High Court Of Gauhati
CIT vs. Shrimanta Sankar Academy
Section 10(22), 10(23), 12A
Asst. Year 2002-03
Ranjan Gogoi & B.P. Katakey, JJ.
IT Appeal No. 3 of 2008
25th February, 2010
Counsel appeared :
U. Bhuyan, for the Appellant : A. K. Goswami, B. Chakraborty, T. R. Sarma, L. Gogoi & Ms. P. Hazarika, for the Respondent
JUDGMENT
B.P. Katakey, J. :
This appeal by the Revenue under s. 260A of the IT Act, 1961 (in short “the Act”), is directed against the order dt. 22nd March, 2007 passed by the learned Tribunal in IT Appeal No. 68/Gau/2006 allowing the appeal filed by the assessee, relating to the exemption under s. 10 (22)/10(23C) of the Act w.e.f. 1st April, 2001, in respect of the asst. yr. 2002-03.
2. The facts relevant for the purpose of disposal of this appeal may be noticed as under : (i) The respondent assessee which is a society registered on 19th June, 1992, under the provisions of the Societies Registration Act, is running educational institutions, namely, schools and colleges at Guwahati and was treated as a society existing solely for educational purposes and hence was granted exemption under s. 10(22) of the Act, since its inception up to the asst. yr. 1998-99, i.e., till the said provision was omitted from the statute. The respondent assessee, thereafter, claimed and was allowed exemption under s. 10(23C)(iiiad) of the Act up to the asst. yr. 2001-02, since the amount of annual receipts of the said society did not exceed Rs. 1 crore. The respondent assessee, thereafter, filed an application dt. 23rd March, 2004 on 30th March, 2004, under s. 12A of the Act before the Commissioner of Income-tax (in short “CIT”), for grant of registration of the society for the asst. yrs. 2002-03 and 2003-04. The respondent assessee also filed a separate application under s. 10(23C)(vi) of the Act before the Chief Commissioner of Income-tax (in short Chief CIT), for according approval as an educational institution, for the purpose of getting the exemption under the provisions of the Act. The said applications were filed since the amount of annual receipts of the society exceeded Rs. 1 crore. (ii) The CIT on receipt of the application filed on 30th March, 2004, by the respondent authority under s. 12A of the Act, issued a notice dt. 5th April, 2004, to the respondent assessee’ asking it to explain the delay in submission of the application. The respondent assessee on receipt of such notice, submitted a detailed reply explaining the delay in making such application under s. 12A of the Act, basically contending that the assessee was duly granted exemption under s. 10(22) of the Act up to the asst. yr. 1998-99 and thereafter under s. 10(23C)(iiiad) of the Act up to the asst. yr. 2001-02, on the basis of the claim made by it, that, thereafter, since the annual receipts of the assessee for the asst. yrs. 2002-03 and 2003-04 exceeded Rs. 1 crore, an application under s. 10 (23C)(vi) of the Act was filed before the Chief CIT for grant of approval for the purpose of getting the exemption for the asst. yrs. 2002-03 and 2003-04 and though the assessee waited for some time for disposal of such application, since the same has not been disposed of, it had to file the application under s. 12A of the Act on 30th March, 2004, which resulted in the delay. (iii) The CIT, however, without considering the claim of the respondent assessee for registration under s. 12A of the Act for the asst. yr. 2002-03, vide order dt. 1st Oct., 2004, registered the assessee under s. 12AA of the Act w.e.f. 1st April, 2003, i.e., in respect of the asst. yr. 2003-04, though the assessee pursuant to the notice dt. 5th April, 2004, issued by the CIT directing to explain the delay caused in filing the application, had explained the delay. iv) The respondent assessee, thereafter, on 10th Jan., 2006 filed another application for grant of registration for the asst. yr. 2002-03 enclosing therewith all the relevant informations as was submitted along with the earlier application filed on 30th March, 2004. The said application, however, has been rejected by the CIT vide order dt. 8th May, 2006, on the ground that there was no satisfactory reason why such application under s. 12A of the Act could not be filed by 31st March, 2002, as required under the law and also on the ground that there cannot be two orders under s. 12AA of the Act and the CIT cannot revise his own earlier order, the same having not suffered from any apparent mistake. (v) The respondent assessee being aggrieved filed an appeal before the Tribunal, which has been registered and numbered as ITA No. 68/Gau)/2006. In the said appeal, there were differences of opinion between the learned JM and the learned AM. While the learned JM has allowed the appeal by directing the CIT to grant registration to the respondent assessee under s. 12A of the Act for the asst. yr. 2002-03, the learned AM has remanded the matter to the CIT with a direction to reconsider the request of the respondent assessee for grant of registration w.e.f. 1st April, 2001, and pass necessary order after giving proper opportunity of hearing to the respondent assessee as per law. The appeal was thus referred to the learned Third Member, who vide order dt. 9th Feb., 2007, agreed with the final order proposed by the learned JM and allowed the appeal filed by the respondent assessee. Consequential order dt. 22nd March, 2007, was passed by the learned Tribunal allowing the appeal by adopting the majority view. Hence the present appeal.
3. While admitting the appeal for hearing on 4th Feb., 2008, the following substantial questions of law were framed :
“1. Whether on the facts and in the circumstances of the case, the Tribunal was justified and correct in law in allowing registration under s. 12AA of the IT Act, 1961 with retrospective effect where the delay in the submission of application for registration was not condoned by the concerned CIT ?
2. Whether on the facts and in the circumstances of the case, the CIT was competent to entertain a second petition under s. 12A of the IT Act,1961 when the first order under s. 12AA did not suffer from any apparent mistake and when the said CIT was not in a position to revise his own earlier order ?
Whether on the facts and in the circumstances of the case, the Tribunal is justified and correct in law in holding that the respondent is entitled for registration under s. 12A of the IT Act, 1961 w.e.f. 1st April, 2001 ?”
We have heard Mr. U. Bhuyan, the learned counsel appearing for the Revenue and Mr. A.K. Goswami, the learned senior counsel appearing on behalf of the respondent assessee.
It has been contended by the learned counsel appearing for the Revenue that since under s. 12A of the Act the period of limitation has been prescribed for filing an application seeking registration, the learned Tribunal ought not to have allowed the appeal preferred by the respondent assessee, as it has failed to satisfactorily explain the delay in filing the application under s. 12A of the Act for grant of registration in respect of the asst. yr. 2002-03. According to the learned counsel, the application filed on 30th March, 2004, being in respect of the asst. yr. 2003-04, the learned Tribunal ought not to have held that such application was also in respect of the asst. yr. 2002-03 and hence ought not to have passed the order impugned in the present appeal.
Mr. Goswami, the learned senior counsel on the other hand, has submitted that it is apparent from the application filed on 30th March, 2004, that the respondent assessee by the said application had prayed for grant of registration for two assessment years, namely, 2002-03 and 2003-04 and the CIT also took cognizance of such fact, by issuing notice dt. 5th April, 2004 directing the respondent assessee to explain the delay in filing the application, even though the application for registration under s. 12A of the Act in respect of the financial year 2003-04 was within the time allowed under s. 12A of the Act. Mr. Goswami, therefore, submits that the CIT ought to have allowed the prayer for grant of registration in respect of both the assessment years, he having found that the respondent assessee is an existing society solely for educational purposes and not for the purpose of profit. The learned senior counsel further submits that the second application filed on 10th Jan., 2006, under s. 12A of the Act was nothing but the reiteration of the earlier application filed on 30th March, 2004, and the CIT, therefore, ought not to have rejected such application on the ground that there cannot be two orders under s. 12AA of the Act, when there is no bar in the Act for passing two separate orders for two assessment years. It has further been submitted that the CIT should have adopted a pragmatic and liberal approach in condoning the delay in filing the application under s. 12A of the Act seeking the registration, when the respondent assessee could demonstrate sufficient cause in not filing such application in time. Mr. Goswami, therefore, submits that the learned Tribunal has rightly allowed the appeal preferred by the respondent assessee and there being no substantial questions of law involved in the present appeal, the same is liable to be dismissed.
We have considered the submissions of the learned counsel for the parties and also perused the materials available on record.
The facts narrated above are not in dispute. It is apparent from the application filed on 30th March, 2004 that the respondent assessee had prayed for registration under s. 12A of the Act in respect of two assessment years, namely, 2002-03 and 2003-04. In respect of the asst. yr. 200304, the said application having been filed on 30th March, 2004, was within the time allowed by s. 12A. The prayer made in the said application for grant of registration under s. 12A in respect of the asst. yr. 2002-03, however, was barred by time, the same having not been filed by 30th March, 2003. The CIT took cognizance of the said fact and hence issued the notice dt. 5th April, 2004, directing the respondent assessee to explain the delay in filing such application. The respondent assessee has, thereafter, explained the delay, as noticed above, in filing such belated application. It is evident from the reply filed by the respondent assessee, pursuant to the notice dt. 5th April, 2004, issued by the CIT, that such application in respect of the asst. yr. 2002-03 could not be filed in time, as the respondent assessee was not in a position to foresee the fate of its earlier application filed under r. 2CA in Form No. 56D for grant of approval under s. 10(23C)(vi) of the Act for the asst. yrs. 2002-03 and 2003-04, which application was pending at that point of time. The respondent assessee has also stated in such reply that it was exempted from payment of income-tax under s. 10(22) up to the asst. yr. 1998-99 and thereafter up to 2001-02 under s. 10(23C) (iiiad) of the Act. The respondent assessee, in fact, from the asst. yr. 2003-04 has been granted the registration and consequent exemption.
The application filed by the respondent assessee on 30th March, 2004, along with the reply filed by it explaining the delay being for grant of registration under s. 12A of the Act in respect of the asst. yr. 2002-03 also, the CIT should have satisfied himself about the grounds given explaining the delay in filing such application and if so satisfied ought to have allowed the prayer for registration under s. 12A, since it is not the case of the Revenue that the respondent assessee is not an existing society for educational purposes only but for the purpose of profit also. The learned CIT, however, failed to so act and no order in respect of the asst. yr. 2002-03 was passed. The said lacuna in the order dt. 1st Oct., 2004 of the CIT was corrected by the learned Tribunal on finding the explanations furnished by the assessee for the delay in filing the application dt. 30th March, 2004, for registration in respect of the asst. yr. 2002-03 to be good and cogent.
The ground on which the subsequent prayer made by the respondent assessee vide application dt. 10th Jan., 2006, for registration under s. 12A of the Act in respect of the asst. yr. 2002-03 has been rejected, is also not tenable in law, since the said application was nothing but the reiteration of the averments as well as the prayer made in the earlier application filed on 30th March, 2004, on which no order has been passed by the CIT in respect of the asst. yr. 2002-03, while granting the registration for the asst. yr. 2003-04. The learned Tribunal, therefore, has rightly passed the impugned order, as the remand of the matter would lead to multiplicity of the proceeding, since the respondent assessee was found to have satisfactorily explained the delay in filing the application on 30th March, 2004 seeking registration under s. 12A of the Act in respect of the asst. yr. 2002-03. Moreover the authority is required to adopt a pragmatic and liberal approach while dealing with an application seeking condonation of delay in making the prayer for registration under s. 12A of the Act.
In view of the aforesaid discussion, we are of the view that no substantial question of law is involved in the present appeal and hence the same is dismissed, however, without any order as to cost.
[Citation : 325 ITR 261]
