Lokmanya Shiksha Samiti v. The Income Tax Officerthe Chief Commissioner Of Income Tax

IN THE HIGH COURT OF MADHYA PRADESHBENCH AT INDORE(DB: Hon'ble Mr. Justice Shantanu Kemkar and Hon'ble Mr.Justice M.C. Garg) W.P. No.7902/2013 Lokmanya shiksha Samiti Vs. The Income Tax OfficerThe Chief Commissioner of Income Tax Shri PM Choudhary, learned counsel for the petitioner.Shri RL Jain, learned Senior Counsel with Ms. Veena Mandalik, learned counsel for the respondents. O R D E R (Passed on this day of September, 2013) Per: M.C. Garg, J. By way of this writ petition, the petitioner seeks to challenge the order dated 29.4.2013 passed by the first respondent, Income Tax Officer (OSD) (Tech) purporting to act for the 2[nd] respondent whereby, the application moved by the petitioner filed under section 10(23C) (vi) for approval of the petitioner's institution as an educational institution existing solely for educational purposes and not for the purpose of profit has been rejected on the ground that the application for the year 2011-12 was belated whereas, for the A.Y. 2012-13, it was pre-mature. 2.According to the petitioner, the order in question was wrong inasmuch as, erroneous interpretation of the 14[th ] Proviso to section 10(23C) has been done in this case. The order passed by the 1[st] respondent Annexure P-1 is reproduced here as under:- dk;kZy; eq[; vk;dj vk;qDr] bUnkSj Office of the Chief Commissioner of Income Tax, Indore. F.No.CCIT/Ind/Tech/10(23C)/149/2012-13Dated: 29[th] April, 2013 To, The Secretary,Lokmanya Shikshan Samiti,Lokmanya Nagar, Indore. Subject: Your application for grant of exemption u/s 10(23C)(vi) of the I.T. Act, 1961 for F.Y. 2010-11 relevant to A.Y.2011-12 – regarding – PAN: . ***** Please refer your application in Form No.56D (under Rule 2CA) dated 28.03.2012 for grant of exemption u/s 10(23C)(vi) of the I.T. Act, 1961 for F.Y. 2010-11 relevant to A.Y.2011-12 filed on 11.04.2012 with Commissioner of Income Tax-I, Indore who has forwarded the same to this office on 04.05.2012. Please also refer your reply dated 22.04.2013 submitted on 23.04.2013 in compliance to this office letter of even number dated 15.04.2013.In this connection, I am directed to inform you as under: As per proviso to section 10(23C) which reads as: [Provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the first proviso makes an application on or after the 1[st] day of June, 2006 for the purposes of grant of exemption or continuance thereof, such application shall be [made on or before the 30[th] day of September of the relevant assessment year] from which the exemption is sought:] Accordingly, application for grant of exemption u/s 10(23C)(vi) of the Act for F.Y. 2010-11 relevant to A.Y. 2011-12 can be filed only after01.04.2011 but before 30.09.2011. As such, the application submitted on 28.03.2012 is considered to be out of time. In this regard, your written reply dated 22.04.2013 is considered wherein you have stated that:“ The application pertains for the period of F.Y.2011-12 (A.Y.2012-13) and not for the period F.Y. 2010-11. As per the proviso to section 10(23C), the application is to be filled before 30[th] September of the relevant assessment year. Since the application is for F.Y.2011-12 and subsequent years, it is to be filed on or before 30[th] September, 2012. Thus, the application is within the statutory prescribed time period.” Your claim as stated above is not acceptable for the following reasons: (i) The Column-10 of application Form 56D requires “Total Income including voluntary contributions, if any, of the University or other educational institution or Hospital or other Medical institution referred to in S.No.1 for the previous year relevant to assessment year for or from which the exemption is sought.” Your claim as stated above is not acceptable for the following reasons: (i) The Column-10 of application Form 56D requires “Total Income including voluntary contributions, if any, of the University or other educational institution or Hospital or other Medical institution referred to in S.No.1 for the previous year relevant to assessment year for or from which the exemption is sought.” No information relevant to A.Y.2012-13 has been filed. On the contrary, against this Column-10, you have categorically and specifically mentioned that “Rs.13117190.00 for A.Y. 2011-12 but the registration is not being filed in that year as there was no managing committee. The relevant documents showing dismissal of managing committee and appointment of administrator was done by the MP Government.” As also, the particulars and documents furnished with the said application are relevant to and in support of the period F.Y.2010-11 and not that of F.Y.2011-12. As such, your statement has no force and is considered to be given a false statement as an after thought. (ii)The exemption under Clause (vi) of Section 10(23C) of the I.T. Act is necessary where Gross Receipt of the Society/Institution exceeds Rs.1.00 Crore. The particulars disclosed by the applicant in the application relevant to F.Y. 2010-11 revels that the Gross Receipt of the Society/Institution during the said period (i.e.F.Y.2010-11) itself exceeded Rs.1.00 Crore. Obviously, the application so filed pertains to F.Y.2010-11 and may not be considered relevant to F.Y.2011-12 so claimed as an after thought. (iii)Further, the date of preparation appearing on the said application is 28.03.2012 and the date of filing of said application is 30.03.2012. This date of filing application under said section is considered to be out of time for F.Y.2010-11 and it is advance date for F.Y.2011-12. This is not permissible in the law. Accordingly, it is appreciated that you were not supposed to file such application in advance without closure of your Accounts and without disclosing/enclosing particulars/copies of final accounts etc mandatory to be furnished with the application as per the claim. Further, the Act also does not permit for condonation of such delay or filing an application in advance. In view of the above discussion, your application under reference is considered as noapplication and treated as disposed off accordingly without going in to its merit. 3.A perusal of this order goes to show that vide impugned order considering the application for the assessment year 2011-12 was rejected because it was not filed after 1.4.2011 but was filed on 28.3.2012 whereas, for the A.Y 2012-13, it was rejected because it was filed on 28.3.2012 and ought to have been filed only after 30.4.2012 even though, admittedly, application had reached to the competent authority in May, 2012 i.e. before 30.9.2012 and according to the petitioner, application was within limitation. 4.We have heard the learned counsel for the parties. 5.One thing which is apparent and relevant is that in this case, the application filed on behalf of the petitioner was not for the awarding exemption for the year 2011-12 but for the assessment year 2012-13. In this regard, it will be relevant to take note of paragraph 10 of the application submitted on behalf of the petitioner under section 10(23C) (vi) of the Act, 1961. The said paragraph reads as under:- 6.A perusal of this paragraph clearly establishes that the application was not for the assessment year 2011-12 but was for the subsequent year. At this stage, it will be appropriate to take note of paragraph 3 of the writ petition which reads as under:- 4.We have heard the learned counsel for the parties. 5.One thing which is apparent and relevant is that in this case, the application filed on behalf of the petitioner was not for the awarding exemption for the year 2011-12 but for the assessment year 2012-13. In this regard, it will be relevant to take note of paragraph 10 of the application submitted on behalf of the petitioner under section 10(23C) (vi) of the Act, 1961. The said paragraph reads as under:- 6.A perusal of this paragraph clearly establishes that the application was not for the assessment year 2011-12 but was for the subsequent year. At this stage, it will be appropriate to take note of paragraph 3 of the writ petition which reads as under:- 3.The petitioner submits that since the petitioner's annual receipts were less than the specified limit of Rs.1 Crore as prescribed for purpose of section 10(23C) (iiiad), the petitioner's earlier exemption continued to claim exemption for and upto A.Y.2010-11, which stands allowed. However, since the petitioner's receipts for the AY 2012-13 exceeded the specified limit,the petitioner was required to make a fresh application for approval of the institution before the prescribed authority in accordance with section 10(23C) (vi) for the said A.Y.2012-13. The petitioner accordingly filed an application under section 10(23C)(vi) of the IT Act, 1961, vide its application dated 28.03.2012filed before the Commissioner of Income Tax-1, Indore. A true copy of the covering letter for filing application alongwith the application in prescribed form 56D alongwith all its Annexures is enclosed hereto and marked as Annexure P/4 to this petition for ready reference.The said application dated 28/03/2012 was actually filed on 30.3.2012 before the commissioner as is clear from the acknowledge. The petitioner further submits that since the prescribed authority for grant of approval for purpose of exemptionunder section 10(23C)(vi) is the Chief Commissioner of Income Tax, the Commissioner of Income Tax then forwardedthe petitioner's application to Respondent No.2, the Chief Commissioner of Income Tax, Indore on 4.5.2012 as is clear fromthe reference to the receipt of application by the Chief Commissioner, who happens to be the prescribed authority, in his impugnedorderdated 29[th ]April, 2013 4.The petitioner submits that although admittedly the petitioner's application was received by the prescribed authority, the Chief Commissioner on 04.05.2012, nothing was heard till the receipt of a letter dated 15[th] April, 2013 from the respondent No.1, who made several queries including an objection to the maintainability of the application on the ground that same was barred by limitation prescribed under cproviso to setion 10(23C). It is clear from the said letter that the respondent No.1 treated the petitioner's application as application for A.Y. 2011-12and since according to the respondent No.1 such application for A.Y. 2011-12 could befiled only before 30[th] Sept 2011, the petitioner's application was beyond the prescribed period of limitation. A true copy of the said letter dated 15[th] April, 2013 received by petitioner from respondent No.1 is also enclosed hereto and marked as Annexure P/5 to this petition for ready reference. 7.The relevant portion of Annexure P-5 reads as under:- dk;kZy; eq[; vk;dj vk;qDr] bUnkSj Office of the Chief Commissioner of Income Tax, Indore. F.No.CCIT/Ind/Tech/10(23C)/149/2012-13 Dated: 15[th] April, 2013 To, The Secretary,Lokmanya Shikshan Samiti,Lokmanya Nagar, Indore. Subject: Your application for grant of exemption u/s 10(23C)(vi) of the I.T. Act, 1961 for F.Y. 2010-11 relevant to A.Y.2011-12 – regarding – PAN: . ***** Please refer your application in Form No.56D (under Rule 2CA) dated 28.03.2012 for grant of exemption u/s 10(23C)(vi) of the I.T. Act, 7.The relevant portion of Annexure P-5 reads as under:- dk;kZy; eq[; vk;dj vk;qDr] bUnkSj Office of the Chief Commissioner of Income Tax, Indore. F.No.CCIT/Ind/Tech/10(23C)/149/2012-13 Dated: 15[th] April, 2013 To, The Secretary,Lokmanya Shikshan Samiti,Lokmanya Nagar, Indore. Subject: Your application for grant of exemption u/s 10(23C)(vi) of the I.T. Act, 1961 for F.Y. 2010-11 relevant to A.Y.2011-12 – regarding – PAN: . ***** Please refer your application in Form No.56D (under Rule 2CA) dated 28.03.2012 for grant of exemption u/s 10(23C)(vi) of the I.T. Act, 1961 for F.Y. 2010-11 relevant to A.Y.2011-12 filed on 11.04.2012 with Commissioner of Income Tax-I, Indore who has forwarded the same to this office on 04.05.2012. 2.As per proviso to section 10(23C) which reads as: [Provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the first proviso makes an application on or after the 1[st] day of June, 2006 for the purposes of grant of exemption or continuance thereof, such application shall be [made on or before the 30[th] day of September of the relevant assessment year] from which the exemption is sought:] Accordingly, application for grant of exemption u/s 10(23C)(vi) of the act for A.Y. 2011-12 can be filed only after 01.04.2011 but before 30.09.2011 [i.e. before the due date for filing of return of income u/s 139(1) of the IT Act]. However, you have submitted the said application on 11.4.2012 which in fact is considered to be not in time as per said section. Thus your application under referencedeserves to be rejected.For the above reason, please explain as towhy your application under reference shouldnot be rejected. 8.Even though, other queries were made but that is not the issue before us. The only question is as to why the said application received by the competent authority on 4.5.2013 be not treated as an application filed within the limitation. 9.A reply was also filed by the petitioner of this application wherein, they have clarify the position vide Annexure P-6. The said clarification reads as under:- LOKMANYA SHIKSHA SAMITI Lokmanya Nagar, Keshar Bagh Road, Indore – 452009,Tel.:2360169, 2361783 Ref.No. Date:22.04.2013 To, The ITO (OSD) (Tech.),For Chief Commissioner of Income Tax,INDORE. Sub: Grant of Exemption under section 10(23C) (vi) of theIncome Tax Act, 1961 of Lokmanya Shiksha Samiti.Ref: CCIT/Ind/Tech/10(23C)/149/2012-13/194 dated 15.04.2013 Sir, This is the point wise reply of the query letter received under the above captioned subject, relating to the Grant of Exemption U/s 10(23C)(vi) of the Income Tax Act, 1961 for the Financial year 2011-12 (A.Y.2012-13). The application was submitted in the Form No.56D dated 28.03.2012 and the application was submitted on 30[th] March, 2012. The Lokmanya Shiksha Samiti is running the school Lokmanya Vidya Niketan sinch 1996. the school Lokmanya Vidya Niketal was established on 01.07.1983. Initially the school was owned and managed by Lokmanya Nagar Griha Nirman Society, the land on which the school is operated is owned by Lokmanya Griha Nirman Society. However to ensure the compliance with the rules of MP Higher Secondary Education Board, the school was then separated from Lakmanya Nagar Griha Nirman Society and Lokmanya Shiksha Samiti was registered as a society under MP Societies Registration Act, 1973 on 21.06.1996 with the main objects of running the school Lokmanya Vidya Niketan. Since then the school is being operated under the governance of Lokmanya Shiksha Samiti. The school got the affiliation of class 12[th] from 01.07.1996 and later on the school got the CBSE affiliation on 17.05.2009. class 12[th] from 01.07.1996 and later on the school got the CBSE affiliation on 17.05.2009. The application pertains for the period of F.Y. 2011-12 (A.Y. 2012-13) and not for the period F.Y. 2010-11. as per the proviso to section 10 (23C), the application is to be filed before 30[th ]September of the relevant assessment year. Since the application is for F.Y. 2011-12 and subsequent years, it is to be filed on or before 30[th ]September, 2012. Thus, the application is within the statutory prescribed time period. 10.From the aforesaid, it is clear that even though the application for exemption for the F.Y. 2012-13was filed before 30.09.2013 even though, technically it should have been filed after 30.04.2013, but it makes no difference inasmuch as, the application reached before the competent authority within time i.e. admittedly 30.09.2013. 11.We have gone through the judgment relied upon by the respondents in the case of Roland Educational andCharitable Trust Vs. Chief Commissioner, Income Taxreported in(2009) 309 ITR 50 (Orrisa)wherein, the judgment which has been discussed and decided by Hon'ble Division Bench, has only discussed the powers of the Commissioner to extend the limitation, which is not the case in hand and therefore, we are afraid that the said judgment is of no help to the respondents in this case. We, therefore, find no substance in the submission made on behalf of the respondent that in any such situation, the respondents were well within rights to reject the application as pre-mature. 12.Accordingly the writ petition filed by the petitioner is allowed and direction is issued to the respondents to consider the application filed on behalf of the petitioner as the application for seeking exemption for the F.Y. 2012-13 within a period of one month from today. We make it clear that this direction would not come in the way of the respondents to dispose of the application in accordance with law and will not prevent the respondents to consider the application in the light of the relevant provisions dealing with such application except on the point of limitation. C.c. as per rules. (Shantanu Kemkar) (M.C. Garg) Judge JudgeKratika