M/s Vestal Institute Technology Educational Society, Eluru V. THE CIT, RAJAHMUNDRY., Rajahmundry

ITA 243/VIZ/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1998 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-11-2015
• Assessment Year: misc
• Appeal Filed On: 04-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S N MURTHY
• Keywords: Charitable institution
• Section: 12A; 12AA; 12; 11

Judgement Text

ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.243/VIZAG/2012 ( / ASSESSMENT YEAR: NA) VESTAL INSTITUTE OF TECHNOLOGY EDUCATIONAL SOCIETY VATLURU, ELURU VS. CIT RAJAHMUNDRY [PAN: AABTV 1337J ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI T.S.N. MURTHY, DR / DATE OF HEARING : 17.03.2016 / DATE OF PRONOUNCEMENT : 24.03.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT RAJAHMUNDRY DATED 1.3.2012. ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 2 2. THE ASSESSEE IS AN EDUCATIONAL SOCIETY ESTABLISH ED WITH FOLLOWING OBJECTIVES: (I) TO IMPART AND PROMOTE HIGHER EDUCATION, GENER AL TECHNICAL AND TECHNOLOGICAL TO BOYS AND GIRLS IRRESPECTIVE OF CAST E OR CREED. (II) TO ESTABLISH COLLEGE OR COLLEGES AND INSTITUTIONS FOR THE SAID PURPOSE (III) TO RUN, DEVELOP OR IMPROVE ANY SCHOOL, COLLEGE, MA NAGEMENT INSTITUTE, TECHNICAL INSTITUTE INCLUDING VOCATIONAL EDUCATION O R ANY OTHER EDUCATIONAL INSTITUTION OR SOCIETY OR ADOPT, ASSIST OR HELP ANY EXISTING EDUCATIONAL INSTITUTION WITHOUT PROFIT MOTIVE FOR THE BENEFIT O F THE PUBLIC IN INDIA IN GENERAL AND MORE PARTICULARLY FOR THE BENEFIT OF SC HEDULED CASTES AND SCHEDULED TRIBES. (IV) TO ORGANIZE, START, RUN OR ASSIST ANY PROGRAMME EIT HER BY ITSELF OR BY ASSISTING OR COORDINATING WITH OTHER EDUCATIONAL OR OTHER INSTITUTIONS FOR COACHING, GUIDANCE AND COUNSELING, VOCATIONAL TRAIN ING OR TRAINING FOR PREPARATION FOR AN ENTRANCE OR COMPETITIVE TESTS FO R RECRUITMENT FOR JOBS INCLUDING ALL INDIA AND STATE SERVICE EXAMINATION O R FOR ADMISSION TO PROFESSIONAL OR OTHER EDUCATIONAL INSTITUTIONS. (V) TO START, RUN OR ASSIST PROGRAMMES FOR THE SCHE DULED CASTES AND SCHEDULED TRIBES, BACKWARD CLASSES, WOMEN, CHILDREN, BONDED L ABOUR AND OTHER SECTIONS OF THE SOCIETY FOR THE PROMOTION OF LEGAL ASSISTANCE, LEGAL AWARENESS, TRAINING OF PARA LEGAL, HUMAN RIGHTS, CI VIL RIGHTS AND OTHER MATTERS CONCERNED WITH OVERALL DEVELOPMENT OF THESE SECTIONS OF SOCIETY. (VI) TO RUN WORKSHOP,, PROGRAMME, SEMINARS ETC, FOR THE EDUCATED UNEMPLOYED AND THE RURAL YOUTH IN CO-ORDINATION WITH OTHER ORG ANIZATIONS. (VII) TO RUN COMPUTER TRAINING CENTERS (VIII) TO ENCOURAGE AND START RESEARCH AND STUDY ON MODERN EDUCATION WITH SCIENTIFIC METHODS. (IX) TO PROMOTE AND FOSTER, EDUCATION AMONG POOR AND DES ERVING STUDENTS, WHETHER OF PRIMARY, SECONDARY, GRADUATE, POST-GRADU ATE OR, VOCATIONAL COURSES BY ALL MEANS AND MAKE SUCH EDUCATION AVAILA BLE TO WEAKER SECTIONS OF THE COMMUNITY. (X) TO GIVE DONATIONS TO EDUCATIONAL INSTITUTIONS WHICH ARE RUN ON NON-PROFIT BASIS SUBJECT TO SUCH CONDITIONS CONSISTENT WITH THE OBJE CTS OF THE MANAGING COMMITTEE. (XI) TO CONSTITUTE SCHOLARSHIPS TO POOR, AND DESERVING S TUDENTS ENABLING THEM TO CONTINUE THEIR STUDIES AND TO GIVE GRANTS FOR FEES AND OTHER CHARGES OR REIMBURSEMENT FOR COSTS OF BOOKS, INSTRUMENTS AND O THER EDUCATIONAL AIDS FOR ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 3 THEIR EDUCATIONAL PURSUITS (XII) TO HELP ESTABLISHMENT OF STUDENTS HOSTEL OR TO GI VE OTHER ASSISTANCE FOR POOR AND DESERVING STUDENTS TO FIND INEXPENSIVE LIVING A CCOMMODATION TO ENABLE THEM TO PROSECUTE THEIR STUDIES (XIII) TO CONSTITUTE PRIZES FOR OUTSTANDING ACHIE VEMENTS OF STUDENTS IN EDUCATIONAL INSTITUTIONS EITHER IN THE EXAMINATIONS, SPORTS, GEN ERAL KNOWLEDGE OR SUCH OTHER PROFICIENCIES. (XIV) TO GIVE LOANS AT NIL OR SUBSIDIZED LOW RATE OF INTEREST TO STUDENTS TO ENABLE THEM TO PROSECUTE HIGHER STUDIES (XV) TO UNDERTAKE OTHER INCIDENTAL ACTIVITIES WITHOUT PR OFIT MOTIVE WHICH ARE CONSISTENT WITH THE ABOVE OBJECTS AND ARE NOT INCON SISTENT WITH THE OBJECT OF THE MANAGING COMMITTEE BEING PROMOTION OF EDUCATION 3. THE ASSESSEE SOCIETY FILED AN APPLICATION SEEKIN G REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS 'THE ACT') FROM CIT, RAJAHMUNDRY IN PRESCRIBED FORM. THE COMMISSIO NER AFTER EXAMINING THE DETAILS, HE REJECTED THE REGISTRATION U/S 12AA OF THE ACT. THEREAFTER, ASSESSEE CARRIED MATTER IN APPEAL BEFOR E THE TRIBUNAL. THE HONBLE TRIBUNAL DIRECTED THE COMMISSIONER TO CONSI DER THE CASE OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 4. IN PURSUANCE TO THE DIRECTIONS GIVEN BY THE TRIB UNAL, THE COMMISSIONER ISSUED A NOTICE AND DIRECTED THE ASSES SEE TO APPEAR. THE ASSESSEE SOCIETY FILED ITS BOOKS OF ACCOUNT, COPIES OF BALANCE SHEETS, INCOME AND EXPENDITURE ACCOUNT, THERE AFTER THE COM MISSIONER HAS ASKED THE ASSESSEE THAT THERE IS A VIOLATION OF SEC TION 13(2)(E) OF THE ACT AND CALLED FOR THE EXPLANATION. IT WAS SUBMITTED B Y THE ASSESSEE BEFORE ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 4 THE LD. COMMISSIONER THAT ON 24.11.2007, THE ASSESS EE HAS PURCHASED AN EXTENT OF 2.65 ACRES OF LAND AT VATLURU, PEDAPAD U MANDAL, W.G. DIST. IN R.S. NO.807/5 VALUED AT ` 4,85,000/- PER ACRE AND ` 1 LAKH FOR BORE AND 20 HP MOTOR AND THE ACTUAL PURCHASE CONSIDERATI ON PAID FOR THE LAND WAS AROUND ` 14 LAKHS. THE LD. COMMISSIONER AFTER CONSIDERING THE ABOVE EXPLANATION OF THE ASSESSEE, HE HAS NOTED THA T ON 5.12.2007 ONE OF THE TRUSTEES OF THE ASSESSEE SOCIETY SMT. K.V.V. LAKSHMI KUMARI SOLD THE LAND IN SAME R.S. NO.807/5 AT VATLURU FOR A TOT AL CONSIDERATION OF ` 5,50,000/- VALUED AT ` 3,02,500/- TO ANOTHER COMPANY M/S. VESTAL SCHOOLS PVT. LTD., THE SAME GROUP OF INSTITUTION. THEREFORE, THE ASSESSEE PAID MORE THAN THE SALE CONSIDERATION, THEREBY ONE OF THE TRUSTEES HAS GOT PECUNIARY BENEFIT AND THUS, THERE IS A VIOLATIO N OF 13(2)(E) OF THE ACT AND THE LD. COMMISSIONER HAS REJECTED THE REGISTRAT ION U/S 12AA OF THE ACT. 5. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS A CHARITABLE EDUCATIONAL SOCIETY, FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. THE COMMISSIONER HAS NOT DOUBTED THE ACTIVITIES OF THE SOCIETY. THEREFORE, AT THE TIME OF THE REGISTRATION, SECTION 13(2)(E) OF THE ACT CANNOT BE INVOKED. ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 5 6. ON THE OTHER HAND, THE LD. D.R. HAS RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE HAVE GONE THROUGH THE OBJECTIVES OF THE TRUST. THE MAIN OBJECTIVE OF THE TRUST IS TO IMPART AND PROMOTE HIGHER EDUCATION , GENERAL TECHNICAL AND TECHNOLOGICAL TO BOYS AND GIRLS IRRESPECTIVE OF CASTE AND CREED AND TO ESTABLISH COLLEGE OR COLLEGES AND INSTITUTIONS T O ACHIEVE THE ABOVE PURPOSE. IT IS OBSERVED THAT THE ASSESSEE SOCIETY HAS EXISTED FOR THE PURPOSE TO PROMOTE AND IMPART THE EDUCATION IRRESPE CTIVE OF CASTE, CREED. THEREFORE, PRIMA FACIE IT CAN BE SAID THAT ASSESSEE IS A CHARITABLE SOCIETY. THE ASSESSEE SOCIETY APPLIED FOR REGISTRA TION U/S 12AA OF THE ACT. THE COMMISSIONER HAS NOT DOUBTED THE GENUINEN ESS OF THE ACTIVITIES OR OBJECTIVES OF THE SOCIETY. THE CASE OF THE COMMISSIONER IS THAT THE ASSESSEE HAS PURCHASED A LAND BY PAYING MO RE THAN THE GUIDELINE VALUE TO ONE OF THE TRUSTEE THEREBY TRUST EE HAS GOT PECUNIARY BENEFIT. IT IS OBSERVED THAT THE LAW DOES NOT PROH IBIT PAYMENT MORE THAN THE GUIDELINE VALUE. IN THE COMPARABLE CASE T AKEN BY THE COMMISSIONER, THE GUIDELINE VALUE IS ` 3,02,500/- BUT THE ACTUAL PAYMENT IS ` 5,50,000/-. IN ASSESSEES CASE THE PAYMENT MADE B Y THE ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 6 ASSESSEE TO PURCHASE THE LAND PER ACRE IS ` 4,85,000/-, WHICH IS MUCH LESSER THAN THE PAYMENT MADE IN THE COMPARABLE CASE . WE DO NOT UNDERSTAND HOW THE COMMISSIONER CAME TO SUCH CONCLU SION THAT ASSESSEE PAID MORE AMOUNT THAN THE COMPARABLE CASE TAKEN BY HIM. 8. IN OUR OPINION, THIS IS NOT AT ALL RELEVANT FOR THE PURPOSE OF GRANTING REGISTRATION U/S 12AA OF THE ACT. THE LD. COMMISSIONER WITHOUT FOLLOWING THE PROPER PROCEDURE AND WITHOUT EXAMINING THE CASE IN PROPER PROSPECTIVE, HE HAS TAKEN IRRELEVANT, IMM ATERIAL TRANSACTION AND INVOKED SECTION 13(1)(B) OF THE ACT AND REJECTE D THE CLAIM. WE FIND THAT THE ORDER PASSED BY THE COMMISSIONER CANNOT BE SUSTAINED IN THE EYE OF LAW. THUS, WE GRANT THE REGISTRATION U/S 12 AA OF THE ACT TO THE ASSESSEE. 9. UNDER SIMILAR CIRCUMSTANCES, THE COORDINATE BENC H OF THE TRIBUNAL IN THE CASE OF SAINT JOSEPH ACADEMY VS. DIT(IT) (20 15) 153 ITD 669 (HYD.) HAS CONSIDERED THE ISSUE THAT AT THE TIME OF GRANTING REGISTRATION U/S 12AA OF THE ACT, WHERE THE COMMISSIONER IS JUST IFIED IN INVOKING SECTION 13(1)(B) OF THE ACT AND HAS OBSERVED AS UND ER: 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THA T ANY TRUST OR INSTITUTION SEEKING TO AVAIL THE BENEFIT OF THE PRO VISIONS OF SECTIONS 11 & 12 IS REQUIRED TO APPLY FOR REGISTRATION UNDER SE CTION 12A. THE PROCEDURE FOR REGISTRATION IS PRESCRIBED IN SECTION 12AA AND AS PER THE PROVISIONS OF SUB-SECTION (1) OF THAT SECTION, THE CIT ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 7 [D.I.T(EXEMPTION) IN THE PRESENT CASE] IS EMPOWERED TO SATISFY HIMSELF ABOUT THE OBJECT OF THE TRUST AND ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION BEFORE G RANTING THE REGISTRATION UNDER SECTION 12A. ONCE THE CIT HAS NOT DOUBTED TH E GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE NOR DOUBTED ITS C HARITABLE OBJECT, HE CANNOT REFUSE TO GRANT REGISTRATION UNDER SECTION 1 2A. IN THE PRESENT CASE, THE REGISTRATION, HOWEVER, WAS REFUSE D BY THE D.I.T(EXEMPTION) ON THE GROUND THAT AS PER ONE OF T HE OBJECTS CLAUSE NOTED ABOVE, THE ASSESSEE SOCIETY WAS ESTABLISHED F OR THE BENEFIT OF PEOPLE BELONGING TO CHRISTIAN MINORITY COMMUNITY WH ICH WAS CLEARLY IN VIOLATION OF SECTION 13(1)(B). HOWEVER, AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE A SSOCIATION (SUPRA), AN OBJECT BENEFICIAL TO THE SECTION OF THE PUBLIC US AN OBJECT OF GENERAL PUBLIC UTILITY AND TO SERVE A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR ALL PERSONS IN A PARTICULAR COUNTRY OR STATE. EX PLAINING FURTHER, IT WAS OBSERVED BY THE HON'BLE APEX COURT THAT IT IS S UFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIED INDIVIDUAL. RELYING ON THIS DECISION OF H ON'BLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATI ON (SUPRA), HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SURJI D EVI KUNJI LAL JAIPURA CHARITABLE TRUST (SUPRA) HAS HELD THAT TRUS T CREATED FOR GIVING MEDICAL AID, SOCIAL WELFARE AND UPLIFTMENT OF POOR MEMBERS OF A PARTICULAR COMMUNITY, VIZ. VAISH COMMUNITY, IS, THE REFORE, FOR CHARITABLE PURPOSES. TO THE SIMILAR EFFECT IS ANOTH ER DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. PT. RAM SHANKAR MISRA TRUST (222 ITR 252) WHEREIN IT WAS HELD THAT EXPENDITURE INCURRED BY A TRUST FOR THE BENEFIT OF ONE COMMUNIT Y IS AN EXPENDITURE INCURRED ON A PUBLIC CHARITABLE OBJECT. THE PROPOSITION PROPOUNDED BY HON'BLE SUPREME COURT AS WELL AS BY H ON'BLE ALLAHABAD HIGH COURT IN THE AFORESAID JUDGMENTS CLE ARLY SHOWS THAT THE OBJECTS OF THE ASSESSEE SOCIETY, NOTWITHSTANDIN G THE RELEVANT CLAUSE INDICATING THE OBJECT OF THE ASSESSEE SOCIET Y TO WORK FOR THE BENEFIT OF CHRISTIAN MINORITY COMMUNITY IN PARTICUL AR, WERE OF CHARITABLE NATURE AND SINCE THE POWERS OF THE CIT/D .I.T (EXEMPTION) CONFERRED UNDER SECTION 12AA WERE CONFINED TO SATIS FY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AS W ELL AS NATURE OF ITS OBJECT BEING CHARITABLE, WE ARE OF THE VIEW THAT HE WAS NOT JUSTIFIED IN REFUSING TO GRANT REGISTRATION TO THE ASSESSEE T RUST UNDER SECTION 12A MERELY ON THE GROUND THAT THE SAID OBJECTS WERE VIOLATIVE OF THE PROVISIONS OF SECTION 13(1)(B). AS REGARDS THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF KAMALA TOWN TRUST SUPRA) RELIED UPON BY THE LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION), IT IS OBSERVED THAT THE FACTS INVOLVED IN THE SAID CASE WERE ALTOGETHER DIFFERENT FROM THE FACTS OF THE PRESENT CASE IN AS MUCH AS THE ASSESSEE TRUST IN THAT CASE WAS E STABLISHED ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 8 PARTICULARLY FOR THE BENEFIT OF THE WORKMEN OF THE COMPANY AND SINCE THE BENEFICIARIES OF THE TRUST WERE A WELL DEFINED SMALLER CLASS OF EMPLOYEES OR WORKMEN OF THE COMPANY, THE HON'BLE SU PREME COURT HELD THAT THE ASSESSEE TRUST COULD NOT BE CONSIDERE D AS A PUBLIC CHARITABLE TRUST. THE DECISION OF THE HON'BLE SUPRE ME COURT IN THE CASE OF KAMALA TOWN TRUST (SUPRA), THEREFORE, IS DISTING UISHABLE ON FACTS AND THE RELIANCE OF THE LEARNED DIRECTOR OF INCOME- TAX(EXEMPTION) THEREON TO DRAW AN ADVERSE INFERENCE AGAINST THE AS SESSEE IN THE PRESENT CASE IS CLEARLY MISPLACED. 10. IT IS PERTINENT TO NOTE THAT THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATI ON (SUPRA), AS FOLLOWED SUBSEQUENTLY BY HON'BLE AILAHABAD HIGH COU RT IN THE CASE OF SDKI JAIPURIA TRUST (NO. 1) (SUPRA) AND IN THE CASE OF CIT V. RAM SHANKAR MISRA TRUST (SUPRA) TO HOLD THAT THE EXPEND ITURE INCURRED BY A TRUST FOR THE BENEFIT OF ONE COMMUNITY IS AN EXPEND ITURE INCURRED ON A PUBLIC CHARITABLE OBJECT, STILL HOLDS THE FIELD NOT WITHSTANDING THE PROVISIONS CONTAINED IN SECTION 13(1)(B) SINCE THE DEFINITION OF THE TERM 'CHARITABLE PURPOSE' GIVEN IN SECTION 2(15) CO NTINUES TO REMAIN THE SAME. THE PROVISIONS OF SECTION 13(1) ARE THUS NOT DIRECTLY RELEVANT IN THIS REGARD. ON THE OTHER HAND, THE SAI D SECTION BEGINS WITH THE WORDS 'NOTHING CONTAINED IN SECTION 11 OR SECTI ON 12 SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVI OUS YEAR OF THE PERSON... 'WHICH CLEARLY ENVISAGES OPERATION OF SEC TION 11 OR SECTION 12 BEFORE THE PROVISIONS OF SECTION 13 CAN BE APPLI ED OR INVOKED IN A GIVEN CASE. IT ALSO SHOWS THAT THE SAID PROVISIONS C AN BE APPLIED OR INVOKED ONLY AT THE TIME OF COMPUTATION OF TOTAL IN COME OF THE PREVIOUS YEAR OF THE PERSON WHO IS CLAIMING EXEMPTI ON UNDER SECTION 11 OR SECTION 12. BOTH THESE SITUATIONS CONTEMPLATE D IN SECTION 13 CAN ARISE ONLY AND ONLY IF REGISTRATION UNDER SECTION 1 2A IS GRANTED TO THE SAID PERSON. IF THE SAME IS NOT GRANTED AND THE PERS ON IS REFUSED THE REGISTRATION UNDER SECTION 12A, HE WOULD NOT BE ENT ITLED TO CLAIM ANY BENEFIT AVAILABLE UNDER SECTION 11 OR 12 AND THERE WILL BE NO OCCASION TO THE ASSESSING OFFICER TO INVOKE OR APPLY SECTION 13 IN HIS CASE. THIS POSITION WOULD NOT ONLY BE CONTRARY TO THE SCHEME O F THE ACT AS LAID DOWN IN SECTIONS 11, 12, 12A, 12AA AND 13 BUT THE S AME MAY ALSO CAUSE PREJUDICE/HARDSHIP TO THE PERSONS IN CERTAIN CASES. FOR INSTANCE, THE RELEVANT OBJECTS CLAUSE OF THE ASSESSEE SOCIETY IN THE PRESENT CASE, AS NOTED ABOVE, EMPHASISES THE WORKING OF THE ASSES SEE SOCIETY FOR THE BENEFIT OF CHRISTIAN MINORITY COMMUNITY IN PART ICULAR. NEVERTHELESS THE SAID OBJECT ALSO PERMITS THE ASSESSEE SOCIETY T O WORK FOR THE BENEFIT OF OTHERS IN GENERAL. IN THIS SITUATION, IF THE REGISTRATION APPLIED FOR UNDER S.12AA IS NOT GRANTED FOR VIOLATION OF PR INCIPLES OF S.13(1)(B), AND IF IT IS ULTIMATELY FOUND THAT THE ASSESSEE TRUST HAS ACTUALLY ACCOMPLISHED THE OBJECTS ONLY FOR THE BENE FIT OF OTHERS IN GENERAL, WITHOUT THERE BEING ANY ACTIVITY UNDERTAKE N FOR THE BENEFIT OF CHRISTIAN MINORITY COMMUNITY IN PARTICULAR, IT WOUL D BE DEPRIVED OF ANY BENEFITS, WHICH OTHERWISE ARE AVAILABLE TO IT UNDER S.11 OR S.12. THIS ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 9 CERTAINLY IS NOT THE LEGISLATIVE INTENTION AS REFLE CTED IN THE SCHEME LAID DOWN IN SECTIONS 11, 12, 12A, 12AA AND 13. ON THE C ONTRARY, THE PHRASEOLOGY OF SECTION 13, AS ALREADY DISCUSSED, MA KES IT EXPLICITLY CLEAR THAT THE SAID PROVISIONS BECOME OPERATIVE OR RELEVANT ONLY AT THE STAGE OF ASSESSMENT WHEN THE ASSESSING OFFICER IS R EQUIRED TO EXAMINE THE CLAIM OF THE ASSESSEE FOR BENEFITS UNDER SECTIO N 11 OR SECTION 12 WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE OF THE RELEVANT PREVIOUS YEAR. THE APPLICATION OF SECTION 13 THUS F ALLS WITHIN THE EXCLUSIVE DOMAIN OF THE AO AND THE PROVISIONS CONTA INED THEREIN CAN BE INVOKED BY HIM WHILE FRAMING THE ASSESSMENT AND NOT BY THE CIT WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA. THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ARYAN EDUCATION SOCIETY V/S. CIT(93 LTD 546) ALSO SUPPORT S THIS VIEW, WHEREIN IT WAS HELD THAT SO LONG AS THE PROVISIONS OF SECTIONS 11, 12 AND 12A ARE COMPLIED WITH, THE EXEMPTION CANNOT BE DENIED MERELY BECAUSE THERE IS ANY VIOLATION OF THE PROVISIONS OF SECTION 13. 10. THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE DE LHI BENCH OF THE TRIBUNAL, WHEREIN IT IS HELD THAT FOR THE PURPOSE O F REGISTRATION U/S 12AA OF THE ACT, THE CIT HAS TO SATISFY HIMSELF THE OBJE CTS OF THE TRUST OR INSTITUTION AND GENUINENESS OF ITS ACTIVITIES. THE TRUST OR INSTITUTION, WHICH IS CARRYING ON EDUCATIONAL ACTIVITIES WILL FA LL WITHIN THE AMBIT OF CHARITABLE PURPOSE U/S 2(15) OF THE ACT, EVEN IF IT INCIDENTALLY INVOLVES CARRYING ON OF THE COMMERCIAL ACTIVITIES. 11. KEEPING IN VIEW OF THE ABOVE TWO DECISIONS OF T HE COORDINATE BENCH OF THE TRIBUNAL, WE ARE OF THE VIEW THAT THE ASSESSEE IS DESERVED FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. ACC ORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.243/VIZAG/2012 VESTAL INSTITUTE TECHNOLOGY EDUCATIONAL SOCIETY, VA TLURU, ELURU 10 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 24 TH MAR16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 24.03.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE CIT, RAJAHMUNDRY 2. / THE RESPONDENT VESTAL INSTITUTE OF TECHNOLOGY E DUCATIONAL SOCIETY, NH-5, BY PASS, VATLURU, ELURU-534 007. 3. ) / THE CIT, RAJAHMUNDRY 4. ) ( ) / THE CIT(A), RAJAHMUNDRY 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM