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2019 (6) TMI 476

not the length of the delay, but the quality of the reasons for delay, which shall prevail in order to adjudicate whether a condonation of delay is merited. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. [1987 (2) TMI 61 - SUPREME COURT] held that the substantive cause of justice should prevail over technical considerations, while dealing with the condonation of delay applications. Therefore we deem it fit and proper to condone the delay in filing of the appeal. Recognition u/s 80G - charitable activity of not? - Assessee-trust was granted registration as a ‘charitable institution’ u/s 12A - whether the Director was justified in denying the continuation of recognition u/s 80G ? - As per the Director, the assessee has not spent any money towards the objects of the Trust - HELD THAT:- The said objection of director is quite otiose to the requirements which are required to be evaluated by the Director at the stage of considering application u/s 80G(5). Some of the germane issues in the present case which clearly stand out are as follows; that the assessee continues to be a charitable institution u/s 12A - assessee has be .....

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NT: The captioned appeal by the assessee is directed against the order dated 07.06.2011 passed by the Director of Income Tax (Exemptions) (in short the Director ) rejecting the application of assessee dated 07.06.2008 seeking continuation of recognition under Section 80G of the Act. 2. The appellant before us is a Trust and a voluntary organisation engaged in conducting studies and programmes in the field of Astronomy. The assessee-trust was granted registration as a charitable institution under Section 12A of the Act by CIT, Mumbai-4 vide order dated 15.06.1987. It has also been pointed out that the assessee-trust was also recognised under Section 80G of the Act right from Assessment Year 1997-98 till the last of the renewals dated 05.12.2005, which was upto 31.03.2008, i.e. upto Assessment Year 2008-09. Subsequently, vide application dated 17.06.2008, assessee made an application to the Director seeking continuation of recognition earlier granted under Section 80G of the Act. By way of the impugned order, the Director has rejected the application on the ground that the applicant-trust was not engaged in any charitable activity. As per the Director, the Profit & Loss Account o .....

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as been pointed out that the said Shri Sameer Kadam was the Trustee looking after the income-tax matters of the trust and due to his recurrent illness, there was a delay in filing of the appeal. It has been contended that the delay is unintentional and it may be condoned, especially considering the fact that it is a case of a charitable institution which is duly registered under Section 12A of the Act. 4. On the other hand, the Ld. DR has not assailed the bona fides of the reasons canvassed by the assessee for the delay, but has pointed out that the delay was quite inordinate. 5. Having considered the rival stands, in our view, the reasons for the delay explained by the assessee are not lacking in bona fides as there is nothing on record to controvert the averments made in the Affidavit filed before us. In any case, it is a settled proposition that it is not the length of the delay, but the quality of the reasons for delay, which shall prevail in order to adjudicate whether a condonation of delay is merited. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors., 167 ITR 471 (SC) held that the substantive cause of justice should prevail .....

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be assailed by the appellant. 8. On the other hand, the Ld. DR appearing for the Revenue has defended the decision of the Director by placing reliance thereon and also reiterating the reference made by the Director to the following decisions :- (i) Ganjam Nagappa & Son Trust vs DIT, 269 ITR 59 (Karnataka); (ii) Vishal Khanna Public Charitable Trust vs UOI, 356 ITR 442 (Allahabad); (iii) Madani Musafir Khana Welfare Society vs CIT, 264 ITR 481 (Patna); and, (iv) Vishwa Budha Parishad vs CIT, 264 ITR 357 (Patna) 9. We have carefully considered the rival submissions. As our discussion in the earlier paras show, the moot question is as to whether the Director was justified in denying the continuation of recognition under Section 80G of the Act. Sec. 80G of the Act enumerates clauses (i) to (v) which contains various conditions for allowing recognition under Section 80G of the Act. The scope and ambit of the inquiries that are permissible to be made by the Director at the stage of evaluating an application under Section 80G of the Act has been considered by the Hon'ble Punjab & Haryana High Court in the case of Sonepat Hindu Educational & Charitable Society (supra). As .....

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gazine published by the International Astronomical Union, which brings out the role being played by the assessee-trust in popularising Astronomy in India. We have perused the said article, which exhaustively brings out the various activities being carried out by the assessee-trust, namely, weekly meetings and library, Sky observation programmes, exhibitions, slide shows, basic and advanced courses in astronomy for students, conducting of study tours, workshops, conference and special events, etc. It was also explained by the Learned Representative that since its inception 20 years ago, assessee-trust has been publishing a bulletin called Khagol Warta in Marathi, which is very well received by the researchers and students of Astronomy. Our attention has also been drawn to the list of publications since 1986, which has been brought out by the assessee-trust. All these aspects, in our view, do not lend support to the perception of the Director that the assessee-trust is not incurring expenditure towards its objects. 11. Even with regard to the level of expenditure incurred by the assessee, we have perused the Income & Expenditure statement enclosed by the assessee in the Paper Boo .....

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able purposes. Obviously, in the instant case there is no such finding of the Director and nor is there any finding in the assessment stage so as to justify any misapplication of funds by the assessee-trust. Therefore, the ratio of the judgment of the Hon'ble Karnataka High Court in the case of Ganjam Nagappa & Son Trust (supra) does not help the case of the Revenue in the present case. 15. Insofar as the judgment of the Hon'ble Allahabad High Court in the case of Vishal Khanna Public Charitable Trust (supra) relied upon by the Ld. DR is concerned, the same, in our view, is also inapplicable in the instant case on account of difference in the fact-situation. In the case before the Hon'ble Allahabad High Court, the object of the Trust was to construct and maintain a charitable hospital, whereas factually it was found that the Trust was diverting monies for construction of a shopping complex. Under these circumstances, the Hon'ble High Court upheld the decision of the Commissioner in denying recognition to the Trust under Section 80G of the Act. Quite clearly, the fact-situation in the instant case stands on an entirely different footing inasmuch as there is no ma .....

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