Income Tax Appellate Tribunal - Pune
Nandkishor Education Society,, Nashik vs Ito, Nashik on 21 March, 2017
आयकर अपील
य अ धकरण पण
ु े यायपीठ "ए" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
सु ी सष
ु मा चावला, या यक सद य एवं ी अ नल चतव
ु द
!
, लेखा सद य के सम$
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM
आयकर अपील सं. / ITA No. 942/PUN/2010
नधा&रण वष& / Assessment Year : 2009-10
Nandkishor Education Society,
Arpan Blood Bank,
102/103, Dr. Athawale Chambers,
1st Floor, Opp. Gavkari Press,
Nashik - 422 001 .... अपीलाथ /Appellant
PAN: AAABN0104A
Vs.
Commissioner of Income Tax Officer-1,
Nashik .... यथ / Respondent
अपीलाथ क
ओर से / Appellant by : Shri S.N. Doshi
यथ क
ओर से / Respondent by : Shri Rajeev Kumar
सन
ु वाई क
तार ख / घोषणा क
तार ख /
Date of Hearing : 06.02.2017 Date of Pronouncement: 21.03.2017
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
This appeal filed by the assessee is against the order of CIT-I, Nashik dated 13.08.2009 against order passed under section 12AA(3) of the Income-tax Act, 1961 (in short 'the Act').
2. The assessee has raised the following grounds of appeal:-
1. The Learned Commissioner of Income Tax-1, Nashik has erred in cancelling the registration of the assessee as a charitable trust under section 12A of the Income Tax Act, 1961.2 ITA No.942/PUN/2010
Nandkishor Education Society
2. The Learned Commissioner of Income Tax-1, Nashik has observed that the society is carrying on other objects of public utility & is rendering services in the nature of trade, commerce or business & therefore cancelled registration under section 12AA and other provisions of the Act.
3. Without properly appreciating facts and circumstances of the case and provisions of law, the learned Commissioner of Income Tax-1, Nashik has erred in passing order under section 12AA(3) of the Income Tax Act, 1961 cancelling registration of the assessee as a charitable and religious trust.
4. The Learned Commissioner of Income Tax-1, Nashik has made the order dated 13.08.2009 in violation of principles of law and therefore the order needs to be cancelled & registration of the trust under section 11, 12 & 80G be allowed.
5. The appellant craves leave to add, amend or alter any of the grounds of appeal."
3. The assessee trust was engaged in running Blood Bank and the Commissioner issued show cause notice to assessee as it was carrying on activities of Blood Bank on commercial basis. In view of amendment to Section 2(15) of the Act, Commissioner cancelled the registration granted to assessee under section 12A of the Act. The assessee is in appeal against the said order of Commissioner. The present appeal is filed after delay of 253 days. The assessee filed affidavit dated 9th July, 2012 explaining the reason for the delay which reads as under;
"I, Nandkishor Kantilal Tathed, aged about 45 years, Son of Shri Kantilal Tathed residing at Bazar Peth, At Post Lasalgaon, Tal: Niphad, Dist. Nashik, do hereby solemnly affirm on oath that -
1. I am the Trustee in Nandkishor Education Society, the Trust, having office at Arpan Blood Bank, 102/103, Ld. D.R. Athawale Chambers, 1st Floor, Opposite Gavkari Press, Nashik-422001. The said Trust is assessed to Income tax under the jurisdiction of the Income Tax Officer, Ward 1(1), Nashik and that Permanent Account No. of the Trust is AAABN0104A.
2. The assessee Trust had filed an appeal for the assessment year 2009-10 before the Honorable ITAT Pune (Appeal No.942/PUN/2010) on June 25, 2010. The appeal was filed against the Hon. CIT's order under section 12AA(3) dated August 13, 2009. The due date for filing 3 ITA No.942/PUN/2010 Nandkishor Education Society appeal was October 12th, 2009. Thus the appeal was filed belatedly by 256 days.
3. The Trust received the order passed by the Hon. Commissioner of Income Tax-I, Nashik, under section 12AA(3) dated August 13, 2009 bearing No. Nsk/CIT - I/Tech/12A/09-10/2151. The assessee Trust had made an application for registration under section 12A which was cancelled vide the aforesaid order mentioned.
4. Later on, an order dated May, 25, 2010 was received by the assessee Trust which further stated that the registration letter dated November 16, 2009 applied by the assessee could not be considered since it was already cancelled by the Assessing Officer.
5. The assessee Trust belongs to a semi-urban area which falls in the district of Dhule. Since the assessee Trust is belonging to such a rural area, it fails to be acknowledged by the litigations of law and the legal proceedings and fails to be aware of the assessment procedures to be carried out by them in respect of the order passed by the Commissioner of Income Tax-I, Nashik.
6. Later, the assessee Trust became aware of the formalities to be carried out by it in regard of the order passed after consulting the required tax consultants.
7. Consequently, relevant efforts and procedures were conducted in respect of filing an appeal in Form No. 36 before your Honour. Thus the appeal is being filed on a belated date.
We had filed a letter dated July 01, 2010 with the Hon. Asstt. Registrar, The Income Tax Appellate Tribunal, Pune on July 09, 2010 requesting for condoning the delay in filing the appeal and admit the appeal memo.
I further affirm that whatever is stated above is true to the best of my knowledge and belief.
This affidavit is made at Nashik on 9th day of July, 2012."
4. During course of hearing of the appeal, the assessee, thereafter, filed another affidavit which is notarized on 07.05.2016 and the same reads as under;
"I, Nandkishor Kantilal Tated, Aged about 47 years, Occupation: Medical Practitioner / Service, Residing at Navkardeep Bunglow, Near Supreme Kidney Centre, Sadhu Vaswani Road, Nasik 422002, hereby state on solemn affirmation as under :4 ITA No.942/PUN/2010
Nandkishor Education Society
1. That I am the Chairman of Nandkishore Education Society, a charitable Medical Institution mainly carrying on the Blood Bank Activity in various cities of Maharastra.
2. The assessee trust received the order on 13.08.2009 passed by the CIT u/s 12 AA(3) cancelling the registration. Thus the appeal was required to be filed on or before 12.10.2009. The appeal however, is filed on 25.06.2010. Therefore, there is delay of 256 days.
Thus admittedly there has been substantial delay in filing the appeal and the reasons for delay are stated in the subsequent Paras.
3. That the trustees of the assessee trust are exclusively involved in medical profession or rendering services in relation to the blood banking activity. They were totally unaware about the provisions relating to filing of an appeal as well as provisions laid down in Income Tax Act, 1961. It is fairly admitted that by reason of this absolute ignorance of the provisions relating to filing of appeal etc. the trustees did not realize the seriousness of this order. It is further solemnly stated that the assessee trust had no benefit of guidance of the tax consultant. Despite the fact that the accounts were audited by one Chartered Accountant as required under Bombay Public Trust Act, 1960 unfortunately, it is learnt that he had no much of the dealing with the case relating to registration u/s 12A, recognition u/s 80G etc. perhaps there are the areas in taxation relating to trust which arise in few cases.
Prayer :
The appellant therefore prays that despite fairly admitting disproportionate delay in filing this appeal, the factual reasons explained above may kindly be considered judicially and sympathetically and the delay be condoned and obliged and particularly taking note of the fact that the appellant trust is the Medical charitable Institution carrying on the loud activity of the Blood bank making available the blood to the needy patients at considerably concessional rate.
The undersigned further solemnly affirms that whatever is stated above is true and correct to the best of my knowledge and belief."
5. A perusal of the said affidavit reflects the contention of the assessee that they were totally unaware about the provisions relating to filing of an appeal as well as provisions laid down in Income Tax Act.
Because of this reason of ignorance of the provisions relating to filing of appeal, the Trustee claimed that they did not realise the seriousness of the order. It is further solemnized that the assessee Trust had no benefit of guidance of tax consultant. The assessee claims that the accounts were audited by Chartered Accountant. However, he had not 5 ITA No.942/PUN/2010 Nandkishor Education Society much dealing with the cases relating to registration u/s 12A, recognition u/s 80G of the Act. The assessee prayed that the delay in the case may be condoned.
6. On the next date of hearing, another supplementary affidavit was filed which reads as under;
" I, Nandkishor Kantilal Tated, age about 48, Occupation Medical practicener, residing at Navkardeep Bunglow, near Supreme Kidney Center, Sadhu Waswani Road, Nashik 422002, here by state on solemn affirmation as under-
1. That I have filed an affidavit dated 07/05/2016 explaining the reasons that caused delay in filing the appeal. Vide this supplementary affidavit I state another vital reason supporting my ignorance relating to the filing of the appeal as well as supporting the additional fact causing delay in filing the appeal.
2. That our institution has on record advocate Shri Ramesh C. Shinde who is entrusted with all the legal matters concerning the institution such as issues to be argued and sorted out before Charity Commissioner that arise under Bombay Public Trust Act, The Societies Registration Act, 1860 any Civil matters etc.
3. That on receipt of the order of the CIT cancelling the registration, in a routine manner the same was handed over to the said advocate Mr. Ramesh C. Shinde. The said advocate by reason of his preoccupation with several other matters for quite a sometime did not look into this order. Thereafter, on referring to this order and having found that the issue relates to Income Tax Act, 1961 and as he is not engaged in any Tax practice returned the said order and in the process this delay has caused.
Advocate Shri Ramesh C. Shinde has separately declared this true position in his sworn affidavit dated 21/11/2016.
I affirm that all that whatever is stated above in this supplementary affidavit is true and correct to the best of my knowledge and belief."
7. The supplementary affidavit notarized on 23.12.2016 again talks of ignorance relating to file of the appeal in delay. It is further stated that the institution has on record advocate, Shri Ramesh C. Shinde who was entrusted with all the legal matters concerning the institution before the Charity Commissioner, The Societies Registration Authority, any Civil matters etc. The assessee thereby solemnly 6 ITA No.942/PUN/2010 Nandkishor Education Society informed that on receipt of order of the Commissioner cancelling the registration, the same was handed over to the said advocate who because of his preoccupation did not look into the order and after gap of time, he returned the said order as he was not engaged in Tax practice. The affidavit of the advocate Shri Ramesh C. Shinde was also enclosed. His enclosed sworn affidavit claims that the Chairman of the assessee Trust had forwarded the order of the Commissioner cancelling registration, to him, with the direction to look into it. He further states that the said order remained with him unattended because he was hard pressed with other legal matters. He claims that the said order remained with him for around 7 to 8 months and when he came to know that the order was relating to Income Tax, it was handed over to the Chairman explaining that he does not deal with the Income Tax matters and the same should be handed over to an advocate or Chartered Accountant engaged in the income tax matters. He solemnly states that the order dated 13.08.2009 was handed over to him somewhere in the month of September and this was the reason causing delay in filing appeal late before the Tribunal.
8. The Ld. AR for the assessee has time and again stated that the Tribunal appears to have condoned the delay on 18.07.2012 i.e the date on which issue of condonation of delay was fixed for hearing. However, we find no merit in the plea of the assessee in this regard, since no order of condoning delay in filing appeal late, is available on record. Accordingly, during course of hearing, the assessee was asked to substantiate its claim and justify the reason for filing the appeal late by 253 days. It is undisputed fact that the appeal was filed after the 7 ITA No.942/PUN/2010 Nandkishor Education Society delay of 253 days. The Ld. AR for the assessee placed reliance on the various judgments of the Hon'ble Supreme Court in the following decisions:
I) Collector, Land Acquisition Vs. MST. Katiji & Ors reported in 167 ITR 0471.
II) Vedabai alias Vaijayanatabai Baburao Patil V/s. Shantaram Baburao Patil, reported in 253 ITR 798 (SC) III) State of Haryana V/s. Chandra Mani, Civil Appeal Nos. 4118 & 4119 of 1996.
IV) Improvement Trust, Ludhiana V/s. Ujagar Singh & Ors, 2010, Civil Appeal Nos. 2395 of 2008.
9. The Ld. D.R. for the Revenue strongly opposed the plea raised by the assessee for condonation of delay in filing appeal late before the Tribunal. The Ld. D.R for the Revenue pointed out that the assessee says that he has no legal support. He drew our attention to the page Nos. 98 to 139 of the paper book which are audit reports filed by the Chartered Accountant and submitted that the assessee was supported by services of Chartered Accountants and Legal Experts from year to year. He states there where sufficient cause for the delay has not been satisfied, then the delay is not be condoned. Referring to the affidavit of the advocate filed by the assessee, it was pointed out by the Ld. D.R. for the Revenue that the said lawyer was for the matters relating to Bombay Public Trust Act and there was no relevance of handing over papers relating to Income Tax.
10. The Ld. AR for the assessee in rejoinder refers to the affidavit filed by the assessee wherein it was pointed out that he had no service of legal consultant. He further stated that simply because Chartered 8 ITA No.942/PUN/2010 Nandkishor Education Society Accountant was doing audit work but he was not aware of appellate proceeding and hence the delay. The appeal of the assessee was heard on the merit of condonation of delay and not on the merit of the case.
11. We have heard the rival contentions and perused the record. The preliminary issue what arises in the present appeal is against the condonation of delay of 253 days in filing the appeal late before the Tribunal. The order u/s 12AA(3) of the Act was passed on 31st August, 2009 and due date for filing appeal was 12th October, 2009. However, the appeal was filed by the assessee on 25.06.2010 i.e after delay of 253 days. Once an appeal is filed late by the assessee, the onus is upon the assessee to explain reason for the said delay and incase the assessee establishes reasonable cause for filing appeal late before the Tribunal, then the delay may be condoned and the appeal be heard on merit. The said onus is upon the assessee to establish its case.
12. The Hon'ble Supreme Court in Collector, Land Acquisition V/s. MST. Katiji & Ors (supra) has held as under:
"3. The legislature has conferred the power to condone delay by enacting s.5 of the Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on "merits". The expression "sufficient cause" employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice- that being the life- purpose of the existence of the institution of Courts."
13. The Hon'ble Supreme Court in the said case was deciding issue of delay of 4 days by the "State", in filing appeal late and it was observed that the liberal approach should be adopted while condoning the delay. 9 ITA No.942/PUN/2010
Nandkishor Education Society However, the doctrine must be applied in a rational common sense and pragmatic manner.
14. In another decision, the Hon'ble Supreme Court in Vedabai alias Vaijayanatabai Baburao Patil V/s. Shantaram Baburao Patil (supra), while condoning the delay of seven days on ground of illness, it was held that a distinction must be made where delay is inordinate and a case where the delay is of few days and where the assessee's appeal of condonation of delay only seven days on genuine ground of illness, the same should be condoned. The Hon'ble Supreme Court further held as under :
"In exercising discretion under section 5 of the Limitation Act, the Courts should adopt pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of few days. Whereas in the former case the consideration of prejudice to the other side will be relevant factor so the case calls for a more cautions approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression 'sufficient cause', the principle of advancing substantial justice is of prime importance."
15. In another decision, Hon'ble Supreme Court in State of Haryana V/s. Chandra Mani (supra), had also condoned the delay of 109 days in filing appeal by the "State" on the ground that State is impersonal machinery working through its officers or servants.
16. However, the Hon'ble Supreme Court in the case of Improvement Trust, Ludhiana V/s. Ujagar Singh & Ors (supra) had considered the case of delay of 90 days and had held that in case of where the delay was not huge, the same could have been condoned without putting the respondent to harm or prejudices.
10ITA No.942/PUN/2010
Nandkishor Education Society
17. In the facts of the present case before us, the first aspect which is to be kept in mind, the huge delay in filing the present appeal late of 253 days. The assessee Trust is constituted of persons from medical profession, which is working from the District of Dhule. The assessee is getting its accounts audited from year to year and hence has services of professional to guide it in the income tax matters. The assessee has filed on record the audit report and audit statements from financial year 1996-1997 onwards at page No. 98 to 139 of the paper book. A perusal of the said documents reflects that the Chartered Accountant has signed audited balance sheet and also prepared audit report for each of the years. Further, Schedule-IX under the Bombay Public Trust Act has also been filed which is duly signed by the Chartered Accountant and the same is annexed to the audited accounts and report of the auditor has been filed from year to year. In such circumstances, it cannot be said that the assessee does not have the service of any professional to guide it who know the procedure of filing appeal before the Tribunal.
18. Now coming to the factual aspect of the condonation application made by the assessee, the assessee has filed various affidavits. The first contention of the assessee is that it is not aware of the procedure relating to filing of appeal as well as provisions laid down in Income Tax Act. The Courts have time and again held ignorance of law can not be excused. Now let us look at the contention of the assessee establishing the sufficient cause explaining delay in filing appeal late. In the first affidavit dated 9th July, 2012, the assessee Trust states that it became 11 ITA No.942/PUN/2010 Nandkishor Education Society aware of the formalities to be carried out after consulting the tax consultants and consequently the appeal was filed late. In the second affidavit which is notarized on 07.05.2016, the assessee pleads reason of ignorance of the provisions relating to filing of appeal and further solemnly states that it had no guidance of the tax consultant. It has also solemnised that accounts were audited by the Chartered Accountant but he does not much deal with the cases relating registration u/s 12A etc. In the third affidavit which is notarized on 23.12.2016, the assessee changes its stand and states that it had forwarded the papers to Ramesh C. Shinde who was advocate looking after the Civil matters of the assessee and matters before the Charity Commissioner that arises under the Bombay Public Trust Act and Societies Registration Act. The assessee has changed its stand of availability of the consultant from one affidavit to the last one. In the first affidavit, the assessee states that initially, it was not aware of the proceeding but after consulting tax Consultant, it became aware of the formalities. In the second affidavit it is stated on oath that it had no benefit of guidance of tax consultant, despite the fact that it had available Chartered Accountant. In the third affidavit, the assessee completely turns the theory of sufficient cause by alleging that papers were handed over to advocate who was engaged in the matters other than Income Tax. In the totality of facts and circumstances, we hold that the assessee fails to establish its case of sufficient cause in filing the appeal late before Tribunal and accordingly, we dismiss the condonation application filed by the assessee. Consequently, the appeal of the assessee is dismissed in limanie. We do not address the merits of the issue raised in the present appeal.
12ITA No.942/PUN/2010
Nandkishor Education Society
19. In the result, appeal of the assessee is dismissed.
Order pronounced on this 21st day of March, 2017.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
पण
ु े / Pune; दनांक Dated : 21st March, 2017.
SB
आदे श क( ) त*ल+प अ,े+षत/Copy of the Order is forwarded to :
1. अपीलाथ / The Appellant;
2. यथ / The Respondent;
3. आयकर आयु"त / The CIT-I, Nashik.
4. ु े "ए" / DR #वभागीय &त&न'ध, आयकर अपील य अ'धकरण, पण 'A', ITAT, Pune;
5. गाड, फाईल / Guard file.
// True Copy// ु ार/ BY ORDER, आदे शानस स या#पत &त //True Copy// सहायक पंजीकार / Assistant Registrar, आयकर अपील य अ'धकरण, पुणे / ITAT, Pune