Bharati Vidyapeeth, Pune V. Commissioner of Income-tax,

ITA 1076/PUN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0809 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIVYA BAJPAI
• Keywords: Benefit of exemption; Cancellation of registration
• Section: 260A; 80G; 12A; 12; 11

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1076/PN/2015 BHARATI VIDYAPEETH, BHARATI VIDYAPEETH BHAWAN, LAL BAHADUR SHASHTRI ROAD, NAVI PETH, PUNE 411 030. PAN : AAATB1836D . APPELLANT VS. THE CIT (EXEMPTIONS), PUNE. . RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SMT. DIVYA BAJPAI / DATE OF HEARING : 30.11.2015 / DATE OF PRONOUNCEMENT: 04.12.2015 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER UNDER RULE 11AA(5) OF THE INCOME TAX RULES, 1962 (I N SHORT THE RULES) PASSED BY THE CIT (EXEMPTIONS), PUNE DATED 28.07.20 15 WHEREIN THE APPROVAL UNDER SECTION 80G(5) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT) WAS DENIED TO THE ASSESSEE. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER :- 1] THE LEARNED CIT ERRED IN NOT GRANTING APPROV AL U/S 80G OF IT ACT TO THE APPELLANT TRUST. 2] THE LEARNED CIT WAS NOT JUSTIFIED IN DENYING THE APPROVAL U/S 80G ON THE GROUND THAT THE ORDER OF ITAT GRANTING REGISTRATION U/S 12A IS CHALLENGED BY THE DEPT. BEFORE THE HON'BLE H.C. AND THE SAME IS N OT YET DECIDED BY HON'BLE H.C. 2 ITA NO.1076/PN/2015 3] THE LEARNED CIT FAILED TO APPRECIATE THAT THE HON'BLE TRIBUNAL HAS ALREADY RESTORED THE REGISTRATION GRANTED TO THE ASSESSEE U /S 12A AND IN VIEW OF ITAT ORDER, THE APPELLANT TRUST SATISFIES ALL THE CONDIT IONS FOR GRANT OF APPROVAL U/S 80G AND THUS, THE DENIAL OF APPROVAL U/S 80G IS NOT JUSTIFIED. 4] THE APPELLANT TRUST PRAYS FOR GRANT OF APPROV AL U/S 80G AS IT SATISFIES ALL THE CONDITIONS PRESCRIBED FOR GRANT OF APPROVAL. 5] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE M/S BHARATI VIDYAPEETH, PUNE (IN SHORT BVP) WAS FOUNDED THROU GH A DEED OF TRUST ON 10.05.1964 TO PROPAGATE EDUCATION IN VARIOUS FIELDS IN MODERN INDIA IN GENERAL AND IN MAHARASHTRA IN PARTICULAR AND OBTAINED THE C ERTIFICATE OF REGISTRATION UNDER SECTION 12A OF THE ACT FROM THE COMMISSIONER OF INCOME-TAX, PUNE ON 13.09.1973. NUMEROUS EDUCATIONAL AND ALLIED INSTIT UTIONS IN DIVERSE FIELDS, INCLUDING MEDICAL COLLEGES, ENGINEERING COLLEGES, M ANAGEMENT INSTITUTES, SCHOOLS, ETC., BHARATI VIDYAPEETH UNIVERSITY (DEEME D) HAVE BEEN OPENED AND ARE BEING RUN UNDER THE AEGIS OF THIS TRUST SINCE T HE GRANTING OF REGISTRATION IN 1973. SINCE THEN BVP HAS ENJOYED EXEMPTION FROM PA YMENT OF TAXES ON INCOME EARNED BY THEM AS PER PROVISIONS OF THE ACT. AS PER THE ORDER UNDER RULE 11AA(5) OF THE RULES DATED 28.07.2015 PASSED B Y CIT (EXEMPTIONS), PUNE, WHICH IS SUBJECT-MATTER OF CHALLENGE BEFORE U S, IT IS SEEN THAT THE EARLIER REGISTRATION GRANTED UNDER SECTION 12A OF THE ACT D ATED 13.09.1973 WAS WITHDRAWN BY THE CIT (CENTRAL), PUNE UNDER SECTION 12AA(3) OF THE ACT VIDE HIS ORDER DATED 08.11.2007. THE REVOCATION OF THE REGISTRATION WAS DONE BY THE CIT (CENTRAL), PUNE IN VIEW OF THE SEARCH AND SEIZU RE OPERATIONS CONDUCTED UNDER SECTION 132(1) OF THE ACT AT THE RESIDENCE AN D CABIN OF SHRI RAMCHANDRA DADA SHINDE SITUATED AT 8 TH FLOOR OF BHARATI VIDYAPEETH BHAWAN ON 20.07.2005 IN WHICH CASH OF RS.3,14,83,840/- AND VARIOUS INCRI MINATING DOCUMENTS WERE FOUND AND SEIZED. THE CIT (CENTRAL), PUNE CAME TO THE CONCLUSION THAT ASSESSEE IS ENGAGED IN ILLEGAL ACTIVITY AND COLLECT ING UNLAWFUL DONATION AND THUS REVOKED THE REGISTRATION GRANTED TO THE ASSESS EES TRUST UNDER SECTION 12A OF THE ACT. 3 ITA NO.1076/PN/2015 4. THE ASSESSEE PREFERRED AN APPEAL TO THE ITAT, PU NE AGAINST THE ORDER PASSED BY THE CIT (CENTRAL), PUNE REVOKING THE REGI STRATION GRANTED TO THE ASSESSEES TRUST UNDER SECTION 12A OF THE ACT. THE ITAT, PUNE VIDE ITS ORDER IN ITA NO.1793/PN/2008 DATED 19.09.2008 DECIDED IN FAVOUR OF THE ASSESSEE. THE DEPARTMENT, IN TURN, PREFERRED APPEAL TO THE HI GH COURT UNDER SECTION 260A OF THE ACT WHICH IS STATED TO BE STILL PENDING FOR DECISION. THE CIT (EXEMPTIONS), PUNE CAME TO THE CONCLUSION THAT SINC E THE DECISION OF THE HONBLE BOMBAY HIGH COURT IS STILL PENDING, THE ISS UE OF REVOCATION OF THE REGISTRATION GRANTED TO THE ASSESSEES TRUST UNDER SECTION 12A OF THE ACT BY THE CIT (CENTRAL), PUNE VIDE ORDER DATED 08.11.2007 HAS NOT YET REACHED ITS FINALITY AND ACCORDINGLY, DENIED APPROVAL UNDER SECTION 80G( 5) OF THE ACT. 5. AGGRIEVED BY THE AFORESAID ACTION OF THE CIT (EX EMPTIONS), PUNE, THE ASSESSEE IS APPEAL BEFORE US. 6. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE REITERATED THE FACTS NOTED ABOVE AND THEREAFTER ADVERTED OUR ATTENTION T O THE ITAT ORDER IN ASSESSEES OWN CASE IN ITA NO.537/PN/2012 RELATING TO ASSESSMENT YEAR 2008-09, ORDER DATED 21.03.2014, WHEREIN BENEFIT OF EXEMPTIONS UNDER SECTION 11 AND 12 OF THE ACT WERE ALLOWED ON THE GROUND THA T THE ASSESSEE TRUST HAS NOT VIOLATED ANY OF THE PROVISIONS OF THE ACT. THE REL EVANT OPERATIVE PARAS RECORDED BY THE ITAT, PUNE IN THE IMPUGNED ORDER IS REPRODUCED HEREUNDER :- 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT THE RE GISTRATION U/S.12AA CANCELLED BY THE CIT (CENTRAL), PUNE VIDE HIS ORDER DATED 08-11-2007 HAS BEEN RESTORED BY THE TRIBUNAL VIDE ITA NO.1793/PN/2008 ORDER DATED 19-09 -2008. WE FIND FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL THE TRIBUNAL IN ASSESSE ES OWN CASE FOR A.YRS. 2006-07 AND 2007-08 AT PARA 60 OF THE ORDER HAS OBSERVED AS UNDER : 60. WHILE DECIDING THE ASSESSEES APPEAL FOR THE A .Y. 2006-07, WE HAVE HELD THAT THE ASSESSEE HAS NOT VIOLATED THE PROVISI ONS OF SEC. 11(5) R.W.S. 13(1)(D) OF THE ACT. WE HAVE ALSO HELD THAT THE REG ISTRATION OF THE ASSESSEE U/S. 12A HAS BEEN RESTORED BY THE TRIBUNAL, HENCE, THE ASSESSEE IS ENTITLED FOR BENEFIT OF THE EXEMPTION TO ITS INCOME BY TREATING IT AS A TRUST U/S. 11 OF THE INCOME-TAX ACT. THE ASSESSING OFFICER HAS RELIED ON AND REFERRED TO THE ASSESSMENT ORDER FOR THE A.Y. 2006-07. WE FIND THER E ARE PRECISELY TWO ISSUES WHICH ARE ARISING FROM THE GROUNDS TAKEN BY THE ASS ESSEE. THE FIRST ISSUE IS THE CANCELLATION OF REGISTRATION BY THE LD. CIT, PU NE BY EXERCISING HIS POWERS U/S. 12AA(3) VIDE ORDER DATED 08-11-2007 BUT THE SAID ORDER HAS 4 ITA NO.1076/PN/2015 BEEN CANCELLED BY THE TRIBUNAL AND THE ASSESSEES R EGISTRATION IS RESTORED AND HENCE, THE FIRST DISQUALIFICATION FOR GETTING T HE BENEFIT OF SEC. 11 OF THE ACT HAS BEEN REMOVED. IN OTHER WORDS, THE ASSESSEE TRUST HAS CROSSED FIRST BARRIER BY GETTING THE RESTORATION OF ITS REGISTRA TION U/S. 12A OF THE ACT WHICH IS ONE OF THE CONDITION FOR AVAILING THE BENEFIT OF EXEMPTION AS A TRUST OR INSTITUTION U/S. 11 OF THE ACT. 8.1 SIMILARLY, THE TRIBUNAL IN SUBSEQUENT PARAGRAPH S HAS HELD THAT THE ASSESSEE TRUST HAS NOT VIOLATED ANY OF THE PROVISIONS OF SEC TION 11(5) R.W.S. 13(1)(D) NOR HAS VIOLATED ANY OF THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT AND ACCORDINGLY HELD THAT THE ASSESSEE IS ENTITLED FOR BENEFIT OF EXEMPT ION AS CLAIMED BY IT U/S.11 AND 12 OF THE ACT IN A.Y. 2006-07 AND 2007-08. THE RELEVANT OBSERVATION OF THE TRIBUNAL IN THE LAST PAGE OF THE ORDER READS AS UNDER : . . . . . . . . . .TO SUM UP WE HOLD THAT A) THE REGISTRATION OF THE ASSESSEE U/S. 12A/12AA H AS BEEN RESTORED BY THE TRIBUNAL AND B) THE ASSESSEE HAS NOT VIOLATED THE PROVISIONS OF SEC. 11(5) R.W.S. 13(1)(D) NOR HAS VIOLATED ANY OF THE PROVISIONS OF SEC. 13(1 )(C) OF THE ACT HENCE, THE ASSESSEE IS ENTITLED FOR BENEFIT OF EXEMPTION AS CL AIMED BY IT U/S. 11 & 12 OF THE ACT IN A.Y. 2006-07 & A.Y. 2007- 08. 67. IN THE RESULT, THE ASSESSEES APPEAL FOR THE A. Y. 2007-08 IS ALLOWED. 8.2 SINCE THE TRIBUNAL IN ASSESSEES OWN CASE FOR A .Y. 2006-07 AND 2007-08 HAS ALLOWED THE BENEFIT OF EXEMPTION U/S.11 AND 12 OF T HE ACT BY HOLDING THAT THE ASSESSEE TRUST HAS NOT VIOLATED ANY OF THE PROVISIO NS OF SECTION 11(5) R.W.S. 13(1)(D) OR SECTION 13(1)(C) AND SINCE THE REGISTRATION EARL IER CANCELLED BY THE CIT HAS BEEN RESTORED BY THE TRIBUNAL AND NOTHING CONTRARY WAS B ROUGHT TO OUR NOTICE REVERSING THE ORDER OF THE TRIBUNAL ON THIS ISSUE, THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE 2 PRECE DING ASSESSMENT YEARS AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT( A), WE FIND NO INFIRMITY IN HIS ORDER IN HOLDING THAT EXEMPTION U/S.11 IS ALLOWABLE TO THE ASSESSEE. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND TH E GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED 7. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE PLEADED THAT IN THE LIGHT OF THE AFORESAID ORDER, THE SPIRIT OF WHICH S QUARELY APPLIES THE PRESENT CASE, RELIEF SOUGHT AS PER GROUNDS OF APPEAL RAISED IS REQUIRED TO BE GRANTED. 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT (EXEMPTIONS) , PUNE APPEALED AGAINST. 9. WE FIND NO MERITS IN THE ACTION OF THE CIT (EXEM PTIONS), PUNE IN DENYING THE APPROVAL UNDER SECTION 80G(5) OF THE AC T MERELY ON THE GROUND THAT THE EARLIER ORDER OF THE ITAT, PUNE HAS BEEN C HALLENGED BEFORE THE HIGH COURT AND THEREFORE IS NOT BINDING. RESPECTFULLY F OLLOWING THE SPIRIT OF ORDER OF THE CO-ORDINATE BENCH OF ITAT, PUNE IN ITA NO.53 7/PN/2012 (SUPRA), WE 5 ITA NO.1076/PN/2015 DIRECT THE CIT (EXEMPTIONS), PUNE TO CONSIDER THE A PPLICATION DATED 08.01.2015 IN FORM 10G SEEKING APPROVAL UNDER SECTI ON 80G(5) OF THE ACT AND GRANT REQUISITE APPROVAL AS SOUGHT IN SYNC WITH THE OBSERVATIONS IN EARLIER ORDER OF THE ITAT, PUNE IN ITA NO.537/PN/2012 (SUPRA). T HUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 04 TH DAY OF DECEMBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 04 TH DECEMBER, 2015. & ' ()* +*( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT (EXEMPTIONS), PUNE; 4) THE DR B BENCH, I.T.A.T., PUNE; 5) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE