M/S DHAN SHRI GURU RAM DASS JI EDUCATIONAL SOCIETY, GURDASPUR V. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH

ITA 103/ASR/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3762 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 28-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEET SING H
• Keywords: Set aside
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 103/Asr/2018 Assessment Year: 2017-18 M/s Dhan Shri Guru Ram Dass Ji Educational Society, 565/9 Batala Road, Opp. Mai Ka Mandir, Gurdaspur-143521 Punjab [PAN: AACAD 6900D] Vs. Commissioner of Income Tax (Exemptions), Chandigarh (Appellant) (Respondent) Appellant by : None Respondent by: Sh. Sanjeet Singh, CIT DR Date of Hearing: 21.02.2022 Date of Pronouncement: 26.04.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal was filed against the order passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh [in brevity the CIT(E)], bearing Appeal No. CIT(E)/Chd/12AA/2017-18/7996 dated 29.12.2017 u/s 12AA(1(b)(ii)) of the Income Tax Act, 1961 [in brevity the Act], in respect of Assessment Year 2017-18. 2. Prelude: The assessee is as educational society filed application in Form No. 10A before the ld. CIT(E) for seeking registration u/s 12A of the Act. ITA No. 103/Asr/2018 Dhan Shri Guru Ram Das Ji E. S. v. CIT 2 3. The assessee is registered under the Societies Registration Act, XXI of 1860 on dated 02.12.2016. The main object of the assessee-society is to allow the financial assistance to the students, to enhance the literacy rate in Punjab, to make the students responsible citizens who may meaningful participate in national effort, to generate conductive atmosphere for over all personality developments of the students etc. The assessee had entered in an agreement with M/s Learning Wings Education Systems (in brevity LWES). As per the ld. CIT(E), the assessee has taken only a franchise to another business and going through a business activity, there is no point of the charity from the end of the assessee, accordingly the assessee’s application was rejected by the ld. CIT(E). 4. Aggrieved the assessee filed an appeal before us. 5. As per the order of ld. CIT(E) the observation is as follow: “This fact totally negates the essence of charity and the applicant trust’s claims of being charitable get impinged by the arrangement that caters to enhancing the receipts of the franchisor. Independence of the applicant to pursue activities, claimed to be charitable is severely impinged in light of the overarching control of the franchisor in practical aspects.” 6. The ld CIT(E) assumed that overarching control of the franchisor with party. The assessee through its contract had not to impart the education in society. But to impart the education is in proper & meaningful way. During processing of registration, it is too early to determine the whole situation of future related contract with the party & assessee-association. The assessee has relied on the judgment of Hon’ble Supreme Court in the case American Hotel & Lodging Association, Educational Institute v. Central Board of Direct Taxes, 301 ITR 86. Same view was taken by Hon’ble Delhi Tribunal-B bench in case of Devki Devi Foundation v. DIT (Exemptions), New Delhi [2019] 110 taxmann.com 492. ITA No. 103/Asr/2018 Dhan Shri Guru Ram Das Ji E. S. v. CIT 3 7. We considered the submissions of both the parties and the available on records. The assessee made an agreement with M/s LWES for furtherance of education. Entering into agreements/contracts by a charitable organization with unrelated third party/private commercial entities not falling within prohibited category of persons specified under section 13(3) of the Act to avail services for achieving purpose of charitable object. Assessee-society is registered with main charitable object of providing educational facility by running/operating of educational institution. We accordingly set aside the order of the ld CIT(E) and he is directed to grant the registration u/s 12A of the Act. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 26.04.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member Date: 26.04.2022 *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order