Ashoka Education Foundation, Nashik V. CIT-I, Nashik

ITA 1294/PUN/2009

• Counselvise Citation: 129424514 RSA 2009
• Duration Of Justice: 5 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Assessee Lawyers: SUNIL U PATH AK
• Keywords: Charitable institution; Benefit of exemption
• Section: 80G; 12A; 12AA; 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.549 & 1294/PN/2009 (ORDER UNDER SECTIONS 80G & 12AA) ASHOKA EDUCATION FOUNDATION ASHOKA HOUSE, S.NO.861, ASHOKA MARG, WADALA, NASHIK 422011 PAN: AABTA3323M . APPELLANT VS. THE COMMISSIONER OF INCOME TAX-1, NASHIK . RESPONDENT APPELLANT BY : SHRI SUNIL U PATHAK RESPONDENT BY : SMT. M.S. VERMA, CIT DATE OF HEARING : 01-12-2014 DATE OF PRONOUNCEMENT : 31-12-2014 ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY THE ASSESSEE ARE AGAINST TWO DIFFERENT ORDERS OF CIT-I, NASHIK, DATED 15.04.2009 AND 09.10.2009 PA SSED UNDER SECTIONS 80G(5) AND 12AA(3) OF THE INCOME TAX ACT, RESPECTIVE LY. 2. THE ASSESSEE IN ITA NO.549/PN/2009, HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT-I, NASHIK, ERRED IN REJECTING THE A PPELLANTS APPLICATION FOR RENEWAL OF CERTIFICATE ISSUED IN TER MS OF PROVISIONS U/S 80G(5)(VI) OF THE I.T. ACT, 1961. 2. THE LEARNED CIT-I, NASHIK ERRED IN INVOKING THE PRO VISIONS OF SEC.13(1)(C) OF THE I.T. ACT, 1961, FOR THE PURPOSES OF IS SUE OF CERTIFICATE U/S 80G(5)(VI) OF THE I.T. ACT, 1961. ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 2 3. THE LEARNED CIT-I, ERRED IN HOLDING THAT, THE PROVI SIONS U/S 13(1)(C) OF THE I.T. ACT, 1961, STOOD VIOLATED FOR THE RE ASONS STATED IN HIS ORDER DT. 15.04.2009. 4. THE LEARNED CIT-I, ERRED IN NOT APPRECIATING THE SU BMISSIONS MADE WITH REFERENCE TO THE APPLICABILITY OF PROVISION S U/S 13(1)(C) R.W.S. 13(2)(B) OF THE I.T. ACT, 1961. 5. APPELLANT CRAVES LEAVE TO ADD / AMEND / ALTER ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. THE ASSESSEE IN ITA NO.1294/PN/2009, HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT-I, NASHIK ERRED IN CANCELING THE CERTI FICATE ISSUED U/S 12AA(1), WITHOUT ANY SPECIFIC SHOW CAUSE N OTICE FOR CANCELLATION U/S 12AA(3) AND WITHOUT REFERENCE TO THE TRUST'S REPLY DT. 15.07.2009. THEREFORE, IT IS PRAYED T O ANNUL THE PROCEEDINGS FOR CANCELLATION U/S 12AA(3). 2.1 THE LEARNED CIT-I, NASHIK, FAILS TO APPRECIATE THAT ON THE APPOINTED DATE OF HEARING ASSESSEE'S REPRESENTATIVE C.A. SHRI PRAVEEN RATHI WENT TO CIT'S OFFICE BUT THE LEARNED C IT WAS OUT OF NASHIK AND SHRI PRAVEEN RATHI WAS INFORMED THAT HE WOULD BE GIVEN NEXT DATE OF HEARING BUT WITHOUT SUCH HEARI NG THE LEANED CIT ERRED IN PASSING THE ORDER U/S 12AA(3) OF THE INCOME TAX ACT,1961. (TO SUBSTANTIATE TH E CLAIM C.A. SHRI PRAVEEN RATHI IS READY TO SUBMIT AN AFF IDAVIT DURING THE HEARING BEFORE ITAT, PUNE.) 2.2 THE ORDER U/S 12AA(3) IS NULL & VOID AND BE DECLARED A S BAD IN LAW, AS IT VIOLATES THE PRINCIPLES OF NATURAL JUSTI CE BY NOT ALLOWING A REAL OPPORTUNITY OF HEARING. 3. UNDER THE FACTS, CIRCUMSTANCES OF THE CASE AND TH E PROVISIONS OF LAW, THE LEARNED CIT I ERRED IN CANCELING THE CE RTIFICATE ISSUED IN THE NAME OF APPELLANT TRUST U/S 12AA(1) BY USE OF POWERS VESTED IN HIM U/S 12AA(3) OF THE IT. ACT, 1961. THEREFORE, IT IS PRAYED TO CANCEL THE ORDER PASSED B Y THE CIT-I, NASHIK, U/S 12AA(3). 4. THE LEARNED CIT- I, ERRED IN HOLDING THAT, THE PROVIS IONS U/S 13(1)(C) OF THE IT. ACT, 1961, STOOD VIOLATED FOR THE R EASONS STATED IN HIS ORDER DT. 09 10.2009. THEREFORE, IT IS PR AYED TO CANCEL THE ORDER PASSED BY THE CIT U/S 12AA(3) 5. THE LEARNED CIT - I, ERRED IN NOT APPRECIATING THE S UBMISSIONS MADE WITH REFERENCE TO THE APPLICABILITY OF PROVISION S U/S 13(1)(C) R.W.S. 13(2)(B) OF THE IT ACT, 1961, IN THE PR OCEEDINGS BEFORE HIM IN RELATION TO THE MATTER OF RENEWAL OF C ERTIFICATE U/S 80G. ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 3 6. APPELLANT CRAVES LEAVE TO ADD / AMEND / ALTER ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 4. BOTH THE APPEALS RELATING TO SAME ASSESSEE WERE HEAR D TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. 5. THE ASSESSEE IN ITA NO.549/PN/2009 IS AGGRIEVED BY T HE DENIAL OF GRANT OF RENEWAL UNDER SECTION 80G(5)(VI) OF THE ACT. FURTHE R, THE ASSESSEE IN ITA NO.1294/PN/2009 IS AGGRIEVED BY THE ORD ER PASSED BY THE CIT CANCELLING THE REGISTRATION GRANTED TO THE ASSES SEE UNDER SECTION 12AA OF THE ACT. 6. THE ASSESSEE IN ITA NO.549/PN/2009 HAS ALSO RAISED AN ADDITIONAL GROUND OF APPEAL, WHICH READS AS UNDER:- 1. THE ORDER PASSED BY THE LEARNED CIT U/S 80G IS BE YOND THE TIME LIMIT PRESCRIBED IN RULE 11AA(6) AND THUS, THE APPRO VAL U/S 80G SHOULD BE ALLOWED TO BE CONTINUED. 7. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE TRU ST HAD FILED AN APPLICATION UNDER SECTION 80G OF THE ACT IN FORM NO.10G ON 31.03.2008 SEEKING EXTENSION OF EXEMPTION UNDER THE SAID SECTION. TH E ASSESSEE FOUNDATION WAS REGISTERED UNDER SECTION 12AA OF THE ACT W.E.F. 14.07.2005. THE CIT, NASHIK IN VIEW OF THE PROVISIONS OF RULE 11AA OF I.T. RULES, 1962 OBSERVED THAT THE CIT BEFORE GRANTING T HE REGISTRATION UNDER SECTION 80G(5) OF THE ACT HAS TO SATISFY HIMSELF ABO UT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST BY CALLING FOR DOC UMENTS / INFORMATION FROM THE TRUST OR BY MAKING ENQUIRIES. THE FULFILLM ENT OF THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (VI) OF SECTION 80G(5) IS TO BE SEEN BY THE CIT IN ORDER TO DECIDE THE ISSUE OF GRANT OF EXEM PTION TO THE ASSESSEE TRUST. ON ENQUIRIES, THE CIT FOUND THAT THE ASSESSEE FOUN DATION ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 4 HAD GIVEN ITS LAND SITUATED AT GANGAPUR ROAD, NASHIK TO M /S. ASHOKA BUILDCON LTD. (IN SHORT ABL), A LEADING CONTRACTOR AND INFR ASTRUCTURE DEVELOPER. THE CIT ALSO NOTED AS PER THE REPORT OF THE ASSESSING OFFICER THAT SIX TRUSTEES / MEMBERS OF THE ASSESSEE FOUNDATION HELD POSITIONS OF DIRECTORS IN M/S. ABL. DURING THE COURSE OF ENQUIRY, IT WAS FURTHER NOTICED THAT M/S. ABL WAS AWARDED CONTRACT WORK ORDER FROM NASHIK MUNICIPAL CORPORATION ON 22.02.2007 FOR RS.5.67 CRORES FOR C ONSTRUCTION OF COLLEGE ROAD IN NASHIK. THEREAFTER, A READY MIX CONCRE TE (IN SHORT RMC) PLANT WAS SET UP ON 6000 SQ. MTRS. OF LAND BELONGING TO THE ASSESSEE. THE RMC PLANT STARTED SUPPLYING MATERIAL FOR T HE CONSTRUCTION OF COLLEGE ROAD WHICH WAS TO BE COMPLETED WITHIN TIME SCHED ULE. THE ASSESSING OFFICER FURTHER REPORTED THAT THE RMC PLANT WAS STILL OPERATIONAL EVEN AFTER THE EXPIRY OF TWO YEARS FROM THE DATE OF INSTALLATION. THE RMC PLANT ESTABLISHED ON THE TRUST LAND, W AS FOUND TO BE SUPPLYING READY MIX CONCRETE TO M/S. ABL AND ALSO FO R SALE OF CONCRETE TO OUTSIDE PARTIES. THE ASSESSING OFFICER OF THE ASSESSEE FOUNDATION TOOK THE PHOTOS OF RMC PLANT WHICH HAVE BEEN SCANNED AND MADE PART OF THE ORDER OF CIT AT PAGES 4 AND 5. THE CIT VIDE PARA 4 NOTED THAT THE OBJECTS OF THE ASSESSEE TRUST WERE FOR THE PROMOTION OF EDUCATIONAL ACTIVITIES AND NOWHERE IN THE MEMORANDUM OF AS SOCIATION, THERE WAS ANY MENTION OF AN OBJECT FOR PROMOTING INDUSTR IAL ACTIVITIES LIKE INSTALLATION OF RMC PLANT. 8. THE CIT FURTHER OBSERVED THAT THE MEMORANDUM OF ASS OCIATION DOES NOT ALLOW THE TRUSTEE TO FACILITATE SETTING UP OF RMC PLANT ON SCHOOL LAND. FURTHER, IN THE COURSE OF ENQUIRY, THE ASSESSING OFFICE R ALSO HAD FOUND AND REPORTED THAT THE ASSESSEE TRUST HAD NOT O BTAINED PERMISSION OF CHARITY COMMISSIONER UNDER SECTION 36 OF THE BOMBAY PU BLIC TRUST ACT ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 5 FOR LEASING OUT THE LAND OR BUILDING TO OUTSIDE PARTIES. FUR THER, NO PERMISSION WAS OBTAINED FROM NASHIK MUNICIPAL CORPORATION BE FORE ALLOWING M/S.ABL TO SET UP THE RMC PLANT. ALSO NECESSARY CLEARANCE FROM THE ENVIRONMENTAL AUTHORITY WAS NOT OBTAINED AND TH ERE WAS LITIGATION WITH THE AFORESAID AUTHORITIES ON THE ISSUE OF INS TALLATION OF RMC PLANT ON SCHOOL LAND. THE CIT WAS OF THE VIEW THAT W HERE THE ASSESSEE TRUST HAD USED OR APPLIED, DIRECTLY OR INDIRECTL Y THE PROPERTY OF THE TRUST FOR THE BENEFIT OF THE PERSON(S) REFERRED TO IN SECTION 13(3) R.W.S. 13(1)(C), SECTION 13(2) OF THE ACT, WHETHER IN SUCH CASES, THE ASSESSEE WAS ENTITLED TO THE CLAIM OF EXEMPTION TO BE GRANTED UNDER SE CTION 80G(5) OF THE ACT. THE FACT OF USE OF SCHOOL LAND FOR INDUSTRIAL AND C OMMERCIAL PURPOSES BY THE COMPANY M/S. ABL, WHICH WAS RUN BY THE TRUSTEES WAS NOT REPORTED IN THE AUDIT REPORT FURNISHED BY THE AUDITO R AND ALSO NO INFORMATION IN THIS REGARD WAS GIVEN IN THE STATEMENT OF AC COUNTS. IT WAS QUESTIONED WHETHER IN THE BACKGROUND OF SUPPRESSION OF IN COME IN THE AUDIT REPORT AND THE STATEMENT OF ACCOUNTS, THE TRUST COULD BE PERCEIVED AS TRULY MAINTAINING REGULAR ACCOUNTING OF ITS RECEIPTS AND EXPENDITURE, AS PER SECTION 80G(5) OF THE ACT. THE CIT OBSERVED THA T THE ANSWER TO THE QUESTION WAS NO SINCE THE ASSESSEE TRUST HAD USED ITS IMMOVABLE PROPERTY FOR THE BENEFIT OF SPECIFIED PERSONS REFERRED TO IN SECTION 13(3) OF THE ACT UNDER THE CIRCUMSTANCES, DEFINED IN SECTION 13(2) O F THE ACT, THEREBY RENDERING ITSELF IN-ELIGIBLE FOR EXEMPTION UNDER SECTI ON 11 R.W.S. 80G(5) OF THE ACT. THE ASSESSEE WAS SHOW CAUSED IN THIS REGARD AND ALSO REPORT OF ASSESSING OFFICER OBTAINED. THE CIT HELD THAT TH E CASE OF THE ASSESSEE WAS DIRECTLY HIT BY SECTION 13(1)(C) OF THE ACT A ND HENCE, THE CONDITIONS PRESCRIBED UNDER SECTION 80G(5) OF THE ACT WER E NOT SATISFIED, BECAUSE OF THE FOLLOWING REASONS:- ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 6 (A) THE TRUST DEED (MO) DOES NOT PERMIT THE TRUSTEES TO D EAL WITH THE TRUST LAND IN THE ABOVE MANNER AND THAT TOO, WITHOUT CHARITY COMMISSIONER'S PERMISSION, (B) THE AGREEMENT SINCE NOT REGISTERED UNDER STATE LAW, IS NEITHER VALID NOR RELIABLE, (C) THE DOMINANT PURPOSE IN ALLOWING M/S ABL TO SET U P RMC WAS NOT EDUCATIONAL BUT FOR FACILITATING M/S. ABL'S C ONTRACT WORK AWARDED BY NMC AS WOULD BE APPARENT FROM THE HUR RIED CONDUCT OF THE TRUSTEES TO JUMP ALL PROCEEDINGS OF OBTAINING CHARITY COMMISSIONER'S APPROVAL, WHAT TO SPEAK OF NMC AND ENV IRONMENTAL CLEARANCE, (D) CONSTRUCTION OF SCHOOL BUILDING HAD STARTED IN PHASES LONG BEFORE FEBRUARY 2007. INSTALLATION OF RMC PLANT M FEBRUARY / MARCH, 2007 ON SCHOOL LAND COINCIDES WITH THE AWARD OF CONTRACT TO M/S. ABL, THE COMPANY IN WHICH THE TRUSTEES ARE INTERESTED. THE VE RY TIMING OF AWARD OF CONTRACT TO M/S ABL AND SETTING UP OF RMC PLANT IS A SORDID REMINDER THAT THE TRUSTEE'S SOLE INTENTION WA S TO BENEFIT T HEIR COMPANY M/S. ABL. (E) NO PUBLICITY / ADVERTISEMENT CALLING FOR THE HIGHEST BIDDER FOR LEASE OF LAND WAS GIVEN, AND NO PERMISSION IS TAKEN FROM THE AUTHORITIES CONCERNED. THE PROVISIONS OF THE BOMB AY PUBLIC TRUST ACT ARE DIRECTLY IMPINGED UPON, (F) THE NASHIK MUNICIPAL CORPORATION, A STATUTORY LOCAL AUT HORITY IS TAKEN TO COURT FOR HAVING ISSUED NOTICE FOR REMOVAL OF RMC PLANT. (G) NEITHER THE TRUSTEES NOR THE CHARTERED ACCOUNTANTS A RE EXPLAINING WHY THE RELEVANT COLUMNS IN FORM 10B ANNEXUR E -II(2) ARE LEFT 'NIL', (H) THE TRUSTEES HAVE NOT PROVED IF ANY OTHER EDUCATIO NAL FOUNDATION / TRUST ENJOYING PUBLIC CHARITABLE TRUST STATUS IN NASHIK WOULD ALLOW ITS LAND FOR SETTING UP OF RMC PLANT BY M /S. ABL UNDER SIMILAR TERMS, (I) THE SEQUENCE OF EVENTS PROVE THAT THE TRUSTEES HAVE ALLOWED THEIR COMPANY M/S. ABL TO USE TRUST PROPERTY FOR ITS BENEF IT. IT IS INTERESTING TO NOTE THAT M/S. ABL HAS BEEN PERMITTED TO SELL READY- MIX-CONCRETE TO OUTSIDE PARTIES ALSO BESIDES SUPPLYING TO ROAD CONSTRUCTION AND PURPORTEDLY TO SCHOOL BUILDING CONST RUCTION. 9. THE ASSESSEE IS IN APPEAL AGAINST THE SAID DENIAL OF EXEM PTION UNDER SECTION 80G(5) OF THE ACT. 10. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE POINTED OUT THAT THE ASSESSEE WAS PART OF M/S. ASHOKA BUILDCON LTD ., WHICH IN TURN ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 7 WAS ENGAGED IN CONSTRUCTION BUSINESS. M/S. ABL APPROAC HED THE ASSESSEE FOR USING PART OF ITS LAND FOR THE RMC PLANT AND AS PER THE AGREEMENT, IT WAS AGREED THAT THE READY MIX CONCRETE WOULD BE GIVEN TO THE ASSESSEE @ RS.550/- PER CUBIC METER FOR THE PURPOS E OF CONSTRUCTING THE SCHOOL BUILDING. OUR ATTENTION WAS DRAWN TO THE COP Y OF AGREEMENT PLACED AT PAGE 95 OF THE PAPER BOOK UNDER WHICH, IT WAS AGREED THAT THE READY MIX CONCRETE WOULD BE SUPPLIED TO THE ASSESSEE A T CONCESSIONAL RATES. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE POINTED OUT THAT THE TRUST HAD PASSED A RESOLUTION IN THIS REGA RD AND COPY OF WHICH IN ENGLISH TRANSACTION IS PLACED AT PAGE 100 OF THE PAPER BOOK. 11. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE FURTHER POINTED OUT THAT THE ASSESSEE HAD RECEIVED QUOTATION FO R THE CONVERSION CHARGES FOR RMC MANUFACTURING FROM ONE SHREE CONSTRUCTI ON COMPANY WHICH IN TURN, SAID THAT THE CONVERSION RATE PER CUBIC ME TER WOULD BE RS.750/-. HE DREW OUR ATTENTION TO THE COPIES OF THE BILLS P LACED AT PAGES 131 TO 133 OF THE PAPER BOOK IN WHICH, M/S. ABL HAD SOLD THE RMC AT A PRICE VARYING BETWEEN RS.2842.44 PER CU MTR. TO RS.3,111 .11 PER CU MTR. THE CASE OF THE ASSESSEE BEFORE US WAS THAT BY GIVING P ART OF ITS LAND TO M/S. ABL FOR ESTABLISHING RMC PLANT, IT WAS RECEIVING THE RE ADY MIX CONCRETE AT A LOWER RATE AND THE NOTIONAL WORKING OF THE SAVINGS MADE ON CONVERSION AND TRANSPORTATION COST OF READY MIX CONCRE TE WAS RS.40,35,826/-, AS PER THE DETAILS FILED AT PAGE 115 OF THE PAPER BOOK. I N CASE THE SAID LAND HAD BEEN RENTED OUT, THEN AT BEST, THE ASSESSEE WAS ENTITLED TO RENTAL OF RS.4,62,000/- FOR A PERIOD OF FIVE YEARS AND FOR A PERIOD OF TWO YEARS WORKED OUT TO RS.1,84,800/-. ON THE OTHER HAND, THE COMPENSATION OF CONCESSION RECEIVED BY THE ASSESSEE WAS MORE THAN RS.40,00,000/-. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 8 REFERRED TO THE ORDER OF CIT AND STATED THAT THE RENE WAL OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT WAS NOT ALLOWED TO THE AS SESSEE SINCE THE PERMISSION OF THE CHARITY COMMISSIONER WAS NOT TAKEN. IT WAS POINTED OUT BY HIM THAT THE UNDERSTANDING BETWEEN THE ASSESSE E AND M/S. ABL WAS ONLY A LEASE, FOR WHICH NO PERMISSION WAS REQUIRED TO BE TAKEN. EVEN OTHERWISE, NO APPROVAL FROM THE CHARITY COMMISSIONER DOES NOT VIOLATE THE PROVISIONS OF SECTION 80G(5) OF THE ACT. FURTHER , THE PLEA OF THE ASSESSEE WAS THAT THE SAID PIECE OF LAND WAS GIVEN TO SISTER CONCERN, WHO WAS TO VACATE THE PREMISES IN 2-3 YEARS. IN ANY C ASE, THERE WAS NO VIOLATION OF THE PROVISIONS OF SECTION 13 OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANC E ON FOLLOWING DECISIONS FOR THE PROPOSITION THAT EVEN IF THERE WAS VIOLATIO N OF SECTION 13 OF THE ACT, THERE WAS NO REASON TO REJECT THE GRANT O F EXEMPTION TO THE ASSESSEE:- I) ORPAT CHARITABLE TRUST VS. CIT (2002) 256 ITR 690 (GUJ) II) GEORGE EDUCATIONAL, MEDICAL & CHARITABLE SOCIETY VS . ASST. DIRECTOR OF INCOME TAX (2002) 80 ITD 619 (COCHIN) III) DIRECTOR OF INCOME-TAX (EXEMPTION) V. PARIWAR SEWA SANSTHAN (2002) 254 ITR 268 (DELHI) 12. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE FURTHER STATED THAT SINCE THE ASSESSEE WAS RUNNING SCHOOL, IT WA S CARRYING ON CHARITABLE ACTIVITIES AND HAD NOT VIOLATED THE PROVISIONS OF SECTION 13 OF THE ACT. IN ANY CASE, THE VIOLATION OF PROVISIONS OF SECTION 13 OF THE ACT IS NOT TO BE SEEN FOR GRANT OF REGISTRATION AS HELD IN AGGAR WAL MITRA MANDAL TRUST VS. DIT (EXEMPTION) (2007) 293 ITR (AT) 259 (DELHI). 13. IN RESPECT OF THE ADDITIONAL GROUND OF APPEAL, THE LEARN ED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CIT IS TO DISPOSE OF THE APPLICATION UNDER SECTION 80G OF THE ACT WIT HIN A PERIOD OF ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 9 SIX MONTHS AS STIPULATED UNDER RULE 11AA(VI) OF THE IT RULE S, 1962. THE APPLICATION FOR GRANT OF EXEMPTION WAS FILED ON 31.03.2008 AN D THE FIRST NOTICE WAS ISSUED ON 19.06.2008 AND THE ORDER WAS PASSE D ON 15.04.2009. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT EVEN IF THE TIME TAKEN BY THE ASSESSEE IS EXCLUDED, THEN ALSO IT WAS BEYOND THE PERIOD OF SIX MONTHS. RELIANCE IN T HIS CASE WAS PLACED IN BHAGWAD SWARUP SHRI SHRI DEVRAHA BABA MEMORIAL SHRI HARI PARMARTH DHAM TRUST VS. CIT (2008) 111 ITD 175 (DELHI) (SB ). FURTHER, THE PLEA OF THE ASSESSEE WAS THAT SIMILAR REASONING WOULD APPLY IN RESPECT OF GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE POINTED OUT THAT SECTION 12A OF THE ACT WAS A STATUTORY PROVIS ION AND THE RULES GOVERNING SECTION 80G(5) OF THE ACT WERE SUBORDINATE LEGISLA TION. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FURT HER POINTED OUT THAT THE DECISION IN BHAGWAD SWARUP SHRI SHRI DEVRAHA BA BA MEMORIAL SHRI HARI PARMARTH DHAM TRUST VS. CIT (SUPRA) HAS BEEN REVERSED BY THE HONBLE ALLAHABAD HIGH COURT AND THE MATTER HAS BEEN RE FERRED TO LARGER BENCH, WHICH ALSO APPROVED THAT THE NON-GRANT OF REGISTR ATION WITHIN PERIOD OF SIX MONTHS WOULD NOT RESULT IN ANY DEEMED GRAN T OF REGISTRATION. RELIANCE WAS PLACED UPON THE DECISION IN CIT VS. MUZAFAR NAGAR DEVELOPMENT AUTHORITY (2013) 38 TAXMANN.COM 21 (ALLA HABAD). THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT IN CASE OF REGISTRATION UNDER SECTION 12A OF THE ACT , THE PERIOD OF 12 MONTHS WAS DIRECTORY AND NOT MANDATORY. FURTHER WITH REGARD TO THE GRANT OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT, THE LEA RNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT INVESTIGATION WAS CONDUCTED IN THE CASE OF ASSESSEE AND THERE WERE MANY ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 10 HEARINGS, IN WHICH THE ASSESSEE HAD SOUGHT ADJOURNMENTS AND EVENTUALLY, AN ORDER WAS PASSED ON 15.04.2009. WITH REG ARD TO THE MERITS OF THE CASE, THE LEARNED DEPARTMENTAL REPRESENTA TIVE FOR THE REVENUE POINTED OUT THAT WHEN THERE WAS MATERIAL CHANG E IN THE OBJECTS OF THE SOCIETY AND WHERE THE CIT BECOMES AWARE OF IT, TH EN THE RENEWAL OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT COULD BE DENIED. RELIANCE WAS PLACED ON THE RATIO LAID DOWN IN CIT VS. O.P. JINDAL 290 TAX MANN.COM 70 (P&H) THAT THE OBJECTS OF THE TRUST ARE REQUIRED TO BE GONE THROUGH AT THE TIME OF GRANT OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT. 15. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE IN REJOINDER POINTED OUT THAT THE ASSESSEE WAS ENJOYING THE BENEFIT OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT W.E.F. 01.04.2005 AND ALSO OF REGISTRATION UNDER SECTION 12A OF THE ACT AND ONLY FOR A PERIOD OF TW O YEARS, THE EXEMPTION UNDER SECTION 80G OF THE ACT WAS WITHDRAWN. F URTHER, THE PLEA OF THE ASSESSEE BEFORE US WAS THAT THE TRUST WAS RUNNING COLLEGE IN NASHIK AND THERE WAS NO MERIT IN THE APPLICATION OF THE PR OVISIONS OF SECTION 13(1)(B) OF THE ACT AS THE ASSESSEE HAS NOT PAID A NYTHING EXTRA. FURTHER, PLEA WAS THAT THE PROVISIONS OF SECTION 13 OF TH E ACT WOULD BE VIOLATED IF BENEFIT WAS PASSED AT THE COST OF THE ASSESSEE . IN VIEW THERE BEING NO CHANGE IN THE ACTIVITIES BEING CARRIED ON BY THE TRUST, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT BOTH THE RENEWAL OF REGISTRATION UNDER SECTION 12AA OF THE ACT AND EXEMPTION UNDER SECTION 80G(5) OF THE ACT, MERITS TO BE ALLOWED TO THE ASSESSEE. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAD SOUGHT EXTENSION OF EXEMPTION UNDER SECTIO N 80G(5) OF THE ACT. IN THIS REGARD, THE ASSESSEE FURNISHED THE FORM NO .10G ON 31.03.2008. THE ASSESSEE TRUST WAS REGISTERED UNDER SECTION 1 2AA OF THE ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 11 ACT W.E.F. 14.07.2005. WHILE GRANTING THE SAID EXEMPTION UNDER SECTION 80G(5) OF THE ACT, THE CONDITIONS / REQUIREMENTS FOR THE SA ID APPROVAL ARE ENSHRINED IN RULE 11AA OF THE RULES. THE SAID RULE PROVIDE S THAT THE APPLICATION HAS TO BE MADE IN FORM NO.10G AND IS TO BE AC COMPANIED BY THE FOLLOWING DOCUMENTS:- I) COPY OF REGISTRATION GRANTED U/S.12A OR COPY OF N OTIFICATION ISSUED UNDER SECTION 10(23) AND 10(23C); II) NOTES ON ACTIVITIES OF INSTITUTION OR FUNDS SINCE ITS INCEPTION OR DURING THE LAST THREE YEARS, WHICHEVER IS LESS; III) COPIES OF ACCOUNTS OF THE INSTITUTION OR FUND SIN CE ITS INCEPTION OR DURING THE LAST THREE YEARS, WHICHEVER IS LESS. 17. THE CIT UNDER SUB-RULE 3 TO RULE 11AA OF THE RULES, IS EMPOWERED TO CALL FOR SUCH FURTHER DOCUMENTS OR INFORMATION FROM THE INSTITUTION OR MAKE SUCH ENQUIRIES AS HE MAY DEEM NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OF THE INSTITUTION OR THE FUND. WHERE THE COMMISSIONER IS SATISFIED THAT ALL THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (VI) OF SECTION 80G(5) ARE FULFILLED BY THE INSTITUTION OR THE FUND, HE SHALL RECORD THE SATISFACTI ON AND GRANT APPROVAL TO THE INSTITUTION OR FUND, SATISFYING THE ASSESS MENT YEAR(S), FOR WHICH THE APPROVAL IS VALID, AS PER RULE 11AA(4) OF THE RULES . IN ANY CASE, WHERE THE COMMISSIONER IS SATISFIED THAT ONE OR MORE OF THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (VI) TO SECTION 80G(5) ARE NOT FULFILLED, THEN HE SHALL REJECT THE APPLICATION FOR APPROVAL AFTER RECORDING REASONS FOR SUCH REJECTION IN WRITING. THE SAID POWER IS E NSHRINED IN CIT VIDE RULE 11AA(5) OF THE RULES. FURTHER, IT IS PROVIDED THAT NO ORDER OF REJECTION OF THE APPLICATION SHALL BE PASSED WITHOUT GIVING R EASONABLE OPPORTUNITY OF HEARING TO THE INSTITUTION OR THE FUND. U NDER SUB-RULE (6) TO RULE 11AA OF THE RULES, THE TIME LIMIT WITHIN WHICH THE COM MISSIONER HAS TO PASS AN ORDER OF EITHER GRANTING THE REGISTRATION OR REJECTING THE ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 12 APPLICATION SHALL NOT EXCEED SIX MONTHS FROM THE DATE ON WHICH THE APPLICATION WAS MADE. FURTHER, IT IS PROVIDED THAT IN COMPU TING THE PERIOD OF SIX MONTHS, ANY TIME TAKEN BY THE APPLICANT IN N OT COMPLYING WITH THE DIRECTIONS OF COMMISSIONER UNDER SUB-RULE (3), SHALL BE EXCLUDED. THE CIT IS TO LOOK INTO THE ACTIVITIES OF THE INS TITUTION FOR THE PAST THREE YEARS AND ALSO TO SEE THAT ALL THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (VI) TO SECTION 80G(5) OF THE ACT ARE FULFILLED BY TH E INSTITUTION OR THE FUND. THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (VI) TO SECTION 80G(5) OF THE ACT READ AS UNDER:- (5) THIS SECTION APPLIES TO DONATIONS TO ANY INSTITUT ION OR FUND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB-S ECTION (271(1)(C) OF THE ACT), ONLY IF IT IS ESTABLISHED IN INDIA FOR A CH ARITABLE PURPOSE AND IF IT FULFILS THE FOLLOWING CONDITIONS, NAMELY:- (I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCOM E, SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 11 AND 12 PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCOME, BEING PROFITS AND GAINS OF BUSINESS, THE CONDITION THAT SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 11 SHALL NOT APPLY IN RELATION TO SUCH INCOME, IF- (A) THE INSTITUTION OR FUND MAINTAINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS; (B) THE DONATIONS MADE TO THE INSTITUTION OR FUND ARE NOT USED BY IT, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS; AND (C) THE INSTITUTION OR FUND ISSUES TO A PERSON MAKING TH E DONATION A CERTIFICATE TO THE EFFECT THAT IT MAINTAI NS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS AND THAT THE DONATIONS RECEIVED BY IT WILL NOT BE USED, DIRECTLY OR INDIRECTLY, FOR THE PURPOSE S OF SUCH BUSINESS;]] (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR F UND IS CONSTITUTED DOES NOT, OR THE RULES GOVERNING THE INSTITUTION OR FUND DO NOT, CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME OF THE WHOLE OR A NY PART OF THE INCOME OR ASSETS OF THE INSTITUTION OR F UND FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE; ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 13 (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO B E FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACCO UNTS OF ITS RECEIPTS AND EXPENDITURE; (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED AS A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF I NDIA OR UNDER SECTION 25 OF THE COMPANIES ACT, 1956 (1 OF 1956), OR IS A UNIVERSITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUCATIONAL INSTITUTION RECOGNISED BY THE GOVERNMENT OR BY A UNIVERSITY ESTABLISHED BY LAW, OR AFFILIATED TO ANY UNIVERSITY ESTABLISHED BY LAW, OR IS AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNM ENT OR A LOCAL AUTHORITY; (VI) IN RELATION TO DONATIONS MADE AFTER THE 31ST D AY OF MARCH, 1992, THE INSTITUTION OR FUND IS FOR THE TIME B EING APPROVED BY THE COMMISSIONER IN ACCORDANCE WITH THE RULES MADE IN THIS BEHALF. 18. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSE SSEE WAS RUNNING SCHOOLS, VOCATIONAL COURSES, COLLEGES, ETC. AND AS P ER THE LIST ANNEXED AT PAGE 3 OF THE PAPER BOOK, WHICH READ AS UNDER:- NAME ACTIVITY ASHOKA UNIVERSAL SCHOOL PRE-PRIMARY, PRIMARY & SECO NDARY SCHOOLS (ICSE & GOVT OF MAHARASHTRA RECOGNIZED) ASHOKA INTERNATIONAL CENTRE FOR EDUCATIONAL STUDIES & RESEARCH B. ED COLLEGE (SNDT, NCTE & GOVT. OF MAHARASHTRA RECOGNISED) ASHOKA INSTITUTE OF MANAGEMENT & TECHNOLOGY MASTER OF COMPUTER MGMT & PG DIPLOMA IN COMPUTER MGMT (PUNE UNIVERSITY & GOVT. OF MAHARASHTRA RE COGNIZED) ASHOKA INSTITUTE OF MANAGEMENT RESEARCH & TECHNOLOGY MBA (PUNE UNIVERSITY, GOVT. OF MAH & AICTE RECOGNIZED) ASHOKA CENTRE FOR BUSINESS & COMPUTER STUDIES BBA, BCA & MCA (PUNE UNIVERSITY & GOVT OF MAH ASHOKA TRAINING INSTITUTE VOCATIONAL COURSES CENTRE FOR EXCELLENCY IN SCIENCE & MATHEMATICS GUIDANCE FOR COMPETITIVE EXAMINATION STUDIES. 19. THE ASSESSEE CAME INTO EXISTENCE IN THE YEAR 2005 A ND WAS ENJOYING THE EXEMPTION UNDER SECTION 80G(5) OF THE ACT FRO M INCEPTION. THE ASSESSEE TRUST WAS ALSO REGISTERED UNDER SECTION 1 2A OF THE ACT AND ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 14 THE COPY OF REGISTRATION CERTIFICATE DATED 14.07.2005 GRANT ED UNDER SECTION 12A OF THE ACT IS PLACED AT PAGE 25 OF THE PAPER BOOK. THE COPY OF EXEMPTION CERTIFICATE UNDER SECTION 80G(5) OF THE ACT GRA NTED FOR THE PERIOD 01.04.2005 TO 31.03.2008 VIDE ORDER DATED 14.07.2005 IS PLACED AT PAGE 26 OF THE PAPER BOOK. THE ASSESSEE WAS GETT ING ITS ACCOUNTS AUDITED AS PER THE REQUIREMENTS OF THE ACT AND THE COP Y OF THE BALANCE SHEETS FOR THE YEARS ENDING 31.03.2007 AND 31.03.2008 ALON G WITH AUDIT REPORT ARE PLACED AT PAGES 27 TO 94 OF THE PAPER BOOK. 20. THE ASSESSEE ON 03.02.2007 ENTERED INTO AN AGREEME NT WITH M/S. ASHOKA BUILDCON LTD. WHICH WAS A SISTER CONCERN OF THE AS SESSEE, IN WHICH IT WAS AGREED UPON THAT PART OF THE LAND OWNED BY THE ASSESSEE WOULD BE HANDED OVER TO M/S. ABL FOR PUTTING UP A PLANT FOR MANUFACTURE OF READY MIX CONCRETE. IN TURN M/S. ABL WO ULD SUPPLY RMC REQUIRED BY THE ASSESSEE FOR THE CONSTRUCTION OF ITS SCHOOL BUILDING ON PRIORITY AND AT CONCESSIONAL RATES TO THE ASSESSEE. M/S. ABL HAD BEEN ISSUED A TENDER BY NASHIK MUNICIPAL CORPORATION FOR T HE CONSTRUCTION OF A ROAD BY USE OF READY MIX CONCRETE ON LY AND AT THE RELEVANT TIME, THERE WAS NO READY MIX CONCRETE MANUFACT URING PLANT IN AND AROUND NASHIK. THE ASSESSEE HANDED OVER AN AREA OF 6000 SQ. MTRS. TO M/S. ABL TO PUT UP A RMC PLANT AND IT WAS AGREED UP ON BETWEEN THE PARTIES THAT THE MATERIAL I.E. RMC WOULD BE SUPPLIED AT CONC ESSIONAL RATE OF RS.550/- PER CU MTR. TO THE ASSESSEE. THE AGREEME NT WAS EXECUTED FOR A PERIOD OF TWO YEARS. THE SAID UNDERSTANDING BETWEEN T HE PARTIES WAS APPROVED BY THE MEETING OF THE TRUST HELD ON 02.02.2007 AND THE COPY OF ENGLISH TRANSLATION OF RESOLUTION NO.4 OF THE SAID MEETING OF T RUST IS PLACED AT PAGES 100 AND 101 OF THE PAPER BOOK. THE AS SESSEE THEREAFTER, HAD APPLIED FOR RENEWAL OF EXEMPTION UNDER SECTION 80G(5) O F THE ACT. ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 15 HOWEVER, THE SAME WAS DENIED BY THE CIT ON THE PREMISE THAT THE ASSESSEE HAD HANDED OVER PORTION OF ITS LAND TO M/S. ABL WITHOUT TAKING ANY PERMISSION FROM THE CHARITY COMMISSIONER AND / OR IN A LLOWING M/S. ABL TO SET UP PLANT IN ITS LAND I.E. THE TRUST PROPERTY WA S USED FOR THE BENEFIT OF M/S. ABL, WHO WERE SELLING THE RMC NOT ONLY TO THE ASSESSEE BUT TO OUTSIDE PARTIES ALSO. THE CIT WAS OF THE VIEW THA T SUCH ARRANGEMENTS WERE HIT BY THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT AND CONSEQUENTLY, THE CONDITIONS PRESCRIBED UNDER SECTION 80 G(5) OF THE ACT WERE NOT SATISFIED. IN VIEW THEREOF, THE RENEWAL OF REGISTRA TION UNDER SECTION 80G(5) OF THE ACT WAS DENIED TO THE ASSESSEE TRUST. 21. WHILE GRANTING THE EXEMPTION OR RENEWAL OF EXEMPTION UN DER SECTION 80G(5) OF THE ACT, THE ROLE OF CIT IS LIMITED TO LOOK IN TO THE NATURE OF ACTIVITIES BEING CARRIED ON BY THE INSTITUTION OR FUND AND THE VIOLATION IF ANY, OF THE PROVISIONS OF SECTION 13 OF THE ACT AND ITS VARIOUS SUB- SECTIONS ARE TO BE LOOKED INTO BY THE ASSESSING OFFICER WH ILE DECIDING THE ISSUE OF GRANT OF DEDUCTION UNDER SECTIONS 11 AND 12 OF THE ACT. THE CIT WHILE ISSUING THE EXTENSION OF EXEMPTION UNDER SECTION 80G(5 ) OF THE ACT HAS A LIMITED ROLE TO PLAY I.E. TO SEE WHETHER THE ACTIVITIES OF THE ASSESSEE TRUST WERE CHARITABLE IN NATURE. AS POINTED OUT IN THE P ARAS HEREINABOVE, THE ASSESSEE WAS ENGAGED IN PROMOTING EDUCATIONAL ACTIVIT IES BY WAY OF RUNNING SCHOOLS, COLLEGES, ETC. THE ACTIVITIES CARRIED ON BY THE ASSESSEE WERE PURELY CHARITABLE IN NATURE WHICH ENTITLED IT TO CLAIM THE EXEMPTION UNDER SECTION 80G(5) OF THE ACT. MERELY BECAUSE, THE AS SESSEE HAD ENTERED INTO AN AGREEMENT FOR LEASING OUT THE PART OF IT S LAND TO ITS SISTER CONCERN M/S. ABL FOR ESTABLISHING RMC PLANT WITH THE UNDE RSTANDING THAT THE RMC WOULD BE SUPPLIED TO IT AT CONCESSIONAL RAT ES AND ON PRIORITY BASIS, DOES NOT ESTABLISH THE CASE OF THE CIT THA T THE ASSESSEE ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 16 HAD ALLOWED M/S. ABL TO USE ITS PROPERTY FOR ITS BENEFIT. ON THE OTHER HAND, THE ASSESSEE HAD BENEFITED BY WAY OF RECEIPT OF THE READY MIX CONCRETE FOR THE CONSTRUCTION OF ITS SCHOOL BUILDING AT CON CESSIONAL RATES. THE ASSESSEE HAS TABULATED SUCH BENEFIT OVER THE PERIOD OF THE AGREEMENT AT RS.40,35,856/-. ON THE OTHER HAND, IF THE PORTION OF LA ND MADE AVAILABLE TO M/S. ABL WAS RENTED OUT, THEN THE SAME WOULD HAVE FETCHED VERY LOW RENTALS. IN OTHER WORDS, BY WAY OF THIS ARRANGE MENT, THE ASSESSEE HAS BENEFITED IN GETTING THE RMC AT CONCESSION AL RATES AND SUCH UNDERSTANDING BETWEEN THE ASSESSEE AND M/S. ABL IS NOT IN VIOLATION OF THE PROVISIONS OF SECTION 13 OF THE ACT. 22. EVEN OTHERWISE, WHILE GRANTING THE EXEMPTION UNDER S ECTION 80G(5) OF THE ACT, THE HONBLE GUJARAT HIGH COURT IN ORPAT CHAR ITABLE TRUST VS. CIT (SUPRA) WHILE DECIDING THE ISSUE OF RENEWAL OF CERTIFICATE UNDER SECTION 80G(5) OF THE ACT, HELD THAT EVEN IF THE GROUND ABO UT CONTRAVENTION OF SECTION 11(5) OF THE ACT WAS VALIDLY TAKEN BY THE CIT, THAT WOULD HAVE BEARING ONLY AT THE POINT OF THE ASSES SMENT AND WOULD NOT BE A MATERIAL CONSIDERATION IN SO FAR AS THE GRANTING APPROVAL UNDER SECTION 80G(5) OF THE ACT WAS CONCERNED. 23. FURTHER, THE COCHIN BENCH OF THE TRIBUNAL IN GEORGE E DUCATIONAL, MEDICAL & CHARITABLE SOCIETY VS. ASST. DIRECTOR OF INCOME TA X (SUPRA) HAD HELD THAT WHILE GRANTING REGISTRATION UNDER SECTION 12 A OF THE ACT WHERE THE OBJECTS OF THE ASSESSEE SOCIETY WERE GENUINE , MERELY BECAUSE IT HAD INCURRED CERTAIN EXPENDITURE, WHICH FELL WITHIN THE CATEG ORY OF BENEFIT TO A PERSON UNDER SECTION 13(3) OF THE ACT AND HE NCE, THE ASSESSEE SOCIETY WAS HELD TO BE HIT BY THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT, DOES NOT ENTITLE THE CIT TO DENY THE EXEMPTION OF INCOME CLAIMED UNDER SECTION 11 OF THE ACT. ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 17 24. THE DELHI BENCH OF THE TRIBUNAL IN AGGARWAL MITRA MANDA L TRUST VS. DIT (EXEMPTION) (SUPRA) HELD THAT WHILE GRANTING REGISTR ATION UNDER SECTION 12A OF THE ACT, THE CIT IS TO SATISFY HIMSELF ABOU T THE GENUINENESS OF ACTIVITIES AND OBJECTS OF THE TRUST AND AS SUCH, THE SCOPE OF HIS POWERS WAS LIMITED IN THIS REGARD TO MAKE SUCH ENQ UIRIES AS HE DEEMED TO, IN RESPECT OF THESE TWO ASPECTS. IT WAS FURT HER HELD THAT IF THE COMMISSIONER HAD NOT DOUBTED THE GENUINENESS OF THE ACT IVITIES OF THE TRUST, HE COULD NOT REFUSE THE GRANT OF REGISTRATION UNDE R SECTION 12A OF THE ACT. THE PROVISIONS OF SECTION 13(1) OF THE ACT WOULD B E APPLIED OR INVOKED ONLY AT THE TIME OF COMPUTATION OF TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON WHO WAS CLAIMING DEDUCTION UNDER SECT ION 11 OR 12 OF THE ACT, BY THE ASSESSING OFFICER AND NOT BY THE CIT, WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT. 25. FOLLOWING THE ABOVE PARITY OF REASONING IN THE FACTS OF THE PRESENT CASE, WHERE THE ASSESSEE WAS ENGAGED IN PROMOTION OF E DUCATIONAL ACTIVITIES, WHICH WITH WITHIN THE DOMAIN OF BEING CHARITABLE, THE CIT AT THE TIME OF GRANT OF EXTENSION OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT WAS NOT EMPOWERED TO DENY THE SAID EXEMPTION TO THE ASSESSEE ON THE GROUND THAT IT HAD VIOLATED THE PROVISIONS OF SECTION 13(1) OF THE ACT. IN ANY CASE, THE ARRANGEMENT ENTERED INTO BY THE ASSE SSEE WITH M/S. ABL WAS A BENEFICIAL ARRANGEMENT AND WAS FOR THE PURPOSE O F CARRYING ON THE ACTIVITIES OF THE TRUST BY WAY OF CONSTRUCTION OF THE BUILDIN GS OF THE EDUCATIONAL INSTITUTES TO BE RUN BY THE ASSESSEE, AND WH ERE THERE WAS BENEFIT TO THE ASSESSEE BY WAY OF SUCH ARRANGEMENT, THE SAME DOES NOT ESTABLISHES THAT THE ASSESSEE WAS NOT ENGAGED IN PROVID ING CHARITABLE ACTIVITIES I.E. EDUCATION. IN VIEW THEREOF, WE FIND NO MERIT IN THE ORDER OF ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 18 COMMISSIONER. ACCORDINGLY, WE DIRECT THE COMMISSIONER TO G RANT RENEWAL OF EXEMPTION UNDER SECTION 80G(5) OF THE ACT TO THE ASSESSEE . 26. ANOTHER ASPECT THAT THE SAID RENEWAL OF EXTENSION O F EXEMPTION UNDER SECTION 80G HAD BEEN DENIED TO THE ASSESSEE ONL Y FOR AN INTERVENING PERIOD OF TWO YEARS. PRIOR TO THIS PERIOD AND THEREAFTER, THE ASSESSEE WAS ENJOYING THE EXEMPTION UNDER SECTION 80G(5 ) OF THE ACT. ONLY FOR THE INTERVENING PERIOD OF TWO YEARS WHEN THE AS SESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S. ABL, THE EXTENSION O F EXEMPTION UNDER SECTION 80G(5) OF THE ACT WAS DENIED TO THE ASSESSEE. 27. IN VIEW OF OUR GRANTING THE EXEMPTION UNDER SECTION 80G(5) OF THE ACT TO THE ASSESSEE, WE ARE NOT ADJUDICATING THE ADDIT IONAL GROUND OF APPEAL RAISED BY THE ASSESSEE THAT THE ORDER PASSED B Y THE CIT WAS BEYOND THE PERIOD OF SIX MONTHS AS PRESCRIBED UNDER R ULE 11AA(6) OF THE RULES. 28. THE DENIAL OF REGISTRATION UNDER SECTION 12A OF THE AC T BY WAY OF ORDER PASSED UNDER SECTION 12AA(3) OF THE ACT WAS ON S IMILAR GROUNDS AS IN THE CASE OF EXEMPTION DENIED UNDER SECTION 80G(5) OF THE ACT. IN VIEW OF OUR FINDING IN THE PARAS HEREINABOVE, WE DIRECT THE CIT TO GRANT REGISTRATION UNDER SECTION 12AA OF THE ACT, AS AT THE TIM E OF GRANT OF REGISTRATION, THE CIT WAS ONLY EMPOWERED TO LOOK INTO TH E NATURE OF ACTIVITIES CARRIED ON BY THE ASSESSEE AND WHETHER THE SAME WERE CHARITABLE IN NATURE AND NOT TO LOOK INTO THE APPLICABILITY O F THE PROVISIONS OF SECTION 13(1) OF THE ACT. THE ASSESSING OFFICER WHILE GRANTING THE DEDUCTION UNDER SECTION 11 AND 12 OF THE A CT IS TO LOOK INTO THE VIOLATION OF THE PROVISIONS OF SECTION 13(1) OF THE ACT, IF ANY. THE COMMISSIONER AT THE TIME OF GRANT OF REGISTRATION UNDER SE CTION 12A OF ITA NOS.549 AND 1294/PN/2009 ASHOKA EDUCATION FOUNDATION 19 THE ACT WAS NOT EMPOWERED IN CONSIDERING THE VIOLATION, IF A NY, UNDER SECTION 13(1) OF THE ACT. FURTHER, IN THE PARAS HEREINABOV E, WE HAVE ALREADY GIVEN A FINDING THAT THE AGREEMENT ENTERED INTO B Y THE ASSESSEE WITH M/S. ABL WAS FOR THE BENEFIT OF THE SOCIETY AND THE SAME CANNOT BE THE GROUND FOR DENIAL OF REGISTRATION TO THE ASSESSEE TR UST UNDER SECTION 12A OF THE ACT. THE CIT IS THUS, DIRECTED TO ALLOW THE REGISTRATION UNDER SECTION 12AA OF THE ACT. THE GROUNDS OF APPEAL RAISED B Y THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED. 29. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF DECEMBER, 2014. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 31 ST DECEMBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-I, NASHIK; 4) THE DR A BENCH, I.T.A.T., PUNE; 5) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE