M/s. Safa Educational and Technical Welfare Society, Shahjahanpur V. Commissiner of Income Tax, Faizabad

ITA 137/LKW/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8146 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-06-2014
• Assessment Year: misc
• Appeal Filed On: 19-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: H RAHMAN
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI B. R. JAIN , ACCOUNTANT MEMBER ITA NO. 137/LKW/2012 M/S SAFA EDUCATIONAL AND T ECHNICAL WELFARE SOCIETY SIDHARTHNAGAR V. CIT FAI ZABAD PAN: AAATS4046A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. H. RAHMAN, ADVOCATE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 09.08.2012 DATE OF PRONOUNCEMENT: 28.08.2012 O R D E R PER S UNIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY T HE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX PASSED UNDER SECTION 12AA(1)(B)(II) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'), ON THE FOLLOWING GROUNDS: - 1 . IN THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW, T HE LEARNED COMMISSIONER OF INCOME - TAX, FAIZABAD HAS ERRED IN REFUSING REGISTRATION TO THE APPELLANT - SOCIETY UNDER SECTION 12AA OF THE INCOME - TAX ACT, 1961. THE ACTION OF THE LEARNED COMMISSIONER IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE DIRECTIONS OF THE HON'BLE BENCH OF THE LEARNED TRIBUNAL IN ITA NO.535/LUC/10 DATED 1 - 11 - 2010 WHEREBY THE TRIBUNAL REMANDED THE MATTER TO THE CIT FOR FRESH ADJUDICATION WITHIN TWO MONTHS : - 2 - : AND GIVE HIS COMMENTS HOW AND IN WHAT MANNER THE ACTIVITIES OF T HE APPELLANT WER E NOT CHARITABLE. 2 . ON FACTS AND IN LAW THE LEARNED COMMISSIONER IS NOT JUSTIFIED IN PASSING THE ORDER BEYOND A PERIOD OF SIX MONTHS AS PRESCRIBED UNDER SECTION 12AA AND IN SUCH A SITUATION THE REGISTRATION IS DEEMED TO HAVE BEEN ALLOWED IN VIEW OF T HE DECIS ION OF T HE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SOCIETY FOR PROMOTION OF EDUCATION ADVENTURE SPORTS AND CONSERVATION OF ENVIRONMENT V. CIT 216 1TR 167 (ALLD). 3 . THE LEANED COMMISSIONER IS NOT JUSTIFIED IN CONSIDERING FRESH MATTER IN THE SET ASIDE PROC EEDING APART FROM THAT CONTAINED IN THE ORDER OF THE APPELLATE AUTHORITY. 2 . THE BRIEF FACTS BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE HAD MOVED AN APPLICATION UNDER SECTION 12A OF THE ACT ON 9.12.2009 IN FORM NO.10A FOR REGISTRATION UNDER SECTION 12A OF THE ACT. THIS APPLICATION WAS REJECTED BY THE LD. COMMISSIONER OF INCOME - TAX VIDE HIS ORDER DATED 24.6.2010. AGGRIEVED WITH THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 1.11.2010 ALLOWED THE AP PEAL OF THE ASSESSEE AND DIRECTED THE LD. COMMISSIONER OF INCOME - TAX TO DECIDE THE MATTER AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE SET ASIDE PROCEEDINGS, THE ASSESSEE HAD PRODUCED FINANCIAL STATEMENTS FOR THE YEARS ENDING ON 31.3.2007 AND 31 .3.2008, IN WHICH LAND VALUED AT ` 29,50,110 AND BUILDING VALUED AT ` 57,10,315 HAVE BEEN SHOWN AS PART OF THE ASSETS OF THE SOCIETY. IN THE PREVIOUS PROCEEDINGS NO EVIDENCE REGARDING OWNERSHIP OF ASSETS WERE FURNISHED. THE LD. COMMISSIO NER OF INCOME - TAX, HOWEVER, AGAIN ASKED THE ASSESSEE TO FURNISH RELEVANT EVIDENCE TO PROVE THAT AS TO HOW THE ASSESSEE HAD ACQUIRED THE SE ASSETS. THE ASSESSEE FILED 18 DIFFERENT INSTRUMENTS OF : - 3 - : TRANSFER OF PROPERTY, MOST OF WHICH ARE SALE DEEDS WHEREFROM T HE LD. COMMISSIONER OF INCOME - TAX NOTED THAT APART FROM 2 OR 3 INSTRUMENTS ALL OTHER DEEDS ARE IN FAVOUR OF ISLAMIC AHL - E - HADIS CENTRE (BEDULAGARH) SCHOOL. THE LD. COMMISSIONER OF INCOME - TAX ALSO NOTED THAT FROM THE PERUSAL OF DOCUMENTS IT IS NOT CLEAR NOR IT HAD BEEN EXPLAINED AS TO HOW THESE INSTITUTIONS ARE PART OF THE ASSESSEE - SOCIETY. BEING NOT CONVINCED WITH THE DOCUMENTARY EVIDENCE, THE LD. COMMISSIONER OF INCOME - TAX AGAIN FO RMED A VIEW THAT THE ASSESSEE DID NOT FULFILL THE CONJUNCTIVE TEST MANDA TED BY LAW WHEREBY THE OBJECTS HAVE TO BE CHARITABLE AND ACTIVITIES GENUINE FOR CLAIMING REGISTRATION. THE LD. COMMISSIONER OF INCOME - TAX ALSO OBSERVED THAT NO EVIDENCE WAS FILED IN SUPPORT OF EXPENSES CLAIMED BY THE ASSESSEE EXCEPT SALE VOUCHERS. 3 . AGGRIEV ED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT FROM THE OBJECTS OF THE SOCIETY, IT IS CLEAR THAT THE ASSESSEE - SOCIETY WAS CREATED FOR CHARITABLE PURPOSES AND WHILE GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT , O NLY THE OBJECTS OF THE SOCIETY ARE TO BE SEEN AND NOT THE APPLICATION OF FUND. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO FILED SOME COPIES OF SALE DEEDS AND REGISTRATION CERTIFICATE S ISSUED BY THE AUTHORITIES IN THE NAME OF THE SCHOOL BEING RUN BY THE ASS ESSEE - SOCIETY. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO SUBMITTED THAT THE TRIBUNAL VIDE ITS ORDER DATED 1.11.2010 HAS GIVEN DIRECTION TO THE LD. COMMISSIONER OF INCOME - TAX TO PASS AN ORDER WITHIN A PERIOD OF TWO MONTHS AFTER AFFORDING OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE, BUT THE LD. COMMISSIONER OF INCOME - TAX DID NOT PASS THE ORDER WITHIN THE PRESCRIBED PERIOD. THEREFORE, REGISTRATION UNDER SECTION 12A A OF THE ACT DEEMED TO HAVE BEEN GRANTED TO THE ASSESSEE - SOCIETY. 4 . IN REBUTTAL, THE LD. D.R. EMPH ATICALLY DISPUTED THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WITH THE SUBMISSION THAT THERE IS NO PROVISION UNDER THE A CT WHICH SAYS IF THE ORDER IS NOT PASSED WITHIN THE : - 4 - : PERIOD PRESCRIBED BY THE APPELLATE AUTHORITIES, RELIEF SOUGHT FOR DEEMED TO H AVE BEEN GRANTED TO THE ASSESSEE. HE HAS ALSO INVITED OUR ATTENTION TO THE TWO COPIES OF SALE DEED AND CERTIFICATE ISSUED BY THE AUTHORITIES WITH THE SUBMISSION THAT ONE SALE DEED WAS EXECUTED IN THE NAME OF MADRASA AL SAFA AL ISLAMIYA (AHLE ADEES) DUMARI YAGANJ THROUGH MANAGER, ABDUL WAHEED S/O SHRI. ABDUL QUDD U S SAKIN. THE SECOND SALE DEED WAS EXECUTED IN FAVOUR OF ISLAMIYA AHLE HADEES CENTRE (SAFA SCHOOL) BAIDOLGARH THROUGH MANAGER SHRI. ABDUL WAH E ED S/O SHRI. ABDUL QUDDUS SAKIN . THE CERTIFICATE BY THE DISTRICT MINORITY WELFARE OFFICER, SIDHARTH NAGAR WAS ISSUED IN FAVOUR OF ZIA JUNIOR HIGH SCHOOL, FAIZ NAGAR, SIDHARTH NAGAR AND SAFA SHARIYAT COLLEGE, BADOLGADH POST, DUMARIYAGANJ. FROM THE PERUSAL OF THESE DOCUMENTS, IT IS NOT CLEAR WHETHER ALL THESE E DUCATIONAL INSTITUTIONS ARE BEING RUN BY THE ASSESSEE - SOCIETY. T HE SALE DEEDS WERE ALSO EXECUTED IN THE NAME OF A PERSON OTHER THAN THE ASSESSEE - SOCIETY. THEREFORE, IT CANNOT BE SAID THAT ALL THESE PROPERTIES ARE OWNED BY THE ASSESSEE AND THE ASSESSEE IS RUNNING VARIOUS EDUCATIONAL INSTITUTIONS. ONUS IS ALWAYS ON THE ASSESSEE TO PLACE RELEVANT EVIDENCE IN SUPPORT OF ITS CONTENTION THAT THE ASSESSEE - SOCIETY IS ENGAGED IN CHARITABLE ACTIVITIES AND ALL THESE EDUCATIONAL INSTITUTIONS ARE BEING RUN BY THE ASS ESSEE - SOCIETY. EVEN BEFORE THE LD. COMMISSIONER OF INCOME - TAX THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE T HOUGH IN THE FINANCIAL STATEMENTS FOR THE YEARS ENDING ON 31.3.2007 AND 31.3.2008 LAND VALUED AT ` 29,50,110 AND BUILDING VALUED AT ` 57,10,315 HAVE B EEN SHOWN AS PART OF THE ASSETS OF THE SOCIETY. 5 . THE LD. D.R. FURTHER CONTENDED THAT NO DOUBT THE LD. COMMISSIONER OF INCOME - TAX HAS TO RESTRICT HIMSELF TO THE OBJECTS OF THE SOCIETY WITH REFERENCE TO ITS ACTIVITIES AND ALSO GENUINENESS OF THE SOCIETY. UND ISPUTEDLY THE SOCIETY WAS CREATED IN THE YEAR 2003 BUT THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT WAS MOVED ONLY ON 9.12.2009. THEREFORE, THE PAST RECORD OF THE SOCIETY IS AVAILABLE BEFORE THE LD. COMMISSIONER OF : - 5 - : INCOME - TAX TO TAKE A DE CISION WITH REGARD TO THE NATURE OF ACTIVITIES OF THE ASSESSEE - SOCIETY. IF CERTAIN ASSETS ARE SHOWN IN THE FINANCIAL STATEMENT TO BE OF THE ASSESSEE - SOCIETY, THE LD. COMMISSIONER OF INCOME - TAX HAS EVERY RIGHT TO EXAMINE AS TO HOW THE ASSETS WERE ACQUIRED BY THE ASSESSEE - SOCIETY IN ORDER TO ASCERTAIN THE GENUINENESS OF THE SOCIETY AND ITS ACTIVITIES. IN THE INSTANT CASE, DESPITE OPPORTUNITIES GIVEN TO THE ASSESSEE, THE ASSESSEE HAS NOT PLACED ANY EVIDENCE TO PROVE THAT THE ASSESSEE - SOCIETY IN FACT ENGAGED IN CHARITABLE ACTIVIT I ES AND ALL THE EDUCATIONAL INSTITUTIONS ARE BEING RUN BY IT. THEREFORE, THE LD. COMMISSIONER OF INCOME - TAX HAS RIGHTLY DENIED REGISTRATION UNDER SECTION 12A OF THE ACT. 6 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT IN THE FIRST ROUND OF APPEAL THE TRIBUNAL HAS REMANDED THE MATTER TO THE LD. COMMISSIONER OF INCOME - TAX WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN AS TO HOW IT HAS ACQUIRED ASSETS SHOWN IN THE FINANCIAL STATEMENTS, THE ONUS IS UPON THE ASSESSEE TO PLACE RELEVANT EVIDENCE IN THIS REGARD. AS PER ORDER OF THE LD. COMMISSIONER OF INCOME - TAX, THE ASSESSEE H AS FILED VARIOUS DOCUMENTS BUT FROM THOSE DOCUMENTS IT IS NOT CLEAR AS TO HOW THIS PROPERTY IS OWNED BY THE ASSESSEE AS THE IMMOVEABLE PROPERTIES ARE PURCHASED BY DIFFERENT INSTITUTIONS AS PER SALE DEEDS. TWO COPIES OF SALE DEEDS ARE ALSO PLACED BEFORE US WHEREFROM IT IS NOTICED THAT THE LAND S WERE PURCHASED BY MADRASA AL SAFA AL ISLAMIYA (AHLE ADEES) DUMARIYAGANJ AND ISLAMIYA AHLE HADEES CENTRE (SAFA SCHOOL) BAIDOLGARH RESPECTSIVELY . WITH REGARD TO OTHER PURCHASES OF IMMOVABLE PROPERTIES , NO EVIDENCE WAS FILED BEFORE US. THE ASSESSEE HAS ALSO FILED TWO CERTIFICATES ISSUED BY THE DISTRICT MINORITY WELFARE OFFICER TO ZIA JUNIOR HIGH SCHOOL, FAIZ NAGAR, SIDHARTH NAGAR AND SAFA SHARIYAT COLLEGE, BADOLGADH POST, DUMARIYAGANJ. NO DOCUMENT IS FILED BEFORE US W HEREFROM IT CAN BE DISCERNED THAT THE SE : - 6 - : INSTITUTIONS BELONGED TO THE ASSESSEE. NO ARGUMENT WAS RAISED DISPUTING THE FINANCIAL STATEMENTS REFERRED BY THE LD. COMMISSIONER OF INCOME - TAX IN HIS ORDER AND AS PER FINANCIAL STATEMENTS FOR THE YEARS ENDING ON 31 .3.2007 AND 31.3.2008 LAND VALUED AT ` 29,50,110 AND BUILDING VALUED AT ` 57,10,315 HAVE BEEN SHOWN AS PART OF THE ASSETS OF THE SOCIETY. BUT TO PROVE THAT THESE ASSET S WERE ACQUIRED BY THE ASSESSEE, NO EVIDENCE WAS FILED EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US. THOUGH THE ASSESSEE HAS RAISED ORAL SUBMISSIONS THAT THE EDUCATIONAL INSTITUTIONS ARE RUN BY THE ASSESSEE - SOCIETY, BUT NO EVIDENCE IS PLACED ON RECORD TO PROVE THE S E FACT S . IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO PROVE THE REAL NATUR E OF ACTIVITIES OF THE ASSESSEE, IT HAS BECOME VERY DIFFICULT TO APPRECIATE THE ARGUMENTS OF THE ASSESSEE THAT THE ASSESSEE - SOCIETY IS ENGAGED IN CHARITABLE ACTIVITIES. IT IS NOT A CASE WHERE THE ASSESSEE HAS MOVED THE APPLICATION FOR REGISTRATION UNDER S ECTION 12AA OF THE ACT IMMEDIATELY AFTER CREATION OF THE SOCIETY WHERE THE LD. COMMISSIONER OF INCOME - TAX HAS NO MATERIAL TO EXAMINE THE ACTIVITIES OF THE ASSESSEE EXCEPT RECITAL OF THE OBJECTS OF THE SOCIETY. THE SOCIETY WAS CREATED ON 3.3.2003 AND APPLI CATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WAS MOVED ON 9.12.2009. THEREFORE, PAST RECORD RELATING TO THE ACTIVITIES OF THE ASSESSEE - SOCIETY W AS AVAILABLE BEFORE THE LD. COMMISSIONER OF INCOME - TAX WHILE ADJUDICATING THE ISSUE OF REGISTRATION UN DER SECTION 12A OF THE ACT WHEREFROM THE LD. COMMISSIONER OF INCOME - TAX HAS NOTED THAT THE ASSESSEE HAS ACQUIRED CERTAIN ASSETS. HE WAS WITHIN HIS POWERS TO CALL FOR RECORD WITH REGARD TO ACQUISITION OF ASSETS. WHEN THE ASSESSEE WAS ASKED TO PRODUCE RELE VANT RECORD WITH REGARD TO THE ACQUISITION , NO EVIDENCE WAS PLACED BEFORE HIM TO PROVE THAT THE ASSETS SHOWN IN THE FINANCIAL STATEMENTS WERE ACQUIRED BY THE ASSESSEE. MOREOVER, WHATEVER DOCUMENTS ARE FILED BEFORE US, THEY RELATE TO THIRD PARTIES AND NO E VIDENCE IS PLACED ON RECORD TO ESTABLISH THAT THIRD PARTIES I.E. EDUCATIONAL INSTITUTIONS IN FACT BELONG TO THE ASSESSEE. DESPITE : - 7 - : REMANDING THE MATTER BACK TO THE LD. COMMISSIONER OF INCOME - TAX, THE ASSESSEE HAS NOT IMPROVED HIS CASE BY PLAC ING RELEVANT E VIDENCE ON RECORD. THEREFORE, WE DO NOT FIND ANY MERIT IN THE CASE OF THE ASSESSEE. IT IS SETTLED POSITION OF LAW THAT ONUS ALWAYS LIES UPON THE ASSESSEE TO PROVE THAT THE ASSESSEE IS ENGAGED IN CHARITABLE ACTIVITIES. WHEN THE ASSESSEE IS FAILED TO PLAC E RELEVANT EVIDENCE, THE LD. COMMISSIONER OF INCOME - TAX HAS JURISDICTION TO REFUSE GRANT OF REGISTRATION. IN THE INSTANT CASE, WHEN THE ASSESSEE HAS NOT FILED RELEVANT EVIDENCE TO PROVE THE NATURE OF ACTIVITIES BY PLACING RELEVANT EVIDENCE ON RECORD AND A LSO TO PROVE THE EX PENSES INCURRED BY IT, THE LD. COMMISSIONER OF INCOME - TAX HA S RIGHTLY REFUSED TO GRANT REGISTRATION UNDER SECTION 12A OF THE ACT. WE, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX. ACCORDINGLY, THE ORD ER OF THE LD. COMMISSIONER OF INCOME - TAX IS CONFIRMED. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.8.2012. S D/ - S D/ - [B. R. JAIN ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.8.2012 JJ: 2308 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR