M/s Mahabir Educational Welfare Society, Ambala V. CIT(E), Chandigarh

ITA 104/CHANDI/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4908 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 01-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K GARG
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES B, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 104/CHD/2018 M/S MAHABIR EDUCATIONAL VS THE CIT, WELFARE SOCIETY, CHANDIGARH. AMBALA. PAN : AABAM0255F (A PPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N.SINGLA, CA RESPONDENT BY : SHRI J.K.GARG, CIT-DR DATE OF HEARING : 23.05.2018 DATE OF PRONOUNCEMENT : 12.06. 2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 30.11.2017 OF CIT(EXEMP TIONS), CHANDIGARH PASSED U/S 80G(5)(VI) ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X (EXEMPTIONS) IS BAD AND AGAINST THE FACTS & LAW. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPT IONS) HAS WRONGLY DENIED THE APPROVAL U/S 80G (5)(VI) REQUESTED BY THE APPELLANT . 2. THE LD. AR REFERRING TO THE IMPUGNED ORDER SUBMITTE D THAT THE ASSESSEE IS RUNNING COLLEGES UNDER THE NAME AND STYLE OF MAHABIR COLLEGE OF EDUCATION AND MAHABIR ENGINEERING COLLEGE. THE AS SESSEE HAS BEEN GRANTED REGISTRATION U/S 12AA AND ITS CLAI M FOR APPROVAL U/S 80G WAS DENIED ON THE GROUNDS THAT THE ASSESSEE TRU ST HAS NEVER RECEIVED DONATIONS IN THE EARLIER YEARS. THE NEED OF THE SAME, AS SUCH WAS QUESTIONED. IT WAS ALSO NOTICED THAT SINCE THE ASSESSEE TRUST HAD SUFFICIENT ACCUMULATED FUNDS AND HAD BEEN MAINTAINI NG FDRS, THE NEED FOR DONATIONS ACCORDINGLY WAS HELD TO NOT ARISE. 3. THE LD. AR AGGRIEVED BY THE ORDER CARRIED US THRO UGH THE REASONING AND SUBMITTED THAT THE VERY PURPOSE FOR SEEKING APPROVAL U/S 80G WAS IN ORDER TO RECEIVE DONATIONS AS ON ACCOUNT OF THIS SP ECIFIC SHORTCOMING, THE ITA 104/CHD/2018 PAGE 2 OF 3 ASSESSEE TRUST WAS UNABLE TO GET ANY DONATIONS. AP ART FROM THAT, IT WAS HIS SUBMISSION THAT THE FDRS MAINTAINED WITH PUNJAB & SIND BANK OF RS. 35 LACS WAS FOR THE PURPOSES OF MEETING THE REQ UIREMENTS OF AICTE AND SIMILARLY THE MAINTENANCE OF THE OTHER FDRS NOT ICED BY THE CIT (EXEMPTIONS) WAS NECESSITATED FOR MEETING THE REQUI REMENTS OF NCET, THE CONTROLLING REGULATORY TECHNICAL BODIES. IT WAS AL SO HIS SUBMISSION THAT AS PER LAW, 85% OF THE PROFITS HAVE TO BE UTILIZED IN TERMS OF THE STATUTORY REQUIREMENTS AND THERE IS NO VIOLATION OF LAW. ACC ORDINGLY, IT WAS HIS SUBMISSION THAT THE DENIAL OF REGISTRATION TO THE A SSESSEE WAS BASED ON PRESUMPTIONS AND PREJUDICES AND CONTRARY TO LAW AND FACTS. 4. THE LD. CIT-DR ON THE OTHER HAND SUPPORTING T HE IMPUGNED ORDER SUBMITTED THAT THE ASSESSEE TRUST IS CHARGING FEES FOR EDUCATIONAL INSTITUTIONS, AS SUCH THERE IS A PROFIT MOTIVE AND THERE IS NO NEED FOR DONATIONS. IT WAS HIS SUBMISSION THAT THE CIT (EX EMPTION) HAS TAKEN NOTE OF THE FACT THAT THERE IS NO DEARTH OF MONEY W ITH THE ASSESSEE TRUST AS FDRS ARE BEING MAINTAINED AND IT WAS EMPHASIZED THAT NEVER IN THE PAST, ANY DONATIONS HAVE BEEN TAKEN. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTE ON GOING THROUGH THE IMPUGNED ORDER THAT IT CANNOT BE UPHELD. THE SAID CONCLUSION HAS BEEN ARRIVED ON A CONSIDERATION OF THE REASONS SET OUT IN THE IMPUGNED ORDER WHICH WE NOTE ARE NOT RELEVANT FOR THE GRANT OF APPROVAL. IN THE FACTS OF THE PRESENT CASE, THE ADMITTED FACT ON RECORD IS THAT THE ASSESSEE TRUST HAS BEEN GRANT ED 12AA REGISTRATION WHICH HAS NOT BEEN REVOKED. THE MERE FACT THAT T HE ASSESSEE TRUST HAS NEVER RECEIVED DONATIONS EARLIER IS NOT A RELEVANT CRITERIA. SIMILARLY, THE FACT THAT THE FDRS ARE BEING MAINTAINED BY THE TRUS T IN COMPLIANCE WITH REGULATORY AUTHORITY OR FOR THAT MATTER EVEN OTHERW ISE BY ITSELF CANNOT BE A CRITERIA TO DENY APPROVAL U/S 80G. THE FACT THAT THESE FDRS WERE MAINTAINED IN ORDER TO GET ACCREDITATION WITH THE R EGULATORY AUTHORITIES WHICH MANAGED THE PROFESSIONAL COLLEGES ETC., IS AN ARGUMENT WHICH WE NOTE ON FACTS IN THE PRESENT CASE IS NOT REBUTTED BY THE R EVENUE. THE FACT THAT THE ASSESSEE TRUST MAY FUNCTION SOMETIME IN TH E FUTURE CONTRARY TO THE MANDATE OF SECTION 12AA CAN THEN BE ADDRESSED I F THE NEED SO ARISES BY WITHDRAWING THE SAID APPROVAL BUT ONLY AS AND WH EN THE FACTS SUPPORTING SUCH AN ACTION WARRANT ACTION AND THEN T O BY FOLLOWING THE DUE PROCEDURES UNDER LAW. HOWEVER, DENIAL OF APPRO VAL U/S 80G IN THE ITA 104/CHD/2018 PAGE 3 OF 3 FACTS OF THE PRESENT CASE CANNOT BE UPHELD. THE TA X AUTHORITIES ARE DIRECTED TO GRANT NECESSARY APPROVAL. SAID ORDER WA S PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12.06. 2018. SD/- SD/- (DR.B.R.KUMAR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.