Madhya Pradesh H.C : the petitioner assails the legality and validity of two orders one dt. 24th March, 2000 (Annexure P3), and other dt. 27th Nov., 1995 (Annexure P4), passed by CIT. In order to appreciate the issue involved and urged, few facts which lie in a narrow compass need mention.

Counsel Appeared

G.M. Chafekar with P.B.S. Nair, for the Petitioner : A.P. Patankar, for the Respondents

ORDER

A.M. SAPRE, J. :

By this petition, preferred under Arts. 226 and 227 of the Constitution of India, the petitioner assails the legality and validity of two orders one dt. 24th March, 2000 (Annexure P3), and other dt. 27th Nov., 1995 (Annexure P4), passed by CIT. In order to appreciate the issue involved and urged, few facts which lie in a narrow compass need mention. Petitioner is a public charitable trust. Petitioner-trust has set up an institution called “Indian Institute of Head and Neck Oncology” which according to petitioner is rendering yeoman service to the society under the scheme of IT Act. Subject to certain conditions and on compliance of certain requirements of the Act, the income of the charitable trust is exempt from payment of income-tax under s. 12A r/w s. 11/12 ibid. The petitioner claiming the benefit under s. 12A ibid made an application on 24th March, 1994/30th March, 1994, to CIT. An application seeking condonation of delay in filing the said application was also made on 27th Nov., 1995, the CIT granted registration to the petitioner under s. 12A ibid w.e.f. 1st April, 1993. It was, however, mentioned in the order granting registration that the application was filed late by three years, four months and sixteen days and that the reasons given in the condonation of delay application are not satisfactory. In other words, in the opinion of CIT no good and sufficient ground was made out for condonation of delay and hence application for condonation of delay was rejected. On 24th Oct., 1997, the petitioner made an application under s. 154 of the IT Act seeking rectification and prayed that the certificate issued under s. 12A on 27th Nov., 1995, need to be rectified/modified as according to petitioner there was a mistake apparent from the record. According to petitioner, since no reasons were recorded as to why the registration was not granted from the date of inception i.e., 14th Nov., 1989, and hence grant of registration w.e.f. 1st April, 1993, amounts to a mistake requiring rectification as envisaged under s. 154 ibid. It was also claimed that there were sufficient reasons for delay in submitting the registration application and hence delay ought to have been condoned thereby granting registration from the date of inception of trust.

The CIT by order dt. 24th March, 2000 (Annexure P3), rejected the rectification application. This is what the learned CIT observed while rejecting the application : “I have heard the learned counsel and gone through the facts of the case. There is no dispute over the fact that the learned CIT, Bhopal, passed the impugned order ex-parte without giving the trust an opportunity of being heard about the reasons which compelled the assessee to file the application for registration under s. 12A late, and such order may not be sustainable in the eyes of law but the question is whether succeeding CIT can sit over the judgment of his predecessor and review his order under the guise of making rectification under s. 154. In my opinion, answer to the question is emphatically “no”. The succeeding officer cannot revise or review his predecessor’s order on the ground that, there was some procedural mistake in not giving full opportunity to the assessee of being heard. In my opinion, therefore, this is not a case where provisions of s. 154 are applicable as there is no mistake apparent from records.” It is this order, which is mainly assailed by the petitioner in this petition. Heard Shri G.M. Chafekar with Shri P.B.S. Nair, learned counsel for the petitioner and Shri A.P. Patankar, learned counsel for respondents. Assailing the impugned order referred supra, learned counsel for the petitioner urged that learned CIT erred in rejecting s. 154 application made by the petitioner. According to learned counsel the reasoning on which the application was rejected are totally erroneous. It was his submission merely because the order sought to be rectified was passed by some other CIT is no ground to entertain the application for rectification by other CIT. It was further submitted that CIT had the jurisdiction to entertain the rectification application on merits and that he should have decided the same holding that there exists a mistake apparent on the record. It was also urged in the alternative that in any event in view of law laid down in the case of Society of Divine Providence vs. Union of India (1998) 146 CTR (MP) 417 : (1997) 235 ITR 339 (MP) : TC S23.2430, the order passed by CIT rejecting condonation of delay application be set aside and matter be remanded to CIT for rehearing on condonation of delay application after granting an opportunity of hearing to petitioner.

In reply, learned counsel for the respondent supported the impugned orders and prayed that no interference is called for in any of the orders impugned and hence they be upheld. Having heard the learned counsel for the parties and having perused the record of the case, I am inclined to accept one of the submission of learned counsel for the petitioner which has a force. In my opinion, learned CIT was not right in his approach when he observed that he being a succeeding CIT cannot sit over the judgment of his predecessor and review his order under the guise of making rectification under s. 154 ibid. In my considered view application under s. 154 ibid was very much maintainable before the CIT and he was under legal obligation to decide it on merits one way or other with a view to find out whether any case for rectification is made out or not as required under s. 154 ibid. Merely because the earlier order sought to be rectified was passed by some other CIT would be of no significance. In order to entertain the application under s. 154, it is not necessary that it has to be made to the same CIT which had earlier passed the main order, what is necessary is that application has to be made to an authority which passed an order as in this case CIT. It was not in dispute that application for rectification was made to the CIT. Learned counsel for the petitioner then urged that even the earlier order passed by CIT dt. 27th Nov., 1995, rejecting condonation of delay application should be set aside as it was passed behind the back of petitioner. I do not agree to this submission, firstly it was never challenged after it was passed in 1995.Secondly, even when it was sought to be challenged, it was by way of application under s. 154 ibid before the CIT. It was only when the petitioner suffered the order of rejection of their s. 154 application, then the petitioner filed this petition and mainly questioned the correctness of order passed on rectification application. The petitioner now cannot be allowed to challenge the correctness of CIT’s order dt. 27th Nov., 1995, independently for the first time in writ after five years. In other words, the petitioner has to question the legality of order dt. 27th Nov., 1995, only in rectification proceedings for which they have already made an application and suffered its rejection. I find substance in the observation of learned CIT when he in detail observed as to what led the petitioner to wake up from slumber for making an application seeking rectification after the lapse of two years. Perusal of order dt. 24th March, 2000 indicate that learned CIT did not render any specific finding on merits as to whether any case is made out for rectification under s. 154 or in other words whether the grounds urged by the petitioner in their application under s. 154 ibid makes out any case for rectification so as to empower him to modify the earlier order, dt. 27th Nov., 1995. In the absence of any specific finding not rendered by the CIT under s. 154 of the Act, the matter has to be remitted to learned CIT for rehearing of the application and decide the same on merits keeping in view the aforesaid observation.

13. Accordingly and in view of aforesaid discussion the petition is partly allowed, impugned order dt. 24th March, 2000 (Annexure P3), is set aside and the matter is sent back to CIT, Indore with a direction to decide theapplication made by the petitioner under s. 154 of IT Act afresh on merits. No costs.

[Citation : 248 ITR 730]