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Facts
Two appeals were filed by Shri Ishwar Hari Charitable Trust against orders of the CIT (Exemptions). One appeal (ITA 475/CHD/2023) was time-barred by 228 days due to a clerical mistake in filing. The other appeal concerned the denial of registration under Section 80G.
Held
The Tribunal condoned the delay in filing ITA 475/CHD/2023, holding that it was a bonafide human error. The Tribunal also modified the order of the CIT(E) regarding the registration, stating that the Trust should have been granted registration as a Charitable Institution, not just a Religious Trust. The issue of Section 80G registration was restored to the CIT(E) for fresh examination.
Key Issues
Whether the delay in filing the appeal can be condoned due to a bonafide human error, and whether the Trust's objectives qualify it for Charitable Trust registration.
Sections Cited
12A(1)(ac)(iii), 80G, 12AB(1)(b), 253, 249, 5
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
The present two appeals are directed against the separate orders of the ld. Commissioner of Income Tax (Exemptions) [in short ‘the CIT (E)’] dated 27.09.2022 ( passed under Section ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 2 12A(1)(ac)(iii) and dated 28.09.2022 (passed in Form No. 10AD for grant of registration under Section 80G.
2. The Registry has pointed out that ITA 475/CHD/2023 is time barred by 228 days. In order to explain the delay, the assessee has filed an application contending therein that both the appeals were required to be filed simultaneously because there is only one day difference between the impugned orders passed by the CIT(E). The clerk of the Tax Consultant did a mistake and put the papers of ITA 475/CHD/2023 i.e. challenging the order of ld. CIT (E) passed under Section 12AB(b)(ii) in the appeal papers of denial of registration under Section 80G. This fact came to the notice when Tax Consultant was preparing the appeal for hearing.
3. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression sufficient cause employed
ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 3 in the section has also been used identically in sub-section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon’ble High Court as well as before the Hon’ble Supreme Court, then, Hon’ble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon’ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji& Others, 1987 AIR 1353:
1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day’s delay must be explained" does not mean that a pedantic approach should be made. Why not ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 4 every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
4. Similarly, we would like to make reference to authoritative pronouncement of Hon’ble Supreme Court in the case of N.
Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under:
“Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy
ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 5 for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finislitium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss”.
ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 6
5. Ld. DR has relied upon the order of the Revenue Authorities.
In the light of the above, if we peruse the application for condonation of delay, then it would reveal that due to some clerical mistake, papers of this appeal have been put in the folder of the second appeal which was duly filed well within limitation. There cannot be any deliberate attempt at the end of the assessee to make its appeal time barred. It was a bonafide human error. Therefore, we condone the delay and proceed to decide the appeal on merit.
The assessee has filed an application for grant of registration under Section 12A(1)(ac)(iii). This application of the assessee has been allowed by the ld. CIT (E) but registration has been granted as a Religious Trust and not as a Charitable Trust. The ld. Counsel for the assessee drew our attention towards the objective of the Trust and submitted that it is not solely existing for religious purpose.
The reference to religious activity is only with an aim to ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 7 fulfill the objects of the Trust. He took us through the Trust Deed for exhibiting the various charitable objects of the
8. On the other hand ld. CIT DR submitted that some of the objectives of the assessee are of religious nature, therefore, ld. CIT (E) has rightly registered it as a Religious Trust.
9. We have duly considered the rival contentions and gone through the record carefully. The Trust Deed dated 05.03.2018 is placed at page No. 23 of the Paper Book. Its English translation is at page32. The objectives of the Trust are on the backside of page No.34. These objectives read as under :
Aims and Objectives of trust:- 1. To achieve public confidence and to make them a part of religious organisations which is for the welfare of society and for spreading the message of peace in society and for the overall development of society, is Established. For working in common and public welfare and collectively motivate people to work for social welfare and for joining hands in public welfare as well as for respecting the famous personalities working in religious field and motivating the needy students of the village to send them to schools as well as imparting awareness against female foeticide in the society, motivating for respecting the women and girl child and to live as civilized
ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 8 persons in the society spreading the message of volunteering. Motivating people according to Gurubani rituals such as Kirat Kama, Naam Japna and Vand Chakhna as well as motivating to perform other tasks in accordance with Gurubani. To impart free education to children of poor people and also arrange free books for them and helping sports students to gain more success and arrange sports events in the village by commemorating sports students; will motivate them. Joining people by way of Gurbani by conducting dharmik samagam in the village and dharmik knowledge alongwith sending chelas to school, college, academic (knowledge) of Board level education and sending chela's to other parts of india and to other countries to let them learn common as well as religious education orally as 'well as by way of correspondence or to establish, run and manage to join the franchise and learn to cooperate.
Organizations like universities, colleges, schools, religious organizations, Gurdwaras, Old age home, orphan home, establishment of hospital, develop as well as control and administer these, attain grant and finance and for the welfare of the people establish rehabilitation centre and shelter houses. Providing good food to them and educate them to lead a clean environment education.
To Establish in India and other parts of the world religious libraries, reference libraries, mobile libraries, study through CDS and cassettes and provide them with, books, reviews, magazines, newspapers and other publications alongwith providing instrumental and vocal music to the disciples and Sadh Sangat.
Understanding normally Indian culture and its review and advertising Dharmik trust between India and the world, propagate and instigate to join hands to organize the cultural mission.
To organise Keertan Darbar, Lecture and for adjoining works by way of direct or indirect methods, for increasing importance of the trust and its objects and to encourage religious as well as social welfare. Taking donations, Receiving Moveable as well as immovable properties and other securities. To give membership of Trust to the Doners and for the welfare of the trust the trust may maintain its property in any state, may sell and buy more or exchange the same, better use of trust's Money for any legal purpose which will be applicable according to the need of time.
6. Make constructions, Development, buying, taking property on rent or lease to fulfil the objectives of the trust and to take care of the trust property for the purpose of doing sewa for all, to get required buildings for the trust.
ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 9
7. Using trust income and its property for the development of its activities which is written in the memorandum. And none of its portion be utilised in the form of dividends, bonus or any other form by the members of the trust.
Development of brotherhood and free service among the members and sadh sangat, providing free physical training to the followers to maintain the discipline which means necessary for the improvement of their health and for the development of brotherhood amongst them by way of developing special facilities towards the development of their cultural Activities.
Fulfilling the requirements of needy patients of poor areas by organizing free health care centres as well as camps for eye testing etc. To Organize healthy free langars at religious places or other areas. 10. To provide immediate help, financial assistance, langar, clothes or any other kind of help during natural calamities. 11. To Organize public congregation for encouraging the brotherhood amongst humanity and organize group marriages for the upliftment of poor people and to adopt needy students for their upliftment.
A perusal of the objectives would indicate that large number of objectives are for charitable purposes only. The assessee would undertake the exercise for education of poor, medical help, brotherhood in the Society, organizing marriages etc. The ld. CIT (E) has called for the record and perused. He was satisfied about some of its activities and therefore, registered it as a Religious Trust but we find that a small segment of activity can be attributed towards
ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 10 religious but majority of objectives are of charitable nature.
Therefore, it should have been granted registration as a Charitable Institution and in case it is find out that assessee failed to apply its income on its charitable objectives, then such issues can be looked after by the AO during the assessment proceedings. Therefore, we modify the order of the CIT (E) dated 27.09.2022. Clause (1) of Annexure appended to this order exhibiting the conditions subject to which registration was granted read as under :
“The Registration is being granted ‘RELIGIOUS TRUST’ u/s 12AB(1)(b) of the Income Tax Act.”
The expression ‘Religious Trust’ would be replaced by a ‘Charitable Trust’. Apart from this modification, rest would remain same.
Now we take ITA No. 719/CHD/2022. We find that the ld. CIT (E) did not grant registration under Section 80G on the ground that the Trust is registered as a Religious Trust.
Apart from that, it has not pointed out any other defects.
Since we have changed the status of the Trust as a ITA 719/CHD/2022 & ITA 475/CHD/2023 A.Y. 2022-23 11 ‘Charitable Trust’ in place of Religious one, then the objections of the ld. CIT (E) would not remain. We set aside the order of the ld. CIT (E) and restore this issue to the file of the ld. CIT (E) for fresh examination.
In view of the above discussion, ITA 475/CHD/2023 is allowed whereas ITA 719/CHD/2022 is allowed for statistical purposes.
Order pronounced on 24.03.2025.