M/s. B.G. Education Trust, Baroda V. The Income tax Officer,Ward-5(1), Baroda

ITA 1349/AHD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8886 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 18-02-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA SRDR
• Assessee Lawyers: SAURABH N SOPARKAR
• Keywords: Charitable institution; Right to appeal
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.635 & 1349/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING:18.2.10 DRAFTED:22.2.10 B.G. EDUCATION TRUST AMBE VIDYALAYA, VIP ROAD, KARELIBAUG, BARODA PAN NO.AAATB2431Q B.G. EDUCATION TRUST AMBE VIDYALAYA, VIP ROAD, KARELIBAUG, BARODA PAN NO.AAATB2431Q V/S. V/S. COMMISSIONER OF INCOME-TAX-III, 2 ND FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA INCOME TAX OFFICER, WARD-5(1), BARODA (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI SAURABH N SOPARKAR & SHRI BANDISH SOPARKAR, AR REVENUE BY:- SHRI C.K. MISHRA, SR-DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THE FIRST APPEAL BY THE ASSESSEE IS AGAINST THE RE FUSAL OF REGISTRATION U.S.12A(A) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BY THE COMMISSIONER OF INCOME-TAX-III, BARODA. THE SECOND APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME- TAX(APPEALS)-V, BARODA IN APPEAL NO.CAB/(A)-V/150/08-09 DATED 06-03-2009. THE ASSESS MENT WAS FRAMED BY THE ITO WARD-5(1), BARODA U/S.143(3) R.W.S. 147 OF THE ACT, VIDE HIS ORDER DATED 30-12-2008 FOR THE ASSESSMENT YEAR 2006-07. ITA NO635 & 1349/AHD/2009 A.Y. 2006-07 B.G. EDUCATION TRUST V. ITO WD-5(1) BRD PAGE 2 FIRST WE WILL DEAL WITH ITA NO.635/AHD/2009. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AS REGARDS TO THE REGISTRATION U/S.12A(A) OF THE ACT. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING FOUR GROUNDS :- 1. THE ASSESSEE TRUST APPLIED FOR REGISTRATION ON 24.06.2002. THE LEARNED ON. COMMISSIONER OF INCOME TAX-III, BARODA AS NOT P ASSED AN ORDER EITHER GRANTING OR REFUSING REGISTRATION WHICH IS REQUIRED TO BE PASSED UNDER CLAUSE B OF SUB SECTION (1) OF SECTION 12AA BEFORE THE EXPIR Y OF 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) OF SECTION 12A. IN VIEW OF THESE FACTS & ON THE BASIS OF VARIO US LEGAL PRONOUNCEMENTS, IT IS REQUESTED TO YOUR HONOUR TO GRANT REGISTRATION T O THE TRUST. THE ASSESSEE CLAIMS DEEMED TO BE REGISTERED. 2. THE ASSESSEE WAS FILED APPLICATION FOR REGISTRAT ION U/S.12(A) OF THE INCOME TAX ACT, 1961 AND NO ORDER WAS PASSED EITHER REGIST RATION OR REFUSAL BY THE HON. COMMISSIONER OF INCOME TAX III, BARODA. THE APPELLANT PRAYS THAT REGISTRATION UNDER SECTION 12(A) BE GRANTED TO THE APPELLANT. 3. THE TRUST IS REQUESTING YOU TO CONSIDER THE PLEA OF REGISTRATION SINCE FROM APPLICATION MADE ON 24.06.2002. 4. IN THE CIRCUMSTANCES STATED ABOVE THE ASSESSEE T RUST CLAIMS THAT IT IS DEEMED TO BE REGISTERED U/S.12A OF THE INCOME TAX A CT ACCORDING TO THE RATIO LAID DOWN IN VARIOUS JUDICIAL DECISIONS INCLUDING T HE FOLLOWING: 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE STATE D THE FACT THAT APPLICATION FOR REGISTRATION OF TRUST U/S.12A(A) OF THE ACT WAS MAD E ON 21-06-2002 AND THIS WAS NOT DECIDED TILL 15-12-2006, WHICH IS EVIDENT FROM THE INTERNAL COMMUNICATION RECEIVED FROM THE OFFICE OF COMMISSIONER OF INCOME-TAX, CENT RAL -II AHMEDABAD. HE REFERRED TO THE COMMUNICATION WHICH READS AS UNDER:- OFFICE OF THE COMMISSIONER OF INCOME TAX CENTRAL-II, AHMEDABAD ________________________________________ NO. CIT-II/HQ/TRANSFER/REV.AUD./2006-07 DATE : 15.12.2006 THE COMMISSIONER OF INCOME-TAX-III, BARODA SIR, [ATTN. THE ACIT(Q)/ITO(TECH.).BARODA] SUB : APPLICATION FOR REGISTRATION OF CHARITABLE TRUST U/S.12A(A) OF I.T. ACT,1961 IN THE CASE OF B.G. EDUCATION TRUST, VADODARA TRANSFER OF FOL DERS REGARDING KINDLY REFER TO THE ABOVE. 2. IN VIEW OF THE CIT(CENTRAL)-II, AHMEDABADS DECEN TRALIZATION ORDER NO. CIT- II/HQ/DECENT/CC-BRD/2006-07 DTD.31.05.2006 PASSED U /S.127(2) OF THE I.T. ACT, 1961, THE ABOVENAMED CASE AS BEEN DECENTRALIZED TO I.T.O. WARD- 5(2), BARODA, UNDER YOUR CHARGE. I AM, THEREFORE, DIRECTED BY THE CIT-II, AHMEDABAD T O FORWARD THE FOLLOWING FOLDER: ITA NO635 & 1349/AHD/2009 A.Y. 2006-07 B.G. EDUCATION TRUST V. ITO WD-5(1) BRD PAGE 3 NAME & ADDRESS OF ASSESSEE P.A. NO. REMARKS, IF ANY, 1 B.G. EDUCATION TRUST, C/O. AMBE VIDYALAYA, VIP ROAD, KARELIBAUG, VADODARA-390 018, AAATB2431Q APPLICATIONS PENDING: (1)THE ASSESSEES APPLICATION FOR REGISTRATION OF CHARITABLE TRUST U/S.12(A) OF I.T. ACT 1961. (2) ASSESSEES APPLICATION FOR GRANT OF APPROVAL U/S.80G. (3) ASSESSEES APPLICATION FOR FORM NO.56D FOR EXEMPTION U/S. 10(23C)(VI) & (VIA) FOR A.Y. 2002-03 YOURS FAITHFULLY, SD/- (B.S.ALMEL) ITO (TECH). ENCL(S): FOLDER (ONE) FOR C.I.T.(CENTRAL)-II, AHMEDABAD COPY TO 1) THE ADDL. CIT, C.R., BARODA 2) THE ADDL. CIT, RANGE-5, BARODA 3) THE TRUSTEE, B.G. EDU CATION TRUST, C/O. AMBE VIDYALAYA, VI P ROAD KARELIBAUG, GADODARA-39 0 018 ITO(TECH)-II, AHMEDABAD TRANSFER MISC.46 HE STATED THAT ONCE THE SIX MONTH IS ELAPSED FROM T HE DATE OF MAKING OF APPLICATION IN VIEW OF SECTION 12A(A) SUB-SECTION 12AA, THE REG ISTRATION IS DEEMED GRANTED. HE REFERRED TO THE RELEVANT PROVISION OF SECTION 12AA, WHICH READS AS UNDER:- PROCEDURE FOR REGISTRATION. 12AA, (1). (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS R ECEIVED UNDER CLAUSE (A) [ OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A] HE STATED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF DELHI TRIBUNAL, SPEC IAL BENCH IN THE CASE OF BHAGWAD SWARUP SHRI SHRI DEVRAHA BABA MEMORIAL SHRI HARI PARMARTH DHAM TRUST V. CIT (2008) 299 ITR 161 (DELHI) [SB] (AT), WHEREIN IT IS HELD:- THE CONSEQUENCE OF A DECISION THAT IF THE COMMISSI ONER OF INCOME-TAX HAS NOT PASSED THE ORDER WITHIN THE PERIOD OF SIX MONTH S FROM THE END OF THE MONTH IN WHICH THE APPLICATION FOR REGISTRATION WAS FILED THEN REGISTRATION WOULD BE DEEMED TO HAVE BEEN GRANTED MAY NOW BE SEEN. WE HAVE ALREADY REFERRED TO SUB-SECTION (3) OF SECTION 12AA WHICH G IVES POWER TO THE COMMISSIONER OF INCOME-TAX TO CANCEL THE REGISTRATI ON AND HE CAN INVOKE THE SAME IF ENQUIRIES COMPLETED BY HIM BEYOND THE TIME- LIMIT REVEAL THAT THE TRUST/CHARITABLE INSTITUTION IS NOT ENTITLED TO REG ISTRATION. THE ASSESSEE WOULD ITA NO635 & 1349/AHD/2009 A.Y. 2006-07 B.G. EDUCATION TRUST V. ITO WD-5(1) BRD PAGE 4 GET A RIGHT OF APPEAL TO THE TRIBUNAL AGAINST THE S AME. THE MATER WOULD BE THRASHED OUT BEFORE THE TRIBUNAL. APPREHENSIONS WER E EXPRESSED BEFORE US ON BEHALF OF THE DEPARTMENT THAT EVEN A TRUST WHOSE OBJECTS WERE NOT CHARITABLE WOULD GET REGISTRATION BY SUCH DEEMING. THE APPREHENSION IS NOT FULLY JUSTIFIED, BECAUSE THERE IS NOTHING IN LAW TO PREVENT THE COMMISSIONER OF INCOME-TAX FROM MAKING HIS OWN ENQUIRIES EVEN AFTER THE EXPIRY OF THE TIME- LIMIT AND MAKING USE OF THE RESULTS THEREOF TO CANC EL THE REGISTRATION UNDER SUB-SECTION(3). THE CONSEQUENCE WOULD OUT-WEIGHT TH E UNCERTAINTY OR CONFUSION WHICH THE NON-PASSING OF THE ORDER WITHIN THE TIME-LIMIT WOULD INTRODUCE INTO THE WORKING OF THE SYSTEM. LORD SHAW S DICTUM WHICH WE HAVE QUOTED EARLIER WOULD COVER THE CASE. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE A SSESSEE, IN VIEW OF THE GIVEN FACTS, WE DIRECT CIT TO GRANT REGISTRATION U/S.12A(A) OF T HE ACT. ACCORDINGLY, THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. COMING TO ASSESSEES APPEAL ITA NO.1349/AHD/2009. 4. LD. COUNSEL FOR THE ASSESSEE FAIRLY STATED THAT THE ASSESSMENT WAS FRAMED AS TRUST WAS NOT REGISTERED U/S.12A(A) AND DENIED EXEM PTION U/S.11 OF THE ACT. HE FURTHER STATED THAT EVEN THE ENTIRE RECEIPT HAS BEE N ASSESSED AS TAXABLE. ON QUERY, THE LD. SR-DEPARTMENTAL REPRESENTATIVE STATED THAT ISSUE CAN BE REMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR RECONSIDERATION I N THE LIGHT OF FACTS AND AS PER THE PROVISION OF LAW. 5. AFTER HEARING THE RIVAL CONTENTIONS AND GOING TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW, THAT THIS ISSUE BE DECIDED AFRESH AFTER TREATING THE TRUST AS REGISTERED, IN VIEW OF OUR DE CISION ABOVE IN ITA NO.635/AHD/2009. THE ASSESSING OFFICER WILL FRAME THE ASSESSMENT AF TER PROVIDING REASONABLE OPPORTUNITIES OF BEING HEARD TO THE ASSE SSEE BY TREATING THE TRUST AS A REGISTERED TRUST. THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES AS INDICATED ABOVE. 6. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.635/AHD/ 2009 IS ALLOWED AND THAT OF ITA NO.1349/AHD/2009 IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23/02 /2010 (A.N.PHAUJA) (MAHAVIR SING H) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 23/02/2010 ITA NO635 & 1349/AHD/2009 A.Y. 2006-07 B.G. EDUCATION TRUST V. ITO WD-5(1) BRD PAGE 5 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-V, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD