D.b. Income Tax Appeal v. Garment Exporters Association Of Rajasthan

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JAIPUR BENCH JAIPUR Judgment D.B. Income Tax Appeal No.711/2008Commissioner of Income Tax, Jaipur-II, Jaipur Vs. Garment Exporters Association of Rajasthan Date of Judgment ::: 18.05.2016 HON'BLE MR. JUSTICE M.N. BHANDARIHON'BLE MR. JUSTICE J.K. RANKA Mr. Nikhil Simlote on behalf ofMr. RB Mathur, for the appellant-revenue.Mr. Sandeep Taneja, for the non-appellant. By this appeal, a challenge is made to theorder of Income Tax Appellate Tribunal, JaipurBench, Jaipur (in short “the Tribunal”) dated29.02.2008. Learned counsel for the appellant-revenuesubmits that as per Section 12AA(a)(ii) of theIncome Tax Act, the registration of the Trustcan be taken from the date of the application,if it is complete in all respect. If anapplication for registration of the Trust issubmitted with defects and are cured later on,the registration would be treated on the date,the defect are removed. It cannot relate back tothe date of submission of the defectiveapplication. The Tribunal has allowed registration under 2 Section 12AA (a) (ii) from the date ofsubmission of the application with condonationof delay. The audited accounts were notsubmitted along with application and the defectaforesaid was cured later on. Learned Tribunalthus committed grave illegality while ignoringmandate of Section 12AA (a)(ii) of the Act. Inthe light of the aforesaid, the order of thelearned Tribunal may be set aside. A referenceof the judgment of Gujrat High Court in the caseof HeeraLal Bhagwati Vs. Commissioner of IncomeTax, reported in 246 ITR 188 has been given. Learned counsel appearing for the assessee-respondent has contested the case and submitsthat application for registration was submittedcomplete in all respect. The defect was yetpointed out showing absence of audited accountwhich was not a condition precedent forsubmission of application for registration underSection 12AA of the Act. Learned Tribunal found that the defect wasunnecessarily pointed out as filing of theaudited accounts along with the application wasnot mandatory in nature and in absence ofmandate to submit audited account along with theapplication, the registration is to be takenfrom the date of application. The application was wrongly considered to be defective. Theorder of the Tribunal is supported by thejudgments of Madhya Pradesh High Court as wellas of Punjab and Haryana High Court. A referenceof the judgment of Allahabad High Court in thecase of CIT Vs. Sri Baldeoji Maharaj Trust(1983) 142 ITR 584 has also been given. Thesimilar issue was decided in favour of theassessee. We have considered rival submissions of theparties and perused the record. The facts available on record reveal that anapplication was submitted by the assessee forregistration under Section 12AA(a)(ii) of theAct. The issue for our consideration is as towhat should be the effective date for acceptanceof the application for registration. According to learned counsel for theappellant-revenue, effective date of applicationfor registration would be when the defects werecured. As against the aforesaid, assesseesubmitted that the application was submittedhaving no defect. The defect was unnecessarilypointed out by the revenue. The audited accountswere not required to be submitted along with We have considered rival submissions of theparties and perused the record. The facts available on record reveal that anapplication was submitted by the assessee forregistration under Section 12AA(a)(ii) of theAct. The issue for our consideration is as towhat should be the effective date for acceptanceof the application for registration. According to learned counsel for theappellant-revenue, effective date of applicationfor registration would be when the defects werecured. As against the aforesaid, assesseesubmitted that the application was submittedhaving no defect. The defect was unnecessarilypointed out by the revenue. The audited accountswere not required to be submitted along with application. The requirement of audited accountsalong with the application was not mandatory butdirectory in nature. The issue aforesaid hasalready been decided by Madhya Pradesh HighCourt in the case of Commissioner of Income TaxVs. Devradhan Madhavlal Genda Trust 230 ITR 714MP and also by Punjab and Haryana High Court inthe case of CIT Vs. Shahzedanand Charity Trust228 ITR 292 Punjab and Haryana. A furtherreference of the judgment of Calcutta High Courtin the case of Commissioner of Income Tax Vs.Hardeodas Agarwalla Trust reported in (1992) 198ITR 511 has been given. The view expressed bydifferent High Courts is about the requirementto submit audited accounts along with theapplication. The requirement is held to bedirectory in nature and not mandatory. If filingof the the audited accounts is not mandatory,the application submitted by the non-appellantcannot be said to be defective. The registrationshould have been allowed from the date theapplication was submitted and not from the datewhen alleged defects in the application werecured. The Tribunal and the revenue have notpointed out any other defect in the applicationthan for filing of the audited accounts. Theissue raised herein is covered by the judgmentssupra. In the light of the aforesaid, we do notfind it to be a case of relating back of thedate of registration from the date of itsfiling. The application was filed without anydefect and the audited accounts were submittedlater on because submission of audited accountsalong with the application was not mandatory. In the light of aforesaid discussion, wefind no error in the order passed by theTribunal. Accordingly, appeal is dismissed. (J.K. RANKA),J (M.N.BHANDARI),J sunita/32 All corrections made in the judgment/order have beenincorporated in the judgment/order being e-mailed. Sunita KanwarJr.P.A.