Srajan Shodh Sansthan Samiti, Ujjain V. CIT Exemption, Bhopal

ITA 115/Ind/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8943 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 11-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Set aside
• Section: 80G; 12A; 12AA; 12; 11

Judgement Text

[ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.115 & 116/IND/2019 ASSESSMENT YEAR: NA SRAJAN SHOD SANSTHA N SAMITI 25, CHIMANGANJ MANDI ANKPAT MARG, UJJAIN / VS. CIT(EXEMPTION) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AAMAS1643L APPELLANT BY SMT. SONAM KHANDELWAL, A.R. RESPONDENT BY SMT. ASHIMA GUPTA, D.R. DATE OF HEARING: 03.07.2019 DATE OF PRONOUNCEMENT: 10.07.2019 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS OF THE CIT(EXEMPTION), BHOPAL DATED 24.10.2008. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 2 NO.115/IND/2019. THE ASSESSEE HAS RAISED SOLITARY GROU ND THAT READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT EXEMPTION BHOPAL HAS REJECTED THE APPLICATION FOR R EGISTRATION OF SAMITI U/S 12AA OF THE INCOME TAX ACT, 1961, WHICH IS WITHOUT ANY BASIS AND VERIFICATION. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE APPLIED FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) IN FORM NO.10A ON 28.4.2014. THE APPLICATION WAS REJECTED ON THE BASIS T HAT THE ASSESSEE DOES NOT FULFILL THE REQUIREMENT OF LAW AS MANDATED U/S 12AA OF THE ACT. AGGRIEVED BY THIS, THE ASSESSEE IS IN PRESENT APPEAL. 3. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE ORDER OF THE LD. CIT(EXEMPTION) IN REJECTIN G APPLICATION IS PATENTLY ERRONEOUS. THE ASSESSEE HAD GIV EN A NOTE ON ACTIVITIES. LD. COUNSEL CONTENDED THAT AT TH E STAGE OF CONSIDERATION FOR REGISTRATION, IT HAS TO BE S EEN WHETHER THE ACTIVITIES ARE CHARITABLE AND THE AUTHORITIES [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 3 BELOW HAS NOT DOUBTED THE ACTIVITIES. MERELY THAT THE COURSES PROVIDED BY THE ASSESSEE FOR THE PURPOSE OF GETTING SELF-EMPLOYMENT ARE CLAIMED TO BE NOT RECOGNIZED BY T HE GOVERNMENT SHOULD NOT BE A REASON FOR REJECTING THE APPLICATION. LD. COUNSEL REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. CIT (EXEMPTION). 4. THE LD. CIT(DR) OPPOSED THESE SUBMISSIONS AND SUBMITTED THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD SUGGESTING THAT THE ACTIVITIES ARE RECOGNIZE D BY ANY REGULATORY AUTHORITY. MERE STATEMENT WOULD NOT BE SUFFICIENT FOR THE PURPOSE OF GETTING REGISTRATION U/S 12AA OF THE ACT. IN REJOINDER, LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE GAIL INDIA LIMITED, A PSU HAS SPONSORED THE PROGRAMMES UNDER THE CENTRAL GOVERNMENT SCHEME FOR PROMOTING SKILL INDIA. LD. COUNSEL SUBMI TTED THAT THERE IS NO ALLEGATION THAT THE ACTIVITIES ARE BEING CARRIED OUT FOR COMMERCIAL PURPOSE. [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(EXEMPTION) HAS OBSERVED IN PARA-4 OF HIS ORDER AS UNDER: 4. THE ASSESSEES REPLY FROM TIME TO TIME OF THE SO CIETY IS CONSIDERED BY THE UNDERSIGNED IS OF THE OPINION THAT THE ASSES SEE SOCIETY IS NOT ENTITLED FOR REGISTRATION U/S 12A ON THE FOLLOWING GROUNDS:- THE JCIT & AO HAVE ALSO NOT RECOMMENDED THE CASE TO GRANT REGISTRATION U/S 12A AFTER THE SPOT VERIFICATION BY THE INSPECTO R OF THE DEPARTMENT DUE TO THE FINDING AS UNDER: I. THE SOCIETY IS RUNNING A VOCATIONAL TRAINING CENTRE WHERE COMPUTER EDUCATION, STITCHING, EMBROIDERY, BEAUTICIAN COURSE S ARE CONDUCTED. THESE COURSES ARE NOT RECOGNISED/AFFILIATED WITH AN Y CENTRAL GOVERNMENT/STATE GOVERNMENT AGENCIES. II. TO CONDUCT THESE COURSE, THE SOCIETY IS GETTING GRA NT FROM GAIL COMPANY CSR FUND. MAJOR EXPENSE CLAIMED IN THE YEA R ENDING 31.3.2018, GR4ANT RECEIVED IS 32.40 LACS OUT OF WHI CH SALARY PAID TO STAFF AND DIRECTORS AMOUNT TO RS.25.50 LACS. THE S OCIETY IS NOT HAVING APPOINTMENT LETTERS REGARDING THESE EMPLOYEE S TO JUSTIFY THE SALARY/EXPENSES. III. THE COMPANY GAIL WHICH IS GIVING GRANT OUT OF CSR F UND, HAVE ALREADY BEEN CLAIMING THE GRANT GIVEN TO SOCIETY AS EXPENSE. BESIDES THESE RECEIPT, THE SOCIETY DOES NOT HAVE AN Y OTHER SOURCE OF INCOME AND NO OTHER SOCIAL WELFARE AND CHARITABLE A CTIVITY IS UNDERTAKEN BY THE SOCIETY EXCEPT RUNNING SKILL DEVE LOPMENT CENTRE. FURTHERMORE, THE A.O. HAS ALSO ENCLOSED THE REPORT OF INSPECTOR AFTER SPOT VERIFICATION, WHICH IS AS UNDER:- AS PER BYE-LAWS THE MAIN OBJECT OF THE SOCIETY IS TO WORK IN THE FIELD OF RESEARCH, ESTIMATION OF VARIOUS SCHEME LAUNCHED BY PRIVATE AND GOVERNMENT INSTITUTIONS, TO OPERATE, ORGANIZE AND M ANAGE EDUCATIONAL INSTITUTIONS AND TO EXECUTE VARIOUS SCHEMES FOR THE DEVELOPMENT OF BACKWARD SECTION OF THE SOCIETY, HOWEVER, THE SOCIE TY IS RUNNING A SKILL DEVELOPMENT CENTRE WHERE COMPUTER SOFTWARE, TALLY, HARDWARE, SILAI & [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 5 KADAI, FASHION DESIGNING ARE CONDUCTED. THESE COUR SES ARE NOT RECOGNIZED/AFFILIATED WITH ANY PRESCRIBED AUTHORITY . THUS, THE ACTIVITIES CARRIED OUT ARE NOT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY. IT IS ALSO SEEN THAT OUT OF 32.40 LACS GRANT RECEIVED DURING T HE YEAR ENDING 31.3.2018, RS.25.50 LACS IS PAID AS SALARY TO STAFF AND ITS DIRECTORS. THE SOCIETY IS NOT HAVING APPOINTMENT LETTERS REGARDING THESE EMPLOYEES TO JUSTIFY THE SALARY/EXPENSES. IN INCOME & EXPENDITU RE ACCOUNT YEAR ENDING 31.3.2018, THE SOCIETY HAS ALSO CLAIMED EXPENSES OF OTHER SAMITI ANTYUVASAI SAMITI WITHOUT ANY JUSTIFICATION HOW T HE EXPENSES OF OTHER SAMITI IS CLAIMED BY THE SOCIETY. NO OTHER SOCIAL, WELFARE AND CHARITABLE ACTIVITY IS UNDERTAKEN BY THE SOCIETY EXCEPT RUNNIN G SKILL DEVELOPMENT CENTRE. 6. WE FIND THAT THE ABOVE OBSERVATION OF THE LD. CIT(EXEMPTION) THAT NO OTHER ACTIVITIES HAVE BEEN CARRI ED OUT IS CONTRARY TO THE MATERIAL PLACED BEFORE US. AS P ER THE MATERIAL PLACED, THE ASSESSEE SOCIETY HAS ALSO CONDUCTED HEALTH CAMPS. FURTHER, IT IS SUBMITTED THAT THE TRAINI NG PROGRAMME CONDUCTED BY THE ASSESSEE IS UNDER SKILL IN DIA SCHEME OF THE CENTRAL GOVERNMENT OF INDIA. WE FIND T HAT THE LD. CIT (EXEMPTION) HAS NOT DOUBTED THE GENUINE NESS OF THE ACTIVITIES BUT HE REJECTED THE APPLICATION MERE LY ON THE BASIS THAT THE COURSES SO PROVIDED BY THE ASSESSEE SOCIETY ARE NOT RECOGNIZED BY THE GOVERNMENT. THIS REASONING OF THE LD. CIT (EXEMPTION) IS NOT IN ACCORD ANCE [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 6 WITH THE PROVISIONS OF LAW. AS PER SECTION 12AA OF THE ACT, LD. PRINCIPAL CIT OR CIT ON RECEIPT OF AN APPLICATION F OR REGISTRATION OF A TRUST OR INSTITUTION WOULD CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTI ON AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF TRUST OR INSTITUTIO N. THERE IS NO SUSPICION CASTED UPON THE ACTIVITIES OF THE ASSE SSEE SOCIETY. UNDER THESE FACTS, THE REASONING OF THE LD. CIT IS NOT SUSTAINABLE. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT AND RESTORE APPLICATION TO THE FILE OF THE LD. CIT TO RECONSIDER THE SAME. THE ASSESSEE WOULD PROVIDE ALL MATERIAL RELATED TO APPLICATION FOR REGISTRATION UNDER S KILL INDIA AND THE ACTIVITIES CARRIED OUT THERE IN AND THE O THER ACTIVITIES, WHICH WOULD HAVE ENTITLED THE ASSESSEE FOR BENEFIT U/S 11 & 12 OF THE ACT. HENCE, THE GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 7 7. NOW COMING TO THE ASSESSEES APPEAL IN ITA 116/IND/2019. THE ASSESSEE HAS RAISED FOLLOWING GROUN D OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT EXEMPTION BHOPAL HAS REJECTED THE APPLICATION FOR R EGISTRATION OF SAMITI U/S 80G OF THE INCOME TAX ACT, 1961, WHICH I S WITHOUT ANY BASIS AND VERIFICATION. 8. THE BRIEF FACTS ARE THAT THE ASSESSEE HAD APPLIED FOR REGISTRATION U/S 80G OF THE ACT TO THE LD. CIT (EXEM PTION), WHICH WAS REJECTED AS THE APPLICATION U/S 12AA OF THE A CT WAS DISMISSED BY THE LD. CIT. IN ITA NO.115/IND/201 9, IN PARA 6 ABOVE, WE HAVE SET ASIDE THE FINDING OF THE LD. C IT (EXEMPTION) FOR RECONSIDERATION OF THE SAME. THEREFO RE, IN THIS APPEAL ALSO, THE GROUND OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. APPLICATION FOR REGI STRATION U/S 80G OF THE ACT IS RESTORED TO THE FILE OF THE L D. CIT (EXEMPTION) TO RE-DECIDE IT. LD. CIT IS HEREBY DIR ECTED TO RECONSIDER THE SAME AFTER DISPOSING OF THE APPLICATION, WHICH HAS BEEN RESTORED FOR REGISTRATION U/S 12AA OF THE [ITA 115 & 116/IND/2019] [SRAJAN SHOD SANSTHAN SAMITI, UJJAIN] 8 ACT, WHICH WAS SUBJECT MATTER OF ITA NO.115/IND/2019 . GROUND RAISED IN THIS APPEAL IS ALSO ALLOWED FOR STATISTI CAL PURPOSES. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10 . 07.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 10/07/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE