Deshpande Educational Trust, Hubli V. CIT, Bangalore

ITA 1402/BANG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9231 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-09-2016
• Assessment Year: misc
• Appeal Filed On: 23-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H N KHINCHA
• Keywords: Charitable institution; Cancellation of registration
• Section: 80G; 12AA

Judgement Text

ITA.1402/BANG/2015 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI. S. JAYARAMAN, ACCOUNTANT MEMBER I.T.A NO.1402/BANG/2015 (ASSESSMENT YEAR : NA) DESHPANDE EDUCATIONAL TRUST, DCSE BUILDING, BVBCET CAMPUS, VIDYANAGAR, HUBLI 580 031 .. APPELLANT PAN : AABTD4450G V. COMMISSIONER OF INCOME TAX (EXEMPTION), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. H. N. KHINCHA, CA REVENUE BY : SHRI. SUNIL KUMAR, VERMA, CIT DR HEARD ON : 23.09.2016 PRONOUNCED ON : 09.12.2016 O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE, A TRUST, AGAINST AN ORDER OF THE CIT (EXEMPTION) (CIT), BENGALURU, DT.31.08.2015 , REJECTING THE APPLICATION FOR RECOGNITION U/S.80G OF THE INCOME T AX ACT, 1961. 02. ASSESSEE FILED AN APPLICATION FOR RECOGNITION U/S.80G ON 05.02.2015. THE CIT NOTICED FROM THE ACTIVITIES OF THE TRUST TH AT IT IS ENGAGED IN CONDUCTING FOLLOWING TRAINING COURSES : 1. DESHPANDE FELLOWSHIP OROGRAM 2. DESHPANDE SUSANDHI KOUTILYA ITA.1402/BANG/2015 PAGE - 2 3. DESHPANDE SUSANDHI FELLOWSHIP 4. DESHPANDI SUSANDHI ELECTRICIAL PROGRAM 5. SUSANDHI KRISHI CHETANA 6. NAVODYAMI 2.1 AFTER GOING THROUGH THE CONTENT AND DETAILS OF THE ABOVE COURSES, THE CIT HELD THAT THE COURSES ARE IN THE NATURE OF PRIV ATE TRAINING COACHING OF VARIOUS SKILLS, THERE IS NO ELEMENT OF NORMAL SCHOO LING OR OBJECT OF EDUCATION WITHIN THE MEANING OF CHARITABLE PURPOSES AS PER SE CTION 2(15) AND IN VIEW OF THAT THE ASSESSEE IS NOT ELIGIBLE FOR RECOGNIT ION U/S.80G(5) . ACCORDINGLY, HE REJECTED THE APPLICATION FOR RECOGN ITION U/S 80G . AGGRIEVED, THE ASSESSEE FILED THIS APPEAL WITH FOLLOWING GROUN DS : 1. THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) , BANGALORE HAS ERRED IN PASSING THE ORDER IN THE MAN NER PASSED BY HIM. THE ORDER SO PASSED BEING BAD IN LAW IS LIA BLE TO BE QUASHED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) . BANGALORE HAS ERRED IN REJECTING THE APPLICATION FI LED FOR RECOGNITION UNDER SECTION 80G OF THE INCOME TAX ACT , 1961. THE REASONS GIVEN BY THE LEARNED COMMISSIONER OF IN COME TAX (EXEMPTIONS), BANGALORE IN REJECTING THE SAID A PPLICATION IS BAD IN LAW AND LIABLE TO BE QUASHED. 3. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCE D AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE ORDER PASSED BY THE LEARNED CIT(E) BE QUASHED OR IN THE ALTERNATIVE THE LEARNED DIT(E) BE DIRECTED TO GRANT RECOGNITION UNDER SECTI ON 80G OF THE INCOME TAX ACT, 1961 TO THE APPELLANT WITH EFFECT F ROM ASSESSMENT YEAR 2015-16 AS PER SECTION 80G(5)(VI) R EAD WITH RULE 11AA OF THE INCOME TAX RULES,1962. 03. WE HEARD THE RIVAL CONTENTIONS AND PERUSED RELE VANT MATERIALS. THE AR SUBMITTED THAT THE CIT, HUBLI HAS REVIEWED THE R EGISTRATION GRANTED TO THE ASSESSEE-TRUST UNDER SECTION 12AA AND PASSED A N ORDER DT.9.5,2012 . ITA.1402/BANG/2015 PAGE - 3 IN THE THAT ORDER , THE CIT HAS GIVEN A FINDING THA T THE ACTIVITIES OF THE ASSESSEE-TRUST DO NOT FALL WITHIN THE AMBIT OF 'CHA RITABLE PURPOSES' AS DEFINED BY THE AMENDED PROVISIONS OF THE SECTION 2( 15) AND HAS THEREFORE WITHDRAWN THE REGISTRATION GRANTED FROM 6.10.2010 I .E. THE DATE FROM WHICH THE REGISTRATION U/S.12AA OF THE ACT. AGGRIEVED, TH E ASSESSEE -TRUST FILED AN APPEAL BEFORE THE TRIBUNAL AND THIS TRIBUNAL ALLOWE D THE ASSESSEES PLEA. THE CIT PASSED THE IMPUGNED ORDER THEREAFTER AND HENCE THAT ORDER SHOULD BE QUASHED . 04. WE HAVE GONE THROUGH THE ORDER. THIS TRIBUNAL I N ITS ORDER ITA NO 857/ BANG/2012 DT 28.03.2013, INTER ALIA, HELD THAT 4.3.3 ..WE FIND THAT THE BASIC CONDITIONS NECESSARY FOR INVOKING THE POWER O F CANCELLATION OF REGISTRATION IN THE CASE ON HAND HA VE NOT BEEN MET / COMPLIED WITH, IN VIEW OF THE ABOVE, WE HOLD THAT THE CIT, HUBLI WAS NOT JUSTIFIED IN CANCELLING THE REGISTRATION UNDER SECTION 12AA(3) OF THE ACT BY AP PLYING THE PROVISO TO SECTION 2(15) OF THE ACT AND THAT TH E ORDER OF CANCELLATION OF REGISTRATION DT.9.5.2012 IN THE PRESENT CASE CANNOT BE SUSTAINED. FOR THE REASONS GIVEN ABO VE, WE QUASH THE IMPUGNED ORDER UNDER SECTION 12AA(3) O F THE ACT DT.9.5.2012 AND THEREBY ALLOW THE ASSESSEE S APPEAL. 4.3.4 AS IT HAS BEEN HELD THAT THE CANCELLATION OF REGISTRATION UNDER SECTION I2 AA(3) OF THE ACT IN T HE CASE ON HAND IS NOT SUSTAINABLE AS THE NECESSARY CONDITI ONS ARE NOT FULFILLED AND THEREBY THE ASSESSEES GRIEVANCE IS ADDRESSED, WE DO NOT SEE ANY REASON TO DEAL WITH QU ESTION NO.(I) (LAID OUT IN PARA 4.3.1 OF THIS ORDER) AS TO WHETHER THE ACTIVITIES OF THE TRUST ARE IN THE NATURE OF TR ADE, COMMERCE OR BUSINESS, AS IT WOULD ONLY BE AN ACADEM IC EXERCISE. ITA.1402/BANG/2015 PAGE - 4 05. SINCE THE ORDER OF THE CIT , AS MENTIONED IN PARA 2, SUPRA, IS CRYPTIC, IT IS SET ASIDE WITH A DIRECTION TO HIM T O PASS A SPEAKING ORDER IN ACCORDANCE WITH THE ACT , AFTER GIVING ADEQUATE OPP ORTUNITY TO THE ASSESSEE. 06. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DAY OF DECEMBER, 2016. SD/- SD/- (VIJAY PAL RAO) (S. JAYARAMAN) JUDICIAL MEMBER A CCOUNTANT MEMBER MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME TAX 4. THE COMMISSIONER OF INCOME TAX (A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR