Nawal Kishore Charitable Trust, Morena v. CIT, Gwalior

ITA 617/AGR/2008 | misc
Pronouncement Date: 27-08-2010 | Result: Allowed

Appeal Details

RSA Number 61720314 RSA 2008
Assessee PAN AAAAN4099B
Bench Agra
Appeal Number ITA 617/AGR/2008
Duration Of Justice 1 year(s) 10 month(s) 24 day(s)
Appellant Nawal Kishore Charitable Trust, Morena
Respondent CIT, Gwalior
Appeal Type Income Tax Appeal
Pronouncement Date 27-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 27-08-2010
Date Of Final Hearing 21-07-2010
Next Hearing Date 21-07-2010
Assessment Year misc
Appeal Filed On 03-10-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.617/AGR/2008 NAWAL KISHORE GARG CHARITABLE TRUST VS. COMMISSI ONER OF INCOME-TAX JIWAGI GANJ MORENA. GWALIOR. (PAN : AAAAN 4099 B). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH ADVOCATE RESPONDENT BY : SMT. SEEMA RAJ CIT (D.R.) ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT DATED 25.10.2007 BY WHICH THE CIT REJECTED THE RENEWAL OF EXEMPTION GRANTED TO THE ASSESSEE UNDER SECTION 80G(5)(VI) OF THE INCOME-TAX ACT 1961 (THE ACT H EREINAFTER). 2. AT THE OUTSET THE LD. A.R. MOVED AN APPLICATION FOR THE CONDONATION OF THE DELAY POINTING OUT THAT THE APPEAL IS DELAYED BY 276 DAYS. IT WAS POINTED OUT THAT EARLIER THERE WAS NO APPEAL IN RESPECT OF THE ORDER PASSED UNDER SECTION 80G BUT S UBSEQUENTLY SECTION 253 WAS AMENDED BY THE FINANCE ACT 2007 W.E.F. 01.06.2007 AND ACCORDINGLY THE ASSESSEE WAS GIVEN RIGHT TO FILE AN APPEAL AGAINST THE ORDER PASSED UNDER SECTION 80G(5 )(VI) BEFORE THE APPELLATE TRIBUNAL. THE ASSESSEE WAS UNDER BONAFIDE IMPRESSION THAT NO APPE AL LIES AGAINST THE IMPUGNED ORDER AND ACCORDINGLY HE WAS ADVISED BY THE LOCAL COUNSEL AT MORENA NOT TO FILE APPEAL. SUBSEQUENTLY WHEN THE ASSESSEE CONTACTED THE COUNSEL AT AGRA IM MEDIATELY HE ADVISED FOR FILING OF THE APPEAL. THUS IT WAS CONTENDED THAT DELAY HAS OCCU RRED DUE TO THE INCORRECT ADVICE GIVEN BY THE 2 LOCAL COUNSEL AND THAT THE ASSESSEE MAY NOT BE PENA LIZED. THUS IT WAS CONTENDED THAT THE DELAY MAY BE CONDONED. 3. THE LD. D.R. ON THE OTHER HAND RELIED ON THE O RDER OF THE CIT AND CONTENDED THAT DELAY SHOULD NOT BE IGNORED. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT EARLIER THERE WAS NO APPEAL LYING BEFO RE THE I.T.A.T. AGAINST THE ORDER OF THE CIT PASSED UNDER SECTION 80G(5)(VI). BY FINANCE ACT 20 07 SECTION 253 HAS BEEN AMENDED AND IT WAS PROVIDED UNDER SECTION 253(1)(C) THAT THE ASSES SEE AGGRIEVED BY THE ORDER PASSED UNDER SECTION 80G(5)(VI) CAN FILE AN APPEAL BEFORE THE I. T.A.T. IN THIS CASE WE NOTED THAT THE ASSESSEE HAS RECEIVED THE ORDER PASSED UNDER SECTION 80G(5)( VI) REFUSING THE RENEWAL ON 02.11.2007. THE TRUST IS SITUATED IN JIWAJIGANJ MORENA A VERY SMA LL PLACE IN M.P. WHICH IS NOT FULLY DEVELOPED. THE COUNSEL OF THE ASSESSEE HAS ADVISED TO THE ASSE SSEE NOT TO FILE APPEAL AS ACCORDING TO HIM APPEAL COULD HAVE NOT BEEN FILED AGAINST THE ORDER PASSED UNDER SECTION 80G(5)(VI) OF THE ACT. IN OUR OPINION THERE IS SUFFICIENT CAUSE AND ACCORDIN GLY WE CONDONE THE DELAY. MISTAKE OF AN ADVOCATE IN OUR OPINION CONSTITUTE A REASONABLE C AUSE. THE ASSESSEE WHO IS AN INNOCENT PARTY SHOULD NOT BE SUFFERED DUE TO THE MISTAKE COMMITTED BY THE ADVOCATE. HONBLE SUPREME COURT IN THE CASE OF RAFIQ C. MUNSHILAL AIR 1981 SC 1400 (1401) OBSERVED THAT WE CANNOT BE A PARTY TO AN INNOCENT PARTY SUFFERING INJUSTICE MERELY BEC AUSE HIS CHOSEN ADVOCATE DEFAULTED. THIS IS SETTLED LAW THAT WHEN TECHNICAL CONSIDERATIONS AND SUBSTANCE OF JUSTICE ARE PITTED AGAINST EACH OTHER THE SUBSTANCE OF JUSTICE HAS TO BE PREFERRED IN THIS CASE THE LAW HAS BEEN AMENDED BY AMENDED SECTION 253 BY THE FINANCE ACT 2007. IT I S QUITE POSSIBLE THAT A JUNIOR CONSULTANT WHO IS PRACTICING AT A REMOTE AREA MAY NOT BE AWARE OF THE LATEST POSITION AND FOR THAT WE CANNOT PASS 3 AN ORDER BY WHICH THE PARTY MAY SUFFER. WE HAVE GO NE THROUGH THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF GUPTA RICE MILLS VS. CST 91 S TC 208 IN WHICH THE ALLAHABAD HIGH COURT IN RESPECT OF CONDONATION OF DELAY HAS HELD AS UNDE R :- THE JUDICIAL OPINION THAT THE COURT SHOULD TAKE A PRAGMATIC VIEW IN THE MATTER OF CONDONATION OF DELAY. THE INCLINATION MU ST BE TOWARDS EXCUSING DELAY RATHER THAN SCUTTLING PROCEEDINGS. THE COURTS HAVE HELD THAT LEGISLATION IS ADEQUATELY ELASTIC TO ENABLE COURT TO APPLY THE LAW IN ITS MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE PURPOSE FOR THE EXISTENCE OF THE INSTITUTION OF COURTS THE WORDS SUFFICIENT CAU SE OUGHT TO RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE W HEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IMPUTABLE TO THE APPLICANT. 5. WE HAVE ALSO GONE THROUGH THE RECENT DECISION OF THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF SUBHASH MALIK VS. CIT & ANOTHER 325 ITR 243 (ALL) WHEREIN THE HIGH COURT HAS HELD AS UNDER :- RULES OF LIMITATION ARE NOT A MEANT TO DESTROY THE RIGHTS OF THE PARTIES RATHER THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. AS FAR AS POSSIBLE THE COURT S DISCRETION SHOULD BE EXERCISED IN FAVOUR OF THE HEARING AND NOT TO SHUT OUT HEARIN G. THE SUPREME COURT IN THE CASE OF WEST BENGAL V. ADMINISTRATOR HOWRAH MUNICI PALITIES [1972] AIR 1972 SC 749 HAS HELD THAT IF A PARTY HAD ACTED IN A PART ICULAR MANNER ON WRONG ADVICE GIVEN BY HIS LOCAL ADVISOR HE CANNOT BE HELD GUILTY OF NEGLIGENCE SO AS TO DISENTITLE THE PARTY TO PLEAD SUFFICIENT CAUSE UNDER SECTION 5 OF THE LIMITATION ACT 1963. IT ALSO HELD THAT THE WORDS SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE AND NO NEGLIGE NCE OR INACTION FOR WANT OF BONA FIDES IS IMPUTABLE TO A PARTY. 6. WE THEREFORE CONDONE THE DELAY AS IN OUR OPIN ION THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE TO FILE AN APPEAL 7. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TR UST HAS FAILED APPLICATION IN FORM NO.10G SEEKING RENEWAL OF EXEMPTION UNDER SECTION 80G(5)(V I) BY AN APPLICATION DATED 06.01.2007 ON 22.03.2007 ENCLOSING THEREWITH AUDITED ACCOUNTS WIT H AUDIT REPORT IN FORM NO.10B FOR THE F.Y. 4 ENDED ON 31.03.2004 31.03.2005 AND 31.03.2006. TH E CIT CALLED FOR REPORT FROM THE A.O. THE A.O. ON THE BASIS OF THE INSPECTORS REPORT REPOR TED TO THE CIT THAT THE ACTIVITIES OF THE TRUST ARE YET TO BE STARTED. THE CIT AFTER OBSERVING THAT TH E ASSESSEE HAS PURCHASED THE PLOT OF LAND IN MORENA IN WHICH A DHARAMSALA IS TO BE CONSTRUCTED I N THE NEAR FUTURE AND THE ASSESSEE TRUST HAS TAKEN LOAN FOR WHICH HE SUBMITTED THE CONFIRMATION HAS NOT YET STARTED ANY OTHER ACTIVITIES. THEREFORE HE TOOK THE VIEW THAT THE ASSESSEE TRUST HAS NOT STARTED THE CHARITABLE ACTIVITIES. ACCORDINGLY HE REJECTED THE RENEWAL OF EXEMPTION S OUGHT FOR BY THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. SECTION 80G(5)(VI) READ WITH RULE 11AA EMPOWERS THE CIT TO REJECT THE APPLICATION FOR APPROVAL AFTER RECORDING THE REASONS FOR SUCH REJECTION IN WRITING ONLY IF THE COMMISSIONER IS SATISFIED THAT ONE OR MORE OF THE CONDITIONS LAID DOWN IN CLAUSE (I) T O (V) OF SECTION 80G(5) ARE NOT FULFILLED. SECTION 80G(5)(I) TO (V) LAYS DOWN AS UNDER :- (I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCO ME SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIO NS OF SECTION 11 AND 12 OR CLAUSE (23AA) OR CLAUSE (23C) OF SECTION 10 : [ PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCO ME BEING PROFITS AND GAINS OF BUSINESS THE CONDITION THAT SUCH INCO ME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 11 SHALL NOT APPLY IN RELATION TO SUCH INCOME IF - (A) THE INSTITUTION OR FUND MAINTAINS SEPARATE BOOK S OF ACCOUNT IN RESPECT OF SUCH BUSINESS; (B) THE DONATIONS MADE TO THE INSTITUTION OR FUND A RE NOT USED BY IT DIRECTLY OR INDIRECTLY FOR THE PURPOSES OF SUCH BUSINESS; AND (C) THE INSTITUTION OR FUND ISSUES TO A PERSON MAKI NG THE DONATION A CERTIFICATE TO THE EFFECT THAT IT MAINTAINS SEPARATE BOOKS OF A CCOUNT IN RESPECT OF SUCH BUSINESS AND THAT THE DONATIONS RECEIVED BY IT WILL NOT BE USED DIRECTLY OR INDIRECTLY FOR THE PURPOSES OF SUCH BUSINESS;] 5 (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED DOES NOT OR THE RULES GOVERNING THE INSTITUTION OR FUND DO NOT CON TAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME OF THE WHOLE OR ANY PART OF THE INCOME OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOSE O THER THAN A CHARITABLE PURPOSE; (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO B E FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACCO UNTS OF ITS RECEIPTS AND EXPENDITURE; (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED A S A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 18 60 (21 OF 1860) OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA OR UNDER SECTION 25 OF THE COMPANIES ACT 1956 (1 OF 1956) OR IS A UNIVER SITY ESTABLISHED BY LAW OR IS ANY OTHER EDUCATIONAL INSTITUTION RECOGNIZED BY THE GOVERNMENT OR BY A UNIVERSITY ESTABLISHED BY LAW OR AFFILIATED TO ANY UNIVERSITY ESTABLISHED BY LAW OR IS AN INSTITUTION FINANCED WHOLLY OR IN PAT BY T HE GOVERNMENT OR A LOCAL AUTHORITY. 9. WE HAVE GONE THROUGH THE ORDER PASSED BY THE CIT REJECTING THE RENEWAL OF THE EXEMPTION UNDER SECTION 80G(5)(VI). WE DO NOT FIND ANY WORD BEING UTTERED BY THE CIT IN THE ORDER PASSED UNDER SECTION 80G(5)(VI) WHICH MAY STA TE THAT THE ASSESSEE DID NOT FULFILL THE CONDITIONS AS STIPULATED UNDER SECTION 80(G)(5)(I T O V). THE ONLY OBJECTION OF THE CIT WAS THAT THOUGH IMMOVEABLE ASSETS HAVE BEEN PURCHASED TO RUN THE ACTIVITIES OF THE TRUST BUT NO CHARITABLE ACTIVITIES ARE BEING CARRIED OUT AS YET. EVEN THER E IS NO FINDING GIVEN BY THE CIT THAT THE ACTIVITIES OF THE TRUST ARE NOT GENUINE. NOT ONLY THIS WE ALSO NOTED THAT UNDER SECTION 12AA WHICH DEALS WITH THE REGISTRATION OF THE CHARITABLE TRUST THE CIT HAS BEEN EMPOWERED TO CANCEL THE REGISTRATION OF THE TRUST OR INSTITUTION GRANTE D UNDER SECTION 12AA IN CASE HE SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GEN UINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. THE C IT IN THIS CASE HAS NOT CANCELLED THE REGISTRATION GRANTED UNDER SECTION 12AA AND HAS ALSO NOT GIVEN A NY FINDING THAT THE ACTIVITIES OF THE TRUST ARE NOT GENUINE. UNDER THESE FACTS AND CIRCUMSTANCE OF THE CASE WE ARE OF THE OPINION THAT THE CIT 6 HAS EXCEEDED HIS JURISDICTION BY REJECTING THE RENE WAL OF THE EXEMPTION TO THE ASSESSEE UNDER SECTION 80G(5)(VI) OF THE ACT. 10. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT DATED 25.10.2007 AND DIRECT THE CIT TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 80 G(5)(VI) OF THE ACT. 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2010) SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 27 TH AUGUST 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY