Dr. Ambedkhar People's Educational Trust, Hyderabad V. DIT (Exemptions), Hyderabad

ITA 1794/HYD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6121 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-02-2017
• Assessment Year: misc
• Appeal Filed On: 27-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Additional evidence; Competent authority
• Section: 80G; 12A

Judgement Text

ITA NO 1794 OF 2014 DR AMBEDKAR PEOPLES EDUCATIONAL TRUST HYDERABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1794/HYD/2014 (ASSESSMENT YEAR: NA ) DR. AMBEDKAR PEOPLES EDUCATIONAL TRUST, AMBEDKAR BHAVAN, HYDERABAD PAN: AAATD 6201 G VS DIRECTOR OF INCOME TAX (EXEMPTIONS) HYDERABAD FOR ASSESSEE : SHRI V. SIVA KUMAR FOR REVENUE : SMT. G. APARNA RAO, CIT(DR) O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL AGAINST THE WITHDRAWAL OF THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT BY DATED 25.09.2014 U/S 12AA(3) OF THE I.T. ACT. 2. THE ASSESSEE IS A TRUST WHICH IS CARRYING ON EDUCATIONAL ACTIVITIES AND IS THUS RUNNING AN EDUCA TIONAL INSTITUTION FOR P.G. STUDENTS IN MANAGEMENT AT VISA KHAPATNAM AND AWARDING MANAGEMENT DEGREES TO THE STUDENTS. TH E ASSESSEE TRUST WAS GRANTED REGISTRATION U/S 12A OF THE ACT B Y THE DIRECTOR OF INCOME TAX (EXEMPTIONS) VIDE ORDERS DATED 4.12.1 990. WHILE GRANTING APPROVAL TO THE INSTITUTION, THE ALL INDIA COUNCIL FOR DATE OF HEARING : 20.02.2017 DATE OF PRONOUNCEMENT : 28.02.2017 ITA NO 1794 OF 2014 DR AMBEDKAR PEOPLES EDUCATIONAL TRUST HYDERABAD PAGE 2 OF 6 TECHNICAL EDUCATION (AICTE), VIDE ITS ORDER DATED 1 2.05.2008, HAS LAID DOWN A SPECIFIC CONDITION THAT THE INSTITUTION WILL CHARGE THE FEE AS PRESCRIBED BY THE COMPETENT AUTHORITY FROM T IME TO TIME AND IN NO SITUATION, CAPITATION FEE SHALL BE CHARGE D FROM THE STUDENTS OR GUARDIANS OF STUDENTS IN ANY FORM. 3. THE ASSESSEE HAS APPLIED FOR REGISTRATION U/S 80 G OF THE ACT AND THE DIT VIDE ORDERS DATED 19.11.2009, R EJECTED THE SAME BY HOLDING THAT THE ASSESSEE TRUST IS RUNNING THE INSTITUTION ON COMMERCIAL LINES. THE ASSESSEE DID NOT CHALLENGE THAT ORDER BEFORE THE HIGHER COURTS. THEREAFTER, THE DIT TAKIN G INTO CONSIDERATION THE SAID ORDER U/S 80G(5), OBSERVED T HAT IT SHOWS THAT THE ASSESSEE IS NOT FUNCTIONING AS A CHARITABL E INSTITUTION AND IS ALSO NOT CARRYING OUT CHARITABLE ACTIVITIES. THEREFORE, HE SOUGHT TO WITHDRAW THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT. THEREFORE, A SHOW CAUSE NOTICE DATE D 13.3.2014 WAS ISSUED U/S 12AA(3) OF THE ACT TO THE ASSESSEE T RUST. 4. THE ASSESSEE, VIDE LETTER DATED 14.4.2014, SUBMI TTED THAT THE ASSESSEE WAS CARRYING ON ACTIVITIES ON NO PROFIT, NO LOSS BASIS AND IS STRICTLY COMPLYING WITH THE GUIDELINES OF THE AICTE. HOWEVER, THE DIT (E) WAS NOT CONVINCED AND OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED THE FEE STRUCTURE WHICH IT HAS FIXED FOR THE STUDENTS FOR THE ACADEMIC YEARS 2007-09 TO 2008 -10 RELEVANT IN THIS CASE. HE ALSO OBSERVED THAT (I) THE ASSESSE E HAS NOT FURNISHED THE COPIES OF THE LETTERS ETC., WRITTEN T O AICTE DURING THE FINANCIAL YEARS 2006-07 TO 2008-09, AND (II) TH E COPIES OF THE APPROVAL, IF ANY, RECEIVED FROM AICTE PERTAINING TO THE FEE ITA NO 1794 OF 2014 DR AMBEDKAR PEOPLES EDUCATIONAL TRUST HYDERABAD PAGE 3 OF 6 STRUCTURE DURING SUCH PERIOD HAS NOT BEEN FURNISHED . UNDER THESE CIRCUMSTANCES, THE DIT (E) HELD THAT THE FEE STRUCT URE OF THE STUDENTS AS FIXED BY THE ASSESSEE TRUST AND IS APPR OVED BY THE AICTE IS NOT KNOWN. HE ALSO OBSERVED THAT THE ASSES SEE HAS NOT FURNISHED THE BOOKS OF ACCOUNT AND ALSO THAT THE AS SESSEE HAS BEEN HAVING EXCESS OF INCOME OVER EXPENDITURE FOR E ACH OF THE A.YS AND THEREFORE, THE ASSESSEES CONTENTION THAT I T WAS RUNNING THE INSTITUTION ON NO PROFIT NO LOSS BASIS IS NOT CORRECT. IN VIEW OF THE SAME, THE DIT (E) PASSED AN ORDER U/S 12AA(3) O F THE ACT WITHDRAWING THE REGISTRATION GRANTED TO THE ASSESSE E U/S 12A OF THE ACT, W.E.F. 1.4.2008. AGGRIEVED, THE ASSESSEE I S IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT BEFORE THE FINANCE ACT BEING AMENDED BY THE FINANCE A CT OF 2014, THE REGISTRATION GRANTED UNDER SECTION 12A COULD BE WITHDRAWN ONLY UNDER TWO CIRCUMSTANCES I.E. (A) THE ACTIVITIE S OF THE TRUST OR INSTITUTION ARE NOT GENUINE OR; (B) THE ACTIVITIES ARE NOT BRING CARRIED IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. HE SUBMITTED THAT THE DIT (E) DID NOT HAVE ANY MATE RIAL BEFORE HIM TO COME TO THE CONCLUSION THAT THE ASSESSEE TRU ST WAS CHARGING CAPITATION FEE OR THAT IT WAS CHARGING EXC ESS OF FEE THAN THE FEE APPROVED BY AICTE. THEREFORE, HE SUBMITTED THAT IN THE ABSENCE OF ANY MATERIAL, THE DIT (E) COULD NOT HAVE COME TO THE CONCLUSION THAT THE ASSESSEE IS NOT CARRYING ON ACT IVITIES IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR THAT TH E ACTIVITIES ARE NOT GENUINE. FURTHER, THE LEARNED COUNSEL FOR THE AS SESSEE ALSO DREW OUR ATTENTION TO VARIOUS DOCUMENTS FILED AS AD DITIONAL ITA NO 1794 OF 2014 DR AMBEDKAR PEOPLES EDUCATIONAL TRUST HYDERABAD PAGE 4 OF 6 EVIDENCE BEFORE US TO CONTEND THAT THE ASSESSEE HAS COMPLIED WITH THE INSTRUCTIONS OF THE AICTE AND THERE WAS NO VIOL ATION IN ANY WAY. HE SUBMITTED THAT THIS EVIDENCE IS BEING FILED AT THIS STAGE ONLY TO SUBSTANTIATE THE ASSESSEES CLAIM THAT IT W AS FOLLOWING THE NORMS LAID DOWN BY THE AICTE AND THERE WAS NO VIOLA TION OF ANY NORMS WHATSOEVER. HE THEREFORE, PRAYED FOR ADMISSIO N OF THE DOCUMENTS AS ADDITIONAL EVIDENCE AND CONSIDERATION OF THE SAME IN ACCORDANCE WITH THE LAW. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE DIT (E) AND SUBMITTED THE FACT THAT T HE ASSESSEE IS NOT CARRYING ON ACTIVITIES AS A CHARITABLE INSTITUT ION IS CONFIRMED BY THE FACT THAT THE REGISTRATION U/S 80G HAS BEEN DENIED TO THE ASSESSEE AND THE ASSESSEE HAS ACCEPTED THE SAID DEC ISION AND THEREFORE, THE WITHDRAWAL OF THE REGISTRATION U/S 1 2A OF THE ACT IS JUSTIFIED. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE BASIS FOR THE WITHDRAWA L OF THE REGISTRATION U/S 12A OF THE ACT IS THE ORDER OF THE DIT (E) DATED 19.11.2009 REJECTING THE APPLICATION FOR APPROVAL U /S 80G OF THE ACT. A COPY OF THE ORDER U/S 80G IS PLACED AT PAGES 1 TO 3 OF THE PAPER BOOK FILED BY THE ASSESSEE. ON A CLOSE READIN G OF THE SAID ORDER, WE FIND THAT THE REGISTRATION U/S 80G WAS RE JECTED ON THE GROUND THAT THE ASSESSEE IS NOT ABLE TO ESTABLISH T HAT THE FEES CHARGED BY IT IS IN ACCORDANCE WITH THE RULES AND R EGULATIONS OF THE GOVT. OF ANDHRA PRADESH AND ALSO THE RULES AND REGULATIONS FRAMED BY THE ALL INDIA COUNCIL FOR TECHNICAL EDUCA TION (AICTE). ITA NO 1794 OF 2014 DR AMBEDKAR PEOPLES EDUCATIONAL TRUST HYDERABAD PAGE 5 OF 6 IT WAS OBSERVED BY THE DIT (E) THAT THE ASSESSEE WA S GIVEN ADEQUATE TIME TO ESTABLISH THAT THE FEE CHARGED BY THE ASSESSEE IS IN ACCORDANCE WITH THE RULES AND REGULATIONS FRAMED BY THE COMPETENT AUTHORITY AND IN THE ABSENCE OF THE EVIDE NCE THAT THE FEE PAID BY THE STUDENTS IS IN ACCORDANCE WITH THE RULES AND REGULATIONS, THE REGISTRATION WAS DENIED TO THE ASS ESSEE. WE FIND THAT THE DIT (E) HAD, ISSUED A SHOW CAUSE NOTICE U/ S 12A(3) OF THE ACT FOR WITHDRAWAL OF THE REGISTRATION U/S 12A OF T HE ACT. IN SUCH CIRCUMSTANCES, THE DUTY WAS CAST UPON THE ASSESSEE TO FURNISH ALL THE RELEVANT MATERIAL BEFORE THE DIT (E) BOTH DURIN G THE PROCEEDINGS U/S 80G AND SECTION 12AA(3) OF THE ACT. 8. THE ASSESSEE HAS NOW FILED THE DETAILS BEFORE US AND ON PERUSAL OF THE SAID DETAILS, WE FIND THAT THEY C ONSISTS OF THE COPY OF THE LETTER ISSUED BY THE AICTE GRANTING REG ISTRATION TO THE ASSESSEE, FINANCIAL STATEMENTS FOR THE ASSESSEE AS ON 31.3.2009 AND SUCH OTHER DOCUMENTS. WE FIND THAT THESE DOCUME NTS ARE VERY ESSENTIAL FOR ADJUDICATING THE ISSUE AS TO WHE THER THE ASSESSEE HAS VIOLATED ANY OF THE CONDITIONS LAID DO WN BY THE AICTE. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROP ER TO ADMIT THE ADDITIONAL EVIDENCE AND REMAND THE ISSUE TO THE FIL E OF THE DIT (E) FOR RECONSIDERATION IN ACCORDANCE WITH THE LAW IN T HE LIGHT OF THE ABOVE MATERIAL. THE ASSESSEE IS DIRECTED TO COOPERA TE WITH THE DIT (E) BY FILING ALL THE RELEVANT MATERIAL CALLED FOR BY THE DIT (E) AND FOR DISPOSAL OF THE ASSESSEES APPLICATION AT THE E ARLIEST. ITA NO 1794 OF 2014 DR AMBEDKAR PEOPLES EDUCATIONAL TRUST HYDERABAD PAGE 6 OF 6 9. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH FEBRUARY, 2017. VINODAN/SPS COPY TO: 1 SHRI S. BABU, ADVOCATE, MIG-I BLOCK-3 FLAT NO.7 B AGH LINGAMPALLY, HYDERABAD 500044 2 DIRECTOR OF INCOME TAX (EXEMPTIONS), AAYAKAR BHAV AN, BASHEERBAGH HYDERABAD 3 ADIT (E) HYDERABAD 4 THE DR, ITAT HYDERABAD 5 GUARD FILE BY ORDER