M/S ANKUR UDBODHARK SAMITI, Jaipur V. ITO, Jaipur

ITA 911/JPR/2011

• Counselvise Citation: 91123114 RSA 2011
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: S L PODDAR
• Keywords: Reasonable cause; Condonation of delay
• Section: 133(6); 12A; 12AA; 10B; 12

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR ( BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAINI ) ITA NO. 911/JP/2011 ASSESSMENT YEAR: 2005-2006 PAN: AAATA 8893 P M/S. ANKUR UDBODHAK SAMITI VS. THE ITO A-18, SHANTI PATH, TILAK NAGAR WARD 6 (1) JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L.PODDAR DEPARTMENT BY : SHRI A.K. KHANDELWAL DATE OF HEARING : 13.01.2014. DATE OF PRONOUNCEMENT : 13.03.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD CIT, CENTRAL, JAIPUR-II, JAIPUR DATED 27-09-2011 FOR TH E A.Y. 2005-06 PASSED U/S 12AA OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHO RT). 2.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE SAMITI / SOCIETY FILED AN APPLICATION IN FORM NO. 10A FOR S EEKING REGISTRATION U/S 12AA OF THE ACT ON 11-01-2008. THE ASSESSEE SOCIETY WAS GRANTED REGISTRATION VIDE ORDER DATED 31-07-2008 W.E.F. 11 -01-2008, AS AGAINST REQUESTED W.E.F. 01-04-2001. AGAINST DENIAL OF COND ONATION OF DELAY AND NOT 2 GRANTING REGISTRATION W.E.F. 01-04-2001, THE ASSESS EE SAMITI FILED APPEAL AND THE APPELLATE TRIBUNAL (AT) VIDE ITS ORDER DATED 10 -03-2011 PASSED IN ITA NO.1641 & 1617/JP/2008 RESTORED THE MATTER TO LD. CIT WITH A DIRECTION THAT HE IS REQUIRED TO PASS A SPECIFIC ORDER IN THIS REG ARD. IN THE SET ASIDE PROCEEDINGS, THE LD. CIT HAS MENTIONED THAT W.E.F. 01-06-2007, SECTION 12AA HAS BEEN AMENDED VIDE WHICH THE LD. CIT HAS BE EN DIVESTED WITH THE POWER OR DISCRETION TO CONDONE THE DELAY. IF THE AP PLICATION FOR REGISTRATION IS FILED ON OR AFTER 01-06-2007 AND SINCE IN THIS CASE THE ASSESSEE SAMITI HAS FILED AN APPLICATION FOR REGISTRATION ON 11-01-2008 , THE DELAY IN FILING OF APPLICATION CANNOT BE CONDONED. IT WAS AGREED THAT THE POWER TO CONDONE THE DELAY IS AN INHERENT POWER VESTED WITH THE AUTHORI TY WHO IS EMPOWERED TO GRANT OR REFUSE REGISTRATION U/S 12AA OF THE ACT. T HEREFORE, IT WAS PLEADED THAT THE DELAY SHOULD BE CONDONED AND REGISTRATION SHOULD BE GRANTED W.E.F A.Y. 2005-06. RELIANCE WAS PLACED ON THE DECISION OF ITAT JAIPUR BENCH IN WHICH DELAY HAS BEEN CONDONED. HOWEVER, THE LD CIT HAS NOT CONDONED DELAY AND HAS NOT GRANTED REGISTRATION TO THE SAMIT I FROM A.Y. 2005-06 (OR W.E.F. 01-04-2001). NOW THE ASSESSEE HAS COME IN AP PEAL BY TAKING FOLLOWING GROUNDS. 3 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E THE ORDER PASSED BY THE LD CIT(A) IN REJECTING ASSESSEES A PPLICATION FOR GRANTING REGISTRATION U/S 12A IS ILLEGAL, UNLAWFU L AND UNJUSTIFIED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN HOLDING THAT LD CIT(A) HAS NO INHERENT POWER TO CONDONE THE DELAY IN GRANTING REGISTRATI ON U/S 12A. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN HOLDING THAT THE POWER TO CON DONE DELAY IN GRANTING REGISTRATION U/S 12A HAS BEEN TAKEN BACK EXPRESSLY IN THE STATUTE. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN REFUSING TO CONDONE THE DELAY AND IN REJECTING ASSESSEES APPLICATION FOR GRANTING REG ISTRATION U/S 12A DESPITE THERE BEING BONA FIDE CAUSE OF THE DELAY. 2.2 WE HAVE HEARD THE RIVAL SUBMISSIONS. WE HAVE AS SESSMENT ORDER CAREFULLY TREATED THE RELEVANT PROVISIONS OF THE AC T AND THE DECISIONS RELIED ON BY THE PARTIES. BOTH THE PARTIES HAVE REITERATED THEIR EARLIER STAND. THERE IS NO DISPUTE REGARDING THE FACTS OF THE CASE NARRATED ABOVE. THE LD. CIT HAS REFUSED TO CONDONE THE DELAY BECAUSE HE IS NOT EMPO WERED TO DO SO IN VIEW OF THE AMENDED PROVISION. THE RELEVANT PROVISION CO NTAINED IN SECTION 12A OF THE ACT WHICH READS AS UNDER:- [ CONDITIONS FOR APPLICABILITY OF SECTIONS 11 AND 12 . ] 12A. [(1)] THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS THE FOLLO WING CONDITIONS ARE FULFILLED, NAMELY: ( A ) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN A PPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE [***] COMMISSIONER BEFORE THE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATI ON OF THE TRUST OR THE 4 ESTABLISHMENT OF THE INSTITUTION, [WHICHEVER IS LAT ER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA ] : [ PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIOD AFORESAID, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUS T OR INSTITUTION, ( I ) FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION IF THE [***] COMMISSIONER IS, FOR REASO NS TO BE RECORDED IN WRITING, SATISFIED THAT THE PERSON IN RECEIPT OF TH E INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF TH E PERIOD AFORESAID FOR SUFFICIENT REASONS; ( II ) FROM THE 1ST DAY OF THE FINANCIAL YEAR IN WHICH T HE APPLICATION IS MADE, IF THE [***] COMMISSIONER IS NOT SO SATISFIED:] [ PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007;] [( AA ) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN A PPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION ON OR AFTER THE 1ST DAY OF JUNE, 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA ;] ( B ) WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUTIO N AS COMPUTED UNDER THIS ACT WITHOUT GIVING EFFECT TO [THE PROVISIONS OF SECTION 11 AND SECTION 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TA X IN ANY PREVIOUS YEAR], THE ACCOUNTS OF THE TRUST OR INSTITUTION FOR THAT Y EAR HAVE BEEN AUDITED BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288 AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES A LONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH AC COUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED.] ( C ) [***] [(2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTE R THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUS T OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FO LLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE.] THE SUBMISSION OF THE LD. AR IS THAT THE ASSESSEE S AMITI / SOCIETY IS REGISTERED UNDER THE SOCIETIES ACT, 1958 W.E.F. 3-0 7-1988 AND IT RUNS TWO SCHOOLS NAMELY SEEDLING NURSERY SCHOOL, JAIPUR AND SEEDLING MODERN PUBLIC SCHOOL, JAIPUR. THE FUNCTIONING OF THE SCHOO LS AND IMPARTING OF EDUCATION BECAME FULLY OPERATIONAL FROM THE F.Y. 20 02-03. THE RETURN OF 5 INCOME DECLARING RS. NIL WAS FILED ON 30-03-2006 FO R THE A.Y. 2005-06. DURING THE A.Y. 2005-06, THE ASSESSEE DERIVED INCOM E FROM RUNNING OF TWO SCHOOLS STATED ABOVE. THIS INCOME WAS CLAIMED EXEMP T U/S 11 OF THE ACT. THE ASSESSEE SOCIETY WAS REGISTERED AND WAS ENGAGED IN THE CHARITABLE WORK WHICH INCLUDED EDUCATION. HOWEVER, THE A.O. HAS COM PLETED THE ASSESSMENT ON 31-12-2007 AT TOTAL INCOME OF RS. 30,53,721/- ON THE REASONING THAT THE ASSESSEE WAS NOT REGISTERED U/S 12A OF THE ACT AND WAS NOT ENGAGED IN THE CHARITABLE ACTIVITY AS SUCH. THEREAFTER, THE ASSESS EE SAMITI/ SOCIETY APPLIED FOR REGISTRATION U/S 12A OF THE ACT BEFORE THE LD C IT AS PER LAW ON 01-01- 2008 IN FORM NO. 10A IN ACCORDANCE WITH RULE 17A U NDER FORWARDING LETTER DATED 01-01-2008 ON 11-01-2008. THE ASSESSEE ENCLOS ED AUDITED ACCOUNTS FOR THE F.Y. 2004-05 TO 2006-07 AND THE REQUEST WAS MADE FOR REGISTRATION W.E.F. A.Y. 2005-06 BUT THE LD. CIT GRANTED REGISTR ATION W.E.F. 11-01-2008 AND FOR THE EARLIER PERIOD NO ORDER WAS PASSED. IT WAS SUBMITTED THAT PRIOR TO 01-06-2007, THE PROVISIONS OF SECTION 12A(1)(A) EMP OWERED THE LD. CIT TO CONDONE THE DELAY IN FILING OF APPLICATION FOR REG ISTRATION. THE ASSESSEE HAS FILED APPLICATION 07 MONTHS LATER AFTER THE AMENDE D PROVISIONS. IT WAS STATED THAT THE ASSESSEE SOCIETY WAS NEITHER AWARE OF THE AMENDMENT IN THE LAW NOR EVEN ABOUT GETTING THE SOCIETY IS REQUIRED TO BE REGISTERED FOR GETTING THE EXEMPTION OF SECTION 11 OF THE ACT. IT WAS ONLY WHEN THE 6 ASSESSMENT FOR THE A.Y. 2005-06 WAS COMPLETED ON 31 -12-2007. THIS FACT CAME TO ITS KNOWLEDGE AND WAS PROMPTED TO APPLY FOR REGISTRATION U/S 12A OF THE ACT. WITH THESE SUBMISSION, IT WAS PLEADED TH AT THERE IS A REASONABLE CAUSE FOR THE CONDONATION OF THIS DELAY. IN THE BAC KGROUND OF EVEN AMENDED PROVISIONS W.E.F. 01-06-2007 WHEREBY THE CONDONATIO N POWER OF LD. CIT HAVE BEEN TAKEN AWAY, IT HAS BEEN ARGUED THAT THE APPELLATE TRIBUNAL AND / OR THE LD CIT HVEAS INHERENT POWER TO CONDONE THIS DELAY. IN THIS REGARD, THE LD. AR HAS RELIED ON THE FOLLOWING DECISIONS. (1) RAJASTHAN STATE AGRICULTURAL MARKETING BOARD VS CIT, (2007) 106 TTJ (JP) 1109, IN WHICH IT HAS BEEN HE LD THAT APPLICATION WHICH HAS LOST BENEFIT OF EXEMPTIO N U/S 10(2) AFTER INSERTION OF EXPLANATION OF SECTION 10(2) BY FINANCE ACT, 2002 HAVING FILED BELATED APPLICATI ON FOR REGISTRATION U/S 12A AS IT CAME TO KNOW ONLY AT A LATER STAGE FROM A DECISION OF THE TRIBUNAL THAT IT CA N CLAIM EXEMPTION U/S 11, THERE WAS REASONABLE CAUSE FOR THE DELAY IN FILING THE APPLICATION; DELAY CONDONED. OBJECTS OF THE AGRICULTURAL MARKET BOARD ARE OBJECTS OF GENERAL PUBLIC UTILITY; NON-FILING OF RETURN OR NON-FILI NG OF AUDITED ACCOUNTS ALONGWITH RETURN IS NO HURDLE T O REGISTRATION U/S 12; CIT DIRECTED TO ALLOW REGI STRATION U/S 12A. (2) ITAT, JAIPUR BENCH A , SAHITYA SADAWART SAM ITI VS CIT (ITA NO.20/JP/2006 DATED 31 ST MAY, 2007), IN WHICH IT HAS BEEN HELD THAT SECTION 12A(A) OF INCOME-TAX ACT, 1961 ASSES SEE SOCIETY WAS REGISTERED UNDER THE RAJASTHAN SOCI ETIES REGISTRATION ACT, 1953 ON 20-11-1959. ITS MAIN O BJECT IS TO IMPART EDUCATION IN THE STATE OF RAJASTHAN. I T FILED AN 7 APPLICATION BEFORE THE CIT IN FORM NO.10A SEEKIN G REGISTRATION U/S 12A(A) OF THE INCOME-TAX ACT, 1 961 ON 30-05-2002 ALONGWITH COPIES OF ITS CONSTITUTION, CERTIFICATE OF REGISTRATION, AUDIT REPORT IN FOR M NO. 10B AND COPIES OF INCOME AND EXPENDITURE A/C AND BAL ANCE SHEET FOR A.YS 1998-99, 1999-2000 AND 2000-01. S INCE THE ASSESSEE WAS ENJOYING BENEFIT OF THE EXEMPTI ON GRANTED TO THE EDUCATIONAL INSTITUTIONS BY THE P ROVISIONS OF SECTION 10(22), IT WAS NOT REQUIRED TO FILE A NY RETURN OF INCOME. LATER ON, FROM ASSESSMENT YEAR 1999-2000 , SECTION 10(22), WAS REPLACED BY SECTION 10(23C), ACCORDING TO WHICH AN EDUCATIONAL INSTITUTION EN GAGED SOLELY FOR EDUCATIONAL PURPOSE WHOSE GROSS RECEI PTS EXCEED RS. ONE CRORE WILL BECOME ENTITLED TO EXE MPTION ONLY WHEN IT HAS NOT ITSELF REGISTERED U/S 12A(A ) OF THE ACT. IN THE LIGHT OF THIS AMENDMENT, DEPARTMENT ISSUED A NOTICE TO THE ASSESSEE U/S 133(6) ON 13.05.2002. IMMEDIATELY THEREAFTER ASSESSEE FILED APPLICATIO N U/S 12A(A) AND ALSO U/S 10(23C)(VI) ON 30.05.2002 SE EKING REGISTRATION U/S 12A(A). COMMISSIONER OF INCOME TAX REJECTED THE APPLICATION BEING BELATED BY MORE T HAN 28 YEARS AND 10 MONTHS NOT SATISFYING THE MANDATORY CONDITION FOR REGISTRATION U/S 12A OF THE ACT AN D THAT IT IS NOT ELIGIBLE FOR REGISTRATION FROM FIRST DAY OF FINANCIAL YEAR 2002-03 SINCE COPIES OF ACCOUNT FOR FINANCI AL YEAR 2001-02 WHERE NOT FILED ALONG WITH THE APPLICATI ON IN VIEW OF RULE 12A(B) OF I.T. RULES. CIT ALSO OBSE RVED THAT NO APPLICATION FOR CONDONATION OF DELAY WAS FIELD BY THE ASSESSEE ALONG WITH THE APPLICATION AND THAT NO CAUSE FOR DELAY HAD BEEN EXPLAINED. NOW TRIBUNAL HAVE CONDONED THE DELAY IN THE FILIN G OF APPLICATION AFTER OBSERVING THAT TILL THE RECEIPT OF NOTICE U/S 133(6) DATED 13.05.2002 ASSESSEE WAS UNDER A BONA FIDE BELIEF AND IMPRESSION THAT IT WAS UNDER AN OBLIGATION TO THE APPLICATION. 8 (3) COUNCIL OF SCIENTIFIC AND INDUSTRIAL RESEARCH VS. DIT (EXEMPTION) (2010) 123 ITD 401 (DEL) IN THIS CASE COUNCIL OF SCIENTIFIC AND INDUSTRIAL RESEARCH WAS REGISTERED AS A SOCIETY ON 26.09.1942. IT APP LIED FOR REGISTRATION U/S 12A ON 20.03.2007 W.E.F. 01.04.2 000. THE APPLICATION WAS MADE LATE BY 34 YEARS. THE DELAY WAS CONDONED AND REGISTRATION WAS GRANTED. AFTER GOING THROUGH THE ABOVE DECISIONS, WE HAVE FO UND THAT THESE DECISIONS PERTAINS TO THE CASES IN WHICH APPLICATION FOR REGI STRATION U/S 12A OF THE ACT WERE FILED BEFORE 01-06-2007 AND THAT TIME OF POWER TO CONDONE VESTED IN THE COMMISSIONER OF INCOME-TAX. HOWEVER, A VALID AR GUMENT HAS BEEN ADVANCED BY THE LD. AR THAT POWER TO CONDONE BEING INHERENT VESTS IN HIGHER FORMS LIKE THE TRIBUNAL, IF THEY DO NOT VEST IN THE COMMISSIONER. HE HAS ARGUED THAT THE POWER TO CONDONE IS IN-BUILT IN THE POWERS TO DECIDE AS HAS BEEN JURISPRUDENTIALLY RECOGNIZED. HE HAS ARGUE D THAT THE BENCH MARKING DATE ON WHICH POWER HAS BEEN TAKEN AWAY IS 01-06-20 07. HE ARGUED THAT THE POWER TO DECIDE INCLUDES POWER TO CONDONE THE DELAY AS PER THE PROVISIONS OF SECTION 5 OF THE EVIDENCE ACT, WHICH IS A GENERAL P ROVISION. THE COURTS HAVE BEEN VERY LONG DELAYS AND IT CONDONED DELAYS OF 34 YEARS IN THE CASE OF COUNCIL OF SCIENTIFIC AND INDUSTRIAL RESEARCH VS. D IT (EXEMPTION) (2010) 123 ITD 401 (DEL). 2.3 ON THE OTHER HAND, THE LD DR HAS VEHEMENTLY REF UTED THE ABOVE SUBMISSIONS OF THE ASSESSEE AND HAS STATED THAT TH E INTENTION OF THE 9 LEGISLATURE IS VERY CLEAR. THE AMENDMENT IN THIS PROVISION HAS BEEN PURPOSELY MADE. IF APPLICATION FOR REGISTRATION IS FILED ON OR AFTER 01-06- 2007, THE LD. CIT HAS NO POWER TO CONDONE ANY DELA Y. 2.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAV E FOUND IT FOR A FACT THAT PRIOR TO THIS AMENDMENT IN SECTION 12A BROUGH T VIDE THE FINANCE ACT, 2007, W.E.F. 01-6-2007, THE CHIEF COMMISSIONER/ COM MISSIONER, IN HIS DISCRETION, COULD ADMIT AN APPLICATION FOR REGISTR ATION OF ANY TRUST OR INSTITUTION EVEN AFTER EXPIRY OF THE STATED PERIOD . THE STRICT SCRUTINY OF SECTION 12A REVEALS THAT BENEFIT OF SECTION 11 AND1 2, WHICH EXCLUDE CERTAIN RECEIPTS/ INCOME FROM THE FORMING PART OF THE TRUST - INCOME CAN BE AVAILED OF WHEN ANY PERSON OR INSTITUTION FILES AN APPLICATION FOR REGISTRATION IN PRESCRIBED FORMAT AS PER RUE 17A AND FORM NO. 10A B EFORE FIRST DAY OF JULY, 1973 OR BEFORE THE EXPIRY OF PERIOD OF ONE YE AR FROM THE DATE OF CREATION OF THE TRUST OR ESTABLISHMENT OF THE INSTI TUTION, WHICHEVER IS LATER. HOWEVER, IN CASE APPLICATION FOR REGISTRATION OF TH E TRUST/ INSTITUTION IS MADE AFTER EXPIRY OF THE SAID PERIOD, THE PROVISIONS OF SECTION 11 AND 12 OF THE ACT SHALL APPLY MEANING THEREBY AS IN THAT SITUATIO N THE RECEIPT OF SUCH INCOME WHICH ALSO APPLIES TO THE PROCEEDINGS UNDER THIS ACT. THIS POWER HAS NOT BEEN SPECIFICALLY TAKEN AWAY BY THIS AMENDMENT SHALL BE SUBJECT TO TAX IN THE NORMAL COURSE. IN SUCH CASES, THE PROVISIONS OF SECTION 11/12 SHALL APPLY 10 IN RELATION TO THE INCOME OF SUCH TRUST/ INSTITUTIO N FROM THE DATE OF CREATION OF THE TRUST OR ESTABLISHMENT OF THE INSTITUTION. HOWE VER, THIS CONDITION IS FURTHER SUBJECT TO THE DISCRETION OF THE COMMISSION ER. FOR CONDONING THIS DELAY, HE HAS TO RECORD REASON IN WRITING FOR REAC HING HIS SATISFACTION THAT SUCH PERSON WAS PREVENTED FROM MAKING APPLICATION B EFORE THE EXPIRY OF SAID PERIOD FOR SUFFICIENT REASONS. THE OTHER SITUA TION IN WHICH THIS EXEMPTION WILL NOT BE AVAILABLE TO THAT PERSON IS W HEN APPLICATION IS FILED IN RELATION TO THE INCOME FROM THE 1ST DATE OF THE FIN ANCIAL YEAR IN WHICH APPLICATION IS MADE , IF THE COMMISSIONER IS NOT S ATISFIED. HOWEVER, THE ABOVE RELAXATION IS NOT AVAILABLE IN VIEW OF THE AM ENDED PROVISIONS INSERTED BY THE FINANCE ACT, 2007 WHICH STATES THAT PROVISIO NS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFT ER 1ST DAY OF JUNE,2007. FURTHER, WHERE THE APPLICATION HAS BEEN MADE ON OR AFTER 01-06-2007, THE PROVISIONS OF SECTION 11 AND 12 SHALL APPLY IN RELA TION TO INCOME OF SUCH TRUST OR INSTITUTION FROM THE A.Y. IMMEDIATELY FALL ING IN WHICH SUCH APPLICATION IS MADE. FROM THE READING OF THE ABOVE PROVISIONS, IT WOULD NOT BE APPROPRIATE TO SAY THAT POWER TO CONDONE DELAY H AS BEEN REMOVED FROM THE STATUTE UNDER THIS SECTION. HOWEVER, IF THE APP LICATION FOR REGISTRATION IS MADE ON OR AFTER 01-06-2007, THE PROVISIONS OF SECT ION 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST / INSTITUTI ON FROM THE ASSESSMENT YEAR 11 IMMEDIATELY FOLLOWING THE YEAR FALLING IN WHICH SU CH APPLICATION IS MADE. IN THE GIVEN CASE, THE RETURN OF INCOME DECLARING NIL INCOME WAS FILED ON 30-03- 2006 FOR THE A.Y. 2005-06. DURING THE A.Y. 2005-06, THE ASSESSEE DERIVED INCOME FROM RUNNING OF TWO SCHOOLS. THE ASSESSEE AP PLIED FOR REGISTRATION ON 01-01-2008. OBVIOUSLY, THE APPLICATION FOR REGI STRATION WAS FILED AFTER 01-06-2007 AND IN VIEW OF SECTION 12A(2), THE PROV ISIONS OF SECTION 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TR UST/ INSTITUTION FROM THE A.Y. IMMEDIATELY FOLLOWING THE F.Y. 2007-08 I.E. A. Y. 2008-09. IN THIS CASE, AS DISCUSSED, THE ASSESSEE HAS GOT A SUFFICIE NT CAUSE AND REASONS FOR NOT FILING THE APPLICATION FOR REGISTRATION U/S 12A AND THIS SECTION WAS NECESSITATED IN VIEW OF THE FINDINGS OF THE A.O. FO R THE A.Y. 2005-06 WHEREIN INCOME OF THE TRUST WAS NOT HELD AS EXEMPT. WHEN THIS ISSUE IS EXAMINED IN DEPTH, THE PROVISO TO CLAUSE 12A(1)(A) SHALL NOT APPLY IF THE APPLICATION FOR REGISTRATION OF THE TRUST IS MADE ON OR AFTER 01-06-2007 WHEN THE SECTION 12A(2) IS NORMALLY READ, IT IMPLIES THA T IN SPECIFIC CONDITION, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN REL ATION TO INCOME OF SUCH TRUST/ INSTITUTION FROM THE ASSESSMENT YEAR IMMEDI ATELY FOLLOWING THE F.Y. IN WHICH SUCH APPLICATION IS MADE. IT MEANS THAT IF ANY APPLICATION IS MADE ON 1ST DAY OF JUNE,2007 I.E. IN F.Y. 2007-08, THE B ENEFIT OF SECTIONS 11 AND 12 IS AVAILABLE IN THE ASSESSMENT YEAR 2008-09. THU S IT IS NOT A CASE OF 12 COMPLETE TAKING-AWAY OF POWERS OF CONDONATION OF DE LAY. THIS PROVISION SEEMS TO BE VERY AND LABYRINTH. WE ARE AWARE OF TH E FACT THAT THE APPELLATE TRIBUNAL, BEING THE APPELLATE AUTHORITY, IS ALWAY S VESTED WITH THE POWER TO CONDONE SUCH DELAY TO PROVIDE SUBSTANTIAL JUSTICE T O THE PARTIES. THE POWER OF CONDONATION IS IN-BUILT AND INHERENT IN THE AUTH ORITY/ OR JUDICIAL TO ADJUDICATE OF ANY SUCH DISPUTE WHICH ARISE UNDER TH E ACT. IN THIS CASE, WE HAVE FOUND THAT THE APPLICANT WAS PREVENTED FROM MA KING APPLICATION BEFORE THE EXPIRY OF SAID PERIOD, FOR SUFFICIENT REASONS. THEREFORE, WE CONDONE THIS DELAY AND ALLOW REGISTRATION. WE DIRECT ACCORDINGLY . 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 13-0 3-2014. SD/- SD/- ( N.K. SAINI ) (HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER *MISHRA COPY FORWARDED TO :- 1. M/S. ANKUR UDBODHAK SAMITI, JAIPUR 2. THE ITO , WARD 6 (1), JAIPUR 3. THE LD CIT 4. THE D/R 5. GUARD FILE (ITA NO.911/JP/2011) BY ORDER, AR ITAT, JAIPUR 13 14