I.K. GUJRAL PUNJAB TECHNICAL UNIVERSITY,KAPURTHALA V. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH

ITA 650/CHANDI/2024

• Counselvise Citation: [2024] 139 COUNSELVISE.COM (IT) 8964 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-10-2024
• Assessment Year: misc
• Appeal Filed On: 24-05-2024

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ \nIN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH \n \nHEARING THROUGH: HYBRID MODE \nŵी आकाश दीप जैन, उपाȯƗ एवं ŵी िवŢम िसंह यादव, लेखा सद˟ \nBEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM \n \nआयकर अपील सं./ ITA NO.650/Chd/2024 \n I.K. Gujral Punjab Technical \nUniversity, \nJalandhar-Kapurthala Highway, \nKapurthala, Punjab-144603 \nबनाम \n \nThe CIT(Exemptions) \nChandigarh \n˕ायी लेखा सं./PAN NO: AAAJP1130J \nअपीलाथŎ/Appellant \n \nŮȑथŎ/Respondent \n \nिनधाŊįरती की ओर से/Assessee by : \nShri Ajay Vohra, Sr. Advocate with \n \n \n \n \n \nMs. Somya Jain, CA \nराजˢ की ओर से/ Revenue by : \nShri Rohit Sharma, CIT, DR \n \nसुनवाई की तारीख/Date of Hearing : \n07/10/2024 \nउदघोषणा की तारीख/Date of Pronouncement : 28/10/2024 \n \nआदेश/Order \n \nPER A.D.JAIN, VICE PRESIDENT \nThis is assessee’s appeal challenging the order dt. 30/03/2024 passed by the ld. \nCIT(E) withdrawing registration granted under section 12AB of the Income Tax Act, \n1961. The following grounds have been raised: \n1. \nThat on the facts and circumstances of the case and in law, impugned order \ndated 30.03.2024 in Form 10AD passed by the Commissioner of Income Tax \nExemptions, Chandigarh (‘CIT(E)’) rejecting/dismissing application for registration \nunder section 12AB of the Income Tax Act, 1961 [‘the Act’] is illegal and bad-in-law. \n \n1.1 \nThat the CIT(E) erred on facts and in law in passing the impugned order \nwithout judiciously considering the submission filed by the appellant, which is in \ngross violation of principles of natural justice, thus, illegal, bad in law and liable to \nbe quashed. \n \n2. \nThat on the facts and circumstances of the case and in law, the CIT(E) erred \nin denying application for registration filed under section 12A(1)(ac)(iii) holding that \nthe appellant university does not falls in the category of assesses eligible to claim \nexemption under section 12AB of the Act. \n \n2.1 \nThat the CIT(E) erred on facts and in law in holding that only(i) a society \nregistered under Society Registration Act, 1860; or (ii) a public charitable trust \nregistered under the relevant Trust Act; or (iii) a section 8 company registered under \nCompanies Act, are eligible to claim exemption under section 12AB of the Act and \nthe consequently University established under a statute is not eligible for \nregistration. \n\n2 \n \n2.2 \n That the CIT(E) further erred on facts and in law in not appreciating that \nthe appellant was a University established as a body corporate under the The Punjab \nTechnical University Act, 1996, and was accordingly covered within the definition of \n‘person’ as provided under section 2(31) eligible to claim registration under section \n12AB of the Act. \n \n2.3 \nThat the CIT(E) erred on facts and in law in rejecting that application for \nregistration without appreciating the fact that the- (i) appellant University is \nimparting ‘education’ covered in definition of ‘charitable purpose’ under section \n2(15) of the Act;(ii) the activities of the appellant are genuine, and (iii) appellant is \ncompliant with all the applicable laws. \n \n3. \nThat the CIT(E) erred on facts and in law in denying registration and \ncancelling the earlier (provisional) registration / approval, retrospectively with effect \nfrom assessment year 2022-23, which action is beyond jurisdiction, bad and \nimpermissible in law. \n \n \n2. \nThe assessee University was established as a State University on 16/01/1997 \nunder the Punjab Technical University Act, 1996, in the name of ‘Punjab Technical \nUniversity’. Subsequently, the name of the assessee was changed to “The I.K. Gujral \nPunjab Technical Univeristy”. \n \n3. \nSince its inception, the assessee University was claiming and being granted \nexemption of its entire income under section 10(23C)(iiiab) of the Act, as available to \nan educational institution financed wholly or substantially by the Government. With \neffect from 01/04/2015, Explanation to Section 10(23C)(iiiab) of the Act was inserted \nin the Act. Simultaneously, Rule 2BBB was inserted in the Income Tax Rules. It was \nprescribed that the educational institution would be considered as substantially \nfinanced by the Government only if the Government grants exceeded 50% of the total \nreceipt of such institution during the relevant financial year. Due to such insertion in \nthe Act and the Rules, w.e.f 01/04/2015, i.e., w.e.f A.Y. 2015-16, the eligibility of the \nassessee for exemption under section 10(23C)(iiiab) of the Act came to an end, since \nthe receipt of the assessee from fees collected exceeded 50% of its total receipt and as \nsuch, the Government grants to the assessee ceased to exceed 50% of the total receipt \nof the assessee. \n\n3 \n \n \n4. \nThe eligibility of the assessee to claim exemption under section 10(23C)(iiiab) \nof the Act having come to an end, on 30/03/2016, the assessee University file \napplication under section 10(23C)(vi), since it was engaged solely in imparting \neducation. \n \n5. \nOn losing its status of being substantially financed by the Government, in view \nof the aforesaid amendment in the Act and the Rules, the assessee University filed an \napplication dt. 30/03/2016 under section 10(23C)(vi) of the Act, for claiming \nexemption, being engaged solely in imparting education. The said application was \nrejected vide order dt. 31/03/2017 and the said order of rejection was confirmed by the \nTribunal, in ITA No. 910/Chd/2017. The assessee’s appeal against the said Tribunal \norder, is pending before the Hon’ble High Court in ITA No. 386/2018, having been \nadmitted. \n \n6. \nThe assessee also filed an application for Registration under section 12A of the \nAct, on 23/03/2017. The ld. CIT(E) rejected this application vide order dt. 29/09/2017. \nAggrieved, the assessee filed ITA No. 1646/Chd/2017 before the Tribunal. The \nTribunal, vide order dt. 05/02/2019, set aside the CIT(E)’s order dt. 29/09/2017. The \nmatter was remanded to the ld. CIT(E) for fresh consideration, particularly in the light \nof the additional evidence filed by the assessee before the Tribunal for establishing the \ncharitable nature of the assessee’s activity of education. The matter is presently \npending before the ld. CIT(E). \n \n7. \nAgainst the order dt. 05/02/2019 passed by the Tribunal, the Department, \nwithout giving effect to said order, filed appeal before the Hon’ble High Court, in ITA \nNo. 343/2019. Simultaneously, the assessee also filed W.P.(C)No. 12714/2022 in the \nHon’ble High Court, challenging the action of the ld. CIT(E) in not passing order \n\n4 \n \ngiving effect to the direction of the Tribunal, as contained in the aforesaid order dt. \n05/02/2019. The writ petition stands admitted. \n \n8. \nApropos the order presently under challenge, as per Ground No. 1, the ld. \nCIT(E) has grossly violated the principles of natural justice in as much as no adequate \nopportunity of hearing was afforded to the assessee before passing the impugned \norder, rejecting the assessee’s application for Registration. It has been contended that \nthe application for Registration was filed on 30/09/2024; that however, the \nquestionnaire (APB 488-490) was issued for the first time by the ld. CIT(E), only on \n14/11/2023. In response, the assessee filed replies (APB 491-496) dt. 23/12/2020, \n04/01/2024, 08/01/2024 and 11/01/2024. Thereafter, it was only on 27/03/2024, when \nonly three days remained for completion of limitation to pass the order, that the ld. \nCIT(A) issued a show cause notice (APB 497-498) requiring the assessee to furnish \nreply by 28/03/2024, i.e., on the very next day as that of the issuing of the show cause \nnotice. Thereby, the assessee was provided effective time of only one day to submit its \nreply to the show cause notice. Thus, as per the assessee the order of the Ld. CIT(E) is \nin gross violation of principles of natural justice in as much as the period of one day \ncannot be taken to be reasonable time to enable the assessee to file response to the \nshow cause notice. Reliance has been placed on the following case laws: \n Sona Builders v. Union of India; 251 ITR 197(SC) \n Vodafone India Ltd. vs. UOI; 221 Taxman 88 (Bom.)(Mag) \n Smt. Ritu Devi vs CIT; 271 ITR 466 (Mad.) \n Rameshwaram Paper Mills(P) Ltd. v. State of U.P. & others, (2009) \n11VLJ33(All); \n Padam Traders & others v. State of U.P. & others, (2009) 47 STJ 392 (All) \n \n9. \nSo far as regards the Ground Nos. 2 & 3, according to these grounds, the ld. \nCIT(E) has erred in holding that the assessee University does not fall in the category \n\n5 \n \nof assessees eligible to claim exemption under section 12AB of the Act; that the Ld. \nCIT(E) has erred in holding that firstly, only a society registered under the Societies \nRegistration Act, 1860, or a public charitable trust registered under the relevant Trust \nAct or a Section 8 Company registered under the Companies Act, are eligible to claim \nexemption under section 12AB, under any of which categories the assessee did not \nfall; that the Ld. CIT(E) has erred in not appreciating that the assessee is a University \nestablished as a body corporate under the Punjab Technical University Act, 1996 and \nthat it is, as such, covered within the definition of ‘person’ as provided under section \n2(31), making it eligible to claim registration under section 12AB; that the Ld. CIT(E) \nhas failed to appreciate that the assessee University is imparting education, which is \ncovered under ‘charitable purpose’ as contained in Section 2(15), that the assessee’s \nactivities are genuine and it has duly complied with all the laws applicable; and that \nthe Ld. CIT(E) has gone wrong in cancelling the provisional registration granted to the \nassessee’s retrospectively, w.e.f. A.Y 2022-23. \n10. \nIt is seen that it is undisputed, being patent on record, that the show cause \nnotice is dt. 27/03/2024 . It requires the assessee to show cause as to why the \napplication of the assessee be not rejected, since there is no change in the facts and \ncircumstances of the case present when the Section 12AA Exemption was earlier \ndenied to the assessee. The assessee has been requested to furnish this explanation on \nor before 28/03/2024, i.e., the immediately next day as the day of the issuing of notice, \nand that too, by 11.00 A.M, on 28/03/2024. Thus, the assessee is wrong in contending \nthat it was effectively provided time of barely one day to submit its response to the \nshow cause notice. The fact of the matter is that the time provided to the assessee for \nreplying to the notice was that of less than one day. As correctly contended, in the \n\n6 \n \ncase laws relied on by the assessee, granting of reasonable opportunity has been \nconsidered as the sine qua non for adhering to the principles of natural justice. But \neven without referring to those decisions, it cannot but he held that by no stretch of \nimagination can the principles of natural justice be adhered to by granting one day, \nnay, less than one day to the assessee to file reply to the show cause notice. And, as is \navailable from the notice itself, the issues which the assessee was required to reply to \nwere complicated, vexed issues of law, to which, the assessee could not have filed \nreply by the next day. \n11. \nSo, on this issue alone, the order under appeal cannot be sustained in the eyes \nof law. \n12. \nConcerning Ground Nos. 2 & 3, the denial of registration, the assessee has been \nordered, holding that since the assessee is a University, it does not fall under any of \nthe three categories of assessees who are eligible to claim exemption under section \n12AB of the Act. These three categories have been stated to be; \n1. A society registered under the Societies Registration Act, 1860 \n2. Public Charitable Trusts registered under the relevant Trusts Act \n3. Section 8 Company registered under the companies Act, 2013 \n \n13. \nWe find that while doing so, ld. CIT(E) has remained oblivious of the position, \nas correctly contended on behalf of the assessee, that Section 12A / 12AB do not \nprovide that only a society or a trust or an entity registered under the Companies Act \nis entitled to exemption. Section 12(1) talks of, amongst other things, an institution \nestablished wholly for charitable purposes. Section 12A mention, inter alia, income of \nany institution, the person in receipt of which makes an application for registration of \nthe trust or institution, and then, Section 12AB talks of the requirement of the \nregistering authority to satisfy themselves about, inter alia, the genuineness of the \n\n7 \n \ninstitution and its objects and activities. Section 13 states that Section 11 would not \napply to exclude certain incomes, as mentioned therein, from the total income of the \nperson who is in receipt of such income. It mentions charitable institutions created \nafter the commencement of the Act. \n13.1 For ease of ready reference, the provisions of Sections 11, 12,12A,12AB and \n13 (with highlighted relevant part thereof) are reproduced hereunder: \n\"11. Income from property held for charitable or religious purposes. \n(I ) Subject to the provisions of sections 60 to 63, the following income shall not be \nincluded in the total income of the previous year o f the person in receipt of the \nincome (a) income derived from property held under trust wholly for charitable or \nreligious purposes, to the extent to which such income is applied to such purposes in \nIndia; and, where any such income is accumulated or set apart for application to \nsuch purposes in India, to the extent to which the income so accumulated or set apart \nis not in excess of fifteen per cent of the income from such property \n \n(7) Where a trust or an institution has been granted registration under section \nI2 AA or section 12AB or has obtained registration at any time under section 12A \n[as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and \nthe said registration is in force for any previous year, then, nothing contained in \nsection 10 [other than clause (I), clause (23C) and clause (46)] thereof] shall \noperate to exclude any income derived from the property held under trust from the \ntotal income o f the person in receipt thereof for that previous year: \n \n12. Income of trusts or institutions from contributions. \n(1) Any voluntary contributions received by a trust created wholly for charitable or \nreligious purposes or by an institution established wholly for such purposes (not \nbeing contributions made with a specific direction that they shall form part of the \ncorpus of the trust or institution) shall for the purposes of section 11 be deemed to be \nincome derived from property held under trust wholly for charitable or religious \npurposes and the provisions of that section and section 13 shall apply accordingly. \n \n12A. Conditions for applicability of sections 11 and 12. \n(1) The provisions of section 11 and section 12 shall not apply in relation to the \nincome of any trust or institution unless the following conditions are fulfilled, \nnamely:— \n \n(aa) the person in receipt of the income has made an application for registration of \nthe trust or institution on or after the 1st day of June, 2007 in the prescribed form \nand manner to the Principal Commissioner or Commissioner and such trust or \ninstitution is registered under section 12AA; \n \n(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt \nof the income has made an application in the prescribed form and manner to the \nPrincipal Commissioner or Commissioner, for registration of the trust or \ninstitution,— \n \n\n8 \n \n(i) \nwhere the trust or institution is registered under section 12A [as it stood \nimmediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or \nunder section 12AA fas it stood immediately before its amendment by the Taxation \nand Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 \nof2020)], within three months from the first day of April, 2021; \n \n(ii) \nwhere the trust or institution is registered under section 12AB and the period \nof the said registration is due to expire, at least six months prior to expiry of the said \nperiod; \n \n(iii) where the trust or institution has been provisionally registered under section \n12AB, at least six months prior to expiry ofperiod of the provisional registration or \nwithin six months of commencement of its activities, whichever is earlier; \n \n(iv) \nwhere registration of the trust or institution has become inoperative due to \nthe first proviso to sub-section (7) of section 11, at least six months prior to the \ncommencement of the assessment year from which the said registration is sought to \nbe made operative; \n \n(v) \nwhere the trust or institution has adopted or undertaken modifications of the \nobjects which do not conform to the conditions of registration, within a period of \nthirty days from the date of the said adoption or modification; \n \n(vi) in any other case, where activities of the trust or institution have— \n(A) not commenced, at least one month prior to the commencement of the previous \nyear relevant to the assessment year from which the said registration is sought; \n(B) commenced and no income or part thereof of the said trust or institution has \nbeen excluded from the total income on account of applicability of subclause (iv) or \nsub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or \nsection 11 or section 12, for any previous year ending on or before the date of such \napplication, at any time after the commencement of such activities,] \nand such trust or institution is registered under section 12AB; \n \n(b) where the total income of the trust or institution as computed under this Act \nwithout giving effect to the provisions of sections 11 and 12. exceeds the maximum \namount which is not chargeable to income-tax in any previous year,— \n(i) \nthe books of account and other documents have been kept and maintained in \nsuch form and manner and at such place, as may be prescribed--; and \n(ii) \nthe accounts of the trust or institution for that year have been audited by an \naccountant defined in the Explanation below sub-section (2) of section 288 before the \nspecified date referred to in section 44AB and the person in receipt of the income \nfurnishes by that date the report of such audit in the prescribed form— duly signed \nand verified by such accountant and setting forth such particulars, as may be \nprescribed] \n \n(ba) the person in receipt of the income has furnished the return of income for the \nprevious year in accordance with the provisions of sub-section (4A) of section 139, \nwithin the time allowed under ---[subsection (I) or sub-section (4) of] that section; \n \n12AB. Procedure for fresh registration \n(1) The Principal Commissioner or Commissioner, on receipt of an application made \nunder clause (ac) of sub-section (1) of section 12A, shall,— \n(a) where the application is made under sub-clause (i) of the said clause, pass an \norder in writing registering the trust or institution for a period of five years; \n\n9 \n \n(b) where the application is made under sub-clause (ii) or sub-clause (Hi) or sub-\nclause (iv) or sub-clause (v) —[or item (B) of sub-clause (vi)] of the said clause,— \n(i) \ncall for such documents or information from the trust or institution or make \nsuch inquiries as he thinks necessary in order to satisfy himself about— \n(A) \nthe genuineness of activities of the trust or institution; and \n(B) the compliance of such requirements of any other law for the time being in force \nby the trust or institution as are material for the purpose of achieving its objects; \n(ii) \nafter satisfying himself about the objects of the trust or institution and the \ngenuineness of its activities under item (A) and compliance of the requirements under \nitem (B), of sub-clause (i),— \n(A) pass an order in writing registering the trust or institution for a period of five \nyears; or \n[(B) if he is not so satisfied, pass an order in writing, \n(I) \nin a case referred to in sub-clause (ii) or sub-clause (Hi) or sub-clause \n(v) of clause (ac) of sub-section (1) of section 12A rejecting such \napplication and also cancelling its registration; \n(II) \nin a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) \nof sub-section (1) of section 12 A, rejecting such application, \nafter affording a reasonable opportunity of being heard;] —[(c) where the \napplication is made under item (A) of sub-clause (vi) of the said clause or the \napplication is made under sub-clause (vi) of the said clause, as it stood immediately \nbefore its amendment vide the Finance Act, 2023, pass an order in writing \nprovisionally registering the trust or institution for a period of three years from the \nassessment year from which the registration is sought,] and send a copy of such \norder to the trust or institution. \n \n(2) All applications, pending before the Principal Commissioner or Commissioner on \nwhich no order has been passed under clause (b) of sub-section (1) of section 12AA \nbefore the date on which this section has come into force, shall be deemed to be \napplications made under sub-clause (vi) of clause (ac) of sub-section (1) of section \n12A on that date. \n \n(4) Where registration or provisional registration of a trust or an institution has been \ngranted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) \nof sub-section (1) of section 12AA, as the case may be, and subsequently,— \n(a) the Principal Commissioner or Commissioner has noticed occurrence of one or \nmore specified violations during any previous year; or \n(b) the Principal Commissioner or Commissioner has received a reference from the \nAssessing Officer under the second proviso to sub-section (3) of section 143 for any \nprevious year; or \n(c) such case has been selected in accordance with the risk management strategy, \nformulated by the Board from time to time, for any previous year, \nthe Principal Commissioner or Commissioner shall,— \n(i) \ncall for such documents or information from the trust or institution, or make \nsuch inquiry as he thinks necessary in order to satisfy himself about the \noccurrence or otherwise of any specified violation; \n(ii) \npass an order in writing, cancelling the registration of such trust or \ninstitution, after affording a reasonable opportunity of being heard, for such \nprevious year and all subsequent previous years, if he is satisfied that one or \nmore specified violations have taken place; \n(iii ) pass an order in writing, refusing to cancel the registration of such trust or \ninstitution, if he is not satisfied about the occurrence of one or more specified \nviolations; \n(iv) forward a copy of the order under clause (ii) or clause (Hi), as the case may be, \nto the Assessing Officer and such trust or institution. \n \n\n10 \n \nExplanation.—For the purposes of this sub-section, the following shall mean \n\"specified violation \",— \n(a) where any income derived from property held under trust, wholly or in part for \ncharitable or religious purposes, has been applied, other than for the objects of the \ntrust or institution; or \n(b) the trust or institution has income from profits and gains of business which is not \nincidental to the attainment of its objectives or separate books of account are not \nmaintained by such trust or institution in respect of the business which is incidental \nto the attainment of its objectives; or \n(c) the trust or institution has applied any part of its income from the property held \nunder a trust for private religious purposes, which does not enure for the benefit of \nthe public; or \n(d) the trust or institution established for charitable purpose created or established \nafter the commencement of this Act, has applied any part of its income for the benefit \nof any particular religious community or caste; or \n(e) any activity being carried out by the trust or institution,— \n(i) \nis not genuine; or \n(ii) \nis not being carried out in accordance with all or any of the conditions \nsubject to which it was registered; or \n(f ) the trust or institution has not complied with the requirement of any other law, as \nreferred to in item (B) of sub-clause (i) of clause (b) of sub-section (1), and the order, \ndirection or decree, by whatever name called, holding that such non-compliance has \noccurred, has either not been disputed or has attained finality; or \n(g) the application referred to in clause (ac) of sub-section (I) of section 12A is not \ncomplete or it contains false or incorrect information.] \n \n13. Section 11 not to apply in certain cases. \n(1) Nothing contained in section 11 or section 12 shall operate so as to exclude from \nthe total income of the previous year of the person in receipt thereof— \n(a) any part of the income from the property held under a trust for private religious \npurposes which does not enure for the benefit of the public; \n(b) in the case of a trust for charitable purposes or a charitable institution created \nor established after the commencement of this Act, any income thereof if the trust or \ninstitution is created or established for the benefit of any particular religious \ncommunity or caste. \n \n13.2 As per the provisions of Section 2(31) of the Act, ‘person’ includes an artificial \njuridical person which does not fall within any of the other sub clauses of Section \n2(31). Here, it is relevant to mention that the assessee University has, all through, \nclaimed itself to be such artificial juridical person, which claim has not been denied. \n13.3 The Explanation under section 2(31) specifically provides that for the purpose \nof Section 2(31), inter alia, an artificial juridical person shall be deemed to be a \nperson. \n14. \nTherefore, the emerging sequence can be led into by stating that the registration \nprovisions of the Act talk of ‘person’. ‘Person’ is defined by Section 2(31) as a person \n\n11 \n \nas, inter alia, ‘every artificial juridical person’. The assessee University is undeniably \nan ‘artificial juridical person’. An artificial juridical person as per the Explanation \nprovided to Section 2(31), is mandated to be a person. \nThe above sequence being taken into consideration, it cannot but be held that the ld. \nCIT(E) has utterly gone wrong in holding that the assessee University is not entitled to \nregistration under section 12AA of the Act, since it does not fall within any of the \nthree categories referred to by the ld. CIT(E), i.e.: \n1. \nA Society registered under the Societies Registration Act, 1860, \n2. \nA Public Charitable Trust registered under the relevant Trust Act \n3. \nA Section 8 company registered under the Companies Act, 2013 \nAs specifically laid down therein, the Punjab Technical University Act, 1996, in \nSection 3(1) thereof, specially lays down that the assessee University is a body \ncorporate. For ready reference, Sections 3(1) and (2) are being reproduced hereunder: \nPUNJAB TECHNICAL UNIVERSITY ACT, 1996 \n \n3. (1) The first chancellor and the first Vice-Chancellor of the University and \nthe first member of the Board of Governors and the Academic Council and all \npersons who may hereafter become such Officers or Members so long as they \ncontinue to hold such office or membership are hereby constituted a body \ncorporate by the name o f \"The Punjab Technical University Jalandhar\". \n \n(2) The University shall have perpetual succession and a common seal with \npower to acquire hold and dispose of property, and to contract, and may by \nthe said name sue and be sued. \n (emphasis supplied) \n \nTherefore, the assessee University is a separate legal entity. It exists independently. It \nhas perpetual succession. It has a common seal. It has independent power to sue and \n\n12 \n \nbe sued. It has independent power to hold property in its name. Further, a separate \nPAN has been allotted to it by the Income Tax Department itself. \n15. \nOn the basis of the above, evidently, such a body as the assessee University is \ndefinitely eligible to be registered under section 12A of the Act. In this regard, \nreliance has rightly been placed by the assessee on ‘O P Jindal Global University Vs. \nCIT’: 127 ITD 164 (Delhi). Therein, under similar facts, it was held that a University \nregistered under a state legislation is competent to be registered under section 12A of \nthe Act. It was held, under similar circumstances, that a University incorporated under \nthe Haryana Private Universities Act, 2006 is an artificial juridical person coming \nwithin the definition of the term ‘person’ under section 2(31)(vii); that therefore, it is \nentitled to make an application for registration under section 12AA of the Act; that \nunder the Explanation to Section 2(31)(vii), an artificial juridical person shall be \ntreated to be a person, whether or not it has been formed or established with the object \nof deriving income, profit or gains; that thus, the juristic person created under that Act \nmay or may not be incorporated as a company or a society so as to be a ‘person’ under \nthe Act; and that accordingly, the CIT(E) erred in coming to the conclusion that the \nassessee University was not a person competent to make an application for its \nregistration. \n16. \nThe said order of the Tribunal in ‘O.P. Jindal Global University’(supra), on the \nappeal of the Department, was upheld by the jurisdictional Punjab & Haryana High \nCourt in ‘CIT Vs. O.P. Jindal Global University’, 219 Taxman 70(P&H)(Mag.). Their \nLordships held that the University was a body corporate and was established for the \npurposes of providing education and that thus, it was an institution eligible for \nregistration within the meaning of Section 12AA of the Act. \n\n13 \n \n17. \nParity of the facts in the present case with those in ‘O.P. Jindal Global \nUniversity’(supra) has been well brought out before us. The Department, on the other \nhand, has not been able to place any decision contrary to ‘O.P. Jindal Global \nUniversity’(supra). The assessee University is a University established under the \nPunjab Technical University Act, 1996. There is no denying that it has been \nestablished for the sole purpose of providing education. \n \n18. \nFor the proposition that Section 12A of the Act does not provide for any \ndistinction between trusts and institutions created by the Government or private \nindividuals and an institution having an objective of charitable nature and falling \nwithin the meaning of ‘person’ under section 2(31) of the Act is eligible for \nregistration under section 12A of the Act, the ld. Counsel for the Assessee has sought \nto place reliance on the following decisions: \n Bar Council of Uttar Pradesh vs. CIT: [1983] 12 Taxman 209(All) \n CIT vs. Agricultural Market Committee: (2012) 336 ITR 541(AP) \n Gujarat Maritime Board vs. CIT: (2005)147 Taxman 31 (Ahd ITAT) \n Indus University vs. ACIT: (2018) 169 ITD 609 (Ahd ITAT) \n Mormugao Port Trust Vs CIT; (2007) 109 ITD 303 (Panaji ITAT) \n \n18.1 In ‘Bar Council of Uttar Pradesh (U.P)’(supra), following ‘CIT Vs. Bar \nCouncil of Maharashtra’ (1981) 130 ITR 28(SC), it was held that since the object and \nactivity of the assessee therein came within the perview of ‘charitable purpose’ under \nsection 2(15) of the Income Tax Act, and since it was undisputed that the assessee \nwas not carrying on its activity with the motive of earning profits, the assessee was an \ninstitution for charitable purpose within the meaning of Section 2(15); and that \naccordingly, it was entitled to claim relief both under sections 10(23A) and 11 of the \nAct. \n\n14 \n \n \n18.2 In ‘Agricultural Market Committee’ (supra) it was held that an Agricultural \nMarketing Committee constituted by the Government of state is an ‘institution’ \nestablished for the advancement of the object of general public utility and, therefore, it \nexists for charitable purposes; and that it is also a person and it will, therefore, be \nentitled to registration under section 12A of the Act. \n \n18.3 In ‘Gujarat Maritime Board’ (supra), it was held that Section 12A of the Act \ndoes not make any distinction between trusts and institutions created by private \nindividuals or by the Government; that if an assessee is an institution whose object is \ncharitable as defined under section 2(15) of the Act, it would be entitled to registration \nunder section 12A, even though, as per the definition of ‘person’ under section 2(31), \nit falls in any other category like company, or AOP, or local authority; and that since \nthe assessee Gujarat Maritime Board was genuinely engaged in the activity of \ndeveloping and maintenance of ports in the state of Gujarat, which was certainly an \nobject of general public utility, the assessee was entitled to registration. \n18.4 In ‘Indus University’(supra) it was held that the assessee private University, \nengaged in imparting education, was eligible for registration within the meaning of \nSection 12AA of the Act as it was established in furtherance of objects contemplated \nunder the Gujarat Private University Act, 2009, according to which, the objects of the \nUniversity established would be to create, organize, preserve and disseminate \nknowledge in the fields of science, technology, humanities, social science, education, \nmanagement, commerce, law, etc. \n \n18.5 In ‘Mormugao Port Trust’(supra), again, as in ‘Gujarat Maritime Board’ \n(supra), it was held that Section 12A of the Income Tax Act does not make any \n\n15 \n \ndistinction between trusts or institutions created by a private individual or by the \nGovernment; that if an assessee is an institution whose object is charitable as defined \nunder section 2(15), it would be entitled to registration under section 12A of the Act. \n19. \nFurther, it remains irrefuted that the Department has been granting registration \nunder section 12A/12AA of the Act to Universities established under the said Act, on \nfinding the objects of those Universities to be charitable in nature. The following have \nrightly been cited as cases in which Universities similar to the assessee University \nhave been granted registration: \n1. IILM University Vs. CIT(E), orer dt. 22/03/2021, passed by the Delhi Bench of \nthe Tribunal, in ITA No. 1263/Del/2019 (ACLPB 91-98) \n2. Visvesvaraya Technological University Vs. CIT(E), Bengaluru [2018] 171 ITR \n414 (Bangalore Trib) \n3. Singhania University Vs. CIT(E), Jaipur [2020] 184 ITR 487 (Jaipur Trib) \n4. Sikkim Manipal Univeristy Vs. ACIT (2012) 148 TTJ 645 (Kolkata) \n \n20. \nBesides the above, we also find ourselves in agreement with the grievance of \nthe assessee that registration under section 12AB cannot be denied in the absence of \nany specific violation, in the preceding year (no such violation has been alleged by the \nCIT(E) against the assessee University in the present case), and that it cannot be \ndenied / cancelled retrospectively, as has been done herein. Reference in this regard \nhas correctly been made to the decisions of the Bangalore Bench of the Tribunal in \n‘Ambala Jyothi Vidya Kendra Vs. PCIT’ passed in ITA No. 458/Bang/2023 and \n‘Islamic Academy of Education Vs. PCIT’, in ITA No. 610/Bang/2023. \n \n21. \nIn view of the above discussion, we hold that the ld. CIT(E) has erred in \ndismissing the application for registration under section 12AB of the Act, filed by the \nassessee University, holding that: \n\n16 \n \n1. The assessee University does not fall in the category of assessees eligible to \nclaim registration under section 12AB of the Act. \n2. Only a society registered under the Societies Registration Act, 1860, or a \nPublic Charitable Trust registered under the relevant Trusts Act, or a Section 8 \ncompany / Section 25 company registered under the Companies Act, are \neligible for registration under section 12AB of the Act and that a University \nestablished under the statute is not eligible for such registration. \n22. \nWe further hold that \n1. The ld. CIT(E) has erred in failing to appreciate that the assessee is a \nUniversity established as a body corporate under the Punjab Technical \nUniversity, Act, 1996 and is, accordingly, covered within the definition of \n‘person’ as provided in Section 2(31) of the Act and that it is eligible to claim \nregistration under section 12AB of the Act. \n2. The assesse University is carrying out a charitable purpose within the meaning \nof Section 2(15) of the Act, since it is only imparting education. \n3. The activities of the assessee University are genuine. \n4. The assessee is duly complying with all the laws applicable. \n23. \nWe further hold that the ld. CIT(E) has erred in cancelling the earlier \nprovisional registration granted to the assessee, with retrospective effect, i.e., w.e.f. \nA.Y. 2022-23. \n \n24. \nTo conclude, it is held that the assesse is entitled to registration under section \n12A/12AB of the Income Tax Act. \n \n\n17 \n \n25. \nAccordingly, the order under appeal is set aside and cancelled. It is directed \nthat the assessee University be granted registration under section 12A/12AB of the \nAct forthwith. Ordered accordingly. \n26. \nIn the result, appeal of the Assessee is allowed. \n \nOrder pronounced in the open Court on 28/10/2024 \n \n Sd/- \n \n \n \n \n \n \n \n Sd/- \nिवŢम िसंह यादव \n \n \n \n \n आकाश दीप जैन \n (VIKRAM SINGH YADAV) \n \n \n \n (AAKASH DEEP JAIN) \nलेखा सद˟/ ACCOUNTANT MEMBER \n \n \n उपाȯƗ / VICE PRESIDENT\n \n \n \n \n \nAG \n \n \nआदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : \n \n1. \nअपीलाथŎ/ The Appellant \n2. \nŮȑथŎ/ The Respondent \n3. \nआयकर आयुƅ/ CIT \n4. \nआयकर आयुƅ (अपील)/ The CIT(A) \n5. \nिवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH \n6. \nगाडŊ फाईल/ Guard File \n \nआदेशानुसार/ By order, \nसहायक पंजीकार/ Assistant Registrar \n \n"