TMI Blog2024 (1) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... RDER PER DR. A.L. SAINI, ACCOUNTANT MEMBER: Captioned two appeals filed by different assessees are directed against the separate orders passed by the Ld. Commissioner of Income Tax (Exemption) Ahmedabad [for short CIT(E)] both dated 24.08.2023, wherein ld CIT(E) has rejected application of assessee filed in Form No.10AB, u/s 80G(5)(iii) of the Income Tax Act, 1961 stating that assessee has not filed application within the time limit prescribed under the Act. 2. Since the issue involved in both the appeals are common and identical therefore, both these appeals, have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The ground as well as facts narrated in ITA No.728/SRT/2023 have been taken into consideration for deciding the above appeals en masse. 3. The grounds of appeal raised by the assessee-trust in lead case in ITA No.728/SRT/2023, are as follows: 1. On the facts and in circumstances of the case as well as law, the ld. CIT(Exemption) has erred in rejecting assessee s application u/s 80G(5) filed on 24.02.2023 on the ground that assessee didn t file the application before 30.09.2022 when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating the issue of similar provisions of due date u/s 10(23C) of the Act, has held as follows: 7. The adjudicating authorities under the Income-tax Act are quasi judicial authorities. They can grant approval with retrospective effect if such mechanism is provided in the Act. There is no such provision nor there is any power to condone the delay after considering the reasonable reasons. A reasonable cause can be taken into cognizance for condoning the delay, if such provision is provided in the Act while considering any issue for adjudication. Therefore, considering the above proposition, we are of the view that ld. CIT(Exemption) has rightly rejected the application of the assessee for grant of approval under section 10(23C)(vi) of the Income-tax Act. All these three appeals are rejected. Therefore, the ld CIT(E) was of the view that the same ratio apply for applications made under clause (iii) of first proviso to sub-section (5) of Section 80G of Income Tax Act, 1961 also. 5. The ld CIT(E) also stated that CBDT on multiple occasions had extended the time limit in filing the application in Form 10AB under clause (iii) of first proviso to sub-section (5) of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee has not furnished date of commencement in spite of specific query raised by ld CIT(E), vide notice dated 12/07/2023. The date of registration/incorporation in assessees s case is 29/11/2001 as per Form No.10AB. Accordingly, a show cause notice dated 31/07/2023 was issued to the assessee, as under: Please refer to your application field in Form 10AB for approval u/s 80G(5)(iii) of the Act. For further seeking required details for granting approval u/s 80G, letters/notices were issued on 12/07/2023. However, in response to the above, you have not submitted the requisite details. In view of above, you are once again granted one more opportunity to comply with the above referred notice/letter dated 12.07.2023 and submit the details/documents sought for, as detailed therein on or before 07/08/2023. 2. Further, your kind attention is invited to the provision of section 80G(5)(iii) of the Act which stipulates as under: where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier. 3. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, within six months of commencement of its activities as stated in above clause (iii) of 3rd proviso of section 80G(5) of the Act. Besides, as per circular No.8/2022 of CBDT dated 31.03.2022, the extended time is up to 30.09.2022, however, the assessee filed Form No.10AB, u/s 80G(5) (iii) on 24.02.2023, therefore, application filed by the assessee before the ld CIT(E) is delayed by 147 days (approx.), and hence ld CIT(E ) rejected application of assessee in Form No.10AB, u/s 80G(5) (iii) of the Act, as not maintainable and cancelled the provisional approval granted in Form No.10AC, under clause (iv) of first proviso to sub-section (5) of section 80 G of the Act. 10. The ld Counsel further stated that ld CIT(E) rejected the assessee`s Form No.10AB, u/s 80G(5 ) of the Act, in a mechanical way just by applying the time limit prescribed in clause (iii) of 3rd proviso of section 80G(5) of the Act, which is not acceptable. The reason being the said clause (iii) of 3rd proviso of section 80G(5) of the Act, contains drafting error of the law makers. Because the assessee is an old trust, which was registered on 29.11.2001 and commenced its activities from 2001, therefore the cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s extended period declared by the Central Board of Direct Taxes (CBDT) is, on or before 30.09.2022, which has also expired, in the assessee`s case under consideration. However, after this Circular No.8/2022, the CBDT has issued another Circular No.6/2023 dated 24.05.2023 wherein in para-5, the CBDT has instructed as follows: 5. In order to mitigate genuine hardship in such cases, the Board, in the exercise of the power under section 119 of the Act, extends the due date of making an application in,- (i) Form No.10A, in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of subsection (1) of section 12A or under clause (i) of the first proviso to subsection (5) of section 80G of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date; (ii) Form No.10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 122A of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date. 15. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence ld CIT(E) rejected application of assessee in Form No.10AB, u/s 80G(5) (iii) of the Act, as not maintainable and also cancelled the provisional approval granted in Form No.10AC, under clause (iv) of first proviso to sub-section (5) of section 80 G of the Act. 17. Therefore, in this ambiguity situation in circular No.8/2022 of CBDT dated 31.03.2022 and latest Circular No.6/2023 dated 24.05.2023, of the CBDT, we do not have any option but to condone the delay in filing application in Form No.10AB, u/s 80G(5) of the Act. We note that Coordinate Bench of Jodhpur in the case of Bhamashah Sundarlal Daga Charitable Trust vs. CIT(Exemption) in ITA No. 278/JODH/2023 dated 10.11.2023 dealt with the issue of clause-(iii) 3rd proviso u/s 80G(5) of the Act stating that whichever is earlier is applicable only to the newly constructed trust. The findings of the Co-ordinate Bench in the case of Bhamashah Sundarlal Daga Charitable Trust (supra) is reproduced below: 10.1 In this background, we need to read the sub-clause (iii) of the Proviso to Section 80G(5) of the Act. For ready reference it is again reproduced here under : (iii) where the institution or fund has been provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 per cent of such agreed price. This is not at all an uncommon case in an economy of rising prices and in fact we would find in a large number of cases where the sale is completed more than a year or two after the date of the agreement that the market price prevailing on the date of the sale is very much more than the price at which the property is sold under the agreement. Can it be contended with any degree of fairness and justice that in such cases, where there is clearly no understatement of consideration in respect of the transfer and the transaction is perfectly honest and bona fide and, in fact, in fulfilment of a contractual obligation, the assessee who has sold the property should be liable to pay tax on capital gains which have not accrued or arisen to him. It would indeed be most harsh and inequitable to tax the assessee on income which has neither arisen to him nor is received by him, merely because he has carried out the contractual obligation undertaken by him. It is difficult to conceive of any rational reason why the Legislature should have thought it fit to impose liability to tax on an assessee who is bound by law to carry out his contractual obligation to sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Minister and the Memorandum of Finance Bill 2020. 11.3 Therefore, in these facts and circumstances of the case, we hold that the Assessee Trust had applied for registration within the time allowed under the Act. Hence, the application of the assessee is valid and maintainable. 12. Even otherwise, the Provisional Approval is upto A.Y. 2025-26, and it can be cancelled by the ld.CIT(E) only on the specific violations by the assessee. However, in this case the ld.CIT(E) has not mentioned about any violation by the Assessee. Therefore, even on this ground the rejection is not sustainable. 13. However, the ld.CIT(E) has not discussed whether the Assessee fulfils all other conditions mentioned in the section as he rejected it on technical ground. Therefore, in these facts and circumstances we hold that the Assessee had made the application in form 10AB within the prescribed time limit and hence it is valid application. Therefore, we direct the ld.CIT(E) to treat the application as filed within statutory time and verify assessee s eligibility as per the Act. The ld.CIT(E) shall grant opportunity to the assessee. Assessee shall be at liberty to file all the necessary doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for registration under section 12A and 80G of the Act. It is not necessary, nor is it proper, for us to decide the culpability or otherwise of A.K. Sikri who was the Treasurer of the assessee-society. All that we need to examine is whether the Tribunal had valid materials before it on the basis of which it could have reasonably come to the conclusion that the assessee-society was prevented by sufficient cause in applying for the registration in time. It is manifest from a fair reading of the order of the Tribunal that it had weighed the circumstances in which the assessee-society was placed and the action it took immediately on receipt of the complaint from M.P. Mansinghka Trust of Mumbai; it has referred to the confession of Sikri in the meeting of the governing body owning up responsibility for having misled the assessee-society by representing that the necessary application for registration were made in time; it has also referred to the action taken by the assessee-society against Sikri when it found that Sikri was not taking adequate steps to remedy the situation; it has also referred to the police complaints filed not only by the assessee-society against Sikri, but also to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns: it cannot found its judgment on conjectures, surmises or speculation. Between the claims of the public revenue and of the taxpayers, the Tribunal must maintain a judicial balance. In Udhavdas Kewalram v. CIT [1967] 66 ITR 462 (SC) the very same Bench of three judges of the Supreme Court again observed as under: - The Income-tax Appellate Tribunal performs a judicial function under the Indian Income-tax Act: it is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its finding on all the contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law ......................................The Tribunal was undoubtedly competent to disagree with the view of the Appellate Assistant Commissioner. But in proceeding to do so, the Tribunal had to act judicially, i.e., to consider all the evidence in favour of and against the assessee. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence cannot be regarded as conclusively determining the questions of fact raised before the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 23. In N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123 the Supreme Court again reiterated the approach. In Ram Nath Sao v. Gobardhan Sao [2002] 3 SCC 195 it was observed by the Supreme Court that acceptance of the explanation furnished should be the rule and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that there was no evidence before them upon which they, as reasonable men, could come to the conclusion to which they have come: and this, even though the Court of Review would on the evidence have come to a conclusion entirely different from theirs. There is no need to further elaborate this position, because the law as laid down in these observations is well settled, and has been adopted in the construction of section 66 of the Act. 25. This view was reiterated by the Supreme Court in CIT v. Daulatram Rawatmull [1964] 53 ITR 574 where it was held that if there is some evidence to support the finding recorded by the Tribunal, even if it appears to the High Court that on re-appreciation of the evidence, it might arrive at a conclusion different from that of the Tribunal the High Court has no power to interfere with the findings of the Tribunal. These decisions were applied by a Division Bench of this Court in CIT v. Baba Avtar Singh[1972] 83 ITR 738 where it was observed as under: - The submission made by Mr. Sharma does not appear to us to be correct. It is well-settled that the court cannot set aside the Tribunal's finding of fact if there is some evi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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