M/s Gaat Foundation, Murshidabad V. CIT(Exemptions), Kolkata, Kolkata

ITA 2194/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1675 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-05-2017
• Assessment Year: misc
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANAND R BAIWAR
• Assessee Lawyers: S M SURANA
• Keywords: Charitable institution; Question of law
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI N.V. VASUDEVAN, JM & SHRI M. BALAGANESH, AM ] I.T.A NOS. 2194 & 221 5/KOL/2016 ASSESSMENT YEAR : 2015-1 6 M/S GAAT FOUNDATION, MURSHIDABAD -VS- CIT(E), KOLKATA [PAN: AABTG 6729 K] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI S.M. SURANA, ADV. FOR THE RESPONDENT : SHRI ANAND R. BAIWAR, C IT DATE OF HEARING : 02.08.2017 DATE OF PRONOUNCEMENT : 16.08.2017 ORDER PER M.BALAGANESH, AM 1. THESE APPEALS OF THE ASSESSEE ARISE OUT OF THE O RDER OF REJECTION OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS THE ACT) AND CONSEQUENTIAL ORDER REJECTING APPROVAL OF EXEMPTION UNDER SECTION 80G OF THE ACT , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (E XEMPTIONS) [ IN SHORT THE LD CIT(E)] DATED 26.9.2016. 2. THE ASSESSEE TRUST CAME INTO EXISTENCE VIDE DEED OF TRUST DATED 30.9.2011 FOR IMPARTING EDUCATION TO THE PERSONS BELONGING TO THE BACKWARD CLASSES , THE SCHEDULED CASTE AND THE SCHEDULED TRIBES , TO BECOME FRUITFUL CITIZENS OF MOTHER INDIA MATCHING SHOULDER TO SHOULDER WITH THEIR UPPER LEVEL BRETHRE N, TO IMPROVE THEIR LOT EDUCATIONALLY, PROFESSIONALLY, VOCATIONALLY, TECHNOLOGICALLY AND I N ALL OTHER RESPECTS, SETTING UP HOSPITALS , OLD AGE HOME AND CLINICS, SOLELY ON NON -PROFIT BASIS. PURSUANT TO ITS CHARITABLE OBJECTS, THE ASSESSEE TRUST HAD CONSTRUC TED A SCHOOL FOR IMPARTING EDUCATION AND AS ON 31.3.2016 HAD INVESTED A SUM OF RS 2,49,3 8,503/- TOWARDS FIXED ASSETS 2 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 2 COMPRISING OF LAND AND BUILDING, MACHINERY &EQUIPME NTS, CANTEEN ASSETS, COMPUTER, FURNITURE & FIXTURES, GENERATOR SET, AIR CONDITIONE RS, CARS, FAX MACHINE, OFFICE ACCOMMODATION BUILDING, INVERTER, SCANNER & PRINTER AND OTHER ASSETS TO THE TUNE OF RS 1,89,83,802/- OUT OF DONATIONS RECEIVED, HOSTEL FEE S, RENTAL INCOME, INTEREST INCOME ETC AND OUT OF TERM LOANS FROM BANGIYA GRAMIN VIKASH BA NK. THE ASSESSEE TRUST APPLIED FOR SEEKING REGISTRATION U/S 12A BY PREFERRING AN A PPLICATION IN FORM 10A AND SEEKING EXEMPTION U/S 80G OF THE ACT IN FORM 10G BEFORE THE LD CIT(E) ON 31.3.2016. 3. THE LD CIT(E) CALLED FOR THE FOLLOWING DETAILS F ROM THE ASSESSEE TRUST :- A. TO FURNISH THE AUDIT REPORT FOR F.Y. 2012-13, 20 13-14, 2014-15 & 2015-16. B. TO EXPLAIN WHY THE DONATIONS RECEIVED FROM ITI, MES, STUDENTS AND OTHER DONATIONS RECEIVED ARE ADDED TO CAPITAL A/C AS CORPUS FUND? C. COPY OF FEE RECEIPT BOOK IN RESPECT OF ITI, MES AND STUDENTS FOR F.YS. 2014-15 & 2015-16. D. WHETHER THE DONATIONS RECEIVED ARE REFLECTED IN THE BANK STATEMENT? IF YES, COPY OF THE STATEMENT AND IF NO, THE REASON THEREOF MAY BE SUBMITTED. E. CERTIFICATE FROM ITI, MES, STUDENTS AND DONORS T HAT, DONATIONS GIVEN SHALL FORM PART OF CORPUS FUND MAY BE SUBMITTED FOR F.YS. 2012-13, 2013-14, 2014-15 & 2015-16. 4. THE LD CIT(E) OBSERVED THAT THE REPLIES WERE FIL ED IN RESPECT OF THE AFORESAID QUERIES BY THE ASSESSEE ON 26.9.2016. FROM THE AUDITED ACC OUNTS SUBMITTED FOR THE FINANCIAL YEARS 2012-13 TO 2015-16, THE LD CIT(E) OBSERVED TH AT THE ASSESSEE TRUST HAD NOT OBTAINED REGISTRATION U/S 12AA OF THE ACT DURING TH E RELEVANT PERIOD AND WHILE THAT IS SO, HOW CERTAIN DONATIONS RECEIVED BY THE ASSESSEE TRU ST WERE CLASSIFIED AS CORPUS DONATIONS. THE ASSESSEE REPLIED THAT THE DONORS HA D GIVEN THE DONATIONS WITH THE STIPULATION THAT THEY SHALL FORM PART OF CORPUS FUN D OF THE TRUST AND ACCORDINGLY THE SAME WERE TREATED AS CORPUS DONATIONS BY THE TRUST IN IT S ACCOUNTS. WITH REGARD TO QUERY RAISED IN POINT NO. D , IT WAS SUBMITTED THAT THE CERTIF ICATES FROM ITI, MES AND STUDENTS THAT DONATIONS GIVEN SHALL FORM PART OF CORPUS FUND OF T HE TRUST WOULD BE SUBMITTED TO THE LEARNED ASSESSING OFFICER LATER. THE LD CIT(E) OBSE RVED THAT THE DENIAL OF ANSWER TO POINT NO. D OBSTACLES THE PURPOSE OF EXAMINATION OF GENUINENESS OF ACTIVTIES OF THE 3 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 3 TRUST AND GENUINITY OF RECIING CORPUS DONATIONS COU LD NOT BE VERIFIED BY THE LD CIT(E). THE LD CIT(E) OBSERVED THAT THE CORPUS DONATIONS CO ULD NOT BE CLAIMED AS EXEMPT U/S 11(1)(D) OF THE ACT BY THE ASSESSEE FOR WANT OF REG ISTRATION FOR THE EARLIER YEARS. HE OBSERVED THAT THE ASSESSEE HAD VIOLATED THE PROVISI ONS OF THE ACT AND EVADED PAYMENT OF TAX BY MAKING INELIGIBLE CLAIMS OF EXEMPTION AND AC CORDINGLY CONCLUDED THAT IT SQUARELY COMES UNDER THE AMBIT OF NOT GENUINE ACTIVITY BY THE ASSESSEE TRUST. ULTIMATELY, THE LD CIT(E) BASED ON THE FINANCIALS OF THE ASSESSEE PREP ARED THE TOTAL INCOME OF THE ASSESSEE TRUST FOR THE ASST YEARS 2012-13 TO 2016-17 AS UNDE R:- ASSESSMENT YEAR FEE RECEIVED DEFICIT ACTUAL INCOME 2012-13 RS. 52,11,592.00 RS. 22,008.00 RS. 51,89,58 4.00 2013-14 RS. 130,70,072.00 RS. 17,181.15 RS. 130,52, 890.85 2014-15 RS. 87,09,725.00 RS. 2,39,091`.33 RS. 84,70 ,633.67 2015-16 RS. 110,43,675.00 RS. 2,46,838.61 RS. 107,9 6,836.39 2016-17 RS. 53,25,290.00 RS. 1,61,213.91 RS. 51,64, 076 .09 5. THE LD CIT(E) OBSERVED THAT THE ASSESSEE HAD NOT FILED ITS RETURNS FOR THE EARLIER YEARS AND NOT PAID TAXES THEREON AND ACCORDINGLY SOUGHT T O TREAT THE ACTIVITIES OF THE TRUST AS NOT GENUINE AND DENIED THE REGISTRATION U/S 12AA OF THE ACT. CONSEQUENTIALLY THE LD CIT(E) REJECTED THE CLAIM OF EXEMPTION U/S 80G OF T HE ACT. AGGRIEVED, THE ASSESSEE IS IN APPEALS BEFORE US ON THE FOLLOWING GROUNDS:- I.T.A. NO. 2194/KOL/2016: 1. FOR THAT THE ORDER OF LD. CIT(EXEMPTION) IS ARBI TRARY AND BAD IN LAW. 2. FOR THAT THE LD. CIT(E) ERRED IN DENYING THE REG ISTRATION WHEN ALL THE CONDITIONS LAID DOWN U/S 12A WERE FULFILLED AND ALL THE RELEVANT DETAILS WERE FILED. 3. FOR THAT THE LD. CIT(E) ERRED IN DENYING THE REG ISTRATION U/S 12AA(1) WHEN THE ACTIVITIES OF THE TRUST WERE GENUINE, THE TRUST WAS ENGAGED IN PROVIDING EDUCATIONAL SERVICES, RUNNING THE HOSTEL AND OTHER EDUCATIONAL COURSES WHICH HAS NOT BEEN DOUBTED OR DISPUTED BY THE LD. CIT(A). 4 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 4 4. FOR THAT THE LD. CIT(E) ERRED IN EQUATING THE RE CEIPTS UNDER DIFFERENT HEADS WITH THE GENUINELY OF THE TRUST AND IT ANY OF THE R ECEIPTS OR FOR THAT MATTER THE INCOME WAS LIABLE TO TAX UNDER THE PROVISIONS OF TH E I.T. ACT, THE SAME CAN BE TAXED IN ACCORDANCE WITH LAW BUT FOR THE SAID REASO N REGISTRATION TO THE TRUST CANNOT BE DENIED AND IT CANNOT BE HELD THAT THE TRU ST HAS INDULGED IN NOT GENUINE ACTIVITIES BY EVADING PAYMENT OF TAX OR HOLDING THA T THE SAME WAS WRONG DOING OF THE TRUST. 5. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(E) SHOULD HAVE GRANTED REGISTRATION TO THE TRUST. 6. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER OF THE LD. CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PR AYED FOR. 7. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. I.T.A. NO. 2215/KOL/2016: 1. FOR THAT THE ORDER OF LD. CIT(E) IS ARBITRARY AN D BAD IN LAW. 2. FOR THAT THE LD. CIT(E) ERRED IN DENYING THE APP ROVAL U/S 80G IN FORM 10G WHEN ALL THE CONDITIONS LAID DOWN U/S 80G WERE FULF ILLED AND ALL THE DETAILS INCLUDING THE DETAILS WERE FILED. 3. FOR THAT THE LD. CIT(E) ERRED IN DENYING THE APP ROVAL U/S 80G WHEN THE ACTIVITIES OF THE TRUST WERE GENUINE, THE TRUST WAS ENGAGED IN PROVIDING EDUCATIONAL SERVICES, RUNNING THE HOSTEL AND OTHER EDUCATIONAL COURSES WHICH HAS NOT BEEN DOUBTED OR DISPUTED BY THE LD. CIT(A). 4. FOR THAT THE LD. CIT(E) ERRED IN EQUATING THE RE CEIPTS UNDER DIFFERENT HEADS WITH THE GENUINELY OF THE ACTIVITIES OF THE TRUST AND IF ANY OF THE RECEIPTS OR FOR THAT MATTER THE INCOME WAS LIABLE TO TAX UNDER THE PROVISIONS OF THE I.T. ACT, THE SAME CAN BE TAXED IN ACCORDANCE WITH LAW BUT FOR TH E SAID REASON REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 TO THE TRUST CANNO T BE DENIED AND IT CANNOT BE HELD THAT THE TRUST HAS INDULGED IN NOT GENUINE ACT IVITIES BY EVADING PAYMENT OF TAX OR HOLDING THAT THE SAME WAS WRONG DOING OF THE TRUST. 5. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(E) SHOULD HAVE GRANTED APPROVAL U/S 80G OF THE INCOME TAX ACT, 196 1 TO THE TRUST. 5 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 5 6. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER OF THE LD. CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PR AYED FOR. 7. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE ASSESSEE TRUST THOUGH HAD COME INTO EXISTENCE FROM 30.9.2011 HAD STARTED ITS EDUCA TIONAL ACTIVITIES IMMEDIATELY AND HAD EARNED SOME INCOME OUT OF THE SAME AS REFLECTED IN THE INCOME AND EXPENDITURE ACCOUNT. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD NOT OBTA INED REGISTRATION U/S 12AA OF THE ACT FROM 30.9.2011 TO 31.3.2016 AS ADMITTEDLY THE APPLI CATION SEEKING FOR THE SAME HAD BEEN PREFERRED BELATEDLY. HENCE IT IS NOT IN DISPUT E THAT THE ASSESSEE WOULD HAVE TO FILE ITS RETURNS UPTO ASST YEAR 2016-17 IN THE CAPACITY OF ASSOCIATION OF PERSONS (AOP) AND PAY TAXES THEREON, UNLESS OTHERWISE EXEMPTED UNDER ANY OTHER PROVISIONS OF THE ACT. HOWEVER, MERE NON FILING OF THE RETURNS FOR THE EAR LIER YEARS AND PAYMENT OF TAXES THEREON, COULD NOT STAND AS A HINDRANCE FOR GRANTI NG OF REGISTRATION U/S 12AA OF THE ACT. FROM THE PROVISIONS OF SECTION 12AA OF THE ACT, THE LD CIT(E) IS EXPECTED TO CALL FOR SUCH DOCUMENTS AND INFORMATION ABOUT THE ACTIVITIES OF THE TRUST AND HAVE TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTI ON AND GENUINENESS OF ITS ACTIVITIES. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASS ESSEE IS INDEED RUNNING AN EDUCATIONAL INSTITUTION BY RUNNING SCHOOL AND IMPARTING EDUCATI ON. THE FEES ARE COLLECTED FROM STUDENTS FOR IMPARTING THE SAID EDUCATION. IT IS NOT IN DISPUTE THAT THE OBJECTS STATED IN THE TRUST DEED ARE CHARITABLE IN NATURE. THE ASSES SEE HAD DULY FURNISHED THE ENTIRE AUDITED FINANCIAL STATEMENTS UPTO 31.3.2016 BEFORE THE LD CIT(E). HENCE THE ACTIVITIES CARRIED OUT BY THE ASSESSEE TRUST UPTO 31.3.2016 CO ULD BE EASILY VERIFIED FROM THE SAME. THERE IS NO DEFECT POINTED OUT IN THE SAID ACCOUNTS EXCEPT STATING THAT CORPUS DONATIONS COULD NOT BE EXEMPT U/S 11(1)(D) OF THE ACT FOR WAN T OF REGISTRATION U/S 12AA OF THE ACT FOR THE EARLIER YEARS. MOREOVER, WE FIND THAT THE TREATMENT OF CORPUS DONATIONS AS REVENUE DONATIONS FOR THE EARLIER YEARS WOULD ONLY BE A COMPUTATION OF INCOME ASPECT AND COULD BE EXAMINED AT THE RELEVANT POINT OF TIME BY THE LD AO. IN OUR CONSIDERED 6 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 6 OPINION, THAT NEED NOT BE LOOKED INTO AT THE TIME O F GRANT OF REGISTRATION U/S 12AA OF THE ACT. HENCE WE ARE CONVINCED ABOUT THE FACT OF GENU INENESS OF ACTIVITIES CARRIED OUT BY THE TRUST AND THE OBJECTS OF THE TRUST AS PER THE T RUST DEED AND IMPLEMENTATION OF THE SAID OBJECTS BY RUNNING A SCHOOL WHICH ARE CHARITABLE IN NATURE AND HENCE WE FIND THAT THE ASSESSEE WOULD BE ENTITLED FOR REGISTRATION U/S 12A A OF THE ACT. WE FIND THAT THE LD CIT(E) MERELY BASED ON THE REPLY GIVEN BY THE ASSES SEE TRUST THAT THE DETAILS OF CORPUS DONATIONS LINKING THE SAME WITH THE BANK STATEMENTS WOULD BE FURNISHED BEFORE THE LD AO , HAD ERRONEOUSLY FRAMED AN OPINION THAT THE GEN UINENESS OF ACTIVITIES OF THE TRUST ARE NOT PROVED. THIS IN OUR CONSIDERED OPINION, I S A FALLACY IN THE ORDER OF THE LD CIT(E). JUST BECAUSE THE RETURNS ARE NOT FILED F OR THE EARLIER YEARS PRIOR TO THE DATE OF PREFERRING APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT, THAT ALONE WOULD NOT MAKE THE ACTIVITIES CARRIED OUT BY THE TRUST AS INGENUIN E AND WOULD NOT MAKE THE ASSESSEE TRUST AS UNCHARITABLE ORGANIZATION. THE DEPARTMENT HAD T O TAKE RECOURSE TO TAKING ACTION FOR NOT FILING RETURNS FOR THE EARLIER YEARS IN THE MAN NER KNOWN TO LAW AS THE DOORS OF THE REVENUE ARE NOT CLOSED IN THAT REGARD. IN OUR OPIN ION, THAT SHOULD NOT JEOPARDIZE THE GRANT OF REGISTRATION TO THE ASSESSEE TRUST WITH EF FECT FROM 1.4.2016 ONWARDS. WE FIND THAT THE RELIANCE PLACED ON THE FOLLOWING DECISIONS BY THE LD AR SQUARELY SUPPORTS THE CASE OF THE ASSESSEE:- A) DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT(EXEMPTIONS) VS SHRI SHIRDI SAI DARBAR CHARITABLE TRUST (DHARAMS HALA) REPORTED IN (2017) 395 ITR 567 (P&H) BRIEFLY, THE FACTS AS NARRATED IN THE APPEAL, NECE SSARY FOR ADJUDICATION OF THE CONTROVERSY INVOLVED, MAY BE NOTICED. THE RESPONDEN T-ASSESSEE, A TRUST, FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT ON DECEMBER 9, 2014. VIDE ORDER DATED JUNE 26, 2015, ANNEXURE A-1, THE COMMISSIONER OF IN COME TAX (EXEMPTIONS) CIT(E) DENIED REGISTRATION TO THE ASSESSEE ON THE GROUND T HAT IT HAD NOT FILED ANY RETURN OF INCOME FOR THE ASSESSMENT YEARS 2012-13 TO 2014-15. THE ASSESSEES RECEIPT FOR THESE YEARS WAS RS. 5,52,369, RS. 15,15,442 AND RS. 10,47 ,415 RESPECTIVELY. IT WAS FURTHER RECORDED THAT THE ACCOUNTS WERE NOT GOT AUDITED BY THE ASSESSEE. THUS, THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS) HELD THAT T HE ACCOUNTS OF THE ASSESSEE WERE NOT RELIABLE/GENUINE. CLAUSE 12 OF THE OBJECTS OF T HE ASSESSEE-TRUST CONFERRED ABSOLUTE 7 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 7 POWERS ON THE TRUSTEES TO MANAGE THE PROPERTY OF TH E TRUST WHICH IN TURN WAS LIABLE TO ATTRACT THE PROVISIONS OF SECTION 13(1)(C) OF THE A CT. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. VIDE ORDER DATED JUNE 8, 2016, ANNEXURE A-2 THE TRIBUNAL ALLOWED THE APPEAL FILED BY THE A SSESSEE AND DIRECTED THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) TO GRANT IT REGISTRATION. IT WAS HELD THAT NON- FILING OF THE RETURN WAS NOT A VALID GROUND TO DENY REGISTRATION AS THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAD ONLY TO SATISFY HIMSELF ABOUT THE CHARITABLE NATURE OF THE OBJECTS AND GENUINENESS OF THE ACTIVITIES OF THE TR UST. IT WAS FURTHER RECORDED THAT PROVISIONS OF SECTION 13 OF THE ACT WERE TO BE LOOK ED INTO BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS AND NOT AT THE TIME OF GRANTING REGISTRATION U/S 12AA OF THE ACT. FURTHER, NO ADVERSE REMARKS HAD BEEN MADE BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) WITH REGARD TO THE OBJECTS CONTAIN ED IN THE MEMORANDUM OF THE TRUST. HENCE, THE INSTANT APPEAL BY THE APPELLANT-REVENUE. 3. WE HAVE HEARD LEARNED COUNSEL OF THE APPELLANT-R EVENUE. 4. THE MATTER HAS BEEN EXAMINED BY THE TRIBUNAL AFT ER PERUSING THE RELEVANT STATUTORY PROVISIONS. IT HAS BEEN CATEGORICALLY RECORDED BY T HE TRIBUNAL THAT THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS TO SATISFY TWO CONDITIO NS WHILE GRANTING REGISTRATION U/S 12AA OF THE ACT. FIRSTLY, WHETHER THE OBJECTS OF TH E ASSESSEE ARE CHARITABLE IN NATURE AND THUS, THE ACTIVITIES ARE GENUINE. IT CANNOT BE CONCLUDED ON THE BASIS THAT THE ASSESSEE HAS NOT FILED ITS INCOME TAX RETURN IN EAR LIER YEARS THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE. IT HAS BEEN FURTHER RECOR DED THAT SECTION 13 OF THE ACT COMES INTO PLAY AT THE TIME OF GRANTING EXEMPTION U/S 11 OF THE ACT AND NOT AT THE TIME OF GRANTING REGISTRATION U/S 12AA OF THE ACT. NO ADVER SE REMARKS HAVE BEEN RECORDED BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) WITH RE GARD TO THE OBJECTS CONTAINED IN THE MEMORANDUM OF THE ASSESSEE-TRUST TO COME TO THE CONCLUSION THAT ITS ACTIVITIES ARE NOT GENUINE. THUS, IT HAS BEEN RIGHTLY DIRECTED BY THE TRIBUNAL TO THE COMMISSIONER OF INCOME TAX(EXEMPTIONS) TO GRANT REGISTRATION U/S 12 AA OF THE ACT. LEARNED COUNSEL FOR THE APPELLANT-REVENUE HAS NOT B EEN ABLE TO SHOW THAT THE FINDINGS RECORDED BY THE TRIBUNAL ARE IN ANY WAY ILLEGAL OR PERVERSE WARRANTING INTERFERENCE BY THIS COURT. CONSEQUENTLY, NO SUBSTANTIAL QUESTION O F LAW ARISES AND THE APPEAL STANDS DISMISSED. B) DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT AT CHANDIGARH IN THE CASE OF CIT VS BABA DEEP SINGH EDUCATIONAL SOCIETY (ITA NO. 881 OF 2010) ; CIT VS AKLIA EDUCATIONAL & RESEARCH SOCIETY (ITA NO. 882 OF 2010 ) ; CIT VS SAINT KABIR EDUCATIONAL TRUST (ITA NO. 883 OF 2010) AND CIT VS AMRAVATI EDUCATIONAL SOCIETY (ITA NO. 884 OF 2010) DATED 13.10.2011. THE POWER OF THE CIT REGARDING THE SCOPE OF SECTIO N 12AA OF THE ACT HAS BEEN CONSIDERED BY THIS COURT IN THE ORDER DATED 5.10.20 11 PASSED IN I.T.A. NO. 701 OF 2010 (COMMISSIONER OF INCOME TAX-II, CHANDIGARH VS. M/S SURYA EDUCATIONAL & CHARITABLE 8 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 8 TRUST) AND IT HAS BEEN HELD THAT SECTION 12AA OF TH E ACT, REQUIRES SATISFACTION IN RESPECT OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, WHICH INCLUDES THE ACTIVITIES WHICH THE TRUST WAS UNDERTAKING AT PRESENT AND ALSO WHICH IT MAY CONTEMPLATE TO UNDERTAKE. THE INSERTION OF SUB SECTION 3 TO SECTION 12AA OF THE A CT REGARDING THE POWERS OF THE COMMISSIONER TO CANCEL THE REGISTRATION IF THE ACTI VITIES OF THE TRUST ARE NOT CARRIED OUT IN ACCORDANCE WITH SUCH OBJECTS WAS ALSO NOTICED. THE ALLAHABAD HIGH COURT IN COMMISSIONER OF INCOME TAX VS. RED ROSE SCHOOL 2007 (163) TAXMAN 19 HAS HELD THAT THE JURISDICTION OF T HE COMMISSIONER AT THE STAGE OF PROCEEDING APPLICATION U/S 12AA OF THE ACT IS LIMIT ED REGARDING WHETHER THE ACTIVITIES ARE GENUINE AND IN CONSONANCE WITH THE OBJECTS OF T HE TRUST OR INSTITUTION AND WHERE EDUCATION IS BEING IMPARTED AS PER THE RULES AND TH E FACTUM OF ESTABLISHMENT AND RUNNING OF SCHOOL IS NOT DISPUTED THE SAME WAS A GE NUINE ACTIVITY AND THE ENQUIRY REGARDING GENUINENESS OF THE ACTIVITIES CANNOT BE S TRETCHED BEYOND THIS. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT WOULD BE CLEAR THAT RESPONDENT-SOCIETY WITH THE RIDER THAT THE SAME COULD ALWAYS BE CANCELLED I F IT CAME TO THE NOTICE OF THE CIT THAT THE SOCIETY WAS NOT CARRYING ON THE ACTIVITIES AS P ER ITS OBJECTS. THE COMMISSIONER WHILE PROCESSING THE APPLICATION U/S 12AA OF THE ACT WAS NOT TO ACT AS AN ASSESSING AUTHORITY AND THUS, THE TRIBUNAL HAS RIGHTLY ALLOWED THE APPE AL FILED BY THE SOCIETY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ACCORDINGLY, NO SUBSTANTIAL QUESTION OF LAW AS CONT ENDED IN THE PRESENT APPEAL ARISES FOR DETERMINATION BY THIS COURT AND THE ORDER DATED 31.03.2010 PASSED BY THE TRIBUNAL IS UPHELD. CONSEQUENTLY, THE APPEAL IS DISMISSED. WE FIND THAT THE OTHER TWO DECISIONS OF CO-ORDINATE BENCH OF RAIPUR TRIBUNAL IN THE CASE OF RISHABH FOUNDATION TRUST VS CIT IN ITA NO. 88/RP R/2014 DATED 4.5.2017 AND PUNE TRIBUNAL IN THE CASE OF YASHASWI EDUCATION SOCIETY VS CIT IN ITA NO. 250/PUN/2014 DATED 13.4.2017 ALSO ENDORSED THE AFORESAID VIEWS. 6.1. IN VIEW OF THE AFORESAID FACTS AND FINDINGS AN D RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT TH E ASSESSEE TRUST WOULD BE ENTITLED FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT IN THE IN STANT CASE AND THE LD CIT(E) IS DIRECTED TO GRANT REGISTRATION IN ACCORDANCE WITH LAW. 6.2. WITH REGARD TO DENIAL OF EXEMPTION U/S 80G OF THE ACT , WE FIND THAT THE LD CIT(E) HAD DENIED THE SAME FOR WANT OF REGISTRATION U/S 12 AA OF THE ACT. IN VIEW OF OUR 9 ITA NOS.2194 & 2215/KOL/2015 M/S GAAT FOUNDATION A.YR.2015-16 9 AFORESAID DIRECTIONS TO THE LD CIT(E) FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT, WE HOLD THAT THE ASSESSEE IS INDEED ENTIRLED FOR GRANT OF EXEMPTION U/S 80G OF THE ACT. WE DIRECT THE LD CIT(E) ACCORDINGLY. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE FOR BOTH THE APPEALS ARE ALLOWED. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 16.08.2017 SD/- SD/- [N.V. VASUDEVAN] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16.08.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. GAAT FOUNDATION, SATYAJALAY, RUP PUR, JEMA RAJB ARI, P.S.-KANDI, DIST-MURSHIDABAD, WEST BENGAL, PIN-742140 2. COMMISSIONER OF INCOME TAX (EXEMPTION), 10, MIDD LETON ROW, KOLKATA (6 TH FLOOR). 3..C.I.T.(E)-KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S