COMMISSIONER OF INCOME-TAX VS VASU PUZIYA JAIN DERASHAR PEDI UNDRI
1999 P T D 2548
[228 I T R 247]
[Rajasthan High Court (India)]
Before B. R. Arora and J. C. Verma, JJ
COMMISSIONER OF INCOME-TAX
Versus
VASU PUZIYA JAIN DERASHAR PEDI UNDRI
D.B. Income-tax Reference No.32 of 1995, decided on 09/09/.
Income-tax---
----Reference---Charitable purposes---Charitable trust---Findings regarding date of registration of trust, donations received by it and its income-- Findings of fact---No question of law arose---Indian Income Tax Act, 1961, Ss. 11, 12, 12-A & 256(2).
Held, dismissing the application to direct reference, that the Tribunal had found that the registration granted to the assessee-trust was -effective from the date of its inception on December 4, 1977, and that on the basis of the material furnished by the assessee it had established that the voluntary contributions in question had been made with the specific direction that, they shall form part of the corpus of the trust and, therefore, they could not have been treated as the income of the assessee. Since the income of the assessee fell below Rs.25,000 for each of the assessment years in question, there was no obligation on its part to furnish Audited accounts in terms of section 12-A(b) of the Income Tax Act, 1961. These were findings of fact which did not give rise to any question of law.
Sandeep Bhandawat for the Commissioner.
Vineet Kothari for the Assessee.
JUDGMENT
B. R. ARORA, J.---The Revenue, by. this application under Pro section 256(2) of the Income Tax Act, 1961, has prayed that the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (camp at Jodhpur), may be directed to refer the following questions of law for the opinion of this Court which arises out of the order, dated January 16, 1991, passed by the Tribunal:
"(1) Whether in regard to the facts and circumstances of the case, the income-tax Appellate Tribunal was justified in holding that if the learned Commissioner of Income-tax was willing to entertain the assessee-trust's application for grant of registration under section 12-A of the Income Tax Act, 1961, and had, granted registration to it, he should have condoned the delay which the assessee-trust has prayed for, in view of the following facts:
(i) that to grant registration and to condone the delay or not is the sole prerogative of the Commissioner of Income-tax which is not appealable and thus the Income-tax Appellate Tribunal has grossly erred in travelling beyond the ambits of its jurisdiction laid down by the Act;
(ii) the specific provision has been brought in the enactment by way of a proviso to the provisions of section 12-A(a) of the Income Tax Act, 1961, for the Commissioner of Income-tax to examine each and every case and each and every circumstance individually to justify as to whether the delay in filing application for condonation of delay is justified or not and for this only the Commissioner of Income-tax is authorised by the Income-tax Act and his decision is final. By granting registration with effect from December 4, 1986, the Commissioner of Income-tax arrived at a conclusion that the circumstances mentioned by the assessee-trust for the delay prior to making application on December 4, 1986, were not convincing to condone the delay but the Commissioner of Income-tax- has also been judicious in granting registration with effect from the date of filing of the application, i.e., December 4, 1986, only in the interest of justice and to avoid inconvenience and harassment to the applicant-trust. Law does not permit the learned Bench of the Income-tax Appellate Tribunal to record a contrary finding over the decision of the Commissioner of Income-tax in this respect and, therefore, the Income-tax Appellate Tribunal's decision is grossly erroneous and unjustified?
(2) Whether the Income-tax Appellate Tribunal was justified in arriving at conclusion after being impressed by the fact that the Deputy Commissioner of Income-tax Udaipur Range, Udaipur, through oversight mentioned in his directions under section 144-A that the application for grant of registration was submitted to the Commissioner of Income-tax after service of notices under section 148 in view of the fact that though the application for grant of registration was submitted to the Commissioner of Income-tax prior to the service of notice under section 148 but the proceedings for issue of notices under section 148 were started in December, 1986, itself as the matter was referred to the Commissioner of Income-tax for his prior sanction and it was not beyond the reach of the assessee to come across the fact of going on the proceedings for issue of notices under section 148 and also the fact that the enquiry proceedings were going on from May 7, 1984, and assessment proceedings for the assessment year 1984-85 were also in progress prior to the submission of the application for grant of registration to the Commissioner of Income-tax by the assessee-trust?
(3) Whether, in the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that there was no obligation on the part of the assessee-trust in terms of section 12-A(b) to furnish audited accounts in Form No. 108 as the income of the assessee-trust did not exceed Rs.25,000 in view of the fact that the gross receipts of the assessee-trust forming income of the assessee-trust were much more than Rs.25,000 unless the assessee-trust categorically proved that the donations were towards corpus and as the assessee failed to prove that the donations were towards corpus and the trust was not registered under section 12-A during the accounting periods relevant to the assessment years under consideration, the total receipts constituted of Rs.1,84,907, Rs.86 d40 and Rs.4,330 were income of the assessee-trust and as such the provisions of section 12-A(b) were applicable to the assessee-trust and since the assessee-trust did not furnish copies of the audited accounts within the prescribed time because of non fulfilment of requirements laid down by the section 12-A of the Income Tax Act, 1961, the assessee-trust was not entitled for registration for the assessment years 1979-80, 1980-81 and 1981-82?
(4) Whether the Income-tax Appellate Tribunal was justified in accepting the averment of the assessee blankly without cross verification from the record to the effect that the receipts of the donations, dated August 1, 1978, August 9, 1978 and August 1, 1978, pertaining to Svs. Harak Chand, Gulab Chand, Ugamchand Venachand and Mahendra Kumar Duli Chand were signed by the donors and as such donations were towards specific purpose which constituted corpus of the trust in total contrast to the fact that in his statement, dated October 15, 1987, recorded by the then Income-tax Officer, Sumerpur, in reply to question No. 1, Shri Chouthmal, trustee, after going through the counterfoils of all the receipt books for the account periods relevant to the assessment years 1979-80, 1980-81 and 1981-82 clearly admitted and confirmed that none of the receipts bore signatures of the donor from which the assessee could not establish that there was any donation from any person, the receipt in whose name has been shown by the assessee-trust and the donation was for the object shown in the so-called receipt in the absence of which the receipt of so-called donation would be treated as general receipt subject to the provisions of section 12-A. It may be that generally it is in the cases of trusts that somebody puts his unaccounted income in the guise of receipt shown in non-existent and fictitious names and, therefore, prior to coming to any conclusion that the donation is towards any specific purpose, the confirmation of donor about amount having been donated by him towards the purpose shown is necessary which lacked in the instant case and in absence of which the only conclusion which can be drawn is that the so-called donations were general donations without any direction for specific purpose?
(5) Whether the Income-tax Appellate Tribunal Bench was justified in giving finding that the so-called donations were towards corpus on the basis of record tampered with after producing before the Income-tax Officer vitally affecting the decision as discussed in preceding paragraphs?"
The assessee, Shri Vasu Puziya Jain Derashar Pedi Undri, Post Sumerpur, District Pali, is a trust constituted under the trust deed, dated December 4, 1977. For the assessment years 1979-80, 1980-81 and 1981-82, the assessee did not file any return and, therefore, the Income-tax Officer, on February 13, 1987, issued notices to the assessee under section 139 of the Income-tax Act. The assessee, in response to these notices, filed returns for these assessment years under the Voluntary Disclosure Scheme on March 30, 1987. The assessee, for these assessment years, declared the income of Rs.10,100, Rs.10,000 and Rs.12,100. During these assessment years, the assessee received donations of Rs.1,84,907, Rs.86,037 and Rs.44,353 which were claimed by the assessee to be the corpus being for the construction of temple. The Income-tax Officer referred the matter to the Deputy Commissioner, Udaipur, for direction under section 144-A of the Act and the directions were issued to him by the Deputy 'Commissioner on December 19, 1986. The Income-tax Officer, following the said directions, added the donation amounts, of Rs.1,84,907, Rs.86,037 and 44,353 as the income of the assessee in these assessment years. The Income-tax Officer also observed that since the income for the assessment years in question exceeds Rs.25,000, the accounts of the trust were also required to be audited by an accountant.
Aggrieved by the order, dated March 31, 1989, passed by the Income-tax Officer, the assessee preferred appeals before the Commissioner of Income-tax (Appeals), Jodhpur. The Commissioner of Income-tax (Appeals), by his order, dated July 27, 1989, dismissed the appeals filed by the assessee by holding that the assessments so finalised are in order and the income has been (sic) which has been subjected to tax in all these years, are on a correct footing and calls for no interference.
Aggrieved by the, order, dated July 27, 1989, passed by the Commissioner of Income-tax (Appeals), Jodhpur, the assessee preferred three appeals before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, and the Tribunal, by its order dated January 16, 1991, partly allowed the appeals filed by the assessee. The Revenue, thereafter, filed: an application under section 256(1) of the Act before the Tribunal to refer the questions of law mentioned in paragraph 1 (page 247) above for the opinion of this Court. The Tribunal dismissed the _ application under section 256(1) filed by the Revenue with the following observations:
"Questions Nos. l and 2:
We, however, find that it was on a consideration of the relevant facts and appreciation of the evidence and material on record that the Tribunal had held that the registration granted to the assessee trust was effective from the date of its inception on December 4, 1977. To us it is purely a finding of fact and such finding does not give rise to any question of law fit for reference.
Proposed question No.3 relates to the assessee's obligation under section 12-A(b) to furnish audited accounts in Form No. 10-B as the income of the assessee-trust (sic). Findings of fact and the conclusions drawn from such findings do not give rise, in our opinion, to any question of law fit for reference. We, therefore, decline reference on proposed question No.3, also.
Proposed questions Nos.4 and 5 relate to treating donations made to the assessee-trust as being towards specific purposes. The Tribunal made a reapprove (sic) of all these evidences and after stating certain principles of law enunciated in various decisions came to the conclusion that the donations had been made by the donors for specific purposes being construction of temple and, therefore, such donations were in fact corpus donations. Again, this is a finding of fact and such finding does not give rise to any question of law fit for reference."
The Tribunal further observed that "none of the proposed questions as set out in the Annexure to the reference applications are questions of law fit for reference. We, therefore, decline reference on any of them".
The contention of learned counsel for the Revenue is that the delay was not under consideration before the Tribunal and the order of the, Commissioner was not under challenge before the Tribunal as no appeal against the order of the Commissioner, lies before the Tribunal. These points raised .by the Revenue do not arise out of the order passed by the Tribunal. So far as the five questions proposed by the Revenue, for which it has been prayed that the Tribunal may be directed to refer those questions for the opinion of this Court, are concerned, they are purely questions of fact and no question of law arises, on which a reference may be called. The Tribunal decided the appeals by its judgment, dated January 16, 1991. While dealing with the question of registration, the Tribunal held as under:
"The assessee is, therefore, right in pointing out that the registration have been granted on February 13, 1987, under section 12, it envisages from the very inception of the trust, i.e., from December 4, 1977. The factum of granting registration finds place in the direction of the Deputy Commissioner (Appeals). Thus, the assessee-trust, being registered there was no impediment to the application of the provisions of sections 11 and 12 in relation thereto."
Dealing with the question of audit of the accounts of the trust, the Tribunal held as under:
"We would presently find that since the total income of the trust as computed under the Income Tax Act, 1961, without giving effect to the provisions of sections 11 and 12, do not exceed Rs.25,000 for any of the assessment years in question, there was no obligation on the part of the assessee-trust, in terms of section 12-A(b) to furnish audited accounts in Form No. 10-B."
The Tribunal, while determining the question of corpus donations, held as under:
"We are, therefore, of the view that on the basis of the material furnished by the assessee it had established that the voluntary contribution in question had been made with the specific direction that they shall form part of the corpus of the trust and, therefore they could not have been treated as the income of the assessee. So treated., since the income of the assessee few below Rs.25,000 for each of the assessment years in question, there was no obligation on its part to furnish audited accounts in terms of section 12-A(b) as referred to above. "
The Tribunal, while deciding the issue of limitation also observed as under:
"The ground regarding assessment orders being time-barred not having been pressed at the time of hearing of the appeals before us no longer survives for our consideration."
The findings recorded by the Tribunal in the judgment, dated January 16, 1991, are purely findings of fact and do not give rise to any question of law arising out of the order passed by the Tribunal. The Tribunal was, therefore, justified in not referring the proposed questions mentioned in the application for the opinion of this Court as none of the proposed questions set out in the application, is a question of law fit for reference to the High Court. We are also of the opinion that no question of law arises out of the order, dated January 16, 1991, passed by the Tribunal and the Tribunal was justified in rejecting the application.
In the result, we do not find any merit in this application under section 256(2) of the Income-tax Act, as no question of law arises out of the order passed by the Tribunal, and the same is hereby dismissed.
M.B.A./3006/FC Application rejected.