Commissioner Of Income Tax v. Sahitya Sadawart Samiti Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR (1) D.B. Income Tax Appeal No. 32 / 2008 Commissioner Of Income Tax ----Appellant Versus Sahitya Sadawart Samiti Jaipur ----Respondent Connected With (2) D.B. Income Tax Appeal No. 29 / 2008 C I T ----Appellant Versus Sahitya Sadwart Samiti ----Respondent (3) D.B. Income Tax Appeal No. 563 / 2009 C I T ----Appellant Versus Sahitya Sadawart Samitti ----Respondent (4) D.B. Income Tax Appeal No. 406 / 2011 C I T ----Appellant Versus Sahitya Sadawart Samitti ----Respondent _____________________________________________________ For Appellant(s) : Mr. R.B. Mathur with Mr. K.D. MathurFor Respondent(s) : Mr. Mahendra Gargeiya with Ms. Manisha Surana _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE INDERJEET SINGHJUDGMENT 19/05/2017 1. Since identical question of law and facts are involved inthese appeals hence they are decided by this common judgment. 2.By way of these appeals, the appellant has assailed thejudgment and order of the Tribunal whereby Tribunal has allowedthe appeal preferred by the assessee. 3.This court while admitting the appeals framed followingsubstantial questions of law:- (i) Appeal No.32/2008 "1. Whether in the facts and circumstances of thecase, the ITAT has not acted illegally and perverselyin making observations with regard to grant ofexemption u/s 10(23C) (vi) when the ITAT has nojurisdiction to decide any application/appeal arisingout of order passed either granting or rejectingexemption u/s 10(23C) (vi) of the Act by theCompetent Authority. 2. Whether, without prejudice to the facts that theITAT did not have jurisdiction to examine the meritsof the case, whether it was justified in quashing thefindings given by the AO holding that the same areperverse, contrary to facts and against the law,completely ignoring the specific findings thatconditions set out in the provisos to Section10(23C) have not been fulfilled. (ii) Appeal No.29/2008 "1. Whether in the facts and circumstances of thecase, the ITAT has not acted illegally and perverselyin directing the CIT to allow application ofrespondent u/s 12A(a) of the Act for registration forthe purpose of the exemption u/s 11 & 12 of theACT for the claimed assessment year?" (iii) Appeal No.563/2009 "(i) Whether in the facts and circumstances of thecase, the ITAT was justified in holding that therespondent assessee is entitled for exemption u/s 11& 12 of the Act? (ii) Whether in the facts and circumstances of thecase, the ITAT was justified in law in makingobservations with regard to grant of exemption u/s10(23C) (vi) when the ITAT has no jurisdiction todecide any application/appeal arising out of orderpassed either granting or rejecting exemption u/s10(23C)(vi) of the Act by the Competent Authority?" (iv) Appeal No.406/2011 "1. Whether in the facts and circumstances of thecase, the ITAT was justified in holding that society isentitled for exemption u/s 11 & 12 of the Act.case, the ITAT was justified in holding that society isentitled for exemption u/s 11 & 12 of the Act. (ii) Whether in the facts and circumstances of thecase, the ITAT was justified in law in makingobservations with regard to grant of exemption u/s10(23C) (vi) when the ITAT has no jurisdiction todecide any application/appeal arising out of orderpassed either granting or rejecting exemption u/s10(23C)(vi) of the Act by the Competent Authority?" (iv) Appeal No.406/2011 "1. Whether in the facts and circumstances of thecase, the ITAT was justified in holding that society isentitled for exemption u/s 11 & 12 of the Act.case, the ITAT was justified in holding that society isentitled for exemption u/s 11 & 12 of the Act. 2. Whether in the facts and circumstances of thecase, the ITAT has not acted illegally and perverselyin making observations with regard to grant ofexemption u/s 10(23C)(vi) when the ITAT has nojurisdiction to decide any application/appeal arisingout of order passed either granting or rejectingexemption u/s 10(23C) (vi) of the Act by theCompetent Authority."case, the ITAT has not acted illegally and perverselyin making observations with regard to grant ofexemption u/s 10(23C)(vi) when the ITAT has nojurisdiction to decide any application/appeal arisingout of order passed either granting or rejectingexemption u/s 10(23C) (vi) of the Act by theCompetent Authority." For convenience of the Court appeal No.29/2008 is taken first 4.In this appeal, counsel for the appellant has contended thatregistration was made on 30.5.2002 and rejected on 18.11.2005. 5.Mr. R.B. Mathur counsel for the appellant contended thattribunal has committed serious error while observing in para no.2.12 reads as under:- "2.12 After having gone through the impgnedorder, we find that the Ld. CIT has denied theabove plea of the assessee on the basis that theapplication dated 30.5.2012 was an invlaidapplication and not meeting with mandatoryrequirement of S.12A(a), hence the limitation ofS12AA (2) is not applicable in respect of suchinvalid application. We do not agree with such findings of the Ld.CIT on the issue beceause in allthe circumstacnes either due to defect in theapplication or on merits of it the Ld. CIT under subclause (2) of S.12AA is supposed to grant orrefuse registration before 6 months from the end ofmonths in which appllication was received and inthe present case since the application was filed on30.5.2012 the Ld. Cit should have disposed off theapplication on or before 30.11.2002. The Ld. CIThas however disposed the application on18.11.2005 i.e. with the delay of around threeyears. In the case Sambandh Organization V/s CIT(supra) relied upon by the Ld. A.R. the applicationu/s 12A for registration was filed on 2.8.2002which was rejected by the Ld. Commissioner on07.11.2003. It was held that in view of provisionsof S.12AA it could be said that impugned order hadbeen passed beyond statutory period deemed to beallowed. Similar view has been expressed by DelhiBench of the Tribunal in the case of Sardarilal ObroiMemorial Charitable Trust v/s ITO (supra) referredby the Ld. A.R." 6.Mr. Mahendra Gargieya counsel for the respondent has relied upon the decision of Supreme Court in Commissioner of IncomeTax and ors. vs. Society for the Promotion of Education (2016)382 ITR 6 (SC) wherein speaking for the bench Supreme Courthas observed as under:- “The short issue is with regard to the deemedregistrationofanapplicationUnderSection 12AAof the Income Tax Act. The HighCourt has taken the view that once an applicationis made under the said provision and in case thesame is not responded to within six months, itwould be taken that the application is registeredunder the provision. 6.Mr. Mahendra Gargieya counsel for the respondent has relied upon the decision of Supreme Court in Commissioner of IncomeTax and ors. vs. Society for the Promotion of Education (2016)382 ITR 6 (SC) wherein speaking for the bench Supreme Courthas observed as under:- “The short issue is with regard to the deemedregistrationofanapplicationUnderSection 12AAof the Income Tax Act. The HighCourt has taken the view that once an applicationis made under the said provision and in case thesame is not responded to within six months, itwould be taken that the application is registeredunder the provision. The learned Additional Solicitor General appearingfor the Appellants, has raised an apprehensionthat in the case of the Respondent, since the dateof application was of 24.02.2003, at the worst,the same would operate only after six monthsfrom the date of the application.We see no basis for such an apprehension sincethat is the only logical sense in which the judgment could be understood. Therefore, inorder to disabuse any apprehension, we make itclear that the registration of the application UnderSection 12AAof the Income Tax Act in the case ofthe Respondent shall take effect from 24.08.2003.Subject to the above clarification and leaving allother questions of law open, the appeal isdisposed of with no order as to costs.” 7.The view taken by the tribunal is very clear that theregistration will take effect from the date of application. In ourconsidered opinion, in view of the observation made by theTribunal, the registration will be granted from 30.5.2002. Theissue is answered in favour of the assessee. The appeal stands dismissed. Appeal No.32/2008 In view of the decision in tax appeal no.29/2008 theregistration will be given accordingly. In that view of the matter,the exemption which is granted u/s 10 (23C) will be considered onthe basis of 12A registration. The issues are accordingly answered. The appeal stands dismissed. Appeal 406/2011 11.Similarly in view of the decision of appeal no. 29/2009, theissue is answered in favour of the assessee and against thedepartment. The appeal stands dismissed. Appeal 563/2009 11.In view of the decision of appeal no.32/2008, the issue isanswered in favour of the assessee and against the department. 12.Counsel for the assessee has also placed on record thenotification dt. 13.4.2009 in respect of assessee passed by ChiefCommissioner of Income Tax, Jaipur which becuase of thisdecision taken will not be distrubed. All the appeals are dismissed as indicated above. A copy of this judgment be placed in each file. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Brijesh 13-16.