Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. M/S Ankur Udbodhak Samiti, A

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 105 / 2014 COMMISSIONER OF INCOME TAX, JAIPUR-II, JAIPUR ----Appellant Versus M/S ANKUR UDBODHAK SAMITI, A-18, SHANTI PATH, TILAK NAGAR, JAIPUR ----Respondent _____________________________________________________ For Appellant(s) : Mr. K. D. Mathur and Ms. Prabhansh Sharma on behalf of Mr. R. B. Mathur For Respondent(s) : Mr. Siddharth Ranka with Mr. Muzaffar Iqbal _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 14/09/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasallowed the appeal of the assessee. 2.This court while admitting the appeal on 13[th] July, 2016 framed the following question of law:- “Whether in the facts and circumstances of the case theTribunal has erred in law in directing to condone thedelay in filing application u/s.12A(1) (aa) even whenthere is no provision enabling the CIT to condone thedelay in application filed u/s 12A(1) (aa) after01.06.2007?” 3. Counsel for the appellant Mr. Mathur has taken us toprovisions of Section 12AA(1) of the Income Tax Act which reads as under:- “(1) The Commissioner, on receipt of an application for registration of atrust or institution made under clause (a) [or clause (aa) of sub-section (1)] of section 12A, shall— (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he - (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. “ 4.He contended that In view of aforesaid provision, theobservation made by the Tribunal are contrary to law:- (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he - (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. “ 4.He contended that In view of aforesaid provision, theobservation made by the Tribunal are contrary to law:- “However, if the application for registration is made on or after01-06-2007, the provisions of section 11 and 12 shall apply inrelation to the income of such trust / institution from the assessmentyear 11 immediately following the year falling in which suchapplication is made. In the given case, the return of income declaringnil income was filed on 30-03- 2006 for the A.Y. 2005-06. During theA.Y. 2005-06, the assessee derived income from running of twoschools. The assessee applied for registration on 01-01-2008.Obviously, the application for registration was filed after 01-06-2007and in view of section 12A(2), the provisions of Section 11 and 12shall apply in relation to the income of such trust/ institution from theA.Y. immediately following the F.Y. 2007-08 i.e. A.Y. 2008-09. In thiscase, as discussed, the assessee has got a sufficient cause andreasons for not filing the application for registration u/s 12A and thissection was necessitated in view of the findings of the A.O. for theA.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 madeon or after 01-06-2007 when the section 12A(2) is normally read, itimplies that in specific condition, the provisions of sections 11 and 12shall apply in relation to income of such trust/ institution from theassessment year immediately following the F.Y. in which suchapplication is made. It means that if any application is made on 1stday of June,2007 i.e. in F.Y. 2007-08, the benefit of sections 11 and12 is available in the assessment year 2008-09. Thus it is not a case of 12 complete taking-away of powers of condonation of delay. Thisprovision seems to be very and labyrinth. We are aware of the factthat the Appellate Tribunal, being the appellate authority, is alwaysvested with the power to condone such delay to provide substantialjustice to the parties. The power of condonation is in-built andinherent in the authority/ or judicial to adjudicate of any such disputewhich arise under the Act. In this case, we have found that theapplicant was prevented from making application before the expiry ofsaid period, for sufficient reasons. Therefore, we condone this delayand allow registration. We direct accordingly. section made by theTribunal as contrary he has taken to us of this court” 4. No doubt counsel for the respondent Mr. Ranka has sought to relyupon the subsequent development but looking to the observation madeby the Tribunal we are of the opinon that such an observation could nothave been made by the statutory creation. No authority can travelbeyond the law and make contrary observation. 5. Hence the order of the Tribunal is required to be quashed and setaside and the matter is remitted back to the Tribunal to decide the sameafresh. It will be open for the parties to raise all points and the Tribunalwill decide the same afresh taking into consideration the position of lawprevailing on the date of hearing. 6.The appeal is allowed. (VIJAY KUMAR VYAS)J. (K.S.JHAVERI)J. B. M. Gandhi/Gourav-97