Ved Dhara Education, Hamirpur V. CIT(E), Chandigarh

ITA 1077/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9577 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-04-2019
• Assessment Year: misc
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Assessee Lawyers: J S BHASIN
• Section: 12A; 12AA

Judgement Text

ITA NO. 1077/CHD/2018 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH , . '.., # $, %& BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER & DR. B.R. R. KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 1077/CHD/2018 UNDER SECTION 12AA VED DHARA EDUCATION VPO BELA, SHARMA NIWAS TEHSIL NADAUN, HAMIRPUR HIMACHAL PRADESH THE CIT(E) CR BUILDING CHANDIGARH ./ PAN NO: AAFCV3244F / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI. J.S.BHASIN, ADVOCATE ! / REVENUE BY : SHRI GULSHAN RAJ, CIT DR ' !# $/ DATE OF HEARING : 29/04/2019 %&'()* $/ DATE OF PRONOUNCEMENT : 02/07/2019 %'/ ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(E) CHANDIGARH DT. 29/06/2018. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT THE ID.CIT HAS MISDIRECTED HIMSELF IN LAW A ND ON FACTS IN ARBITRARILY REJECTING THE ASSESSEE'S APPLICATION FOR REGISTRATI ON UNDER SECTION 12A, ON HIGHLY ERRONEOUS AND INSUFFICIENT GROUNDS. 2. THAT THE ASSESSEE COMPANY REGISTERED U/S.8 OF TH E COMPANIES ACT, WITH THE DOMINANT OBJECT TO UNDERTAKE EDUCATION AND ALLIED A CTIVITIES, AND HAVING COMPLIED ITA NO. 1077/CHD/2018 2 WITH ALL THE REQUISITES AND QUERIES RAISED FOR REGI STRATION, THE ID.CIT(A) MISCONSTRUED THE FACTS, TO ARBITRARILY REJECT ASSES SEE'S APPLICATION, DOUBTING THE GENUINENESS OF ASSESSEE'S ACTIVITIES. 3. THAT THE IMPUGNED ORDER BEING ARBITRARY, UNJUST AND DE HORS THE FACTS AND EVIDENCE PLACED ON RECORD, IS NOT SUSTAINABLE EITHE R ON FACTS OR ON LAW. 4. THAT THE IMPUGNED ORDER BE REVERSED AND REG ISTRATION U / S .12A BE KINDLY DIRECTED TO BE GRANTED. 3. AN APPLICATION IN FORM NO. 10A WAS RECEIVED BY TH E LD.CIT(E) ON 12.12.2017 SEEKING REGISTRATION U/S 12A OF THE INCO ME TAX ACT, 1961. THE APPLICANT HAS BEEN IN OPERATION SINCE 24.06.2015. TH E APPLICATION WAS REJECTED VIDE ORDER DATED 29.06.2018 AGGRIEVED WITH THE REJE CTION OF THE APPLICATION, THE APPEAL HAS BEEN FILED BEFORE US. 4. THE AIMS AND OBJECTS OF THE COMPANY ARE TO CARR Y ON THE ACTIVITY OF PROMOTING, SPONSORING, SETTING UP ESTABLISHING, MAINTAINING MAN AGING, RUNNING AND CONTROLLING, EDUCATIONAL INSTITUTES, SCHOOLS, COLLEGES, TRAINING CENTRES E-EDUCATION, DISTANCE LEARNING IN ALL DISCIPLINES INCLUDING BUT NOT LIMITED TO SOCI AL SCIENCES, ARTS, SCIENCE, COMMERCE STREAMS, PHYSICAL EDUCATION, SPORTS, ADVANCED EDUCA TION IN MEDICINE, PHARMA, ENGINEERING, ENVIRONMENT ETC. 5. THE LD. CIT(E) WHILE REJECTING THE APPLICATION H AS OBSERVED THAT (A) THE APPLICANT HAS NOT GIVEN ANY COGENT REPLY ABOUT THE NATURE OF ENDURING BENEFITS OF PRIVATE IN NATURE; (B) THE APPLICANT HAS NOT PROVIDE D CORRECT EXPLANATION ABOUT THE RECEIPT OF RS.70 LAKHS AND ABOUT ITS UTILIZATION ; (C) THE APPLICANT HAS BEEN PAYING MONTHLY RENT OF RS.50,000/- PER MONTH TO THE ADDL. DIRECTOR OF THE APPLICANT WHICH IS IN THE NATURE OF PRIVATE BENEFIT TO THE TRUSTEES. 6. BEFORE US, THE LD. AR ARGUED THAT THE AMOUNT OF RS.70 LAKHS HAS BEEN DULY EXPLAINED BEFORE THE LD. CIT(E) AS LOAN TAKEN FROM THE BANK FOR THE PURPOSES OF ITA NO. 1077/CHD/2018 3 THE ACTIVITIES OF THE TRUST WHICH CANNOT BE REGARDED AS MISUTILIZATION OF PUBLIC FUNDS. FURTHER, IT WAS ARGUED THAT THE AMOUNT OF RE NT PAID OF RS.50,000/- PER ANNUM CANNOT BE AT ANY STRETCH OF IMAGINATION BE TREA TED AS A BENEFIT ACCRUING TO THE PRIVATE PERSONS AND THE LD. CIT(E) HAS WRONGLY NOTED THE ANNUAL PAYMENT AS MONTHLY PAYMENT. HE ARGUED THAT THE SUBMISSIONS GIV EN BY THE ASSESSEE TRUST HAVE NOT BEEN EXPLAINED IN RIGHT PERSPECTIVE BY THE L D. CIT(E). 7. THE LD. CIT(DR) RELIED ON THE ORDER OF THE LD. C IT(E). 8. HAVING GONE THROUGH THE FACTS ON RECORD, WE FIND THAT THE REPLIES HAVE BEEN RECEIVED BY THE LD. CIT(E) ON 14.06.2018 AND THE PROCEEDINGS HAVE BEEN COMPLETED ON 29.06.2018. SINCE THE ISSUE OF LOAN OF RS.70,00,000/- HAS TO BE EXAMINED IN DETAILS AS TO THE NATURE AND FUNCTION O F THE LOAN AND ALSO KEEPING IN VIEW THE FACT THE RENT PAID CANNOT BE TREATED AS TH E BENEFIT ACCRUING TO THE TRUSTEES OR PRIVATE PERSONS, WE HEREBY DEEM IT FIT T O REMAND THE MATTER TO THE FILE OF LD. CIT(E) TO EXAMINE THE FACTS AFRESH AND PASS AN ORDER AFTER CONDUCTING THE PROCEEDINGS DE NOVO AFTER AFFORDING DUE OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIMSELF. 9. AS A RESULT, THE APPEAL IS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . '.., # $, (SANJAY GARG ) ( DR. B.R.R. KUM AR) / JUDICIAL MEMBER %& / ACCOUNTANT MEMBER AG DATE: 02/07/2019 &+ ,- .-)/ COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2 THE RESPONDENT , 3. CIT, 4. THE CIT(A), 5. DR, ITAT, CHANDIGARH, 6. GUARD FILE