Navyug Public Education & Welfare Society, New Delhi V. DIT (E), New Delhi

ITA 1940/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3651 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 30-06-2010
• Assessment Year: misc
• Appeal Filed On: 29-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NEROEM
• Keywords: Opportunity of being heard
• Section: 12A; 12AA; 12; 11; 139

Judgement Text

I.T.A. NO.1940 /DEL/2010 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH F BEFORE SHRI C. L. SETHI, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 1940 /DEL/2010 (ASSESSMENT YEAR 2009-10) M/S. NAVYUG PUBLIC EDUCATION VS. DIT(EXEMPTIONS), & WELFARE SOCIETY, DELHI. RZ-1, MAHAVIR ENCLAVE, SAINIK ENCLAVE-II, OPP. RPF CAMP, JHARODA KALAN, NEW DELHI-72. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAAJN0622M APPELLANT BY: SHRI VIVEK GUPTA, CA RESPONDENT BY: SMT. BANITA DEVI NEROEM, SR. DR ORDER PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF DIRECTOR OF INCOME TAX (EXEMPTION) DELHI DATED 26.0 2.2010 PASSED BY HIM U/S 12AA(1)(B) READ WITH SECTION 12A OF THE I. T. ACT, 1961. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER: THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE AND PROVISION OF LAW THE LD. DIT (EXEMPTIONS) IS NOT JUSTIFIED IS NO T GRANTING THE APPROVAL U/S 12A AS THE SOCIETY IS CONDUCTING THE C HARITABLE ACTIVITY BY RUNNING A SCHOOL & PROVIDING DEDICATION TO THE GENERAL PUBLIC. 2. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE DIT(E) IN HIS ORDER THAT THE ASSESSEE FILED AN APPLICATION ON 11.08.2009 IN FORM 10A FOR SEEKING REGISTRATION U/S 12A OF THE I. T. ACT, I.T.A. NO.1940 /DEL/2010 2/5 1961. HE ISSUED LETTER TO THE ASSESSEE ASKING HIM TO SUBMIT VARIOUS DOCUMENTS WITH EXPLANATION INCLUDING A NOTE ON ACTIVITIES THERETO OF THE SOCIETY SINCE ITS INCEPTI ON/DURING LAST 3 YEARS ALONG WITH SUPPORTING DOCUMENTARY EVIDENCE. THEREAFTER, IT IS NOTED BY HIM IN PARA 3 OF HIS ORDER THAT FOR THE PERUSAL OF DETAILS, IT WAS SEEN THAT THOUGH THE ASSESSEE SOCIE TY HAS BEEN IN EXISTENCE SINCE 31.10.1992, YET IT HAD, REPORTEDLY, NEVER FILED ITS INCOME TAX RETURN FOR ANY ASSESSMENT YEAR EXCEPT AS SESSMENT YEAR 2009-10 FILED ON 30.10.2009. IT IS ALSO NOTED BY HIM THAT DURING THE FINANCIAL YEAR 2008-09 RELEVANT TO ASSES SMENT YEAR 2009-10 ALSO, THE ASSESSEE SOCIETY WAS NOT REGISTER ED U/S 12A AND HENCE IS NOT ENTITLED TO EXEMPTION U/S 11 OF TH E I. T. ACT. IT IS FURTHER OBSERVED BY HIM THAT IN ALL THE OTHER AS SESSMENT YEARS BEGINNING FROM ASSESSMENT YEAR 1992-93, THE I NCOME OF THE ASSESSEE SOCIETY WAS TAXABLE IN THE STATUS OF A N AOP AND IT WAS LIABLE TO FILE RETURN OF INCOME. IT IS FURTHER NOTED BY HIM THAT NOTWITHSTANDING THE FACT THAT THE SOCIETY IS R UNNING SCHOOL WHICH IS CONSIDERED A CHARITABLE ACTIVITY AS PER TH E PROVISIONS OF SECTION 2(15) OF THE I. T. ACT, IT CANNOT BE GRANTE D REGISTRATION U/S 12A OF THE I. T. ACT IN THE ABSENCE OF REQUISIT E COMPLIANCE REGARDING FILING OF INCOME TAX RETURN FOR THE ASSES SMENT YEAR 1992-93 ONWARDS TILL ASSESSMENT YEAR 2008-09. IN T HIS MANNER, HE HAD REJECTED THE APPLICATION OF THE ASSE SSEE FILED BY IT FOR REGISTRATION U/S 12A AND NOW, THE ASSESSEE I S IN APPEAL BEFORE US. 3. IT IS SUBMITTED BY THE LD. A.R. THAT LD. DIT(E) HAS HIMSELF ACCEPTED THAT THE ASSESSEE SOCIETY IS RUNNING A SCH OOL WHICH IS CONSIDERED A CHARITABLE ACTIVITY AS PER THE PROVISI ONS OF SECTION 2(15) OF THE I. T. ACT AND HENCE HE WAS NOT JUSTIFI ED IN REJECTING I.T.A. NO.1940 /DEL/2010 3/5 THE APPLICATION OF THE ASSESSEE FOR GRANTING REGIST RATION U/S 12A. A QUERY WAS RAISED BY THE BENCH REGARDING EVIDENCE IN CONNECTION WITH ACTIVITIES OF THE ASSESSEE SOCIETY, IT WAS SUBMITTED BY THE LD. A.R. THAT COPY OF INCOME AND E XPENDITURE ACCOUNT OF THE ASSESSEE SOCIETY FOR THE YEAR ENDED 31.03.2007 TO 31.03.2009 ARE AVAILABLE ON PAGES 19 21 OF THE PA PER BOOK AND IN ALL THE 3 YEARS THERE IS DEFICIT AND HENCE T HE ASSESSEE SOCIETY WAS NOT LIABLE TO FILE INCOME TAX RETURN AS PER THE PROVISIONS OF SECTION 139 AND THEREFORE, THIS FACT ALONE CANNOT BE THE BASIS OF REJECTION OF THE APPLICATION OF THE ASSESSEE FILED BY IT U/S 12AA OF THE I. T. ACT. RELIANCE WAS PLAC ED BY HIM ON THE FOLLOWING TRIBUNAL DECISIONS: (A) AGARWAL MITRA MANDAL TRUST VS DIT(E) 106 ITD 531 (D EL), (B) SAIN JI DHARMARTH TRUST VS CIT 8 SOT 446 (DEL.) (C) DR. BHIM RAO AMBEDKAR EDUCATIONAL SOCIETY VS CIT 11 4 TTJ 9LKO) 965, (D) MODERN DEFENCE SHIKSHAN SANSTHAN VS CIT 108 TTJ (JD ) 732. 4. AS AGAINST THIS, LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF DIT (E). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE JUDGEMENTS CITED BY THE L D. A.R. FOR THE ASSESSEE. WE FIND THAT AS PER THE PROVISIONS O F SECTION 12AA(1), LD CIT/ DIT(E) SHALL CALL FOR SUCH DOCUMEN TS AND INFORMATION FROM THE TRUST OR INSTITUTION AS HE THI NKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS O F THE ACTIVITIES OF THE TRUST OR INSTITUTION. THIS IS THE ADMITTED POSITION THAT THE APPLICATION FOR REGISTRATION WAS FILED BY THE ASSES SEE SOCIETY ON 11.09.2009 AND HENCE AS PER SUB-SECTION (2) OF SECT ION 12A, THE I.T.A. NO.1940 /DEL/2010 4/5 ASSESSEE CAN CLAIM THE BENEFIT OF SECTION 11 & 12 O NLY FOR THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH APPLICATION FOR REGISTRATION HAS BEEN MADE BY THE ASSESSEE AND HENCE EVEN IF REGISTRATION IS ALLOWED TO THE AS SESSEE U/S 12A, THE SAME WILL BE EFFECTIVE ONLY FOR THE ASSESS MENT YEAR 2010-2011 AND UP TO ASSESSMENT YEAR 2009-10, THE AS SESSEE SOCIETY CANNOT CLAIM EXEMPTION U/S 11 TO 13 EVEN IF REGISTRATION IS ALLOWED TO THE ASSESSEE U/S 12A. THIS IS ALSO A DMITTED POSITION THAT EXCEPT FOR ASSESSMENT YEAR 2009-10, I NCOME TAX RETURN WAS NOT FILED BY THE ASSESSEE FOR ALL EARLIE R YEARS STARTING FROM 1992-93 BUT FOR THIS DEFAULT OF THE ASSESSEE, THE A.O. IS AT LIBERTY TO TAKE ACTION U/S 147/148 BUT THIS CANNOT BE A BASIS FOR REJECTING THE APPLICATION OF THE ASSESSEE FOR REGIS TRATION U/S 12A. 6. THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/ S 12A SHOULD HAVE BEEN DECIDED BY DIT (E) AFTER RECORDING HIS FI NDING AS TO WHETHER HE IS SATISFIED OR NOT ABOUT THE GENUINENES S OF THE ACTIVITIES OF THE ASSESSEE SOCIETY BUT ON THIS ASPE CT, NO FINDING IS GIVEN BY LD. DIT(E) AND HENCE, WE FEEL THAT THIS MA TTER SHOULD GO BACK TO THE FILE OF THE DIT(E) FOR A FRESH DECIS ION. THE ASSESSEE HAS TO FURNISH EVIDENCES BEFORE HIM IN SUP PORT OF ITS CHARITABLE ACTIVITIES AND THEREAFTER, THIS ISSUE SH OULD BE DECIDED BY DIT(E) AFRESH BY WAY OF PASSING SPEAKING ORDER O N THIS ASPECT. HENCE WE SET ASIDE THE ORDER OF DIT(E) AND RESTORE THIS MATTER BACK TO HIM FOR A FRESH DECISION AS PER ABOV E DISCUSSION. IT WILL PASS NECESSARY ORDER AS PER LAW AFTER PROVI DING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. WITH REGARD TO VARIOUS TRIBUNAL DECISIONS CITED BEF ORE US BY THE LD. A.R. FOR THE ASSESSEE, WE FIND THAT AS PER THES E JUDGEMENTS, IT WAS HELD BY THE TRIBUNAL THAT U/S 12AA, THE POWE R OF DIT(E) I.T.A. NO.1940 /DEL/2010 5/5 ARE LIMITED TO MAKE INQUIRY WITH A VIEW ONLY TO SAT ISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES AND OBJECTS OF THE TRUST. OUR ABOVE DECISION IS IN LINE WITH THESE TRIBUNAL D ECISIONS CITED BY THE LD. A.R. BECAUSE WE HAVE RESTORED THE MATTER BACK TO THE FILE OF DIT(E) FOR A FRESH DECISION AFTER MAKING IN QUIRIES WITH A VIEW TO SATISFY HIMSELF ABOUT THE GENUINENESS OF TH E ACTIVITIES AND OBJECTS OF THE TRUST. 8. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWE D FOR STATISTICAL PURPOSES. 9. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 3 0 TH JUNE 2010. SD./- SD./- (C. L. SETHI) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:30 TH JUNE, 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI