Wp/758/2021 Of M/S Visakha Academy Of Para Medical Sciences Charitable Trust v. The Commissioner Of Income Tax (Exemptions)

l, [ [33861] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Original Jurisdiction) TUESDAY, THE TWENTY SECOND DAY OF AUGUSTTWO THOUSAND AND TWENTYTHREE PRESENT THE HONOURABLE SRt JUSTICE P.SAi' KOSHYANDTHE HONOURABLE SRI JUSTTCE LAXMI NARAYANA ALISHETTYWRIT PETITION NO:758 OF 2O21 Between M/s Visakha Academy ot Para Medical Sciences Charitable Trust, 1_g1_2,MIG - 4, Sector - 5, MVP Colony, Visakhapatnam: S30 0.t7, Andhra irradesh.f9Opsg1t9-A_ -..b.V^ [i!. ][Secrbtary, ][Mr. ][Kodali ][Venkata ][namein,.]S/o Mr. K.S.R.N.V. Subba Rao. ...PETITIONER AND I . The Commissioner of lncome Tax (Exemptions), Andhra pradesh,Telangana & Odisha, 2nd Floor, Aayakai Bhavan, 6pposite LB Stadium,Basheerbagh, Hyderabad - SO0 004, T6langana.Telangana & Odisha, 2nd Floor, Aayakai Bhavan, 6pposite LB Stadium,Basheerbagh, Hyderabad - SO0 004, T6langana. 2. The lncome Tax Officer (H. Ors.), O/o the Commissioner of lncome Tax(Exemptions), Andhra Pradesh, T'elangana & Odisha, 2nd Floor, AavafirBhavan, Opposite LB Stadium, Basheerbagh, Hyderabad ['-506004,]Telangana.(Exemptions), Andhra Pradesh, T'elangana & Odisha, 2nd Floor, AavafirBhavan, Opposite LB Stadium, Basheerbagh, Hyderabad ['-506004,]Telangana. 3. The Assistant Director of lncome Tax, centralised processing center, lncome]91 560 500, [D-e_pgJtment,. ]Kamataka.[Posr ][Bag No. ][2, ][Etectronic ][City ][post Ofrce, earigitoie ][_]]91 560 500, [D-e_pgJtment,. ]Kamataka.[Posr ][Bag No. ][2, ][Etectronic ][City ][post Ofrce, earigitoie ][_] 4. The lncome Tax Officer (Exemptions), Visakhapatnam, Aayakar Bhavan,Daba Gardens, Visakhapatnam - 530 O2ODaba Gardens, Visakhapatnam - 530 O2O ...RESPONDENTS Petition under Article 226 of the cons{itution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High court may bepleased to issue a writ of Mandamus or any other appropriate writ, order orDirection, declaring the order of the 1st Respondent, dated 19.0g.2020, vide F.No.clr(E)/Hyd/3991119(21(b)t2o1g-20, refusing to condone the delay in filing FormNo, 9A, for the Assessment Year 2016 - 17, being the application for exercise of option under clause (2) of the Explanation 1 to Sec. [1 ][1 ][(1 ]) of the lncome [Tax ][Act,]1961 , as bad in lavr, illegal and violative of [principles ]of natural Justice, bereft [of]valid reasons, and lhat it has been rejected in a mechanical and arbitrary fashionin total disregard ol the statute, consequently set aside the same and direct theRespondents to condone the delay and accept the applicati<ln filed by thePetitioner for exercir;e of option under clause [(2) ]of the Explanation [1 ]to Sec. [1 ][1(1 ])of the lncome Tax A ct, 1961 [.] 1A NO: 1 OF 2021 Petition unde' Section 151 CPC [praying ]that in the circumstances stated [in]the affidavit filed in support of the [petition, ][the ][High Court ][mal' ][be ][pleased ][to]suspend the order of the 1st Respondent, dated [19.08.20j20, ]vide [F.No.]CIT(E)/Hyd/399111912Xb)12O19-20, refusing to condone [the ][delay ][in ][filing ][Form]No,: 9A, for the Ass.essment Year 2016 [- ]17, [pending ]disposal [ol ][the ][above Writ]Petition. Counsel for the Petitioner : SRl. A V A SIVA KARTIKEYA Counsel for the Re:;pondent Nos.1 & [2 : ]SMT Counse! for the Re:;pondent Nos.3 & 4 : SRI K [REDY,]SC FOR INCOME TAXThe Court made the,following: OROER HOITOT'RABLE SRI JUSTICE P.SAII KOSEYAilDHON'BLE SRI JUSTICE LAXIII NARAYAJTA ITLISHETTY IIRIT PEfITION TIO.758 OF 2O2L ORDER: [(per ]Hon'ble Sri Ju.stire P.*.m Koshg) Heard Sri A.V.A.Siva Kartikeya, learned counsel for the petitioner, Smt. K.Mamatha learned counsel for the respondentNos.l and 2, and Sri K.Raji Reddy, learned standing counsel forrespondent Nos.3 and 4.Nos.l and 2, and Sri K.Raji Reddy, learned standing counsel forrespondent Nos.3 and 4. Counsel for the Petitioner : SRl. A V A SIVA KARTIKEYA Counsel for the Re:;pondent Nos.1 & [2 : ]SMT Counse! for the Re:;pondent Nos.3 & 4 : SRI K [REDY,]SC FOR INCOME TAXThe Court made the,following: OROER HOITOT'RABLE SRI JUSTICE P.SAII KOSEYAilDHON'BLE SRI JUSTICE LAXIII NARAYAJTA ITLISHETTY IIRIT PEfITION TIO.758 OF 2O2L ORDER: [(per ]Hon'ble Sri Ju.stire P.*.m Koshg) Heard Sri A.V.A.Siva Kartikeya, learned counsel for the petitioner, Smt. K.Mamatha learned counsel for the respondentNos.l and 2, and Sri K.Raji Reddy, learned standing counsel forrespondent Nos.3 and 4.Nos.l and 2, and Sri K.Raji Reddy, learned standing counsel forrespondent Nos.3 and 4. 2. Aggrieved by tl.e order vide F.No.CIT(EIlHydl399lllg(2l.(bll2OI9-2O2O, dated 19.O8.2020, passed by the Comrnissioner ofIncome Tax (Exemptions), the instant writ petition has been filed.By the impugned order, the authority concerned (1=t respondent)has rejected the application for condonation of delay in filing Form-9A for tlre Assessment Year 2016-17. 3. The facts in nutshell leading to frling of the writ petition andrequired for ttre adjudication of the present writ [petition ]is that thepetitioner had hled its return of income on 17.10.2O16 declaring'Nil'income. The [petitioner ]is a trust, [registered ]under [Section ][l2A]of the Income Tax Act, 196 I (for short, Act) and has exemptedestablishment in terms of Section I I of the Act. The Audit report inForm No. 1OB, dated O1.O9.2O16 in terms of the provisions of lawwas also uploaded along with return of income. In the audit report, the petitione r while claiming the benefit available irr terms ofclause (2) of tJle Explanation I to Section 11(1) of ttre Act hadsought for deemed application for sum of Rs.5O,91,5,)O/- beingthe tuition lees received by the petitioner for the year underconsideration. Subsequently, an intimation under Section 1a3(1) ofthe Act was issued by respondent No.3 to the pel:itioner on24.O8.2O17 seeking explanation as to why the zLmount ofRs.50,91,500/- being the tuition fee receivable during the year benot treated irs deemed application on income in terms of clause(2) of the Exp lanation I to Section l1(1) of the Act. 4. Aggrie ved by the intimation, peLitioner filed r,ectificationapplication u:rder Section 154 of the Act on 13.O5.2019 before tleerespondent nc.3. On 17 .O2.2O2O, respondent No.3 communicatedwith the pe litioner informing that its return of income forAssessment [\.'ear ]2016-17 henceforth rectified by the concernedAssessing Oficer i.e., [jurisdictional ]Assessing OIIicer. Petitionerapproached the [jurisdictional ]Assessing Officer also. 'y'ide orderdated 18.O3.:2O2O, the Assessing Offrcer refused to zrccept therectification application of the petitioner. 5. l,earne d counsel for the petitioner submits that rneanwhilehe had tried to upload Form-9A again before the [jurisdictional]Assessing Off .cer on 03.O3.2O2O, which has been turnerl down [by] 4. Aggrie ved by the intimation, peLitioner filed r,ectificationapplication u:rder Section 154 of the Act on 13.O5.2019 before tleerespondent nc.3. On 17 .O2.2O2O, respondent No.3 communicatedwith the pe litioner informing that its return of income forAssessment [\.'ear ]2016-17 henceforth rectified by the concernedAssessing Oficer i.e., [jurisdictional ]Assessing OIIicer. Petitionerapproached the [jurisdictional ]Assessing Officer also. 'y'ide orderdated 18.O3.:2O2O, the Assessing Offrcer refused to zrccept therectification application of the petitioner. 5. l,earne d counsel for the petitioner submits that rneanwhilehe had tried to upload Form-9A again before the [jurisdictional]Assessing Off .cer on 03.O3.2O2O, which has been turnerl down [by] order dated 18.O3.2O2O. [Meanwhile, ][the ][Department ][had ][already]issued Circular [No.7 ]/2018, [dated ][20.12.2018, whereby the ][Central]Board of Direct Taxes [(CBDT) ][had ][delegated ][ttre ][powers ][to ][the]Comrnissioner of [Income ][Tax ][to ][admit ][the ][belated ][applications ][in]Form-9A & Form-10 [in ][respect of Assessment Year 2O16-17, ][where]such Form-9A & [Form-lO ][are ][filed after expiry ][of ][ttre ][time ][allowed]under the relevant [provisions ][of the ][Act. The said circular ][was]reiterated again followed [by ][another ][circular ][by ] [on]lg.O2.2O2O i.e., Circular [No'6 of ][2O2O ][reiterating the ][same ][for ][the]Assessment Year [2016-17, ][2017-18 ][& ][2018-19. ][The ][petitioner]meanwhile had approached [the ][Commissioner ][seeking ][for]condonation of delay [in ][submission ][of ][Form-9A ][and ][seeking for]condonaiton in terms of the [aforementioned ][three circulars ][i'e]Circular Nos.7 of [2O18, ][30/2019 ][and 6/2O2O- ][It ][is the ][submission,]which has been rejected [by respondent ][No. ] [vide impugrred ][order]dated 19.O8.202O. 6. kamed counsel [for the ][petitioner submits ][that ][the ][very ][intend]and object of the CBDT in [issuing ][the circular would ][give ][a ][clear]indication that [the intention ][was ][to ][accommodate ][the ][assessees']who were reasons best [known could ][not submit their ][report ][within]the stipulated [period ][of ][time and ][subsequently ][who ][were ][filing ][it]dilficult to [submit ][even ][if ][they wanted since ][the ][system was not] \ --\ accepted and in this context that the Commissioner wari delegatedwith the pow:rs to admit belated applications and to condone thedelay in subnftting Form-9A and Form-lO. 7. Learnr:d standing counsel for the Departmernt furthersubmitted that the whole difficulty for the assessee arose onaccount of tlre requirement filing of the return by wzry of e-filealong with F orm-9A electronically and realizing the difhcultiesfaced by the assessee, the CBDT has delegated the pov/ers to theCommissione' for condoning the delay upon sufhcient reasonablecause being e rplained by the assessee. 8. l,eamed counsel for t]re petitioner submits that a pleLin readingof the impugeed order clearly indicate that respondent No.l, infact, has in a mechanical manner without giving a liberal approachto tJ.e circulrr issued, without realizing the intencl t,ehind theissuance of tlrose circulars have rejected the application, whereasthe Authority concerned could have simply if at all is not satisfiedwith the reasons specilied ask the assessee to provide for betterexplanation frrr the delay that occurred in filing of Form-9A andcould have al lowed the application removing ttre difl-rculties withthe petitionel and for the said reasons, the impugned orderdeserved to be remitted back. 8. l,eamed counsel for t]re petitioner submits that a pleLin readingof the impugeed order clearly indicate that respondent No.l, infact, has in a mechanical manner without giving a liberal approachto tJ.e circulrr issued, without realizing the intencl t,ehind theissuance of tlrose circulars have rejected the application, whereasthe Authority concerned could have simply if at all is not satisfiedwith the reasons specilied ask the assessee to provide for betterexplanation frrr the delay that occurred in filing of Form-9A andcould have al lowed the application removing ttre difl-rculties withthe petitionel and for the said reasons, the impugned orderdeserved to be remitted back. 9. Per antra, learned standing counsel for [the ][Department while]opposing the petition submits that it is a case, where [the]intimation und.er Section 1a3(1) of the Act issued by theDepartment was datd 24.08.2017 and the [petitioner ][for ][the ][first]time had frled application rectification [petition ]only on [13.05.2019]and that too the petitioner at that [point ]of time [had not ][supported]his application with Form-9A. Neither, the [petitioner ]submittedapplication for condonation of delay in submission of Form-9A andit was only much before the order dated O3.O3.2O2O that [ttre]petitioner for the first time had submitted Form-9A that toowithout any justifiable reasons explaining the delay or anyobligation. It iS further contended that ttre [petitioner ][for the first]time had moved an application before the Commissioner seekingfor condonation of delay only on 16.03.2020 i.e., after a huge [gap]of time spent in between which is around 2Vz [years ]and therefore,the authority concerned cannot said to have [passed ]order in amechanical martner or said to have acted in arbitrary manner. 10. Having heard the contentions put-forth on either side and onperusal, when we look into the circulars issued by the CBDT firston 20.12.2018 and ttrereafter on O3.01.2O2O, it [would ][clearly]reflect that the intention of the Department [was ][to ][accommodate]the assessees inasmuch as possible subject to their [providing] \\ necessary n-.asonable cause for the delay that has or:curred andForm-9A wzls supported by th" application for con,lonation ofdelay. When it was in this context, the CBDT had de,legated thepowers tb the Commissioner of Jncome Tax to consider theapplication s _rbmitted by the assesses seeking for conclonation ofdelay snd fr,r submission reiterated of Form_9A. The fact that it wasagain on O3.O3.2O2O further strengttlens the intentionof object and modve behind the CBDT in issuing the circulars.Even otherwis-- the pedtioner in the instant ,ase had fumishedForm_gA on o3.o3.202 l0 and the earlier circular in this regard i.e.,07 was /2}lg atready in force in between and which too was for thespecific assessment year 2016_lZ and which furthc:r stoodreiterated again vide circular. No.30/20lg, extending the br:nefit forthe subsequent assessment years as well. In t}te given factualbackdrop, considering the motive and intend of the C BDT inissuing the circular, it was necessary for the Commissioner to havetaken more pragrnatic approach wh,e deciding the appricarion forcondonation of dt lay in submission of Form_9A for the AssessmentYear 2OL6_IZ. 1lIn view of t re same, we areof the considered opinion thatopinion thatthetmpugned or<ler dated lg.Oa.2O2O to the aforesaidextendwould not be sust,rinabl-. and the matter deserves to beremittedlg.Oa.2O2O to the aforesaidextendwould not be sust,rinabl-. and the matter deserves to beremitted -.----a-.- back to respondent [No. ][1 ][for ][reconsidering ][the ][Form-9A submitted]by the petitioner. The [petitioner may be permitted ][to ][hle ][fresh]application with better [alfidavit ][for condonation of ][delay ][while ][filing]Form-9A. On such [application, ][the ][Commissioner ][shall ][take]appropriate decision [strictly in ][accordance ][with ][law' ][Writ ][Petition]is accordingly disposed [of. ][There ][shall ][be ][no order ][as ][to costs'] 1lIn view of t re same, we areof the considered opinion thatopinion thatthetmpugned or<ler dated lg.Oa.2O2O to the aforesaidextendwould not be sust,rinabl-. and the matter deserves to beremittedlg.Oa.2O2O to the aforesaidextendwould not be sust,rinabl-. and the matter deserves to beremitted -.----a-.- back to respondent [No. ][1 ][for ][reconsidering ][the ][Form-9A submitted]by the petitioner. The [petitioner may be permitted ][to ][hle ][fresh]application with better [alfidavit ][for condonation of ][delay ][while ][filing]Form-9A. On such [application, ][the ][Commissioner ][shall ][take]appropriate decision [strictly in ][accordance ][with ][law' ][Writ ][Petition]is accordingly disposed [of. ][There ][shall ][be ][no order ][as ][to costs'] Pending miscellaneous [applications, ][if ][any, ][shall ][stand] closed. SD/. G.SIREESHAASSISTANT REGISTRAR@@SECTION OFFICER //TRUE COPY// To,1. The Commissioner of lncome Tax (Exemptions), Andhra Pradesh, Telanganaand Odisha, 2nd Floor, Aayakar Bhavan, Opposite LB Stadium, Basheerbagh,Hyderabad - 500 004, Telangana.1. The Commissioner of lncome Tax (Exemptions), Andhra Pradesh, Telanganaand Odisha, 2nd Floor, Aayakar Bhavan, Opposite LB Stadium, Basheerbagh,Hyderabad - 500 004, Telangana. 2. The lncome Tax Officer (H. Ars.), O/o the Commissioner of lncome Tax(Exemptions), Andhra Pradesh, Telangana and Odisha, 2nd Floor, AayakarBhavan, Opposite LB Stadium, Basheerbagh, Hyderabad - 500 004,Telangana.(Exemptions), Andhra Pradesh, Telangana and Odisha, 2nd Floor, AayakarBhavan, Opposite LB Stadium, Basheerbagh, Hyderabad - 500 004,Telangana. 3. The Assistant Director of lncome Tax, Centralised Processing Center, lncomeTax Department, Post Bag No. 2, Electronic City Post Office, Bangalore [- ]560500, Kamataka.Tax Department, Post Bag No. 2, Electronic City Post Office, Bangalore [- ]560500, Kamataka. 4. The lncome Tax Officer (Exemptions), Visakhapatnam, Aayakar Bhavan,Daba Gardens, Visakhapatnam - 530 020Daba Gardens, Visakhapatnam - 530 020 5. One CC to SRl. AVASIVA KARTIKEYA, Advocate. 6. One CC to SMT. K MAMATA, Advocate.[OPUCI6. One CC to SMT. K MAMATA, Advocate.[OPUCI 7. One CC to SRI K RAJI REDDY, SC FOR INCOME TAX. 8. T_wo CD Copies\-\r8. T_wo CD Copies\-\r SB GJ HIGH COUR DATED:22l0tll2023 S irAIr^ /:,_' i-r';15 [Strltm]-:r+T.. -Oo$.:i,i. f [i]-t-1:'.:r;..t;- ORDER WP.No.758 ot 2021 DISPOSING I)F THE WRIT PETITIONWITHOUT CoSTS.