DIRECTOR OF INCOME TAX vs. VISHWA JAGRITI MISSION

t IN THE IIIGH COURT OF DELHI AT NEW DELHI Reserved on: 20'h Seplember, 2012 Dale of Deci.sion: 21" December,2012 + + f + -r + + + trA 773/2010 rTA775l20t0 tTA 1092/2010 ITA 1101/2010 ITA 1103/2010 ITA 1104/2010 rTA ttt2/20r0 rrA 1124/2010 DIRECTOR OF INCOME TAX G)GMPTION) .. .Appellant Through: Mr. Sanjeev Rajpal, Sr. Standing Counsel with Mr Karan Chauhan. Advocate. Versus VISHWA JAGRITI MISSION Respondent Through: Mr. N. K Poddar, Sr. Adv. with Mr. Rajender Singhvi, Mr. Amit Aggarwal and Mr. Anurag Dubey, Advocate for applicant/ interveners. CORAM: MR. JUSTICE S. RAVINDRA BHAT MR. JUSTICE R.V. EASWAR R.V. EASWAR. J. For detailed order see ITA 754/2010 llr illl l" -\.rr.--, ' (R.V.EASWAR) JUDGE DECEMBER 21, 20l2/hs ITA Nos'77 3 12010, 7'7 5 12010, 10921 2010. I I 0 l/20 I 0, I 103/2010. 1 104/2010. rrl2l20r0 & rr24l20r0 (S. RAVINDRA BHAT) JUDGE Page I of I 2012:DHC:7826-DB

@-, * II\ TIIE HIGII CO{JR.'[' OF- DEX.IIX ,A'F NtrW DI].[,L{tr Rcserved on; 20"' ,\cplcmber", 2012 Date of Dectston; 2 I''' I)cc<:tnbar, 20I2 + nTA 754/2010 & C.M. AFFI-" No.15650/2012 + \TA7731201,0 + \TA77512010 + ltTA 1092/20tr0 + nTA 1n01/2010 + nTA 1X03/2010 + ltTA 1104/20X0 + ltTA. 111212010 + nT.A 1124120tr0 DIRECTOR OF INCOME TAX (EXEMPTION) Appellanl Througlt: Mr. Sanjee v Ra-ipal, Sr. Standrng Counsel with Mr. Iizrran (llratrhan. Advocate. Versus VISHWA JAGzuTI MISSION Resporrtlcnt Through. Mr. N. I(. I'oddar, Sr'. Adv. wrth ML. Ralender Srnghvi, Mr. Anut Agganval and Mr Auturng Drrbcy, Aclvocatc {irL applicant/ intetvenci's r I COR,AM: MR. JUSTICE S. RAVINDRA. tsX{A.T MR, JUSTICE R.V. EA.SWAR R..V. EASWATT, J. These are nine appeals, all filed by Cornnrissiotrer of ltrcottre'l'ax (Cl'l') trrrclcr section 260A of the Income Tax Act, 1961 ('Act', for short) 'fwo sLtbstitttltal ITA Nos 1 5412010,'t1312010,'71 512010' 109212010, t I0l/20 l0' 1103/2010. 1104/2010, lll2l20l0 &117412010 Pasc l o['22 2012:DHC:7826-DB

questions of law were frarned by this Court ot 21 11 2011 rn l'l'A Nos 75412010 773/2070 anJ 77512010. which are as follows - "(l) IWtether the Inconte Tax Appellate Ti'tbund hct.s' ctt'ecl itt condoning delalt in .filing of the applicalron .fbr regrstraliotr ttnc{ar Section I2A/ 12AA of the Income Tax Act, 19617 (2) 't4lhether lhe order passed b-v the Ti"rburral rs' lterverse'/" 2 In the other appeals, the following colnlnotr substanttal question of-lau'rryas frarned otr the sante daY - "Wethet'the Incorne Tax Appellale Tr'fiutml was nght irt sellrrtg cr.;rc{a the order passed. by the Directctt' General of the ltrccttrtc 'l-ctr (Exemplion) under Secfion 263 of the Inconte Tax tlcl, 19617" 3 Two separate orders were passed by the Incoure f ax Appellate '[riburnal, Dclhi Bench 'I' The first order is dated 06 05 2009 ancl was passed in Il'A \lo:; 3052.- 3054lDel/2008 which order is challenged by the Itevertue in l'fA Nos 7521, JJ1 aml 775 of ZOIO The second order of tire Tribunal was passed on 10 01 2009 in I'fA Nos 1653-1658tDell2)09 This order was passed by the Tribunal in tlie appeals lrled by the assessee against the orders passecl by the Director of lncolrle '['ax (Excnrptions) under section 263 of the Act The Tribunal followed its first order dated 06 05 2009 a1d allowed the appeals of the assessee In the first order, the'Iribunal helcl 1lra1 the assessee was entitled to registration uuder section 12A and sectiort 80G of the Act iirlcl that the delay in makir-rg the application for such registration was cotrclotrecl Thts was the orcler passed by the Tribunal in ITA No 3054/Del/2008, which rvzrs thc trtattt appeal by the assessee and consequently ITA Nos.3052-3053/Del/200U wer c disrnissed as infructuous. ITA Nos 7 54/2010, 713/2010, 71 512010, 109?-12070, I l0l/20 I 0' i 103/2010. I 104/2010, lll2/2010 & lr24l20lo Page ) ol 22, 2012:DHC:7826-DB

i It would be, therefore, appropriate to refer to the circutnstances uttder whtclt IIA No 3054lDell2008, rn otder tcr the assessee filed the appeal before the J'ribunal rn appreciate the controversy irt perspective 5. The assessee was incorporated as a soclety on l0 05 1993 tttrdcr llte Soctcttes Registration Act, 1860 Under the mernorandum of assoctatlon execuled, the assessec claimed itself to be charitable institution It filed an applicatron in Form No l[)/\ seeking registration under section 12L(a) of the Act fiorn the date ol'its tnccpLtou t c fi om 10 05 1993 This application was filed with the DIT (IJxempl ion) on I 9 12 2O0'.t 'Ihe application was accornpanied by the audrted balance sireet aud ac;cttultts lbr llrc firrancial years ending on 31 03 2004 and 31 03 2005 The assessce also fllcd an application for grant of approval under section BOG(5)(vr) of tl're Act ott tlte satne ilay ie. 19 122005 in Form No 10G under Rule llAA otthe lnoonte'fax l{Lrles, 1962 An application for condonation of delay in seeking approval under sectiotts l24 arril 80G was filed on 14 03 2006 whrch was accompanied by the following docutrctrts - (a) A note of the charitable activities carried on by the iLssessecs (b) Analysis of the financial accounts of the assessee f or the financial ycar:; 2002-03. 2003 -04 and 2004-05, (") Copies of the returns of income of the assessee tn Fortti No 1A ibr the assessment years 2003 -04,2004-05 and 2005-06, 6 The applications were scrutinized by the DIT (Exemptions) and sLrflic:e to trole that he fould certain irregularities in the receipts issued by l.he asscssee According 1o him, the receipts containecl a reference to a certificate said to have bccl't tssttcd ott 31 03.2003 under section 80G to the effect tliat donations to the assessec werc eutrtlccl to tlre exemption for the period frorn 0104.2003 to 3l 03 2005 l{e hacl the t'cc;crpts verified by the assessing officer having jurisdictiorl over the assessee 'l'lic assesslnp. ITA Nos 1 5412010.'t73/2010, 1'7 sl20l0, 109212010' I 101/20 l0' 1103/2010, 1104/2010, Ill2l2010 E ll24l20lo Ptrgc 3 ctl-22 2012:DHC:7826-DB

€v officer reported that the assessee had never filcd any I elurtts of inc:otttc srtttrc inception. It would appear that thereafter an applicalron [br registratlott Ltttclct scc:ttou BOGwas subrnitted by the assessee on21 12 2005 and an applicatron lor condonaltotr of the delay in subrnitting the application was also filed l'he returns ol'incotle rvoulcl also appear to have been filed claiming exemptiou under section I I of tlte Ac:l rtr respect of the entire income of the assessee - society on the ground that it had applrecl for registration under section 12A 7 Subsequently, the DIT (Exemptions) seems 1o have found that the assesscc lracl issued certificates under section 80G for collection of donations {.bl thc pertorl 0l 04 2001 to 31 03 2003, these certificates of approval rvele fouud no1 1o have becrr issued by the income tax authorities Based on thrs serious irregulartty tlrc DI'l' (Exernptions) sought an explanation fi-orn the assessee Several otlter partrc:r.rlat s rver-c also called for such as the names, addresses and PAN nuurbers of the douors, tlrc tnocle in which the donations were received, etc l-lte assessee was also callcd uporr lu explain the reasons for not fihng the retul'trs of tncome on a legular basts evett tlttirrglt no registration under section 12A was granted The assessec respon(led by a lcttcr dated 17.03 2006 the gist of wirich was that the financial matters ancl tax rclatcd rsslros were being dealt with by its erstwhile lreasurer A K Srkri, Chartered Accountanl rvho had since ceased to work for the sociely and that the asscssee had tnade ittqurries Ir'ont hiur, tlrat lre had informed the society that "due to c'erlcrrn lopses l.t.1t lrts suborclttrula,t lhe d.ocuruenlatiott is not adequale" and that "he ha,s lalrerr apprrlprrale s'le1n:/ r ettrt'tlrc.s ht thrc regard' With regard to the failure to submit the r.cturns of iuconrc, tlrc assessee gave a sirnilar explanation 8 The DIT (Exernptions) was not satrsfied with the assessee's rcply arrd lre rrracle further queries in relation to certain receipts tssued by the atisessee {i.rr donattotrs lrr response to this quely the assessee subrnitted a detarled reply dated 26 05 2006 'l'hrs letter is reproduced in paragraph12 of the first order of the T'ribunal and ts, lltct'clirt'e, ITA Nos '154/2010,713/2010, 11512010, 1092/2010, I 101/2010 I103/2010, 1104/2010, llr2l20r0 & 11,2ry2010 l'irgc 4 o1'22 2012:DHC:7826-DB

ll i, not reproduced here. lt is sulllcient to note that the assessee placed tlte tespttttsrbrlity for the irregularities in the receipts and the tax related ntalters upon A I( Stl<r r 'l'lrc assessee explained that on cotning to know of the rolc played by A I( Stkrt' att executive committee meeting was iinmediately convened and in that rneetitrg Siltrr hacl ir-rformed the assessee that he in turn relied upon his cnrployee otre Vishnu Prasad ttr assist him in the assessee's tax related matters and that on coming tO litlow llrat lrrs employee had not discharged tire rvork entrusted to hirn properly, he had filed a Poltcc cornplaint seeking initiation of action against Vishnu Prasad 'l'hcse lacts tvcre confirmed by Sikri in writing and he also appended his signatureto the nrirtt-ttcs ol'thc meeting ip proof thereof The assessee further pointed out that it had loclgccl a complaint with the police against Sikri in December, 2005 and itl trupport of thc lact. a copy of the cornplaint was enclosecl with the assessee's letler It was f urther sLtbttttllcd that the executive comrnittee normally entrusts drfferent luncltons to dr{I'ercrrt ofllcc bearers/ executive members and relies upon thern for the proper dischalge o['thosc functions, as would happen in any organisation It was subrnitted lirrtller that all thc donations were properly accounted for As regards the tton-sttbtnissiott ol'the tetlttl'ts of income, it was pointed out that for the assesstnettt years 2001-02 and 2002-0-l llre returns were sent through speed post while those relating to tltc assessntcttt yczrt s 2OO3-04 to 2005-06 were filed on21 022006 lt was explained that as soott as 1he assessee came to know of the lapse it realised that the erstwhile treasuler (A l( Srlc'r) had failed to discharge his functions properly and also did not apprtse llte cxccrt-tlivc committee members about the lapse and, therefore, his scrvices wcre teruttttatcd atlcl steps were taken to cornply with the filing of the returns 'fhe zrssessec also cxPlatnecl that these developments constituted suffrcient cause fcrr thc delayccl {'iling o[' thc applications for approval under sections 12A and BOG and that the DI'l' (ExcrnPtions) ought to have condoned the delay and accorded regrstration. tTA Nos 7 54l2OlQ. 77312010, 77 sl20l0' lr)9212010' 1 I 0l/20 l0' I I 03/20 I 0, I 104/20 I 0, | | 12 lz0l0 &- 1 r24 I 20 |t) l)agc 5 o1.22 2012:DHC:7826-DB

9 The DIT (Exemptions) refused to grant registration to the assesscc-socicll' I'lc gave several reasons for the refusal. The rnain reasons were that the activitres o1'llre assessee - socibty were not genuine, that the assessee had forged tlte BOG ccrtiflcatcs, that the assessee had also fa.ked the cerlificate granting exletlsiott of registration uttdct section 12A for the period 01 04.2005 to 31 03 2008, that no sr-rch ccrtrllcale ltas trectt issued to the assessee by the DIT (E>remptions), that the assessec did not subtntt atty particulars relating to the donations received on the basrs of alleged ccrltl'tcales tssttecl under section 80G, that simply by taking the plea that the soctety was clepenrlerrl on A I( Sikri, its erstwhile treasurer, it cannot rvash off its hands fi'om the rllcgaltty cornmittecl by it, that the conduct of the society since inception had to bc l<cpt ltr ttttttci, that it was inconceivable that the failure to apply lor approviil/ r-egrstralitttt ttttdcr section IZA and section BQG was not within the l<nowledge o1- the govcrtirrlg body til' the society, that it was only after being cornered that the assessee canle ionvzrt'd ttt February, 2006 to file the returns and in these ciroutnstances the zlsscssec's explanation for the inordinate delay cannot be accepted The DIT ([rxcnrptions) furlher observed that it was part of the duty of Lhe treasurer under the tnentot-ittlclr-tttt and articles of association to present the accour-rts in the monthly tncetitrgs ol thc 'ranaging committee for approval and this would clearly show tlrat he was l<ccPing the comrnit1ee ilformed about the financial matters, that at any rate no pcrsoll:ll bcnelll accrued to the treasurer by delaying or not perfornring his duties and that "tltc lrtltrlrl.T' of fhe circumstances aS discussetJ abotte and rn lhe earlrer pm'dgt o1ilts 'tlttn"s llrul lhese activrties could nol hat.,e conlutued (^,er' o penod of vtr:h a lottg lrtttc t't'ltL:rt lltt: lmowledge of the mentbers of the mcu'mgtlg conttrtrllee/ got,ernirtg ltttclst " ittlcl ,,hatting regard to otterall. conduct of the applicant ancl lhe lotctLillt rtf'crt'ct.utr,sltttrc'e.v, the argument put forv,ard regarding ils ltono frdes cuttttol be accepled' lior tlrcsc reasons the DIT (Exernptions) held as follows - ,,5.Invteluofthedetaileddiscussionsmthe.foregoiltgpdlogt.upl.t's and rn the totalitlt of the circunr.sl,cutces, I Lutt t'tol sali.s.fied abtntl lhc' ITANos.75412010,11312010,11512010,109212010,1101/2010' 1 103/2010, i 104/2010, lrl2l20l0 &- rr24l20r0 Pagc 6 ol 22 2012:DHC:7826-DB

1T genumeness of fhe octivties of the applicctrrl .soc'iely T'lte|c.frtrc, llrc apphcant socinq,'S request.for regtslrafictrt tr/s I2rl t,s re.1ccletl. 6. Smce I ltat,e refused lo gt'anl regrslralrort lo llte LlPpliL'(utl society vtrlhilz lhe nteaning oJ l2AA(l)(b)ft1 of the ltrcctnre-ttx At't, I96l, I do nof consider fi appropriale lo adludtcole on Ils reque'\'t.fa' condonatron.for delay in.fil,ing a?tphcaltctn tnforrtt Mt.l0A fot'grctrrl rt/ registrattotr u/s I2A of the Income-lax Acl, I96I '" 10 Against the aforesaid order of the DIT (Exemptions), tlte assessee lllcd an appeal before the Tribunal and raised several contentions which were all "u'',*1,1stod by the Tribunal which upheld in principle the right of the DIT (l3xemptions) lo lttoh ir-rto the activities of tlie trust including the forged certillcates rvhilc grantrrrg registration It held that the trust and the trustees were indcpendent and 1hc acts o1'tltc trustee cannot be that of the trust unless they are enacted wrth the iuvolvemetrt of othcr trustees Eventually, the Tribunal by order dated 15 5 2O0l held asr utrdcr - "80. Thus it was necessary .for lhe l.d. DfT' @,) l0 extrrtrrttc lltul ' whether other members of Gotrcrning Bodlt v,cre ulso tnvttlvccl rtr obtctining .fake certrftcates or lhe.y were m llte lotowlarlge llttrl lha certtficaies are fake' Individuul acln'tl)t of a lrtstee ot' d ttrt'rtthet' ccntnot be lertnecl lo lte the aclitti\t of lhe lrusl. 'l'he lartguage ttsed rrr lhe prot,ision of section l2AA re.fers lo getrurneness of lhc aclrttrltes o/ the trusl or mstilution and not lo lhe actntrlres ctf cm irrdtviducrl lrttslce. IJ'aryt nusctppt'oprratron is made lhal v,rll be only a breaclt o.f lt'rts'l ort lhe part of that parficui,ar truslee. Tlttts ttt oLtr vtev) rl tttct.s ttece't,\ot'.)) for.^fhe drc 1n1 to exannine thal aspect a.s all lhe relcvattl ttrolat'trtls "were placed. before hnt. Wfthoul exammtng he catnro( clrov' tr presuitption thit other rnentbers of lhe Got'ertung Bodv tvu'e ol's'rt mt,olved. In the circuntslances y/e con,vder tt 1t.tsl anL{ propar lO reslore thrc rcsue to the file of DIT ([,) to exan',nne lht's' rssue 1t'operl.1t and after ntaking t)errrtcafion irt lhts regard pass att orclcr tr/,s I2tlA tr.s per prot)tsrons of latu' We du'ecl accordmgly' BI. so as it relales lo condctnalion of delay, 1r1. 1il7'(l:') hu,s ttttl decujed (hts tssue andhis observatrcln m this regot'd cottlturted ttt p(ItLl l7 of the mtpugned order whch l'tus alreadl' beert rept'othtt:cd rrt llte abotte part olnis order. lk tto not.filul any.forc:e rrt llte cottlctrlrorr of the Id. Ai that cottdonalrrn qf 4ela1t s'hould be c'il'tLlet'cd 1TANos75412010.11312010,7'7sl20l0,I}92l2olo,ll01/2010' I 103/2010, 1104/2010, 1rI2l20l0 &' rl24l20t0 Ptge T ol'12, 2012:DHC:7826-DB

aulomalicalllt g"anled as lhere is no speahng ordu' tn lhs regcrrd b.1' the lrl. DIf @) He has not consitlered thrs rssue. After exutttrtritrg lhc issue of genuineness of actruities as djrecled abot'e, lcl. DI'I'(E) wrll also coniider lhe issue regardtng cortdonatir,tn ctf'deloy otr rnaril.Y turd pass a speaking order on this issue. we dtrect ctccr.trclrtrgly." 11 pursuant to the aforesaid directions of the Tribunal, the DIT (Exemptrotrs) tooli up the proceedings afresh FIe called upon the surwiving trustees and rccorded thetr submissions and aiso examined one M P Mansinghka rvho was the dotlot. rvho blcw tlie whistle by intimating the income tax department that the receipts issued to hirrr try the assessee contained false ceflificates under sectiotrs l2A and 80G Aficl trll examination of all the issues afresh as directed by the Tribunal the Dl'f (Flxcrnptiotrs) arrived at the following conclusiorts - It is not acceptable that A I( Srkrr, Treasuuer rvers solely lespotrsible fc,l forgery of the certificate uuder section 80G, (a) the (b) The subsequent society statement of Sikri recorded on 20 10 2005 does not match rvith the police complaint and confessiou ol'Sikri to the Chain-rlatr (.)1- lhe (c) There is no evidence to shorv the exclusive itrvolvetnetlt of Siltlr ttr tllc forgery or to show that the other members of the socicty were tlot itlvolveil There is circumstantial evidence to suggest that ol,her tlleurbers of the st)crcly were also involved (d) Because of the involvement of several tnetnbers of the socicty in the fOrgery of the certificates, the assessee caunot be considered to be catryrl.lg ()ll a charitable activity, it was actually carrying o1 a criminal activity (") The delay in filing the aplthcation for registration uucler scctions 12,^' and BOG cannot be condoned because it was or-rly after being corucred that thc ITANos't5412010,1'7312010'11512010,10971701Q'li0l/2010 1 103/2010. 1 104/2010, lrl2l70l0 &' rl24l20l0 l'>ttgc tl of 22 2012:DHC:7826-DB

I assessee came up with the defence that the responsibility for thc allegecl forgery of the certificates lay at the doors of A I( liikrr, wlticlt was trol att acceptable or reasonable explanation, the assessee was also involvecl ttl llte forgery and, therefore, its plea for condonation of the delay cantrot be acceptcd IZ In fine, the DIT (Exemptions) concluded that registratiou under section l2A cannot be granted and the delay in filing the applicatron cattnot be ct-ttrcloltccl Consequently the claim for certificate of exenption under sectton BOG rvas alstr reiected. This order was passed on24 9 2008 13. It rvas against the aforesaid order of the DIT (Exernptions) that thc asscsscc preferred an appeal to the Tribunal in ITA No 3054/Del/2008 '['he 'l'riburlal exatrttttetl the facts and the submissions in great detail frorn paragraphs 30 to 104 of'lhe impugqed order dated 06 05.2009 In these paragraphs the eulit'e sequeltoe ol-cvctrts was marshalled cogently and the rival subtnissions have beert elaborately aclvertccl to ilcluding the authorities cited by both the sides Ultirnately Lhe lindings ol' thc 'fribunal are contained in pagaraphs 105 to 124 of the irnpugned orclcr .r\ perusal ol these paragraphs shows that the Tribunal has recorded the follorving findings - (a) In the earlier order of the Tribunal dated 2lt 05 2O0l, it rnrtrs hclcl that the DIT (Exemptions) should examine whether the other tttetrtLrcrs ol- tlre governing body of the assessee - society were involved in the alleged lirrgery, etc. or not. This order became final, both parlies having accepted thc sattte (b) The trust as an entity and the trustees or thc luentbers ol- the govcrrltng body, as individuals, have independent extsteuce and lhey have zr fitlLrciary relationship with eacli other based on the assumption ol borrer.fclc lrehavtottt A crirninal act of a trustee or member of the governing botly carltlol bc attributed to the trust which is an independent entlty lfowcver, tlte postttotl may be differelt if it is found that the trustees or metnbers of'the g()vcrrrrng ITA Nos 7 5412010,11312010,17 512010, 1Q9212010, I l0l/2010, r 103/2010. I 104/2010, rrr2l20l0 &, 112412010 Ptrgc 9 ol 22 2012:DHC:7826-DB

@ body had colluded or were conniving with each other ancl using the trust as a plalforrn to advance their r"refarious agetrda In such a case tlte lrust woulcl equally be resPonsible (") The facts and the sequence of events right fionr the beginnitlg cliscloscd that the trustees or the members of the goveruing body rvere trot trtvolvcd ttr the alleged acts of illegality comrlrtted by A i( stkri, who altinc rvas responsible for them. (d) The trust itself appeared to be a victim of the mishanclling of thc responsibility entrusted to A.K Sikri. (") All the nonies were properly accountcd fcrr arrd dr-rly aplllictl firt charitable purposes (0 There is no question of any collective responsibility utlder whrch thc trust could be liable to answer for the irregularities or illegalitres allcgcr-liy committed by A K Sikri since all these are attributable to hirn in his individual capacity (g) The DIT (Exemptions) has failed to establish thal the govcrning boclv members or other trustees were acting in collusion with A I( Srliri lt rvas tttl individual act of Sikri, not attributable to the assessee Forthe above reasons the Tribunal held that the'society was etrtitled to gct rcgisttatiott under sections 12A and BOG, however, it was held tlrat the authorities rvoulcl be [l'ee to examine the application of funds in conformity with the objects of the trr:st in lhe assessment to be made under tl-re Act Since there were sufficieut reasons lor the clelzry in filing the applications for registration, it was held that the delay was condotrecl atltl tlie trust should be granted registration from inception ITANos754l2OlO,113/2010,7'75/2010'lO92l20IQ'1101/2010' l 103/2010. 1104/2010, llI2l20r0 &' rr24l20r0 Page l0 of 22 2012:DHC:7826-DB

\ /2,t ) lvl 14 While narrating the sequence of the events leading to the ln-est of A I( Stkt'r, the Tribunal took note of the genesis of the entire affarr whic;h started fi'ottt thc cornplaint lodged by M P Mansinghka Charities Trust of Mumbai lntmedial.cly on receipt of the complarnt, the assessee convened a tneetiug of its governirrg body ttt t{s head office at Delhi in which Sikri was present His explanatiott was tlrat hc lrail applied for exemption ceftificates in the normal course of his worlt, relyrng ott ltil; office accountant (Vishnu Prasad) The accoumtant was absconding ancl accotcling to Sikri an FIR had been lodged with the police for taking action Shkr-i also signed thc minutes of the meeting in which these facts were appareully recorded 'l'hc gcnclal body appointed a committee consisting of Sikri and Dev Ral I(ataria, the Gctreral Secretary to enquire into the matter On 15 0l 2006, Sikri wrote a lctter to tlte Chairman that as Treasurer he was responsible for all the accouttting and tax mitttct s, tliat he was following up the issue about the forged registration cer.titlcales tvtl"lt tlre income tax authorities and a private agency was appoirrted (by him) to asc:cflain lltc wlrereabouts of the erring employee. Sikri submitted a report on 28 022006 to lhe Chainnan of the society that the fake certificates rryere procured by his ernploycc which was submitted by him (Sikri) ir-r turn to the society IIc acccptccl nrorzrl responsibility and prornised to regularise the tnatters and tendered hrs apology to lltc trust He sought for some time to enable him to interact rvith the incotrte tax department to prove his bonafide and correct the iristakes He ttttdet'toolt responsibility for getting the society into trouble, including crinrinal proceedtngs -l-he trust found these replies of Sikri to be evasive and filed a poltce conrplaint rvith the SHO, Nangloi Police Station, New Delhi on 17 03.2006 In this complatrtt thc soctety stated that apart frorn Sikri, one Radhey Lal Gupta could also be ittvolved Lloth Radhey Lal Gupta and Sikri were removed on 04042006 On this day a [iesh cornmittee consisting of five members was constituted to eltquit'e inlo the tnatler Apprehending further proceedings, Sikn filed another complaittt against his cnrploycc (Vishnu Prasad) witl-r the SHO, Pitampura, Delhi narratttlg in detail as 1o horv hc ITA Nos 7 54120L0,'113/2010, 71 512010, 109212010. l'10 I/20 l0 I 103/2010, 1104/2010, ll12l70l0 6L ll24l20l0 I'agc ll ttl 22 2012:DHC:7826-DB

entrusted the work to hirn and how he later on calne to know that evett regtrlat' tax returns l-rad 1ot beel filecl, etc In this police cor-nplair-rt also, accorcling to llrc Tribur-ral, Sikri acoepted the forgery of the cefltficates and the notr-lilrng of tltc lax returns, which were duly prepared by him and handed ovet'to the entployec lbr Irling with the income tax department Pressure started to build on S ikri both frorn 1 he tr trst and from the police and he was forced to file another corr-rplaint utrder secttotr 156(3) of the Criminal Procedure Code on 29 04 2006 before the Clrief' Metropolitarr Magistrate, Rohini District Court The complatnt was accompanied by cvtdettce IIt support thereof He pointed out that the police had not registered ltis oont;rlartrts though they disclosed cognizable offenscs and prayed fbr a direction tirat tltc polic:c should register the FIRs ancl proceed with the investrgatiotr agattlst hts enrployce 'l'hc police authorities then carried out an investigatron atrd subnttttcd a tcpott ott 28.05 2OO1 thatthe particulars of the employee, as given by Silcri were itlcotnplctc attcl that in the absence of any evidence regarding ctnployrnetrt o[ tl-re absconclitrg pcrsL)lr, Sikri hinself was responsible for the alleged irregr,rlarities On 3 I 05 2007 Sikr r himself was examined by the Kirti Nagar Pohce Station, Dclhi in relatiotr lo lill{ No 605/2006 filed by the incorne tax authorities on 31 1Z 2006 repor.ting firrgcry o{' the certificates of registration under sections 12A and BOG In the statetucnt givctr ltr tlre police on 31 05.2007, Sil<ri gave the same explatration, natnely, the entrustrlcrrl ol- the work of filing the applications for approval uucler scctror)s 12A arrd B0(i and tlrc filing of the income tax returns to his employee FIe also statecl that it rva:; ltts ernployee who had given the certificates to R L Gtrpta, tlre Frcsideut of llrc asscl;sec - society for further action Radhey Lal who was also examined by thc Kirti Nagnr police confirmed the statement of Silcri On29 02 2.008 a report was suburitted try tlre police i' the Court of the Metropolitan Magistrate, Roirini to thc effect tlrat Sikri rvas rnaking false staternents and a prayer was made that actton under sectiott 1Bl, Incliart perral Code may be taken against hirn. Prtor thereto, on 2l II2001, on tlte basis o[- tlre crimilal cornplaint No I B7OI20O1filed by the assessee on 28 06 2006 in lhe (loutt ITA Nos.?54 I z0 10, 1 1 3 lzo 10, 17 s 12010' 10921 20 I0' I I 0 1 /20 I 0, I I03/20I0. I 104/2010, lll7l20l0 &- ll2412010 I'agc 12 ol'22 2012:DHC:7826-DB

l I of ACMM, Rohili coufts, Delhi an FIR was registeled agarnst siltri aucl lte was arrested by the police He remained in custody till 26.I22001 ln the tneallttttrc ott 27 lI.ZOOT he filed a bail application uncler section 437 of thc Cr P C aud evctt in this bail application, he reiterated his earlier stand that he aloue was responsiblo (irr the controversy, through his ernployee. He also stated that no other trttstec was involved in the conttoversy Eventually Sikri passed away in 2011 15 The above facts and the sequence or chronology oIevenl-s havc bectt discr-rssed in paragraph l0g of the order of the Tribunal The Tribgnal has optlted ttl llatagralllt l l0 that these facts cannot be bruslied aside or oalled self-servrng thcts 'l'ltc cvttlcttcc in the form of statement of A.I( Sikri, minutes of the mcetttrgs, cottrlllattrt to thc police autfiorities (both by the assessee atid also by tlie incotre tax clcpattt'e1t), i.vestigatiol by the police and therr reports, proceedrngs before tlte crintttlal coutts, the bail application of Sikri on the basis of which bail was granted to ltitn at'c all evidence, according to the Tribunal, to show the cornplicity or invglvcuet'rt of Srhri irr the alleged forgery or irregularities in the issue of the certificates of'registral"it-rrr/ approval under sections 12A and BOG Accordir-rg to the'lribunal, the cviclcttcc contained Court proceedir-rgs and were complementaty to eaclt ollrer 'fltey rvcrc contemporalleous and cannot be brushed aside as the DIT (Exernptions) has dottc, as having 'o evidentiary value The eir.tile docutnentary eviderlce was pt'esctltccl bcforc the DIT (Exemptions), the police authontics and the crintirtal cottt'1s atttl lltett credibility cannot be impeached, accorcling to the Tribr,rnal 'l'l.re l'r'ibr-nrztl, tltcrcitrr.c' held that the DIT (Exemptions) was not justified r1 refusing to tzrl<e cogtttzrttcc trl' those vital documents in corning to the conclusion that the asscssee - socicty ot- tts trustees/ governing body merrbers connived or coiludecl wilh Srltr-i '['hc rcl|acttott ol' A K. Sikri on which reliance was placed by the DIT (Exenlptions) ltas Lrcctt hclcl lry the Tribunal in paragraphs 111 and 112 of its order as iraving been "sttdclcttl)' trtatlo that too when he was removed from the trust and the police hacl already ttnpltcitlecl ll ti lTANos.754l2OlO,'t7312010,71512010'1092/2010'1101/2010' I 103/2010, I 104/2010, lll2lz0lo &- llz4l20lo Pnge 13 o['22 2012:DHC:7826-DB

G\ \__--.. hirn alleging that he was fabricating s1ories". 'l'he T'ribr"rnal has also hclcl that Srl<r.r clrcl not succeed in demolishing his earlier statements given not only to the trust bttt also to the police and the Courts and also in his bail application on the basis ol'whtclr he rvas released from police custody 16 Questioning the correctness of the vierv taken by tire Triburnal it is contcnclcLl by the learned standing counsel for the Revenue that the l'ribunal wetrt wr.ong in rts appreciation of the evidence and in exonerattng tlte assessec - society artcl 1hc members of the governing body from any guilt or cuipability 11 is contcttclecl that arr overall appreciation of the sequence of events and ihe evidence would sr"rggcst thal there was cgllusion between AK Sikri and the assessee - soctety in the rvhole a{lhrr It is pointecl out that Sikri did not stand to gain or beneflt by the alleged acls o[' illegality, forgery, etc and that the ultimate beneficiary of'such acts was only thc assessee - society and this crucial aspect has been nrissed by the'I'ribLrnal Accordiug to l.lie learned standing counsel, Sikri could not have had any nrotive for indulgrng in such acts except onthe prompting or directions of the metnbers of the govcrntng bocly oftheassessee-society. Attentior-risaiso'drarvutothelactthatlhervholea[]att c:tnte to light only because of the complaint of M P Mattsinghlca'lrust of Mtrnrbat lt rs vehemently contended that Sikri was only acting as an employce i e 'l'reasurcr o1'tltc society without ally personal motive or benefit and it ls wrong ou the part o{'thc Tribunal to have concluded that the society itself was a victiu-t of the fraud allcgedly cornmitted by Sikri 17 On the other hand, it was subrnitted on bel-ralf of the assessee - socicty tlral rt took prornpt action on receipt of the notice fronr the Advocate of M l' Manstttghlta Trust of Murnbai in Decemb.er,2005 until whrcli time it was totally LlllAwtlre o[-llrc lapses and irregularities comr.nitted by Sikri, tl'rat the applical.ion urade for regtsttittttttt of tl.re society under section llA(a),on l9 122005 was sigtred only by Sil.r'i arrd all this came to light in the course of the proceedings of the executive body n'rectrrrg held ITA Nos.7 54 120 10, 1 7 3 170 10, 7 1 5 17010. 10921 201 0' I I 0 I /20 I 0, 1 103/2010. I 104/2010. lrr2/2010 & 1124/2010 Pitgc 14 ol'22 2012:DHC:7826-DB

lr on 28. 12.2005 on receipt of the notice fi om the Advocate of M P. Mansinghka 'l't'usl It is submitted that Sikri was present in the meeting and conl'essed to the trregrrlariltes and even signed the minutes of the meeting which recorded tlte r:onfesstcrtl ol' Stl<rt Strolg reiiance is placed on the findings and observations of the TribLrnal on tlre basts of the chronology of events starting fiorn the application made on 19 122005 ttndcr' the sig'ature of Sikri upto the date of his release on barl inclucling the stnleurctrts tttadc by him to the police, to tl-re crirninal courts and in his bail apphcatiotr Or-tr attettttotr was also drawn to the fact that even in the contplaittt tuade by the ttlcollle lax authorities on 3l Lz.z0o6 in FIR No 605/2006 with the l(rrti Nagar Policc Stattott, they had implicated only A K. Sikri and not any of the trustees or governtttg bocly members of the assessee - society by name Frour thrs it ts subttritted by thc lcartrctl counsel for the assessee, that it was clear that the income tax aul.horitics llterrtsclrrcs looked upon the AK Sikri only as the person r.esponstblc for thc {irlse/ [irrgccl certificate and all other irregularities/ illegalities Quitc apatl [r'otrt tlte a[-rove . submitted the learned counsel for the assessee, the question of concloualiot'r OI-clcltty otr the ground of sufficient cause for the delay was a discretion conferred upott tltc Cottt-t a1d it can be interfered with only if it was shown to have beett exerrcised in a pe rvcl sc manner and so long as the discretion is shown to have been exercised propcrly arrcl having regard to the entire conspectus of the facts ar-rd crrcuutstattces o{'tlte casc itrtd o. the application of the relevant principles of law, and so lottg as tlte t-elevattt firt:ts have not been ignored or irrelevant facts have not influetrced the discrction. the appellate court acting under section 260L of the Act should not intcrlero rvith lhe decision of the lower court It is further pointed outthatthe question of llerversity was not even raised by the Revenue in the metnorandutn of appeal and, therelolc, tllclc was no substance in the appeals In support of these submissions relrance was Placecl on several autl'rorities compiled in the form of a paper-book ITA Nos 7 5 41 20 10, 1 7 3 120 10, 7 1 5 lZ0 10' 1 0971 20 10, I I 0 l/20 I 0' I 103/2010, I 104i20i0, lrl2/201} & ll24l)-0lQ Pagc 15 of 22 i 2012:DHC:7826-DB

6b li, -' l8 The main question that falls for our consideration is trrhether the I'ribunnl was justified i' condonipg the delay in the filing of the application for registratiorr rurclct section 12A of the Act and whether the view tahen by the 'l-r.ibunal is pel'verse 'l'hc question whether there was sufficient cause for the delay is always a questiott of'lhcl as has been held by two Division Bench judgments of this Court (t) C-l7- v. l'crt'rtrtt Nand, (2004) 266 ITR 255 and (t1) CIT t,. ITOC.HU Cot'prtrotron, (2004) 268l1'l\ 172 The Tribunal has, in an elaborate order in which all the facts and the rival sttbnrissitlrts have been taken into consideration, held that tirere was sufficient causc for lhc dclay on the part of the assessee - society in rraking the applications for tegistratiorr t-tttclcr section 12A and 80G of the Act lt is not necessary, not ls it proper, lor us to dccicle the culpability or otherwise of A I( Sikri wiro was the Treasurer of thc assessce society. All that we need to examine is whether the Tribr-rnal had valtcl tttalcrtals before it on the basis of which it could have reasonably corne to the conclustotr 1lta1 the assessee - society was prevented by sufficient caLlse in applyrng lirr thc registration in tirne It is manifest from a fair reading of the order of the'l'ribunal that it had weighed the circumstances in which the .assessee - society was placecl atrd the action it took immediately on receipt of the complaint from M P Mansinghlta 'l'rust of Mumbai, it has referred to the confession of Sikri in the meeting o1'tire govel'nlt)g body owning up responsibility for having r-nisled the assessce socrcty I'v representing that the necessary application for registration rvere made itt tttttc" it has also referred to the action taken by the assessee - society against Srhli rvhen it lbLrnd that Sikri was nottaking adequate steps to remedy the situation, it has also tefcrt.cd to tlie police complaints filed not only by the assessee - society against Sil<rr, btrt also 1tr the complai't filed by the income tax authorities against !'iil<ri whrch indicalctl tlrat they also viewed Sikri to be responsible 1br the mis-representatiotl, fakc certtllcalos o{- registration, etc Moreover, the Tribunal has talcen trote ol' llte lacl tlurt thc Metropolitan Magistrate, acling on the police corlplaint, retnatrded Sikrt to ctrr;tocly and also referred to the fact that ir.r the bail application, Sil<ri had again owttccl ttll ITANos154l20I0,'71312010,77512010,109212010'll0I/2010 l 103/2010. I 104/2010, lrr2l20r0 & rl24l40rc Page 16 of ZZ 2012:DHC:7826-DB

responsibility for the fahe certificates of registration T'aking zrtt ovet.all vterv ol-thc fa.cts and going by the preponderance of probabilrties, the l'ribunal caure to lrolcl lhe view that it was because of the irregularities, illegalities and tnls-reprcsetttattotts ttf Sikri that the assessee - society was led to believe that appropriate applicatiotts ttndcr the Act were already filed with the income tax authoritles for registt'ttttou 'l'lie assessee - society was thus under the belief, though mistaken but honcst, tltal there was no delay and once it came to know on 06 122005 about thc irregula.rtttcs oll a complaint frorn M. P. Mansinghka Trust of Mumbai and ott lurther elrqllrl'y cotrclttt:tccl on 14 l2.2OO5 by the governing body, it hastened to take retler,lial acliort try filrrrg applications for registration both under section l2A and BOG of lhe Act, rt,lticlt tvctc followed up by another set of applications filed directly rvith the Dl'f (ltxcnrptrotrs) otr 21 12.2005; these applications were obviously deiaycd and the cotrtlonatiott application was filed on 14 03 2006 narrating the events that led to the delay 19 In the above circurnstances, it seems to us lhat the l'rtbunal has ttctcd judicially, taking note of all the facts and circumstances including pLobabilitics o['the case h Esthun As'vathiah v. CIT, (1967) 66 ITI{ 478 SC, the SLrprcrttc C'ottrt outlined the duties of the Tribunal in the following words - "The funclion of the Tribunal. rn hearntg an apptectl rs lttu'ely lrrdrcrul. It is under a dury b decide all queslions of /acl attd latu rai'scd ttt lhe appeal before it: .for lhat lnrpose il ntusl uttsider wltelher ott llte ntalerrals relied upon by lhe assessee his plea rs tnade rnr(. ('rtttcltt,rrve proof of the clamt ts ttot predicaled: llte'li'iburrcrl ntctlt crcl ultotr ltrobabilities, and presumlttrc,trt,s may 51rppl.)/ gQps rrt lhe evrclartc'a v,hich may nol, on accounl of delay or llrc tralure o/ the lt'artscrclrr,ttt',s' rtr for otlrcr rectsons, be supplied .fi'om tndependenl 'tource.\'. ]Jul llrc Tribunal cannot nmlce arbifi'ary dectsrorts: i1 catttrcl .fittrtul tls' judgntent on conjectures, Surnuses or speculelron. lJetweetr llte clmtrr.s' of the public ret)enue and o.f the taxpalters, the Ti'tbunal musl nrcrrtrlrrrrt a ludrcial balance." ITA Nos 7 5412010. 17312010, 77 512010, 109212010. I l0l/20 10' l r03/2010. 110412010. rrr2/2010 & 1 124/2010 Pagc 17 of22 2012:DHC:7826-DB

In (Jrlhat,elas l(evtalram v. CIT, (1967) 66 ITR 462 SC., the very satrte llettclr ol'llrlcc judges of the Supreme Court again observed as under' - "The Inconte-tax Appellale Tribunal per.'fornt,s tt lttdrctul firrrclrrttr under the Indtan Income-lax Acl: il rs rrtve.s'led v,rl/t crt,rlhot'tl.\t /rt cleterntine.ftnalllt all Eresfions of facl. T'he'frrbtmal, mtrsl, itr dectc{rtrg an appeal, constder wilh due care all lhe mulerml..fctcls trrrd rt:cr,t'd tl,s finding on all the contenlions ratsed by lhe a.s.ressve ttrrul llta Conunissioner ilt lhe hght of lhe et'ulence attd lhc relevttrtl \rnt,.......... ......The Tnbunal v,as utrdoubtedly cotrtlrclettl lrt disagree wrth the vretu of the Appellole Assslanl Comntisstonar lJul m proceeding to do so, the Tnbunal had to act fudrctctlly, r c , lO constder all the evidence ut favour of artd crgcrrtt.st lhe a,s's'es,sce. hr order recorded on a revietu of otily a parl of the et,tdettce uttd rgttttt'ttrg lhe rentautittg evidence canttol be regat'ded ori t;r,nrcltt,stvel.t, delerninmg the questions o.f .facl rarsed befct'e lhe Trtburrul." 20 We are satisfied that the Tribunal has, in malcing its clecisron, liept itt ttrtttcl lltc afloresaid principles adumbrated by the Sltprerne Court lts order caltuot, tlrcrclirte" lrc branded as perverse or unreasonable or irrational 21 That takes us to the question as to whether in condoning the delay the J'trbtrlral cornmitted any error of law or illegality. There is a wealth of judicial literalr"rrc otr tltc subject of condonation of delay and most of the cases have arisen under sectton 5 of the Limitation Act, 1963. The principles that are to be applied are, ho\^icver, no different whenever the question of condonatlon of delay colnes up for col'tstclcraltott under other statutes In the oft quoted judgrnent of the Supreme Court nt Crtllcclttr', Land Acquisttion v. MST. Idati1r & Ors., (1987) 167 ITR 471 it was observecl as follows - ,,The Legislature has confer"recl lhe potuct' lo curdotre clelu.lt b.1, enaclmg secfion 5 I of the Lrnulalion Acl of I963 rtt ordet' lo etnble lltt' cour'fs lo do subslariral ltslice lo pctt'fie,s by dtspttstng o.f nrallu's tttr cla mertls". The expresslon "suffictenl ccutse" emplctyed by tlrc Legi,s'lulrrra is adequalellt sl.ot\i. lo enable lhe uturls lo crpply lhe luttt itr tr ITA Nos 7 54/2010. 77312010, 11 sl20l0, l0nD0I0' I l0l /20 10, 1103/2010, rt04120r0, nl2,l20l0 &" lr24l20l0 I']agc llf o[ 22 2012:DHC:7826-DB

/2q / ( 1r,/ ntearungful mannet'whclt subsers,es tl'te ends of'.1t.rslicc lltul l,t'rrrg ,Y lfe-purpose of the extslence of the rrtslrlulron of courls. I( rs cotnrtttttt tmowtedge that ths cour'l ha,g been malctng (I .1u'slr.fiubly Irbt'r'ul approach in nrufters instiluted m lhts courl. Bul /he nlessuge cfux:'t trrtl appear lo hat,e percolated down lo all lhe olher c'ottr'l.s rtr lha hierarchy." 22 The following general principles were laicl down and it ts thesc lrrinciplcs which guide the Court in approaching the question of condonation of delay - "Attd. such a liberal approach is adopled on prutcillle cts rl is rculrzul tha{: I. Ordtnarily, a liltganl does nol sland /o betrc./it b.1t loclgrtrg ttrr appeal late. 2. Refusitrg to condone delay can reswll itt ct nret'tlorrrtr,t,t nrollar bemg lhr-ovtn out at lhe very threshold ancl cquse of fuslict: h<:trtg defeated. As agamst this, when delalt rs corrdorted, the highe.rl lhcrl t'trrr happen is that a cause would be deurJe.cl ott ntct'Il.r crfler lteut'tng lha parttes. 3. "Every day'5 5ls7t, nrusl be explcuned" cloes nr-tl me(Itt lltql u pedanfic approach should be mctde. Wty rtrtl cvet't) hour''s delcr.y, cvct'-)) second'S delalt? The doctnne nrusl be ctpplrcd Dl u rolrortal, crttttrtrrtrt sense and Pragnafic nmnner. 4. Wen substanlial, .Jtrsltce and lechrncal c'ottstc{eralirtts ure pilted against each other, the couse of subsluntml .iuslicc dcsu't,c,t ltt be preferred, for the other stde cannot claint lo have veslcd right trr injustice bemg done because of a nort-delibet'ale clel'ct.1t' 5. There is no presumptiort .lhal delalt is occasioned deltbcralcllt, or on accourtt o.f culpabt.e neghgence, or on accouttl of nrala ./tdc,s. A Iilryant does not sland to benefit by resorlrng lo clelcr1,. In.fuct, he rtttt,t a s'erious nslc. 6. It tttust be gra,sped lhul /he luchcrcu'1t rs re.tpetle,l rrLtl rttt accounl of its pot4)er to legahze inlusltce on lechrucal gt'rtturcls brrl because it n capable of rentovtng inlus'lrce arrd r,s expecled lo clo s'tt." ITA Nos.7 54 170 lO, 1 1 3 12010, 11 5 I 2010, 1092 12010, I t 0 I /20 I 0, l 103/2010. I 104/2010, llr2l2010 &" ll24l20 l0 I'age l9 ol'22 2012:DHC:7826-DB

8v 23 In N. Balahtshtnn t,. M. I*'ishrnnmrlh.y, (1998) 7 SCC 123 thc Supt'ctttc Court again reiterated the approach In Ram Nalh Sao (a) ftcrm Nalh Su]ru curcl Or's I".s' Gobarc{han Sao and Ors., (2002) 3 SCC 195 it was observed by the Supretne (ltxtt't that acceptance of the explanation furnished should be the mle and relusal, zrn exception, ll1ore so when no negligence or iltzrctiou or rva-nt ol lxttrtt .fitle's can I'te rlrputcd to t5e defaulting party In the present case, the Tribunal has fotrtld lltat tlrc assessee - society has taken prompt rernedial actiott ancl put Silcri on the clock atrcl lte also admitted his fault, though he tried to shift the blarnc to ltrs etlploycc wlto:ic whereabouts were never known Even in his bail application ire had conlbsscd to lris role in the alleged irregularities and illepfalities There has been tto wzrtlt ol bttttcr,ftclt',s' on the parl of the assessee, nor did it fail to take tmtnediate acliou ottce it rvas appttsccl of the irregularities in its affairs by M P Mansinghka 'l'rust of Mutttbat Itr lltesc circumstances, we are unable to say that the Tribunal oomrnitted an el't'ol' tn crlltdrltttltg the delay 24 On the question of perversity of the decision of the Tribunal we mzry alsio rclbr' to rlre judgmelt of the Supreme Courl rn Sree Meuruks'h A4rlls Lld. v. (-l'l-, (19,57) 3l ITR 28. In that judgment, it was noted that only a cluesttotr of lztw catr be re['errcc[ lirr decision of the Court and the decision of the Tnbunal ol-l il qlreslrott o{' lacl t:att lre challenged only if it is not supported by any evidencc, or is uureasonairle or llcr.vcl rjc The following pithy observations of T L Venkataratna Aiyar, .l speaktng lirr (hc Court are rclevanl . - The poittt for deusiort rs vthelJter llte.re at'tses oul rtf (lte order of the fibunal any quesltott tvhich can be lhe strbfec:l of referenie under secfion 66 (I) of the Act (Inder lhal secliott, il rs ottl.1' a queslion o.f latv that can be re.ferred for dectxott r1f'lhe ('r-turl, tuuJ rl ts mtpossible lo argue that lhe conclu.sron o.f tlte 'lj'ihunal rs crrtltllrrng but one of fact. It has been held on the corresponding prrntisions itr llrc English Income-lax stalules thal o f rnlittg'on Lt quesliotl o.f facl is r'tpcrr ITANos754l20l0,173l20l0,'71512010'109212010'll0i/2010' 1 103/2010, 1 104/2010, 1ll7l20l0 &" ll24l20l0 I'agc'2ll of 7.2 2012:DHC:7826-DB

lo attaclc as erroneous ttl /aw only i.f rl r.s rtol ,sttl4trtr'lcd by ottll evrdence, or tf tt i.s unreasonable and pervcr.\e, btrl lltctl t'vhet'a lhare t,t' evidence to consider', the decisiott clf lhe Ti-rbunal ts./inal cverr /horrglt lhe Court ntight not, on lhe malertal,s, lnve cottte l.r,t lhe ,urrtrtt conclusion if it had lhe povtet' to subsltlule tls ot,r,rt lttdgntcnl. Itr (lrcttl l4/eslern Railtuay Co. v. Ba{et' (l), Lord Atlrinsort ob.servetJ: "Their (Commissiorrcrs') delermrncrliotts of queslt rttn r1f pure.fact at'e not lo be dtstut'bed' ctttl' more lltcrtt are llte findings of a juryt, unless it should aPpear lhal l.hare v)as no evidence before lhent uport v'lttch lhe)t, (t,l reasonable nrcn, could cctnte lo lhe conclus'rcttt ltt vvhtc'h lhelt have conle; anct thts', et'en though lhe Crttrt'l rt/' Ret,ietv tuould on lhe et'rdence ltave cottle lrt o concluson enlirely dffirett.fi"om lheirs " There rs no need to further elaborale lhis posiltrtrt, beccttt.sa (lrc luw o,t lord doy,tt m lhese obsert,afiorts is well sellled., cutd ltus beur crcfutl,tlcd rrr llrc construction of section 66 of the ,4ct." 25 Thrs view was reiterated by the Suprerne Court irr (--l'l' v l)utrlcrlrtrttr Rawatntull, (1964) 53 ITR 574 where it was held that "rf there IS s()me cvt(Jcttc( to support thefinding recorded by the Tnbunal, even tf il appears lo lhe IIrgh ('orn't tlnrt or.t re-appreciafion o.f the et,idence, tl nughl LTrrIve ol a conclu,sutt dr.fferettl .f rttttt llrul of the Tribunaf' the High Courl has no power to inlerfere with the i-rndings o['thc Tribunal. These decisions were appligd by a Division Bench of this Courl n ('l'l' t' Baba At,tar Smgh, (1972) 83 ITR 738 where it was observed as under - "The Submsslotx made by Mr. Sharma Qoe's nol appear' lo tt,r l() l)c correct. Ir is well-setlled thal the cour'l cannot sel o'srde lhe 'l'rtburml"s' finding of fact if there ts s(rne evidence to sltppctr'l lltal Jinding avatt though the courl flself ntight han,e conte lo a dr/ferenl corrclnsiott t,tpott lhe evidence." ITA Nos.754 120 10, 17 3 lZ0 10, 71 5 12010, 1092/20 I 0, I l0 l/20 I 0' I 103/2010. I 104/2010, lll2l2010 &- ll24l20r0 l'age 2l o[ 22 2012:DHC:7826-DB

26 The aforesaid principles govern the order o1'the l'ribunal and the apptoaclt 1o be adopted by us in the present case. At best, rvhat can be argued by the l{cvcttr-rc ts olly that another view was possible to be taken by the 'fribr-rnal and this ('otlrt sltor"rlcl prefer the alternative view on the same facts and evideltce atld cliscard the'l-ribr-rrlal's view Obviously the argument cannot be upheld, having regard to tlrc abovc judgrnents 2j For the above reasons we answer the substantial cluestiotts of law fiatttctl ttt ITA Nos 754, 173 and 775 of 2010 in the negative, against the Revettr-te attd itr lhvtrttr of the assessee Consequently the sole substantial qucstton of law fiamed by us rtr ITA Nos.1092, 1101, 1103, 1104, l112 and 1724 of' 2010 is auswered in thc affirmative, against the Revenue and hn favour of the assessee 'l'he C M Applrcatiorr is clisposed of. The appeals of the Revenue are accordtngly dismissed with no ordcr as to costs. Ilil k \\ ;-.-'.-r ' . 0R:v. nASwAIt) .NU]DCE \ L*.J"*[V.,.,1" (s" IRA,VINDItA. IlttA,'l') .I[JDG[,], DECEMEE,R.2l, 2ON2 hs ITA Nos. 7 5 4 I 20 lO,'7 1 3 I 20 10, 7 1 5 I 2010, 1092 I Z0 lO, 1 103/2010, t 104/2010, lll2l20l0 & 112412010 I 101/2010, Page 22 ol-22 2012:DHC:7826-DB