Praja Prerana Foundation, Visakhapatnam, Visakhapatnam V. CIT(Exemptions), Hyd, Hyderabad

ITA 162/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6102 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 29-11-2016
• Assessment Year: misc
• Appeal Filed On: 15-02-2016
• Court: TRIBUNAL
• Department Lawyers: P CHANDRA SEKHAR
• Assessee Lawyers: PRADEEP KASTHALA
• Section: 12AA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ITA NO. 162/HYD/2016 M/S PRAJA PRERANA FOUNDATION VISAKHAPATNAM PAN AAICP0603M VS. THE CIT (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRADEEP KASTHALA REVENUE BY : SHRI P. CHANDRA SEKHAR DATE OF HEARING : 20-02-2017 DATE OF PRONOUNCEMENT : 24-02-2017 ORDER PER G. PAVAN KUMAR, J.M.: THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER OF THE CIT(EXEMPTIONS) HYDERABAD IN F. NO. CIT(E)/28(4)/H YD /12A/2015-16, DATED 26-10-2015 PASSED U/S 12AA(1)(B )(II) OF THE IT ACT, AND THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS. 1. THE HON. COMMISSIONER OF INCOME TAX (EXEMP.) H AS ERRED IN REJECTING THE APPLICATION IN FORM L0A FOR REGIST RATION U/S. 12M OF THE INCOME TAX ACT, 1961 ON GROUNDS THAT (1) BOO KS OF ACCOUNTS ARE NOT MAINTAINED AND (2) NOT REGISTERED THE AMENDMENT CLAUSE & WINDING UP CLAUSE WITH REGISTRAR OF COMPANIES. 2. THE CIT (E) FAILED TO APPRECIATE THAT: THE APPELLANT COMPANY IS MAINTAINING DAY TO DAY BOO KS OF ACCOUNTS OF THE ACTIVITIES OF THE FOUNDATION. 2 ITA NO. 162/HYD/2016 M/S PRAJA PRERANA FOUNDATION, VISAKHAPATNAM. THE APPELLANT COMPANY IS NOT REQUIRED TO REGISTER T HE RESOLUTION WITH REGARDS TO AMENDMENT CLAUSE & WINDI NG-UP CLAUSE AS THE SAME ARE IN EXISTENCE IN THE MEMORAND UM OF ASSOCIATION SINCE INCORPORATION OF THE COMPANY. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELET E OR MODIFY ALL OR ANY OF THE ABOVE GROUND AT THE TIME OF HEARI NG. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS INCORPORATED UNDER THE COMPANIES ACT 2013 ON 27-03- 2015 AND OBTAINED LICENSE U/S 8(1) OF THE COMPANIES ACT. THE MAIN OBJECTS ARE TO SPONSOR AND PROMOTE CITIZEN, N GO CENTRIC INFORMATION PRODUCTS, SERVICES AND PROGRAMS WHICH EMPOWER CITIZENS, ORGANIZATIONS, GOVERNMENTS IN THE AREA OF LOCAL INFORMATION, DEVELOPMENT & GOVERNANCE, DEVELOPMENT AND EMPOWERMENT TO BE MORE TRANSPARENT, EFFECTIVE AND FASTER. THE ASSESSEE MADE AN APPLIC ATION FOR REGISTRATION UNDER 12AA OF THE IT ACT IN FORM 10A ON 24- 04-2015 WITH THE CIT(EXEMPTIONS). THE ASSESSEE RECE IVED NOTICE FROM THE CIT(EXEMPTIONS) ON 19/08/2015 AND 10/09/2015. IN RESPONSE THE ASSESSEE FILED REPLY O N 24/08/2015 & 18/09/2015 WITH DETAILS, AS PER THE QUESTIONNAIRE AND ENCLOSED COPY OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION, BANK ACCOU NT DETAILS, INCOME-TAX PARTICULARS, DECLARATION UNDER 13(1) AND 11(5) OF THE IT ACT. DETAILS OF DONATIONS AND NOTE ON AMENDMENT CLAUSE ALONG WITH THE INFORMATION OF THE DIRECTORS AND FURTHER THE ASSESSEE WAS SANCTIONED GRANT FROM NAVJBAI RATAN TATA TRUST. 3. IN THE HEARING PROCEEDINGS, THE LD. CIT(EXEMPTIO NS) OBSERVED THAT THE ASSESSEE COMPANY HAS NOT MAINTAIN ED 3 ITA NO. 162/HYD/2016 M/S PRAJA PRERANA FOUNDATION, VISAKHAPATNAM. THE BOOKS OF ACCOUNTS AND HAS NOT REGISTERED THE AM ENDED CLAUSES, INTER-ALIA, AMENDMENT & WINDING UP CLAUSE S WITH REGISTRAR OF COMPANIES, AFTER PASSING THE BOARD RESOLUTION. THE LD. CIT(EXEMPTIONS) WAS OF THE OPI NION THAT THE ASSESSEE COMPANY IS NOT ELIGIBLE FOR GRANT OF REGISTRATION UNDER 12AA OF THE IT ACT AND REJECTED THE APPLICATION AND PASSED ORDER ON 26-10-2016. AGGRIE VED BY THE ORDER OF THE CIT(EXEMPTIONS) THE ASSESSEE FILED AN APPEAL WITH THE TRIBUNAL. 4. BEFORE US THE LD. AR ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE BEFORE CIT(EXEMPTIO NS) AND EXPLAINED THAT THE LD. CIT(EXEMPTIONS) HAS REJE CTED THE APPLICATION ON 2 ISSUES BEING (I) NON MAINTENAN CE OF BOOKS OF ACCOUNT AND (II) AMENDMENT & WINDING UP O F CLAUSES WERE NOT REGISTERED WITH REGISTRAR OF COMPA NIES. THE LD. AR DREW ATTENTION TO THE PAGE 34 OF PAPER B OOK FILED WHERE THE RESOLUTION FOR AMENDMENT CLAUSE W AS PASSED ON 10-08-2015 IN THE MEETING OF BOARD OF DIR ECTORS. FURTHER, THE COMPANY WAS INCORPORATED ON 27-03-2015 , AND THE FIRST FINANCIAL YEAR ENDING BEING 31-03-201 6, AND THE ACTIVITIES HAVE TO BE UNDER TAKEN BY THE ASSESS EE. 5. THE LD. AR SUBMITTED THAT THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT AND RECEIVED G RANT FROM NAVJIBAI RATAN TATA TRUST AND THE SAID AMOUNT WAS KEPT IN FIXED DEPOSITS WITH THE BANK AND ALSO INCUR RED SOME PRE-OPERATIVE AND SET UP ACTIVITIES EXPENDITU RE. FURTHER, THE AMENDMENT CLAUSE OF MEMORANDUM OF ASSOCIATION WAS SUBSEQUENTLY FILED IN PRESCRIBED FO RM WITH THE REGISTRAR OF COMPANIES FOR REGISTATION AND WAS 4 ITA NO. 162/HYD/2016 M/S PRAJA PRERANA FOUNDATION, VISAKHAPATNAM. INCORPORATED AND PRAYED FOR GRANTING OF REGISTRATIO N U/S 12AA OF THE IT ACT. 6. CONTRA, THE LD. DR RELIED ON THE ORDER OF CIT(EXEMPTIONS) AND SUBMITTED THAT THE ASSESSEE HAS NOT COMPLIED THE DIRECTIONS OF CIT(E) AND THE RESOLUTIO N COPY FILED WITH CIT(EXEMPTIONS) IS OF BOARD OF DIRECTORS MEETING AND SUCH AMENDMENT CLAUSE SHOULD BE INCORPORATED IN THE ORIGINAL MEMORANDUM OF ASSOCIATION WITH THE REGIST RAR OF COMPANIES, WHICH WAS NOT CARRIED OUT AT THE TIME OF SUBMITTING THE INFORMATION. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE SUBSTANTIVE GROUND OF THE ASSESSEE THAT THE CIT(EXEMPTIONS) REJECTED THE APPL ICATION IN FORM 10A IN GRANTING REGISTRATION UNDER 12AA OF THE IT ACT. THE LD. AR EMPHASIZED THAT THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS. WE FOUND T HE ASSESSEE COMPANY WAS INCORPORATED WITH REGISTRAR OF COMPANIES ON 23-03-2015 AND THE APPLICATION WAS MAD E FOR REGISTRATION U/S 12AA OF THE IT ACT ON 24-04-20 15. AND IN RESPECT OF AMENDMENT CLAUSE OF WINDING UP IN THE MEMORANDUM OF ASSOCIATION, THE LD. AR DREW OUR ATTENTION TO THE PAGE 5 OF THE PAPER BOOK AT PARA X WHERE THE ASSESSEE HAS INCORPORATED THE CLAUSES AS PER TH E BOARD RESOLUTION PASSED ON 10-08-2015 AND SIMILARLY AMENDMENTS WERE INCORPORATED WITH REGISTRAR OF COMPANIES. FURTHER THE LD. AR SUBMITTED THAT AFTER THE INCORPORATION OF AMENDMENT IN THE MEMORANDUM OF ASSOCIATION WITH REGISTRAR OF COMPANIES. THE ASSES SEE MADE ANOTHER APPLICATION TO THE CIT(EXEMPTIONS) AND THE 5 ITA NO. 162/HYD/2016 M/S PRAJA PRERANA FOUNDATION, VISAKHAPATNAM. SAME IS PENDING. WE ARE OF THE OPINION THAT THE AS SESSEE SINCE COMPLIED THE DIRECTIONS ENVISAGED BY CIT(EXEM PTIONS) IN HIS ORDER. WE CONSIDER IT APPROPRIATE TO PROVID E AN OPPORTUNITY TO THE ASSESSEE TO PRESENT THESE FACTS BEFORE THE CIT(EXEMPTIONS). ACCORDINGLY, WE REMIT THE DIS PUTED ISSUE TO THE FILE OF CIT(EXEMPTIONS) FOR VERIFICATI ON AND ALLOW THE REGISTRATION UNDER 12AA OF THE IT ACT ON COMPLIANCE OF PROVISIONS OF LAW AND THE ASSESSEE SH OULD BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING BEFORE PAS SING THE ORDER OF MERITS. 8. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2017. SD/- SD/- (B. RAMAKOTAIAH) (G.PAVAN KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 24 TH FEBRUARY, 2017 KRK 1) M/S PREJA PRERANA FOUNDATION, 15-12-15, KALYANS RACAKONDA RESIDENCE, 1 ST FLOOR, KRISHNA NAGR, MAHARNIPET, VISAKHAPATNAM 530 002. 2) CIT(E) HYDERABAD 3) ITO(E) -II, WARD, VISAKHAPATNAM 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 5) GUARD FILE