The Punjab Building & Other Construction Workers Welfare Board, Chandigarh V. CIT I, Chandigarh

ITA 925/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77128 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-05-2014
• Assessment Year: misc
• Appeal Filed On: 10-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Charitable institution; Reasonable cause; Condonation of delay
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.924 & 925/CHD/2012 UNDER SECTION 12AA THE PUNJAB BUILDING & OTHER VS. THE C.I.T-I, CONSTRUCTION WORKERS WELFARE BOARD, CHANDIGARH. 76,BAY BUILDING, SECTOR 17, CHANDIGARH. PAN: AAALP0698P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SMT.JYOTI KUMARI, DR DATE OF HEARING : 20.05.2014 DATE OF PRONOUNCEMENT : 29.05.2014 O R D E R PER SUSHMA CHOWLA, J.M. : OUT OF THESE TWO APPEALS FILED BY THE ASSESSEE, TH E APPEAL IN ITA NO.924/CHD/2012 IS AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX-I, CHANDIGARH DATED 14/16.3.2012 REJECTING REG ISTRATION UNDER SECTION 12AA(1)(B)(I) OF THE INCOME TAX ACT, 1961, WHEREAS THE APPEAL IN ITA NO.925/CHD/2012 IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-I, CHANDIGARH DATED 22.08.2012 REJECTIN G REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE IN ITA NO.924/CHD/2012 HAS RAISED F OLLOWING GROUNDS OF APPEAL : 2 1. THAT THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN ALLOWING REGISTRATION UNDER SECTION 12AA O F THE ACT ONLY W.E.F. A.Y. 2012-13 AND NOT FROM THE DATE OF CREATION OF B OARD I.E. 30.04.2009 WHICH IS ARBITRARY & UNJUSTIFIED. 2. THAT ADMITTEDLY, THE ASSESSEE BOARD FULFILS ALL THE CONDITIONS NECESSARY FOR REGISTRATION AND THE OBJECTIVES FOR WINCH IT HAS B EEN CONSTITUTED IS TO UNDERTAKE WHOLLY CHARITABLE ACTIVITIES SINCE IT HAS BEEN GRANTED, REGISTRATION PROSPECTIVELY AND AS SUCH DENYING REGI STRATION RETROSPECTIVELY FOR THE PERIOD STARTING FROM 30.04.2009 IS ARBITRARY AND UNJUSTIFI ED. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 3. THE ASSESSEE IN ITA NO.925/CHD/2012 HAS RAISED F OLLOWING GROUNDS OF APPEAL : 1. THAT THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN REJECTING THE REPRESENTATION OF THE ASSESSES WHEREBY THE ASSESSEE SOUGHT REGISTRATION UNDER SECTION 12AA OF THE ACT FROM THE DATE OF CREATION OF BOARD I.E. 30.04.2009 AS AGAINST ALLOWED ONLY FROM A.Y 2012-13 VIDE ORDER DATED 14.03.2012 WHICH IS ARBITRARY & UNJUSTIFIED. 2. THAT ADMITTEDLY THE ASSESSEE BOARD FULFILS ALL THE CONDITIONS NECESSARY FOR REGISTRATION AND THE OBJECTIVES FOR WHICH IT HAS BE EN CONSTITUTED IS TO UNDERTAKE WHOLLY CHARITABLE ACTIVITIES SINCE IT HAS BEEN GRANTED REGISTRATION PROSPECTIVELY AND AS SUCH DENYING REGISTRATION RETROSPECTIVELY FO R THE PERIOD STARTING FROM 30.04.2009 IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE 4. BOTH THE APPEALS OF SAME ASSESSEE ON SIMILAR ISS UE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED OR FOR THE SAKE OF CONVENIENCE. 5. THE APPEAL IN ITA NO.924/CHD/2012 WAS FILED AFTE R A DELAY OF 113 DAYS. THE LEARNED A.R. FOR THE ASSESSEE FILED AN A PPLICATION FOR CONDONATION OF DELAY WHICH IS AVAILABLE ON RECORD. THE CONTENTION OF 3 THE ASSESSEE WAS THAT THE ASSESSEE HAD APPLIED FOR REGISTRATION 12A OF THE ACT. THE COMMISSIONER OF INCOME TAX, CHANDIGARH VI DE ORDER DATED 14/16.3.2012 HELD THAT THE OBJECTIVE OF THE TRUST W AS CHARITABLE AND REGISTRATION WAS GRANTED FROM 30..9.2012 I.E. THE D ATE WHEN THE APPLICATION UNDER SECTION 12A WAS MOVED BY THE ASSE SSEE. THE ASSESSEE BY WAY OF APPLICATION FOR CONDONATION OF DELAY: 1. THAT THE ABOVE INCOME TAX APPEAL AGAINST THE ORDER DATED 14/15.03.2012 OF THE COMMISSIONER OF INCOME TAX -1, CHANDIGARH WAS F ILED ON 10.09.2012 WHICH WAS LATE BY 113 DAYS. 2. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX -1 , CHANDIGARH WAS RECEIVED ON 21.03.2012 AND AS SUCH THE APPEAL WAS T O BE FILED BY 19.05.2012. 3. THAT SH. PAWAN SHARMA, CHARTERED ACCOUNTANT OF THE ASSESSEE WAS REPRESENTING THE ASSESSEE BEFORE THE COMMISSIONER O F INCOME TAX IN RESPECT OF REGISTRATION UNDER SECTION 12A OF THE ACT. 4. THAT ON RECEIPT OF THE ORDER OF COMMISSIONER OF INC OME TAX ALLOWING REGISTRATION ONLY PROSPECTIVELY AND NOT FROM THE DA TE OF FORMATION OF BOARD, IT WAS ADVISED THAT A RECTIFICATION APPLICATION BE FIL ED BEFORE THE COMMISSIONER OF INCOME TAX INSTEAD OF FILING AN APPEAL BEFORE TH E HON'BLE INCOME TAX APPELLATE TRIBUNAL. 5. THAT IT WAS ONLY WHEN THE AFOREMENTIONED RECTIFICAT ION APPLICATION WAS REJECTED BY THE COMMISSIONER OF INCOME TAX VIDE ORD ER DATED 22.08.2012, IT WAS ADVISED BY THEIR COUNSEL THAT AN APPEAL SHOULD BE PREFERRED AGAINST THE INSTANT ORDER DATED 14.03.2012. 6. THAT IMMEDIATELY CORRECTIVE MEASURES WERE INITIATED AND THE APPEAL WAS FILED THOUGH BELATEDLY ON 10.09.2012 6. THE ASSESSEE HAS FURTHER FILED AFFIDAVIT OF CHAR TERED ACCOUNTANT SHRI PAWAN SHARMA ON WHOSE ADVICE THE ASSESSEE MOVE D AN APPLICATION FOR RECTIFICATION BEFORE THE COMMISSIONER OF INCOME TAX AND DID NOT FILE THE APPEAL BEFORE THE TRIBUNAL. THE CONTENTION OF THE ASSESSEE BEFORE US IS THAT SINCE ACTING ON THE ADVICE OF THE COUNSEL I T HAD SOUGHT ALTERNATIVE REMEDY AND DID NOT APPROACH THE TRIBUNAL, THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL COULD NOT BE ATTRIBUTED TO THE ASSESSEE AND THE SAME MERITS TO BE CONDONED. 4 7. THE LEARNED D.R. FOR THE REVENUE STATED THAT IGN ORANCE OF LAW AS PLEADED BY THE ASSESSEE CANNOT BE EXCUSED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRELIMINARY ISSUE RAISED IN THE PRESENT APPEAL IS VIS--VIS CONDONATION OF DELAY IN FILING THE APPEAL. THE COM MISSIONER OF INCOME TAX, CHANDIGARH VIDE ORDER DATED 14/16.3.2012 HAD G RANTED REGISTRATION UNDER SECTION 12AA OF THE ACT FROM THE DATE OF FILI NG THE APPLICATION AND NOT FROM THE DATE OF FORMATION OF THE TRUST. THE S AID ORDER OF THE COMMISSIONER OF INCOME TAX, CHANDIGARH WAS RECEIVED BY THE ASSESSEE ON 21.3.2012 AND THE APPEAL BEFORE THE TRIBUNAL WAS DUE TO BE FILED BY 19.5.2012. HOWEVER, THE SAID APPEAL WAS FILED ON 1 0.9.2012 I.E. AFTER A DELAY OF 113 DAYS. THE PLEA OF THE ASSESSEE IN THI S REGARD WAS THAT SHRI PAWAN SHARMA, CHARTERED ACCOUNTANT WHO WAS REPRESEN TING THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX, CHANDIGARH I N RESPECT OF REGISTRATION UNDER SECTION 12A OF THE ACT, ON RECEI PT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX ADVISED THE ASSESSEE THA T RECTIFICATION APPLICATION BE FILED BEFORE THE COMMISSIONER OF INC OME TAX INSTEAD OF FILING THE APPEAL BEFORE THE TRIBUNAL. THE SAID RE CTIFICATION APPLICATION WAS REJECTED BY THE COMMISSIONER OF INCOME TAX, CHA NDIGARH VIDE ORDER DATED 22.8.2012 AND THEREAFTER THE COUNSEL ADVISED THE ASSESSEE TO FILE THE PRESENT APPEAL BEFORE THE TRIBUNAL WHICH WAS FI LED ON 10.9.2012. THE ASSESSEE CLAIMED THAT SINCE HE WAS ACTING ON TH E ADVICE OF HIS COUNSEL AND WAS APPROACHING THE ALTERNATE REMEDY AV AILABLE TO THE ASSESSEE, THE DELAY IN FILING THE PRESENT APPEAL CO ULD NOT BE ATTRIBUTED TO THE ASSESSEE AND MERITS TO BE CONDONED. IN THE EN TIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES WHERE THE ASSESSEE ACT ING ON THE ADVICE OF HIS COUNSEL WAS APPROACHING ANOTHER REMEDY AVAILABL E UNDER THE ACT, IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT PREVENTED FROM REASONABLE CAUSE 5 IN NOT FILING THE APPEAL IN TIME BEFORE THE TRIBUNA L. ACCEPTING THE CONTENTION OF THE ASSESSEE IN THIS REGARD WE CONDON E THE DELAY OF 113 DAYS IN FILING THE PRESENT APPEAL BEFORE US. 9. NOW COMING TO THE ISSUE RAISED VIDE GROUND NOS.1 AND 2 ADMITTEDLY THE ASSESSEE TRUST WAS CREATED ON 30.4.2009. THE A PPLICATION UNDER SECTION 12A OF THE ACT IN FORM NO.10A WAS FILED BEF ORE THE COMMISSIONER OF INCOME TAX-I, CHANDIGARH ON 30.9.20 11. THEREAFTER VIDE ORDER DATED 14/16.3.2012 THE COMMISSIONER OF I NCOME TAX HAS RECOGNIZED THE OBJECTIVES OF THE ASSESSEE TRUST TO BE CHARITABLE IN NATURE AND HAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT W.E.F. THE DATE OF FILING THE APPLICATION. THE GRIEVANCE OF T HE ASSESSEE IS THAT RECOGNITION OF CHARITABLE TRUST TO THE ASSESSEE SHO ULD BE ALLOWED FROM THE DATE OF CREATION OF THE TRUST I.E. 30.4.2009. 10. THE RELEVANT PROVISIONS LAYING DOWN THE CONDITI ONS FOR APPLICABILITY OF SECTIONS 11 AND 12 ARE UNDER SECTI ON 12A OF THE ACT. IT IS PROVIDED UNDER SECTION 12A(1)(A) OF THE ACT THAT THE PERSON IN RECEIPT OF THE INCOME OF ANY TRUST OR INSTITUTION HAS TO MA KE THE APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRE SCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE EXPIRY OF PERIOD OF ONE YEAR FROM THE DATE OF CREATION OF THE TRUST OR ESTA BLISHMENT OF THE INSTITUTION. SUB-SECTION (2) TO SECTION 12A OF THE ACT PROVIDES THAT WHERE AN APPLICATION HAS BEEN MADE UNDER SUB-SECTIO N (1) ON OR AFTER THE FIRST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUT ION, FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WH ICH SUCH APPLICATION WAS MADE. IN VIEW OF CLEAR CUT PROVISIONS OF THE A CT THE REGISTRATION U/ 12AA OF THE ACT IS TO BE ALLOWED TO THE CONCERNED P ERSON W.E.F. THE DATE OF APPLICATION AND THE SAME IS NOT ALLOWABLE FOR AN Y RETROSPECTIVE PERIOD 6 I.E. THE PERIOD FROM THE DATE OF CREATION OF THE TR UST TO THE DATE ON WHICH IT APPLIED FOR REGISTRATION IS TO BE IGNORED. IN V IEW OF CLEAR CUT PROVISIONS OF THE ACT WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE AND THE REGISTRATION ALREADY GRANTED TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT WOULD BE APPLICABLE FROM THE PRESCRIBED DATE UN DER THE PROVISIONS OF SECTION 12AA OF THE ACT AND NOT FROM THE DATE OF CR EATION OF THE TRUST IN THE HANDS OF THE ASSESSEE. THUS THE ISSUE RAISED O N MERITS IN THE SAID CASE ARE DECIDED AGAINST THE ASSESSEE AND THE GROUN DS OF APPEAL RAISED BY THE ASSESSEE IN THIS REGARD ARE DISMISSED. 10. IN ITA NO.925/CHD/2012 THE ASSESSEE IS FURTHER AGGRIEVED BY SECOND ORDER PASSED BY THE COMMISSIONER OF INCOME T AX, CHANDIGARH DATED 22.8.2012 IN WHICH THE PLEA OF THE ASSESSEE F OR GRANTING REGISTRATION FROM ASSESSMENT YEAR 2009-10 NOT FROM 2012-13 WAS DISMISSED. IN VIEW OF CLEAR CUT PROVISIONS OF THE ACT I.E. SUB-SECTION(2) TO SECTION 12A OF THE ACT, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE AND THE SAME IS REJECTED. THE GROUNDS OF APPEAL RA ISED BY THE ASSESSEE ARE THUS DISMISSED. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29 TH MAY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH