National Education Foundation, Pune V. CIT- II Pune., Pune

ITA 1562/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76074 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-01-2014
• Assessment Year: misc
• Appeal Filed On: 17-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Keywords: Search and seizure; Charitable institution; Corroborative evidences
• Section: 80G; 12A; 194C; 6; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1562 /PN/20 1 2 ASSESSMENT YEAR : NATIONAL EDUCATION FOUNDATION, 25 PARVATI , PURANDARE BUILDING, 2 ND FLOOR, PUNE VS. COMMISSIONER OF INCOME TAX - II, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAATN1073G APPELLANT BY: SHRI PRAMOD S. SHINGTE RESPONDENT BY: SMT. M.S. VERMA DATE OF HEARING : 09 - 01 - 2014 DATE OF PRONOUNCEMENT : 27 - 01 - 2014 ORDER PER R.S . PADVEKAR , JM : - THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER PASSED BY THE LD. CIT - II, PUNE DATED 17 - 05 - 2012 U/S. 80G(5)(VI) OF THE INCOME - TAX ACT R.W. RULE 11AA OF THE INCOME - TAX RULES. THE ASSESSEE HAS TAKEN FOLLOWING GROUND IN THE APPEAL: ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LOWER AUTHORITIES HAVE GRAVELY ERRED IN REJECTING THE APPLICATION IN FORM 10G FOR RENEWAL OF EXEMPTION FOR DONATIONS UNDER SECTION 80G BY DISREGARDING THE EXPLANATION OFFERED BY THE ASSESSEE IN THIS REGARD . 2. THE ASSESSEE FILED THE APPLICATION TO THE LD. CIT FOR GRANTING THE APPROVAL U/S. 80G OF THE INCOME - TAX ACT. THE ASSESSEE HAD BEEN EARLIER GRANTED APPROVAL U/S. 80G VIDE AN ORDER DATED 23 - 08 - 2005 AND THE SAID APPROVAL WAS VALID FROM 23 - 06 - 2004 TO 31 - 03 - 2007. AS OBSERVED BY THE LD. CIT AFTER 31 - 03 - 2007 , THE ASSESSEE SOCIETY HAD NOT MADE ANY OTHER 2 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE APPLICATION IN FORM NO. 10G SAVE THE APPLICATION ON WHICH THE PRESENT IMPUGNED ORDER IS PASSED. THE L D. CIT HAS NOTED THAT THE APPLICATION WAS NOT ACCOMPANIED WITH THE COPIES OF THE FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 - 03 - 2010 AND 31 - 03 - 2011 BUT HAD ATTACHED THE FINANCIAL STATEMENTS FOR F.YS. 2006 - 07, 2007 - 08 AND 2008 - 09. THE LD. CIT HAS OBSERVED THAT THE APPLICATION WAS NOT ACCOMPANIED BY ANY NOTES ON ACTIVITIES CARRIED OUT DURING THE THREE PRECEDING YEARS. THE LD. CIT HAS NOTED THAT AS PER RULE 11AA, FURNISHING OF COPIES OF STATEMENTS OF ACCOUNTS FOR THE PRIOR YEARS NOT EXCEEDING A PERIOD OF THR EE YEARS AS WELL AS SUBMISSION OF NOTES ON ACTIVITIES DURING THE PRECEDING THREE YEARS ALONG WITH THE APPLICATION IN FORM NO. 10G IS A MANDATORY REQUIREMENT AND ASSESSEE HAD NOT COMPLIED WITH THE SAID REQUIREMENT. AS NOTED BY THE LD. CIT THE APPLICATION W AS ALSO NOT ACCOMPANIED BY A COPY OF THE MEMORANDUM OF ASSOCIATION. THE ASSESSEE WAS ISSUED THE LETTER FOR MAKING THE COMPLIANCE FOR FILING THE DOCUMENTS AND PARTICULARS. AFTER EXAMINING THE DOCUMENTS FILED BY THE ASSESSEE, THE LD. CIT HAS OBSERVED AS UN DER: 3.2. IN ANY CASE, THE DOCUMENTS NOW SUBMITTED BY THE APPLICANT - SOCIETY WERE SCRUTINIZED AND THE FOLLOWING FEATURES WERE NOTICED: - I) FROM THE COPIES OF THE TDS CERTIFICATES IN RESPECT OF THE FIN. YEAR 2009 - 10 RELEVANT TO THE A. Y. 20 10 - 11, IT WAS FO UND THAT THE PAYMENTS MADE /CREDITED TO THE APPLICANT HAD BEEN SHOWN THEREIN AS PAYMENTS COVERED BY SECTIONS I94J AND 194C OF THE INCOME - TAX ACT, 1961. IN FACT, IN ONE SUCH CERTIFICATE, THE NATURE OF PAYMENT WAS CATEGORICALLY MENTIONED AS 'ADVERTISING AGEN CY'. THE NATURE OF PAYMENTS THUS MENTIONED IN THE TDS CERTIFICATE WAS BOUND TO RAISE EYE - BROWS AS THE APPLICANT IS A CHARITABLE INSTITUTION AND IS NEITHER A CONTRACTOR NOR AN ADVERTISING AGENT. FURTHER, FROM THE COPY OF THE 'COMPUTATION OF TOTAL INCOME' EN CLOSED TO THE RETURN OF INCOME FOR THE A.Y. 201 1 - 12, IT WAS FOUND THAT 3 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE THE APPLICANT HAD CLAIMED CREDIT FOR TDS OF RS.93,060/ - . ALL SUCH CREDITS HAD BEEN CLAIMED U/S. 194C. HOWEVER, COPIES OF THE RELEVANT CERTIFICATES DID NOT FORM PART OF THE APPLICANT'S SUBMISSIONS. II) IT WAS FURTHER NOTICED THAT THE APPLICANT - SOCIETY HAD RECEIVED SUBSTANTIAL AMOUNTS UNDER THE CAPTION 'ENDURO RECEIPTS'. THE APPLICANT WAS ALSO GETTING RECEIPTS ON ACCOUNT OF CAMPS. IT APPEARED, PRIMA FACIE, THAT THESE RECEIPTS WERE COMMERC IAL IN NATURE. BECAUSE THE STATEMENTS GAVE SUFFICIENT INDICATION THAT THESE ARE THE SAME RECEIPTS WHICH HAD BEEN SUBJECTED TO TDS UNDER SECTIONS 194C & 194J. THE SAME ALSO EXCEEDED RS. TWENTY - FIVE LAKHS EACH DURING THE YEARS ENDED 31/3/2010 & 31/3/2011. III) IN VIEW OF THE FOREGOING, IT ALSO APPEARED THAT THE ASSESSEE WAS ENGAGED, DURING THE RELEVANT YEARS,IN THE NATURE OF ACTIVITIES REFERRED TO IN THE FIRST PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961. THE SAID PROVISO, WHICH CAME INTO EFFECT FRO M 1/4/2009 AND WHICH APPLIES TO 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' PROVIDES AS UNDER: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON 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, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION , OR RETENTION , OF THE INCOME FROM SUCH ACTIVITY. THE APPLICANT'S CASE APPEARED TO BE ADVERSELY HIT BY THE AFORESAID PROVISO. IV) IT WAS ALSO SEEN FROM THE STATEMENT OF ACCOUNTS FOR THE YEAR ENDED 31/3/2011 THAT THE APPLICANT HAD TAKEN THE INTERESTS RECEIVED/ACCRUED ON FIXED DEPOSIT WITH BANKS DIRECTLY TO THE BALANCE - SHEET WITHOUT ROUTING THE SAID RECEIPTS THROUGH THE INCOME AND EXPENDITURE 4 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE ACCOUNTS. IN OTHER WORDS, THE INTEREST RECEIVED WAS NOT ADMITTED AS PART OF TOTAL INCOME. V) IT WAS ALSO NOTICED FROM THE STATE MENTS THAT THE APPLICANT HAD INCURRED FOREIGN TRIP EXPENSES IN SOME YEARS. THE PURPOSE FOR WHICH THESE EXPENSES WERE INCURRED WAS NOT SELF - EVIDENT FROM THE STATEMENTS. 3. THE ASSESSEE S EXPLANATION WAS SOUGHT ON THE ABOVE POINTS. THE ASSESSEE FILED THE R EPLY WHICH IS REPRODUCED IN THE IMPUGNED ORDER IN PARA NO. 4.1 , AS UNDER: A) THE APPLICANT CONDUCTS VARIOUS ADVENTURE SPORTS EVENTS WHEREBY ADVERTISEMENT AND SPONSORSHIP MONEY IS ALSO RAISED FOR THE PURPOSE OF ADVANCING THE OBJECTS. THE PERSONS MAKING THE PAYMENTS FOR ADVERTISEMENT/SPONSORSHIP DO SO AFTER DEDUCTING TAX AT SOURCE UNDER SEC. 194C OF THE INCOME TAX ACT, 1961. AS REGARDS DEDUCTION OF TAX UNDER SEC. 194J, THE CORRESPONDING PAYMENTS WERE RECEIVED FROM M/S KIRLOSKAR OIL ENGINES LIMITED, NASHIK. HO WEVER, AS COULD BE SEEN FROM THE APPLICANT'S ACKNOWLEDGEMENT OF THE SAID RECEIPT, THE APPLICANT HAD TREATED THE SAME AS DONATION FOR THE FURTHERANCE OF ITS ACTIVITIES. B) THE RECEIPTS REPRESENTED BY THE TDS CERTIFICATES WERE FOR THE PURPOSE OF AND INCIDENT AL TO ADVANCING THE OBJECT OF EDUCATION AND ADVENTURE SPORTS. THEREFORE, THESE RECEIPTS ON ACCOUNT OF SPONSORSHIP COULD NOT BE TAKEN TO CONSTRUE THAT THE APPLICANT IS PURSUING ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. C) THE PROVISO TO SEC .2(15) WOULD NOT APPLY TO THE APPLICANT EVEN IF IT COLLECTS ADVERTISEMENT OR SPONSORSHIP FUND IN AS MUCH AS THE OBJECT OF THE APPLICANT WOULD FALL WITHIN THE SCOPE OF 'EDUCATION' AS REFERRED TO IN THE SAID SECTION. THE PROVISO IS APPLICABLE TO ANY 'OTHER O BJECT OF GENERAL PUBLIC UTILITY' AND, THEREFORE, WOULD NOT APPLY TO THE APPLICANT'S CASE. 5 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE D) IT IS ONLY IN THE F.Y.2010 - 11 THAT THE APPLICANT DID NOT ROUTE THE INTEREST ON THE FIXED DEPOSIT THROUGH THE INCOME & EXPENDITURE ACCOUNT, AND, INSTEAD, ADDED THE SAME TO THE BUILDING FUND. HOWEVER, THE SAME DID NOT HAPPEN IN THE EARLIER YEARS, AND, THEREFORE, NO CORRECTION IS NEEDED TO BE MADE IN THE INCOME & EXPENDITURE ACCOUNT OF THE EARLIER YEARS. E) DURING THE YEARS UNDER CONSIDERATION, THE APPLICANT SPENT CERT AIN AMOUNTS ON FOREIGN TRAVELS. THESE TRAVELS WERE MAINLY UNDERTAKEN FOR PARTICIPATING IN ADVERTURE - SPORT EVENT IN SOUTH AFRICA. CONSIDERING THE NATURE OF THE APPLICANT'S ACTIVITY, PARTICIPATION IN THE ABOVE EVENT IN SOUTH AFRICA DIRECTLY HELPED THE APPLIC ANT IN ORGANIZING AND CONDUCTING POPULAR SPORT EVENTS BACK IN PUNE. HENCE, THE IMPUGNED EXPENSES COULD NOT BE CONSIDERED AS UN - RELATED TO THE CHARITABLE ACTIVITY UNDERTAKEN BY THE APPLICANT IN INDIA. 4. IT APPEARS THAT THE ASSESSEE MADE THE RECTIFICATION OF THE PROCEDURE DEFECT S WHICH HAS BEEN POINTED OUT BY THE LD. CIT IN PARA NO. 5.1 AND HE HAS HELD THAT AS THE ASSESSEE HAS RECTIFIED THE DEFECTS ON 20 - 04 - 2012 BY FILING THE APPLICATION IN FORM NO. 10G HENCE, THE SAME HAS TO BE TREATED AS FILED ON THE SAID DATE ONLY. THE LD. CIT REJECTED THE ASSESSEES APPLICATION BY GIVING THE FOLLOWING REASONS: II) AS ALREADY NOTED, THE APPLICANT HAS NOT FURNISHED DETAILS IN RESPECT OF THE ENDURO CAMP RECEIPTS AND EXPENSES. HOWEVER, IT IS CLEAR FROM THE TDS CERTIFICATE S AND FROM THE WRITTEN SUBMISSIONS MADE IN THE COURSE OF PRESENT PROCEEDINGS THAT SUBSTANTIAL AMOUNTS HAD BEEN RECEIVED DURING THE F.YS. 2009 - 10 AND 2010 - 11 TOWARDS ADVERTISEMENT AND SPONSORSHIP. SIMILARLY, THE APPLICANT RECEIVED AMOUNTS TOWARDS FEES FOR P ROFESSIONAL OR TECHNICAL SERVICES. THE PLEA NOW BEING RAISED TO THE EFFECT THAT THE RECEIPTS FROM M/S M/S KIRLOSKAR OIL ENGINE LIMITED, NASHIK, WERE IN THE NATURE OF DONATIONS IS WITHOUT MERIT. THE ACT OF THE APPLICANT IN ACKNOWLEDGING THE RECEIPT AS DONAT ION WOULD NOT MAKE IT SO PARTICULARLY WHEN THE PAYER HAD DEDUCTED TAX AT SOURCE U/S. 6 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE 1 94J OF THE ACT. FROM THE SUBMISSIONS MADE BY THE ASSESSEE IT IS ALSO CLEAR THAT THE CONCERNED PAYERS WHO DEDUCTED TAX AT SOURCE HAD DONE SO AS THE PAYMENTS WERE ON ACCOUN T OF CONTRACT, ADVERTISEMENT AND OTHER PROFESSIONAL CHARGES. THIS IN ITSELF WOULD DEMONSTRATE THAT THE ACTIVITIES OF THE APPLICANT IN RESPECT OF WHICH THE IMPUGNED PAYMENTS WERE RECEIVED AMOUNTED TO BEING IN THE NATURE OF TRADE OR COMMERCE. FURTHER, ADVERT ISING A SPONSOR IN A SPORTS EVENT TANTAMOUNTS TO RENDERING SERVICES TO A TRADE, COMMERCE OR BUSINESS IN AS MUCH AS THE CONCERNED SPONSOR GETS THE BENEFIT OF ADVERTISEMENT, WHICH IN TURN PROMOTES ITS TRADE, COMMERCE OR BUSINESS. THUS, THE APPLICANT'S CASE W OULD CLEARLY FALL WITHIN THE PURVIEW OF THE FIRST PROVISO TO SEC 2(15). EVEN THE MONETARY LIMIT PRESCRIBED IN THE SAID FIRST PROVISO IS EXCEEDED IN BOTH THE ASSESSMENT YEARS. WHILE THE RECEIPTS SUBJECTED TO TDS FOR THE A.Y.2010 - 11 AGGREGATED TO RS.25,60,72 5/ - (RS.2352000 + RS.62738 + RS. 145987) THE CORRESPONDING RECEIPTS FOR THE A.Y.2011 - 12 AGGREGATED TO RS.45,59,940/ - (RS.2352000 + RS.2207940) FOR THE ABOVE REASONS , THE APPLICANT'S ACTIVITY CANNOT BE REGARDED AS CHARITABLE WITHIN THE MEANING OF SEC.2(15) . THIS IN ITSELF SHOULD SUFFICE TO REJECT THE APPLICATION FOR APPROVAL U/S80G OF THE INCOME TAX ACT, 1961. III) IT HAS BEEN ARGUED BY THE APPLICANT THAT SEC. 2(15) WOULD NOT APPLY TO IT AS ITS OBJECT IS IN THE DOMAIN OF 'EDUCATION . I AM AFRAID, THE ABOV E SUBMISSION IS DEVOID OF ANY BASIS. THE APPLICANT ITSELF HAS ENCLOSED TO ITS WRITTEN SUBMISSIONS A COPY OF THE CBDT CIRCULAR NO.395 DT: 24/09/1984. IN THIS CIRCULAR, THE CBDT ISSUED A CLARIFICATION AS TO WHETHER OR NOT PROMOTION OF SPORTS WOULD CONSTITUTE A CHARITABLE PURPOSE. IT WAS CLARIFIED BY THE BOARD THAT THE OBJECT OF PROMOTION OF SPORTS AND GAMES WOULD BE AN OBJECT OF GENERAL PUBLIC UTILITY. THIS ITSELF MEETS AS WELL AS NULLIFIES THE APPLICANT'S CLAIM THAT IT IS PURSUING EDUCATION, AND, HENCE THE PROVISO OF SEC. 2(15) WOULD NOT APPLY. IV) COMING TO INTEREST ON FIXED DEPOSITS AND THE APPLICANT'S ACTION IN NOT ROUTING SUCH INTEREST FOR THE A.Y.2011 - 12 7 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE THROUGH/THE INCOME 85 EXPENDITURE ACCOUNT, IN ITS SUBMISSION THE APPLICANT HAS IMPLIEDLY A CCEPTED T HAT THIS WAS NOT CORRECT. HOWEVER, IT IS NOT NECESSARY TO DWELL ON THIS MATTER ANY FURTHER BECAUSE THE APPLICANT IS BEING REFUSED APPROVAL UNDER SEC. 80G ON REFERENCE TO THE PROVISO TO SEC. 2(15). V) C OMING TO THE FOREIGN TRIP EXPENSES, THE APPLICANT'S SU BMISSIONS HAVE BEEN NOTED. IN THE ABSENCE OF COMPLETE DETAILS , IT IS NOT POSSIBLE AS OF NOW TO HOLD WHETHER OR NOT THE SAID EXPENSES WOULD BE H IT BY THE PROVISIONS OF CLAUSE (C) (II) OF SUB SECTION (1) OF SECTION 11. HOWEVER , IF THE IMPUGNED EXPENSES THU S GOT ADVERSELY HIT, THE SAME WOULD AT THE MOST HAVE A BEARING ON THE COMPUTATION OF THE INCOME APPLIED BY THE ASSESSEE TO CHARITABLE PURPOSES AND NOT ON ITS ELIGIBILITY FOR APPROVAL U/S 80G PER SE . HENCE, THIS ISSUE IS NOT PURSUED FOR THE PURPOSE OF THE PRESENT PROCEEDINGS . NOW THE ASSESSEE HAS CHALLENGED THE SAME BEFORE US. 5. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS THAT THE ASSESSEE HAS BEEN GRA NTED THE REGISTRATION U/S. 12A OF THE ACT WHICH HAS NOT BEEN CANCELLED. THE LD. COUNSEL RELIE D ON THE DECISION OF THE HON'BLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF SONEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY VS. CIT & ANR. 278 ITR 262. HE SUBMITS THAT SO FAR AS THE NATURE OF THE ACTIVITIES OF THE ASSESSEE ARE CONCERNED , THE ASSESSEE CANNOT BE REFUSED THE APPROVAL U/S. 80G AS ADMITTEDLY IN THE PRECEDING YEARS ON THE SAME ACTIVITIES AND OBJECTS , T HE ASSESSEE HAS BEEN GRANTED APPROVAL U/S. 80G AND THE REGISTRATION U/S. 12A IS STILL VALID. IN THE CASE OF SONEPAT HINDU EDUCATIONAL & CHARI TABLE SOCIETY (SUPRA) THE HON'BLE HIGH COURT HAS EXPLAINED THE POWER AND SCOPE OF ENQUIRY OF THE LD. CIT WHILE CONSIDERING THE APPLICATION FILED BY THE ASSESSEE U/S. 80G(5) AND IT IS HELD AS UNDER: 15. WE MAY NOW EXAMINE THE CASE IN HAND ON THE TOUCHSTONE OF THE AFORENOTED BROAD PRINCIPLES. IN THE INSTANT CASE, THE COMMISSIONER HAS NOT FOUND THAT THE OBJECTS OF THE PETITIONER - SOCIETY, ESTABLISHED IN 8 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE INDIA, AS SET OUT IN ITS MEMORANDUM OF ASSOCIATION, ARE NOT FOR A CHARITABLE PURPOSE OR THAT THE SOCIETY IS NOT CARRYING ON ITS ACTIVITIES IN FURTHERANCE OF ITS OBJECTS. AS A MATTER OF FACT, REGISTRATION OF AN INSTITUTION UNDER SECTION 12A(A) OF THE ACT BY ITSELF IS A SUFFICIENT PROOF OF THE FACT THAT THE TRUST OR THE INSTITUTION CONCERNED IS CREATED OR ESTABLIS HED FOR CHARITABLE OR RELIGIOUS PURPOSES. FURTHERMORE, AS NOTED ABOVE, THE GROUNDS WHICH HAVE WEIGHED WITH THE COMMISSIONER TO NEGATIVE THE PETITIONER'S CLAIM IS THAT IT SHOULD HAVE APPLIED FOR FRESH REGISTRATION UNDER SECTION 12A(A) OF THE ACT BECAUSE OF CHANGE IN ITS OBJECTS ON SEPTEMBER 17, 1989 ; ITS MEMORANDUM SHOULD HAVE BEEN GOT AMENDED AS PER THE PROCEDURE PRESCRIBED IN SECTION 92 OF THE CIVIL PROCEDURE CODE ; THE PETITIONER'S INSTITUTION HAS NOT BEEN NOTIFIED UNDER SECTION 10(23C) OF THE ACT FOR TH E ASSESSMENT YEAR 2000 - 01 ; SEPARATE BOOKS OF ACCOUNT SHOULD HAVE BEEN MAINTAINED FOR PURCHASE AND SALE OF BOOKS AND IT HAD SPENT SUBSTANTIAL AMOUNTS AS ENTERTAINMENT EXPENDITURE ON VISITORS AND EXAMINERS, BUT NO SUPPORTING EVIDENCE HAD BEEN PRODUCED. 16 . WE ARE OF THE OPINION THAT, IN VIEW OF THE FACT THAT THE PETITIONER HAD ENJOYED APPROVAL UNDER SECTION 80G OF THE ACT FROM THE YEAR 1991 TO MARCH 31, 1999, I.E., EVEN AFTER THE AMENDMENT OF ITS OBJECTS ON SEPTEMBER 17, 1999, AND AFTER THE INSERTION OF CL AUSE (VI) WITH EFFECT FROM OCTOBER 1, 1991, THE COMMISSIONER WAS NOT JUSTIFIED IN HOLDING THAT EITHER FRESH REGISTRATION UNDER SECTION 12A(A) OF THE ACT WAS REQUIRED OR THE MEMORANDUM SHOULD HAVE BEEN AMENDED AS PER THE PROCEDURE LAID DOWN IN SECTION 92 OF THE CODE OF CIVIL PROCEDURE. IN RADHASOAMI SATSANG V. CIT [1992] 193 ITR 321 THEIR LORDSHIPS OF THE SUPREME COURT, INTER ALIA, OBSERVED THAT THOUGH STRICTLY SPEAKING, RES JUDICATA DOES NOT APPLY TO INCOME - TAX PROCEEDINGS, WHERE A FUNDAMENTAL ASPECT PERMEA TING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE, AT ALL, APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUB SEQUENT YEAR. WE FEEL THAT THESE OBSERVATIONS ARE QUITE APPOSITE IN THE PRESENT CASE. THE RATIO OF THE DECISION OF THE APEX COURT IN NIZAM'S CASE [2000] 243 ITR 676 IS NOT ATTRACTED IN THIS CASE. 17. AS REGARDS THE QUESTION WHETHER THE PETITIONER'S INCOME WOULD BE LIABLE TO BE INCLUDED IN ITS TOTAL INCOME UNDER THE PROVISIONS OF 9 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE SECTIONS 11 AND 12 OF THE ACT, A BARE PERUSAL OF THE SAID PROVISIONS WOULD SHOW THAT THERE ARE VARIOUS FACTORS, LIKE THE NATURE OF CONTRIBUTIONS ; THE QUANTUM OF INCOME SET APART A ND ACCUMULATED FOR APPLICATION IN FUTURE FOR SPECIFIED PURPOSES WHICH WOULD REQUIRE CONSIDERATION TO DETERMINE WHETHER THE INCOME DERIVED BY SUCH TRUST OR SOCIETY WOULD BE LIABLE TO BE INCLUDED IN THE TOTAL INCOME. IT WILL THUS BE NOT POSSIBLE, TO DETERMIN E ON THE DATE WHEN A DONATION IS MADE FOR DEDUCTION UNDER SECTION 80G, AS TO WHAT WILL BE THE POSITION AS ON THE END OF THE RELEVANT PREVIOUS YEAR OF THE SOCIETY OR THE TRUST, WHO HAD SOUGHT APPROVAL UNDER SECTION 80G OF THE ACT. WE HAVE NO HESITATION IN H OLDING THAT THE SCOPE OF ENQUIRY BY THE COMMISSIONER, WHILE DEALING WITH THE APPLICATION UNDER SECTION 80G(5)(VI) OF THE ACT, EXTENDS TO ELIGIBILITY TO EXEMPTION UNDER VARIOUS PROVISIONS OF THE ACT, REFERRED TO IN THAT SUB - SECTION, BUT NOT TO ACTUAL COMPUT ATION OF INCOME UNDER THE ACT, PARTICULARLY WHEN A SOCIETY OR A TRUST IS CLAIMING EXEMPTIONS UNDER SECTIONS 11 AND 12 AND NOT UNDER SECTION 10 OF THE ACT. IT NEEDS LITTLE EMPHASIS THAT THE ENQUIRY FOR THE SAID PURPOSE RELATES TO WHETHER THE APPLICANT IS RE GISTERED UNDER SECTION 12A ; WHETHER IT IS A TRUST WHOLLY FOR CHARITABLE PURPOSES AND WHETHER THE INCOME RECEIVED BY IT IS LIABLE TO BE CONSIDERED UNDER SECTION 11 OF THE ACT. THE ENQUIRY WHETHER AT THE END OF THE PREVIOUS YEAR, THE DONOR WILL BE ABLE TO S USTAIN A CLAIM BECAUSE OF NON - FULFILMENT OF SOME CONDITIONS BY HIM WOULD DEPEND AT THE CLOSE OF THE RELEVANT PREVIOUS YEAR, AS IT IS NOT POSSIBLE TO PREDICATE THESE CONDITIONS IN PRAESENTI WHEN THE DONATION IS MADE . 6. IN THE PRESENT CASE, THE ASSE SSEE HAS BEEN ALREADY GRANTED APPROVAL U/S. 80G FOR THE PERIOD OF 23 - 06 - 2004 TO 31 - 03 - 2007. THE ASSESSEE FILED THE APPLICATION ON 02 - 11 - 2011. THERE WAS SOME PROCEDURAL COMPLIANCE REQUIRED TO BE MADE AND THE SAME HAS BEEN COMPLIED WITH BY THE ASSESSEE ON 20 - 04 - 2012. THE LD. CIT, THEREFORE, TREATED THE VALID DATE OF FILING OF THE APPLICATION IS 20 - 04 - 2012. IN OUR OPINION, WHATEVER THE CIT HAS POINTED OUT THESE ARE ONLY THE PROCEDURE REQUIREMENT S AND THE ASSESSEE HAS MA DE THE COMPLIANCE DURING THE PENDENCY OF HIS APPLICATION HENCE, WE HOLD THAT THE ASSESSEE HAS FILED 10 ITA NO. 1562 /PN/2012, NATIONAL EDUCATION FOUNDATION, PUNE THE VALID APPLICATION ON 02 - 11 - 2011 AND FOR CONSIDERING THE APPROVAL U/S. 80G THE SAME DATE IS TO BE TAKEN INTO CONSIDERATION. 7. NOW THE NEXT ISSUE IS WHETHER THE LD. CIT HAS EX CEEDED HIS POW ER BY EXAMINING THE NATURE OF THE ACTIVITY OF THE ASSESSEE. IN OUR OPINION, THE PRINCIPLES LAID DOWN IN THE CASE OF SONEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY (SUPRA) ARE SQUARELY APPLICABLE. MOREOVER, THE ASSESSEES CASE IS ALSO SQUARELY COVERED BY THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF N.N. DESAI CHARITABLE TRUST VS. CIT, 246 ITR 452 (GUJ). WE, THEREFORE, ALLOW THE APPEAL FILED BY THE ASSESSEE AND DIRECT THE CIT - II, PUNE TO GRANT THE APPROVAL U/S. 80G W.E.F. 02 - 11 - 2011. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 27 - 01 - 2014 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 27 TH JANUARY, 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 4 THE CIT - II, PUNE THE A CIT , RANGE - II, PUNE 5 THE DR, ITAT, A BENCH, PUNE. 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE