The Institute and Electronics Engineers INC, Hyderabad V. The DIT (Exemptions), Hyderabad

ITA 1967/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66168 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 25-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GYANA PRAKASH
• Assessee Lawyers: A V RAGHURAM
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1967/HYD/2011 ASSESSMENT YEAR : 2011-12 THE INSTITUTE OF ELECTRONICS ENGINEERS INC, HYDERABAD SECTION, HYDERABAD. .... APPELLANT PAN:AABAT 4111D VS. DIT (EXEMPTIONS), HYDERABAD. RESPONDENT APPELLANT BY : SHRI A.V. RAGHU RAM RESPONDENT BY : SHRI K. GYANA PRAKASH DATE OF HEARING : 25-06-2012 DATE OF PRONOUNCEMENT : 24-08-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 31-10-2011 OF THE DIT (E) HYDERABAD REJ ECTING ASSESSEES APPLICATION FOR REGISTRATION U/S 12A OF THE ACT. 2. AS SEEN FROM THE ORDER UNDER APPEAL THE DIT (E) AFTER EXAMINING THE OBJECTIVES OF THE TRUST AND THE MEMBE RSHIP CLAUSE IN THE ARTICLES OF ASSOCIATION CAME TO A CONCLUSION THAT THE ACTIVITIES OF ORGANISING PROGRAMMES, SEMINARS, LECT URES ARE NOT FOR THE BENEFIT OF THE PEOPLE AT LARGE BUT AIMED A T IMPROVING KNOWLEDGE AND COMPETENCE OF MEMBERS, THEREFORE IT C ANNOT BE 2 ITA NO. 1967 OF 2011 INSTITUTE AND EE INC. LTD., HYD. HELD TO BE ENGAGED IN CHARITABLE ACTIVITIES. THE D IT (E) FURTHER HELD THAT EVEN IF IT IS HELD THAT THE TRUST IS ADDR ESSING ACTIVITY ON GENERAL PUBLIC UTILITY STILL IT IS HIT BY PROVISO TO SEC. 2(15) SINCE THE ACTIVITIES OF THE TRUST IS IN THE COMMERCIAL LI NE AS IT SIC HARING FEE. 3. THE LD. A R CONTENDED BEFORE US THAT THE DIT (E) HAS TOTALLY MISCONCEIVED THE FACTS WHILE COMING TO A CONCLUSION THAT THE ASSESSEES ACTIVITY IS HIT BY PROVISO TO SEC. 2(15 ). THE LD. AR CONTENDED THAT THE OBJECT OF THE ASSESSEE IS IMPROV ING TECHNICAL KNOWLEDGE AND THE PROVISO TO SEC. 2(15) WILL NOT AP PLY. THE LD. AR FURTHER CONTENDED THAT THE DIT (E) HAS DRAWN CON CLUSION ON PRESUMPTION BY SIMPLY GOING BY THE NOMENCLATURE IN THE RECEIPTS AND PAYMENTS ACCOUNT WITHOUT ACTUALLY MAKING ANY AT TEMPT TO VERIFY THE TRUE NATURE OF RECEIPTS. REFERRING TO T HE DOCUMENTS SUBMITTED IN THE FORM OF PAPER BOOK THE LD. AR CONT ENDED THAT THE DIT (E) HAVING NOT EXAMINED THE DOCUMENTS PRODUCED BEFORE HIM PROPERLY HAS REJECTED THE APPLICATION FOR REGISTRAT ION U/S 12A. THE LD. AR SUBMITTED THAT THE MATTER MAY BE RESTORE D BACK TO THE DIT (E) WITH A DIRECTION TO RE-EXAMINE THE ENTIRE I SSUE AFTER CONSIDERING ALL THE DOCUMENTS PRODUCED BY THE ASSES SEE. 4. THE LD. DR SUBMITS HE HAS NO OBJECTION IF THE I SSUE IS RESTORED BACK TO THE FILE OF THE DIT (E) FOR RE-EXA MINATION. 5. WE HAVE HEARD SUBMISSIONS OF THE PARTIES AND PER USED MATERIALS ON RECORD. IT IS SEEN THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT. T HE ASSESSEE MAINTAINS REGULAR BOOKS OF ACCOUNTS AND ITS ACCOUNT S ARE ALSO AUDITED. IT IS THE CONTENTION OF THE ASSESSEE THAT THE OBJECT OF THE TRUST IS CHARITABLE PURPOSE AND INCOME HAS ALSO BEEN APPLIED FOR ACHIEVING THAT OBJECTIVE SEC. 12AA OF THE ACT ENJOINS UPON THE COMMISSIONER TO MAKE NECESSARY INQUIRY FOR SATI SFYING HIMSELF 3 ITA NO. 1967 OF 2011 INSTITUTE AND EE INC. LTD., HYD. ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUS T. IF THE COMMISSIONER IS NOT SATISFIED WITH THE GENUINENESS OF THE TRUST OR OBJECT OF THE TRUST THEN HE SHALL PASS AN ORDER REF USING REGISTRATION. THUS, THE SATISFACTION OF THE COMMISS IONER MUST BE AN OBJECTIVE SATISFACTION AFTER TAKING INTO CONSIDE RATION ALL MATERIAL FACTS. WE FIND THIS LACKING IN THE ORDER PASSED BY THE DIT (E). THE ORDER DOES NOT REVEAL PROPER APPLICAT ION OF MIND BY THE DIT (E) BEFORE REJECTING THE ASSESSEES APPLICA TION. AS IT APPEARS THE DIT (E) HAS NOT MADE ANY ENQUIRY TO SAT ISFY HIMSELF ABOUT THE OBJECT AND GENUINENESS OF THE TRUST. WE THEREFORE SET ASIDE THE ORDER PASSED BY THE DIT (E) WITH A DIRECT ION TO RE- EXAMINE THE ISSUE AFRESH AFTER CONSIDERING THE DOCU MENTS PRODUCED BEFORE HIM BY THE ASSESSEE AND AFTER MAKIN G SUCH ENQUIRY AS MAY BE DEEMED NECESSARY. THE ASSESSEE S HALL BE GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD BEFOR E PROCEEDING IS COMPLETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 24- 8-2012. SD/- SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 24 TH AUGUST, 2012. COPY TO:- 1) C/O S/SRI K. VASANT KUMAR, A.V. RAGHU RAM, P. VI NOD AND P. PEDDI RAJULU, ADVOCATES, FLAT NO.610, 6 TH FLOOR, BABUKHAN ESTATES, BASHEERBAGH, HYDERABAD. 2) DIT (EXEMPTIONS), HYDERABAD. 3) THE CIT CONCERNED, HYDERABAD 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERAB AD. JMR* 4 ITA NO. 1967 OF 2011 INSTITUTE AND EE INC. LTD., HYD.