M/s Mata Charan kaur Para Medical Education Society, Amritsar. V. The Commissioner of Income Tax (Exemption), Chandigarh

ITA 158/ASR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7808 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 28-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: SAKSHI GUPTA LD
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.158(ASR)/2017 ASSESSMENT YEAR:..... ...... M/S MATA CHARAN KAUR PARA MEDICAL EDUCATION SOCIETY. PAN:AABM-1175G VS. CIT (EXEMPTION), CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. SAKSHI GUPTA (LD. C.A ) RESPONDENT BY: SH. RAHUL DHAWAN (LD. D.R) DATE OF HEARING:12.09.2017 DATE OF PRONOUNCEMENT:20.09.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE, BY FEE LING AGGRIEVED AGAINST THE ORDER DATED 31 ST JANUARY, 2017 PASSED BY THE LD. CIT (EXEMPTION), U/S 12AA OF THE I. T. ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. THAT THE LD. CIT (EXEMPTIONS) HAS WRONGLY DISMISSED THE APPL ICATION FOR REGISTRATION II/S 12AA OF THE INCOME-TAX ACT, 1961, WITHOUT GIVING APPROPRIATE OPPORTUNITY AND IGNORING ALL MERITS OF THE CASE. 2. THAT THE LD. CIT (EXEMPTIONS) HAS ALSO WRONGLY CONCLUDED THA T THE AIMS & OBJECTS OF THE TRUST ARE NOT OF CHARITABLE NATURE. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS ) HAS ERRED IN LAW AS WELL AS ON FACTS IN REJECTING REGISTRATION UND ER SECTION 12AA OF THE ACT WHICH IS ARBITRARY & UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX(EXEMPTIONS ) HAS ERRED IN OBSERVING THAT THE ASSESSEE SOCIETY HAS NOT EFFECTI VELY CARRIED OUT ANY CHARITABLE ACTIVITY WHICH IS UNFOUNDED, WITHOUT ANY BASIS AND AS SUCH THE ORDER IS ARBITRARY AND UNJUSTIFIED. ITA NO.158 (ASR)/2017 2 5. THAT THE REGISTRATION HAS BEEN REFUSED ONLY ON THE BASIS OF SUSPICION, CONJECTURES AND SURMISES WHICH IS NOT PERMITTED UND ER THE LAW AND AS SUCH THE ORDER REFUSING REGISTRATION IS ILLEGAL, AR BITRARY AND UNJUSTIFIED. 6. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X(EXEMPTIONS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF T HE CASE AND IS, THUS, UNTENABLE. 7. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, AMEND A ND/OR DELETE ANY GROUNDS(S) OF APPEAL AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THAT THE APPELLANT IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT , ON 07.02.2000 AND SUBSEQUENTLY AN APPLICATION UNDER SEC.12AA OF THE ACT WAS FILED ON 09.01.2016 . ON CONSIDERATION OF THE SAID APPLICATION THE APPELLANT WAS CALLED UPON TO PROVIDE THE DOCUMENTS /CLARIFICATION BY 28. 11.2016. ON 28.11.2016, SH. AMIT GUPTA COUNSEL FOR THE APPLICA NT ATTENDED THE PROCEEDINGS AND FILED WRITTEN REPLY. THE REAFTER, ON CONSIDERATION OF THE SAID DOCUMENTS, VIDE ORDER DATED 31 ST JANUARY, 2017 THE LD. CIT(E) REJECTED THE APPLICATION U/S 12A ON THE GROUNDS THAT THE DOCUMENT PRODUCED REVEALS THAT THE APPLICANT SOCIETY HAS BEEN GRANTED APPROVAL BY THE ALL INDIA INSTITUTE OF LOCAL SELF GOVERNMENT, MUMBAI TO CONDUCT AIILSF 'FIREMANS TRA INING COURSE- FIRE & SAFETY' AND SANITARY INSPECTOR'S DIPLOMA COURSE. NOTWITHSTANDING THAT THE ABOVE SHOWS THAT AIILSF IS AN INSTITUTE IN ITSELF THE CON TENTS OF THE LETTER FROM AIILSF ALSO REVEALS THAT THE APPLICANT IS GIVING TRAINING ON BEHALF OF AITLSF AND THUS IS A MERE EXTE NSION OF THE PARENT CONCERN. THE DEGREE'S VALUE, AS IS CLEAR FROM THE PROSPECTUS IS UNCLEAR AND ITS RECOGNITION BY THE GOVERNMEN T IS ALSO UNCLEAR. THE APPLICANT'S FURTHER PLEA THAT IT IS APPROVED BY THE PMTO TO INDIA, RECOGNIZED BY GOVERNMENT OF MADHYA PR ADESH ITA NO.158 (ASR)/2017 3 WAS ALSO CONSIDERED. THE SUBJECT OF AUTHORITY LETTER FROM PMTO TO THE APPLICANT IS 'AUTHORITY LETTER TO PUBLISH ADVERTISEMENT THROUGH NEWSPAPER/HANDBILL REGARDING TO OPEN D.M.L. T ONE YEAR COURSE TRAINING CENTRE IN AMRITSAR PUNJAB DIVISIO N OF P.M.T.O. OF INDIA. THIS MEANS THAT THE APPLICANT IS WORKING ON BEHALF OF PMTO AND NOT AS AN INDEPENDENT ENTITY. IN THE LETTER OF PMTO, THERE IS NO MENTION OF ITS UNIT IN PUNJAB AL THOUGH FROM THE CONTENTS IT IS AMPLY CLEAR THAT IT'S A MERE CEN TRE. THE CONTENTS OF PARAS 6.1 AND 6.2 CLEARLY ESTABLISH THA T THE APPLICANT IS ACTING AS AN EXTENSION OF THE AIILSF AND PMTO. NO AGREEMENTS WITH THE PARENT CONCERNS HAVE BEEN FURNISHED THAT MAY HAVE SHOWED GREATER LIGHT ON THE AFFAIRS & FINANCE OF THE APPLICANT. MOREOVER, IN THE ABSENCE OF ANY RECOGNITION TO THE SO-CALLED DEGREES, BY ANY OF THE CENTRAL GOVERNMENT AGE NCIES/ AUTHORITIES CREATED FOR THE PURPOSE, THE OUTCOMES OF THE ENTIRE PROCESS DOESN'T IMPART THE APPLICANT WITH THE CHARACTER O F EDUCATION AS ENUNCIATED BY THE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOKA SIKSHAN SANSTHAN (101 ITR 234). IT CONNO TES THE/ WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON H AS RECEIVED. THE WORD EDUCATION HAS NOT BEEN USED IN THAT WIDE AND EXTENDED SENSE, ACCORDING TO WHICH EVERY ACQUISITION O F FURTHER KNOWLEDGE CONSTITUTES EDUCATION. THE APPLICANT SOCIETY RECEIVED GRANTS FROM SOSVA/RCH DURING THE FINANCIAL YEAR 2013-14 AND 2014-15 AS IS EV IDENT FROM THE INCOME AND EXPENDITURE STATEMENTS FILED. THE SAME GRANTS ARE COMPLETELY ABSENT IN THE FINANCIAL YEAR 2015 -16 AS DETAILED BELOW:- ITA NO.158 (ASR)/2017 4 FINANCIAL YEAR RECEIPTS INCLUDING GRANTS SURPLUS 2013-14 35,53,965/- 2,65,900/- 32,781/- 2014-15 25,74,640/- 2,07.000/- 21,765/- 2015-16 34,44,500/- 145,102/- TO THAT EXTENT WHATEVER LITTLE THE ENTITY WAS UNDERT AKING IN THE FIELD OF RCH ETC. HAS BEEN STOPPED. TO THAT EXTENT NO ACTIVITIES IN AREAS THAT COULD HAVE QUALIFIED FOR THE L ABEL 'CHARITABLE PURPOSE' ARE EVIDENT AND HAMPER THE APPLI CANT'S QUEST FOR REGISTRATION. AND FINALLY THE LD. CIT(A) OBSERVED THAT THERE IS NO WAY THE GENUINENESS OF ACTIVITIES OF THE SOCIETY CAN BE CORROBORATE D WITH THE STATED AIMS AND OBJECTS. FURTHER, THE ACTIVITIES THAT COUL D HAVE BEEN CONSTRUED AS GETTING COVERED BY THE DEFINITION OF CHARIT ABLE PURPOSES HAVE BEEN STOPPED AND ACCORDINGLY, THE APPLICATION U/S 1 2A FOR GRANT OF REGISTRATION IS REJECTED. THE LD. COUNSEL FURTHER ARGUED THAT THE LD. CIT(A) WITHOUT CONFRONTING THE DOCUMENTS AND WITHOUT GIVING A PROPER OPPORTUNITY OF BEING HEARD AND OBSERVED THAT THE AFORESAID FORMED OP INION IS CONTRARY TO THE PURPOSE OF THE SOCIETY AND ALSO AS AGAINS T THE DOCUMENTS SUBMITTED DURING THE PROCEEDINGS OBJECTS OF THE SOCIETY ARE DETAILED IN THE MEMORANDUM OF ASSOCIATION WHICH ARE EXT RACTED AS UNDER: TO EDUCATE THE STUDENTS OF THE GENERAL PUBLIC WITHO UT ANY DISTINCTION OF CASTE, CREED, SEX OR RELIGION TO HOLD MEDICAL CLASSES IN ORDER TO EDUCATE THE GEN ERAL PUBLIC WITHOUT ANY DISTINCTION OF CASTE, CREED, SEX OR RELIGION TO MAKE AGREEMENT WITH ANY IN ORDER START TO PARAM EDICAL INSTITUTE, ENGINEERING INSTITUTE, MEDICAL COLLEGE, PHARMACY COLLEGE, HIGHE R EDUCATION COLLEGES, SCHOOL, NURSING COLLEGES (PRIVATE OR GOVT, AND ANY OTHER CO URSE OF KNOW-HOW, TECHNOLOGY AND OF EDUCATING AND VOCATIONAL COURSES ISSUING OF CERTIFICATE OF PASSING THE COURSE TO HELP THE NEEDY STUDENTS BY COACHING IN GETTING A DMISSION IN HIGHER CLASSES TO CONDUCT AIDS/HIV AWARENESS SEMINAR, FAMILY PLANN ING AWARENESS, AGENTS FEMALE FETICIDE AWARENESS, RURAL DEVELOPMENT PROGRA MME, SELF EMPLOYEE CAMP EDUCATION & VOCATIONAL TRAINING FOR WOMEN, CHILD LA BOUR, ETC ITA NO.158 (ASR)/2017 5 THE LD. COUNSEL, SMT. SAKSHI GUPTA ALSO RELIED UPON TH E JUDGMENT PASSED BY THE ITAT, DELHI BENCH IN THE CASE SAR ASWATI DEVI EDUCATIONAL & CHARITABLE TRUST VS. CIT, ITA NO.4641 & 4642/DEL/2011. FURTHER SUBMITTED THAT THE CIT(E) HAS NOT SEEN THE MOT IVE BEHIND THE COURSES CARRIED OUT BY THE SOCIETY. THE APPELL ANT SOCIETY IS WORKING IN THE FIELD OF EDUCATION AS COVERED BY SECTION 10(23C) OF INCOME TAX ACT. IT IS PROVIDING ALL THE COURSES TO STUDENT S AT VERY MARGINAL COST. THE APPELLANT SOCIETY ALSO PROVIDES 50% SCH OLARSHIP TO SC/ST STUDENTS ON THE BASIS OF MERIT LIST. IT ALSO PROVID ES FREE COURSE TO VERY NEEDY STUDENTS AND THE SOCIETY IS DOING SOCIAL WO RK AS IT IS EVIDENT FROM THE FACT THAT THE APPELLANT SOCIETY HAD R ECEIVED GRANTS FROM SOSVA & RCH. 4. THE LD. DR ON THE OTHER HAND, RELIED UPON THE ORDER PASSED BY THE LD. CIT(E). 5. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND PRIMA FACIE WE ARE IN AGREEMENT WITH THE CONT ENTIONS OF THE LD. AR, SMT. SAKSHI GUPTA THAT THE OBJECTS OF THE SOCIET Y ARE CHARITABLE IN NATURE AND THE CIT(E) HAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD AND/OR FOR CONFRONTATION OF THE DOCUMENTS RELIED UPON BY THE SOCIETY. AS WE REALIZED FROM THE ORDER THAT EVEN AFTER RECEIV ING THE DOCUMENTS AND WRITTEN REPLY BY THE APPELLANT SOCIETY ON 28 TH AUGUST, 2016, THE LD. CIT(E) HAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD TO THE APPELLANT SOCIETY AND PASSED THE ORDER UNDER CHALLEN GE ON ITS OWN ASSUMPTION AND SURMISES, THEREFORE, CONSIDERING THE PECULIA R FACT AND ITA NO.158 (ASR)/2017 6 CIRCUMSTANCES OF THE CASE AS THE POWER U/S 12A OF THE ACT OF THE CIT(E) IS VERY LIMITED TO CONSIDER THE OBJECTS OF THE SOCIETY AND GENUINENESS OF THE ACTIVITIES OF THE SOCIETY OR THE INSTIT UTION BY MAKING ANY ENQUIRY HE MAY DEEM NECESSARY IN THIS BEHALF. ON THE AFORESAID OBSERVATION, WE SET ASIDE THE ORDER P ASSED BY THE CIT(E) AND REMAND THE CASE BACK TO THE FILE OF THE LD. CIT(E) TO DECIDE AFRESH U/S 12A OF THE ACT BY GIVING PROPER OPPOR TUNITIES OF BEING HEARD TO THE APPELLANT SOCIETY. THE LD. CIT(E), IN THE PECULIAR FACTS AND CIRCUMSTANCES AS STATED ABOVE DIRECTED TO COMPLETE THE PROCEEDINGS AND PASS THE ORDER WITHIN TWO MONTHS FROM TODAY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.09.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20.09.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER