M/s Sri Saraswathi Educational Society, Amalapuram V. The CIT, Rajahmundry, Rajahmundry

ITA 202/VIZ/2012

• Counselvise Citation: 20225314 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 29-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Section: 12A; 12AA; 12; 11

Judgement Text

ITA NO.202/VIZAG/2012 SRI SARASWATHI EDUCATIONAL SOCIETY, AGRAHARAM IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.202/VIZAG/2012 ASSESSMENT YEAR : NA SRI SARASWATHI EDUCATIONAL SOCIETY AMALAPURAM VS. CIT RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAN NO.AAHTS 6401N ASSESSEE BY: SHRI G.V.N. HARI, ADVOCATE REVENUE BY: SHRI K.V.N. CHARYA, CIT DATE OF HEARING : 03.07.2014 DATE OF PRONOUNCEMENT : 03.07.2014 ORDER PER BENCH:- THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 1.3.2012 PASSED BY THE CIT RAJAHMUNDRY GRANTING REG ISTRATION U/S 12A OF THE INCOME-TAX ACT TO THE ASSESSEE W.E.F. 1.4.2010 APPLI CABLE TO ASSESSMENT YEAR 2010-11 AND FURTHER CONDITION IMPOSED BY THE CIT TH AT REGISTRATION U/S 12AA OF THE ACT IS SUBJECT TO REGISTRATION U/S 43(1) OF THE ACT UNDER ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUTIONS AND ENDOW MENTS ACT, 1987. 2. BRIEFLY THE FACTS ARE, THE ASSESSEE WAS REGISTER ED AS A SOCIETY UNDER THE ANDHRA PRADESH SOCIETIES REGISTRATION ACT ON 19 .3.2008. IT FILED AN APPLICATION IN FORM NO.10A FOR GRANT OF REGISTRATIO N U/S 12A OF THE ACT BEFORE THE CIT ON 18.12.2009. AS CAN BE SEEN FROM RECORD, THE APPLICATION FILED BY THE ASSESSEE WAS INITIALLY REJECTED BY THE CIT VIDE ORDER DATED 26.3.2010 ON THE GROUND THAT THE ASSESSEE IS REQUIRED TO BE REGI STERED U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUT IONS AND ENDOWMENTS ACT. ASSESSEE CHALLENGED THIS DECISION OF THE CIT BEFORE THE ITAT. THE ITAT VIDE ORDER DATED 27.8.2010 SET ASIDE THE AFORESAID ORDER OF THE CIT AND RESTORED THE MATTER BACK TO HIS FILE WITH A DIRECTI ON TO ADJUDICATE THE ISSUE AFRESH BY PASSING A REASONED ORDER. AS A CONSEQUEN CE OF THE DIRECTION OF THE ITAT, THE CIT AGAIN INITIATED PROCEEDING AFRESH. IN COURSE OF THE PROCEEDING ITA NO.202/VIZAG/2012 SRI SARASWATHI EDUCATIONAL SOCIETY, AGRAHARAM 2 ASSESSEE APPEARED AND PRODUCED BOOKS OF ACCOUNTS FO R THE PRECEDING 3 YEARS AND OTHER DOCUMENTS AS WERE CALLED FOR BY THE CIT. THE CIT AFTER EXAMINING THE BOOKS OF ACCOUNTS AND BEING SATISFIED WITH THE OBJECTS OF THE ASSESSEE SOCIETY AS WELL AS GENUINENESS OF ITS ACTIVITIES WA S OF THE VIEW THAT REGISTRATION U/S 12A OF THE ACT IS REQUIRED TO BE G RANTED TO THE ASSESSEE WITH EFFECT FROM THE ASSESSMENT YEAR COMMENCING FROM 1.4 .2010 I.E. ASSESSMENT YEAR 2010-11 PROVIDED THE ASSESSEE GETS ITSELF REGI STERED U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUT IONS AND ENDOWMENTS ACT, 1987. 3. BEING AGGRIEVED OF THE AFORESAID ORDER OF THE CI T, THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE IMPUGN ED ORDER OF THE CIT AS WELL AS OTHER MATERIALS ON RECORD. THE GRIEVANC E OF THE ASSESSEE AS PUT FORWARD BY THE LD. A.R. IS TWO FOLD. FIRSTLY, SINC E THE ASSESSEE HAS APPLIED FOR REGISTRATION ON 18.12.2009, THE CIT SHOULD HAVE GRA NTED REGISTRATION W.E.F. 1.4.2009 AS PER SUB-CLAUSE (II) OF PROVISO TO SECTI ON 12A(1)(A) OF THE ACT AND SECONDLY THE CONDITION IMPOSED BY THE CIT FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT BY REQUIRING THE ASSESSEE TO GET ITSELF REGISTERED U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUT IONS AND ENDOWMENTS ACT, 1987 IS NOT AT ALL RELEVANT FOR THE PURPOSE OF REGISTRATION U/S 12AA OF THE ACT AS IT IS NOT THE STATUTORY MANDATE. IN SUPPORT OF SUCH CONTENTION THE LD. A.R. RELIED UPON A NUMBER OF DECISIONS OF ITAT COPI ES OF WHICH ARE SUBMITTED IN THE PAPER BOOK. 5. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORD ER OF THE CIT. 6. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIES , WE ARE OF THE VIEW THAT SO FAR AS THE OBJECT OF THE SOCIETY AND GENUIN ENESS OF THE ACTIVITIES ARE CONCERNED, THERE CANNOT BE ANY DOUBT IN RESPECT OF THE SAME AS THE CIT HAS GRANTED REGISTRATION TO THE ASSESSEE U/S 12AA OF TH E ACT. HOWEVER, THE ISSUE BEFORE US IS WHETHER THE CIT WAS CORRECT IN GRANTIN G REGISTRATION W.E.F. 1.4.2010 I.E. ASSESSMENT YEAR 2010-11? IT IS NOT DI SPUTED THAT THE ASSESSEE ITA NO.202/VIZAG/2012 SRI SARASWATHI EDUCATIONAL SOCIETY, AGRAHARAM 3 HAS FILED THE APPLICATION FOR GRANT OF REGISTRATION IN THE PRESCRIBED MANNER BEFORE THE CIT ON 18.12.2009. AS PER CLAUSE (II) O F THE FIRST PROVISO TO SECTION 12A (1)(A) OF THE ACT IN A CASE WHERE THE APPLICATI ON FOR REGISTRATION IS NOT FILED BEFORE THE COMMISSIONER BEFORE THE EXPIRY OF A PERIOD OF 1 YEAR FROM THE DATE OF CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, THEN THE REGISTRATION SHALL BE GRANTED FROM THE FIRST DAY OF FINANCIAL YEAR IN WHICH THE APPLICATION IS MADE. HOWEVER, AS PER THE SECOND PR OVISO THE CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFT ER THE FIRST DAY OF JUNE, 2007. SIMILARLY, SUB-SECTION 2 OF SECTION 12A OF T HE ACT WHICH WAS INSERTED INTO THE STATUTE FROM 1.6.2007 MANDATES THAT IN A C ASE WHERE APPLICATION FOR REGISTRATION IS MADE AFTER THE FIRST DAY OF JUNE, 2 007, THE PROVISIONS OF SECTION 11 & 12 SHALL APPLY IN RELATION TO THE INCOME OF SU CH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINAN CIAL YEAR IN WHICH SUCH APPLICATION IS MADE. THEREFORE, IN VIEW OF THE CLE AR STATUTORY PROVISION AS CONTAINED U/S 12A(2) OF THE ACT WHICH IS APPLICABLE TO APPLICATIONS FOR REGISTRATION MADE AFTER 1.6.2007 WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT IN GRANTING REGISTRATION FOR THE ASSESSMENT YEAR 2010-11. THEREFORE, ASSESSEES CONTENTION IN THIS RESPECT CANNOT BE ACC EPTED. IN ANY CASE OF THE MATTER, INCOME EARNED BY THE ASSESSEE IN FINANCIAL YEAR 2009-10 WILL BE ELIGIBLE FOR EXEMPTION U/S 11 SUBJECT TO FULFILLMEN T OF OTHER CONDITIONS. SO FAR AS THE SECOND ISSUE OF REQUIREMENT OF REGISTRATION U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUTIONS A ND ENDOWMENTS ACT, 1987 IS CONCERNED, WE ARE NOT ABLE TO AGREE WITH THE VIE W OF THE CIT IN THIS REGARD. LAW IS NOW FAIRLY WELL SETTLED THAT FOR REGISTRATIO N U/S 12A OF THE ACT THE SOCIETY IS NOT REQUIRED TO BE REGISTERED U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUTIONS AND ENDOWM ENTS ACT, 1987. FURTHER, IT IS A FACT ON RECORD THAT THE ASSESSEE H AD APPLIED FOR REGISTRATION U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987 BEFORE THE ASSISTANT COMMISSIO NER, ENDOWMENTS DEPARTMENT. HOWEVER, ASSESSEES APPLICATION FOR RE GISTRATION WAS NOT ACTED UPON AND THE ASSESSEE WAS INFORMED THAT AS THERE IS A BAN ON NEW REGISTRATIONS, ASSESSEES APPLICATION CANNOT BE ACC EPTED. THAT BEING THE CASE, WHEN THE AUTHORITIES ARE NOT GRANTING REGISTR ATION UNDER THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUTIONS A ND ENDOWMENTS ACT, 1987, ITA NO.202/VIZAG/2012 SRI SARASWATHI EDUCATIONAL SOCIETY, AGRAHARAM 4 REGISTRATION U/S 43(1) CANNOT BE MADE A CONDITION P RECEDENT FOR GETTING REGISTRATION U/S 12AA OF THE ACT. ASSESSEE CANNOT BE EXPECTED TO PERFORM AN IMPOSSIBLE ACT. EVEN OTHERWISE ALSO THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF DDIT VS. SOCIETY FOR INTEGRATED DEVELOPMENT IN URBAN AND RURAL AREAS ITA NO.674/HYD/2011 DATED 3.1.2014 HAS HELD THAT NO N-REGISTRATION U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELI GIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987 WILL NOT BE A BAR FOR THE ASSE SSEE IN GETTING EXEMPTION U/S 11 OF THE ACT WHEN THERE IS NO SUCH R ESTRICTION PUT U/S 11, 12 & 13 OF THE ACT. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID VIEW OF THE COORDINATE BENCH, WE HOLD THAT REGISTRATION U/S 12A A OF THE ACT CANNOT BE SUBJECT TO THE CONDITION THAT THE ASSESSEE GETS ITS ELF REGISTERED U/S 43(1) OF THE ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INS TITUTIONS AND ENDOWMENTS ACT, 1987. IN VIEW OF THE AFORESAID WE D IRECT THE CIT TO GRANT REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE WI THOUT INSISTING UPON REGISTRATION U/S 43(1) OF ANDHRA PRADESH CHARITABLE & HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987. 7. IN THE RESULT, ASSESSEES APPEAL IS CONSIDERED TO BE ALLOWED TO THE EXTENT INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 3 RD JULY14 SD/- SD/- (J. SUDHAKAR REDDY) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 3 RD JULY, 2014 COPY TO 1 M/S. SRI SARASWATHI EDUCATIONAL SOCIETY, SAI SURY A RESIDENCY, FLAT NO.101, BHUPAYYA AGRAHARAM, AMALAPURAM-533 201 (E.G.D.) 2 THE CI T, RAJAHMUNDRY 3 THE CIT(A), RAJAHMUNDRY 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM