2016 (10) TMI 171 - HC - Income Tax

Application for grant of exemption made under Section 10 (23C) rejected - time limit of filling application - Held that - It is the unrebutted case of the petitioner that the quoted columns were the same even prior to the said amendment made in the year 2009. At that time, applications for seeking exemption could be made only prior to 31st March of the relevant Financial Year, for which the exemption was being sought. The information supplied by the applicant against these columns at that time was considered adequate by the Department. Even otherwise, if an application under the 14th proviso, as it stands today, is filed prior to 1st April of the relevant Assessment Year, for which exemption is sought for and after the filing thereof, any further information is still needed by the respondent Authorities, before taking a final decision thereupon, that information can be sought for from the applicant. As observed earlier, this was done in the case in hand, in which all the accounts for the year ending 31.03.2014, when asked for, were duly provided by the petitioner much before the passing of the order impugned before us. Note 1(a) to Form No. 56-D provides that an application can be filed before the specified date and Note 3 clearly provides that after filing of the application, an applicant shall furnish any other documents or information as required by the Chief Commissioner or any other Authority authorised by the Chief Commissioner, as the case may be. These Notes clearly indicate that the application can be filed even prior to 1st April of the relevant Assessment Year, from which the exemption is sought. In view of the above, the impugned order dated 03.03.2015 passed by the Chief Commissioner is set aside with a direction to the Chief Commissioner to consider the application filed by the petitioner for grant of exemption under Section 10 (23C) of the Act, on merits.

Summary

Issues Involved:
1. Validity of the application for exemption under Section 10(23C)(vi) of the Income Tax Act, 1961.
2. Interpretation of the 14th proviso to Section 10(23C) regarding the timing of the application.
3. Adequacy of information provided in Form No. 56-D.

Detailed Analysis:

1. Validity of the Application for Exemption under Section 10(23C)(vi):
The petitioner sought the quashing of the order dated 03.03.2015 by the Chief Commissioner of Income Tax, Amritsar, which rejected the application for exemption under Section 10(23C)(vi) of the Income Tax Act, 1961. The petitioner, a Trust registered on 16.08.2007, applied for exemption as its receipts exceeded ? 1 crore in the Financial Year 2013-14. The application was filed on 25.03.2014 along with Form No. 56-D, as prescribed under Rule 2CA of the Income Tax Rules, 1962.

2. Interpretation of the 14th Proviso to Section 10(23C) Regarding the Timing of the Application:
The Chief Commissioner rejected the application on the ground that it was prematurely filed on 24.03.2014 and should have been filed between 1st April and 30th September of the relevant Assessment Year. The court, however, interpreted the 14th proviso to Section 10(23C) differently. It stated that the proviso allows an application to be made on or before 30th September of the relevant Assessment Year, without specifying that it must be filed after 1st April. The court emphasized that the plain and simple meaning of the proviso is unambiguous and does not necessitate any external aid for interpretation. The court found no reason to add a condition that the application must be made after 1st April, as suggested by the respondent.

3. Adequacy of Information Provided in Form No. 56-D:
The Chief Commissioner also relied on Clauses 11 to 19 of Form No. 56-D, arguing that the information required under these clauses would only be available after the end of the Financial Year. The court noted that these columns were the same even before the 2009 amendment, when applications had to be filed before 31st March of the Financial Year. The court observed that if additional information was needed after the filing of the application, the authorities could request it before making a final decision. In this case, the petitioner had provided all required accounts and audit reports for the year ending 31.03.2014 when asked.

The court also referred to Notes 1(a) and 3 of Form No. 56-D, which indicate that an application can be filed before the specified date and that further documents or information can be requested by the authorities after the application is filed.

Conclusion:
The court set aside the impugned order dated 03.03.2015 and directed the Chief Commissioner to consider the petitioner's application for exemption under Section 10(23C) on its merits.