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TMI Blog2021 (11) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... at due to lockdown, the assessee was prevented from filing the present appeal and the delay so happened was not deliberate. In support, the reliance was also placed on the decision of Hon'ble Supreme Court dated 27.04.2021 wherein the period of limitation in filing of appeal, irrespective of the limitation prescribed under the general law or special laws whether condonable or not shall stand extended with effect from 14th March, 2021 till further orders. It was accordingly submitted that the delay so happened in filing the present appeal was beyond the control of the assessee and the same may be condoned and appeal of the assessee be heard on merits. 3. Per contra, ld. Pr.CIT/DR did not raise any specific objection and fairly accepted that the explanation so furnished by the ld. AR regarding delay in filing the present appeal on account of COVID-19 pandemic may be considered by the Bench as it deems fit and appropriate. 4. After hearing both the parties and considering the material on record, we find that there was a reasonable cause for delay in filing the present appeal due to COVID-19 pandemic and lockdown imposed in the state of Rajasthan which was beyond the control of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts objects as set forth in this memorandum. No portion of the profits, other income or property aforesaid shall be paid or transferred, directly or indirectly, by way of dividend, bonus or otherwise by way of profit, to person who, at any time are, or have been members of the Company or to any one or more of them or to any person claiming through any one or more of them. No remuneration or other benefit in money or monies worth shall be given by the Company to any of its members, whether officers or members of the Company or not, except payment of out of pocket expenses, reasonable and proper interest on money lent, or reasonable and proper rent on premises let to the Company. No alteration shall be made to this Memorandum of Association or to the Articles of Association of the Company which are for the time being in force, unless an ordinary or special resolution of the Members or a Central Government approval as may be applicable as per prevailing laws has been obtained and alteration has been previously submitted to and approved by the Registrar of Companies, Jaipur, Rajasthan. If upon a winding up or dissolution of the company, there remains, after the satisfaction of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried out or not and allowability of benefit u/s 11 and 12 can be examined by the Assessing Officer at the time of regular assessment for the relevant previous years. In view of the above, it was submitted that the order of CIT(E) denying approval u/s 12AA deserves to be quashed and he may be directed to grant approval to the appellant company. 11. Per contra, the ld. Pr. CIT/DR in his submission taken us through the application filed by the appellant company in Form No. 10A wherein the object of the appellant company has been specified as advancement of other objects of General Public Utility. It was further submitted that on perusal of its memorandum of association, it is seen that the objects no. 1, 2, 4 & 5 are having elements of commercial/business nature and the appellant company failed to furnish valid explanation on why these activities should not be considered as commercial in light of section 2(15) of the Act. Given that it was a limitation matter and inspite of giving sufficient opportunities, the appellant company failed to produce details and furnish explanation, therefore, the ld CIT(E) rejected the application based on material available on record. 12. It was furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on commercial basis and therefore, it cannot be said that these objects are having an element of commercial/business nature." We therefore find that the assessee company did submit its response to the show-cause notice and it is therefore not a case where the assessee company has failed to respond to the queries raised by the ld CIT(E). We however find that the ld CIT(E) has failed to take into consideration the explanation so offered by the assessee company. 14. Having said that, we may refer to the objects, including the objects highlighted by the ld CIT(E) in the show-cause notice, for which the assessee company has been established and incorporated as Section 8 company under the Companies Act, 2013 and the same reads as under: "3) (a) The main objects for which the Company is established are: 1. To promote, establish, set up, maintain, operate, advance, improve, enhance, devise, evaluate, execute, protect and develop Training and Research Centres to facilitate 'skill development' to the entire chain of work force engaged at various level in the Garment and Textile Industry. The key objective is to define the skill requirements of the industry and to create a deployable tal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on commercial basis. 16. Further, we find that the assessee company by virtue of being incorporated u/s 8 of the Companies Act, 2013 has committed to the approving authorities under the parent legislation that its activities are for the promotion of its aforesaid objects and it shall intend to apply its profits or income in promoting its objects and intends to prohibit the payment of any dividends to its members and has gone ahead and provided specific clauses in its memorandum of association to this effect. We find that the said commitment and undertaking on part of the assessee company as part of its charter provides an additional level of comfort in terms of determining the real intent and objectives behind setting up of the assessee company and whether the same is for the purposes of earning profits or for the purposes of carrying out activities in pursuance of its objectives of enhancing the skill set of manpower in the field of garment and textile sector by setting up training and research centres, identifying and naturing the budding entrepreneurs in the field of garment and textile sector and providing them initial handholding in form of business incubation centres, sett ..... X X X X Extracts X X X X X X X X Extracts X X X X
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