TMI Blog2010 (1) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the assessee is ignorance of law, not having any worthwhile receipts in the initial years, and a belief that corpus donations were not taxable - In any case, knowledge of all statute laws cannot be presumed as held by Hon'ble Apex Court in the case of Motilal Padampet Sugar Mills Co. Ltd. v. State of UP. reported in 118 ITR 326 – Accordingly the delay ought to have been condoned and assessee granted registration from the date of inception - Appeal is allowed - ITA No. 530/Mds/2009 - - - Dated:- 8-1-2010 - ORDER PER ABRAHAM P. GEORGE. ACCOUNTANT MEMBER : In this appeal, the grievance of the assessee is that the CIT did not condone the delay in filing application for registration under section 12AA of the Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication in September, 2006, registration as per law had to be granted with effect from 1.4.2006. 4. Meanwhile, assessee moved in appeal against the CIT's order refusing to condone the delay, inter alia, pleading that there was denial of natural justice, since it was not given a proper opportunity to present its case. 5. In the fresh proceedings also the CIT refused to condone the delay citing the following reasons:- (i) The ground taken was only ignorance of law. (ii) For financial year 2004-05, Trust had corpus donation of Rs,32,66,500/- which was reflected in the bank as cash balance. (iii) For assessment year 2005-06, there was further corpus donations of Rs,17,34,250/- and accumulated corpus was again reflected as bank fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending 31.3.2005 and 31.3.2006, bringing its activities to a halt. 7. Per contra, the Ld. D.R'. strongly supported the order of the CIT. 8. We have heard the rival contentions and perused the relevant orders and relevant records. There is no dispute that assessee-Trust is well eligible for registration under section 12AA of the Act. Its objects were all found to be noble and good enough for giving such registration, and no doubt its activities also clearly showed that it was pursuing its objects vigorously. During financial year 2006-07, it had given help and aid to the needy and also maintained and helped in construction of a public place of worship. The reasons for not condoning the delay in applying for the registration, are as give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder tax laws, we are afraid we cannot accept. Being a charitable Trust, the trustees could have had a belief that donations received would not be taxable, for the simple reason that none of them were beneficiaries or interested persons, but only administering the Trust. Therefore, there is much strength in argument of the assessee that it became aware of the requirement under tax laws when it consulted a Chartered Accountant in March, 2006. Even if some laches were there in the hands of the trustees, looking into the objects of the Trust, which undisputedly were noble and charitable, it would be unjustified to tax the Trust on donations it had received for pursuing such objects. This would result in a situation where the ultimate beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... war who was running that agency. The Trust kept on Ipiling up the donations for more than 5 years without spending anything therefrom. It was for this reason registration was held to have been rightfully denied. Here, on the other hand, the trustees numbered 33, there was no collection from any employees, and in any case registration under section 12AA was indeed granted, though only from a later date, than what was sought by the assessee. Therefore, the facts were entirely different and the decision rendered in the case of Aman Shiv Mandir Trust (supra) has no application, Coming to the second decision which is that of Hon'ble Kerala High Court in the case of Self Employers Service Society (supra), there the members of the society were mai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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