Commissioner Of Income Tax, Salem v. Salem Sengunthar Welfare Trust

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE: 12.03.2021 THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI Commissioner of Income Tax,Salem.... Appellant/RespondentVs. Salem Sengunthar Welfare Trust,No.655/222, Thiru.Vi.Ka. Road,Ammapet, Salem – 636 003.... Respondent/Appellant Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Madras, "B" Bench, dated 11.02.2010 in I.TA.No.1877/Mds/2009 andagainst the order of the Commissioner of Income Tax, Salem-7dated 16.10.2009 in C.No.9755(109)/SLM/2005-2006 and against theorder of the Income Tax Appellate Tribunal, Chennai Bench 'D'dated 13/06/2008 in ITA No.2113/mds/2006 and against theCommissioner of Income Tax, Salem-636 007 dated 25/08/2006 inC.No.9755(109)//SLM/2005-2006. (Judgment was delivered by M.DURAISWAMY, J.) Challenging the order passed in I.T.A.No.1877/Mds/2009 onthe file of the Income Tax Appellate Tribunal, Chennai, "B"Bench, the Revenue has filed the above appeal. 2.The appellant has raised the following substantialquestions of law in the grounds of appeal:“1)Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in setting aside theorder of the Commissioner of Income Tax u/s.12AArejecting the application for registration u/s 12 https://hcservices.ecourts.gov.in/hcservices/ AA of the Income Tax Act on the ground that allthe objects were of the charitable nature and atthe time of registration, the Commissioner ofIncome Tax could only look into the genuinenessof the Trust and did not examine the activitiesof the Trust, relying on the decisions renderedunder the old provisions of Section 12A of theIncome Tax Act and without considering the newprovision of Section 12AA of the Act?2)Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthere were sufficient reasons for the delay infiling the application for registration eventhough the assessee had not explained the delayfrom January 2003 to 2006 and the assessee Trustitself had by its letter dated 09.10.2009foregone its claim for registration withretrospective effect?” 3.When the above appeal came up for admission on 31.08.2010,the Hon'ble Division Bench of this Court admitted the appeal onthe 2[nd] question of law. As far as the question raised relatingto the genuineness of the Trust claiming exemption andregistration under Section 12AA of the Income Tax Act isconcerned, the Hon'ble Division Bench rejected the plea of theRevenue and agreed with the conclusion of the Tribunal statingthat it is purely a question of fact. The Hon'ble Division Benchhas rightly decided the said question of law against theRevenue. Hence, we are not inclined to give any finding withregard to the 1[st] question of law. 4.So far as the 2[nd] question of law is concerned, theTribunal, while setting aside the order passed by theCommissioner of Income Tax with direction to grant registrationto the Trust, further directed the Commissioner to decide theissue with regard to condonation of delay by taking a lenientview and in accordance with the observation made by theTribunal. The application for registration was made by theassessee – Trust on 27.02.2006 for getting the registration doneretrospectively from 01.04.2002. 5.As per Section 12A (1) proviso (2) of the Income Tax Act,the registration of the Trust or Institution shall be made fromthe first day of the Financial Year in which the application ismade. So far as the present application is concerned,admittedly, the Trust had submitted their application on27.02.2006. Therefore, as per Section 12A(1) proviso (2) of theAct, registration can be done only from 01.04.2005. Therefore, https://hcservices.ecourts.gov.in/hcservices/ 5.As per Section 12A (1) proviso (2) of the Income Tax Act,the registration of the Trust or Institution shall be made fromthe first day of the Financial Year in which the application ismade. So far as the present application is concerned,admittedly, the Trust had submitted their application on27.02.2006. Therefore, as per Section 12A(1) proviso (2) of theAct, registration can be done only from 01.04.2005. Therefore, https://hcservices.ecourts.gov.in/hcservices/ as per the said provision, registration cannot be doneretrospectively from 01.04.2002, which the respondent is seekingfor. 6.It is also pertinent to note that the respondent – Trustitself, by its letter dated 09.10.2009, had foregone its claimfor registration with retrospective effect. Therefore, thequestion of condonation of delay in registering retrospectively,does not arise. Hence, we are of the considered view that theregistration can be done from 01.04.2005 based on the assess'sapplication dated 27.02.2006. 7.With these observations, the Tax Case Appeal is disposedof. No costs. Sd/- Assistant Registrar(CS IX) //True Copy// Sub Assistant Registrar vaTo 1.The Income Tax Appellate Tribunal, Chennai, "B" Bench. Chennai, "B" Bench. 2.The Commissioner of Income Tax, Salem-7. Salem-7. 3.The Income Tax Appellate Tribunal, Chennai Bench'D'. Chennai Bench'D'. nr[co]srg 15/04/2021 T.C.A.No.827 of 2010