The Madras Bar Association Charitable And Welfare Trust v. The ITO, Exemptions Ward-2, Chennai / The CIT (Exemptions), Chennai
[Citation -2020-LL-0205-140]

Citation 2020-LL-0205-140
Appellant Name The Madras Bar Association Charitable And Welfare Trust
Respondent Name The ITO, Exemptions Ward-2, Chennai / The CIT (Exemptions), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 05/02/2020
Assessment Year 2016-17
Judgment View Judgment
Keyword Tags claim of exemption • reasonable cause • public charitable trust • unspent accumulation amount • denial of exemption • charitable objects
Bot Summary: Respondents Prayer: PETITION filed under Article 226 of The Constitution of India praying for the issuance of Writ of Certiorari, calling for the records on the file of the Respondent in its impugned proceedings made in Order No.ITBA/AST/S/143(3)/2018-19/1014209118(1) dated 12.12.2018 and to quash the same as illegal. In W.P. No.8360 of 2019 requirement of filing Form 10 at the time of assessment was only directory and it would suffice if the same were filed even thereafter so long as relevant information in support of the claim of accumulation was furnished by the assessee even at the time of assessment. 1593 of 2008 dated 12.12.2018), the petitioner was permitted on 06.01.2020 to file a petition for condonation of delay in filing Form 10 and the Commissioner of Income Tax, who is the proper authority to consider the condonation of delay was impleaded suo motu in the Writ Petition as second respondent. Further, AY 2016-17 being the first year of filing Form No.10 electronically, due to delay in getting DSC for the authorized signatory, Form No.10 could not be filed in time. As per CBDT Circular No.7/2018, dated 20/12/2018 The Commissioner will, while entertaining such belated applications in Form No.10, satisfy himself that the assessee was prevented by reasonable cause from filing of applications in Form No.10 within the stipulated time. The assessee fulfilled the above conditions and therefore, I am satisfied that it is a fit case for condonation of delay in filing Form No.10 and accordingly, the delay in filing Form No.10 by the assessee for accumulation of Rs.13,76,161/-, as claimed, for the Assessment Year 2016-17 is hereby condoned. The impugned assessment which rejects the claim of exemption solely on the ground of non-filing of Form 10 is thus set aside and the matter remitted to the file of the Assessing Authority to be re-done de novo, taking into account order of R2 dated 28.01.2020.


W.P. No.8360 of 2019 IN HIGH COURT OF JUDICATURE AT MADRAS Dated: 05.02.2020 CORAM HONOURABLE DR. JUSTICE ANITA SUMANTH W.P. No.8360 of 2019 and WMP Nos.15973, 8903 and 8904 of 2019 Madras Bar Association Charitable and Welfare Trust, Rep. by its Trustee, First Floor, MBA High Court Buildings, Chennai 600 104. Petitioner Vs 1.The Income Tax Officer, Exemptions Ward 2 Chennai, Aayakar Bhavan Annexe Building, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai 600034. 2.The Commissioner of Income Tax (Exemptions), Ayakar Bhavan, Chennai 34. (R2 suo motu impleaded vide order dated 06.01.2020) Respondents Prayer: PETITION filed under Article 226 of Constitution of India praying for issuance of Writ of Certiorari, calling for records on file of Respondent in its impugned proceedings made in Order No.ITBA/AST/S/143(3)/2018-19/1014209118(1) dated 12.12.2018 and to quash same as illegal. For Petitioner : Mr.S.Rajasekar For Respondents : Mrs.Hema Muralikrishnan, Senior Standing Counsel 1/6 http://www.judis.nic.in W.P. No.8360 of 2019 ORDER petitioner challenges order of assessment for assessment year (A.Y.) 2016-17 passed in terms of Income Tax Act, 1961 (in short 'Act'). petitioner is Madras Bar Association, registered Public Charitable Trust. It holds registration under Section 12AA of Act. 2. Trust was established in 1995 by general body of Bar Association for purpose of carrying out avowed charitable objects including encouragement of profession of law and promotion of legal, cultural and philanthropic services. It also states that it provides medical relief for benefit of public, in particular lawyers and their dependents. 3. For A.Y.2016-17, petitioner sought exemption under Section 11 of Act requiring petitioner to apply 80% of its gross receipts in respect of financial year or, in alternative, accumulating amount in terms of Section 11(2) of Act. claim of accumulation requires filing of Form 10 within specified time limit. This was however not done by petitioner leading to impugned order of assessment rejecting claim of exemption under Section 11 in full. 4. Supreme Court in case of Commissioner of Income Tax V. Nagpur Hotel Owners Association (247 ITR 201) considered question of whether prescription of Form 10 for purpose of accumulation under section 11(2) was mandatory or directory. conclusion was that 2/6 http://www.judis.nic.in W.P. No.8360 of 2019 requirement of filing Form 10 at time of assessment was only directory and it would suffice if same were filed even thereafter so long as relevant information in support of claim of accumulation was furnished by assessee even at time of assessment. 5. impugned order of assessment in this case refers to claim of accumulation and details of such accumulation. For this reason and in line with judgment of Supreme Court in Nagpur Hotel (supra) that has also been followed by this Court in case of Commissioner of Income Tax V. Spic Educational Foundation (T.C.(A)No.1593 of 2008 dated 12.12.2018), petitioner was permitted on 06.01.2020 to file petition for condonation of delay in filing Form 10 and Commissioner of Income Tax (Exemptions), who is proper authority to consider condonation of delay was impleaded suo motu in Writ Petition as second respondent. second respondent was directed to consider submissions of petitioner, and to dispose delay condonation petition within specified time limit. 6. matter was listed today for production of copy of order of Commission either accepting or rejecting request for condonation and it is seen that vide order dated 28.01.2020 passed under Section 119(2)(b) of Act, R2 has, after consideration of submissions of petitioner, condoned delay in following terms: '4. In obedience to order of Hon'ble High Court, case has been posted for hearing on 21/1/2020 at 10.30 AM. AR of trust appeared and filed relevant particulars. AR has been asked to 3/6 http://www.judis.nic.in W.P. No.8360 of 2019 file further information in respect of claim for accumulation. said details have been filed on 27.01.2020. details filed have been considered. 5. It is submitted by assessee that all trustees are legal professionals and meeting of trust could not be held earlier due to non-availability of some of office bearers. Further, AY 2016-17 being first year of filing Form No.10 electronically, due to delay in getting DSC for authorized signatory, Form No.10 could not be filed in time. assessee filed F.No.10 electronically on 29/12/2016. 6. It is further submitted by assessee that it has invested accumulated funds in modes prescribed under section 11 (5) of Act for purpose of carrying out objects of trust. It is noticed that funds to extent of Rs.19,44,491/- (April 2015 to March, 2016) are kept in account of The Tamilnadu State Apex Co-operative Bank Limited, Head Office branch, NSC Bose Road, Chennai. shortfall si worked out as under: Gross Receipt (in Rs.) 33,20,035 85% thereon 28,22,030 Application (Rs.) 13,12,392 Shortfall (Rs.) 15,09,638 7. I have carefully examined facts of case and submissions of Assessee Trust. As per CBDT Circular No.7/2018, dated 20/12/2018 Commissioner will, while entertaining such belated applications in Form No.10, satisfy himself that assessee was prevented by reasonable cause from filing of applications in Form No.10 within stipulated time. Further, in respect of Form No.10, Commissioner shall also satisfy himself that aunt accumulated or set apart has been invested or deposited in any one or more of forms or more specified in sub-section(5) of Section 11 of Act 8. assessee fulfilled above conditions and therefore, I am satisfied that it is fit case for condonation of delay in filing Form No.10 and accordingly, delay in filing Form No.10 by assessee for accumulation of Rs.13,76,161/-, as claimed, for Assessment Year 2016-17 is hereby condoned.' 7. impugned assessment which rejects claim of exemption solely on ground of non-filing of Form 10 is thus set aside and matter remitted to file of Assessing Authority to be re-done de novo, taking into account order of R2 dated 28.01.2020. 4/6 http://www.judis.nic.in W.P. No.8360 of 2019 8. Writ Petition is allowed in aforesaid terms. No costs. Connected Miscellaneous Petitions are closed. 05.02.2020 Index : Yes Speaking Order sl To 1.The Income Tax Officer, Exemptions Ward 2 Chennai, Aayakar Bhavan Annexe Building, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai 600 034. 2.The Commissioner of Income Tax (Exemptions), Ayakar Bhavan, Chennai 34. 5/6 http://www.judis.nic.in W.P. No.8360 of 2019 DR. ANITA SUMANTH, J. W.P. No.8360 of 2019 and WMP Nos.15973, 8903 and 8904 of 2019 05.02.2020 6/6 http://www.judis.nic.in Madras Bar Association Charitable And Welfare Trust v. ITO, Exemptions Ward-2, Chennai / CIT (Exemptions), Chennai
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