9911796707
TMI Blog2021 (11) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 the alteration has been previously submitted to and approved by the Registrar. If upon a winding up or dissolution of the company, there remains, after the satisfaction of all the debts and liabilities, any property whatsoever, the same shall not be distributed amongst the members of the company but shall be given or transferred to such other company registered under this section and having similar objects, subject to such conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the Rehabilitation and Insolvency Fund formed under section 224 of the Act. The Company can be amalgamated only with another Company registered und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 12AA. It was submitted that activities of commercial/business nature whether actually carried 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. 9. 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 certain objects as highlighted by the PCIT 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mote the garment industry in general. It is clearly mentioned in the memorandum of association that no objects of the company shall be carried out 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. 12. 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 establish a high-class incubation facility, including but not limited to: (a) suitable physical infrastructure and operating facilities, and (b) affiliations with sectoral experts. 2. To enable support ecosystem for incubated start ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 establishing incubation facility and supporting eco system to foster entrepreneurial culture among the students, alumini, faculty members and public at large. 15. Further, we find that under section 12AA(a)(ii) of the Act, the ld CIT(E) has to examine compliance of requirements of other law as are material for the purposes of achieving its objects and in the instant case, approval by the sanctioning authority and grant of registration under section 8 of the companies act is one such material requirement for achievement of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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