Om Sai Shaikshanik Prasarak Sanstha, Nashik V. CIT-I, Nashik

ITA 1967/PUN/2012

• Counselvise Citation: 196724514 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1967 / P N/ 20 1 2 ASSESSMENT YEAR : OM SAI SHAIKSHANIK PRASARAK SANSTHA, PIMP ALGAON - GHADGA, A/P - PIMPALGAON DUKRA, TAL. - IGATPURI, DISTT. - NASHIK VS. COMMISSIONER OF INCOME TAX - I , NASHIK (APPELLANT) (RESPONDENT) PAN NO. AAAT02158H APPELLANT BY: SHRI PRAMOD SHINGTE RESPONDENT BY: SHRI A.K. MODI DATE OF HEARING : 04 - 07 - 2014 DATE OF PRONOUNCEMENT : 09 - 0 7 - 2014 ORDER PER R.S . PADVEKAR , JM : - THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT - I , NASHIK DATED 30 - 08 - 2012 REJECTING THE APPLICATION FOR REGISTRATION OF THE ASSESSEE U/S. 1 2AA OF THE INCOME - TAX ACT , 1961 . THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND IN THE APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX I ERRED IN NOT GRANTING THE REGISTRATION U/S. 12AA OF THE I NCOME TAX ACT, 1961, MERELY ON CERTAIN ALLEGED TECHNICAL DEFAULTS AND WITHOUT APPRECIATING THE FACT THAT THE TRUSTS SOLE ACTIVITY IS CHARITABLE IN NATURE IT FULLY COMPLIES WITH THE REQUIREMENTS OF PROVISIONS OF SECTION 2(15) OF THE INCOME TAX ACT, 1961. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE TRUST IS INCORPORATED W.E.F. 26 - 07 - 2005 AS PER THE TRUST DEED AND REGISTRATION CERTIFICATE DATED 24 - 01 - 2007 ISSUED BY THE ASSTT. CHARITY COMMISSIONER, NASHIK REGION, NASHIK. THE ASSES SEE IS ALSO 2 ITA NO. 1967/PN/2012, OM SAI SHAIKSHANIK PRASARAK SANSTHA, NASHIK REGISTERED AS A S OCIETY UNDER THE SOCIETIES REGISTRATION ACT, 1860 BEARING REGISTRATION NO. MAH/377/2005/NASHIK DATED 03 - 08 - 2005. 3. THE ASSESSEE APPLIED FOR REGISTRATION U/S. 12A OF THE ACT IN FORM NO. 10A ON 23 - 02 - 2012. AS OBSERVED BY THE L D. CIT - I, NASHIK , THE ASSESSEE WAS REQUIRED TO PRODUCE THE BOOKS OF ACCOUNT, BILLS/VOUCHERS, NOTES ON ACTIVITIES, PHOTOGRAPHS/NEWSPAPER CUTTINGS ETC. FOR VERIFICATION OF THE PERIOD FOR WHICH COPIES OF ACCOUNTS WERE ATTACHED. AS OBSERVED BY THE LD. CIT - I, NASHIK IN THE IMPUGNED ORDER , DURING THE COURSE OF HEARING THE ASSESSEE TRUST WAS ASKED TO PROVE THE SOURCE OF BUILDING FUND DISCLOSED IN THE B ALANCE S HEET S FOR A.YS. 2009 - 10, 2010 - 11 AND 2011 - 12 . THE ASSESSEE EXPLAINED THE SOURCE FOR BUILDING FUND STATIN G THAT THE SAID FUND WAS COLLECTED FROM LOCALITY IN THE NEARBY VICINITY AND PEOPLE WHOLE HEARTEDLY DONATED TO THE ASSESSEE ON THE CAUSE OF IMPARTING EDUCATION. THE LD. CIT - I, NASHIK HAS NOTED THAT THE ASSESSEE FAILED TO PROVE SATISFACTORILY THAT THE SOURC E OF BUILDING FUND AND THE ACTIVITIES OF THE TRUST ARE FOR CHARITABLE PURPOSES ONLY AND NOT IN THE NATURE OF BUSINESS OR TRADE. IT APPEARS THAT THE LD. CIT - I, NASHIK CALLED FOR THE REPORT OF THE ASSESSING OFFICER WHICH REFERENCE IS MADE IN THE PARA NO. 3 OF THE IMPUGNER ORDER. IT APPEARS THAT THE ASSESSEE HAS ALSO APPLIED EARLIER FOR THE REGISTRATION U/S. 12AA VIDE APPLICATION DATED 23 - 03 - 2009 BUT THE SAID APPLICATION WAS REJECTED BY THE LD. CIT - I, NASHIK VIDE ORDER DATED 30 - 09 - 2009 AND THE ASSESSEE DID N OT CHALLENGE SAID ORDER IN ANY APPELLATE PROCEEDING . NOW, BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE ASSESSEE HAS FILED THE PAPER BOOK WHICH IS PLACED ON RECORD. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS THAT AT THE TIME OF C ONSIDERING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION THE LD. CIT - I, NASHIK HAS TO ONLY SEE THE OBJECT S AND THE ACTIVITIES OF THE ASSESSEE TRUST. HE REFERS TO SEC.12A/12AA AND SUBMITS THAT THERE IS A PLETHORA OF 3 ITA NO. 1967/PN/2012, OM SAI SHAIKSHANIK PRASARAK SANSTHA, NASHIK DECISIONS THAT THE APPLICATION AND CO LLECTION OF THE FUND IS THE MATTER WITH IN THE JURISDICTION OF THE ASSESSING OFFICER AND NOT WITHIN THE AMBIT AND JURISDICTION OF THE CIT WHO IS THE REGISTRATION AUTHORITY. HE ASSAILED THE ORDER OF THE LD. CIT BY SUBMITTING THAT THE ASSESSEE HAS FI LED THE AUDIT ED STATEMENT OF THE ACCOUNTS FOR THE RELEVANT FINANCIAL YEARS. HE ARGUES THAT THE MAIN OBJECTS OF THE ASSESSEE TRUST IS IMPARTING TECHNICAL EDUCATION AND PROMOTE HIGHER EDUCATION. THE ASSESSEE TRUST HAS ALREADY ESTABLISHED ITS UNIT IN TAL. - IGATPURI, DISTT. - NASHIK FOR IMPARTING THE TECHNICAL EDUCATION. HE SUBMITS THAT NOWHERE THE LD. CIT HAS STATED THAT THE OBJECTS OF THE ASSESSEE TRUST ARE NOT CHARITABLE. HE SUBMITS THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE IN COMPLIANCE WITH THE OBJECTS OF THE ASSESSEE. HE PLEADED FOR DIRECTING THE LD. CIT - I, NASHIK TO GRANT THE REGISTRATION. WE HAVE ALSO HEARD THE LD. DR. 5. WE HAVE ALSO PERUSED THE IMPUGNED ORDER . F OR THE SAKE OF BREVITY, W E REPRODUCE HERE - WITH THE RELEVANT PROVISIONS OF SEC. 12AA: 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE ( A ) OR CLAUSE ( AA ) OF SUBSECTION (1) OF SECTION 12A, SHALL ( A ) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THIN KS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND ( B ) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTIO N AND THE GENUINENESS OF ITS ACTIVITIES, HE ( I ) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; ( II ) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER S HALL BE SENT TO THE APPLICANT : PROVIDED THAT NO ORDER UNDER SUB - CLAUSE ( II ) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 4 ITA NO. 1967/PN/2012, OM SAI SHAIKSHANIK PRASARAK SANSTHA, NASHIK 6. AS PER THE LANGUAGE USED BY THE LEGISLATURE IN SEC. 12A(1)(B) THE POWER OF THE COM MISSIONER IS TO SATISFY HIMSELF ABOVE THE OBJECT S OF THE TRUST OR INSTITUTION AND GENUINENESS OF ITS ACTIVITY. WE FIND THAT THE ASSESSEE FILED ALL THE REQUIRED INFORMATION BEFORE THE LD. COMMISSIONER BUT WITHOUT MAKING ANY REFERENCE TO THOSE DOCUMENTS , T HE LD. COMMISSIONER REJECTED THE ASSESSEES APPLICATION. AS RIGHTLY ARGUED BY THE LD. COUNSEL , THE LD. COMMISSIONER HAS NOT EVEN MADE ANY WHISPER IN RESPECT OF THAT THE OBJECT S OF THE ASSESSEE TRUST ON GENUINENESS VIS - - VIS ITS ACTIVITY. MOREOVER, IN A V ERY CRYPTIC MANNER THE LD. COMMISSIONER HAS PASSED THE ORDER REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION U/S. 12AA OF THE ACT. WE, THEREFORE, ALLOW THE GROUND TAKEN BY THE ASSESSEE AND DIRECT THE CIT - I, NASHIK TO GRANT THE REGISTRATION TO THE AS SESSEE WITHIN THREE MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 09 - 07 - 20 1 4 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 09 TH JULY, 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT - I , NASHIK 4 THE DR, ITAT, B BENCH, PUNE. 5 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APP ELLATE TRIBUNAL PUNE