M/s Tagore Educational General Welfare Trust, Solan V. CIT (Exemptions), Chandigarh

ITA 1107/CHANDI/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5339 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-02-2017
• Assessment Year: misc
• Appeal Filed On: 28-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: K R CHHABRA
• Section: 143(3); 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1107/CHD/2016 U/S 12AA(1)(B)(II) M/S TAGORE EDUCATIONAL GENERAL VS. CIT(EXEMPTION) WELFARE TRUST- VILL-KUTHAR CHANDIGARH TEHSIL KAUSALI, SOLAN PAN NO. AACTT0527B (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. K.R. CHHABRA REVENUE BY : SH. RAVI SARANGAL DATE OF HEARING : 04/10/2017 DATE OF PRONOUNCEMENT : 02/01/2018 ORDER PER DR. B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(E) CHANDIGARH DT. 30/09/2016. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPE AL: 1. ORDER PASSED BY LD.CIT(E) IS ILLEGAL, ARBITRARY AND BAD IN LAW. 2. ON FACTS AND IN CIRCUMSTANCES OF THE CASE LD. CI T(E) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION U/S 12A FOR GRANT OF REGI STRATION UNDER INCOME TAX ACT. 3. THE ASSESSEE FILED APPEAL BEFORE US OWNING TO RE JECTION OF GRANT OF REGISTRATION UNDER SECTION 12AA. THE REASONS GIVEN BY THE LD. CIT(E) ARE AS UNDER: 1. THE APPLICANT HAD ALL THE REASONS TO APPLY FOR E XEMPTION UNDER SECTION 10(23C) (VI) RATHER THAN 12AA. 2. WHILE THE ASSESSEE HAS CONSISTENTLY AVAILED BENE FITS FOR A NUMBER OF YEARS UNDER SECTION 10(23C)(IIIAD) , THE NATURAL PROGRESS ION SHOULD BE TO GO FOR 10(23C)(VI). 3. THERE WAS NO CHANGE OF COMPOSITION OF THE SOCIET Y OR THE BYLAWS. 4. ABSENCE OF DISSOLUTION CLAUSE. 5. HIGHER FEES BEING CHARGED BY THE SCHOOL WHEN COM PARE TO OTHER SCHOOLS. 6. THE SCHOOL IS BEING RUN ON COMMERCIAL PRINCIPLES AND FOR THE BENEFIT OF THE FAMILY MEMBERS AS THE TRUST COMPRISES OF MOTHER, FATHER AND SON ONLY. 2 4. DURING THE HEARING BEFORE US THE LD. AR ARGUED T HAT THERE IS NO BAR TO APPLY FOR EXEMPTION UNDER SECTION 12AA WHEN THE ASS ESSEE IS MEETING THE REQUIREMENTS NECESSARY FOR GRANTING EXEMPTION. IT W AS ALSO SUBMITTED THAT THE TRUST HAS SIX MEMBERS NOT THREE MEMBERS AS OBSERVED BY THE LD. CIT(E). IT WAS ARGUED THAT THE TRUST IS EXISTING FROM 2007 AND THE ASSESSMENT ORDER FOR THE YEAR 2013-14 PASSED UNDER SECTION 143(3) DID NOT FIND AN YTHING CONTRA REGARDING THE ACTIVITIES WHICH WERE SOLELY CHARITABLE IN NATURE C OVERED UNDER SECTION 2(15). FURTHER IT WAS ARGUED THAT THE CHARITABLE NATURE OF THE TRUST CAN BE EXAMINED BY THE ASSESSING OFFICER ON YEAR TO YEAR BASIS AND REF USING THE REGISTRATION AT THIS JUNCTURE IS NOT JUSTIFIABLE. 5. LD. DR ARGUED THAT IT IS A FAMILY TRUST COMPRISI NG SOLELY OF THE FAMILY MEMBERS AND THE ABSENCE OF DISSOLUTION CLAUSE IS IN TENTIONAL IN THE ABSENCE OF WHICH THE EXEMPTION HAS BEEN RIGHTLY REFUSED BY THE LD. CIT(E). 6. WE HAVE GONE THROUGH THE SUBMISSIONS BEFORE US A ND HEARD THE ARGUMENTS OF BOTH THE PARTIES. 7. SECTION 12AA(III) GIVES THE POWER TO THE CIT / P CIT TO CANCEL THE REGISTRATION OF TRUST OR INSTITUTION IF HE SATISFIE D THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. 8. THE REQUIREMENTS MENTIONED IN SECTION 12AA(1(A)) STIPULATES THAT THE REGISTERING AUTHORITY SHOULD SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. IN THE PRESENT CASE THE TRUST IS BEIN G OPERATED SINCE 2007 AND ALREADY ENJOYING THE EXEMPTION UNDER SECTION 10(23) (IIIAD) AND BEING RUN BY TOTAL TRUSTEES NUMBERING SIX CONTRARY TO THE OBSERV ATION OF THE LD. CIT(E). HENCE THE CASE IS BEING SENT BACK TO LD. CIT(E) TO CONSID ER THE PLEA OF THE ASSESSEE AFRESH WITH RESPECT TO THE REASONS RECORDED FOR REF USAL. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 02/01/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR