTED OUT TH AT THE EXEMPTION WAS GRANTED BY THE LD.CIT(E) IN NORMAL CO URSE ,BUT THE YEAR FROM WHICH IT WAS GRANTED WAS MENTION ED AS A.Y 2018-19 AND NOT A.Y 2017-18 FROM WHICH THE ASSE SSEE HAD SOUGHT EXEMPTION. LD.COUNSEL POINTED OUT FROM T HE ORDER, THAT NO REASON WAS ASSIGNED BY THE LD.CIT(E) FOR DIGRESSING FROM THE YEAR IN WHICH EXEMPTION WAS SOU GHT. HE CONTENDED THAT HAVING OBTAINED THE ORDER GRANTING EXEMPTION IN NORMAL COURSE WITH NO DISCUSSION IN TH E ORDER OVER CHANGE OF YEAR FROM WHICH IT WAS SOUGHT BY THE ASSESSEE, THE ASSESSEE FAILED TO READ THE FINE PRIN T AND INNOCENTLY HARBORED THE BELIEF THAT EXEMPTION HAD B EEN GRANTED FROM THE YEAR IT WAS SOUGHT I.E. A.Y. 2017- 18. THAT IT WAS ONLY SUBSEQUENTLY WHEN THE INTIMATION FOR TH E A.Y. 2017-18 WAS MADE U/S 143(1) OF THE ACT ,DENYING EXE MPTION ITA NO.82/ASR/2020 A.Y.2017-18 4 FROM TAX TO THE ASSESSEE AND AS A CONSEQUENCE RAISI NG DEMAND OF RS.55,64,399/- THAT THE ASSESSEE WAS APPR ISED BY THE ITO OF THE FACT THAT IT HAD BEEN NOT BEEN GRANT ED EXEMPTION FOR A.Y 2017-18. LD.COUNSEL FOR THE ASSES SEE POINTED OUT THAT THE LD.CIT(E) HAD PASSED THE ORDER ON 30- 07-2018,BUT THE ASSEESEE BECAME AWARE OF THE ABERRA TION ONLY IN THE LAST WEEK OF JANUARY 2020 WHEN THE INTI MATION U/S 143(1) WAS MADE ON 03.09.2019 ON THE ASSESSEE A ND HE HAD APPROACHED THE AO FOR RECTIFICATION OF THE SAME . THAT IMMEDIATELY THEREAFTER THE ASSESSEE FILED APPEAL BE FORE US AGAINST THE ORDER OF THE LD.CIT(E) AND HENCE THE DE LAY OF 468 DAYS. LD.COUNSEL FOR THE ASSESSEE CONTENDED THA T THERE WERE BONAFIDE REASONS FOR THE DELAY AND THE SAME T HEREFORE BE CONDONED. OUR ATTENTION WAS DRAWN TO THE ORDER O F THE LD.CIT(E) AND COPY OF FORM NO.56D FILED BEFORE US B RINGING OUT THE AFOREMENTIONED FACTS. 4. LD.DR VEHEMENTLY OBJECTED TO THE SAME POINTING OUT THAT THE DELAY WAS NOT SMALL BUT SHOWED INACTION O N THE PART OF THE ASSESSEE FOR A PERIOD EXCEEDING A YEAR WITHOUT ANY SUFFICIENT CAUSE AND THE SAME THEREFORE SHOULD NOT BE DEPRECATED/CONDONED. 5. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PER USED THE MATERIAL BEFORE US. WE FIND THAT THE ASSESSEE H AS BEEN ITA NO.82/ASR/2020 A.Y.2017-18 5 ABLE TO DEMONSTRATE REASONABLE CAUSE FOR THE DELAY IN FILING THE PRESENT APPEAL. UNDOUBTEDLY THE LD.CIT(E) HAD ACCEPTED THE ASSESSEES APPLICATION FOR GRANT OF APPROVAL FOR EXEMPTION U/S 10(23C)(VI) OF THE ACT, BUT WHILE DOING SO HAD MENTIONED THE A.Y FROM WHICH THE APPROVAL WAS GRANTED AS A.Y 2018- 19, AS OPPOSED TO THE ASSESSEE SEEKING IT FROM A.Y. 2017-18. NO REASON FOR THE DEVIATION FINDS MENTION IN THE OR DER. IN SUCH CIRCUMSTANCES, WITH THE ASSESSEES APPLICATION SEEKING APPROVAL HAVING BEEN ACCEPTED BY THE LD.CIT(E) AN D THERE BEING NO DISCUSSION REGARDING DEVIATION OF THE YEAR FROM WHICH IT WAS SOUGHT BY THE ASSESSEE, IN OUR VIEW, T HE ASSESSEE HARBORING THE MISTAKEN BELIEF OF HIS APPLI CATION HAVING BEEN ACCEPTED COMPLETELY, I.E. EVEN FOR A.Y. 2017-18, IS NOT GROSSLY IMPROBABLE. THAT SUBSEQUENTLY AN INT IMATION MADE U/S 143(1) OF THE ACT IN SEPTEMBER 2019 RAISIN G HUGE DEMAND ON THE APPLICANT ASSESSEE, FOR THE YEAR WHI CH WAS NOT GRANTED APPROVAL, I.E. A.Y 2017-18, ACTED AS A TRIGGER FOR THE ASSESSEE TO LOOK INTO THE MATTER AS A RESULT OF WHICH HE BECAME AWARE OF THE FACT OF DENIAL OF APPROVAL FOR A.Y. 2017- 18,LEADING TO THE FILING OF THE PRESENT APPEAL BEFO RE US, IS IN OUR VIEW A FAIRLY BONAFIDE REASON FOR THE DELAY IN FILING THE APPEAL. IN OUR CONSIDERED VIEW THE DELAY IN FILING APPEAL WAS NOT DELIBERATE BUT FOR BONAFIDE REASONS. THE ASSES SEE SURELY DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY, AN D NO ITA NO.82/ASR/2020 A.Y.2017-18 6 PREJUDICE IS CAUSED TO REVENUE BY CONDONING THE DEL AY. IT IS A FIT CASE, THEREFORE, WE HOLD, FOR CONDONING THE D ELAY. 6. IN THE LIGHT OF THE ABOVE THEREFORE, WE CONDONE THE DELAY. THE ORDER WAS PRONOUNCED IN THE OPEN COURT A T THE TIME OF HEARING ON 11.0.2021. 7. ON MERITS THE LD.COUNSEL FOR THE ASSESSEE CONTEN DED THAT SINCE IT HAD APPLIED FOR GRANT OF APPROVAL OF REGISTRATION W.E.F. A.Y. 2017-18, AND THE LD.CIT(E) HAD GRANTED THE SAME W.E.F. ASSESSMENT YEAR 2018-19, WITHOUT ASSIGN ING ANY REASON, IT WAS PALPABLY BY OVERSIGHT. THE LD.COUNSE L FOR THE ASSESSEE CONTENDED THAT THE ASSESSEES CLAIM WAS TEN ABLE IN LAW. 8. AT THIS JUNCTURE, IT WAS STATED AT BAR TO THE PA RTIES THAT SINCE THE LD.CIT(E) HAD SPECIFICALLY MENTIONED A.Y 2018-19 IN HIS ORDER, BUT AT THE SAME TIME ASSIGNED NO REASONS FOR NOT GRANTING THE SAME FROM A.Y. 2017-1 8 AS ASKED FOR BY THE ASSESSEE, IT WOULD BE IN THE FITN ESS OF MATTER TO RESTORE THE ISSUE BACK TO THE LD.CIT(E) T O RECONSIDER THIS ASPECT . BOTH THE PARTIES HAD NO OBJECTION TO THE SAME. ITA NO.82/ASR/2020 A.Y.2017-18 7 9. AFTER THE CONCLUSION OF HEARING ON 11.02.2021, A ND WHILE DICTATING THE ORDER IT WAS NOTICED THAT THE A PPLICANT ASSESSEE HAD FILED THE APPLICATION SEEKING APPROVAL IN FORM 56D ON 15.07.2017, I.E. IN F.Y. 2017-18 RELATING TO A.Y. 2018-19 WHICH ACCORDINGLY HAD BEEN GRANTED BY THE LD.CIT(E) FROM A.Y 208-19. CONSIDERING THE FACT THA T THE APPLICANT HAD NOT EVEN APPLIED FOR APPROVAL IN THE FINANCIAL YEAR FROM WHICH IT SOUGHT THE EXEMPTION I.E. F.Y. 2 016-17, A CLARIFICATION WAS SOUGHT AS TO HOW IT WAS ELIGIBLE IN LAW FOR GRANT OF APPROVAL FROM F.Y. 2016-17. ACCORDINGLY TH E CASE WAS FIXED FOR SEEKING THE AFORESAID CLARIFICATION O N 23.02.2021. ON THE SAID DATE A SUBMISSION IN WRITIN G WAS FILED BY THE LD.COUNSEL FOR THE ASSESSEE EXPLAINING ITS ELIGIBILITY FOR SEEKING APPROVAL FROM F.Y 2016-17, AS PER LAW. THE CONTENTS OF THE SAME ARE AS UNDER: SUB: SUBMISSIONS ON CLARIFICATION SOUGHT BY THE BENCH MOST RESPECTFULLY SUBMITTED AS UNDER: 1. THAT THE ABOVESAID APPEAL WAS HEARD BY HON'BLE BENC H ON 11.02.2021 AND NOW BENCH HAS SOUGHT A CLARIFICAT ION AS TO HOW APPROVAL U/S 10(23C)(VI) WAS TO BE GRANTE D FOR ASST YEAR 2016-17 AS SOUGHT BY THE ASSESSEE AGAINST THE APPROVAL GRANTED BY THE CIT(E) FOR FINANCIAL YE AR 2017-18. ITA NO.82/ASR/2020 A.Y.2017-18 8 2. IN THIS REGARD IT IS RESPECTFULLY SUBMITTED THAT TH E ASSESSEE MADE AN APPLICATION FOR GRANT OF EXEMPTION U/S 10(23C)(VI) IN FORM NO. 56D(COPY ON THE FILE) FOR F INANCIAL YEAR 2016-17 AS PER THE PROVISIONS OF THE INCOME TA X ACT. IN THIS REGARD YOUR KIND ATTENTION IS DRAWN TO WARDS THE XVI PROVISO OF SECTION 10(23C) WHICH IS REPRODU CED AS UNDER: 'PROVIDED ALSO THAT IN CASE THE FUND OR TRUST OR IN STITUTION OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION REFERRED TO IN THE FIR ST PROVISO MAKES AN APPLICATION ON OR AFTER THE 1 ST DAY OF JUNE, 2006 FOR THE PURPOSES OF GRANT OF EXEMPTION OR CONTINUANCE T HEREOF, SUCH APPLICATION SHALL BE MADE ON OR BEFORE THE 30 TH DAY OF SEPTEMBER OF THE RELEVANT ASSESSMENT YEAR FROM WHIC H THE EXEMPTION IS SOUGHT.' THIS PROVISO WAS OMITTED BY THE FINANCE ACT 2020 W. E.F. 01.06,2020. UNDER THIS PROVISO THE APPLICATION IN FORM NO. 56D COULD ONLY BE MADE TILL 30.09.2017 FOR FINANCIAL YEAR 2016-17 I.E. SIX MONTHS FROM 31.03.2017 WHICH THE APPELLANT DULY MAD E ON 15.07.2017 RECEIVED BY THE CIT(E)ON 17.07.2017 WHIC H IS ADMITTED BY HIM IN HIS ORDER GRANTING APPROVAL. THE APPLICATION FOR FINANCIAL YEAR 2017-18 COULD ON LY BE MADE AFTER THE END OF 31.03.2018 AND UPTO 30.09.201 8 AS PER THE PROVISION OF THE ACT STATED ABOVE. 3. THAT IN VIEW OF THE ABOVE IT IS RESPECTFULLY CL ARIFIED THAT THE EXEMPTION WAS SOUGHT BY THE ASSESSEE U/S 10(23C)(VI ) W.E.F. FINANCIAL YEAR 2016-17 . 10. REFERRING TO THE SAME LD.COUNSEL FOR THE ASSESS EE CONTENDED THAT THE LAW PROVIDED THE APPLICATIONS T O BE FILED UPTO THE 30 TH OF SEPTEMBER OF THE RELEVANT ASSESSMENT YEAR FROM WHICH EXEMPTION WAS SOUGHT. THAT SINCE THE ASS ESSEE IN THE PRESENT CASE HAD FILED ITS APPLICATION IN JU LY 2017,I.E BEFORE 30 TH SEPTEMBER 2017, IT WAS ELIGIBLE AND HAD RIGHTFULLY SOUGHT EXEMPTION FROM A.Y. 2017-18, AND THE ITA NO.82/ASR/2020 A.Y.2017-18 9 LD.CIT(E) HAD NOT GRANTED APPROVAL FROM THE SAID A. Y., WITHOUT ASSIGNING ANY REASONS FOR THE SAME. 11. THE LD.CIT(DR) FAIRLY AGREED WITH THE CONTENTIO N OF THE LD.COUNSEL FOR THE ASSESSEE THAT BY VIRTUE OF THE 1 6 TH PROVISO TO SECTION 10(23C), THE APPLICANT ASSESSEE WAS WELL WITHIN ITS RIGHTS TO BE GRANTED APPROVAL FROM A.Y. 2017-18. 12. CONSIDERING THE ABOVE ,SINCE THE APPLICANT ASS ESSEE HAS PRIMA FACIE DEMONSTRATED TO US ITS ELIGIBILITY TO CLAIM GRANT OF APPROVAL FOR EXEMPTION U/S 10(23C)(VI) OF THE ACT FROM A.Y 2017-18, WHICH THE LD.DR HAS ALSO AGREED T O, BUT THE LD.CIT(E) HAS , FOR REASONS BEST KNOWN TO HIM, GRANTED APPROVAL FROM THE SUCCEEDING YEAR ONLY, I.E. A.Y. 2 018-19, WE ARE OF THE VIEW THAT THE MATTER NEEDS RECONSIDER ATION AT THE END OF THE LD.CIT(E).WE THEREFORE RESTORE THE I SSUE TO THE LD.CIT(E) WITH THE LIMITED DIRECTION TO RECONS IDER THE ISSUE OF ASSESSMENT YEAR FROM WHICH EXEMPTION IS T O BE GRANTED, CONSIDERING THE SPECIFIC PROVISO TO SECTI ON 10(23C) OF THE ACT, REFERRED TO BEFORE US BY THE LD.COUNSEL FOR THE ASSESSEE. NEEDLESS TO ADD THE ASSESSEE BE GIVEN D UE OPPORTUNITY OF HEARING . THE LD.CIT(E) IS DIRECTED TO ARRIVE AT HIS FINDINGS IN ACCORDANCE WITH LAW GIVING DUE R EASONS FOR DIGRESSION IF ANY FROM THE YEAR IN WHICH EXEMPTION HAS BEEN SOUGHT FOR BY THE ASSESSEE. THE LD. CIT(E) IS DIRECTED ITA NO.82/ASR/2020 A.Y.2017-18 10 TO DECIDE THE ISSUE WITHIN FOUR MONTHS OF PASSING O F THIS ORDER. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS, T HEREFORE, ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 24.02.2021. SD/- SD/- (R.L. NEGI) (ANNAPURNA GUPTA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED: 24 TH FEBRUARY, 2021 * * # $%&'()* '! / COPY OF THE ORDER FORWARDED TO : 1. )(+ / THE APPELLANT 2. %,+ / THE RESPONDENT 3. ## - / CIT 4. ## - ( )( )/ THE CIT(A) 5. './%0 , #)(#0' , 123/4 / DR, ITAT, CHANDIGARH 6. /35 / GUARD FILE # $ / BY ORDER, ( / ASSISTANT REGISTRAR ITA NO.82/ASR/2020 A.Y.2017-18 11 DRAFT DICTATED 11/23.02.2021 SR.PS DRAFT PLACED BEFORE AUTHOR 11 .0 2 .20 2 1 SR.PS APPROVED DRAFT COMES TO THE SR.PS/PS 02.2021 SR.PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK SR.PS DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.