The Dy.Director of Income tax(Exemp.), Ahmedabad v. Vasant Atma Chartitable Trust,, Ahmedabad

ITA 4081/AHD/2007 | 2004-2005
Pronouncement Date: 31-08-2010 | Result: Dismissed

Appeal Details

RSA Number 408120514 RSA 2007
Assessee PAN RULES1962W
Bench Ahmedabad
Appeal Number ITA 4081/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 23 day(s)
Appellant The Dy.Director of Income tax(Exemp.), Ahmedabad
Respondent Vasant Atma Chartitable Trust,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-08-2010
Date Of Final Hearing 30-08-2010
Next Hearing Date 30-08-2010
Assessment Year 2004-2005
Appeal Filed On 07-11-2007
Judgment Text
THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI BHAVNESH SAINI JUDICIAL MEMBER AND A.N. PAHUJA ACCOUNTANT MEMBER) ITA.NO.4081/AHD/2007 [ASSTT. YEAR : 2004-2005] DDIT (EXEMPTIONS) 2 ND FLOOR NATURE VIEW BUILDING NEAR HK HOUSE ASHRAM ROAD AHMEDABAD-380009 VS. VASANT ATMA CHARITABLE TRUST 8 ASHTAPAD SOCIETY NARAYAN NAGAR ROAD PALDI AHMEDABAD. [PAN: (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.M. MAHESH DR ASSESSEE BY : SHRI NIRAV SHAH AR O R D E R A.N. PAHUJA : THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 23.08.2007 OF THE LD. CIT(APPEALS)-XX AHMEDABAD R AISE THE FOLLOWING GROUNDS: 1) THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.11 55 230/- WHILE THE ASSESSEE HAS NOT SUBMITTED ITS ACCOUNTS IN FORM NO.10AA ON OR BEFORE 30.6.2004 TO DGIT(E) NEW DELHI AS REQUIRED U/S.80G(5C)(V) OF THE I.T.ACT 1961 READ WITH RULE 18AAAA OF I.T.RULES 1962 WHEREAS SEC TION 12(3) OF I.T.ACT 1961 SPECIFICALLY ORDAINS THAT TH E AUDITED ACCOUNTS HAVE TO BE RENDERED BEFORE THE PRESCRIBED AUTHORITY WITHIN THE SPECIFIED TIME THEREIN. 2) THE LD.CIT(A) HAS EXCEEDED HIS JURISDICTION IN C ONDONING THE DELAY FOR SUBMISSION OF THE AUDITED ACCOUNTS IN FOR M N0.10AA WHEREAS THERE IS NO PROVISION IN THE I.T.A CT 1961 FOR CONDONATION OF DELAY IN FILING FORM NO.10AA BEYOND THE PRESCRIBED TIME 30.06.2004. THE FILING OF FORM NO.1 0AA BEFORE THE DUE DATE I.E. 30.06.2004 IS A STATUTORY REQUIRE MENT AND IN CASE OF DEFAULT THE AMOUNT OF DONATION RECEIVED BY THE TRUST IN TERMS OF SECTION 80G(2)(D) OF THE I.T.ACT 1961 READ WITH SECTION 12(3) OF THE ACT BECOMES CHARGEABLE TO TAX. 3) IN THE ABSENCE OF ANY EXPRESS PROVISION OF APPLI CABILITY OF SECTION 5 OF THE LIMITATION ACT 1963 TO AN APPLICAT ION FILED BEFORE THE ASSESSING AUTHORITY THE HON'BLE ALLAHAB AD HIGH ITA.NO.4081/AHD/2007 -2- COURT FOLLOWING THE DECISION OF HON'BLE SUPREME CO URT IN THE CASE OF CIT V/S. DATA SOFTWARE RESEARCH CO. LTD (24 7 ITR 207) HELD THAT IT IS DIFFICULT TO HOLD THAT SUCH ASSESSI NG AUTHORITY IS COMPETENT TO ACCEPT THE APPLICATION FILED BEYOND THE PERIOD PRESCRIBED UNDER THE I.T.ACT (282 ITR 44). 4) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE T HE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF A.O.IT IS THEREF ORE PRAYED THAT THE ORDER OF LD.CIT(A) MAY BE SET-ASIDE AND TH AT THE ORDER OF A.O. BE RESTORED. 2. ADVERTING TO GROUND NOS. 1 TO 3 IN THE APPEAL F ACTS IN BRIEF AS PER THE RELEVANT ORDERS ARE THAT THE RETURN DECLARING NIL I NCOME FILED ON 2-11-2004 BY THE ASSESSEE A CHARITABLE TRUST REGISTERED ON 31 .3.1995 U/S12AA OF THE INCOME-TAX ACT 1961[HEREINAFTER REFERRED TO AS THE ACT] AFTER BEING PROCESSED U/S 143(1) OF THE ACT WAS SELECTED FOR SCRUTINY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT. THE MAIN OBJECTS OF THE TRUST ARE STATED TO BE TO HELP NEEDY PERSONS FOR MEDICAL AID AND FOOD ETC. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER[AO IN SHORT] ASKED THE ASSESSEE TO SUBMIT A COPY OF FORM NO. 10AA IN TERM S OF RULE 18AAAA OF THE INCOME-TAX RULES 1962 FILED WITH THE DGIT(EXEMPTIO NS) IN RESPECT OF DONATIONS COLLECTED TOWARDS GUJRAT EARTHQUAKE RELI EF FUND AND UTILIZATION THEREOF. HOWEVER THE ASSESSEE DID NOT FILE A COPY OF THE SAID FORM NO.10AA FILED WITH DGIT(EXEMPTIONS)IN TERMS OF RULE 18AAAA OF THE IT RULES 1962.INSTEAD THE ASSESSEE SUBMITTED A COPY O F FORM NO.10AA ALLEGEDLY FILED WITH THE OFFICE OF THE DDIT(EXEMPTI ONS) AHMEDABAD ON 24-6- 2004. ON PERUSAL OF THE SAME THE AO FOUND THAT IT DID NOT HAVE ANY ACKNOWLEDGEMENT OR THE RECEIPT STAMP OF THE OFFICE OF THE DDIT (EXEMPTIONS). SINCE THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE OF FILING FORM NO.10AA ALONG WITH AUDITED ACCOUNTS BEFORE THE DGIT (EXEMPTIONS) ON OR BEFORE 30.6.2004 IN TERMS OF PROVISIONS OF SECTI ON 80G(5C)(V) OF THE ACT NOR EXPLAINED THE REASONS FOR DELAY THE AO CONCLUDED T HAT THE ASSESSEE VIOLATED THE PROVISIONS OF SEC. 12(3) OF THE ACT AND ACCORDI NGLY THE ENTIRE DONATIONS OF RS.11 55 250/- RECEIVED TOWARDS EARTHQUAKE RELIEF D URING THE FYS 2001-02 TO 2004-05 WERE BROUGHT TO TAX EVEN WHEN THESE WERE S TATED TO HAVE BEEN UTILISED IN THE RELEVANT YEARS TOWARDS THE EARTHQU AKE RELIEF. ITA.NO.4081/AHD/2007 -3- 3. ON APPEAL THE LEARNED CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE IN THE FOLLOWING TERMS: 5. I HAVE GONE THROUGH THE RECORDS AND ALSO CONSID ERED THE ASSESSING OFFICER'S FINDINGS AND OBSERVATIONS AND DETAILED SU BMISSIONS MADE BY THE APPELLANT MENTIONED ABOVE. CONSIDERING THE TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE CONSIDERED V IEW THAT THE APPELLANT'S CLAIM IS CORRECT AND SHOULD SUCCEED FOR THE FOLLOWING REASONS: A) THERE IS NO DISPUTE ABOUT THE FACT THAT THE ENTI RE DONATION COLLECTED UPTO 31-3-2003 HAS BEEN SPENT BY 31-3-200 3 ITSELF FOR PROVIDING EARTHQUAKE RELIEF. FURTHER THE APPELLANT TRUST HAS COLLECTED THE AMOU NT OF RS.11 55 250/- AS DONATION FOR PROVIDING RELIEF TO EARTHQUAKE VICT IMS BETWEEN 26-1- 2001 AND 30-9-2003. OUT OF THE SAME IT HAS SPENT R S.11 40 455/- UPTO 30-9-2001 AND THE UNUTILISED AMOUNT OF PS.14 765/ HAS BEEN TRANSFERRED TO PRIME MINISTERS NATIONAL RELIEF FUN D ON 31-3-2003. B) THE ASSESSING OFFICER HAS BROUGHT TO TAX THE ENT IRE DONATION RECEIPTS OF RS.11 55 250/ ONLY FOR THE REASON THAT THE APPELLANT TRUST HAS NOT FILED THE AUDITED ACCOUNTS IN FORM NO.10AA BEFORE THE DGIT(EXEMPTION) WITHIN THE DUE DATED I.E. 30-6-2004 . 5.1 THE FACTS MENTIONED ABOVE CLEARLY SHOW THAT THE APPELLANT TRUST HAS IN FACT GOT ITS ACCOUNTS AUDITED AND HAS FILED FORM NO.10AA BEFORE THE DDIT (EXEMPTION). AHMEDABAD ON 24-6-2004 IN RES PECT OF DONATIONS COLLECTED FOR PROVIDING RELIEF TO THE EAR THQUAKE VICTIMS. 5.2 I HAVE GONE THROUGH THE RELEVANT CASE LAWS WHIC H ARE DISCUSSED AS UNDER: A) GUJARAT HIGH COURT IN THE CASE OF GUJARAT OIL & ALLIED INDUSTRIES (201 ITR 325) - IN THIS CASE HON'BLE C OURT TOOK THE VIEW THAT 'FOR CLAIMING DEDUCTION UNDER SECTION 80J AN ASSESSEE A NEWLY ESTABLISHED INDUSTRIAL UNDERTAKING HAS TO F URNISH AUDIT REPORT ALONG WITH RETURN. HOWEVER SUCH AUDIT REPOR T WAS NOT FILED ALONG WITH THE RETURN BUT SUBMITTED BEFORE TH E ASSESSING OFFICER BEFORE THE COMPLETION OF ASSESSMENT. THE C OURT HAD HELD THAT FILING OF AUDITED REPORT IS NOT MANDATORY AND FILING THE SOME BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS IS SUFFICIENT COMPLIANCE OF THE PROVISIONS OF THE A CT THE COURT HAS OBSERVED THAT WHILE CONSIDERING THE ASSESSEE'S CLAI M CARE HAS TO BE TAKEN TO SEE THAT THE RELEVANT PURPOSE UNDERLYIN G SECTION 80J IS AUGMENTED AND FORTIFIED AND NOT FRUSTRATED BY TH E CONSTRUCTION ITA.NO.4081/AHD/2007 -4- PUT UP ON THE SAID PROVISION. B) GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAYOR FOUNDATION 274 IIR 562 THAT - 'ASSESSMENT PROCEEDIN GS CANNOT BE SAID TO BE COMPLETE BUT ARE PENDING TILL APPEAL IS HEARD AND DISPOSED OFF BY THE TRIBUNAL AND THE ORDER OF THE T RIBUNAL IS GIVEN EFFECT TO BY THE AUTHORITY BY COMPUTING THE CORRECT TAX LIABILITY OF THE ASSESSEE'. IN THAT CASE THE TRIBUNAL HAS ACCEP TED THE ASSESSEE'S CLAIM AND HELD THAT FORM NO.10 SEEKING A CCUMULATION OF INCOME UNDER SECTION 11(2) OF THE ACT FILED AFTE R COMPLETION OF ASSESSMENT AND FIRST APPEAL BUT DURING THE PROCEED INGS OF APPEAL BEFORE ITAT IS SUFFICIENT COMPLIANCE AND ACCEPTED T HE VALIDITY OF SUCH APPLICATION IN FORM NO.10 AND DECIDED THE ISSU E IN ASSESSEE'S FAVOUR. C) THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. HARDEODAS AGRAWALLA TRUST 198 ITR 511 HAS HELD THAT - 'IT IS NOW WELL-SETTLED THAT A PROCEDURAL PROVISION ORIDINARILY SHOULD NOT BE CONSTRUED AS MANDATORY IF THE DEFECT IN THE ACT DONE IN PURSUANCE OF IT CAN BE CURED BY PERMITT ING APPROPRIATE RECTIFICATION TO BE CARRIED OUT AT A SU BSEQUENT STAGE. HAVING REGARD TO THE OBJECT OF SECTION 12A IT CANNOT BE SAID THAT THE LEGISLATURE INTENDED THAT EVEN WH ERE THE TRUST HAS GOT ITS ACCOUNTS AUDITED AND THE CERTIFIC ATE OBTAINED IN FORM NO. 1OB BEFORE THE ASSESSMENT IS COMPLETED MERELY BECAUSE SUCH REPORT COULD NOT BE FILED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WOULD DEPRIVE A TRUST FROM GETTING THE EXEMPTION IF IT IS OTHERWI SE ENTITLED TO IT IN LAW. THE DIRECTION THAT INC AUDIT REPORT SHOU LD ACCOMPANY THE RETURN IS NOT MANDATORY AS THE OMISSI ON TO DO IT MAY BE RECTIFIED BY FILING THE REPORT AT A LA TER STAGE BEFORE THE ASSESSMENT IS COMPLETED. OR EVEN AT THE APPELLATE STAGE. D) ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION 285 ITR 14 7 HAS HELD THAT THE PROVISIONS CONTAINED IN SECTION 12A(B) ARE ONLY DIRECTORY IN NATURE AND NOT MANDATORY. THEREFORE THE ASSESSE E WAS ENTITLED TO EXEMPTION U/S.11 OF THE INCOME TAX ACT 1961 THOUGH THE PRESCRIBED AUDIT REPORT IN FORM 10B WAS FURNISH ED BEFORE ASSESSMENT WAS MODE INSTEAD OF FURNISHING ALONG WIT H RETURN OF INCOME. THOUGH THE ABOVE DECISIONS ARE RENDERED IN THE CONT EXT OF FURNISHING AUDIT REPORT IN FORM NO 10B (U/S.12A) THEY ARE EQU ALLY RELEVANT AND APPLICABLE IN THE PRESENT CONTEXT AS FILING OF FOR M NO.10AA IS ONLY ITA.NO.4081/AHD/2007 -5- PROCEDURAL IN NATURE. 5.3 IN THE LIGHT OF SPECIFIC OBSERVATIONS OF VARIOU S HIGH COURTS CITED ABOVE IT CAN BE FAIRLY INTERPRETED THAT THE PURPOS E OF FILING OF AUDIT REPORT IN FORM NO.10AA BEFORE THE DGIT IS TO VERIFY WHETH ER THE AMOUNT OF DONATION RECEIVED FOR PROVIDING RELIEF TO THE EARTH QUAKE VICTIMS IS SPENT FOR SUCH PURPOSE. ASSESSING OFFICER HAS NOT DISPUTE D THAT THE AMOUNT HAS BEEN ACTUALLY SPENT FOR SUCH PURPOSE. ONCE IT IS FOUND THAT SUCH INTENT AND PURPOSE HAS BEEN FULFILLED AND THE ASSE SSEE HAS FILED FORM NO.10AA BEFORE DGIT (EXEMPTION) AND THE ASSESSING O FFICER BEFORE COMPLETION OF ASSESSMENT IT SHOULD BE TREATED AS V ALID COMPLIANCE OF SECTION 80G(5C). PROVISIONS OF SECTION 80G(5C) SHOU LD BE INTERPRETED IN A HARMONIOUS MANNER AND ALL THE CLAUSES OF SUB-SECT ION (5C) OF SEC.80G SHOULD BE REND TOGETHER AND NOT IN ISOLATIO N. HENCE FILING OF FORM NO.10AA BY THE ASSESSES BEFORE THE ASSESSING O FFICER & DGIT(EXEMPTION) DURING THE ASSESSMENT PROCEEDINGS S HOULD BE ACCEPTED AS SUFFICIENT COMPLIANCE OF SUB-SECTION (5 C) OF SECTION 80G OF THE ACT IN THIS CASE. HENCE THERE IS NO CASE FOR INVOKING PROVISIONS OF SECTION 12(3) IN THE CASE OF THE APP ELLANT. 5.4 FOR THE ABOVE REASONS THE ADDITION MADE BY THE AO AT RS.11 55 250/- (DONATION RECEIVED FOR THE PERIOD 26 -1-2001 TO 31-3- 2003) IS DELETED. GROUND OF APPEAL NO.1 IS ALLOWED . 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR WHILE REFERR ING TO THE RELEVANT PROVISIONS OF THE ACT CONTENDED THAT THE LD. CIT(A) WAS NOT JU STIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. INTER ALIA THE LD. DR RELIED UPON DECISION IN THE CASE OF CIT VS. DATA SOFTWARE RESEARCH COL LTD. 247 ITR 207(SC) REFERRED TO IN THE GROUNDS OF APPEAL. ON THE OTHER HAND THE LD. AR ON BEHALF OF THE ASSESSEE SUPPORTED THE FINDINGS OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE DECISION RELIED UPON. UNDISPUTEDLY THE ASSESSEE COLLECTED AN AMOUNT OF RS.11 55 250/- BY WAY OF DONATIONS BE TWEEN 26-1-2001 AND 31-3-2003 FOR PROVIDING RELIEF TO EARTHQUAKE VICTIM S AND UTILISED RS.11 40 465/- FOR THE PURPOSE UNTIL 31-3-2003 WHIL E THE UNUTILISED AMOUNT OF PS.14 765/ HAD BEEN TRANSFERRED TO PRIME MINISTERS NATIONAL RELIEF FUND ON 31-3-2003. THE PRESCRIBED REPORT IN FORM NO. 10AA WAS ALSO SIGNED BY THE AUDITORS ON 22.6.2004 AND HAD LATER BEEN SUBMITTED TO THE ITA.NO.4081/AHD/2007 -6- DGIT(EXEMPTIONS).THE AO DENIED EXEMPTION FOR THE A MOUNT OF DONATIONS COLLECTED BY THE ASSESSEE MERELY BECAUSE THE ASSESS EE DID NOT FILE THE PRESCRIBED FORM NO.10AA ALONG WITH THE AUDITED ACCO UNTS BEFORE THE DGIT(EXEMPTIONS) WITHIN THE TIME STIPULATED U/S 80G (5C)(V) OF THE ACT. HOWEVER THE LD. CIT(A) WHILE RELYING UPON FEW DECI SIONS ACCEPTED THE CLAIM ON THE GROUND UTILIZATION OF THE AMOUNT FOR THE PU RPOSE WAS NOT DISPUTED AND THE ASSESSEE FILED THE SAID FORM NO.10AA BEFORE T HE DGIT (EXEMPTIONS) AND THE AO BEFORE COMPLETION OF THE ASSESSMENT. WE DO NOT FIND ANY MISTAKE IN THE APPROACH OF THE LD. CIT(A). 6. THE LD. DR APPEARING BEFORE US RELIED ON A DE CISION OF THE HONBLE APEX COURT IN THE CASE OF DATA SOFTWARE REASEARCH CO LT D.(SUPRA) REFERRED TO IN THE GROUNDS OF APPEAL . WE FIND THAT THE SAID DECIS ION WAS RENDERED ALTOGETHER ON DIFFERENT FACTS. IN THE CITED CASE HONBLE MADRAS HIGH COURT NOTED THAT THE APPLICATION OF THE ASSESSEE UNDER SE CTION 80-O OF THE ACT IN REGARD TO THE TWO AGREEMENTS THAT HAD BEEN ENTERED INTO BY IT ON JANUARY 3 1979 AND FEBRUARY 20 1979 WITH A PARTY IN THE UN ITED STATES OF AMERICA WERE NOT APPROVED FOR THE ASSESSMENT YEAR 1981-82 O N THE GROUND THAT THEY HAD BEEN PRODUCED ONLY ON SEPTEMBER 30 1982. THE H ONBLE HIGH COURT HOWEVER ORDERED THAT 'THERE IS NO PROVISION UNDER T HE INCOME-TAX ACT FOR THE CONDONATION OF DELAY IN THE PRODUCTION. HOWEVER WE FEEL THAT JUSTICE SHOULD BE RENDERED. THEREFORE WE DIRECT THAT THE DELAY IN THE PRODUCTION OF THE AGREEMENT BE CONDONED AND THE MATTER BE TAKEN UP ON MERITS. . . .'. 6.1 HONBLE APEX COURT ON THE AFORESAID ORDER O F THE HONBLE HIGH COURT HELD AS UNDER: THE PROVISIONS OF SECTION 80-O MANDATE THE PRODUCT ION OF THE AGREEMENTS IN RESPECT OF WHICH RELIEF IS SOUGHT 'B EFORE THE 1ST DAY OF OCTOBER OF THE ASSESSMENT YEAR IN RELATION TO WHICH THE APPROVAL IS FIRST SOUGHT' AND THERE IS NO PROVISION FOR THE CONDONAT ION OF SUCH DELAY. THERE WAS ALSO NO APPLICATION BEFORE THE CENTRAL BO ARD FOR CONDONATION OF DELAY. IN THE CIRCUMSTANCES THE HIG H COURT OUGHT NOT TO HAVE DIRECTED THAT DELAY IN THE PRODUCTION OF TH E AGREEMENTS BE CONDONED. THE COURTS ARE OBLIGED TO DO JUSTICE ACCO RDING TO THE LAW. IN ORDERING CONDONATION OF DELAY IN THESE CIRCUMSTA NCES IT CANNOT IN ITA.NO.4081/AHD/2007 -7- OUR OPINION BE SAID THAT JUSTICE ACCORDING TO THE LAW WAS RENDERED BY THE HIGH COURT. LEARNED COUNSEL FOR THE RESPONDENT SUBMITS THAT THE RESPONDENT MAY BE PERMITTED AT THIS STAGE TO MAKE AN APPLICATION T O THE CENTRAL BOARD. IT SHALL BE OPEN TO THE RESPONDENT TO TAKE S UCH STEPS AS ARE AVAILABLE TO IT UNDER THE LAW AND ANY SUCH APPLICAT ION SHALL BE CONSIDERED ON ITS MERITS. 6.2 THE LD. DR APPEARING BEFORE US DID NOT DEMONS TRATE AS TO HOW THE SAID DECISION IS OF ANY HELP TO THE REVENUE. THE CONDIT ION OF RENDERING OF ACCOUNTS BEFORE A SPECIFIED DATE IN TERMS OF PROVI SIONS OF SEC. 80G(5C)(V) OF THE ACT FOR EXEMPTION U/S 12(3) OF THE ACT CAN NOT BE EQUATED WITH THE MANDATORY APPROVAL OF THE AGREEMENT IN TERMS OF TH E EXTANT PROVISIONS OF SEC. 80O OF THE ACT ESPECIALLY WHEN EVEN AGREEMENTS WER E NOT PLACED BEFORE THE CBDT FOR THEIR APPROVAL. IN THE INSTANT CASE UNDIS PUTEDLY PRESCRIBED REPORT WAS READY AND SIGNED BY THE AUDITORS ON 22.6.2004 W HILE THE ASSESSEE UTILIZED THE DONATIONS FOR THE PURPOSE THESE WERE C OLLECTED. WE ARE OF THE OPINION THAT THE SAID DECISION CITED IN THE GROUNDS IS NOT AT ALL RELEVANT TO THE ISSUE BEFORE US. 7. WE FIND THAT ISSUE IN THE INSTANT CASE HAS BEE N ADJUDICATED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTIONS) V. DIVYAJYOT FOUNDATION 321 ITR 53(GUJ ) WHERE IN THE HONBLE HIGH COURT CONCLUDED THAT THE PURPOSE OF FILING O F AUDIT REPORT IN FORM NO. 10AA BEFORE THE DGIT(EXEMPTIONS) IS TO ENSURE THAT THE AMOUNT OF DONATIONS RECEIVED FOR PROVIDING RELIEF TO EARTHQUAKE VICTIMS IS SPENT FOR SUCH PURPOSE; ONCE IT IS FOUND THAT SUCH PURPOSE HAS BEEN FULFIL LED AND ASSESSEE HAS FILED FORM NO. 10AA BEFORE THE AO BEFORE COMPLETION OF ASSESSMENT IT SHOULD BE TREATED AS SUFFICIENT COMPLIANCE WITH SUB-SECTION ( 5C) OF SECTION 80G EVEN IF IT WAS NOT FILED IN TIME BEFORE THE PRESCRIBED AUTHORI TY . IN FACT THE FOLLOWING COMMON SUBSTANTIAL QUESTION OF LAW WAS PROPOSED FOR ADMISSION OF THE THREE APPEALS BEFORE THE HONBLE HIGH COURT 'WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN CONFIRMING THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APP EALS) IN DELETING THE ADDITION OF RS. 2 12 35 583 WHILE THE ASSESSEE HAS NOT SUBMITTED ITS ACCOUNTS ITA.NO.4081/AHD/2007 -8- IN FORM NO. 10AA ON OR BEFORE JUNE 30 2004 TO THE DGIT(E) NEW DELHI AS REQUIRED UNDER SECTION 80G(5C)(V) OF THE INCOME-TAX ACT 1961 READ WITH RULE 18AAAA OF THE INCOME-TAX RULES 1962 WHEREAS SECTI ON 12(3) OF THE INCOME- TAX ACT 1961 SPECIFICALLY MENTIONED ABOUT THE ACCO UNTS WHICH HAVE NOT BEEN RENDERED BEFORE THE PRESCRIBED AUTHORITY IN GIVEN T IME?' 7.1 HONBLE HIGH COURT FOUND THAT THE TRIBUNAL HAD CONSIDERED THE ISSUE RAISED IN THE QUESTION WHILE REFERRING TO DECISION OF THE LD. CIT(A) AS UNDER: '6. I HAVE GONE THROUGH THE DECISION OF THE GUJ ARAT HIGH COURT IN THE CASE OF CIT V. GUJARAT OIL AND ALLIED INDUSTRIES [ 1993] 201 ITR 325 RELIED UPON BY THE ASSESSEE CITED ABOVE. IN THAT CASE THE HON'BLE COURT TOOK THE VIEW THAT FOR CLAIMING DEDUCTION UNDER SECTION 80J AN ASSESSEE A NEWLY ESTABLISHED INDUSTRIAL UNDERTAKING HAS TO FUR NISH AUDIT REPORT ALONG WITH THE RETURN. IN THAT CASE SUCH AUDIT REP ORT WAS NOT FILED ALONG WITH THE RETURN BUT SUBMITTED BEFORE THE ASSESSING OFFICER BEFORE THE COMPLETION OF ASSESSMENT. THE COURT HAD HELD THAT F ILING OF AUDITED REPORT IS NOT MANDATORY AND FILING THE SAME BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS IS SUFFICIENT COM PLIANCE WITH THE PROVISIONS OF THE ACT. THE COURT HAS OBSERVED THAT WHILE CONSIDERING THE ASSESSEE'S CLAIM CARE HAS TO BE TAKEN TO SEE THAT T HE RELEVANT PURPOSE UNDERLYING SECTION 80J IS AUGMENTED AND FORTIFIED A ND NOT FRUSTRATED BY THE CONSTRUCTION PUT UP ON THE SAID PROVISIONS. 6.1 IN THE LIGHT OF THE OBSERVATIONS OF THE HIGH CO URT CITED ABOVE IT CAN BE FAIRLY INTERPRETED THAT THE PURPOSE OF FILING OF AUDIT REPORT IN FORM NO. 10AA THE DGIT IS TO ENSURE THAT THE AMOUNT OF DONA TION RECEIVED FOR PROVIDING RELIEF TO THE EARTHQUAKE VICTIMS IS SPENT FOR SUCH PURPOSE. ONCE IT IS FOUND THAT SUCH PURPOSE HAS BEEN FULFIL LED AND THE ASSESSEE HAS FILED FORM NO. 10AA BEFORE THE ASSESSING OFFICE R BEFORE COMPLETION OF ASSESSMENT IT SHOULD BE TREATED AS S UFFICIENT COMPLIANCE WITH SUB-SECTION (5C) OF SECTION 80G OF THE ACT. THUS TO SUM UP THE ASSESSEE HAS FULFILLED THE CONDITION LA ID DOWN UNDER THE PROVISIONS OF SECTION 80G(5C) OF THE ACT AND HENCE THERE IS NO CASE FOR INVOKING SECTION 12(3) OF THE ACT AND BRINGING TO T AX THE ENTIRE RECEIPTS OR ANY AMOUNT AS THE ENTIRE DONATION RECEIVED WAS SPENT WITHIN THE TIME ALLOWED UNDER THE ACT. THE ASSESSING OFFICER'S INTERPRETATION THAT THE ENTIRE RECEIPT IS TAXABLE IS ALSO WITHOUT ANY RATIONALE AND LOGIC. I FIND NO INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS) WHO HAS FOLLOWED THE HON'BLE HIGH COURT JUDGMENT W HICH HAS CLEARLY HELD THAT FILING OF AUDIT REPORT IS DIRECTORY AND NOT MANDATORY IN NATURE. FILING OF AUDIT REPORT FOR SECTION 80G OR IN OTHER STATUTORY COMPLIANCE ASSUMES CHARACTER. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS WE ALLOW THE CLAIM OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENU E. THE LEARNED DEPARTMENTAL REPRESENTATIVE HOWEVER R ELIED ON THE ORDER OF THE ASSESSING OFFICER. ITA.NO.4081/AHD/2007 -9- WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PA RTIES AND PERUSED THE RECORD. THE FACTS AND CIRCUMSTANCES BEING SAME AND RESPECTFULLY FOLLOWING THE ABOVE TRIBUNAL'S ORDER WE DISMISS TH E APPEAL OF THE REVENUE.' 7.2 IN THE LIGHT OF AFORESAID FINDINGS OF THE ITA T THE HONBLE HIGH COURT CONCLUDED IN THE FOLLOWING TERMS: 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) AS WELL AS THE TRIBUNAL BOTH FOUND THAT THOUGH THE ASSESSEE HAS NOT SUBMITTED IT S ACCOUNTS IN FORM NO. 10AA BEFORE THE PRESCRIBED AUTHORITY IN GIVEN TIME BUT THAT DOES NOT JUSTIFY THE ADDITION AND DISALLOWANCE OF THE CLAIM OF THE A SSESSEE. CONSIDERING THE CONCURRENT FINDINGS WE SEE NO MERIT IN THESE THREE APPEALS. 5. ALL THE THREE APPEALS STAND DISMISSED AT THE ADMISS ION STAGE. 8. IN THE LIGHT OF VIEW TAKEN BY THE HONBLE JURI SDICTIONAL HIGH COURT IN THEIR AFORESAID DECISION UPHOLDING THE FINDINGS OF THE I TAT THAT FILING OF THE SAID AUDIT REPORT BEFORE THE DGIT(E) WAS DIRECTORY AND NOT MANDATORY IN NATURE WE HAVE NO ALTERNATIVE BUT TO UPHOLD THE FINDINGS O F THE LD. CIT(A). THEREFORE GROUND NOS. 1 TO 3 IN THE APPEAL ARE DISMISSED. 9. GROUND NO. 4 BEING MERE PRAYER DOES NOT REQUIR E ANY SEPARATE ADJUDICATION AND IS THEREFORE DISMISSED. 10. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31ST AUGUST 2010. SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A.N. PAHUJA) ACCOUNTANT MEMBER PLACE : AHMEDABAD DATE : 31-08-2010 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DDIT(E) AHMEDABAD 3) : CIT(A) XX AHMEDABAD 4) : DIT(E) AHMEDABAD 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD