Noorul Islam trust, Thodupuzha V. CIT, Cochin

ITA 166/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81419 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2014
• Assessment Year: misc
• Appeal Filed On: 02-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: MOHAN PULICKAL
• Keywords: Charitable institution
• Section: 12AA; 12; 11

Judgement Text

1 ITA NO.166 /COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 166/COCH/2013 NOORUL ISLAM TRUST VS THE CIT-I, KOCHI 46/IV/2005, AL AZHAR CAMPUS PERUMPILLICHIRA P.O, THODUPUZHA PAN : AAATN9216B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MOHAN PULICKAL RESPONDENT BY : SHRI M ANIL KUMAR, CIT DATE OF HEARING : 03-12-2014 DATE OF PRONOUNCEMENT : 05-12-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER DATED 31-01-2013 REJECT ING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT. 2. SHRI MOHAN PULICKAL, THE LD.COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSEE IS A CHARITABLE TRUST ESTABLISHED AND IS MANAGING SEVERAL EDUCATIONAL INSTITUTIONS IN THE FIELD OF ARTS AND S CIENCE, TEACHER TRAINING, DENTAL COLLEGE, PARA-MEDICAL SCIENCES, ETC. ACCORD ING TO THE LD.COUNSEL, 2 ITA NO.166 /COCH/2013 THE ASSESSEE FILED THE APPLICATION FOR REGISTRATION U/S 12AA ON 29-12-2008. HOWEVER, THE ADMINISTRATIVE COMMISSIONER REJECTED T HE CLAIM OF THE ASSESSEE FOR REGISTRATION WHICH WAS ALSO CONFIRMED BY THE ORDER OF THIS TRIBUNAL. THE ASSESSEE TOOK THE MATTER BEFORE THE HIGH COURT. THE HIGH COURT BY JUDGMENT DATED 17-11-2011 SET ASIDE THE OR DER OF THE TRIBUNAL AND THE COMMISSIONER AND REMANDED BACK THE MATTER T O THE FILE OF THE COMMISSIONER FOR GIVING AN OPPORTUNITY TO THE ASSES SEE TO GET THE APPROVAL OF THE COMPETENT CIVIL COURT IN RESPECT OF THE AMEN DMENT MADE IN THE TRUST DEED AND PRODUCE THE SAME BEFORE THE COMMISSIONER W ITHIN FOUR MONTHS. AS PER THE LIBERTY GIVEN BY THE HIGH COURT, THE ASS ESSEE FILED A CIVIL SUIT IN O.S. NO.131/2011 BEFORE THE COMPETENT CIVIL COURT, VIZ. THE SUBORDINATE JUDGE, THODUPUZHA. THE SUBORDINATE JUDGE BY JUDGME NT AND DECREE DATED 29-12-2012 DECREED THE SUIT FILED BY THE TRUS TEE OF THE ASSESSEE TRUST DECLARING THAT THE MODIFICATION / RECTIFICATI ON EFFECTED IN THE TRUST DEED BY DOCUMENT DATED 24-02-2009 WILL HAVE RETROSPECTIV E EFFECT WITH EFFECT FROM 23-07-1998 BEING THE DATE ON WHICH THE TRUST C AME INTO EXISTENCE. BY VIRTUE OF THIS JUDGMENT AND DECREE OF THE SUBORD INATE JUDGE, THODUPUZHA, THE ASSESSEE FILED ANOTHER APPLICATION BEFORE THE COMMISSIONER ON 12-07-2012 FOR REGISTRATIONS U/S 12 AA OF THE ACT. THE COMMISSIONER REJECTED THE CLAIM OF THE ASSESSEE IN A HURRIED MANNER ON THE LAST DATE OF LIMITATION FOR PASSING THE ORDER. ACCORDING TO THE LD.COUNSEL, THE APPLICATION WAS FILED AS EARLY AS 1 2-07-2012. THE SIX 3 ITA NO.166 /COCH/2013 MONTHS PERIOD PROVIDED IN SECTION 12AA FOR PASSING THE ORDER EXPIRED ON 31-03-2013. WITHOUT PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE, THE COMMISSIONER PASSED THE ORDER HURRIEDLY. 3. REFERRING TO THE ADVANCE OF RS.95 LAKHS SAID TO BE MADE TO M/S V.S. EXPORTS AND IMPORTS, PUTHUPPADY, THE LD.COUNSEL SUB MITTED THAT THIS AMOUNT WAS ADVANCED TO M/S V.S. EXPORTS & IMPORTS F OR PURCHASE OF TIMBER FOR CONSTRUCTION OF TRUST BUILDING. IN FACT , THE TIMBER WAS PURCHASED TO THE EXTENT OF RS.25 LAKHS AND THE BALANCE AMOUNT WAS RECEIVED BACK IN THE MONTH OF MARCH, 2010. 4. ON A QUERY FROM THE BENCH AS TO WHAT HAPPENED TO THE PROCEEDINGS BEFORE THE COMMISSIONER ON THE BASIS OF THE APPLICA TION FILED ON 29-12- 2008 WHICH WAS REMANDED BACK TO THE FILE OF THE COM MISSIONER BY THE HIGH COURT BY JUDGMENT DATED 17-11-2011 THE LD.COUN SEL FOR THE ASSESSEE SUBMITTED THAT IT IS PENDING BEFORE THE COMMISSIONE R. THE LD.COUNSEL FURTHER SUBMITTED THAT THE JUDGMENT OF THE SUBORDIN ATE JUDGE, THODUPUZHA SHOULD HAVE BEEN FILED BEFORE THE COMMISSIONER IN T HE PENDING PROCEEDING CONSEQUENT TO THE HIGH COURT DIRECTION. HOWEVER, THE ASSESSEE FILED A SEPARATE APPLICATION AND THE PROCE EDING REMANDED BY THE HIGH COURT IS STILL PENDING BEFORE THE COMMISSIONER . THE LD.COUNSEL ALSO 4 ITA NO.166 /COCH/2013 CLARIFIED THAT NO ORDER WAS PASSED BY THE COMMISSIO NER CONSEQUENT TO THE JUDGMENT OF THE HIGH COURT DATED 17-11-2011. 5. ON THE CONTRARY, SHI M ANIL KUMAR, THE LD.DR SUB MITTED THAT IT IS NOT CORRECT TO SAY THAT THE COMMISSIONER HAS PASSED THE ORDER IN HURRY. ACCORDING TO THE LD.DR, THE COMMISSIONER HAS GIVEN ADEQUATE OPPORTUNITY. REFERRING TO THE ADVANCE OF RS.95 LAKHS TO M/S V.S. EXPORT & IMPORT THE ASSESSEE CLAIMED BEFORE THE COMMISSIONER THAT AFTER PURCHASE OF TIMBER TO THE EXTENT OF RS.25 LAKHS, THE BALANCE AMOUNT WA S RECEIVED BACK IN THE MONTH OF MARCH, 2010. HOWEVER, THE COMMISSIONER FO UND THAT THE PURCHASE ITSELF WAS RECORDED IN THE MONTH OF AUGUST AND SEPTEMBER, 2010. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE BALAN CE AMOUNT WAS RECEIVED BACK IN THE MONTH OF MARCH, 2010 CANNOT BE CORRECT. ACCORDING TO THE LD.DR, EVEN IF THE CLAIM THAT TIMBER WAS PUR CHASED TO THE EXTENT OF RS.25 LAKHS, THE BALANCE OF RS.75 LAKHS WAS LEFT WI TH A BUSINESS ENTITY FOR A LONG PERIOD OF TWO YEARS. THE LD.DR FURTHER SUBM ITTED THAT HUGE DEPOSITS WERE MADE IN THE SAVINGS BANK ACCOUNT AND THE CHAIR MAN OF THE TRUST, SHRI K.M. MOOSA. EVEN THOUGH THE CHAIRMAN CLAIMED THAT FUNDS FOR THE TRUST WAS ARRANGED THROUGH PRIVATE CHITS WHICH WAS ROUTED THROUGH THE PERSONAL ACCOUNT OF THE CHAIRMAN, THE SAME WAS NOT SUBSTANTI ATED BY FILING ANY MATERIAL, THEREFORE, THE COMMISSIONER FOUND THAT TH E OBJECT OF THE TRUST AND ITS ACTIVITY IS NOT GENUINE. ACCORDINGLY REGISTRAT ION WAS NOT GRANTED. 5 ITA NO.166 /COCH/2013 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION U/S 12AA ON 29-12-2 008. THE COMMISSIONER REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND TH AT THE AMENDED TRUST DEED IS NOT VALID. THE ORDER OF THE COMMISSIONER W AS ALSO CONFIRMED BY THIS TRIBUNAL. ON FURTHER APPEAL BEFORE THE HIGH C OURT THE MATTER WAS REMANDED BACK TO THE FILE OF THE COMMISSIONER BY GI VING LIBERTY TO THE ASSESSEE TRUST TO FILE A CIVIL SUIT BEFORE THE COMP ETENT CIVIL COURT AND FILE THE COPIES OF THE DECREE WITHIN A PERIOD OF FOUR MONTHS BEFORE THE COMMISSIONER. IN FACT, THE HIGH COURT HAS PASSED T HE FOLLOWING ORDERS: 3 THE OBJECTS ARE ADMITTEDLY CHARITABLE IN NAT URE ENTITLING THE ASSESSEE TO CLAIM EXEMPTION, IF THE C ONDITIONS OF SECTION 11 ARE SATISFIED. MOREOVER, EDUCATIONAL IN STITUTIONS ARE ENTITLED TO SEPARATE EXEMPTION ON INCOME EARNED BY IT UNDER SECTION 10(23)(C) OF THE INCOME TAX ACT. IN ANY CA SE SINCE THE ASSESSEE WANTS TO CORRECT A TECHNICAL OMISSION BEFORE THE CIVIL COURT, WE FEEL AN OPPORTUNITY CAN BE GRANTED TO THE ASSESSEE TO GET APPROPRIATE ORDERS FROM CIVIL COURT . ACCORDINGLY WITHOUT GOING INTO THE MERITS OF THE CA SE WE ALLOW THE APPEAL BY SETTING ASIDE THE ORDER OF THE TRIBUN AL THAT OF THE COMMISSIONER AND REMAND THE CASE TO THE COMMISSIONE R FOR RECONSIDERATION AFTER GIVING ASSESSEE AN OPPORTUNIT Y TO GET ORDERS FROM CIVIL COURT. THE ASSESSEE IS GRANTED F OUR MONTHS 6 ITA NO.166 /COCH/2013 TIME TO OBTAIN ORDERS FROM THE CIVIL COURT AND PROD UCE THE SAME BEFORE THE COMMISSIONER. HOWEVER, WE MAKE IT CLEAR THAT THE ASSESSEE SHALL NOT BE ENTITLED TO CLAIM AN Y EXEMPTION ON GROUND OF LIMITATION RECKONING THE PERIOD OF FOU R MONTHS GRANTED BY US FROM TODAY. CONSEQUENT TO THE JUDGMENT OF THE HIGH COURT, THE A SSESSEE FILED A SUIT BEFORE THE SUBORDINATE JUDGE, THODUPUZHA IN O.S. NO .131 OF 2011. THE SUBORDINATE JUDGE, THODUPUZHA DECREED THE SUIT BY J UDGMENT AND DECREE DATED 29-03-2012, I.E. WITHIN THE PERIOD OF FOUR MO NTHS GRANTED BY THE HIGH COURT FOR APPROACHING THE CIVIL COURT. THEREFORE, THE ASSESSEE OUGHT TO HAVE FILED THE COPIES OF THE DECREE BEFORE THE COMM ISSIONER IN THE PENDING PROCEEDING CONSEQUENT TO THE DIRECTION OF T HE HIGH COURT. UNFORTUNATELY, INSTEAD OF PROSECUTING THE APPLICATI ON PENDING BEFORE THE COMMISSIONER CONSEQUENT TO THE JUDGMENT OF THE HIGH COURT, THE ASSESSEE FILED A SEPARATE APPLICATION ON 12-07-2012 . THE COMMISSIONER ALSO PASSED ORDER REJECTING THE APPLICATION OF THE ASSESSEE DATED 12-07- 2012 BY AN ORDER DATED 31-12-2013. THE PROCEEDING REMANDED BY THE HIGH COURT BY ITS JUDGMENT DATED 17-11-2011 IS STIL L PENDING BEFORE THE COMMISSIONER. THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT WHEN THE HIGH COURT REMANDED BACK THE MATTER BEFORE THE COMM ISSIONER SETTING ASIDE THE ORDER OF THE TRIBUNAL AND THE COMMISSIONE R, THE COMMISSIONER OUGHT TO HAVE PROCEEDED FURTHER ON THE BASIS OF THE DIRECTION OF THE HIGH 7 ITA NO.166 /COCH/2013 COURT. EVEN IF THE ASSESSEE FILED ANOTHER APPLICAT ION, THE COMMISSIONER OUGHT TO HAVE DISPOSED OF THE SAME BY A COMMON ORDE R. THE COMMISSIONER CANNOT KEEP THE PROCEEDING PENDING WHE N THE HIGH COURT DIRECTED THE COMMISSIONER TO RECONSIDER THE MATTER ON THE BASIS OF THE JUDGMENT OF THE CIVIL COURT THAT MAY BE PRODUCED BY THE ASSESSEE AS PER THE LIBERTY GIVEN TO THE ASSESSEE BY THE HIGH COURT . SINCE THE REMANDED PROCEEDING IS STILL PENDING BEFORE THE COMMISSIONER AND THE ASSESSEE HAS IN FACT OBTAINED THE DECREE FROM THE CIVIL COURT AS DIRECTED BY THE HIGH COURT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE COMMISSIONER HAS TO PROCEED FURTHER ON THE BASIS OF THE DIRECTION OF THE HIGH COURT. ACCORDINGLY, THE ORDER OF THE COMMISSIONER IS SET A SIDE AND THE ISSUE OF REGISTRATION U/S 12AA IS REMITTED BACK TO THE FILE OF THE COMMISSIONER. THE COMMISSIONER SHALL PROCEED FURTHER ON THE BASIS OF THE APPLICATION FILED BY THE ASSESSEE ON 29-12-2008 AND THE DIRECTION OF THE HIGH COURT. IT IS ALSO OPEN TO THE COMMISSIONER TO PASS COMMON ORDER IF CO NSIDERS SO ON THE APPLICATION OF THE ASSESSEE DATED 12-07-2012. 7. WITH THE ABOVE OBSERVATIONS, THE ISSUE OF REGIST RATION U/S 12AA IS REMANDED BACK TO THE FILE OF THE COMMISSIONER OF IN COME-TAX. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. 8 ITA NO.166 /COCH/2013 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05 TH DECEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 05 TH DECEMBER, 2014 PK/- COPY TO: 1. NOORUL ISLAM TRUST, PERUMPILLICHIRA PO, THODUPUZ HA 2. THE CIT, KOCHI 3. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH