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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI ARUN KHODPIA
आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Exemption), Bhopal, dated 24.02.2016. The assessee has assailed the impugned order on the following grounds of appeal before us : “The society is registered under the Societies Registration Act, 1860. It is a charitable institution established with the primary object of imparting education to all irrespective of the caste, creed or sex. We have filed application u/s 10(23C)(vi) of the Income Tax Act, 1961 in Form No. 56D on 6th April, 2015 seeking exemption from Assessment Year 2014-15. Our said application is rejected on 24th February, 2016 showing cause “assessee did not apply for the exemption within the stipulated time under the Act.” Had the application disposed off before 30th September 2015, we could have file the application for the next Assessment Year i.e. 2015-16 on time. Delay in disposal of case and order has even time-barred us to re-apply the application for the Assessment year 2015-16. Where there are time-limits for the assessee, the same is expected from the part of department also. The application was rejected on the technical ground of delay in filing. However, there was no problem on merit basis on the object of Durg Education & Charitable Society. Therefore we are requesting to condone the delay of our application for the Assessment year 2014-15 OR Consider Application for next Assessment Year i.e. 2015-16.”
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Succinctly stated, the assessee society which is stated to have been established with the primary object of imparting education had filed an application in Form No. 56D on 06.04.2015 with the Commissioner of Income-Tax (Exemption), Bhopal for grant of approval under Sec. 10(23C)(vi) of the Act for A.Y. 2014-15.
Considering that though the assessee society as per the fourteenth proviso to Sec. 10(23C) as amended by Finance (No.2) Act, 2009 w.e.f. 01.04.2009 was obligated to have filed the aforesaid application seeking approval on or before 30.09.2007 for claiming exemption for F.Y. 2006- 07, had however filed the same only as on 16.12.2014 i.e. beyond the prescribed period as enshrined in the Act, the Commissioner of Income- Tax (Exemption), Bhopal was of the view that the application so filed by the assessee was liable to be rejected on the said ground itself. Accordingly, the Commissioner of Income-Tax (Exemption), Bhopal after drawing support from certain judicial pronouncements concluded that as the assessee had failed to apply for the approval under Sec. 10(23C)(vi) within the stipulated time period, therefore, the application so filed before him was not maintainable.
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The assessee being aggrieved with the order of the Commissioner of Income-Tax (Exemption), Bhopal has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of the appeal had failed to put up an appearance, therefore, we are constrained to dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963 after hearing the respondent department and perusing the impugned order before us.
We have heard the Ld. Departmental Representative (for short ‘DR’) and perused the order passed by the Commissioner of Income-Tax (Exemption), Bhopal declining the assesse’s application for approval under Sec. 10(23C)(vi) of the Act. As observed by us hereinabove, the Commissioner of Income-Tax (Exemption), Bhopal was of the view that as the application filed by the assessee seeking approval under Sec. 10(23C)(vi) was time barred, therefore, the same was not maintainable. The relevant observations of the Commissioner of Income-Tax (Exemption), Bhopal are culled out as under : “However, it has been noticed that the application u/s 10(23C)(vi) of the IT Act in Form No.56D was belated filed on 06.04.2015 for the F.Y. 2013-14,
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which should have been filed on or before 30th September, 2014. The delay is not condonable and belated application is liable to be rejected, in the light of following legal position: (i) The 14th proviso to section 10(23C) introduced w.e.f. 01.06.2013 vide Finance Act, 2006 as amended by Finance (No.2) Act, 2009, w.e.f. 01.04.2009 states as under : [“provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the purpose of grant of exemption or continuance thereof, such application shall be made on or before the 30th day of September of the relevant assessment year from which the exemption is sought.”] Considering the afore-mentioned proviso, the application should have been filed on or before 30th September 2007 for claiming the exemption from the F.Y. 2006-07, but the same was filed on 16.12.2014 i.e. beyond the prescribed time period as enshrined in the Act. Hence, on this ground along, the application of the society is liable to be rejected.” 6. Controversy involved in the present appeal hinges around the sustainability of the order of the Commissioner of Income-Tax (Exemption), Bhopal, rejecting the application filed by the assessee as not maintainable for the reason that the same was time barred. Also, it is the claim of the assessee that as the Commissioner of Income-Tax (Exemption), Bhopal had rejected its application on 24.02.2016, therefore, it was divested of its statutory right for filing an application for the next assessment year i.e. A.Y. 2015-16 within the stipulated time period i.e. latest by 30.09.2015. In sum and substance, the assessee by
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raising the second limb of its contention had tried to attribute the laches in non-filing of the application seeking approval under Sec. 10(23C)(vi) for A.Y. 2015-16 to the department which had delayed disposing off its application for the year in question i.e. A.Y. 2014-15.
Before proceeding any further we deem it fit to cull out the provisions of Sec. 10(23C)(vi) of the Act, which reads as under : “Incomes not included in total income In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included – (i) to (v) …………………………………………………………….. (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority” Although the “provisos” appended to Sec. 10(23C)(vi) had undergone an amendment w.e.f. 01.06.2020, however, as the case before us pertains to a period prior to the aforesaid date, therefore, we herein cull out the provisions as were applicable during the year under consideration, as under : “First and second provisos substituted by the Finance Act, 2020, w.e.f. 1.6.2020. Prior to their substitution, first and second provisos, as amended by the Finance (No. 2) Act, 1998, w.e.f. 1.4.1999, Finance Act, 1999, w.e.f.
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1.4.1999, Finance Act, 2007, w.e.f. 1.6.2007 and Finance (No.2) Act, 2019, w.e.f. 1.9.2019, read as under:- Provided that the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall make an application in the prescribed form and manner to the prescribed authority for the purpose of grant of the exemption, or continuance thereof, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via); Provided further that the prescribed authority, before approving any fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), may call for such documents (including audited annual accounts) or information from the fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as it thinks necessary in order to satisfy itself about the genuineness of the activities of such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, and the compliance of such requirements under any other law for the time being in force by such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as are material for the purpose of achieving its objects and the prescribed authority, may also make such inquiries as it deems necessary in this behalf.” 8. Ostensibly, it is the primary contention of the assessee before us that there is an error on the part of the Commissioner of Income-Tax (Exemption), Bhopal in rejecting its application seeking approval under Sec. 10(23C)(vi) on the technical ground of delay involved in filing of the same within the stipulated time period, brushing aside the fact that the case of the assessee considering its charitable activities did merit approval under the aforesaid statutory provision. On a perusal of the
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grounds of appeal filed before us, it transpires that the assessee had came forth with a double facet claim, viz. (i) that the delay in filing of the application for A.Y. 2014-15 be condoned; or (ii) that the application in hand be considered as an application for the next year i.e A.Y. 2015- 16.
Adverting to the request of the assessee that the delay involved in filing the application for approval under Sec. 10(23C)(vi) be condoned, we are afraid that the same not being as per the mandate of law cannot be accepted. Admittedly, the application which was filed by the assessee society on 06.04.2015 for approval under Sec. 10(23C)(vi) for A.Y. 2014- 15 as per the “fourteenth proviso” (as was at the relevant point of time available on the statute) was required to be filed latest by 30.09.2014. Apropos the delay involved in filing of the aforesaid application is concerned, the Commissioner of Income-Tax (Exemption), Bhopal was vested with no power under the Act to condone the same. Our aforesaid view is fortified by the judgment of the Hon’ble High Court of Madras in the case of All Angels Educational Society Vs. Chief CIT, Chennai-III, 72 taxmann.com 251. In its aforesaid order the Hon’ble High Court had
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after considering the judgments of the Hon’ble Supreme Court in the case of State of UP Vs. Harish Chandra AIR 1996 SC 2173 as well as Union of India Vs. Kirloskar Pneumatic Co. Limited AIR 1996 SC 3285 had held that where there is no provision to empower the statutory authority to condone the delay, than the authority concerned cannot condone the same. The observations of the Hon’ble Court in Paragraphs No. 15 & 16 worth to note, read as under :- “15. However, considering the legal position that there is no power to condone the delay in filing an application under Section 10(23C) of the Act, this Court is not inclined to exercise its extraordinary jurisdiction to condone the delay. However, this Court is inclined to give appropriate direction to the respondent to consider the petitioner's application as an application for the subsequent assessment year, namely, 2013-2014 in accordance with law. Such direction is issued considering the peculiar facts and circumstances of the case and that the petitioner could not have made an application for the subsequent assessment year 2013-2014, since their application for assessment year 2012-2013 was still pending consideration and the impugned order came to be passed only on 13.11.2013. The respondent is at liberty to consider the amended objectives of the petitioner Trust. 16. Accordingly, the writ petition is partly allowed and the finding rendered by the respondent that the petitioner's application cannot be considered as the same is time barred is affirmed and the finding with regard to objectives of the Society by respondent holding that the Society cannot be said to be solely for education purpose is set aside. Consequently, the matter is remanded back to the respondent for fresh consideration and the petitioner's application is directed to be considered for the assessment year 2013-2014 in accordance with law and while doing so, may consider the amendments made to the objectives of the petitioner Trust. No Costs. M.P. No. 1 of 2014 is closed”.
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Also, a similar view had been taken by the Hon’ble High Court of Andhra Pradesh in the case of Aurora Educational Society Vs. Chief CIT, 20 taxmann.com 46. The Hon’ble High Court of Orissa had also similarly held in the case of Roland Educational & Charitable Trust Vs. Chief CIT, 309 ITR 50 (Ori). In its aforesaid order the Hon’ble High Court had observed as under : “Be that as it may, we are here concerned whether in the absence of any statutory provision to condone the delay in presenting the application under section 10(23C)(vi), the Chief Commissioner of Income Tax can exercise any such power”. On the basis of the aforesaid position of law, we are of the considered view that as the Commissioner of Income-Tax (Exemption), Bhopal was not vested with any power to condone the delay involved in filing of the application by the assessee society under Sec. 10(23C)(vi), therefore, the same had rightly been rejected by him. We, thus, finding no infirmity in the view taken by the Commissioner of Income-Tax (Exemption), Bhopal who had rightly rejected the assessee’s application for approval under Sec. 10(23C0(vi), uphold the same.
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We shall now take up the grievance of the assessee that as the assessee’s application for approval under Sec. 10(23C)(vi) was disposed off by the Commissioner of Income-tax (Exemption), Bhopal vide his order dated 24.02.2016, therefore, for the said reason the assessee was precluded from reapplying for the aforesaid approval for the immediately succeeding year i.e. A.Y. 2015-16. Having given a thoughtful consideration to the aforesaid claim of the assessee we find substance in the same. Admittedly, it is a matter of fact borne from record that as the assesse’s application for approval under Sec. 10(23C)(vi) for A.Y. 2014-15 was pending disposal on 30.09.2015, and the order came to be passed only on 24.02.2016, therefore, the assessee could not have made an application for the subsequent assessment year i.e A.Y. 2015- 16. Considering similar facts which had came up before the Hon’ble high Court of Madras in the case of All Angels Educational Society (supra), the High Court had though rejected the assesses request for condonation of delay involved in filing of its application for approval under Sec. 10(23C)(vi) for A.Y. 2012-13, but accepting its alternative contention that as its application for the said year i.e. A.Y. 2012-13 was
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pending consideration and the impugned order came to passed only on 13.11.2013, therefore, it could not have filed an application for the subsequent assessment year i.e. A.Y. 2013-14, had therein remanded the matter to the file of the CIT, Exemption with a direction to consider the same as the assessee’s application for the succeeding year i.e. A.Y. 2013-14. As the facts and the issue involved in the case of the present assessee before us are in parity with those as were there before the Hon’ble High Court in the case of All Angels Educational Society (supra), therefore, respectfully following the same we herein remand the matter to the file of the Commissioner of Income-Tax (Exemption), Bhopal with a direction to consider the present application filed by the assessee for approval under Sec. 10(23C)(vi) as that filed for the immediate succeeding year i.e. A.Y. 2015-16.
We, thus, in terms of our aforesaid deliberations though decline the assessee’s request for condonation of the delay involved in filing of its application for approval under Sec. 10(23C)(vi) for A.Y. 2014-15, but at the same time remand the matter to the file of the Commissioner of Income-Tax (Exemption), Bhopal with a direction to consider the
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aforesaid application of the assessee as that filed for the immediately succeeding year i.e. A.Y. 2015-16.
Resultantly, the appeal filed by the assessee is partly allowed for statistical purposes in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 09th September, 2022 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent. 3. The CIT(Exemption), Bhopal 4. The Pr. CIT, MP & CG, Bhopal 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.
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Date 1 Draft dictated on 10.08.2022 Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr. Sr.PS/PS PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order