M/S Seed Association of Madhya Pradesh, Indore V. THE CIT (EXEMPTION), Bhopal

ITA 1023/IND/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9737 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 30-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: GIRIDHAR GARG
• Keywords: Charitable institution; Competent authority
• Section: 12A; 12AA; 12

Judgement Text

ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1023/IND/2016 ASSESSMENT YEAR: NA SEED ASSOCIATION OF MADHY A PRADESH, C/O GIRIDHAR GARG & ASSOCIATES, 409-411, CHETAK CENTRE, INDORE, 12/2, RNT MARG, INDORE-452 001. (APPELLANT) CIT (EXEMPTION) BHOPAL (REVENUE ) P.A. NO. AACAS4752J APPELLANT BY SHRI GIRIDHAR GARG, AR RESPONDENT BY SMT. ASHIMA GUPTA, DR DATE OF HEARING: 07.09.2018 DATE OF PRONOUNCEMENT: 26.09.2018 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTION), BH OPAL, ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 2 DATED 2.9.2016. THE ASSESSEE HAS RAISED FOLLOWING GROUN DS OF APPEAL: 1. THAT THE HON'BLE CIT(EXEMPTION) IS ERRED TO REJECT THE APPLICATION FILED BY THE ASSESSEE U/S 12A OF THE I.T. ACT AFTER LAPSE OF MORE THAN 10 YEARS WHICH IS NOT ALLOWED IN THE ACT. 2. THAT THE HON'BLE CIT(EXEMPTION) IS ERRED TO CONSIDE R THE APPLICATION AFRESH INSTEAD OF THE DIRECTION OF HON'BLE HIGH COU RT FOR THE ASSESSEE TO SUBMIT ANY FRESH MATERIAL AND DIRECTED TO THE COMMI SSIONER TO DECIDE THE APPLICATION AS PER LAW AND LAW NOR PERMITTED TO REJECT THE APPLICATION AFTER SIX MONTHS. 3. THE HON'BLE CIT (EXEMPTION) IS ERRED TO NOT CONSIDE R THE HON'BLE SUPREME COURT ORDER IN WHICH THE COURT HAS HELD THA T IF THE APPLICATION IS NOT DECIDED WITHIN SIX MONTHS THE REGISTRATION W ILL BE DEEMED TO GRANT FROM THE LAST DATE OF SIX MONTHS PASSED FROM THE APPLICATION DATE. 4. THE HON'BLE CIT( EXEMPTION) IS ERRED IN NOT CONSIDE R THE OBJECT OF THE SOCIETY AS CHARITABLE. 5. THAT NO PROPER AND REASONABLE OPPORTUNITY WAS GIVEN TO THE APPELLANT TO PROVE HIS CASE AND LEAD EVIDENCE IN SUPPORT OF H IS CLAIM. 6. THE APPLLANT CRAVES, TO LEAVE, TO ADD, TO ALTER OR AMEND ANY GROUNDS OF APPEAL AT THE TIME OF OR BEFORE FINAL HEARING OF TH IS APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FILED AN APPLICATION BEFORE THE CIT(A)-1, INDORE DATED 30.8.200 6 SEEKING REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). HOWEVER, THE SAID APPLICATION REMAINED UNDISPOSED OF. ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 3 3. AGGRIEVED BY THIS, THE ASSESSEE FILED A WRIT PETI TION BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT BEARING NO.570/2016. THE HON'BLE HIGH COURT DIRECTED THE ASSESSEE TO FILE A FRESH REPRESENTATION AND CIT WAS DIRE CTED TO DECIDE THE SAME IN ACCORDANCE WITH LAW. IN PURSUANC E TO THE ORDER OF THE HON'BLE JURISDICTIONAL HIGH COUR T, LD. CIT PASSED THE IMPUGNED ORDER, THEREBY THE APPLICATION SEEKING REGISTRATION WAS REJECTED. NOW THE ASSESSEE I S IN APPEAL BEFORE THIS TRIBUNAL. 4. GROUND NOS.1 TO 3 ARE INTER-RELATED AND IN RESPECT OF THE SUBMISSION THAT IF THE APPLICATION IS NOT DISPOSED WITHIN 6 MONTHS, IN THAT EVENT, REGISTRATION PRESUMED TO BE GRANTED. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS, WHI CH ARE REPRODUCED AS UNDER: ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 4 WRITTEN SUBMISSION FACTS:- THE FACTS IN BRIEF ARE THAT THE APPELLANT IS A REGI STERED SOCIETY UNDER THE M,P, SOCIETIES REGISTRATION ADHINIUM, 1973 WITH REGISTRAR OF FIRMS AND SOCIETIES, INDORE VIDE REGISTRATION NUMBER 03/27/03/08665/05 DATED 2.09.2005 AND CARRYI NG ON CHARITABLE ACTIVITIES FOR THE BENEFIT OF PUBLIC AT LARGE SPECIALLY FOR THE PURPOS ES TO DEVELOP THE HABIT OF THE FARMER TO GET BENEFITED BY THE TRAINING GIVEN BY THE EXPERTS THROUGH ORGANIZED THE VARIOUS SEMINARS AND OTHER MEANS OF EDUCATION AS WELL AS LI VE DEMO OF THE PRODUCED. THE SOCIETY HAS EDUCATED THE FARMERS TOWARDS PURCHASE/S ALE OF SEEDS SO THEY ARE GET MORE MONEY OF ITS CROP AND IN CASE THERE IS ANY PROBLEM TOWARDS THE GERMINATION THEY GET THE COMPENSATION FOR THE SELLER I.E, SHOP KEEPER WHO HA S SOLD THE GOODS TO THE FARMERS. EDUCATE THE FARMERS TO GET REGISTERED WITH THE MPSS C (GOVERNRNENT BODY WHO ORGANIZED THE SEED MECHANISM). THROUGH THIS THE SOC IETY HAS SERVE A LARQE NUMBER OF FARMERS (IN THOUSANDS) WHO GET BENEFITED BY JOINING SUCH TYPE OF ACTIVITIES AND EARNED MORE AND MORE MONEY AND ALSO HELP TO THE GOVERNMENT TO GROW THE SEEDS INSTEAD OF GROW COMMERCIAL PRODUCED, IF THE FARRNERS GROW THE SEED THEY GET RETURN THE NEXT GENERATION SEED AND SUCH NEXT GENERATION SEED I R! THE BACK BORN OF THE INDIAN ECONOMY TO GET INDEPENDENT IN AGRICULTURAL SECTOR. THROUGH THIS EDUCATION PROGRAM THE FARMER IS ABLE TO GET THREE OR MORE CROP IN ONE YEAR AND ULTI MATELY THE NATION IS GET BENEFITED. THE SOCIETY IS DOING ONLY AN FOR SEED PURPOSE THAT MEAN S TO DEVELOP THE AVAILABILITY OF GOOD CLASS OF SEED TO ALL THE FARMER IN THE NATION AND I F THERE ARE GOOD CLASS OF SEED AVAILABLE GET THE BENEFIT AND THE NATION WILL GROW RAIPIDLY. SIR, THROUGH THIS OUR CLIENT ASSOCIATION HAS SECURE D THE LIFE OF HUNDRED OF FARMERS AND THROUGH THIS NOBLE WORK IN MADHYA PRADESH THERE IS MINIMIZE SUICIDE CASE OF FARMERS OR IF WE ARE ABLE TO SECURE ANY LIFE OF THE FARMER THE WHOLE FAMILY OF THE FARMER IS SECURE. THE MAIN MOTTO OF THE SOCIETY IS RELATED TO SEED AN D FOR THIS PURPOSES THE SOCIETY HAS NOT CHANGED ANY AMOUNT FROM THE FARMERS AND THIS ED UCATIONAL PROGRAMME IS ABSOLUTELY FREE. THE SOCIETY IS RUNNING FOR THE DEVELOPMENT OF SEED AND THE FARMERS ARE THE BASE FOR THE SAME THIS IS THE BASIC ROUTE OF WHOLE PROCESS. THE CENTRAL AS WELL AS STATE GOVERNMENT HAS GIVING EMPHASIS ON THE DEVELOPMENT OF THIS SECT OR BUT THERE IS SOME LIMITATION AND THE NATURE OF GOVERNMENT WORK WE ARE NOT ABLE TO AC HIEVE THE DESIRE LEVEL. OUR CLIENT ASSOCIATION IS FORM FOR THAT PURPOSES ONLY TO PROVI DE THE DESIRED SEEDS LIKE BREEDER, FOUNDATION-L ETC SEED TO THE FARMERS SO THE NEXT GE NERATION SEED WILL BE AVAILABLE TO THE FARMERS AND ULTIMATELY THE STATE AND CONSEQUENTIALL Y THE NATION IS GET BENEFIT. TOWARDS THE FUNDING FOR THE SMOOTH RUNNING OF ACTIV ITIES OF THE SOCIETY THE SOCIETY IS FUNDED BY ITS MEMBERS AND THE MEMBERS ARE THE SEED PRODUCERS. THESE SEED PRODUCERS ARE THE ONLY SOURCE OF SEED WHO PROVIDES THE SEEDS TO THE STATE GOVERNMENTS AND CENTRAL GOVERNMENTS AND DIRECTLY TO THE END USE R IF THERE IS NO ACTIVITY DONE BY THESE SEED PRODUCERS THERE IS NO SEED AVAILABLE IN THE MARKET AND THE INDIAN ECONOMY WILL BE GO DOWN SINCE MOST OF THE INDUSTRY IS RUNNI NG ONLY ON AGRI PRODUCED. ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 5 IF A NATION IS HEALTHY IN ITS AGRICULTURE PRODUCED THE WHOLE NATION WILL BE GROW SMOOTHLY AND THE WHOLE ECONOMY OF THE NATION WILL IN PROCESS FROM DEVELOPING COUNTRY TO THE DEVELOPED COUNTRY. SIR, THE MEMBERS OF THE SOCIETY HAS GIVING THE MEMB ERSHIP FEES ONLY AND NOT GET BENEFIT IN ANY MODE OF TRANSACTIONS BUT WITH THIS M OTTO THAT IN INDIAN ECONOMY SEED IS PLAY IMPORTANT ROLE THEY WISH TO SERVE THE NATION I N THIS WAY SO THE GOOD CLASS OF SEED IS ALWAYS AVAILABLE TO THE INDIAN FARMERS AT LARGE AND THE FARMERS HAS NOT SUICIDE IN ABSENCE TO GOOD SEED OR INSUFFICIENT REALIZATION OF THE AGRICULTURE PRODUCED OR NON GERMINATION OF THE SEED. IF THE FARMER IS GETTING EDUCATED AND HE GROW SEED IN THAT CASE IF ANY GERMINATION PROBLEM THE SAID FARMER IS ALSO GET COMPENSATION. I N BETWEEN 2009- 2012 A HUNDRED OF FARMERS WHO GROW SEEDS GET THE COMPENSATION AND SEC URED FROM THE LOSS ON ACCOUNT OF NON GERMINATION COST OR OTHER RELATED EXPENSES. SIR, THROUGH THIS THE SOCIETY HAS DOING ITS CHARITA BLE ACTIVITIES AND FOR THIS THE SOCIETY HAS NOT EXPECTED ANY RETURN FROM THE FARMERS AND OTHER RELATED PERSONS. OUR SOCIETY IS DOING THE THOSE WORK AS DONE BY OTHE R STATE ASSOCIATION AND THAT ASSOCIATION IS GETTING THE REGISTRATION U/S 12 A (C OPY OF WHICH IS ENCLOSED HEREWITH) WE FURTHER PROVIDED CUTTING AND OTHER RELATED PAPER S BEFORE THE CIT -EXEMPTION WHICH ARE IN OUR SUPPORT TO ESTABLISH THE FACTS THAT THE ASSESSEE SOCIETY HAS DOING CHARITABLE ACTIVITIES I.E. EDUCATED THE FARMERS AT LARGE. FINDING OF THE COMMISSION OF INCOME TAX EXEMPTION 01. IN PARA 3.1 THE CIT HAS MENTIONED THAT THE OBJE CT NOS. 3,5,7,9 ANS 11 ARE SPECIFICALLY DEDICATED TO WARDS PRIVATE SEED COMPAN IES. SUBMISSION PLEASE REFER PAGE NO. 39 OF THE PAPER BOOK IN WHICH OBJECT NO. 5 IS RELATED TO ADMINISTRATION OF THE ASSOCIATION. OBJECT NO. 7 IS RELATED TO FARMERS BENEFIT OBJECT NO. 9 IS RELATED TO FARMERS BENEFIT OBJECT NO. 11 IS DELETED. 02, IN PARA 3.2 THE CIT HAS MENTIONED THAT THE SOCI ETY HAS PROVIDE PROFESSIONAL SERVICES TO THE PRIVATE COMPANIES WHICH IS BASELESS. AND FUR THER THE CIT HAS SPECIFICALLY ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 6 MENTIONED THAT ONLY ONE CLAUSE IS CHARITABLE BUT IN ACTUALLY CLAUSE 6,7,8 AND 9 IS DIRECTLY RELATED TO FARMERS AND FIRST 5 CLAUSE ARE ALSO LINK ED TO THE SEED AND ULTIMATELY THE SAME IS FOR THE FARMERS. 03. IN PARA 3.2 THE CIT HAS SPECIFICALLY MENTIONED THE PROCESS OF SEEDS AND IN LAST OBJECT THAT ALL THE MEMBERS ARE ONLY SEED COMPANIES . PLEASE NOTE THAT IN ALL CHARITABLE ASSOCIATION NONE OF THEM IS BENEFICIARY PERSONS HAV ING ANY MEMBERSHIP. THE ASSOCIATION HAS RECEIVED THE ANNUAL FEES AND FROM T HIS THEY EDUCATED TO THE FARMERS TO GROW SEEDS NOT COMMERCIAL PRODUCT. SIR, IT IS GOVERNMENT POLICY, THAT THE REGISTERED ( WITH THE GOVERNMENT) SEEDS PRODUCED COMPANIES AND ASSOCIATION ARE AUTHORIZED TO SELL TH E SEEDS AND THE ASSOCIATION IS HELP TO THE FARMERS TO PROCURE, PRODUCED AND SELL THE SE EDS AND IF GOVERNMENT HAS MADE A POLICY TO DISTRIBUTE THE SEEDS THROUGH SEED PRODUCE D COMPANIES IT IS NOT IN HAND OF THE ASSOCIATION TO INTERFERE THIS MECHANISM AND HELP TO THE GOVERNMENT TO ACHIEVE THE DOUBLE INCOME OF THE FARMERS IN NEXT 5 YEARS. IN PARA 4.1 THE CIT HAS MENTIONED THAT THE FARMER I S BOUND TO SEIL THE SEEDS TO THE SEED COMPANIES NOT IN THE MARKET. PLEASE NOTE FURTHER TH AT THIS IS GOVT POICV AND NOT THE ASSOCIATION POLICY. FURTHER IF THE FARMERS KEEP THE SAME FOR NEXT CROP THE SAME CAN BE HAPPEN AND THERE IS NO BOUNDATION TO SELL THE CROP TO THE OPEN MARKET, WHAT HAPPEN NOBODY CAN KNOW TOWARDS THE GOODS TO BE SALE THAT W EATHER THE SAID CROP IS SEED OR COMMERCIAL CROP AND IF ANYTHING HAPPEN I.E NO GERMI NATION OR LOW GERMINATION WHO WILL COMPENSATE THE FARMERS TOWARC S DEFECTIVE GERMINATI ON ETC SINCE THERE IS NO NAME ON THE SALE OF GOODS (FARMER ARE NOT ALLOWED TO SALE A S TRADERS). 05. IN PARA 4.2 THE CIT HAS MENTIONED THAT THE FARM ER MAYOR MAY NOT BE BENEFITED (AS NO EVIDENCE OR REPORT HAS BEEN PLACED ON RECORD). T HE FINDING OF THE CIT IS BASELESS SINCE THE ASSESSEE HAS ALREADY FURNISHED THE COMPAR ATIVE CHART (IF SEEDS RATE AND COMMERCIAL CROP RATE WHICH PROVED THAT THE FARMERS ARE BENEFITED AT LARGE IN TUNE OF SALE PRICE AS WELL AS FOR COMPENSATION OR GET MOR E . CROP BY USING GOOD QUALITY SEEDS IN CULTIVATION. IT IS RIGHT THAT THE MEMBERS ARE MA Y BE BENEFITED BY THIS PROCESS BY THE SEED POLICY FRAME BY THE GOVERNMENT BUT THIS IS NOT THE OBJECT OF THE SOCIETY, THE OBJECT OF THE SOCIETY IS TO PROMOTE CULTIVATING SEEDS AND FROM THIS PROCESS FARMERS GET THE BENEFITED. THE CIT HAS MENTIONED THAT THIS IS THE A DVERTISEMENT AND COMPENSATION PAID BY THE TRADERS IS LIKE WARRANTY. THE OBSERVATION OF THE CIT IS BASELESS, SINCE THE SOCIETY HAS NET MADE ANY ADVERTISEMENT, ON BEHALF OF MEMBER S AND NOT PROMOTES ANY MEMB J. THE ASSESSEE SOCIETY JUST EDUCATE THE FARMERS FOR G ETTING BEST PRICE OF THE SAME PRODUCT BY CHANGE THE SEED AND THE FARMER IS OPEN T O SALE SUCH GOODS TO CLNY OTHER TRADERS WHO IS NOT MEMBER OF THE SOCIETY. 06. IN PARA 4.3 THE CIT HAS MENTIONED THAT THE MEMB ERS ARE ONLY SEED TRADERS, AND THEY MUTUALLY DO THE BUSINESS AND FOR THE MUTUALLY BENEF IT THEY CREATED: THE ASSOCIATION. WE HAVE TO SUBMIT THAT ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 7 THIS IS TRUE THAT THE SEED TRADERS ARE MEMBER OF TH E ASSOCIATION BUT IT IS NOT TRUE THAT THEY GET THE BENEFIT THROUGH MUTUALLY, BECAUSE THE MAIN PURPOSES OF THE ASSOCIATION TO PROCURE SEEDS AT LARGE SCALE AND REDUCED THE CULTIV ATION OF COMMERCIAL CROP TO PREVENT THE GERMINATION OF SEED. THE ASSOCIATION HAS CARRYI NG ON CHARITABLE ACTIVITIES FOR THE BENEFIT OF PUBLIC AT LARGE SPECIALLY FOR THE PURPOS ES TO DEVELOP THE HABIT OF THE FARMER TO GET BENEFITED BY THE TRAINING GIVEN BY THE EXPERTS THROUGH ORGANIZED THE VARIOUS SEMINARS AND OTHER MEANS OF EDUCATION AS WELL AS LI VE DEMO OF THE PRODUCED. THE SOCIETY HAS EDUCATED THE FARMERS TOWARDS PURCHASE/S ALE OF SEEDS SO THEY ARE GET MORE MONEY OF ITS CROP. EDUCATE THE FARMERS TO GET REGIS TERED WITH THE STATE GOVERNMENT (GOVERNMENT BODY WHO ORGANIZED THE SEED MECHANISM). THROUGH THIS THE SOCIETY HAS SERVE A LARGE NUMBER OF FARMERS (IN THOUSANDS) WHO GET BENEFITED BY JOINING SUCH TYPE OF ACTIVITIES AND EARNED MORE AND MORE MONEY AND AL SO HELP TO THE GOVERNMENT TO QROW THE SEEDS INSTEAD OF GROW COMMERCIAL PRODUCED. IF T HE FARMERS GROW THE SEED THEY GET RETURN THE NEXT GENERATION SEED AND SUCH NEXT GENER ATION SEED IN THE BACK BORN OF THE INDIAN ECONOMY TO GET INDEPENDENT IN AGRICULTURAL S ECTOR. THOUGH THIS EDUCATION PROGRAM THE FARMER IS ABLE TO GET THREE OR MORE CRO P IN ONE YEAR AND ULTIMATELY THE NATION IS GET BENEFITED. THE SOCIETY IS DOING ONLY AN FOR SEED PURPOSE THAT MEANS TO DEVELOP THE AVAILABILITY OF GOOD CLASS OF SEED TO A LL THE FARMER IN THE NATION AND IF THERE ARE GOOD CLASS OF SEED AVAILABLE THE FARMERS GET TH E BENEFIT AND THE NATION WILL GROW RAPIDLY. IN RECENTLY THE HON'BLE PRIME MINISTER HAS STATED I N ITS SPEECH DELIVERED ON INDEPENDENCE DAY THAT FOR GROWTH THE GOOD QUALITY O F SEED IS ALSO ESSENTIAL AND GOVERNMENT HAS TAKEN NECESSARY SHAPE FOR THE SAME A ND THROUGH THIS PROCESS THE EARNING OF THE FARMER WILL BE INCREASE AND IN THE N EAR YEARS THE SAME LILL BE DOUBLED IN COMPARE TO THE CURRENT EARNINGS WHICH IS THE MOTIVE OF THE CENTRAL AS WELL AS OF THE STATE GOVERNMENT. ONE MORE INTERESTING ISSUE IS THAT ALL THE STATE GO VERNMENT OR CENTRAL GOVERNMENT IF THEY WANT TO PURCHASES THE SEEDS IT IS REQUIRED TO BE PU RCHASED FROM THE REGISTERED TRADER'S ONLY WHO IS ENGAGED IN THIS PROCESS I.E. PROCURED S EEDS OF EARLIER GENERATION AND BY PRODUCTION PROGRAM THE SAME SEEDS WILL GENERATED NE XT GENERATION SEED AND BY CULTIVATING THE SAID SEED FURTHER NEW GENERATION SE ED WILL RECEIVED. 07. IN PARA 5.1 THE CIT HAS MENTIONED THAT THE ISSU E IS NOT THAT THE FARRNER ARE BENEFITED OR NOT THEY WOULD SALE COMMERCIAL CROP AND EARN MOR E THAN THE SEED VALUE. THIS FINDING IS ALSO BASE LESS SINCE IN THIS MARKET THE RATE OF SEEDS ALWAYS HIGHER THAN THE COMMERCIAL CROP HENCE IT IS IMPOSSIBLE FOR THE FARM ER' TO GET MORE VALUE OF COMMERCIAL CROP AGAINST THE SEEDS RATE. THE FARMER IS BENEFITE D ONLY IF HE CULTIVATED THE SEED. 08. IN PARA 5.4 THE CIT HAS MENTIONED THAT THE ABOL ITION OF VAT IS BENEFITED TO THE TRADERS AND NOT TO THE FARMERS IS ALSO MISCONCEPTION, BECAU SE TRADERS ARE NET EFFECT FROM THE LEVY OF VAT, SINCE THE TRADERS ARE RECOVERED THE SA ME FROM THE FARMERS AND DEPOSITING THE SAME TO THE GOVERNMENT, HENCE THERE IS NO EFFEC T ON THE EARNING OF THE TRADERS BUT IN CASE OF FARMER LEVY OF VAT WILL EFFECTED T E EARNIN G BY INCREASE COST OF SEED AND THE MARGIN OF THE FARMER IS LOW BY VAT. HENCE THE ASSES SEE SOCIETY HAS PROTESTED THE LEVY ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 8 OF VAT ON SEEDS FOR THE BENEFIT OF THE FARMER NOT F OR THE MEMBERS AND GET SUCCEEDS IN THE SAME AND FOR THIS THE FARMERS HAS RECOGNIZED TH E ASSOCIATION WORK, IN PARA 5,5 THE LD CIT HAS MENTIONED THAT THE DRAFT ORDER WAS MADE ON 15 TH MARCH 2007 BUT THE SAME IS NOT ISSUED THAT MEANS THE SIX MONTH IS LAPS AND THE CIT IS NOT IN A POSITION TO REJECT THE APPLICATION OF THE ASSESSEE SOCIETY HENCE THE CASE IS HOLD FOR 10 YEARS AND NOT RESPOND THE LETTERS SUBMITTED BY THE ASSESSEE, ONLY AFTER HON'BLE HC DECISION THE CIT HAS ACT ON THE FILE, FURTHER AS MENTIONED BY THE CIT THAT THE HON'BLE HC PASSED THE ORDER AFTER HON'BLE SC ORDER THEREFORE HE PREVAIL THE LATER JUDGMENT BUT I N THIS CASE THE HON'BLE HC IS NOT DIRECTED TO THE CIT FOR FRESH CONSIDERATION OF THE CASE, HON'BLE HC JUST GIVE THE OPPORTUNITY TO THE ASSESSEE SOCIETY TO FURNISHED FR ESH MATERIAL AND THE CIT IS TAKE DECISION AS PER LAW AND LAW SAID IF THE CIT IS IN O PINION THE REJECTION WILL BE WITHIN SIX MONTH FROM THE END OF THE MONTH IN WHICH THE APPLIC ATION IS FILED, THAT MEANS THE TIME LIMIT FOR REJECTION IS OVER ON 28/02/2007, THE HON' BLE HC HAS NEVER ORDERED FOR DECIDED THE CASE ON MERIT BASIS. THEREFORE THE SAME IS BASE LESS. THAT ON THE BASIS OF WRONG INTERPRETATIONS OF THE C ASE AND MISINTERPRETING THE ORDER OF THE HON'BLE HC THE CIT HAS REJECTED THE APPLICATION OF THE ASSESSEE SOCIETY AND NOT CONSIDERED THE CHARITABLE OBJECT OF THE SOCIETY, IT IS FURTHER MENTION THAT IN ALL OTHER ASSOCIATION OF SIMILAR TIME OF OBJECT IS GETTING THE REGISTRATION AND THE OBJECT OF THE SAID ASSOCIATION IS ACCEPTED AS CHARITABLE OBJECT. FURTHER IN CASE OF ADDL CIT VS SURAT SILK CLOTH MAN UFACTURERS ASSOCIATION (1979) 13 CTR (SC) 378 HELD THAT PROMOTE OR PROTECT THE INTER EST OF A PARTICULAR TRADE OR INDUSTRY IS OBJECT OF PUBLIC UTILITY. ITS INCOME AND PROPERTY WERE TO BE APPLIED SOLELY F OR THE PROMOTION OF ITS OBJECTS AND NO PORTION OF THE INCOME OR PROPERTY WAS TO BE PAID OR TRANSFERRED DIRECTLY OR INDIRECTLY BY WAY OF DIVIDEND, BONUS OR PROFITS TO ITS MEMBERS. I N THE EVENT OF ITS WINDING UP OR DISSOLUTION, SURPLUS OF ASSETS OVER LIABILITIES, IF ANY, COULD NOT BE DISTRIBUTED AMONGST THE MEMBERS BUT WAS LIABLE TO BE GIVEN OR TRANSFERRED T O SOME OTHER SOCIETY HAVING THE SAME OBJECTS ,IS THE ASSESSEE WHICH ALSO PROVE THAT THE ASSOCIATION HAS NOT RUNNING ONV FER MEMBERS. THE ACTIVITIES CARRIED ON BY THE ASSESSEE WERE IN F ULFILLMENT: OF THE PRIMARV PURPOSES WHICH DID NOT INVOLVE THE CARRYING ON OF ANY ACTIVI TY FOR PROFIT. WHERE DOMINANT OBJECTS OF TRUST ARE CHARITABLE IN N ATURE, MERE FACT THAT SORLIE RELATIVES OF SETTLER CAN ALSO PARTICIPATE AND HAS PREFERENCE OVER GENERAL PUBLIC IN SUCH CHARITABLE OBJECTS, WILL NOT MAKE TRUST AS NON-CHARITABLE MANO CKJEE COWASJEE PETTI CHARITIEIS V/S DIT [2012] 136 ITO 355 (MUM.) DEFINITIONS OF CHARITABLE PURPOSE - SECTION 2 (15) SECTION 2( 15) OF THE INCOME TAX ACT, ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 9 1961, DEFINES 'CHARITABLE PURPOSE' WHICH INCLUDES I) RELIEF OF THE POOR, II) EDUCATION, III) YOGA, (W.E.F. 01/04/2016) IV) MEDICAL RELIEF, V) PRESERVATION OF ENVIRONMENTS (INCLUDING WATER SH EDS, FORESTS AND WILD LIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST (ADDED W.E.F. 1.4.2009 I.E. FROM A.Y. 2009-10) VI) THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. AS PER VARIOUS DECISIONS OF THE VARIOUS HON'BLE HC AND ITAT AND SPECIALLY INDORE BENCH OF ITAT IN WHICH IT IS THE MANDATORY FOR THE CIT TO GRANT REGISTRATION U/S GRANT REGISTRATION U/S 12A FOR WHICH THE ASSESSEE IS PRAY BEFORE YOU. 12A TO SEE WHETHER THE OBJECT IS CHARITABLE OR NOT AND IN OUR CASE THE SOC IETY HAS HAVING CHARITABLE OBJECT AND OF GENERAL PUBLIC UTILITY AND RUNNING FOR SUCH CHAR ITABLE OBJECT WE PRAY FOR THE JUSTICE AND CANCEL THE ORDER OF THE LD CIT AND GRANT REGISTRATI ON U/S 12A FOR WHICH THE ASSESSEE IS PRAY BEFORE YOU. 5. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDER OF LD. CIT (EXEMPTION). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE SUBMISSION OF THE ASSE SSEE IS TWO FOLD. FIRSTLY, IT IS CONTENDED THAT THE APPLICAT ION FOR ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 10 REGISTRATION U/S 12A OF THE ACT WAS MADE ON 30.8.2006 . THEREFORE, IT MAY BE CONSIDERED THAT REGISTRATION U/S 12A OF THE ACT DEEMED TO HAVE BEEN GRANTED. IT IS FURTHER SUBMITTED THAT DUE TO INACTION OF THE REVENUE, THE ASS ESSEE WAS FORCED TO APPROACH THE HON'BLE HIGH COURT BY WAY OF WRIT PETITION. LD. COUNSEL SUBMITTED THAT THE HON'B LE HIGH COURT HAD DIRECTED THE REVENUE TO DISPOSE OF APPLICAT ION OF THE ASSESSEE AS PER LAW. FURTHER, IT IS CONTENDED T HAT THE SIMILARLY SITUATED ASSOCIATIONS HAVE BEEN GRANTED REGISTRATION BY THE REVENUE. IN SUPPORT OF THIS, TH E ASSESSEE HAD PLACED ON RECORD ORDER U/S 12A OF THE ACT BY THE CONCERNED CIT IN THE CASE OF NATIONAL SEED ASSOCIAT ION. IT IS SUBMITTED THAT THE NATIONAL SEED ASSOCIATION OF I NDIA HAS SAME AND SIMILAR OBJECTIVES AS OF THE ASSESSEE. LD. COUNSEL SUBMITTED THAT THE REVENUE CANNOT BE ALLOWED T O ACT IN A DISCRIMINATORY MANNER. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSION OF THE PAR TIES. ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 11 SO FAR THE CONTENTION OF THE ASSESSEE THAT THE REGIST RATION U/S 12A OF THE ACT IS DEEMED TO HAVE BEEN GRANTED IS DEVOID OF ANY MERIT AS THE HON'BLE HIGH COURT IN THE ORDER DATED 25.7.2016 HAD DIRECTED THE ASSESSEE TO FILE A FRE SH REPRESENTATION ALONG WITH DOCUMENTS BEFORE THE CONCER NED CIT. IT WAS CATEGORICALLY DIRECTED THAT THE LD. COMPET ENT AUTHORITY WOULD CONSIDER THE REPRESENTATION AND PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW WITHIN A PERIOD OF 6 WEEKS THEREAFTER. THEREFORE, IN OUR VIEW, THE LI MITATION FOR DISPOSAL OF APPLICATION FOR REGISTRATION U/S 12A OF THE ACT WOULD RUN FROM THE DATE WHEN THE HON'BLE HIGH CO URT HAD DIRECTED THE REVENUE TO CONSIDER THE REPRESENTATI ON AND PASS AN APPROPRIATE ORDER IN ACCORDANCE WITH LAW WITHIN A PERIOD OF 6 WEEKS THEREAFTER. THE ASSESSEE HAS PLACED ON RECORD PREVIOUS ORDERS PASSED U/S 12A OF T HE ACT BY THE COMPETENT AUTHORITY. MORE PARTICULARLY, IN THE CASE OF NATIONAL SEED ASSOCIATION OF INDIA WAS GRANTED ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 12 REGISTRATION VIDE ORDER DATED 26.3.2010 WHICH HAS BEEN PLACED ON RECORD. UNDER THESE FACTS, WE RESTORE THE ISSUE OF REGISTRATION U/S 12A OF THE ACT TO THE FILE OF THE L D. CIT TO RECONSIDER AFRESH AFTER VERIFYING THE FACTS AND CIRCUMSTANCES ON THE BASIS OF WHICH THE SIMILARLY SITU ATED ASSOCIATIONS LIKE NATIONAL SEED ASSOCIATION OF INDIA, SEEDMEN ASSOCIATION OF HYDERABAD WERE GRANTED REGISTRATION. IN CASE IT IS FOUND THAT THE OBJECTIVES ARE SIMILAR AND THE ACTIVITIES AS CARRIED OUT BY THE ASSOCIATI ON ARE GENUINE, LD. CIT WOULD GRANT EXEMPTION AND DECIDE THIS ISSUE WITHIN 4 WEEKS FROM THE DATE OF THIS ORDE R. 7. GROUND NOS.1 TO 3 OF THE ASSESSEES APPEAL ARE DISMISSED, GROUND NOS.4 & 5 ARE ALLOWED FOR STATISTICAL PURPOSES ON THE TERMS INDICATED HEREIN ABOVE, GROUND NO.6 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. ITA 1023/IND/2016 SEED ASSOCIATION OF MADHYA PRADESH, INDORE 13 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 .09.2018. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 26 / 09/2018 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER SR. PRIVATE SECRETARY, INDORE