M/S.CARMEL EDUCATIONAL AND C vs. THE INCOME TAX OFFICER

TCA.No.770 of 2019 In the High Court of Judicature at Madras Dated : 05.10.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.770 of 2019 M/s.Carmel Educational and Charitable Trust, Erode ...Appellant Vs The Income Tax Officer, Non Ward 1(4), Erode. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 22.5.2015 made in ITA.No.785/Mds/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for the assessment year 2012-13. For Appellant: Mr.A.S.Sriraman For Respondent: Mr.J.Narayanasamy, SSC Judgment was delivered by

T.S.Sivagnanam,J

We have heard Mr.A.S.Sriraman, learned counsel appearing for the appellant – assessee and Mr.J.Narayanasamy, learned Senior 1/8 http://www.judis.nic.in TCA.No.770 of 2019 Standing Counsel appearing for the respondent – Revenue. 2. This appeal, filed by the assessee under Section 260A of the Income Tax Act, 1961 (for short, the Act), is directed against the order dated 22.5.2015 made in ITA.No.785/Mds/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench (for brevity, the Tribunal) for the assessment year 2012-13. 3. The assessee filed this appeal by raising the following substantial questions of law : “i. Whether the Appellate Tribunal is correct and justified legally in not considering and not deciding the issue relating to the plea for grant of retrospective registration under Section 12AA of the Act for tax exemption even though the fact of compliance of the statutory provisions prescribed in relation thereto by the appellant ? ii. Whether the Appellate Tribunal is correct and justified legally in not considering and not deciding the issue relating to the plea for grant of retrospective registration under Section 12AA of the Act for tax exemption overlooking the substantial non compliance of their directions contained in the order passed in first round by the CIT while giving effect to the said order ? And 2/8 http://www.judis.nic.in TCA.No.770 of 2019 iii. Whether the Appellate Tribunal is correct in law in rejecting the plea for grant of retrospective registration for tax exemption impliedly based on the report of the Assessing Officer which contained the issues relevant for the assessment purposes while overlooking the narrow scope of the proceedings initiated for registration under Section 12AA of the Act ?” 4. By the impugned order, the appeal filed by the assessee was dismissed. The said appeal was filed before the Tribunal challenging the order passed by the Commissioner of Income Tax-2, Coimbatore [for brevity, the CIT(A)] dated 21.3.2013 passed under Section 12A(a) of the Act in so far as he has not granted registration under Section 12A(a) of the Act with effect from the date of application namely 11.3.2009. 5. Admittedly, the assessee has been granted registration under Section 12A(a) of the Act with effect from 01.4.2011 i.e for the assessment year 2012-13. Thus, the appeal before the Tribunal was on the limited issue that the assessee should have been granted registration with effect from 11.3.2009 i.e from the date of first application. 3/8 http://www.judis.nic.in TCA.No.770 of 2019 6. The present proceedings before the Tribunal were the second round of litigation initiated by the assessee. In the first round, the assessee's application was rejected by order dated 28.12.2011. Aggrieved by the said order dated 28.12.2011 passed by the CIT, the assessee preferred an appeal before the Tribunal, which allowed it by order dated 18.9.2012 by faulting the procedure adopted by the CIT while considering the first application. 7. We find from the order dated 18.9.2012 passed by the Tribunal that there is no finding on the merits of the assessee's claim, but the appeal was allowed on the ground of not providing an opportunity to the assessee before a decision was taken. After remand, the CIT considered the application and granted registration for the assessment year 2012-13. 8. It is the argument of Mr.A.S.Sriraman, learned counsel appearing for the assessee that the first application filed by the assessee for grant of registration is dated 11.3.2009, that the CIT did not dispose of the application, but kept it pending, that the assessee would have been well within their jurisdiction to claim deemed registration, but they did not do so, rather they abided by the direction issued by the CIT to file a fresh application on 28.6.2011 and that this application was rejected by order dated 28.12.2011. The order dated 4/8 http://www.judis.nic.in TCA.No.770 of 2019 28.12.2011 was put to challenge before the Tribunal and on remand, the CIT granted registration under Section 12A(a) of the Act only with effect from 01.4.2011 namely for the assessment year 2012-13. 9. The learned counsel for the assessee would vehemently contend that the Tribunal ought to have considered the vital issue that the registration should have been granted with effect from the date of first application i.e. 11.3.2009. 10. Per contra, Mr.J.Narayanasamy, learned Senior Standing Counsel appearing for the Revenue has referred to the order passed by the CIT and more particularly the findings in the earlier round of litigation, in which, the application was rejected. He would submit that on facts, the CIT considered the matter and granted registration with effect from 01.4.2011, that the entire issue was factual and that no substantial question of law arises for consideration in this appeal. 11. The short issue, which falls for consideration in this appeal, is as to whether the assessee would be entitled to get registration under Section 12A(a) of the Act with effect from the date of application dated 11.3.2009 namely the first application or the CIT was right in granting registration with effect from 01.4.2011 by taking into consideration the second application dated 28.6.2011. 5/8 http://www.judis.nic.in TCA.No.770 of 2019 12. Admittedly, the assessee did not take any steps from 2009 to 2011 to get their first application disposed of. There are varieties of remedies available to the assessee and a petition under Article 226 of The Constitution of India also could have been maintainable. However, the assessee would submit that they went by the advice rendered by the Department and filed the second application dated 28.6.2011 on 30.6.2011. 13. Both the applications find a place in the typed set of papers. The first application is dated 11.3.2009 in Form 10A in accordance with Rule 17A of the Income Tax Rules, 1962. The second application dated 28.6.2011 is also in Form 10A and on going by the form of application, it is clear that it is a fresh application and it is not a letter in continuation of the earlier application. Thus, the assessee is deemed to have abandoned or waived their claim made in the first application dated 11.3.2009 owing to the fact that they made the second application dated 28.6.2011, which is a fresh application.