MAHARISHI DAYANAND EDUCATION SOCIETY ,PUNJAB vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS )CHANDIGARH , CHANDIGARH
Facts
The assessee, Maharishi Dayanand Education Society, filed an application for approval under Section 10(23C)(vi) of the Income Tax Act, 1961. The CIT (Exemptions) rejected the application, stating that required documents were not filed. The assessee appealed against this order, which was filed belatedly.
Held
The Tribunal condoned the delay in filing the appeal, considering the submissions regarding change of counsel and technical issues with the e-filing portal. The matter was remanded back to the CIT(E) to examine and verify the documents submitted by the assessee.
Key Issues
Whether the CIT(E) was justified in rejecting the application for approval under Section 10(23C)(vi) due to alleged non-filing of documents, and if the delay in filing the appeal should be condoned.
Sections Cited
10(23C)(vi), 10(23C)(iiiad)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. VIKRAM SINGH YADAV & SH. UDAYAN DASGUPTA
Per Udayan Dasgupta, J.M.:
This appeal is filed by the assessee against the order of the ld. Commissioner
of Income Tax (Exemptions), Chandigarh dated 22.09.2020 rejecting an application for seeking approval u/s 10(23C)(vi) of the Income Tax Act, 1961
2 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT
Grounds of appeal taken by the assessee in Form No. 36 are as under:
“1. That the Ld. CIT(Exemptlons), Chandigarh has erred in passing the order u/s 10(23C)(vi) of the Income Tax Act, 1961 vide order, dated 22.09.2020 and dismissing the application of the assessee for grant of approval u/s 10 (23C) (vi) of the Income Tax Act. 2. That the Ld. CIT (Exemptions) has failed to appreciate that the assessee had complied with various questionnaires/details as required from time to time and it is wrong to allege that certain details as mentioned in the order of Ld. CIT (Exemptions) has not been filed by the assessee. 3. That the rejection of application u/s 10(23C)(vi) is uncalled for, since the assessee had submitted all the details as mentioned in para 3 of the order of Ld. CIT(Exemptions) and, thus, the order as passed by the Ld. CIT(Exemptions) for granting approval u/a 10(23C)(vi) is not valid. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.”
Condonation of delay:- It is pointed out by the registry that the appeal has
been belatedly filed before the Tribunal which is delayed by 1294 days. The assessee
has filed an application requesting for condonation of delay, the relevant portion of
which are explained as follows:
“1. The order was passed by the CIT (Exemptions) on 20.09.2020 2. The appeal was to be filed on or before 20.11.2020 3. The appeal filed on 07.06.2024 4. The COVID period to be excluded from 20.11.2020 to 31.05.2022 5. Actual delay 738 days”
An affidavit has been filed by Mr. Tarun Munjal, Adv. of the assessee and also
by the Director of the society Mr. Ranveer Partap Asija, and as per the details
3 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT contained in sworn affidavit filed, it is seen that the earlier to June, 2018 one Mr.
Sakshi Juneja, CA was looking after the taxation work of the above said Society from
2016 to May 2018 and through the primary e-mail address and mobile number
registered on the societies profile belongs to the society, the secondary e-mail address
and mobile number belongs to C.A. Juneja & Associates, Chartered Accountants, and
mobile and the landline number also relates to the Sakshi Juneja, CA. The said
profile of the society has not been updated. It is further submitted by him that he has
applied in Form No. 56D for grant of exemptions u/s 10(23C)(vi) and in response to
such an application, questionnaires were issued by the ld. CIT(E), Chandigarh in
response to which replies were submitted on various dates through online portal. The
rejection order of ld. CIT(E) dated 22.09.2020 was received through secondary e-
mail id, but unfortunately he never intimated the same to the assessee’s society
because office of the society was non functional during Covid period. Thereafter, he
has filed a fresh application in form 56D with CIT(E), Chandigarh on 22.10.2020 and
till date no response has been received against such application. He further submitted
that on 21.05.2024 he was intimated by the Director of the assessee’s societies,
regarding outstanding demand for assessment year 2020-21 received through e-mail
from the Income Tax Department and on subsequent verification of the portal, he was
aware that the order for registration has been passed rejecting the application.
Similarly, affidavit has also been filed by the Director of the Society Mr. Ranveer
4 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT Pratap Asija who reiterated the fact that he has been informed by the e-mail from the
Income Tax Department regarding the outstanding demand for assessment year 2020-
21 after which he contacted his counsel Mr. Tarun Munjal and along with him, they
have appointed a new counsel to file this appeal before the Tribunal on 07.06.2024.
As such, the main contention of the assessee is that the entire delay has occurred due
to change in counsel and non receipt of proper notice in the proper e-mail id because
of some technical error regarding spelling mistakes in the mail address, and he prays
that since there has been no malafide intention or intentional default on the part of the
assessee the delay may be condoned and the appeal may please be admitted to be
heard on merits.
Considering the affidavits filed by the advocate and the Director of the Society
and considering the reasons contained in such affidavit, we condone the delay of 738
days (excluding Covid period from 20.11.2020 to 31.05.2022) and while condoning
this delay, we also place reliance and draw support from the followings decisions
where it has been held that the assessee should not suffer on account of mistake of
the counsel and considering the facts stated above, we condone the delay:
(i) MANOJ AHUJA (MINOR) & ANR. vs. INSPECTING ASSISTANT COMMISSIONER, reported in 150 ITR 696.
(ii) Gurfateh Films and Sippy Grewal Productions (P) Ltd. Vs CIT, reported in 95 ITR (Trib.) 0456 (Amritsar)
5 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT (iii) C.G. PAUL & CO. vs. INCOME TAX OFFICER 1TAT, COCHIN BENCH, reported in 52 ITD 276
(iv) INCOME TAX OFFICER vs. MEGHALAYA BONDED WAREHOUSE, I.T.A.T., GAUHATI BENCH, reported in 60 ITD 219.
(v) Judgment of ITAT, Chandigarh Bench, in the case of H.P. Cricket Association in ITA Nos. 110 & lll/Chd.2004.
(vi) SUDERSHAN AUTO ft GENERAL FINANCE vs. COMMISSIONER OF INCOME TAX, ITAT, DELHI ‘B’ BENCH, reported in 60 ITD 177.
The brief facts of the case are that the assessee is a Charitable Society engaged
in providing education through its college namely Maharishi Dayanand Education
Society and is duly registered under the ‘Societies Registration Act, 1860’ and
registered number 1313 of 2023. The assessee has been consistently allowed
exemptions u/s 10(23C)(iiiad) of the Act, as the gross receipts of the society where
all along below Rs. one crore. During the year under appeal, the gross receipts
exceeded one crore, and the assessee filed an application seeking approval u/s
10(23C)(vi) on 30.09.2019 in Form 56D. The Commissioner (Exemptions) raised
questionnaires dated 15.06.2020 against which complete response has been filed by
the assessee through e-filing portal. Subsequently other notices were issued from the
office of the CIT(E) dated 10.09.2020 seeking response to earlier notice and
requested for copy of MOA, bank statements, fees structure, salary details and details
of donations. As per the ld. CIT(E), no documents has been filed by the assessee and
6 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT as such in absence of the required documents there is no way, the genuineness of the
activities of the society can be corroborated with the aims and objectives thereof and
as such accordingly approval u/s 10(23C)(vi) was rejected.
Now, the assessee is in appeal before the Tribunal on the grounds contained in
the Memorandum of Appeal and has categorically submitted that the copy of
Memorandum of Association has been filed on 28.07.2020, bank statements filed on
29.07.2020, fees structure details has been filed on 28.07.2020 and salary details are
already appearing in audit financial statements which has been filed on 29.06.2020,
and details of donation is also apparent from Audited Financial statement filed on
29.06.2020. Therefore, the ld. AR submits that each and every details has been filed
which are evident from the documents available in the portal and as such the finding
of the ld. CIT(E) regarding allegations of non filing of documents while rejecting the
application is not at all correct and against the principles of natural justice. On merits
of the case also he relied on the judgment of the Hon’ble jurisdictional Punjab &
Haryana High Court in the case of Sanatan Dharam Shiksha Samiti, reported in 19
Taxmann.com 87 and also placed relaince on the judgment of Hon’ble Punjab &
Haryana High Court in the case of Pinegrove International Charitable Trust, reported
in 327 ITR 73, wherein it has been held as under:
7 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT “Section 10(23C)(vi) of the Income Tax Act, 1961 - Educational institutions - Assessment years 2000-01 to 2007-08 - Whether to decide entitlement of an institution for exemption under section 10(23C)(vi), test of predominant object of its activity has to be applied by posing question whether it exists solely for education and not to earn profit and merely because profits have resulted from activity of imparting education would not result in change of character of an institution that it exists solely for educational purpose - Held, yes."
He further submits that in the instant case, it is clear from the aims and objects
as appearing in the Memorandum of Association of the society that the society exists
solely for the purposes of education and if properly evaluated, the basic condition of
section stands satisfied. As such he humbly prays that the registration of the society
may please be directed to be allowed or directed to be granted.
Per contra, the ld. DR relied on the order of the ld. CIT(E) and argued that all
documents and papers was not filed before the ld. CIT(E) and there might have been
also technical glitches in the portal or otherwise and he states that the papers and
documents needs to be verified and inquired into to be satisfied regarding the
activities of the societies which could not be done due to technical reasons by the ld.
CIT(E).
We have heard the rival contentions and considered the materials on record
including the contents of the paper books filed by the assessee which consists of
8 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT Memorandum of Association along with the Rules and Regulation, affiliation
certificate by the Punjab University, (Chandigarh) and copy of screenshot of e-filing
portal evidences in filing of details before the ld. CIT(E), filing of response with
reference to earlier letters, copy of audited accounts and balance-sheet and income
expenditure-account for assessment year 2017-18, 2018-19 and 2019-20, guidelines
of fees as issued by the Director of state counsel of Educational Research and
Training, (Punjab), copy of month-wise and employee wise salary sheet and copies of
bank statements maintained by the assessee society. Considering all this materials on
record we find it proper and just to remand the matter back to the file of the ld.
CIT(E) to examine and verify the documents and papers along with the supporting
evidences required to arrive at the conclusion regarding the genuineness of the
activities of the society in terms of its aims and objects as contained in the
Memorandum of Association.
As such, the matter is remanded back to the files of ld. CIT(E) to consider the
application for registration u/s 10(23C)(vi) afresh after allowing reasonable
opportunity of hearing to the assessee and the assessee is also directed to file all
necessary documents before the ld. Commissioner (E) and fully co-operate in the
fresh proceedings for disposal of the application as per the provisions of law.
9 I.T.A. No.343/Asr/2024 Maharishi Dayanand Education Society v. CIT 10. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate
Tribunal) Rules, 1963 as on 09.01.2025
Sd/- Sd/- (Vikram Singh Yadav) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T
