Yadhava Kalvi Nithiyadhava College,Govindarajan Campus,Thiruppalai,Madurai v. Income-Tax Officer (Exemptions),Income-Tax Offices

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURTDATED: 12.04.2018 CORAM THE HON'BLE MR.JUSTICE M.GOVINDARAJ W.P.(MD)No.6636 of 2018and W.M.P.(MD)Nos.6431 and 6432 of 2018 Yadhava Kalvi NithiYadhava College,Govindarajan Campus,Thiruppalai,Madurai 625014,a Society registered under the SocietiesRegistration Act represented by its Secretary, Sri.K.P.Navaneetha Krishnan... Petitioner -Vs- Income-tax Officer (Exemptions),Income-tax Offices,2, V.P.Ratnasamy Nadar Road,Bibikulam,Madurai 625002 ... Respondent Prayer: Writ Petition - filed under Article 226 of Constitution ofIndia, to issue a Writ of Certiorarified Mandamus, to call for therecords in the matter of assessment of the petitioner' for theassessment year 2010-11 which resulted in the issue of attachmentof Bank Account with Central Bank of India Tiruppalai Branch,Narayanapuram New Natham Road, Madurai 625 014 (Yadhava CollegeSelf Finance A/c) in From ITNS 27 Notice under Section 226 (3) ofthe Income-Tax Act, 1961 in PAN /Yadhava KalviNidhi/2010-11 dated 15.03.2018 after a lapse of 5 years, condonethe delay in preferring appeal to the first appellate authority(Commissioner of Income-Tax Appeals) and direct such authority todispose of the appeal in a short time in accordance with law aftergiving an opportunity to the petitioner. O R D E R https://hcservices.ecourts.gov.in/hcservices/The writ petitioner is an Educational Society. According tothe writ petitioner, it is exempted from income tax being involvedin the public charitable activity of running an educationalthe writ petitioner, it is exempted from income tax being involvedin the public charitable activity of running an educational Institution. The petitioner Society is receiving grants from theGovernment nearly to the extent of 47% and accordingly, they areexempted under Section 10(23C)(iiiab) of the Income-tax Act, 1961and Section 11 of the Income-tax Act, 1961. All along, exemptionwas given to the Society, but, suddenly, by a letter dated07.11.2011, a demand was made by the respondent demanding a sum ofRs.83,74,558/-. Since there was litigation over the management ofthe Society, no appeal was preferred by the petitioner for thedemand made by the respondent. 2. From the year of 2011, the Special Officer appointed by theHigh Court is managing the affairs of the College. Therefore, thesociety could not approach the respondent in time. Since no appealwas filed the respondent issued a Garnishee order. The writpetitioner prefers this petition for quashing the notice issued bythe respondent under Section 226(3) of the Income-tax Act, 1961[Garnishee Order] dated 15.03.2018. Pursuant to the order, theIncome Tax Department has also recovered the money from the bankaccount of the society to the tune of Rs.83,74,558/-. 3. The learned counsel appearing for the petitioner wouldcontend that because of the rivalry between the members of theManagement with regard to the administration, appeal could not befiled in time. Since the money is taken out from the bank accountof the Society, the College Administration is crippled. It isimminent to file an appeal to claim exemption from income tax. 4. The learned Standing Counsel appearing for the Income TaxOfficer would vehemently contend that the existence of disputebetween the members of the Management is nothing to do with thedemand made by the Income Tax Department. In fact, all theprocedures were followed by the respondent in accordance with theAct. The petitioner Society has woken up from the deep slumberafter the attachment and recovery of the dues. Now, it is not opento the petitioner Society to seek for condonation of delay infiling an appeal by way of setting the order dated 15.03.2018.Further, there is a dispute with regard to the maintainability ofthe appeal by the petitioner, as the Management is under thecontrol of the Special Officer. 5. I have considered the rival contentions. 4. The learned Standing Counsel appearing for the Income TaxOfficer would vehemently contend that the existence of disputebetween the members of the Management is nothing to do with thedemand made by the Income Tax Department. In fact, all theprocedures were followed by the respondent in accordance with theAct. The petitioner Society has woken up from the deep slumberafter the attachment and recovery of the dues. Now, it is not opento the petitioner Society to seek for condonation of delay infiling an appeal by way of setting the order dated 15.03.2018.Further, there is a dispute with regard to the maintainability ofthe appeal by the petitioner, as the Management is under thecontrol of the Special Officer. 5. I have considered the rival contentions. 6. Admittedly, the writ petitioner is a Society running aCollege and imparting education to the students belonging to theBackward areas and from the statement, it is seen that more than4,000 students are studying in the College. The College isfinancially crippled due to the attachment and recovery made bythe respondent. Ultimately, the beneficiaries, the students andhttps://hcservices.ecourts.gov.in/hcservices/staff of the Educational Institution alone will be affected. TheSpecial Officer is appointed only to manage the College and not to monitor the affairs of the Society. 7. In such circumstances, somebody should take up theinterests of the Society and consequentially the interest ofstudents and the staff of the College. The Society shall bepermitted to agitate the matter on merits for the cause of doingsubstantial justice, rather than knocking it off on technicalitiesof delay. The Honourable Supreme Court in the case ofN.Balakrishnan v. M.Krishnamurthy reported in (1998) 7 SCC 123 atParagraph Nos.9 to 13, observed as under:“9. It is axiomatic that condonation of delay isa matter of discretion of the court. Section 5 of theLimitation Act does not say that such discretion canbe exercised only if the delay is within a certainlimit. Length of delay is no matter, acceptability ofthe explanation is the only criterion. Sometimesdelay of the shortest range may be uncondonable dueto a want of acceptable explanation whereas incertain other cases, delay of a very long range canbe condoned as the explanation thereof issatisfactory. Once the court accepts the explanationas sufficient, it is the result of positive exerciseof discretion and normally the superior court shouldnot disturb such finding, much less in revisionaljurisdiction, unless the exercise of discretion wason wholly untenable grounds or arbitrary or perverse.But it is a different matter when the first courtrefuses to condone the delay. In such cases, thesuperior court would be free to consider the causeshown for the delay afresh and it is open to suchsuperior court to come to its own finding evenuntrammelled by the conclusion of the lower court. 10. The reason for such a different stance isthus: The primary function of a court is to adjudicatethe dispute between the parties and to advancesubstantial justice. The time-limit fixed forapproaching the court in different situations is notbecause on the expiry of such time a bad cause wouldtransform into a good cause. 11. Rules of limitation are not meant to destroythe rights of parties. They are meant to see thatparties do not resort to dilatory tactics, but seektheir remedy promptly. The object of providing alegal remedy is to repair the damage caused by reasonof legal injury. The law of limitation fixes alifespan for such legal remedy for the redress of thelegal injury so suffered. Time is precious and wastedhttps://hcservices.ecourts.gov.in/hcservices/time would never revisit. During the efflux of time,newer causes would sprout up necessitating newer 11. Rules of limitation are not meant to destroythe rights of parties. They are meant to see thatparties do not resort to dilatory tactics, but seektheir remedy promptly. The object of providing alegal remedy is to repair the damage caused by reasonof legal injury. The law of limitation fixes alifespan for such legal remedy for the redress of thelegal injury so suffered. Time is precious and wastedhttps://hcservices.ecourts.gov.in/hcservices/time would never revisit. During the efflux of time,newer causes would sprout up necessitating newer persons to seek legal remedy by approaching thecourts. So a lifespan must be fixed for each remedy.Unending period for launching the remedy may lead tounending uncertainty and consequential anarchy. Thelaw of limitation is thus founded on public policy.It is enshrined in the maxim interest reipublicae upsit finis litium(it is for the general welfare thata period be put to litigation). Rules of limitationare not meant to destroy the rights of the parties.They are meant to see that parties do not resort todilatory tactics but seek their remedy promptly. Theidea is that every legal remedy must be kept alivefor a legislatively fixed period of time. 12. A court knows that refusal to condone delaywould result in foreclosing a suitor from puttingforth his cause. There is no presumption that delayin approaching the court is always deliberate. Thiscourt has held that the words “sufficient cause”under Section 5 of the Limitation Act should receivea liberal construction so as to advance substantialjustice vide Shakuntala Devi Jain v. Kuntal Kumariand State of W.B. v. Administrator, HowrahMunicipality. 13. It must be remembered that in every case ofdelay, there can be some lapse on the part of thelitigant concerned. That alone is not enough to turndown his plea and to shut the door against him. Ifthe explanation does not smack of mala fides or it isnot put forth as part of a dilatory strategy, thecourt must show utmost consideration to the suitor.But when there is reasonable ground to think that thedelay was occasioned by the party deliberately togain time, then the court should lean againstacceptance of the explanation. While condoning thedelay, the Court should not forget the opposite partyaltogether. It must be borne in mind that he is aloser and he too would have incurred quite largelitigation expenses. It would be a salutary guidelinethat when courts condone the delay due to laches onthe part of the applicant, the court shall compensatethe opposite party for his loss.” 8. In the instant case, as stated supra, considering theinterest of the students community as well as hundreds ofemployees working in the College and the Society, this Court is ofthe view that this is a fit case for issuing certain directions.Because of the rivalry between the members of the Management thereal beneficiaries shall not be deprived of their rights and thehttps://hcservices.ecourts.gov.in/hcservices/benevolent object of the Society to impart Education to the peopleof the Backward areas should not be defeated. 9. It is also pertinent to note that the Society is notrepresented by regularly by the Elected Office Bearers. There isan apprehension on the side of the respondent, from the pastexperiences, that too many persons would interfere and meddle withthe matter. In such circumstances, permission is granted to theperson named as Secretary of the petitioner Society before thisCourt to present an appeal and the respondent Department shalldeal only with that person. No else can interfere in the matter ofappeal to be filed. This order cannot be taken advantage by namedSecretary in this petition for other issues or affairs of theSociety and it is absolutely only in respect of filing an appealbefore the respondent alone. 9. It is also pertinent to note that the Society is notrepresented by regularly by the Elected Office Bearers. There isan apprehension on the side of the respondent, from the pastexperiences, that too many persons would interfere and meddle withthe matter. In such circumstances, permission is granted to theperson named as Secretary of the petitioner Society before thisCourt to present an appeal and the respondent Department shalldeal only with that person. No else can interfere in the matter ofappeal to be filed. This order cannot be taken advantage by namedSecretary in this petition for other issues or affairs of theSociety and it is absolutely only in respect of filing an appealbefore the respondent alone. 10. In view of the above observations, the followingdirections are issued:(a) an appeal shall be filed through the Secretary named inthe present Writ Petition for the assessment year 2010-2011 withina period of two weeks from the date of receipt of a copy of thisorder. (b) on receipt of the appeal, the respondent is directed toprovide ample opportunity to the petitioner in conformity with theprinciples of natural justice and decide the appeal on meritswithin a period of three months thereafter. (c) It is clear that none other than the petitioner isentitled to deal with the appeal filed by the Society till itsdisposal.(d) this order is restricted only to the appeal to be filedand shall not be taken advantage of in the affairs of themanagement of the Society in other respects.Sd/-AssistantRegistrar(RTI) /True Copy/ Sub Assistant Registrar ToIncome-tax Officer (Exemptions),Income-tax Offices,2, V.P.Ratnasamy Nadar Road,Bibikulam,Madurai 625002+ 1 cc TO Mrs.S.Srimathy , Advocate in SR No. 60938+ 2 ccs TO Mr.R.Srinivasan , Advocate in SR No. 60946smAE/RSK/SAR1/04.05.2018/5P/5C Order made inW.P.(MD)No.6636 of 2018Dated:12.04.2018