Gujrathi Shikshan Sanstha , Pune V. Commissioner Of Income Tax, Exemptions, Pune

ITA 10/PUN/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9537 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 12-01-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Set aside
• Section: 12AA; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO . 10 /PUN/20 21 GUJRATHI SHIKSHAN SANSTHA, SHRI GUJARATHI ENGLISH SCHOOL, LOKHAND GALLI, LATUR 413512 PAN : AAATG3089M ...... / APPELLANT / V/S. COMMISSIONER OF INCOME TAX, (EXEMPTIONS), PUNE / RESPONDENT ASSESSEE BY : SHRI BHUVANESH KANKANI REVENUE BY : SHRI DEEPAK GARG / DATE OF HEARING : 1 6 - 03 - 2021 / DATE OF PRONOUNCEMENT : 18 - 03 - 2021 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 08 - 08 - 2020 PASSED BY THE COMMISSIONER OF INCOME TAX ( EXEMPTION), PUNE [CIT( EXEMPTION )] . 2 ITA NO .10/PUN/2021 2. THIS APPEAL WAS FILED WITH A DELAY OF 97 DAYS. THE ASSESSEE FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE REASONS STATED BY THE ASSESSEE ARE BONAFIDE WHICH REALLY PREVENTED THE ASSESSEE TO FI LE THE PRESENT APPEAL IN TIME. THEREFORE, THE DELAY OF 97 DAYS ARE CONDONED. 3. THE ASSESSEE RAISED 5 GROUNDS AMONGST WHICH THE ONLY ISSUE IS TO BE DECIDED IS AS TO WHETHER THE CIT( EXEMPTION) JUSTIFIED IN REJECTING THE APPLICATION FILED SEEKING REGISTRATION U/S. 12AA OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LD. AR, SHRI BHUVANESH KANKANI SUBMITS THAT THE ASSESSEE MADE AN APPLICATION SEEKING REGISTRATION U/S. 12AA OF THE ACT ON 24 - 09 - 2019. THE ASSESSEE IS A CHARITABLE TRUST REGISTERED UNDER BOMBAY PUBLIC TRUST ACT, 1950 VIDE REGISTRATION NO. E - 6/LATUR DATED 17 - 10 - 1985. THE CIT(EXEMPTION) REJECTED THE APPLICATION SEEKING REGISTRATION BASICALLY ON ONE GROUND THAT NON - PAYMENT OF TAXES ON SURPLUS FUND AND TREATED THE ACTIVITIES OF THE ASSESSEE AS NON - GENUINE. FURTHER, HE HELD THAT THE ASSESSEE COLLECTED VARIOUS FEES AND ALSO KEPT FUNDS IDLE IN FDS WITHOUT UTILIZING THEM FOR THE OBJECTS OF THE TRUST. THE LD. AR SUBMITS THAT THE CIT(EXEMPTION) WENT BEYOND HIS PURVIEW U/S. 12AA O F THE ACT TREATING THE ACTIVITIES OF THE ASSESSEE AS NON - GENUINE AND NON - UTILIZATION OF FUNDS FOR THE OBJECTS OF THE TRUST. THESE ASPECTS ARE PART OF ASSESSMENT PROCEEDINGS AND NOT IN THE PURVIEW OF CIT(EXEMPTION) IN DECIDING AND GRANTING OF REGISTRATION U/S. 12AA OF THE ACT. THE CIT(EXEMPTION) HAS NOT OBJECTED ON THE ACTIVITIES CARRIED OUT BY THE ASSESSEE AND DID NOT SHOW A SINGLE RUPEE OF THE FD IS UTILIZED FOR ANY OBJECT OTHER THAN OBJECT OF THE TRUST. HE SUBMITS THAT THE TRUST IS ACCUMULATING THESE F UNDS WITH A VISION TO CONSTRUCT 3 ITA NO .10/PUN/2021 SCHOOLS ON THE PLOTS OWNED BY THE TRUST AND REFERRED TO PAGE NO. 11 OF THE PAPER BOOK. HE ALSO PLACED ON RECORD A LIST OF STUDENTS TO WHOM ADMISSION HAVE BEEN GIVEN IN THE ACADEMIC YEAR 2019 - 20 AND SUBMITTED TOTAL ADMISSION S WERE GIVEN 62 STUDENTS AND OUT OF 62 STUDENTS, 11 STUDENTS WERE IN THE CATEGORY OF RTE. THE LD. AR PLACED ON RECORD ORDER DATED 18 - 12 - 2020 IN ITA NO. 581/PUN/2020 PASSED BY THIS TRIBUNAL IN THE CASE OF SANT ZOLEBABA SANSTHAN CHIKHALI AND REFERRED TO PAR A NOS. 7 TO 10 AND SUBMITS THAT THIS TRIBUNAL DECIDED THE SIMILAR ISSUE IN THE SAID CASE AND DIRECTED THE CIT(EXEMPTION) TO GRANT REGISTRATION U/S. 12AA OF THE ACT. HE SUBMITS THAT THIS TRIBUNAL HELD THAT AT THE TIME OF GRANTING REGISTRATION THE CIT(EXEMP TION) IS ONLY REQUIRED TO EXAMINE WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE OR NOT AND THE ACTIVITIES OF THE TRUST ARE GENUINE . SINCE, THE ISSUE IS SIMILAR AND THE DIRECTION IN THE SAID CASE MAY BE FOLLOWED IN THE PRESENT CASE ALSO AND PR AYED TO ALLOW GROUNDS OF APPEAL. 5. THE LD. DR, SHRI DEEPAK GARG SUBMITS THAT THE CIT(EXEMPTION) REJECTED GRANTING OF REGISTRATION U/S. 12AA OF THE ACT ON TWO ASPECTS, ONE IS , ACTIVITIES OF THE TRUST ARE NOT GENUINE WHEREIN THE ASSESSEE COULD NOT PAY TAXES ON SURPLUS FUNDS AND PLACED RELIANCE ON PARA NO. 5 OF THE IMPUGNED ORDER. FURTHER, HE SUBMITS THAT THERE ARE MISMATCH OF ACCOUNTS AND REFERRED TO PARA NO. 5 OF THE IMPUGNED ORDER AND SUBMITTED THAT IN THE BALANCE SHEET OF F.Y. 2018 - 19 THE FDS AT RS .3.78 CRORES WERE LYING IN BANK ACCOUNTS WHICH ARE OUT OF TOTAL ASSETS OF RS.6.18 CRORES AND THERE IS MISMATCH COMPARE D TO BALANCE SHEET AS ON 31 - 03 - 2019 PLACED AT PAGE NO. 13 OF THE PAPER BOOK. IN REPLY, THE LD. AR SUBMITS THAT THE ASSESSEE RUNNING EDUCA TIONAL INSTITUTE IN LATUR IN THE NAME OF GUJARATI ENGLISH SCHOOL FOR 1 ST STANDARD TO 10 TH STANDARD AND KIDS PLANET PRE - PRIMARY 4 ITA NO .10/PUN/2021 SCHOOL. THE ASSESSEE HAS SHOWN THE ASSETS SEPARATELY INSTITUTION WISE AND THERE IS NO MISMATCH AS POINTED BY THE LD. DR. 6. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE FROM THE IMPUGNED ORDER AS RIGHTLY POINTED BY THE LD. AR THAT THE CIT(EXEMPTION) DID NOT POINT OUT THE ACTIVITIES OF THE ASSESSEE ARE NON - GENUINE AND HE REJECTED ONLY ON THE GROU ND THAT THE ASSESSEE ACCUMULATED FUNDS AND KEPT THE SAME IN FDS NOT UTILIZING THE SAME FOR THE OBJECTS OF THE TRUST. THIS TRIBUNAL IN THE CASE OF SANT ZOLEBABA SANSTHAN CHIKHALI HELD THE ISSUE OF GRANT OF REGISTRATION AND THE ASSESSMENT OF INCOME OF TRUST ARE DISTINCT AND SEPARATE , BY PLACING RELIANCE IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST VS. CIT REPORTED IN 272 TAXMAN 7 OF HONBLE SUPREME COURT HELD THE MANDATE OF THE PROVISIONS U/S. 12AA OF THE ACT IS TO EXAMINE WHETHER OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE ARE NOT AND THE ACTIVITIES OF THE TRUST ARE GENUINE , BUT HOWEVER , IN THE PRESENT CASE AS DISCUSSED ABOVE THE CIT(EXEMPTION) DID NOT POINT OUT ANYTHING AGAINST THE OBJECTS AND GENUINENESS OF THE ACTIVITIES OF THE TRUST BUT HOWEVER R EJECTED THE REGISTRATION ON EXAMINATION OF FINANCIAL STATEMENT S OF THE ASSESSEE FOR THE LAST FOUR YEARS BY HOLDING THE ASSESSEE HAS MADE SURPLUS AND NO TAXES PAID THEREON ON SUCH SURPLUS FUNDS. WE FIND THAT IT IS A SETTLED PRINCIPLE THAT THE GRANT OF REGI STRATION AND THE ISSUE OF ASSESSMENT OR EXEMPTION U/S. 11 OF THE ACT ARE SEPARATE AND DISTINCT. THE PROCESS OF REGISTRATION IS NOT ON OCCASION FOR DECIDING THE ISSUE OF EXEMPTION OF DONATION U/S. 11 OF THE ACT. THE ISSUE OF EXEMPTION CANNOT BE EXAMINED D URING THE PROCESS OF REGISTRATION. THEREFORE, IN OUR OPINION, THE ORDER OF CIT(EXEMPTION) IN DENYING THE REGISTRATION U/S. 12AA OF THE ACT CANNOT BE SUSTAINED AND THE IMPUGNED ORDER IS SET ASIDE. 5 ITA NO .10/PUN/2021 7. IN VIEW OF THE ABOVE, THE ASSESSEE IS ENTITLED TO HAV E REGISTRATION U/S. 12AA OF THE ACT IN TERMS OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST (SUPRA) AS RELIED ON BY THIS TRIBUNAL IN THE CASE OF SANT ZOLEBABA SANSTHAN CHIKHALI. ACCORDINGLY, WE DIRECT THE CIT(EXEMP TION) TO GRANT REGISTRATION U/S. 12AA OF THE ACT TO THE ASSESSEE FROM THE DATE OF APPLICATION. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH, 202 1 . SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 18 TH MARCH, 202 1 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(EXEMPTION), PUNE 4 . , , , / DR, ITAT, A BENCH, PUNE. 5. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE