9911796707
TMI Blog2003 (6) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... come for the year under consideration on or before 10th October, 1993 but since no return was filed, a notice under section 142(1) was issued on 30-3-1994 asking the assessee to file the return along with requisite details. No return came forth and a notice under section 142(1) was issued again on18th September, 1995. On5th October, 1995i.e. the date of hearing, the AR of the assessee attended and submitted that the books of account had been seized by the Police and which had been released only on29th November, 1994. The explanation therefore was that under the aforesaid circumstances, the return could not be filed and an adjournment was sought for25th October, 1995. On this date also, no return was filed and a show-cause notice was issued proposing to deny the benefit under section 11 and the case was finally adjourned to 31st October, 1995 on which date again there was no compliance since nobody attended and nor was the return filed. 5. The other relevant facts are that the Organization ultimately filed its return on1-11-1995without attaching the audited accounts and which was a statutory requirement. The AO by means of a written communication dated7th February, 1996asked the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to it" 6. In addition to the aforesaid, the AO observed that the Society had not fulfilled the conditions laid down under section 12A(a) for seeking registration as also provisions of section 12A(b) by not furnishing a copy of the audited accounts or the audit report in Form No. 10B. On the aforesaid various facts, the AO ultimately denied the benefit of section 11 to the assessee and brought to tax a sum of Rs. 55,37,890, which represented the sum of Rs. 61,53,212 shown in the Corpus Fund minues 10 per cent of this figure as expenditure. 7. Being aggrieved, the assessee moved the CIT(A) and at which stage it was submitted that a petition under section 12A(a) seeking registration had been filed in 1973 but there was no refusal of the said application on the part of the Assessing Officer. Further, according to the assessee, the ITAT in the case of the assessee had held that it had fulfilled the requirements of section 12A(a) by applying for registration and the Tribunal in turn held that exemption under section 11 could not be denied on the ground that the assessee was not registered under section 12A(a) of the Income-tax Act. 8. As regards the non-filing of the audit report u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for certain very valid reasons and the same were filed along with revised return dated12-3-1996which is after the date when the Assessing Officer passed the order. The appellant has also filed audit report as prescribed under section 12A(b) of the Income-tax Act. Of course this was not before the Assessing Officer but even as per the original return the appellant was not having any excess of income over expenditure which could have been taxed. The appellant has been held to be a charitable organization in the past even if it were to be denied exemption under section 11 for not filing audit report in time, the Assessing Officer is not justified in taxing the whole receipts and the corpus fund. The corpus fund has been coming for the earlier years and as per the provision of sections 12 and 11(1)(a) of the Income-tax Act it is a capital receipt. The appellant has not contravened the provision of section 11(5) or section 13. Even if for the sake of arguments it were accepted that it was involved directly or indirectly in the demolition of Babri Masjid, what will be taxable will be its surplus. Even as per the definition of the term 'income' the same has to be arrived at only after con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant provisions of law. According to the ld. counsel, the application had not been rejected and in so far as the position today was the order for registration had been passed by the Director of Income Tax (E) on24-2-1999i.e. after a gap of nearly 26 years. 15. In considering rival submissions, we in the ultimate analysis opine in relying upon earlier orders of the Tribunal that the benefit of section 11 cannot be denied on the ground raised by the AO. 16. During the course of the hearing of the present appeal some arguments were also advanced by the ld. DR about the non-filing of the audited accounts and the audit report by the respondent but in our opinion this issue cannot be raised by the revenue since the initial ground raised before the Tribunal questions the action of the CIT(A) in allowing the benefit of section 11 although no order under section 12A(a) had been passed by the Director of Income Tax (E). Moreover, the registration now has been granted and the order relates back to the date of the application. 17. Coming to the additional ground, which has been admitted by us by means of an interim order, the stand of the Revenue is that the assessee had been treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) had done so and the orders of the CIT(A) had become final, their being no second appeals to the Tribunal by the Revenue. For assessment years 1998-99 to 2002-03, the assessments were stated to be pending. These factual aspects were not rebutted by the ld. DR and we, therefore, have no hesitation in observing that in the preceding and succeeding assessment years, the claim for exemption under section 11 stands allowed to the assessee and the only hurdle which seems to be coming in its way for the assessment year 1993-94 is the notification issued by the Government declaring it to be an unlawful organization and the subsequent order passed by the Unlawful Activities (Prevention) Tribunal upholding the notification. 20. We have examined the submissions of the parties with reference to the additional ground raised before the Tribunal and would at the outset observe that the question of involvement of the leaders of the VHP in the demolition of the structure is sub-judice before the various courts and the Liberhan Commission has not come to any conclusive finding in spite of examining the matter all these years. Then again the Unlawful Activities (Prevention) Tribunal in the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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