Uttar Prakash Expressways Industrial Development Authority, Lucknow V. Commissioner of Income Tax-I, Lucknow

ITA 167/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78532 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-05-2014
• Assessment Year: misc
• Appeal Filed On: 10-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Assessee Lawyers: YOGESH AGARWAL
• Keywords: Charitable institution; Principle of natural justice
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 167/LKW/2012 UTTAR PRADESH EXPRESSWAYS INDUSTRIAL DEVELOPMENT AUTHORITY LUCKNOW V. CIT - I LUCKNOW PAN: AAALU0121E (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. YOGESH AGARWAL, ADVOCATE RESPONDENT BY: SHRI. VIVEK MISHRA, CIT (DR) DATE OF HEARING: 22 05 2014 DATE OF PRONOUNCEMENT: 27 05 2014 O R D E R PER SUNIL KUMAR YADAV: T HIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX DENYING REGISTRATION UNDER SECTION 12AA OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1. BE CAUSE LOOKING TO THE CHRONOLOGY OF RELEVANT DATES AND EVENTS AS GIVEN HEREUNDER: - DATES EVENTS (I) 16.3.2009 APPLICATION SEEKING REGISTRATION UNDER SECTION 12AA W.E.F. 1.4.2009 WAS FILED BEFORE THE ID. CIT - I, LUCKNOW. (II) 29.09.2009 THE ID. CIT - I, LUC KNOW DECLINED TO GRANT REGISTRATION BY PASSING AN ORDER ON THAT DATE, ON THE GROUND THAT THE 'ASSESSEE HAD FAILED TO ESTABLISH THE CARRYING ON OF CHARITABLE ACTIVITIES WHICH IS A CONDITION PRECEDENT FOR GRANT OF RECOGNITION U/S PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : 12A(1)(A)'. (III) 28.01.201 0 THE HON'BLE ITAT, LUCKNOW BENCH, LUCKNOW DECIDED THE APPEAL BEING ITA NO.630/LUC/09 (THAT HAD BEEN FILED BY THE APPELLANT AGAINST THE ABOVE REFERRED OR DATED 29.9.2009 WHEREBY THE MATTER WAS SET ASIDE AND THE 'ASSESSEE'S REQUEST FOR REGISTRATION' WAS RE STORED BACK TO THE FILE OF THE CIT. (IV) 19.02.2010 THE ABOVE REFERRED ORDER PASSED BY THE HON'BLE ITAT, LUCKNOW BENCH, LUCKNOW WAS PLACED BEFORE THE LD. CIT - I, LUCKNOW. THE 'CIT' COULD NOT HAVE PASSED ANY ADVERSE ORDER AFTER THE EX PIRY OF SIX MONTHS ON 31.08.2010 AND THE ORDER DATED 10.2.2012 IMPUGNED IN THE PRESENT APPEAL IS WHOLLY ILLEGAL. 2. BECAUSE IN TERMS OF THE ORDER DATED 28.01.2010 PASSED BY THE HON'BLE I TAT, THE PARTIES STOOD RELEGATED TO THE STAGE OF FILING OF APPLICATION FOR REGISTRATIO N UNDER SECTION 12AA AND NO ADVERSE ORDER HAVING BEEN PASSED WITHIN A PERIOD OF SIX MONTHS, THE 'CIT' COULD NOT HAVE PASSED THE IMPUGNED ORDER, SO AS TO REJECT THE CLAIM FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. 3. BECAUSE THE IMPUGNED ORDER HAVING BEEN PASSED IN VIOLATION OF THE DIRECTIONS CONTAINED IN THE ORDER DATED 28.01.2010 PASSED BY THE HON'BLE ITAT, IS WHOLLY VITIATED IN LAW. WITHOUT PREJUDICE TO THE AFORESAID 4. BECAUSE THE 'CIT' HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT 'THE ACTIVITIES OF THE ASSESSEE DETAILED IN PARA 1 ABOVE, ARE EVIDENTLY REAL, SUBSTANTIAL, SYSTEMATIC AND ORGANIZED WITHOUT ANY SHADOW OF DOUBT PARTAKE OF THE NATURE OF BUSINESS' AND IN HOLDING THAT OBJECTS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : ARE HIT BY THE FIRST PROVISO TO SECTION 2(15) OF THE ACT, AND IN REJECTING THE CLAIM FOR REGISTRATION UNDER SECTION 12AA AS AN 'INSTITUTION EXISTING FOR CHARITABLE PURPOSES'. 5. BECAUSE THE CASE LAWS REFERRED TO AND RELIED UPON BY THE 'CIT' IN ARRIVING AT THE AFORESAID CONCLUSION HAD BEEN RENDERED IN AN ALTOGETHER DIF FERENT CONTEXT AS IS BORNE OUT FROM A BRIEF 'RESUME' OF THE SAME WHICH IS ENCLOSED AS ANNEXURE - I TO THE PRESENT GROUNDS OF APPEAL AND FORMING PART OF THE SAME, AND ACCORDINGLY THE IMPUGNED ORDER IS WHOLLY VITIATED. 6. BECAUSE APPLICATION OF THE PROVISO TO SECTION 2(15) COULD NOT HAVE BEEN GENERALIZED AND LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, PARTICULARLY THAT; (A) UPEIDA HAD BEEN CONSTITUTED AS AN 'AUTHORITY' BY THE GOVERNMENT OF UTTAR PRADESH, UNDER UTTAR PRADESH INDUSTRIAL AREA DEVELOPMENT ACT, 1976 VIDE NOTIFICATION NO.4246/77 - 4 - 07 - 94 BHA/07TC DATED 27.12 . 007; (B) INITIALLY, IT WAS ENTRUSTED WITH THE EXECUTION OF 08 LANE EXPRESSWAY FROM GREATER NOIDA TO BALIA AND LINK EXPRESSWAY PROJECTS; (C) LATER ON OTHER 'EXPRESSWAY PROJECTS' WERE ALSO ENTRUSTED TO IT FOR IMPLEMENTATION; (D) IT WAS IMPLEMENTATION OF SUCH PROJECTS ONLY AS HAS BEEN UNDERTAKEN BY THE APPELLANT, AS A PART OF ITS ACTIVITIES, WHICH HAS BEEN IN PROGRESS ALSO; AND (E) SUCH 'IMPLEMENTATION OF PROJECTS ' WAS ON BEHALF OF THE STATE GOVERNMENT AND AMOUNTED TO 'DISCHARGE OF FUNCTIONS' OF THE STATE ITSELF. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : IT COULD NOT BE SAID AND HELD THAT THE APPELLANT IS CARRYING ON ACTIVITIES IN THE NATURE OF BUSINESS FOR A CONSIDERATION' SO AS TO REJECT ITS CLAIM FOR R EGISTRATION UNDER SECTION 12AA OF THE ACT. 7. BECAUSE THE APPELLANT HAD NOT BEEN CARRYING ON ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION AND ITS CLAIM FOR REGISTRATION UNDER SECTION 12AA COULD NOT HAVE BEEN REJECTED BY AP PLYING THE PROVISO TO SECTION 2(15) OF THE ACT AS IT CAME IN FORCE W.E.F. 1.4.2009. 8. BECAUSE THE APPELLANT IS NOT AN 'INDUSTRY AND TRADE ASSOCIATION' WHICH ALONE ARE COVERED BY THE SAID PROVISO AS PER THE CIRCULAR NO.11 OF 2008 DATED 19.12.2008 BUT IT B EING AN 'AUTHORITY' CONSTITUTED BY THE GOVERNMENT OF UTTAR PRADESH UNDER UTTAR PRADESH INDUSTRIAL AREA DEVELOPMENT ACT, 1976, FOR CARRYING ON AND IMPLEMENTING THE OBJECTIVES AND POLICIES OF THE STATE GOVERNMENT ITSELF FULLY ELIGIBLE FOR GRANT OF REGISTRATI ON UNDER SECTION 12AA OF THE ACT. 9. BECAUSE AFTER HAVING ACCEPTED THAT THE OBJECTS OF THE APPELLANT ARE THE 'OBJECTS OF GENERAL PUBLIC UTILITY' AND THERE BEING NO DISPUTE ABOUT CARRYING ON OF SUCH ACTIVITIES BY IT, THE 'CIT' WAS NOT JUSTIFIED EITHER ON F ACTS OR IN LAW IN NOT ACCEPTING THE APPELLANT'S CLAIM FOR REGISTRATION UNDER SECTION 12AA. 10. BECAUSE THE RECEIPTS SHOWN BY THE APPELLANT, CLASSIFIED AS 'STREAMS OF REVENUE' BY THE 'CIT' WERE NOT IN THE NATURE OF 'CESS' OR 'FEE' OR ANY OTHER CONSIDERATIO N' AND REJECTION OF THE APPELLANT'S CLAIM FOR REGISTRATION UNDER SECTION 12AA IS BASED ON A WHOLLY WRONG PREMISE AND THE SAME IS NOT TENABLE. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 11. BECAUSE THE ORDER PASSED BY THE 'CIT', AS WHICH HAS BEEN IMPUGNED IN THIS APPEAL IS BASED ON A WHOLLY WRONG P REMISE AND IS NOT SUSTAINABLE EITHER ON FACTS OR IN LAW AND THE 'APPELLANT'S' CLAIM FOR REGISTRATION UNDER SECTION 12AA DESERVE TO BE ACCEPTED. 12. BECAUSE LOOKING TO THE FACTS THAT THE APPELLANT, BY VIRTUE OF ITS EXISTENCE AS AN 'AUTHORITY' CONSTITUTED B Y THE STATE GOVERNMENT BY INVOKING THE PROVISIONS CONTAINED IN U.P. INDUSTRIAL AREA DEVELOPMENT ACT, 1976, WAS LIABLE TO BE TREATED AS AN EXTENDED ARM OF THE STATE, GOVERNMENT, HAVING ALL THE ATTRIBUTES OF A STATE UNDER .ARTICLE 12 OF THE CONSTITUTION OF I NDIA, THE 'CIT' SHOULD HAVE HELD THAT IT (UPEIDA) ENJOYS EXEMPTION FROM UNION TAXATION UNDER ARTICLE 285 READ WITH ARTICLE 289 OF THE CONSTITUTION OF INDIA, CALLING FOR NO REGISTRATION AS SUCH, UNDER SECTION 12AA OF THE ACT, FOR THE PURPOSES OF CLAIMING EX EMPTION. 13. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2 . THE ASSESSEE HAS RAISED A PRELIMINARY OBJECTION THROUGH THESE GROUNDS THAT THE LD. COMMISSIONER OF INCOME - TAX HAS PASSED THE ORDER UNDER SECTI ON 12AA OF THE ACT AFTER A PERIOD OF SIX MONTHS FROM THE ORDER OF THE TRIBUNAL RESTORING THE MATTER TO HIS FILE VIDE ORDER DATED 28.01.2010 IN ITA NO. 630/LUC/2009. SINCE THE LD. COMMISSIONER OF INCOME - TAX HAS NOT PASSED THE ORDER UNDER SECTION 12AA OF TH E ACT WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF RECEIPT OF THE ORDER OF THE TRIBUNAL, REGISTRATION IS DEEMED TO HAVE BEEN GRANTED IN THE LIGHT OF THE PROVISIONS OF SECTION 12AA(2) OF THE ACT, ACCORDING TO WHICH THE LD. COMMISSIONER OF INCOME - TAX IS RE QUIRED TO GRANT OR REFUSE REGISTRATION UNDER CLAUSE (B) OF SUB - SECTION (1) OF SECTION 12AA OF THE ACT BEFORE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH APPLICATION WAS RECEIVED UNDER CLAUSE (A) OR CLAUSE (AA) PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : OF SUB - SECTION (1) OF SECTION 12A OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SOCIETY FOR THE PROMOTION OF EDUCATION ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS. CIT & OTHERS [2008] 216 CTR 167, IN WHICH HON'BLE COURT HAS HELD THAT NON - CONSIDERATION OF THE APPLICATION FOR REGISTRATION UNDER SECTION 12A WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD BE A DEEMED GRANT OF REGISTRATION. 3 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON T HE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX. 4 . HAVING CAREFULLY EXAMINED THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE TRIBUNAL HAS PASSED AN ORDER IN ITA NO. 630/LUC/2009 ON 28.1.2010 DIRECTING TH E LD. COMMISSIONER OF INCOME - TAX TO RE - ADJUDICATE THE ISSUE OF REGISTRATION UNDER SECTION 12AA OF THE ACT. BUT THE LD. COMMISSIONER OF INCOME - TAX HAS PASSED AN ORDER ON 10.2.2012 AFTER MORE THAN TWO YEARS. WE FIND THAT THIS ISSUE WAS EXAMINED BY US IN TH E CASE OF HARSHIT FOUNDATION, JAUNPUR VS. CIT, FAIZABAD IN ITA NOS. 104 & 105/LUC/2012 VIDE DATED 28.6.2013 IN WHICH WE HAVE HELD THAT IF THE LD. COMMISSIONER OF INCOME - TAX DOES NOT PASS ANY ORDER EVEN AFTER SIX MONTHS FROM THE DATE OF RECEIPT OF THE TRIBU NALS ORDER REMITTING THE MATTER TO HIM, REGISTRATION WILL BE DEEMED TO HAVE BEEN GRANTED. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL IS EXTRACTED HEREUNDER: - 4. IN OUR CONSIDERED VIEW, PLEA OF THE ASSESSEE DESERVES TO BE ACCEPTED IN THE LIGHT OF HON'BLE JURISDICTIONAL HIGH COURT'S JUDGMENT IN THE CASE OF SOCIETY FOR PROMOTION OF EDUCATION, ADVENTURE SPORTS AND CONSERVATION OF ENVIRONMENT (SUPRA), WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS: - 'THE APEX COURT HAS ALSO APPLIED DOCTRINE OF P URPOSIVE INTERPRETATION IN FISCAL STATUTES THAT WOULD BE EVIDENT FROM ITS DECISION IN CIT VS. ANJUM M.H . GHASWALA & ORS. (2001) 171 CTR (SC) 1 : JT 2001 (9) SC 61. CONSIDERING THE PROS AND CONS OF THE TWO VIEWS, WE ARE OF THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 7 - : OPINION THAT BY FAR THE BETTER INTERPRETATION WOULD BE TO HOLD THAT THE EFFECT OF NON - CONSIDERATION OF THE APPLICATION FOR REGISTRATION WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD BE A DEEMED GRANT OF REGISTRATION. WE DO NOT FIND ANY GOOD REASON TO MAKE THE ASSESSEE SUFFER BECAUSE T HE IT DEPARTMENT IS NOT ABLE TO KEEP ITS OFFICERS UNDER CHECK AND CONTROL, SO AS TO TAKE TIMELY DECISIONS IN SUCH SIMPLE MATTERS SUCH AS CONSIDERATION OF APPLICATIONS FOR REGISTRATION EVEN WITHIN THE LARGE SIX MONTH PERIOD PROVIDED BY S. 12AA(2) OF THE ACT . WE ACCORDINGLY DIRECT THE RESPONDENTS, SUBJECT TO ANY ORDER WHICH MAY BE PASSED UNDER S. 12AA(3), TO TREAT THE PETITIONER SOCIETY AS AN INSTITUTION DULY APPROVED AND REGISTERED UNDER S. 12AA AND TO RECOMPUTED ITS INCOME BY APPLYING THE PROVISION OF S.11 OF THE ACT. ACCORDINGLY, A FORMAL CERTIFICATE OF APPROVAL WILL BE ISSUED FORTHWITH TO THE PETITIONER BY THE RESPONDENT NO.2.' 5. APPLYING THE PRINCIPLE SO LAID DOWN, WHERE COMMISSIONER DOES NOT PASS ANY ORDERS EVEN AFTER SIX MONTHS FROM RECEIPT OF TRIBUNAL 'S ORDER REMITTING THE MATTER TO HIM. THE REGISTRATION WILL BE DEEMED TO HAVE BEEN GRANTED. OF COURSE, THIS IS SUBJECT TO EXERCISE OF COMMISSIONER'S POWER U/S. 1 2AA(3) IN APPROPRIATE CASES, BUT THE REGISTRATION WILL BE DEEMED TO HAVE BEEN GRANTED. 6. FOR TH E REASONS SET OUT ABOVE, WE UPHOLD THE PRELIMINARY OBJECTION RAISED BY THE ASSESSEE AND DIRECT THE COMMISSIONER TO ISSUE APPROVAL OF REGISTRATION FORTHWITH. IN THIS VIEW OF THE MATTER, WE SEE NO NEED TO DEAL WITH OTHER LEGAL AND FACTUAL ISSUES RAISED BY TH E ASSESSEE. 5 . THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SOCIETY FOR THE PROMOTION OF EDUCATION ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS. CIT & OTHERS (SUPRA) HAS HELD THAT NON - CONSIDERATION OF THE APPLICATION FOR REGISTRATION UNDER SECTI ON 12A WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD BE A DEEMED GRANT OF REGISTRATION. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 8 - : 6 . FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL AND ALSO THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT , WE HOLD THAT SINCE THE LD. COMMISSIONER OF INCOME - TAX HAS NOT DIS POSED OF THE APPLICATION FOR REGISTRATION WITHIN A PERIOD OF SIX MONTHS CONSEQUENT TO THE ORDER OF THE TRIBUNAL REMITTING THE MATTER BACK TO HIM VIDE ITS ORDER DATED 28.1.2010 , REGISTRATION UNDER SECTION 12AA OF THE ACT WILL BE DEEMED TO HAVE BEEN GRANTED. ACCORDINGLY, WE DIRECT THE LD. COMMISSIONER OF INCOME - TAX TO GRANT REGISTRATION UNDER SECTION 12AA OF THE ACT FORTHWITH. ORDER PRONOUNCED IN THE OPEN COURT ON 27.5.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH MAY , 2014 JJ: 2305 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )