AP Right to Sight Society, Hyd, Hyderabad V. DDIT(E)-I, Hyderabad

CO 43/HYD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7669 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 15-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V RAGHURAM
• Assessee Lawyers: ALKA R JAIN
• Keywords: Reopening of assessment; Charitable institution
• Section: 147; 148; 6; 11; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 184/HYD/2011 ASSESSMENT YEAR: 2004-05 DY. DIRECTOR OF INCOME-TAX(EXEMPTIONS)-II,.. APPELL ANT HYDERABAD VS. ANDHRA PRADESH RIGHT TO SIGHT SOCIETY, RESPONDE NT RANGE 6, HYDERABAD. AND C.O. NO. 43/HYD/2011 (IN ITA NO. 184/HYD/2011 ASSESSMENT YEAR: 2004-05) ANDHRA PRADESH RIGHT TO SIGHT SOCIETY, CROSS OBJE CTOR RANGE 6, HYDERABAD. VS. DY. DIRECTOR OF INCOME-TAX(EXEMPTIONS)-II,RESPONDEN T HYDERABAD REVENUE BY : SHRI ALKA R. JAIN RESPONDENT BY : SHRI A.V. RAGHURAM DATE OF HEARING : 19/07/2012 DATE OF PRONOUNCEMENT : ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-IV, HYDERABAD DATED 15/11/2010 FOR THE ASSESSMENT YEAR 2004-05. THE ASSESSEE ALSO FILED C. O. AGAINST THE SAID ORDER OF THE CIT(A). ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-0 5 ON 21.10.2004. IN THAT THE ASSESSEE HAS MENTIONED THEY HAVE UTILIZED RS.13.69 CRORES ON ACQUISITION OF CERTAIN OVERSEAS EQUIPMENT ETC. AS PER THE REPORT OF COMPTROLLER AND AUDITOR GENERAL (CIVIL) FOR THE GOVERNMENT OF ANDHRA PRADES H. A CROSS VERIFICATION OF THE RETURN SHOWS THAT THE TOT AL ASSETS AMOUNTED TO RS.4,14,382/- ONLY. THEREFORE NOTICE U/ S.148 WAS ISSUED ON 10.02.2009. HOWEVER, EVEN THOUGH THE AO DID NOT PERUSE THE REASON GIVEN FOR REOPENING VIZ., UTILIZATION OF THE AMOUNT OF RS.13.69 CRORES FOR AC QUIRING OVERSEAS EQUIPMENT, HE HAD PROCEEDED TO WITHDRAW TH E BENEFIT TO THE ASSESSEE UNDER SECTION 11 OF THE I.T ACT AND ASSESSED THE GRANT AND CONTRIBUTION GIVEN BY VARIOU S PERSONS INCLUDING THE STATE GOVERNMENT AS WELL AS I NTEREST EARNED BY THE ASSESSEE. THE MAIN REASON IS THAT THE MAIN DONOR IS THE GOVERNMENT OF ANDHRA PRADESH AND APPLI CATION INCLUDED EXPENSES WORTH OF RS.4,88,49,585/- TOWARDS SUPPLY OF EQUIPMENT TO GOVERNMENT SECTOR. THE AO FELT THA T IF ANY PART OF THE INCOME OR PROPERTY OF THE TRUST IS DIRE CTLY OR INDIRECTLY APPLIED FOR THE BENEFIT OF ANY PERSON ME NTIONED IN SECTION 13 (3) AND BENEFIT UNDER SECTION 11 IS NOT APPLICABLE. 3. BY APPEAL BEFORE THE CIT(A) THE ASSESSEE SUBMITT ED AS UNDER :- 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE APPELLANT SOCIETY IS A CHARITABLE INSTITUTION OPERA TING UNDER THE NAME 'ANDHRA PRADESH RIGHT TO SIGHT SOCIETY', WHICH WAS FORMED WITH THE OBJECTIVE OF DEVELOPING HIGH QUALITY SUSTAINABLE COMPREHENSIVE E YE CARE SERVICES, AIMING TOWARDS INTENSIFYING AND ACCELERATING THE EFFORTS THROUGHOUT THE STATE OF A. P. FOR ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 3 ERADICATION OF NEEDLESS BLINDNESS BY THE YEAR 2020. THE PROGRAMME OF THE ASSESSEE IS A COLLABORATIVE EFFORT INVOLVING THE WORLD HEALTH ORGANISATION AND INTERNATIONAL AGENCY FOR PREVENTION OF BLINDNESS. 5.1 THE APPELLANT SUBMITTED THAT FIRSTLY THE ASSESS ING OFFICER WRONGLY MADE AN ADDITION OF RS. 16 CRORES INSTEAD OF THE ACTUAL GRANT OF RS. 12 CRORES RECEIV ED BY THE SOCIETY FROM THE GOVT. OF THE A.P. DURING THE FINANCIAL YEAR 2003-04 FOR ACQUIRING THE LATEST EQUIPMENTS TO BE INSTALLED IN DIFFERENT HOSPITALS I N THE STATE. HE FURTHER SUBMITTED THAT THE STATE GOVT. HA D GIVEN THE SAID GRANT WITH A DIRECTIONS TO CARRY OUT TRAINING PROGRAMME FOR EFFECTIVE UTILIZATION OF SUC H INSTRUMENT IN CONDUCTING EYE CAMPS FOR THE UNDER PRIVILEGED. THE APPELLANT'S REPRESENTATIVE AVERRED THAT APART FROM SUPPLY AND ERECTION OF EQUIPMENTS, THE SOCIETY IS ALSO ENGAGED ACTIVELY IN THE MAINTENANCE OF EQUIPMENTS AND IMPARTING TRAINING ON USAGE THEREOF. THE REPRESENTATIVE AVERRED THAT THE OPERATION AND MAINTENANCE OF EQUIPMENTS SO INSTALLED IS UNDER THE CONTROL AND MANAGEMENT OF THE SOCIETY AND THEREFORE IT CANNOT BE INFERRED THAT THE EQUIPMENT HAD BEEN DONATED TO THE GOVT. HOSPITALS. 5.2 THE REPRESENTATIVE FURTHER ARGUED THAT FOR THE PURPOSE OF SEC. 13(1)(C), THE 'GOVERNMENT' CANNOT B E TREATED AS A 'PERSON', AS IT IS NOT COVERED UNDER T HE DEFINITION GIVEN IN SEC. 2(13) OF THE ACT. HE AVERR ED THAT THE ANALOGY GIVEN BY THE ASSESSING OFFICER IS INCORRECT AS IN CASES OF DEFAULT COMMITTED IN RECOV ERY OF TDS BY ANY GOVT. AUTHORITY; IT IS THE 'DRAWING OFFICER', WHO SHALL BE RESPONSIBLE FOR SUCH OMISSIO N AND NOT THE GOVT. ITSELF. HE PLEADED THAT ALL THE GOVERNMENTS HAVE BEEN ESTABLISHED TO TAKE CARE OF T HE POOR AND NEEDY AND THE GOVT. OF A. P. DOES NOT DERI VE ANY BENEFIT DIRECTLY IN RUNNING THESE INSTITUTIONS EXCEPT THE WELFARE OF PUBLIC AT LARGE. HE STATED THAT IN T HE APPELLANT'S CASE THE SOCIETY, FORMED EXCLUSIVELY FO R BLINDNESS CONTROL PROGRAMME HAD RELEASED THE EQUIPMENTS TO SOCIAL ORGANIZATIONS, INCLUDING GOVT. HOSPITALS, WHICH ARE MANAGED BY VARIOUS GOVT. FUNCTIONARIES TO ENABLE THE BENEFIT OF LATEST TECHNOLOGIES TO THE BENEFIT OF THE COMMON MAN AND T O DERIVE OPTIMUM UTILIZATION OF THE EQUIPMENTS. ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 4 5.3 WITH REGARD TO THE ASSESSING OFFICER'S OBSERVAT ION REGARDING INELIGIBILITY OF THE APPELLANT FOR EXEMPT ION U/S 11 ON ACCOUNT OF ITS NON REGISTRATION UNDER THE A. P. CHARITABLE AND HINDU RELIGIOUS INSTITUTION AND ENDOWMENTS ACT, 1987. IT WAS SUBMITTED THAT THE APPELLANT'S SOCIETY IS NOT A PRIVATE TRUST, BUT HAS BEEN CONSTITUTED BY THE GOVT. OF A. P., WITH CHIEF MINIS TER AND OTHER PRINCIPAL HEADS OF VARIOUS DEPARTMENTS AS TRUSTEES AND ITS FUNCTIONING IS MONITORED BY THE RESPONSIBLE PERSONS OF THE GOVT. HE AVERRED THAT TH E GRANTS RELEASED BY THE GOVT. ARE MONITORED BY A TAS K FORCE COMMITTEE. THE REPRESENTATIVE SUBMITTED THAT THE LEGISLATIVE PURPOSE OF REGISTRATION U/S 43(1) OF TH E ABOVE ACT IS TO ENSURE THAT ALL THE PUBLIC AND CHAR ITABLE INSTITUTIONS, WHICH THRIVE ON VOLUNTARY CONTRIBUTIO NS, SHOULD CONDUCT THEMSELVES IN A FAIR AND TRANSPARENT MANNER. HOWEVER, THE APPELLANT TRUST IS FORMED BY T HE GOVT. ITSELF AND IN VIEW OF ITS CONSTITUTION AND FUNCTIONING, THE BENEFITS CANNOT BE DENIED ON ACCOU NT OF ITS NON REGISTRATION UNDER THE SAID ACT. THE APP ELLANT FURTHER CONTENDED THAT THE \ INCOME TAX ACT, 1961 N O WHERE STATES THAT EXEMPTION U/S. 11 SHOULD BE DENIE D IF THE TRUST IS NOT REGISTERED UNDER A LOCAL STATUT E. 5.4 THE REPRESENTATIVE OF THE APPELLANT FURTHER SUBMITTED THAT THE OBSERVATIONS MADE REGARDING THE FUNCTIONING OF THE SOCIETY AND LAPSES IN UTILIZATIO N OF THE EQUIPMENTS ARE PURELY OF AN ADMINISTRATIVE NATU RE AND THE UNDERUTILIZATION OF AN ASSET SET UP BY THE SOCIETY AT THE HOSPITALS CANNOT BE A GROUND FOR DEN IAL OF THE BENEFIT U J S. 11, AS SUCH ASPECTS ARE CLOSE LY MONITORED BY THE GOVT. BODIES AND BY THE TASK FORCE . HE AVERRED THAT THE ASSESSING OFFICER'S OBSERVATION REGARDING THE QUALITY OF THE CHARITY IS NOT RELEVAN T. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) ALLOWED THE APPEAL OBSERVING AS UNDER:- 6. I HAVE GONE THROUGH THE FACTS OF THE CASE AND T HE SUBMISSIONS OF THE APPELLANT. THE FIRST GROUND FOR REFUSAL OF EXEMPTION UJ S. 11 IS THAT THE ASSESSING OFFICER OPINED THAT BY PROVIDING THE EQUIPMENTS TO THE GOVERNMENT HOSPITALS, THE APPELLANT HAD CONTRAVENED OF THE PROVISIONS OF SEC. 13(I)(C)(II). HE OPINED T HAT BY WAY OF THE CONTRIBUTION OF RS. 30 CRORES, THE GOVERNMENT BECAME AN 'INTERESTED PERSON' WITHIN THE MEANING OF SEC. 13(3)(B). ON A CONSIDERATION OF THE ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 5 PROVISIONS OF THE ACT, HOWEVER, I AM OF THE OPINION THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS NOT SUSTAINABLE. FIRST OF ALL IT IS CLEAR THAT THE GOVT . IS NOT A TAXABLE ENTITY. IT IS THE AUTHORITY THAT LEVIES T AXES AND IS NOT ITSELF SUBJECT TO THE TAX STATUTE ENACTE D BY THE LEGISLATURE. THIS IS THE REASON 'GOVERNMENT' HA S NOT BEEN INCLUDED IN THE DEFINITION OF 'PERSON' UND ER SEC. 2(31) OF THE I TACT, 1961. 6.1 AS REGARDS, THE CONCLUSION OF THE ASSESSING OFF ICER THAT THE DEFINITION OF THE 'PERSON' GIVEN IN THE SE C. 2(31) OF THE ACT IS TO BE READ WITH THE DEFINITION OF 'ASSESSEE' HAS GIVEN IN SEC. 2(7), I AM OF THE OPIN ION THAT THE ASSESSING OFFICER FORMED A WRONG OPINION T HAT IT WAS THE GOVERNMENT, THE GOVERNMENT OF ANDHRA PRADESH IN THIS CASE, AGAINST WHOM HE HAD UNDERTAKE N THE PROCEEDINGS. THE FACT IS THAT THE ASSESSING OFF ICER HAD UNDERTAKEN THE ASSESSMENT PROCEEDINGS AGAINST THE APPELLANT SOCIETY, WHICH THOUGH FORMED AT THE BEHEST OF THE GOVERNMENT, IS NOT THE GOVERNMENT ITSELF. UNDER THE CIRCUMSTANCES, THE ARGUMENT OF TH E ASSESSING OFFICER ON THIS ACCOUNT IS NOT SUSTAINABL E. 6.2 AS REGARDS, THE CONTENTION OF THE ASSESSING OFF ICER THAT BY WAY OF ITS CONTRIBUTION OF RS. 32 CRORES, T HE GOVERNMENT HAD BECOME AN 'INTERESTED PERSON' AS DEFINED IN SEC. 13(3)(B), IT IS CLEAR THAT THE GOVT . DOES NOT HAVE ANY FINANCIAL STAKE IN THE APPELLANT'S SOC IETY. DESPITE HAVING MADE SUBSTANTIAL CONTRIBUTION, IT IS NOT 'A PERSON WHO HAS A SUBSTANTIAL INTEREST' IN THE APPELLANT'S SOCIETY. IT IS NOT ENTITLED TO ANY PART OF THE PROFITS OF THE APPELLANT AT ANY TIME. 6.3 MOREOVER, IT IS AN ESTABLISHED POSITION OF THE LAW THAT WHAT IS BARRED U/S. 13(1)(C)(II) IS 'THE PERSO NAL BENEFIT OF THE TRUSTEES', AS WAS POINTED OUT BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. SRI RADHA KRISHNA TEMPLE TRUST (277 ITR 158). IT IS CLE AR THAT BY WAY OF CONTRIBUTING EQUIPMENTS TO THE GOVT. HOSPITALS, THE GOVERNMENT DID NOT GET ANY PERSONAL BENEFIT NOR GRANTED ANY PERSONAL BENEFIT TO ANY OTH ER INTERESTED PERSON OF THE APPELLANT'S SOCIETY. IN TH IS REGARD, T IS SEEN THAT HON'BLE MUMBAI ITAT IN CASE OF SMT CHANDARKALA SOMANI CHARITABLE TRUST VS ITO (30 ITD 70) HAD OBSERVED THAT THE WORD 'BENEFIT' HAS TO BE INTERPRETED AS AN ADVANTAGE, PROFIT, FRUIT OR PRIVI LEGE AND, IN THE CONTEXT IN WHICH IT IS USED IN THE PRES ENT ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 6 SECTION, IT HAS TO BE TREATED AS AN ADVANTAGE OF A PECUNIARY NATURE. REFERRING TO THE DECISION OF HON' BLE MADRAS HIGH COURT IN THE CASE OF MANICKVASAGAM CHETTIAR (53 ITR 292) THE BENCH OBSERVED THAT THE CHARACTERISTIC OF A BENEFIT IS THAT IT IS REAL AND NOT NOTIONAL, CONCRETE AND NOT ABSTRACT, CERTAIN AND NO T CONJECTURAL. HOWEVER, IT IS CLEAR THAT IN THE APPEL LANT'S CASE, NO PERSONAL ADVANTAGE OR PROFIT OR PRIVILEGE ACCRUED TO THE GOVERNMENT ITSELF OR ANY OTHER INTERESTED PERSON. OBVIOUSLY, IT IS NOT THE CASE TH AT THE ASSESSING OFFICER COULD ESTABLISH THAT THE EQUIPMEN TS WERE USED BY ANY 'INTERESTED PERSON', OTHER THAN TH E GOVERNMENT ALSO, FOR ANY PERSONAL PECUNIARY BENEFIT . AS REGARDS, THE ASSESSING OFFICER'S OBSERVATION REGARDING 'QUALITY OF SERVICE', I AM OF THE VIEW TH AT THE SAME IS NOT A RELEVANT CONSIDERATION FOR EXAMINING THE ELIGIBILITY OF AN ASSESSEE FOR EXEMPTION U/S. 11. I THEREFORE FIND THAT THE ASSESSING OFFICER CANNOT BE SAID TO BE CORRECT IN CONCLUDING THAT THERE WAS A CONTRAVENTION OF PROVISIONS OF SEC. 13)(1)(C)(II) I N THE PRESENT CASE ON ACCOUNT OF THE EQUIPMENTS PROVIDED BY THE APPELLANT'S SOCIETY TO GOVERNMENT HOSPITALS. 6.4 SO FAR AS, THE DENIAL OF EXEMPTION ON ACCOUNT O F NON REGISTRATION OF THE APPELLANT UNDER SEC. 43(1) OF A P CHARITABLE AND HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987 IS CONCERNED, IT IS SEEN THAT THE HON'BLE JURISDICTIONAL ITAT, HYDERABAD IN A RECENT DECISION DATED 5.3.2010 IN THE CASE OF MIS. KAMALAK AR MEMORIAL CHARITABLE TRUST VS. DIT (EXEMPTIONS) HYDERABAD IN ITA NO. 1145/HYD/09 HAVE OPINED THAT I N VIEW OF THE DECISION OF THE HON'BLE NAGPUR BENCH OF THE ITAT IN THE CASE OF AGRICULTURAL PRODUCE AND MARKET ING COMMITTEE, TELHARA AND ORS VS. CIT (97 TTJ 165), TH E MERE FACT THAT THE ASSESSEE TRUST IS NOT REGISTERED UNDER THE PROVISIONS OF THE SAID ACT, SHALL NOT REN DER THE ASSESSEE TRUST AS A NON CHARITABLE ONE. RESPECT FULLY FOLLOWING THE SAID VIEW OF THE HON'BLE JURISDICTION AL ITAT THEREFORE, I AM OF THE OPINION THAT THE APPELL ANT COULD NOT HAVE BEEN DENIED EXEMPTION UNDER SEC. 11 OF THE ACT EVEN ON THIS GROUND. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS ON APPEAL BEFORE US. ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 7 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. AS HELD BY THE CIT(A), THE DEFIN ITION OF PERSON UNDER SECTION 2(31) INCLUDES LEGAL AUTHORI TY BUT NOT GOVERNMENT ITSELF. THE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT V DREDGING CORPORATION OF INDIA (174 IT R 682), HAS HELD THAT GOVERNMENT IS NOT A PERSON FALLING WI THIN THE DEFINITION OF SECTION 2(31) OBSERVING: IT IS A CARDINAL PRINCIPLE IN THE CONSTRUCTION OF ENACTMENTS THAT, UNLESS THE CONTEXT OTHERWISE REQUIRES, THE MEANING OF AN EXPRESSION CONTAINED IN THE ACT SHOULD PREVAIL THROUGHOUT THE ACT. THEREFOR E, WHENEVER A DIFFERENT MEANING IS SOUGHT TO BE GIVEN TO THAT EXPRESSION OCCURRING AT DIFFERENT PLACES IN TH E ACT, IT IS NECESSARY TO POINT OUT WHY THE CONTEXT REQUIR ES DIFFERENT MEANINGS TO BE GIVEN TO THE SAME EXPRESSI ON OCCURRING AT DIFFERENT PLACES IN THE ACT. NOW, THE DEFINITION OF THE EXPRESSION 'PERSON' OCCURRING IN SECTION 2(31) OF THE INCOME-TAX ACT, 1961, IS A VER Y CRUCIAL DEFINITION BECAUSE IT IS WITH REFERENCE TO THE CATEGORIES OF ENTITIES SPECIFIED IN SECTION 2(31) T HAT THE LIABILITY TO TAX UNDER THE ACT IS DETERMINED. IF A PERSON IS NOT CAPABLE OF BEING CONSIDERED AS A 'PERSON' WI THIN THE MEANING OF SECTION 2(31), THEN NO LIABILITY ATTACHES. IF THE STATE OR THE GOVERNMENT CANNOT BE REGARDED AS A 'PERSON' FOR THE PURPOSE OF SECTION 2 (31) AND, CONSEQUENTLY, IS IMMUNE FROM TAXATION, WHETHER ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE, IT IS NATURAL TO EXTEND THE SAME LOGIC TO UNDERSTAND THE EXPRESSION 'PERSON' WHEREVER IT OCCURS IN THE ACT. THERE IS NO REASON TO GIVE A DIFFERENT EXPRESSION T O THE WORD 'PERSON ' WHICH OCCURS IN THE EXPLANATION TO SECTION 32(1)(VI). THEREFORE AS HELD BY THE JURISDICTIONAL HIGH COURT, STATE GOVERNMENT CANNOT BE CONSIDERED AS A PERSON UNDER SEC 2(31) AND THE DEPARTMENT HAS NOT POINTED OUT AN Y SPECIAL CIRCUMSTANCES AS TO WHY A DIFFERENT MEANING SHOULD BE GIVEN FOR THE PHRASE PERSON FOR THE PURPOSE OF SECS 11 TO 13 SO AS TO INCLUDE THE SATE GOVERNMENT AS A PE RSON FOR ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 8 THESE SECTIONS ONLY. THEREFORE THE CONTENTION OF TH E REVENUE THAT BY GIVING THE MACHINES TO THE GOVERNMENT HOSPI TALS SEC. 13(1)(C) HAS BEEN VIOLATED IS NOT CORRECT NOT ONLY BECAUSE STATE GOVERNMENT IS NOT A PERSON, BUT ALSO BECAUSE BY NO STRETCH OF IMAGINATION CAN THE GOVERNMENT BE SAID TO HAVE BENEFITED BY THE MACHINES OUT OF THE GRANT GIV EN BY THE GOVERNMENT AND GIVEN TO THE GOVERNMENT HOSPITAL S. THE BENEFIT ACCRUES TO THE GENERAL PUBLIC AND QUESTIONI NG THE PROVISION FOR BADLY NEEDED MEDICAL EQUIPMENT TO T HE GOVERNMENT HOSPITALS WHICH ARE CLEARLY FOR THE BENE FIT OF THE PUBLIC AT LARGE ON THE GROUND THAT IT HAS BENEFITED THE GOVERNMENT IS AGAINST THE FUNDAMENTAL PRINCIPLES OF PHILANTHROPY OF THE TRUST. 7. THE OTHER GROUND RAISED BY THE REVENUE THAT THE ASSESSEE HAS NOT REGISTERED UNDER A.P. CHARITABLE & HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987 AND HENCE THE ASSESSEE IS A NON CHARITABLE ONE, IS AN ARGUMEN T TO BE ADMITTED ONLY TO BE REJECTED. THE PROVISIONS OF SEC TIONS 2(15), 11 TO 13 ARE VERY CLEAR AND SELF CONTAINED C ODE IN RESPECT OF INSTITUTIONS WHICH ARE CONSIDERED AS CHA RITABLE IN NATURE AND THE EXEMPTIONS THAT THESE INSTITUTIONS A RE ELIGIBLE FOR UNDER THE INCOME TAX ACT. THESE SECTIO NS NO WHERE REFERS THAT CHARITABLE INSTITUTION TO BE ELIG IBLE FOR EXEMPTION UNDER SECTION 11 SHOULD ALSO TO BE REGIST ERED UNDER ANY OTHER ACT FOR THE TIME BEING. ONCE AN IN STITUTION IS APPROVED AND GRANTED REGISTRATION U/S 12A, THE DEPARTMENT CANNOT REFUSE THE REGISTRATION EXCEPT FO R VIOLATION OF SEC 11, 12 OR 13. THEREFORE, ELIGIBILI TY FOR EXEMPTION UNDER SECTION 11 OF THE INCOME-TAX ACT HA S TO BE INDEPENDENTLY CONSIDERED BASED ON THE PROVISIONS OF THE INCOME TAX ACT AND NOT ANYTHING ELSE. IN OUR OPINIO N, ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 9 THEREFORE THAT THE CIT(A) HAS RIGHTLY HELD THAT THE EXEMPTION UNDER SECTION 11 CANNOT BE DENIED TO THE ASSESSEE M ERELY BECAUSE IT IS NOT REGISTERED UNDER A.P. CHARITABLE & HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987 ON APPEAL THE ASSESSEE HAS NOT COME UP ON THIS ISSUE, WE ARE NOT DECIDING ON THE VALIDITY OF THE REOPENING. 8. FOR THE REASONS STATED EARLIER, ON MERITS OF THE CASE, WE ACCEPT THE FINDING AND CONCLUSION OF THE CIT(A) AND DISMISS THE REVENUES APPEAL. C.O. NO. 43/HYD/2011 BY THE ASSESSEE 9. THE ASSESSEE FILED ITS RETURN OF INCOME ADMITTIN G NIL INCOME. THE CASE WAS SELECTED FOR SCRUTINY BY ISSUI NG NOTICE U/S 143(2) AND AFTER DISCUSSING WITH THE AR OF THE ASSESSEE AND EXAMINATION OF BOOKS OF ACCOUNT, THE ASSESSMENT WAS COMPLETED ON 29/12/2006 DETERMINING THE INCOME AT N IL. THE ASSESSMENT WAS REOPENED U/S 147 ON 30/11/2009 A ND NOTICE U/S 148 WAS ISSUED ON THE GROUND THAT THE AS SESSEE UTILIZED RS. 13.69 CRORES ON ACQUISITION OF CERTAIN OVERSEAS EQUIPMENT ETC. AS PER THE REPORT OF COMPTROLLER AND AUDITOR GENERAL (CIVIL) FOR THE GOVT. OF ANDHRA PRADESH FOR THE YEAR ENDED 31/03/2004 ON PAGE-133. A CROSS VERIFICATION OF THE RETURN SHOWS THAT THE TOTAL ASSETS AMOUNTED TO RS. 4,14,382/- ONLY. 10. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER WITH RESPECT TO THE REOPENING OF ASSESSMENT. 11. ON APPEAL BEFORE US, THE LEARNED COUNSEL FOR TH E ASSESSEE CONTENDED THAT THE CIT(A) SHOULD HAVE APPR ECIATED ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 10 THAT THE ASSESSING OFFICER IN THE PRESENT CASE HAD REOPENED THE ASSESSMENT ON SUSPICION BASED ON CIT (A)&AG OF THE AP STATE TO VERIFY WHETHER THE ASSETS PURCHASED FROM G RANTS OF THE GOVT., ARE APPEARING IN THE BALANCE SHEET OR NO T AND NOT BASED ON ANY REASON THAT THERE IS ESCAPEMENT OF INC OME WHICH AMOUNT TO REOPENING MERELY ON SUSPICION AND SURMISES AND BASED ON GENERAL INFORMATION AVAILABLE IN THE GOVT. WEBSITE AND NOT ON RECORD. HE FURTHER CONTEND ED THAT THE CIT(A) SHOULD HAVE ANNULLED THE ASSESSMENT AS T HE ASSUMPTION OF JURISDICTION BY ASSESSING OFFICER IS ILLEGAL AND WITHOUT JURISDICTION AS NO ADDITION IS MADE ON THE REASON FOR WHICH THE ASSESSMENT WAS REOPENED. 12. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THE INFORMATION HAS BEEN BROUGHT BY TH E ASSESSING OFFICER FOR REOPENING FROM THE REPORT OF COMPTROLLER AND AUDITOR GENERAL (CIVIL) FOR THE GOV T. OF A.P FOR THE YEAR ENDED 31/03/2004, IT WAS OBSERVED BY T HE ASSESSING OFFICER THAT THE ASSESSEE HAD UTILIZED RS . 13.69 CRORES ON ACQUISITION OF CERTAIN OVERSEAS EQUIPMENT ETC. BUT, ON A CROSS VERIFICATION OF THE RETURN OF INCOME FIL ED BY THE ASSESSEE FOR THE AY 2004-05 IT WAS OBSERVED BY HIM THAT THE RETURN SHOWED TOTAL ASSETS AMOUNTING TO RS. 4,14,38 2/- ONLY. 13. THE ASSESSING OFFICER CANNOT REOPEN THE ASSESSM ENT MERELY ON THE BASIS OF ROVING ENQUIRY AND SINCE THE RE IS NO ADDITION WITH RESPECT TO THE PURCHASE OF EQUIPMENTS THE INITIAL REASON GIVEN FOR REOPENING CANNOT SURVIVE A ND THE ASSESSING OFFICER CANNOT GO BEYOND THE REASONS GIVE N BY HIM FOR REOPENING. HENCE, WE ALLOW THE CROSS APPEAL OF THE ASSESSEE ON THE ISSUE OF REOPENING. ITA NO. 184/HYD/2011 & C.O. NO. 43/HYD/11 ANDHRA PRADESH RIGHT TO SIGHT SOCIETY 11 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND THE C.O. FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 03 RD AUGUST, 2012. SD/- SD/- ( CHANDRA POOJARI) (ASHAVIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 3 RD AUGUST, 2012. KV COPY TO:- 1) DDIT(E)-II, ROOM NO. 307A, 3 RD FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD-04. 2) ANDHRA PRADESH RIGHT TO SIGHT SOCIETY, PLOT NO. 12, BN REDDY COLONY, BANJARA HILLS, HYDERABAD 500 034. 3) THE CIT (A)-IV, HYDERABAD 4) DIT(E), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.