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TMI Blog2024 (1) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... R. 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 the assessee has filed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Section 80G, which are as under: Sl. No. Circular No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 the above, you are also requested to state the date of commencement of activities along with corroborative evidences. In absence of same, you are hereby further requested to explain as to why the date of Incorporation/Creation/Registration should not be treated as the date of commencement of activities for the purposes of determining 'due date' prescribed under section 80G(5)(iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed 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 criteria of "within six months of commencement of its activities, whichever is earlier." is not only difficult but impossible to achieve, especially in old trust. In this connection, various bodies, made representation before the Government and CBDT, however, no guidelines have come yet. Before cancelling the provisional approval, no show cause notice was given to the assessee. The ld Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise 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, in earlier Circular 8/2022, which was issued on 31.03.2022 the CBDT has given instruction about approval 80G(5) of the Act, which is reproduced below: "1. On consideration of difficulties in electronic filing of form No.10AB as stipulated in Rule 2C or 11AA or 17A of the Income-Tax Rules, 1962 w.e.f. 01.04.2021, the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119(1) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave 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 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" 10.2 The sub-clause says that the Institution which have provisional registration have to apply at-least six months prior to expiry of the provisional registration or within Six months of commencement of activities, whichever is earlier. 10.3 In continuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 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 the property at the agreed price and honestly carries out such contractual obligation. It would indeed be strange if obedience to the law should attract the levy of tax on income which has neither arisen to the assessee nor has been received by him. If we may take another illustration, let us consider a case where A sells his property to B with a stipulation that after sometime, which may be a couple of years or more, he shall resell the property to A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 documents before the ld.CIT(E). 14. Accordingly, the appeal of the assessee is allowed for statistical purpose. Since we have set aside to Ld.CIT(E), we do not intend to adjudicate each ground separately." 18. We note that the Co-ordinate Bench of ITAT Jodhpur in the case of Bhamashah Sundarlal Daga Charitable Trust (supra) dealt with only the issue/terminology of "whichever is earlier" which is applicable to new trust which have created recently, and it doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading 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 the complaint filed by the income tax authorities against Sikri which indicated that they also viewed Sikri to be responsible for the mis-representation, fake certificates of registration, etc. Moreover, the Tribunal has taken note of the fact that the Metropolitan Magistrate, acting on the police complaint, remanded Sikri to custody and also referred to the fact that in the bail application, Sikri had again owned up responsibility for the fake certificates of registration. Taking a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 Tribunal." 20. We are satisfied that the Tribunal has, in making its decision, kept in mind the aforesaid principles adumbrated by the Supreme Court. Its order cannot, therefore, be branded as perverse or unreasonable or irrational. 21. That takes us to the question as to whether in condoning the delay the Tribunal committed any error of law or illegality. There is a wealth of judicial literature on the subject of condonation of delay and most of the cases have arisen u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 refusal, an exception, more so when no negligence or inaction or want of bona fides can be imputed to the defaulting party. In the present case, the Tribunal has found that the assessee-society has taken prompt remedial action and put Sikri on the dock and he also admitted his fault, though he tried to shift the blame to his employee whose whereabouts were never known. Even in his bail application he had confessed to his role in the alleged irregularities and illegalities. There has been no want of bona fides on the part of the assessee, nor did it fail to take immediate action once it was apprised of the irregularities in its affairs by M. P. Mansinghka Trust of Mumbai. In these circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 evidence to support that finding even though the court itself might have come to a different conclusion upon the evidence." 26. The aforesaid principles govern the order of the Tribunal and the approach to be adopted by us in the present case. At best, what can be argued by the Revenue is only that another view was possible to be taken by the Tribunal and this Court should prefer the alternative view on the same facts and evidence and discard the Tribunal's view. Obviously the argument cannot be upheld, having regard to the above judgments. 27. For the above reasons we answer the substantial questions of law framed in ITA Nos. 754, 773 and 775 of 2010 in the negat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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