Mahatma Gandhi State Institute of Public Administration , Chandigarh V. CIT(E), Chandigarh

ITA 1262/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4888 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 28-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANU MALIK
• Keywords: Charitable institution; Opportunity of being heard
• Section: 80G; 12A; 12AA; 12; 10; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1262/CHD/2017 (ASSESSMENT YEAR : 2017-18) MAHATMA GANDHI STATE INSTITUTE VS. THE C.I.T., EXEMPTIONS, OF PUBLIC ADMINISTRATION CHANDIGARH. SECTOR 26, CHANDIGARH. PAN: AAAJM0319A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N. SINGLA, ADV. RESPONDENT BY : MANU MALIK, CIT DR DATE OF HEARING : 21.03.2018 DATE OF PRONOUNCEMENT : 09.04.2018 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (EXEMPT IONS), CHANDIGARH (HEREINAFTER REFERRED TO AS (LD.CIT(E) DATED 28.7.2017,DENYING GRANT OF REGISTRATION U/S 12AA OF THE ACT. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. THAT THE ORDER OF HE LEARNED COMMISSIONER OF INCOME TAX IS BAD, AGAINST THE FACTS & LAW. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS NOT GIVEN OPPORTUNITY OF BEING HEARD. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS WRONGLY REJECTED THE APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 2 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 3. BRIEFLY STATED, THE ASSESSEE HAD APPLIED FOR GRA NT OF REGISTRATION SUBMITTING AN APPLICATION IN FORM NO.1 0A ON 27.1.2017. THE LD.CIT(E) AFTER RAISING RELEVANT QU ERIES TO SATISFY HIMSELF OF THE GENUINENESS OF THE OBJECTS AND ACTIVITIES OF THE ASSESSEE AND AFTER CONSIDERING TH E REPLY FILED BY THE ASSESSEE IN THIS REGARD, HELD THE APPLICANT/ASSESSEE INELIGIBLE FOR GRANT OF REGISTRA TION U/S 12AA OF THE ACT SINCE AS PER THE LD.CIT(E), THE ACT IVITIES OF THE ASSESSEE SOCIETY COULD NOT BE TERMED TO FALL U NDER THE CATEGORY OF CHARITABLE PURPOSE AND THE ABSENCE OF DISSOLUTION CLAUSE IN THE MEMORANDUM OF ASSOCIATION OF THE APPLICANT-ASSESSEE IMPINGED ON THE PUBLIC CHARITABL E CHARACTER OF THE SOCIETY. 4. DURING THE COURSE OF HEARING BEFORE US THE LD. C OUNSEL FOR ASSESSEE DREW OUR ATTENTION TO THE ORDER OF THE LD.CIT(E) AND POINTED OUT THEREFROM THE SPECIFIC REASONS FOR DENIAL OF REGISTRATION. TAKING UP EACH FINDING OF THE LD.CIT( E) ONE BY ONE, LEADING TO THE DENIAL OF GRANT OF REGISTRATION U/S 12A, THE LD. COUNSEL FOR ASSESSEE FIRST DREW OUR ATTENTI ON TO THE FINDINGS OF THE LD.CIT(E) THAT SINCE THE PRESENT AP PLICATION WAS TRIGGERED BY REJECTION OF THE CLAIM OF THE ASSE SSEE TO EXEMPTION U/S 10(23C(IIIAB) BY THE ASSESSING OFFICE R, ANY DECISION AT THIS STAGE WOULD AMOUNT TO SUBVERTING T HE DUE PROCESS OF LAW IMBIBED IN THE APPELLATE PROCEEDINGS AND FURTHER THAT SEEKING REGISTRATION AFTER LAPSE OF 39 YEARS WAS ANACHRONISTIC AND REGISTRATION SHOULD HAVE BEEN SO UGHT AT 3 THE INITIAL STAGE OR AT ITS INCEPTION. THE LD. COU NSEL FOR ASSESSEE DREW OUR ATTENTION TO PARAS 7.1 & 7.2 OF T HE ORDER OF THE LD.CIT(E) IN THIS REGARD AS UNDER: 7.1. THE REPLY SUBMITTED BY THE APPLICANT HAS BEEN PERUSED. THE APPLICANT VIDE ITS UNDATED REPLY AT P ARA 3 HAS SUBMITTED THE REASON FOR FORWARDING THE PRESENT APPLICATION AS THE DENIAL OF EXEMPTION U/S 10(23C)( IIIAB) OF THE ACT BY THE JURISDICTIONAL ASSESSING OFFICER. TH E RESPONSE TO THE QUERY REGARDING SEEKING REGISTRATION UNDER SECTIO N 12A AFTER A LAPSE OF 39 YEARS' OF EXISTENCE IS PERFU NCTORY. MERE DENIAL OF CLAIMS UNDER SECTION 10(23C)(IIIAB) D OES NOT PROVIDE AMPLE GROUNDS FOR A 12A REGISTRATION. THE U NDATED RESPONSE RECEIVED IN THIS OFFICE ON 7 LH JULY 2017, CLEARLY EXEMPLIFIES THAT THE ENTITY CLAIMS TO BE MAINLY FINAN CED BY DIE GOVERNMENT. IF THAT BE SO, THE APPLICABILITY OF 10(23C )(IIIAB) IS MORE PERTINENT. GIVEN THE FACT THAT SELF-CONFESSEDL Y THE PRESENT APPLICATION WAS TRIGGERED BY REJECTION OF C LAIMS U/S 10(23C)(IIIAB) BY THE ASSESSING OFFICER, ANY DE CISION AT THIS STAGE SHALL AMOUNT TO SUBVERTING THE DUE PR OCESS OF LAW IMBIBED IN THE APPELLATE PROCEDURE. 7.2. SEEKING REGISTRATION AFTER LAPSE OF 39 YEARS IS FURTHER ANACHRONISTIC. REGISTRATION, AS IS COMMONLY UNDERSTOOD, ENTAILS DIE SAME AT DIE INITIAL STAGE O R AT ITS INCEPTION (SOCIETY HAS BEEN IN OPERATION SINCE 28.03.1978). 5. VIS--VIS THE AFORESAID FINDINGS OF THE LD.CIT(E ), THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT THE ASSES SEES CLAIM OF EXEMPTION U/S 10(23C(IIIAB) PERTAINING TO THE ASSESSMENT YEAR 2013-14 REFERRED TO BY THE LD.CIT(E ), HAD BEEN ALLOWED BY THE I.T.A.T. VIDE ITS ORDER PASSED IN ITA NO.270/CHD/2017 DATED 30.10.2017. COPY OF THE ORDE R WAS PLACED BEFORE US. FURTHER, THE LD. COUNSEL FOR ASSE SSEE STATED THAT THE ASSESSEE IS FREE TO SEEK REGISTRATI ON AT ANY POINT OF TIME AND IS NOT REQUIRED UNDER THE STATUTE TO NECESSARILY SEEK THE SAME ONLY AT THE INITIAL STAGE OR AT ITS INCEPTION. THE LD. COUNSEL FOR ASSESSEE DREW OUR A TTENTION TO THE PROVISIONS OF SECTION 12A(1)(A)/12A(1)(AA) W HICH ARE AS UNDER: 4 [(1)] THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INS TITUTION UNLESS THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY: (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITU TION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE [***] COMMISSIONER BEFORE THE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF TH E INSTITUTION, [WHICHEVER IS LATER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA ] : [PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATIO N OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIO D AFORESAID, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION, (I) FROM THE DATE OF THE CREATION OF THE TRUST OR T HE ESTABLISHMENT OF THE INSTITUTION IF THE [***] COMMIS SIONER IS, FOR REASONS TO BE RECORDED IN WRITING, SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED F ROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PERI OD AFORESAID FOR SUFFICIENT REASONS; (II) FROM THE 1ST DAY OF THE FINANCIAL YEAR IN WHICH THE APPLICATION IS MADE, IF THE [***] COMMISSIONER IS N OT SO SATISFIED:] [PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUS E SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFT ER THE 1ST DAY OF JUNE, 2007;] [(AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTIT UTION ON OR AFTER THE 1ST DAY OF JUNE, 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA;] 6. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THEREFR OM THAT THE ASSESSEE WAS ALWAYS FREE TO APPLY FOR REGI STRATION AT ANY POINT OF TIME BOTH BEFORE 1.6.2007 WHICH IS GOVERNED BY THE PROVISIONS OF SECTION 12A(1)(A) AND AFTER 1. 6.2007 WHICH IS GOVERNED BY THE PROVISIONS OF SECTION 12A( 1)(AA). THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THERE W AS NO MERIT THEREFORE IN THIS GROUND OF LD.CIT(E) FOR DEN YING GRANT OF REGISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT . 5 7. THE LD. DR ON THE OTHER HAND, FAIRLY AGREED THAT THE REJECTION OF CLAIM OF EXEMPTION U/S 10(23C(IIIAB) H AD BEEN REVERSED BY THE I.T.A.T. HOLDING THAT IT IS ELIGIBL E FOR THE SAME VIDE ITS ORDER REFERRED TO ABOVE. FURTHER THE LD. DR COULD NOT CONTROVERT THE CONTENTION OF THE LD. COUN SEL FOR ASSESSEE THAT IT COULD SEEK REGISTRATION AT ANY POI NT OF TIME AND WAS NOT NECESSARILY REQUIRED TO SEEK THE SAME A T THE INITIAL STAGE OR AT ITS INCEPTION ONLY. 8. IN VIEW OF THE ABOVE, WE REJECT THE DENIAL OF REGISTRATION BY THE LD.CIT(E) TO THE ASSESSEE FOR T HE REASON OF DENIAL OF CLAIM OF EXEMPTION IN EARLIER YEAR U/S 10(23C(IIIAB) AND SEEKING REGISTRATION AFTER A LAP SE OF 39 YEARS , AND HOLD THE SAME AS BEING IMMATERIAL AND O F NO CONSEQUENCE FOR THE PURPOSE OF GRANT OF REGISTRATIO N TO THE ASSESSEE U/S 12AA OF THE ACT. 9. THE LD. COUNSEL FOR ASSESSEE THEREAFTER DREW OUR ATTENTION TO PARA 8 OF THE ORDER AND POINTED OUT TH EREFROM THAT THE NEXT REASON FOR DENIAL OF REGISTRATION WAS THE FINDINGS OF THE LD.CIT(E) THAT THE APPLICANT-ASSESS EES ACTIVITIES OF AFFORDING TRAINING TO GOVERNMENT EMPL OYEES DID NOT FIT IN THE DEFINITION OF EDUCATION SO AS TO BE HELD AS A CHARITABLE ACTIVITY WITHIN THE DEFINITION OF THE SA ME U/S 2(15) OF THE ACT. THE RELEVANT FINDINGS OF THE LD.C IT(E) AT PARA 8 OF THE ORDER IN THIS REGARD ARE AS UNDER: 8. MOREOVER, THERE ARE OTHER ISSUES THAT DO NOT REN DER THE APPLICANTS ACTIVITIES MEASURING UPTO THE REQUIREME NT OF REGISTRATION. AFFORDING TRAINING TO GOVERNMENT EMPLOYE ES DOES NOT FIT INTO THE DEFINITION OF EDUCATION LAID DO WN BY THE SUPREME COURT IN THE CASE OF 'SOLE TRUSTEE LOK SHIKSHAN 6 SANSTHAN'. THE SENSE IN WHICH THE WORD 'EDUCATION' HA S BEEN USED IN SECTION 2(15) AS INTERPRETED BY THE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOKA SIKSLIAN SANSTHAN (101 1TR 234) IS SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG IN PREPARATION FOR THE WORK OF LIFE. IT A LSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THE WORD 'EDUCATION' HAS NOT BEEN USED IN THAT WIDE AND EXTENDED SENSE, ACCORDIN G TO WHICH EVERY ACQUISITION OF FURTHER KNOWLEDGE CONSTIT UTES EDUCATION. 10. VIS--VIS THIS FINDING OF THE LD.CIT(E), THE LD . COUNSEL FOR ASSESSEE POINTED OUT THAT THE I.T.A.T. IN ITS O RDER PASSED IN THE CASE OF THE ASSESSEE, WHILE GRANTING EXEMPTI ON U/S 10(23C)(IIIAB) IN ITA NO.270/CHD/2017 DATED 30.10.2 017, HAD DEALT WITH IDENTICAL ISSUE AND HAD HELD THE ACT IVITY OF AFFORDING THE TRAINING TO GOVERNMENT EMPLOYEES AS B EING IN THE NATURE OF EDUCATION. THE LD. COUNSEL FOR ASSES SEE DREW OUR ATTENTION TO PARAS 18 AND 19 OF THE ORDER OF TH E I.T.A.T. IN THIS REGARD WHICH ARE AS UNDER: 18. EVEN OTHERWISE, WE FIND THAT THE ACTIVITY OF TRAINING AND CONDUCTING STUDY COURSES, CONFERENCES, SEMINARS AND LECTURES TO PUBLIC SERVICE ADMINISTRATIVE OFFICERS IN THE FIELD OF PUB LIC ADMINISTRATION TANTAMOUNTS TO NOTHING ELSE BUT IMPARTING EDUCATION. ALL THE STATED OBJECTS OF THE ASSESSEE SOCIETY ARE AIMED AT DIFFUSING CERTAIN BRANCH OF KNOWLEDGE I.E. PUBLIC ADMINISTRATION BY CONDUCTING TRAINING PROGRAMMES, STUDY COURSES, CONFERENCES, SEMINARS, LECTURES OR BY PROMOTING RESEARCH AND TRAINING, PUBLISHING PAPERS AND PERIODICALS AND MAINTAINING LIBRARIES AND INFORMATION SERVICES IN THE AREA OF PUBLIC ADMINISTRATION. THE UNDERTAKING OF TRAINING AND STUDY COURSES IS CARRIED OUT IN A STRUCTURED MANNER BY CONDUCTING REGULAR COURSES FOR IMPARTING INSTRUCTION AND TRAINING ON VARIOUS SUBJECTS RELATED TO PUBLIC ADMINISTRATION. THE ACTIVITIES UNDERTAKEN THEREFORE IS IN THE NATURE OF IMPARTING EDUCATION. THE HONBLE GUJARAT HIGH COURT DEALT WITH AN IDENTICAL ISSUE IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNION VS CIT REPORTED IN195 ITR 279.IN THE SAID CASE ALSO THE ASSESSEE SOCIETY WAS ESTABLISHED WITH THE OBJECT OF SPREADING EDUCATION RELATING TO COOPERATIVE MOVEMENT BY CONDUCTING COURSES, TRAINING 7 PROGRAMMES, RESEARCH AND STUDY OF THE SUBJECT, OPENING LIBRARIES AND PUBLISHING PERIODICALS AND LITERATURE ON THE SUBJECT. THE QUESTION BEFORE THE HONBLE HIGH COURT WAS WHETHER THE ASSESSEE HAD BEEN RIGHTLY DENIED EXEMPTION U/S 10(22) OF THE INCOME TAX ACT,1961,HOLDING ITS ACTIVITIES TO BE NO T EDUCATIONAL IN VIEW OF THE MEANING GIVEN BY THE SUPREME COURT IN SOLE TRUSTEE, LOKA SHIKSHANA TRUST VS CIT 101 ITR 234. THE HONBLE HIGH COURT HELD THAT THE OBJECTS OF THE ASSESSEE INDICATED THA T THE SOCIETY WAS ESTABLISHED FOR DIFFUSION OF CERTAI N BRANCH OF KNOWLEDGE AND THEREFORE WAS IN THE NATURE OF IMPARTING EDUCATION. FURTHER REFERRING TO THE DECISION OF THE SUPREME COURT IN LOK SHIKSHANA (SUPRA), THE COURT HELD THAT THE OBSERVATION OF THE APEX COURT THAT EDUCATION MEANS SCHOOLING WOULD MEAN, THAT SCHOOLS, INSTRUCTS OR EDUCATES AND THE OBSERVATIONS OF THE APEX COURT WERE NOT INTENDED TO GIVE A NARROW OR PEDANTIC SENSE TO THE WORD EDUCATION. THE RELEVANT FINDING OF THE HIGH COURT ARE AS UNDER: THE CONTROVERSY WHICH WE ARE CALLED UPON TO DECIDE IS, THEREFORE, WHETHER THE ASSESSEE IS AN EDUCATIONAL I NSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FO R PURPOSES OF PROFIT WITHIN THE MEANING OF S. 10(22) OF THE AC T. UNDER S. 10(22) OF THE ACT, IT IS PROVIDED THAT IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN THE SAID CLAUSES, I.E., ANY INCOME OF A UNIV ERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR E DUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT, SHALL NOT BE INCLUDED. THE OBJECTS OF THE ASSESSEE-CO-OPERATIVE UNION AS A LSO THE ACTIVITIES ACTUALLY CARRIED ON BY IT WILL THROW CON SIDERABLE LIGHT ON THE QUESTION WHETHER THE ASSESSEE-CO-OPERATIVE U NION IS EXISTING SOLELY FOR EDUCATIONAL PURPOSES OR NOT. BY E-LAWS 2 OF THE ASSESSEE-CO-OPERATIVE UNION, A COPY OF WHICH IS PLACED ON RECORD BY THE CONSENT OF BOTH THE LEARNED COUNSEL F OR OUR CONSIDERATION, ENUMERATES THEREIN EIGHT OBJECTS OF THE ASSESSEE- CO-OPERATIVE UNION AND THEY READ AS UNDER : (I) TO IMPART EDUCATION TO MEMBERS OF CO-OPERATIVE SOCIETIES AND TO WORKERS IN THE CO-OPERATIVE MOVEMENT; (II) TO ACT AS A CO-ORDINATING AGENCY ON ALL MATTER S PERTAINING TO CO-OPERATIVE EDUCATION AND FUNCTION AS A BODY OF EX PERTS IN MATTERS RELATING TO EDUCATION; (III) TO FUNCTION AS A FOCUSING CENTRE ON NON-OFFIC IAL OPINION ON VARIOUS SUBJECTS AFFECTING THE MOVEMENT AND FOR REP RESENTING IT IN PROPER QUARTERS; (IV) TO FURTHER THE SPREAD OF THE CO-OPERATIVE MOVE MENT; (V) TO PROMOTE THE STUDY OF PROBLEMS CONNECTED WITH CO- OPERATION AND CARRY ON RESEARCH IN THE SAME; 8 (VI) TO OPEN CIRCULATING LIBRARIES, TO PUBLISH PERI ODICALS, BOOKS, PAMPHLETS, AND LITERATURE IN GENERAL ON CO-OPERATIO N; RURAL DEVELOPMENT AND ALLIED SUBJECTS; (VII) TO CONDUCT TRAINING CLASSES, TRAINING CENTRES , SCHOOLS, COLLEGES, PRESCRIBE COURSES OF INSTRUCTION FOR THEM , CONDUCT EXAMINATION AND AWARD CERTIFICATES OR DIPLOMAS; AND (VIII) TO RUN A PRINTING PRESS. THE ACTIVITIES CARRIED ON BY THE ASSESSEE-CO-OPERAT IVE UNION HAVE BEEN BRIEFLY SUMMARISED AT ANNEXURE A' TO THE ORDER OF THE CIT(A) DT. 22ND NOV., 1983 AND THE SAID LIST OF ACTIVITIES IS REFERRED TO IN PARA 5 OF THE ORDER OF THE CIT. THE FACT THAT THESE ACTIVITIES ARE CARRIED ON BY THE ASSESSEE-CO-OPERAT IVE UNION HAS NOT BEEN DISPUTED. THE LIST OF ACTIVITIES AT AN NEXURE A' GIVES PARTICULARS OF THE COURSES CONDUCTED BY THE A SSESSEE-CO- OPERATIVE UNION AND THEIR DURATION. THE ASSESSEE CO NDUCTS COURSES FOR HIGHER DIPLOMA IN CO-OPERATION (CONDENS ED)18 WEEKS, DIPLOMA IN LAND DEVELOPMENT BANKING12 WEEKS , CERTIFICATE COURSE IN CO-OP. CREDIT & BANKING10 WE EKS, AND SPECIALISED SHORT-TERM COURSES/ORIENTATION COURSES. THE ASSESSEE ALSO CONDUCTS SEMINARS. IT ALSO APPEARS TH AT THE ASSESSEE HAS BEEN RUNNING FOUR CO- OPERATIVE TRAINI NG WHICH CONDUCT JUNIOR BASIC COURSES OF 24 WEEKS DURATION F OR DIPLOMA IN CO-OPERATION, SPECIAL COURSE FOR EMPLOYEES OF UR BAN CO-OP. BANKS, DIST. CO-OP. BANKS AND MARKET CLASS, AND ALS O SEMINARS. THE ASSESSEE ALSO CONDUCTS CO-OPERATIVE E DUCATION PROGRAMME, CONSUMER EDUCATION PROGRAMMES (PROJECT), WOMEN CO-OP. EDUCATION PROGRAMME, SPECIAL TRAINING CLASSES IN THE DISTRICT UNDER CO-OP. EDUCATION AND INDUSTRI AL PROJECTS OF THE NATURE AND DURATION AS MENTIONED IN DETAIL I N THE SAID LIST OF ITS ACTIVITIES. IT IS NOT SUGGESTED THAT TH E ASSESSEE-CO- OPERATIVE UNION IS DOING ANY ACTIVITY OTHER THAN TH OSE ENUMERATED IN THE SAID LIST. 4. FROM THE NATURE OF THE ACTIVITIES OF THE ASSESSEE, IT IS ABUNDANTLY CLEAR TO US THAT THE ASSESSEE IS EXISTIN G SOLELY FOR EDUCATIONAL PURPOSES. IT WAS SOUGHT TO BE CONTENDED BY THE LEARNED COUNSEL FOR THE REVENUE THAT HAVING REGARD TO THE OBJECTS ENUMERATED IN CLS. (III), (IV), (VI) AND (V III) OF THE BYE-LAW 2 OF THE BYE LAWS OF THE ASSESSEE, IT CANNOT BE SAI D THAT THE ASSESSEE WAS EXISTING SOLELY FOR EDUCATIONAL PURPOS ES. IN CL. (III) OF THE BYE-LAW 2, THE OBJECT ENUMERATED IS TH AT THE ASSESSEE WILL FUNCTION AS A FOCUSING CENTRE ON NON- OFFICIAL OPINION ON VARIOUS SUBJECTS AFFECTING THE MOVEMENT AND FOR REPRESENTING IT IN PROPER QUARTERS. UNDER CL. (IV), ITS OBJECT IS TO FURTHER THE SPREAD OF THE CO-OPERATIVE MOVEMENT. CL AUSE (VI) REFERS TO OBJECTS OF OPENING CIRCULATING LIBRARIES, PUBLISHING PERIODICALS, BOOKS, PAMPHLETS, AND LITERATURE IN GE NERAL ON CO- OPERATION, RURAL DEVELOPMENT AND ALLIED SUBJECTS, W HILE CL. (VIII) REFERS TO RUNNING OF A PRINTING PRESS. IT IS DIFFIC ULT TO ACCEPT THE CONTENTION OF THE REVENUE THAT THESE CLAUSES INDICA TE ANY OBJECT OTHER THAN EDUCATIONAL FOR WHICH THE ASSESSE E SEEMS TO HAVE BEEN ESTABLISHED. ON TOTALITY OF THE OBJECTS E NUMERATED IN BYE-LAW 2, IT IS CLEAR TO US THAT THE ASSESSEE-C O-OPERATIVE UNION IS EXISTING SOLELY FOR EDUCATIONAL PURPOSES A ND EVEN THE OBJECTS WHICH ARE ENUMERATED IN CLS. (III), (IV), ( VI) AND (VIII) ARE REFERABLE TO SUCH PURPOSES. IT WILL NOT BE OPEN TO READ ANY OF THESE CLAUSES IN ISOLATION TORN OF ITS CONTEXT FOR THE PURPOSES OF 9 URGING THAT THE ASSESSEE IS NOT EXISTING SOLELY FOR EDUCATIONAL PURPOSES AS ENVISAGED UNDER S. 10(22) OF THE ACT. I T IS OBVIOUS THAT THE OBJECTS OF FUNCTIONING AS A FOCUSING CENTR E ON NON- OFFICIAL OPINION ON VARIOUS SUBJECTS AFFECTING THE MOVEMENT AND FOR REPRESENTING IT IN PROPER QUARTERS, PROMOTING T HE STUDY OF PROBLEMS CONNECTED WITH CO-OPERATION AND CARRYING O N RESEARCH IN THE SAME AND OF OPENING CIRCULATING LIB RARIES, PUBLISHING PERIODICALS, BOOKS, PAMPHLETS AND LITERA TURE ARE CONNECTED WITH EDUCATIONAL PURPOSES FOR WHICH THE A SSESSEE- CO- OPERATIVE UNION IS ESTABLISHED. THE OBJECT OF R UNNING A PRINTING PRESS AS ENUMERATED IN CL. (VIII) HAS TO B E READ IN CONTEXT OF THE OBJECT OF PUBLISHING PERIODICALS, BO OKS, PAMPHLETS AND LITERATURE. THEREFORE, SO READ, IT BE COMES PART OF THE EDUCATIONAL ACTIVITIES OF THE ASSESSEE-CO-OP ERATIVE UNION. THE SUBSIDIARY OBJECTS SUCH AS PRINTING AND PUBLISHING BOOKS AND LITERATURE ON THE RELEVANT SUBJECTS ARE I N OUR JUDGMENT ANCILLIARY AND DO NOT DETRACT FROM ITS EXC LUSIVELY EDUCATIONAL CHARACTER. THE QUESTION WHETHER AN EDUC ATIONAL INSTITUTION IS EXISTING SOLELY FOR EDUCATIONAL PURP OSES OR NOT CAN ALSO BE RESOLVED WITH REFERENCE TO THE ACTIVITI ES ACTUALLY CARRIED ON BY IT AND, AS NOTED ABOVE, THE LIST OF A CTIVITIES OF THE ASSESSEE CLEARLY INDICATES THAT IT IS EXISTING SOLE LY FOR EDUCATIONAL PURPOSES. IT CANNOT BE DOUBTED THAT THE ASSESSEE WAS A SOCIETY FOR DIFFUSION OF A CERTAIN BRANCH OF KNOWLEDGE OF THE CO- OPERATIVE MOVEMENT IN VARIOUS FIELDS GOVERN ING HUMAN LIFE AND THE ACTIVITIES FOR THE PURPOSES WERE CARRI ED OUT IN AN ORGANISED AND SYSTEMATIC MANNER BY CONDUCTING REGUL AR COURSES FOR IMPARTING INSTRUCTION AND TRAINING ON V ARIOUS SUBJECTS INCLUDED IN THE CURRICULA AS IS REFLECTED FROM THE LIST OF ITS ACTIVITIES. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE-CO-OPERATIVE UNION IS GIVEN FINANCIAL ASSI STANCE BY THE GOVERNMENT. THE RESOLUTIONS OF THE GOVERNMENT D T. 15TH FEB., 1968 AND 10TH DEC., 1982 [MENTIONED IN PARA 8 OF THE ORDER OF THE CIT(A)] CLEARLY INDICATE THAT THE GRAN TS SANCTIONED BY THE GOVERNMENT ARE FOR EDUCATIONAL PURPOSES. THE GOVERNMENT HAD SANCTIONED RS. 15 LAKHS FOR THE YEAR 1982-83 WHICH APPEARS TO HAVE BEEN RAISED TO RS. 20 LAKHS F ROM THE YEAR 1988-89. WE ARE FULLY SATISFIED FROM THE NATUR E OF THE ACTIVITIES OF THE ASSESSEE-CO-OPERATIVE UNION AND I TS OBJECTS THAT THE ASSESSEE IS EXISTING EXCLUSIVELY FOR EDUCA TIONAL PURPOSES AND NOT FOR THE PURPOSES OF PROFITS. THE A SSESSEE WAS PUBLISHING TWO JOURNALS : (1) 'SAHAKAR', A WEEK LY JOURNAL HAVING CIRCULATION OF 6,700 COPIES, AND (2) 'GRAM S WARAJ', A MONTHLY MAGAZINE HAVING CIRCULATION OF 7,150 COPIES . BOTH THESE JOURNALS WERE PUBLISHED IN CONNECTION WITH TH E ACTIVITIES OF THE ASSESSEE AND ON THE SUBJECT OF CO-OPERATIVE MOVEMENT. THE ASSESSEE WAS ALSO HAVING AN AUDIO-VISUAL UNIT F OR EXHIBITING FILMS ON CO-OPERATIVE MOVEMENT TO EDUCAT E THE MASSES. IT ALSO APPEARS THAT THE ASSESSEE MAINTAINE D A RICH LIBRARY ON THE SUBJECT OF CO-OPERATION. AS NOTICED ABOVE, FROM THE OBJECTS OF THE ASSESSEE, IT IS CONDUCTING TRAIN ING CENTRES AND COLLEGES FOR VARIOUS COURSES HAVING BEARING ON THE FIELD OF CO-OPERATIVE MOVEMENT. IT APPEARS TO US THAT THE DE CISION OF THE TRIBUNAL WHICH SEEKS TO REST IT ON THE OBSERVAT IONS MADE BY THE SUPREME COURT IN 'LOK SHIKASHANA TRUST'S CAS E (SUPRA), FOR HOLDING THAT THE ASSESSEE IS NOT ENTITLED TO EX EMPTION UNDER S. 10(22) OF THE ACT IS BASED ON A COMPLETE M ISREADING OF THE OBSERVATIONS OF THE SUPREME COURT. IN LOK SH IKASHANA TRUST'S CASE (SUPRA) THE SUPREME COURT WHILE DEALIN G WITH THE 10 PROVISIONS OF S. 11 R/W S. 2(15) OF THE ACT WHICH D EFINES CHARITABLE PURPOSES' OBSERVED AS UNDER : 'THE SENSE IN WHICH THE WORD EDUCATION' HAS BEEN U SED IN S. 2(15) IN THE SYSTEMATIC INSTRUCTION, SCHOOLING OR T RAINING GIVEN TO THE YOUNG IN PREPARATION FOR THE WORK OF LIFE. I T ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THE WORD EDUCATION' HAS NOT BEEN USED IN THAT WIDE AND EXTENDED SENSE, ACCORDING TO WHICH EVERY ACQUIS ITION OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. ACCORDING TO THIS WIDE AND EXTENDED SENSE, TRAVELLING IS EDUCATION, B ECAUSE AS A RESULT OF TRAVELLING YOU ACQUIRE FRESH KNOWLEDGE. ...... BUT THAT IS NOT THE SENSE IN WHICH THE WORD EDUCATION' IS U SED IN CL. 15 OF S. 2. WHAT EDUCATION' CONNOTES IN THAT CLAUSE I S THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MI ND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING.' THE SUPREME COURT IN THE ABOVE OBSERVATIONS BY REFE RRING TO THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING G IVEN TO THE YOUNG HAS ONLY CITED AN INSTANCE IN ORDER TO INDICA TE AS TO WHAT THE WORD EDUCATION' APPEARING IN S. 2(15) OF THE ACT WHICH DEFINES CHARITABLE PURPOSES' IS INTENDED TO MEAN. WE ARE CERTAIN THAT THESE OBSERVATIONS WERE NOT INTEND ED TO KEEP OUT OF THE MEANING OF THE WORD EDUCATION', PERSONS OTHER THEN YOUNG'. THE EXPRESSION SCHOOLING' ALSO MEANS 'THA T SCHOOLS, INSTRUCTS OR EDUCATES' (THE OXFORD ENGLISH DICTIONA RY, VOL. IX 217). THE SUPREME COURT HAS OBSERVED THAT THE WORD EDUCATION' ALSO CONNOTES THE WHOLE COURSE OF SCHOL ASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THIS CLEAR LY INDICATES THAT THE OBSERVATIONS OF THE SUPREME COURT WERE NOT INTENDED TO GIVE A NARROW OR PEDANTIC SENSE TO THE WORD EDU CATION'. BY GIVING FURTHER ILLUSTRATIONS OF A TRAVELLER GAINING KNOWLEDGE, VICTIMS OF SWINDLERS AND THIEVES BECOMING WISER, TH E VISITORS TO NIGHT CLUBS ADDING TO THEIR KNOWLEDGE AND HIDDEN MYSTERIES OF LIFE, THE SUPREME COURT HAS INDICATED THAT THE W ORD EDUCATION' IS NOT USED IN A LOOSE SENSE SO AS TO I NCLUDE ACQUISITION OF EVEN SUCH KNOWLEDGE. THE OBSERVATION S OF THE SUPREME COURT ONLY INDICATE PROPER CONFINES OF THE WORD EDUCATION' IN THE CONTEXT OF THE PROVISIONS OF S. 2(15) OF THE ACT. IT WILL NOT BE PROPER TO CONSTRUE THESE OBSERV ATIONS IN A MANNER IN WHICH THEY ARE CONSTRUED BY THE TRIBUNAL WHEN IT INFERS FROM THESE OBSERVATIONS, IN PARA 17 OF ITS J UDGMENT, THAT THE WORD EDUCATION' IS LIMITED TO SCHOOLS, COLLEGE S AND SIMILAR INSTITUTIONS AND DOES NOT EXTEND TO ANY OTHER MEDIA FOR SUCH ACQUISITION OF KNOWLEDGE. THE OBSERVATIONS OF THE S UPREME COURT DO NOT CONFINE THE WORD EDUCATION' ONLY TO S CHOLASTIC INSTRUCTIONS BUT OTHER FORM OF EDUCATION ALSO ARE I NCLUDED IN THE WORD EDUCATION'. AS NOTICED ABOVE, THE WORD S CHOOLING' ALSO MEANS INSTRUCTING OR EDUCATING. IT, THEREFORE, CANNOT BE SAID THAT THE WORD EDUCATION' HAS BEEN GIVEN AN UN DULY RESTRICTED MEANING BY THE SUPREME COURT IN THE SAID DECISION. THOUGH IN THE CONTEXT OF THE PROVISIONS OF S. 10(22 ) THE CONCEPT OF EDUCATION NEED NOT BE GIVEN ANY WIDE OR EXTENDED MEANING, IT SURELY WOULD ENCOMPASS SYSTEMATIC DISSEMINATION OF KNOWLEDGE AND TRAINING IN SPECIALISED SUBJECTS AS I S DONE BY THE ASSESSEE. THE CHANGING TIME AND THE EVER WIDENI NG HORIZONS OF KNOWLEDGE MAY BRING IN CHANGES IN THE METHODOLOGY OF TEACHING AND A SHIFT FOR THE BETTER IN THE INSTITUTIONAL SETUP. ADVANCEMENT OF KNOWLEDGE BRING WITHIN ITS FOLD SUITABLE METHODS OF ITS DISSEMINATION AND THOU GH THE 11 PRIMARY METHOD OF SITTING IN A CLASS-ROOM MAY REMAI N IDEAL FOR MOST OF THE INITIAL EDUCATION, IT MAY BECOME NECESS ARY TO HAVE A DIFFERENT OUTLOOK FOR FURTHER EDUCATION. IT IS NO T NECESSARY TO NAIL DOWN THE CONCEPT OF EDUCATION TO A PARTICULAR FORMULA OR TO FLOW IT ONLY THROUGH A DEFINED CHANNEL. ITS PROGRES S LIES IN ACCEPTANCE OF NEW IDEAS AND DEVELOPMENT OF APPROPRI ATE MEANS TO REACH THEM TO THE RECIPIENTS. 19. IN VIEW OF THE ABOVE WE HOLD THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE SOCIETY OF CONDUCTING COURSES AND TRAINING PROGRAMMES AMOUNTS TO EDUCATION. 11. THE LD. DR FAIRLY AGREED WITH THE ABOVE CONTENT ION OF THE LD. COUNSEL FOR ASSESSEE. 12. IN VIEW OF THE ABOVE, WE HOLD THAT THE CONTENTI ON OF THE LD.CIT(E) THAT THE ASSESSEE WAS NOT CARRYING OUT TH E ACTIVITY OF IMPARTING EDUCATION IS WITHOUT ANY MERI T AND NEEDS TO BE REJECTED. 13. THE LD. COUNSEL FOR ASSESSEE THEREAFTER DREW OU R ATTENTION TO PARA 9 OF THE ORDER OF THE LD.CIT(E) P OINTING OUT THEREFROM THE NEXT CONTENTION OF THE LD.CIT(EXE MPTIONS) THAT THE ASSESSEE WAS NOT ELIGIBLE FOR GRANT OF EXE MPTION U/S 12AA SINCE ITS ACTIONS DID NOT FLOW FROM AN ALT RUISTIC INTENT BUT WERE PART OF ITS STATUTORY OBLIGATIONS. THE RELEVANT FINDINGS OF THE LD.CIT(E) AT PARA 9 & 10 T O WHICH OUR ATTENTION WAS INVITED ARE AS UNDER: 9. FURTHER WHEN THE APPLICABILITY OF SECTIONS 11 & 12 IS EXAMINED IN THE INSTANT CASE IT IS EVIDENT THAT THE GOVERNMENT GRANTS CANNOT BE TERMED TO BE VOLUNTARY AND ARE NOT FREE FROM ENCUMBRANCES, IT HAS BEEN LAID DOWN IN CL AUSE OF THE MEMORANDUM OF ASSOCIATION OF THE APPLICANT S OCIETY THAT THE EXPENDITURE OF GRANTS WOULD BE SUBJECT TO DIRECTION S OF THE GOVERNMENT OF PUNJAB EMANATING FROM TIME TO TIME. S IMILARLY, THE SOCIETY'S FUNCTIONING IS HEMMED IN BY THE POWERS OF THE GOVERNMENT TO ISSUE DIRECTIONS AND THE FINALITY ACCORDED TO SUCH DECISIONS. CLAUSE XV OF TINE RULES & REGULATIONS ARE AS UNDER. 'IN THE DISCHARGE OF ITS FUNCTIONS, THE GENERAL COU NCIL SHALL BE GUIDED BY SUCH DIRECTIONS ON QUESTIONS OF POLICY AS MAY BE GIVEN TO IT BY THE 12 GOVERNMENT OF PUNJAB. THE DECISION OF THE GOVERNMEN T OF PUNJAB WHETHER A QUESTION IS OR IS NOT A MATTER OF POLICY SHALL BE FINAL. SUCH DIRECTIONS SHALL BE IN WRITING''. THESE IMPINGE ON THE INDEPENDENCE OF THE SOCIETY. I N ORDER TO QUALIFY TO BE TREATED AS AN ENTITY CAPABLE O F REDEEMING ITS CHARITABLE INTENT AND EXISTING FOR THE BENEFIT OF PUBLIC AT LARGE, INDEPENDENCE OF THAT ENTITY IS A S INE QUA NON. THE VARIOUS CLAUSES OF THE MOA OF THE SOCIETY A S WELL AS THE COMPOSITION ENABLE THE GOVERNMENT TO ISSUE DIRECTIONS, INQUIRE INTO THE AFFAIRS AND CONTROL TH E FINANCES OF THE APPLICANT. TO THAT EXTENT THE SOCIETY'S FUNCT IONAL INDEPENDENCE IS IMPINGED AND THE SAME SEEMINGLY IS NOT AMENABLE TO INDEPENDENT DECISION MAKING. THE COMPOSITION OF THE SOCIETY IS AGAIN DRAWN FROM THE GOVERNMENT DEPARTMENTS AND. TO THAT EXTENT IS A CONTINUATION OF THE SAID DEPARTMENT. THERE IS NO SC OPE FOR PUBLIC PARTICIPATION IN THE COMPOSITION OF SUCH SOC IETY. 10. IN THE INSTANT CASE, GIVEN ALL OF THE ABOVE IT IS CLEARLY HELD THAT THE APPLICANT'S ACTIVITIES DON'T FIT INTO THE ESTABLISHED DEFINITIONS OF CHARITABLE PURPOSES. LAC K OF COMMERCIAL INTENT DOES NOT IN ANY WAY MEAN THAT THE ACTIVITIES ARE CHARITABLE. THE CONCEPT OF CHARITY T HAT ENTAILS EXEMPTION FROM TAXATION CAN'T BE STRETCHED AND ATTACH ED TO ANYTHING THAT IS ALTRUISTIC. FURTHER, THE ACTIONS O F THE APPLICANT DON'T FLOW FROM AN ALTRUISTIC INTENT BUT ARE PART OF STATUTORY OBLIGATIONS. REDEEMING ONE'S STATUTORY FU NCTIONS CAN'T BE PASSED OFF AS CHARITY. IN LIGHT OF THE ABOV E IT IS HELD THAT THE OBJECTS AND THE ACTIVITIES ARE NOT CHARITABLE AS ENVISAGED IN SECTION 2(15) OF THE INCOME TAXACT,1961. IMPARTING TRAINING TO GOVERNMENT SERVANTS DON'T IN ANY WAY TANTAMOUNT TO QUALIFY AS 'EDUCATION 1 IN THE WAY INTERPRETED BY THE SUPREME COURT IN THE CASE OF SOLE TRUSTEE LOK SIKSHAN SANSTHAN. 14. VIS--VIS HE ABOVE CONTENTION OF THE LD.CIT(E), THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THE FACT THAT T HE APPLICANT-ASSESSEE WAS GOVERNED IN THE DISCHARGE OF ITS FUNCTIONS BY THE GOVERNMENT OF PUNJAB DID NOT TAKE AWAY THE FACT THAT IT HAD BEEN FORMED TO CARRY OUT CHARI TABLE ACTIVITIES AND, THEREFORE, NO ADVERSE VIEW COULD BE TAKEN VIS--VIS EITHER THE OBJECTS OF THE APPLICANT-ASSES SEE OR VIS- -VIS THE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY IT IN PURSUANCE OF THE STATED OBJECTS ON ACCOUNT OF THE 13 AFORESTATED OBSERVATIONS OF THE LD.CIT(E) REGARDING THE INDEPENDENT FUNCTIONING OF THE APPLICANT-ASSESSEE. 15. THE LD. DR, ON THE OTHER HAND RELIED UPON THE F INDINGS OF THE LD.CIT(E). 16. WE HAVE HEARD HE CONTENTIONS OF BOTH THE PARTIE S IN THIS REGARD. WE FIND MERIT IN THE CONTENTION OF TH E LD. COUNSEL FOR ASSESSEE. THE FACT THAT THE ACTIVITIES CARRIED OUT BY THE APPLICANT /ASSESSEE ARE CHARITABLE IN NA TURE BEEN CONFIRMED BY US IN THE EARLIER PART OF THE ORD ER. MERELY BECAUSE THE FUNCTIONING OF THE APPLICANT/ASS ESSEE IS GUIDED BY THE DIRECTIONS GIVEN BY THE GOVERNMENT OF PUNJAB, DOES NOT TAKE AWAY THE CHARITABLE CHARACTER OF THE OBJECTS OF THE ASSESSEE, NOR DO THEY EFFECT THE GEN UINENESS OF THE ACTIVITIES CARRIED OUT BY THE APPLICANT/ASSE SSEE. EVEN IF THE APPLICANT/ASSESSEE IS WORKING UNDER THE DIRECTIONS OF THE GOVERNMENT AS LONG AS THE ACTIVI TIES CARRIED OUT BY IT ARE IN SYNC WITH ITS STATED OBJEC TS, WHICH HAVE BEEN HELD TO BE CHARITABLE BY US IN THE EARLIE R PART OF OUR ORDER AND AS LONG AS THERE IS NO OTHER FINDING VIS--VIS THE GENUINENESS OF THE ACTIVITIES CARRIED BY THE AS SESSEE, THE INDEPENDENCE OF THE ASSESSEE IN DECISION MAKING CANNOT IN ANY WAY EFFECT THE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE APPLICANT/ASSESSEE. THE AFORESAID CONTEN TION OF THE LD.CIT(E) IS, THEREFORE, DISMISSED BY US. 17. THE LD. COUNSEL FOR ASSESSEE THEREAFTER DREW OU R ATTENTION TO PARA 11 OF THE ORDER OF THE LD.CIT(E) POINTING OUT THEREFROM THAT THE GRANT OF REGISTRATION WAS AL SO DENIED 14 FOR THE REASON THAT THE MEMORANDUM OF ASSOCIATION H AD NO DISSOLUTION CLAUSE AS A CONSEQUENCE OF WHICH THE PR OVISIONS OF SECTION 13(1)(C) OF THE ACT WERE CLEARLY ATTRACT ED MAKING THE ASSESSEE INELIGIBLE FOR GRANT OF REGISTRATION U /S 12AA OF THE ACT. THE RELEVANT FINDINGS OF THE LD.CIT(E) IN THIS REGARD ARE AS UNDER: 11. IT IS ALSO OBSERVED THAT THE MOA SUBMITTED BY THE APPLICANT LACKS DISSOLUTION CLAUSE. THE PROVISIONS OF SECTION 13(L)(C) OF THE IT ACT STATES THAT 'IN CASE O F A TRUST/ SOCIETY FOR CHARITABLE OR RELIGIOUS PURPOSES OR A CHARITAB LE OR RELIGIOUS INSTITUTION, ANY INCOME THEREOF - (I) IF SUCH TRUST OR INSTITUTION HAS BEEN CREATED O R ESTABLISHED AFTER THE COMMENCEMENT OF THIS ACT AND UNDER THE TERMS OF THE TRUST OR THE RULES GOVERNING THE INSTITUTION, ANY PART OF SUCH INCOME ENURES, OR (II) IF ANY PART OF INCOME OR ANY PROPERTY OF THE T RUST OR THE INSTITUTION (WHENEVER CREATED OR ESTABLISHED) IS DURING THE PRE VIOUS USED OR APPLIED, DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF ANY PERSON REFERRED TO IN SUB-SECTION (3): 18. VIS--VIS THE AFORESAID CONTENTION, THE LD. COU NSEL FOR ASSESSEE STATED THAT THE SAID CLAUSE HAD BEEN AMEND ED BY THE EXECUTIVE COMMITTEE OF THE APPLICANT-ASSESSEE I N ITS MEETING HELD ON 25.11.2008. COPY OF THE MINUTES OF THE MEETING WERE REFERRED TO BEFORE US AND OUR ATTENTIO N WAS DRAWN TO AGENDA ITEM NO.XIX IN THE SAME WHICH STATE D AS UNDER: AGENDA ITEM NO.XIX: ADDITION OF DISSOLUTION CLAUS E IN MEMORANDUM OF ASSOCIATION APPROVED ADDITIONAL AGENDA ITEM NO.I: EMINENT CHAIR DEFERRED ADDITIONAL AGENDA ITEM NO.I: DOCUMENTATION AND PUBL ICATION ACTIVITIES OF THE INSTITUTE. DEFERRED 15 AGENDA ITEM NO.XIX ADDITION IN THE MEMORANDUM OF ASSOCIATION, RULES & REGULATIONS OF MGSIPAP THIS AGENDA SEEKS THE APPROVAL FOR INSERTION OF DISSOLUTION CLAUSE IN MEMORANDUM OF ASSOCIATION, RU LES & REGULATION OF THE INSTITUTE 2. THE INSTITUTE HAD APPLIED FOR REGISTRATION U/S 1 2A OF THE INCOME TAX ACT. 1961 TO GET EXEMPTION U/S 80G OF TH E INCOME TAX ACT. THE COMMISSIONER INCOME TAX HAS INFORMED THAT IT IS PRESENTLY NOT POSSIBLE TO PROCESS THE CASE ON MERIT UNLESS APPROPRIATE DISSOLUTION CLAUSE IN MEMORANDUM OF ASS OCIATION, RULES & REGULATION OF THE INSTITUTE IS INSERTED THAT IN T HE EVENT OF DISSOLUTION OF THIS SOCIETY/ INSTITUTE, ASSETS AND FUNDS OF THE SOCIETY WOULD BE TRANSFERRED TO ANOTHER SOCIETY WITH SIMILAR AIMS & OBJECTIVES. 3. EXECUTIVE COMMITTEE MAY APPROVE TO INSERT THE ABOV E DISSOLUTION CLAUSE IN MEMORANDUM OF ASSOCIATION, RU LES & REGULATION OF THE INSTITUTE. THIS WILL BE PUT UP T O THE GENERAL COUNCIL FOR RATIFICATION LATER ON. 19. THE LD. COUNSEL FOR ASSESSEE STATED THAT IN VIE W OF THE AFORESAID AMENDMENT THE CONTENTION OF THE LD.CIT(E) DID NOT SURVIVE. THE LD. DR COULD NOT CONTROVERT THE S AME. 20. IN VIEW OF THE ABOVE, WE FIND NO MERIT IN THE C ONTENTION OF THE LD.CIT(E) THAT IN THE ABSENCE OF DISSOLUTION CLAUSE IN THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE, THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT WERE ATTR ACTED SINCE THE SAID DISSOLUTION CLAUSE HAD BEEN AMENDED WAY BA CK IN 2008 ITSELF PROVIDING FOR THE TRANSFER OF THE ASSET S AND FUNDS OF THE SOCIETY TO ANOTHER SOCIETY WITH SIMILA R AIMS AND OBJECTS IN THE EVENT OF THE DISSOLUTION OF THE APPLICANT- ASSESSEE. 21. IN VIEW OF THE ABOVE, SINCE NONE OF THE REASONS FOR DENIAL OF REGISTRATION SURVIVE, WE SET ASIDE THE OR DER OF THE LD.CIT(E) AND DIRECT GRANT REGISTRATION U/S 12A OF THE ACT TO THE APPLICANT SOCIETY. 16 22. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS, THEREFORE, ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 9 TH APRIL, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH