EMMANUEL BIBLEW INSTITUTE SAMITI, Kota V. CIT, Kota

ITA 143/JPR/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6175 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDAR MEHTA
• Keywords: Charitable institution; Principle of natural justice; Question of law; Tangible material; Cancellation of registration; Reason to believe; Reassessment proceedings; Borrowed satisfaction
• Section: 12A; 12AA; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 143/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : .... EMMANUEL BIBLE INSTITUTE SAMITI, KOTA CUKE VS. COMMISSIONER OF INCOME TAX, KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAATCO245R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI RAJEEV SOGANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDAR MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 12/04/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 24/04/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT, KOTA DATED 28.12.2012 PASSED U/S 12AA(3) OF TH E ACT WHEREIN THE REGISTRATION GRANTED U/S 12AA HAS BEEN WITHDRAWN AN D CANCELLED. IN ITS APPEAL AGAINST THE SAID ORDER, THE ASSESSEE IS IN A PPEAL BEFORE US. 2. AT THE OUTSET, IT IS NOTED THAT THIS IS THE SECO ND ROUND OF APPELLATE PROCEEDINGS AGAINST THE CANCELLATION OF REGISTRATIO N U/S 12A(A) OF THE ACT. IN THE EARLIER ROUND, THE CO-ORDINATE BENCH IN ITA NO. 135/JP/2010 ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 2 DATED 21.10.2011 HAS SET ASIDE THE MATTER TO THE FI LE OF LD. CIT WITH THE FOLLOWING DIRECTIONS: ..24. THE ASSESSEE IS SAYING THAT REPORT OF AO HAS NOT BEEN PROVIDED. THE LD. CIT IS USING THAT REPORT AND HENCE NATURAL JUSTICE DEMANDS THAT COPY OF SUCH REPORT TO BE PROVIDED TO ASSESSEE. ON THE GROUND, THE ORDER IS REQUIRED TO BE SET ASIDE TO BE MADE AGAIN. 27. THE HONBLE JURISDICTIONAL HIGH COURT HAS LEFT OPEN THE AUTHORITIES TO TAKE ACTIONS UNDER THE PROVISIONS OF LAW IN CASE THERE ARE IRREGULARITIES OR ANY ILLEGAL ACT BY THE SOCIETY. T HE REGISTRAR HAS REFERRED TO POLICE CASE AND HAS ALSO REFERRED THAT THE SOCIE TY IS INDULGING IN ANTI- NATIONAL ACTIVITIES. THEREFORE THE LD CIT WILL HAVE TO ASCERTAIN THE NATURE OF THE CASES, IF ANY, FILED AGAINST THE SOCI ETY AND IF THESE CASES HAVE IMPACT ON CANCELLATION OF REGISTRATION THEN SU CH FACTORS ARE TO BE CONSIDERED. WE, THEREFORE, FEEL THAT THE ORDER OF L D.CIT U/S 12AA(3) OF THE ACT IS REQUIRED TO BE SET ASIDE TO BE MADE AGAI N AFTER CONSIDERING OUR OBSERVATIONS GIVEN IN THE ORDER. THE ASSESSEE W ILL BE GIVEN AN OPPORTUNITY OF HEARING BEFORE PASSING THE FRESH ORD ER 3. IT IS ALSO NOTED THAT SUBSEQUENT TO THE ORDER PA SSED BY THE CO- ORDINATE BENCH REFERRED SUPRA, THE REVENUE HAS MOVE D AN APPEAL BEFORE THE HONBLE RAJASTHAN HIGH COURT IN APPEAL N O. 110/2012 WHICH WAS ADMITTED ON 04.07.2012 FRAMING THE FOLLOWING SU BSTANTIAL QUESTION OF LAW: WHETHER THE TRIBUNAL WAS LEGALLY JUSTIFIED IN SETT ING ASIDE THE ORDER OF THE CIT PASSED U/S 12AA(3) CANCELLING THE REGISTRAT ION WHEN THE REGISTRAR OF SOCIETIES HAS ALSO CANCELLED THE REGIS TRATION OF THE ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 3 RESPONDENT ON ACCOUNT OF IRREGULARITIES FOUND, POLI CE CASE AND ILLEGAL ACTIVITIES CARRIED ON BY THE SOCIETY. 4. THE HONBLE HIGH COURT VIDE ITS ORDER DATED 22.1 1.2017 HAS DISMISSED THE APPEAL OF THE REVENUE HOLDING AS UNDE R:- 9. TAKING INTO CONSIDERATION THE FACT THAT THE MAT TER WHICH IS PENDING BEFORE THE HIGH COURT, THE OBSERVATIONS MAD E BY THE TRIBUNAL ARE JUST AND PROPER. 12AA REGISTRATION COULD NOT HA VE BEEN GIVEN ON THE BASIS WHICH IS STAYED BY THE HIGH COURT. 10. IN THAT VIEW OF THE MATTER, THE ISSUE IS ANSWER ED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 5. IT IS ALSO NOTED THAT IN ANOTHER APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL FOR AY 2007-08 IN APPEAL NO. 387/2011 WHICH WAS ADMITTED ON 11.09.2015 FOR DECID ING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: WHETHER THE ITAT IS RIGHT IN LAW IN NOT APPRECIATI NG THAT PROVISIONS OF SECTION 13(1)(B) WHICH HAVE AN OVERRIDING EFFECT OV ER THE PROVISIONS OF SECTION 11 & SECTION 12, ARE APPLICABLE TO THE ASSE SSEE SOCIETY SINCE THE SOCIETY HAS BEEN CREATED/ESTABLISHED FOR THE BENEFI T OF A PARTICULAR COMMUNITY I.E. CHRISTIANS? 6. THE HONBLE HIGH COURT VIDE ITS AFORESAID COMMON ORDER DATED 22.11.2017 HAS DECIDED THE SAID ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT AND THE APPEAL OF THE DEPART MENT WAS DISMISSED. ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 4 7. IN THE ABOVE BACKGROUND, THE CONTENTIONS SO RAIS ED BY THE LD. AR WHICH ARE ALSO CONTAINED IN WRITTEN SUBMISSION ARE REPRODUCED AS UNDER:- 2.6 LD. CIT HAS PASSED THE ORDER IN TOTAL DISREGAR D OF THE DIRECTIONS GIVEN BY THE HONBLE ITAT IN FIRST ROUND. 2.7 REPORT OF LD. AO WAS NOT AT ALL PROVIDED EVEN IN THE SECOND ROUND. LD. CIT, IN PARA 5, HAS ONLY MENTIONED THAT THE SAI D REPORT OF AO WAS BASED ON HIS FINDINGS MADE DURING THE COURSE OF ASS ESSMENT PROCEEDINGS FOR A.Y. 2007-08 WHICH READS AS UNDER : 5. BEFORE THE HONBLE ITAT, THE ASSESSEE PLEADED T HAT THE REPORT OF THE AO WAS NOT PROVIDED IT ON THE BASIS OF WHICH THE RE GISTRATION U/S 12A (A) OF THE SOCIETY WAS WITHDRAWAL AND CANCELLED VID E ORDER DATED 26.11.2010. THE AOS REPORT WAS ON THE BASIS OF HIS FINDINGS MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y .2007-08, THE ORDER OF WHICH HAD ALREADY BEEN SERVED TO THE ASSESSEE. D URING THE PROCEEDINGS FOLLOWING THE DECISION OF THE HONBLE I TAT DATED 21.10.2011, SHRI RAJIV MATHUR, CA ATTENDED AND THE CASE WAS DISCUSSED WITH HIM. FURTHER, SHOW CAUSE NOTICES ISSUED TO THE ASSESSEE BY THIS OFFICE WERE SELF EXPLANATORY IN THIS REGARD. THE IS SUES ON THE BASIS OF WHICH REGISTRATION OF THE SOCIETY WAS WITHDRAWN AND CANCELLED, WERE DISCUSSED WITH THE A/R OF THE ASSESSEE BEFORE ORDER DATED 26.11.2010. THUS, NOT MAKING AVAILABLE THE LD. AO REPORT TO THE APPELLANT SOCIETY RENDERS THE ORDER WITHOUT ANY BASIS AND ALSO VIOLAT IVE OF PRINCIPLES OF NATURAL JUSTICE. ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 5 2.8 THE DIRECTIONS FOR EXAMINING THE CASES AGAINS T THE SOCIETY ARE DEALT WITH BY THE LD. CIT AT PARA 7, 8 AND 9. BEFOR E THE LD. CIT, FOLLOWING WAS SUBMITTED: THERE ARE NO CASES PENDING AGAINST THE SOCIETY. AF FIDAVIT IN THIS REGARD FROM THE OFFICE BEARER OF THE SOCIETY IS FINDING PL ACE AT PAPER BOOK PAGE NO. 41 THE NATURE OF CASES PENDING AGAINST THE OFFICE BEAR ERS OF THE SOCIETY, DULY EXPLAINED BY THE ADVOCATE SHRI MOHAMMAD AKRAM IS PLACED AT PAPER BOOK PAGE NO. 42-45. 2.9 LD. CIT AT PARA 7 HAS EQUATED THE FIR AS A CA SE AGAINST THE SOCIETY. IT IS UNDISPUTED THAT UNLESS FIR CULMINATE S INTO FILING OF CHALLAN BEFORE THE COURT OF APPROPRIATE JURISDICTION, THERE CANNOT BE SAID TO BE ANY CASE AGAINST THE APPELLANT SOCIETY. 2.10 SIMILARLY, LD. CIT AT PARA 7 HAS MISDIRECTED HIMSELF IN EQUATING THE CASES FILED AGAINST THE OFFICE BEARERS OF THE SOCIE TY AS CASE AGAINST THE SOCIETY. SINCE, SOCIETY AND ITS OFFICE BEARERS ARE SEPARATE AND INDEPENDENT, SOCIETY CANNOT BE PENALIZED FOR ANY CA SES, IF ANY, AGAINST THE OFFICE BEARERS OF THE SOCIETY. 2.11 RELIANCE IS PLACED ON THE JUDGMENT OF HONBLE JURISDICTIONAL RAJASTHAN HIGH COURT IN THE CASE OF COSMOPOLITAN ED UCATION SOCIETY VS DEPUTY COMMISSIONER OF INCOME-TAX [2000] 244 ITR 49 4 (RAJ.), THE RELEVANT EXTRACT OF WHICH HAVE BEEN SET OUT FOR THE SAKE OF READY REFERENCE: ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 6 THE COMMISSIONER (APPEALS) HAD RECORDED A FINDING OF FACT: IT WAS NOT KNOWN THAT ANY PART OF THE INCOME OF THE ASSESSEE-S OCIETY WAS MISUTILISED. FOR SO SAYING, THE APPELLATE AUTHORITY REFERRED THAT THE ASSESSEE WAS A REGISTERED SOCIETY UNDER THE RAJASTH AN SOCIETIES ACT AND THAT IT WAS ALSO RECOGNIZED BY THE CBSE; IF THE RE WAS ANY MISUTILISATION OR MISMANAGEMENT, ACTION COULD BE TA KEN AGAINST THE MEMBERS OF THE SOCIETY, BUT, FROM THE RECORDS AND F ACTS, IT WAS NOT POSSIBLE TO SAY THAT ANY AMOUNT OF FUNDS OF THE SOC IETY WAS NOT UTILISED FOR EDUCATIONAL PURPOSES. THE TRIBUNAL CONCURRED WI TH THIS FINDING OF FACT. HAVING REGARD TO THE FINDING OF FACT SO RECOR DED, IT WAS NOT POSSIBLE TO SAY THAT ANY SUBSTANTIAL QUESTION OF LA W AROSE FOR CONSIDERATION. 2.12 LD. CIT ERRED IN HOLDING THAT THE FIR AGAINS T THE WRITER OF THE BOOK NAMED HAKIKAT, HAD BEARING ON THE SOCIETY FO R THE REASON THAT THE BOOK WAS WRITTEN BY THE OFFICE-BEARER OF THE SO CIETY AND THE BOOK WAS SOLD FROM THE PREMISES OF EMMANUEL SCHOOL, KOTA . IN THIS REGARD , WITHOUT AGREEING, IT IS SUBMITTED THAT MERELY BECAU SE THE BOOK WAS SOLD FROM THE PREMISE OF SCHOOL, IT CANNOT BE HELD THAT THE SOCIETY WAS INVOLVED IN ITS DISTRIBUTION. IT IS NOT THE CASE OF LD. CIT THAT THE SALE PROCEEDS FROM BOOKS AND THE RELEVANT EXPENDITURE OF THE SAME, ARE FINDING PLACE IN THE BOOKS OF ACCOUNT OF THE SOCIET Y. 2.13 THE OBSERVATION OF LD. CIT AT PARA 8, ABOUT EMMANUEL ORPHANAGE, KOTA ARE NOT CONCLUSIVE. FURTHER, EMMANU EL ORPHANAGE SOCIETY IS NOT RELATED TO THE APPELLANT SOCIETY AS IT IS A SEPARATE SOCIETY WHICH IS HAVING SEPARATE PAN AAATE0453F. ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 7 2.14 HONBLE ITAT WHILE SETTING ASIDE THE CASE HAD DIRECTED THE LD. CIT TO ASCERTAIN THE NATURE OF CASES, IF ANY, FILED AGA INST THE SOCIETY AND IF THESE CASES HAVE IMPACT ON CANCELLATION OF REGISTRA TION, THEN SUCH FACTORS ARE TO BE CONSIDERED. IN GROSS VIOLATION OF THIS SPECIFIC DIRECTION, LD. CIT HAS AT PARA 9 OF HIS ORDER CONSIDERED ALL T HOSE ISSUES WHICH HAVE NO BEARING ON THE CANCELLATION OF REGISTRATION. DET AILS ARE AS UNDER: S. NO. IRREGULARITIES OBSERVED EFFECT ON 12A 1. CONSTITUTION OF THE SOCIETY WAS CHANGED WITHOUT PRI OR PERMISSION OF THE REGISTRAR OR WITHOUT FOLLOWING TH E DUE PROCEDURE OF CHANGING THE CONSTITUTION. NO EFFECT ON 12A 2. THE SOCIETY HAS BEEN CARRYING OUT ITS FUNCTIONS OUT SIDE AREA OF OPERATION. NO EFFECT ON 12A 3. ACCOUNTS AND BUDGET OF THE SOCIETY WAS NEVER PLACED BEFORE THE ANNUAL GENERAL MEETING AND WITHOUT GETTI NG THE BUDGET PASSED THE FUNDS OF THE SOCIETY WERE MISUTILISED BY THE OFFICE BEARERS OF THE SOCIETY IN THE MANNER THEY VIZED. NO EFFECT ON 12A 4. SOCIETY WAS INDULGED IN VIOLATION OF THE PROVISIONS OF FOREIGN CONTRIBUTION REGULATION ACT AND WAS MISUSIN G THE FOREIGN AID IN CONTRAVENTION OF THE PROVISIONS OF AFORESAID ACT. NO EFFECT ON 12A 5. AS PER INQUIRY REPORT OF SOCIAL WELFARE DEPARTMENT THE OFFICE BEARERS OF THE SOCIETY WERE ALSO INDULGED IN FORCIBLE CONVERSION OF RELIGION OF THE TRIBAL PEOPL E AND CHILDREN AND WERE ALSO COMMITTING ATROCITIES ON THE NO EFFECT ON 12A AS NO PROOF OF SAID ALLEGATION. ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 8 CHILDREN RESIDING IN ORPHANAGES OF THE SOCIETY. 6. THUS, THE SOCIETY HAD BEEN ACTING AGAINST AND BEYON D THE AIMS AND OBJECTS OF THE SOCIETY. CANNOT BE A CONCLUSION BASED ON ABOVE OBSERVATIONS 7. THE SOCIETY WAS ALSO INDULGED IN ANTINATIONAL ACTIV ITIES, AS DR. M.A.THOMAS, CHAIRMAN OF THE SOCIETY AND DR. SAMUEL THOMAS PRESIDENT OF THE SOCIETY, ARE FOUNDER AND CEO OF HOPEGIVERS INTERNATIONAL, WHICH IS SHOWI NG DISTORTED AND INCOMPLETE MAP OF INDIA AT ITS WEBSIT E AND JAMMU AND KASHMIR HAS NOT BEEN SHOWN TO BE PART OF INDIA. HOPEGIVERS INTERNATIONAL IS A SEPARATE SOCIETY. 2.15 WITHOUT PREJUDICE TO ABOVE, IT IS SUBMITTED T HAT AS PER SECTION 12AA(3), LD. CIT BEFORE CANCELLING THE REGISTRATION GRANTED TO TRUST OR INSTITUTION HAS TO BE SATISFIED THAT THE ACTIVITIES ARE NOT GENUINE OR ARE NOT CARRIED OUT IN ACCORDANCE WITH OBJECTS OF TRUST OR INSTITUTION. AS PER THE PROVISIONS OF SECTION, LD. CIT, BEING A QUASI-J UDICIAL AUTHORITY, IS EXPECTED TO DISCHARGE HIS OBLIGATION WITH DUE DILIG ENCE AFTER CONDUCTING PROPER AND INDEPENDENT ENQUIRY. 2.16 VARIOUS HIGH COURTS HAVE HELD THAT WHILE DIS CHARGING DUTY THE SATISFACTION HAS TO BE OF THE INDIVIDUAL PERSON AND SHOULD NOT BE BASED ON SOME THIRD PARTY INFORMATION OR REPORT. RELIANCE IS PLACED ON THE FOLLOWING JUDGMENTS OF HONBLE HIGH COURTS: P.CIT V. MEENAKSHI OVERSEAS (P.) LTD. [2017] 82 TAX MANN.COM 300 (DELHI) WHEREIN HONBLE DELHI HIGH COURT HELD THAT THE REPORT OF ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 9 THE INVESTIGATION WING MIGHT HAVE CONSTITUTED MATER IAL ON THE BASIS OF WHICH THE ASSESSING OFFICER FORMED THE REA SONS TO BELIEVE, THE PROCESS OF ARRIVING AT SUCH SATISFACTION COULD NOT BE A MERE REPETITION OF THE REPORT OF INVESTIGATION. IN THE A SSESSEE'S CASE, THE CRUCIAL LINK BETWEEN THE INFORMATION MADE AVAILABLE TO THE ASSESSING OFFICER AND THE FORMATION OF BELIEF WAS A BSENT. THE 'REASONS TO BELIEVE' RECORDED WERE NOT REASONS BUT ONLY CONCLUSIONS AND A REPRODUCTION OF THE CONCLUSION IN THE INVESTIGATION REPORT RECEIVED FROM THE DIRECTOR (IN VESTIGATION). IT WAS A 'BORROWED SATISFACTION'. IT WAS FURTHER HELD BY THE COURT THAT THERE IS NO INDEPENDENT APPLICATION OF MIND BY THE AO TO THE TANGIBLE MATER IAL WHICH FORMS THE BASIS OF THE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE CONCLUSIONS OF THE AO ARE AT BEST A REPRODUCTION OF THE CONCLUSION IN THE INVESTIGATION REPORT. INDE ED IT IS A 'BORROWED SATISFACTION'. THE REASONS FAIL TO DEMONS TRATE THE LINK BETWEEN THE TANGIBLE MATERIAL AND THE FORMATION OF THE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. SHREE CHALTHAN VIBHAG KHAND V. DEPUTY COMMISSIONE R OF INCOME-TAX [2015] 60 TAXMANN.COM 450 (GUJARAT) WHER EIN HONBLE HIGH COURT OF GUJRAT HELD: AT THIS STAGE IT IS REQUIRED TO BE NOTED THAT IN S OME OF THE CASES THE ASSESSING OFFICER HAS FORMED AN OPINION ON THE BASIS OF THE ORDER PASSED BY THE LEARNED CIT (APPEALS) WHICH WER E PURSUANT TO ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 10 THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF S HRI SATPUDA TAPI PARISAR SSK LTD. (SUPRA). HOWEVER, IT IS REQUI RED TO BE NOTED THAT ON THE BASIS OF THE ORDER PASSED BY THE LEARNE D CIT(APPEALS) IN THE CASE OF SOME OTHER ASSESSEE THE SATISFACTION OF THE ASSESSING OFFICER AND FORMATION OF OPINION IN THE C ASE OF PRESENT ASSESSEE CANNOT BE SUSTAINED AND THE SAME CAN BE SA ID TO BE A BORROWED SATISFACTION FROM ANOTHER OFFICER. SUCH BO RROWED SATISFACTION IN ABSENCE OF ANY APPLICATION OF MIND AND ANY REAL FINDING IN THE CASE OF THE ASSESSEE DO NOT CONSTITU TE VALID REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. UND ER THE CIRCUMSTANCES ON THE AFORESAID GROUND ALSO THE IMPU GNED REASSESSMENT PROCEEDINGS WITHIN 4 YEARS AND BEYOND 4 YEARS DESERVES TO BE QUASHED AND SET ASIDE. 2.17 LD. CIT HAS ERRED IN LAW IN OBSERVING THAT FO R GRANT OF REGISTRATION U/S 12AA, SAMITI MUST BE REGISTERED WITH REGISTRAR OF SOCIETIES. IT IS SUBMITTED THAT THE ORDER OF SUB-REGISTRAR SOCIETIES IS STAYED BY THE DIVISION BENCH OF HONBLE RAJASTHAN HIGH COURT AND, THEREFORE, THE CANCELLATION IS NOT IN OPERATION MEANING THEREBY TH AT THE SOCIETY IS REGISTERED WITH REGISTRAR OF SOCIETIES. 2.18 WITHOUT PREJUDICE TO ABOVE, IT IS SUBMITTED T HAT SECTION 12AA, NOWHERE MANDATES THAT THE SOCIETY MUST BE REGISTERE D WITH REGISTRAR OF SOCIETIES. PROVISIONS OF SECTION 11, 12 AND 12AA AR E APPLICABLE ON TRUST OR INSTITUTION. INSTITUTION WILL IMPLY UNREGISTERED BODY ALSO. RELIANCE IS PLACED ON THE RATIO LAID DOWN BY HONBLE ITAT IN TH E BELOW MENTIONED ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 11 CASES, THE EXTRACTS HAVE ALSO BEEN SET-OUT HEREUNDE R FOR THE SAKE OF CONVENIENCE:- SENGUNTHAR MATRICULATION HIGHER SECONDARY SCHOOL VS . CCIT (ITA NO. 2008/MDS./2015) (CHENNAI BENCH) .THE PRIMARY CONDITION U/S.10(23C)(VI), THE ASSES SEE SHALL EXIST SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PR OFIT. THE CHIEF COMMISSIONER OF INCOME TAX WITHOUT OBSERVING THAT T HE ASSESSEE NOT SOLELY EXISTING FOR EDUCATIONAL PURPOSE, HE WENT ON PROPOSITION THAT THE ASSESSEE IS NOT HAVING MEMORANDUM OF ASSOCIATION OR TRUST DEED SO AS TO CARRY ON THE FUNCTION OF THE ASSESSEE. BUT THE F ACT BROUGHT ON RECORD SUGGESTS THAT THE ASSESSEE IS AN AOP, MANAGED BY SENGUNTHER EDUCATION BOARD WHICH IS A REGISTERED BODY UNDER TH E SOCIETY REGISTRATION ACT IN THE YEAR 1946 VIDE REGISTRATION NO.S/8/1946. THE ABOVE EDUCATION BOARD IS MANAGING THE ASSESSEE SCHO OL WITH THE COMMITTEE MEMBERS OF THE SAID EDUCATION BOARD AND C ONSTITUTED THE OFFICE BEARERS OF THE INSTITUTION AND DULY FILING T HE RETURN OF INCOME. IT IS TO BE OBSERVED THAT THERE IS NO EXPRESSED DEFINITIO N FOR INSTITUTION UNDER THE INCOME TAX ACT. HENCE, WE HAVE TO CONSIDE R THE GENERAL MEANING DEFINED IN THE WEBSTERS NEW DICTIONARY, TH E WORD INSTITUTION MEANS AN ESTABLISHED OR ORGANIZED SOCIETY OR CORPOR ATION, AN ESTABLISHMENT, ESPECIALLY ONE OF PUBLIC CHARACTER, OR ONE EFFECTING A COMMUNITY; A FOUNDATION. FURTHER, THIS TRIBUNAL, DE LHI BENCH G BENCH IN I.T.A.NO:3360(DEL) OF 2008 DATED 30.04.20 10 IN DECIDING THE APPEAL IN THE CASE ST. THOMAS GIRLS SENIOR SECONDAR Y SCHOOL, NEW DELHI VS. DIRECTOR OF INCOME TAX(EXEMPTION), NEW DELHI HA VE HELD THAT THE WORD INSTITUTION IS WIDE ENOUGH TO INCLUDE A SCHOOL , WHICH HAS BEEN ESTABLISHED FOR IMPARTING EDUCATION. MERELY BECAUSE THE ASSESSEE ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 12 SCHOOL DOES NOT HAVE POWER TO PURCHASE, ACQUIRE, OR SELL THE PROPERTY, DOES NOT MEAN THAT THE SCHOOL WILL CEASE TO EXIST A S AN INSTITUTION. THUS THE STATUS OF THE ASSESSEE COULD BE A.O.P. IN THE ABSENCE OF ANY MEMORANDUM OF ASSOCIATION OR TRUST DEED. CONSIDERIN G THE ABOVE DECISION OF THE I.T.A.T. DELHI BENCH, IN THE PRESEN T CASE ALSO THE ABOVE MATRICULATION SCHOOL WHICH IS MANAGED BY EDUCATION BOARD AND GRANTED PERMISSION BY THE DIRECTOR OF SCHOOL EDUCATION AS E ARLY AS 07.10.1997 IS AN INSTITUTION QUALIFYING FOR EXEMPTION U/S. 10(2 3C)(VI)OF THE I.T.ACT. HENCE THE EXEMPTION SOUGH FOR THE ABOVE INSTITUTIO NIS TO BE GRANTED. [CLC 44-46] ST. THOMAS GIRLS SENIOR SECONDARY SCHOOL VS. DIT (I TA NO.3360/DEL./2008) (DELHI BENCH) .WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE LD. DIT (E) HAS REJECTED T HE CONTENTION OF THE ASSESSEE BEING AN INSTITUTION ON THE GROUND THAT TH E SCHOOL DOES NOT HAVE POWER TO ACQUIRE OR DISPOSE OF THE PROPERTIES. THE EXPRESSION INSTITUTION HAS NOT BEEN DEFINED UNDER THE INCOME -TAX ACT. AS PER OXFORD DICTIONARY THE EXPRESSION INSTITUTION MEAN S : AN ESTABLISHMENT, ORGANIZATION OR ASSOCIATION, INSTITUTED FOR THE PRO MOTION OF SOME OBJECT ESPECIALLY ONE OF PUBLIC OR GENERAL UTILITY, RELIGI OUS, CHARITABLE, EDUCATIONAL ETC. ACCORDING TO WEBSTERS NEW DICTIO NARY, THE WORD INSTITUTION MEANS AN ESTABLISHED OR ORGANIZED SO CIETY OR CORPORATION; AN ESTABLISHMENT, ESPECIALLY ONE OF A PUBLIC CHARAC TER, OR ONE EFFECTING A COMMUNITY; A FOUNDATION. HONBLE SUPREME COURT I N THE CASE OF VENKATA KRISHNA VS. SUB COLLECTOR AIR 1969 SC 563 H AS HELD THAT A TANK IS A CHARITABLE INSTITUTION WHEN THERE IS A DEDICAT ION IN FAVOUR OF THAT ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 13 TANK. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF C IT VS. RADHA SWAMI SATSANG SABHA HAS HELD THAT DAYAL BAGH SATSANG SABH A OF AGRA IS AN INSTITUTION. A MADARSAH IS AN INSTITUTION AS HELD BY PRIVY COUNCIL IN MASJID SAHID GANJ VS. SHIROMANI GURUDWARA PRABANDHA K COMMITTEE AIR 1940 PC 116. FROM THE ABOVE IT APPEARS THAT THE WOR D INSTITUTION IS WIDE ENOUGH TO INCLUDE A SCHOOL, WHICH HAS BEEN EST ABLISHED FOR IMPARTING EDUCATION. MERELY BECAUSE THE ASSESSEE-SC HOOL DOES NOT HAVE POWER TO PURCHASE, ACQUIRE OR SELL THE PROPERTY, DO ES NOT MEAN THAT THE SCHOOL WILL CEASE TO EXIST AS AN INSTITUTION. THE S TATUS OF THE ASSESSEE COULD BE AOP IN THE ABSENCE OF ANY MEMORANDUM OF AS SOCIATION OR TRUST DEED. THEREFORE, IN OUR CONSIDERED OPINION, T HE LD. DIT (EXEMPTION) HAS NOT EXAMINED THE STATUS OF THE ASSE SSEE-SCHOOL RIGHT PERSPECTIVE IN VIEW OF ABOVE, IT WAS SUBMITTED BY THE LD AR THA T THE ACTION OF LD. CIT IN WITHDRAWING THE REGISTRATION U/S 12AA IS BAD IN LAW AND, THEREFORE, RELIEF MAY PLEASE BE PROVIDED BY CANCELL ING THE ACTION OF LD. CIT. 8. PER CONTRA, LD. CIT DR VEHEMENTLY ARGUED THE MAT TER AND TOOK US THROUGH THE FINDINGS OF THE LD. CIT AND SUBMITTED T HAT THE REGISTRATION GRANTED TO THE SOCIETY HAS BEEN RIGHTLY WITHDRAWN B Y THE LD. CIT. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, AS WE HAVE NOTED ABOV E, THE HONBLE RAJASTHAN HIGH COURT VIDE ITS ORDER DATED 22.11.201 7 WHILE DISPOSING OFF THE REVENUES APPEAL AGAINST THE ORDER OF THE C O-ORDINATE BENCH IN THE FIRST ROUND HAS HELD THAT WHERE THE MATTER IS P ENDING BEFORE THE ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 14 HIGH COURT (IN MATTER RELATING TO CANCELLATION OF R EGISTRATION BY THE REGISTRAR OF SOCIETIES), THE OBSERVATIONS MADE BY T HE TRIBUNAL ARE JUST AND PROPER AND REGISTRATION U/S 12AA COULD NOT HAVE BEEN GIVEN ON THE BASIS WHICH IS STAYED BY THE HIGH COURT. NOW, IF WE LOOK AT THE OBSERVATIONS OF THE CO-ORDINATE BENCH, THE SAME REA DS AS UNDER: 27. THE HONBLE JURISDICTIONAL HIGH COURT HAS LEFT OPEN THE AUTHORITIES TO TAKE ACTIONS UNDER THE PROVISIONS OF LAW IN CASE THERE ARE IRREGULARITIES OR ANY ILLEGAL ACT BY THE SOCIETY. T HE REGISTRAR HAS REFERRED TO POLICE CASE AND HAS ALSO REFERRED THAT THE SOCIE TY IS INDULGING IN ANTI- NATIONAL ACTIVITIES. THEREFORE THE LD CIT WILL HAVE TO ASCERTAIN THE NATURE OF THE CASES, IF ANY, FILED AGAINST THE SOCI ETY AND IF THESE CASES HAVE IMPACT ON CANCELLATION OF REGISTRATION THEN SU CH FACTORS ARE TO BE CONSIDERED. WE, THEREFORE, FEEL THAT THE ORDER OF L D.CIT U/S 12AA(3) OF THE ACT IS REQUIRED TO BE SET ASIDE TO BE MADE AGAI N AFTER CONSIDERING OUR OBSERVATIONS GIVEN IN THE ORDER. THE ASSESSEE W ILL BE GIVEN AN OPPORTUNITY OF HEARING BEFORE PASSING THE FRESH ORD ER 10. IN THE SET-ASIDE PROCEEDINGS, WE FIND THAT THER E IS NOTHING AFRESH WHICH HAS BEEN BROUGHT ON RECORD BY EITHER OF THE P ARTIES AS TO THE PRESENT STATUS OF THE VARIOUS CASES/MATTERS RELATIN G TO IRREGULARITIES/ILLEGAL/ANTI-NATIONAL ACTIVITIES OF THE SOCIETY WHICH THE COORDINATE BENCH HAS DIRECTED TO BE ASCERTAINED TO DETERMINE THE IMPACT THEREOF ON THE CANCELLATION OF REGISTRATION. MERE CONTENTIONS HAVE BEEN ADVANCED BY BOTH THE SIDES WITHOUT BRINGI NG ON RECORD TANGIBLE AND VERIFIABLE EVIDENCE IN SUPPORT OF THEI R RESPECTIVE CONTENTIONS AND WHICH CAN THROW LIGHT ON THE GENUIN ENESS OR OTHERWISE OF THE ACTIVITIES SO CONDUCTED BY THE ASSESSEE SOCI ETY. IN ITS LATEST ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 15 DECISION DATED 22.11.2017, THE HONBLE HIGH COURT H AS ALSO UPHELD THE DIRECTIONS OF THE COORDINATE BENCH AND HAS HELD THA T THE REGISTRATION COULD NOT HAVE BEEN GIVEN ON THE BASIS WHICH IS STA YED BY THE HIGH COURT. IN LIGHT OF THE SAME, WE ARE LEFT WITH NO OP TION BUT TO SET-ASIDE THE MATTER AGAIN TO THE FILE OF THE LD CIT(E). AND WE THEREFORE DONOT DEEM IT FIT TO REFER TO THE VARIOUS CONTENTIONS SO ADVANCED BEFORE US AND THE ASSESSEE IS AT LIBERTY TO RAISE THE SAME BE FORE THE LD CIT(E) AND THE LATTER SHALL CONSIDER THE SAME AND SHALL ASCERT AIN THE PRESENT STATUS OF ALL THESE CASES RELATING TO THE SOCIETY AND IMPA CT THEREOF ON THE CANCELLATION OF THE REGISTRATION GRANTED TO THE SOC IETY. THE LD CIT(E) SHALL ALSO TAKE INTO CONSIDERATION THE LATEST ORDER OF THE HONBLE RAJASTHAN HIGH COURT IN APPEAL NO. 387/2011 DATED 2 2.11.2017 PERTAINING TO AY 2007-08 AND WILL ALSO PROVIDE A CO PY OF REPORT OF THE AO SO REQUESTED BY THE ASSESSEE. NEEDLESS TO SAY, IT IS IN INTEREST OF THE ASSESSEE THAT IT SHALL PROVIDE ALL NECESSARY INFORMATION/DOCUMENTATION AS MAY BE DESIRED BY THE LD CIT(E) FOR TIMELY COMPLETION OF THE PROCEEDINGS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24/04/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 143/JP/2013 EMMANUEL BIBLE INSTITUTE SAMITI, KOTA VS. CIT, KOTA 16 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/04/2018. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- EMMANUEL BIBLE INSTITUTE SAMITI, KOT A 2. IZR;FKHZ@ THE RESPONDENT- CIT, KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 143/JP/2013} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR