M/s. Veerangna Avanti Bai Mahila Chikitsalay, Lucknow V. The Commissioner of Income Tax-II, Lucknow

ITA 14/LKW/2013

• Counselvise Citation: 1423714 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-05-2014
• Assessment Year: misc
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Keywords: Charitable institution; Opportunity of being heard; Benefit of exemption
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 14 & 15/LKW/2013 M/S VEERANGNA AVANTI BAI MAHILA CHIKITSALAY GOLAGANJ LUCKNOW V. C IT - II LUCKNOW PAN: AABAR3140E (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. SHUBHAM RASTOGI, C.A. RESPONDENT BY: SHRI. VIVEK MISHRA, CIT (DR) DATE OF HEARING: 01.05.2014 DATE OF PRONOUNCEMENT: 07 .0 5 .2014 O R D E R PER SUNIL KUMAR YADAV: TH ESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE ORDERS OF THE LD. COMMISSIONER OF INCOME - TAX DENYING REGISTRATION UNDER SECTION 12AA(1)(B)(II) AND APPROVAL UNDER SECTION 80G(5) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 2 . DURI NG THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE LD. COMMISSIONER OF INCOME - TAX HAS DENIED REGISTRATION TO THE ASSESSEE - SOCIETY UNDER SECTION 12AA OF THE ACT HAVING RELIED UPON THE PROVISO TO SECTION 2(15) OF TH E ACT , AS THE RECEIPTS FROM THE ACTIVITIES ARE MORE THAN RS.25 LAKHS, WHEREAS THE LD. COMMISSIONER OF INCOME - TAX WAS REQUIRED TO EXAMINE THE OBJECTS OF THE ASSESSEE - SOCIETY. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THE ASSESSEE - SOCIETY WAS CREATED PURSUANT TO THE DIRECTIONS OF THE STATE GOVERNMENT AND PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : REGISTRATION UNDER SECTION 12A OF THE ACT WAS EARLIER GRANTED TO THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10. COPY OF THE SAME IS ALSO PLACED ON RECORD. THEREFORE, IT CANNOT BE SAID THAT THE OBJ ECTS OF THE ASSESSEE - SOCIETY ARE NOT FOR CHARITABLE PURPOSES. 3 . THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE ASSESSEE HAS BEEN RECEIVING USER CHARGES FROM D IFFERENT SOURCES AND THIS YEAR COLLECTION OF USER CHARGES W ERE AT RS.25,36,928/ - . THEREFOR E, PROVISO TO SECTION 2(15) OF THE ACT IS ATTRACT ED AND THE LD. COMMISSIONER OF INCOME - TAX HAS RIGHTLY DENIED REGISTRATION UNDER SECTION 12A A OF THE ACT AND APPROVAL UNDER SECTION 80G OF THE ACT. 4 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISS IONS AND FROM A CAREFUL PERUSAL OF THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX, WE FIND THAT THE LD. COMMISSIONER OF INCOME - TAX HAS DENIED REGISTRATION UNDER SECTION 12A A OF THE ACT HAVING INVOKED THE PROVI SO TO SECTION 2(15) OF THE ACT, AS USER CHARGE S RECEIVED BY THE ASSESSEE WAS ABOUT RS.25,36,928/ - , BUT HE HAS NOT EXAMINED THE FACT WHETHER THE OBJECTS OF THE ASSESSEE INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN REL ATION TO A NY TRADE, COMMERCE OR BUSINESS. ALL THESE ASPECTS CAN ONLY BE EXAMINED WHILE GRANTING BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT BY THE ASSESSING OFFICER AND NOT AT THE TIME OF REGISTRATION UNDER SECTION 12A A OF THE ACT. FOR THE SAKE OF R EFERENCE, WE REPRODUCE THE DEFINITION OF CHARITABLE PURPOSE AS GIVEN IN SECTION 2(15) OF THE ACT AS UNDER: - 2( 15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY : PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A C HARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECT IVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY ; PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TWENTY - FIVE LAKH RUPEES OR L ESS IN THE PREVIOUS YEAR 5 . DURING THE COURSE OF HEARING OF THE APPEAL, OUR ATTENTION W AS ALSO INVITED TO THE G.O ISSUED BY THE STATE GOVERNMENT LAYING DOWN PROCEDURES OR GUIDELINES FOR COLLECT ION OF USER CHARGES. IT IS ALSO EVIDENT FROM RECORD THAT THE RE GISTRATION UNDER SECTION 12A OF THE ACT WAS ALSO GRANTED TO THE ASSESSEE - SOCIETY IN ASSESSMENT YEAR 2009 - 10. THEREFORE, THE OBJECTS OF THE ASSESSEE - SOCIETY CANNOT BE DISPUTED THAT IT WAS NOT FOR CHARITABLE PURPOSES. COP Y OF THE BYE - LAWS OF THE ASSESSEE - S OCIETY IS ALSO PLACED ON RECORD WHEREFROM IT IS ALSO EVIDENT THAT THE SOCIETY WAS CREATED FOR CHARITABLE PURPOSES. IN THIS REGARD, A REFERENCE CAN ALSO BE MADE TO THE LETTER OF THE STATE GOVERNMENT DATED 16.11.2006 APPEARING AT PAGES 4 TO 6 OF THE COMPILA TION OF THE ASSESSEE, IN WHICH THE OBJECTS OF THE ASSESSEE - SOCIETY HAS BEEN ILLUSTRATED ALONG WITH THE SOURCE OF COLLECTION OF FUNDS. 6 . ON A CAREFUL PERUSAL OF THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX, WE FIND THAT HE HAS DENIED REGISTRATION UNDER SEC TION 12A OF THE ACT HAVING INVOKED THE PROVISO TO SECTION 2(15) OF THE ACT INSTEAD OF VERIFYING THE OTHER ASPECTS WITH REGARD TO APPLICATION OF FUNDS, ETC. AND CHANGE S IN THE OBJECTS OF THE SOCIETY. PROVISO TO SECTION 2(15) OF THE ACT CAN BE INVOKED BY TH E ASSESSING OFFICER WHILE GRANTING EXEMPTION UNDER SECTION 11 OF THE ACT, BUT NOT AT THE TIME OF GRANT OF REGISTRATION UNDER SECTION 12A A OF THE ACT BY THE LD. COMMISSIONER OF INCOME - TAX . IT IS ALSO EVIDENT FROM THE RECORD THAT THE SOCIETY WAS CREATED PUR SUANT TO THE DIRECTIONS OF THE STATE GOVERNMENT, BUT ALL THESE ASPECTS WERE NOT PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : CONSIDERED BY THE LD. COMMISSIONER OF INCOME - TAX WHILE DENYING REGISTRATION UNDER SECTION 12A A OF THE ACT. WE ARE, THEREFORE, OF THE VIEW THAT THIS MATTER SHOULD BE RESTORED B ACK TO THE LD. COMMISSIONER OF INCOME - TAX FOR RE - ADJUDICATING THE ISSUE OF GRANT OF REGISTRATION UNDER SECTION 12AA (1)(B)(II) OF THE ACT IN THE LIGHT OF THE OBJECTS AND APPLICATION OF FUNDS, ETC. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX AND RESTORE THE MATTER TO HIS FILE FOR RE - ADJUDICATION OF THE ISSUE AFRESH IN TERMS INDICATED ABOVE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7 . THE ISSUE I N ITA NO.15/LKW/2013 IS WITH REGARD TO THE DENIAL OF APPROVAL UNDER SE CTION 80G(5) OF THE ACT BY THE LD. COMMISSIONER OF INCOME - TAX FOLLOWING HIS OWN ORDER FOR DENIAL OF REGISTRATION UNDER SECTION 12AA OF THE ACT. SINCE THE MATTER RELATING TO REGISTRATION UNDER SECTION 12AA OF THE ACT HAS BEEN RESTORED BACK TO THE FILE OF T HE LD. COMMISSIONER OF INCOME - TAX FOR RE - ADJUDICATION, THE ISSUE OF GRANT OF APPROVAL UNDER SECTION 80G OF THE ACT ALSO NEEDS TO BE RE - EXAMINED BY HIM. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) IN THIS REGARD AND RESTORE THE MATTER TO HIS FILE FOR RE - ADJUDICATING OF THE ISSUE OF APPROVAL UNDER SECTION 80G OF THE ACT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN TERMS INDICATED IN ITA NO.14/LKW/2013. 8 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPO SES. ORDER PRONOUNCED IN THE OPEN COURT ON 7.5.2014. S D/ - S D/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH MAY , 2014 JJ: 0105 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )