St John Antony Farina Educational And Charitable Society, Amaravathi V. Commissioner of Income Tax, (Exemptions), Hyderabad

ITA 266/Hyd/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2259 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: misc
• Appeal Filed On: 16-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K CHENNUBOTLU
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER IT A NO. 266 /H/20 2 0 ST. JOHN ANTONY FARINA EDUCATIONAL AND CHARITABLE SOCIETY, AMARAVATHI. PAN A BFAS 4435G VS. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI K. CHENNU B OTLU REVENUE BY: S HRI ROHIT MUJUMDAR DATE OF HEARING: 14 /0 6 /2021 DATE OF PRONOUNCEMENT: 30 /0 6 /2021 O R D E R PER L.P. SAHU, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST CIT( EXEMPTIONS ), HYDERABADS ORDER DATED 11 / 0 2 /20 20 INVOLVING PROCEEDINGS U/S 12AA(1)(B)(II) OF THE INCOME - TAX ACT, 1961; IN SHORT THE ACT ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) GROSSLY I TA NO. 266 /HYD /20 20 ST. JOHN ANTONY FARINA EDUCATIONAL AND CHARITABLE SOCIETY, AMARAVATHI. : - 2 - : ERRED IN REJECTING THE APPLICATION FOR REGISTRATION U/S 12 AA OF THE INCOME TAX ACT 2. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) GROSSLY ERRED IN LAW IN REJECTING THE APPLICATION FOR REGISTRATION U/S 12 AA OF THE INCOME TAX ACT SOLELY ON THE BASIS OF THE FACT THAT THE APPELLANT HAS NOT STARTED 'NY ACTIVITY AND HENCE NOT ABLE TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE APPELLAN T 3. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS NOT PASSED ANY ADVERSE COMMENTS ON THE CHARITABLE NATURE OF THE OBJECTS CLAUSE OF THE APPELLANT WHICH WILL FIT INTO THE SECTION 2 (15) OF THE INCOME TAX ACT. 4. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) FAILED TO APPRECIATE THE FACT THAT COMMENCEMENT OF ACTIVITY IS NOT A PRE CONDITION FOR CONSIDERING THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT. 5. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) FAILED IN APPRECIATING THE FACT THAT ALL THE OBJECTS OF THE APPELLANT FALLS INTO THE AMBIT OF SECTION 2 (15) OF THE INCOME TAX ACT. 6. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) FAILED TO APPRECIATE THE FACT THAT SECTION 12A IS A PRE CONDITION FOR AVAILING OF THE BENEFIT UNDER SECTION 11 A ND 12 7. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) FAILED TO APPRECIATE THE FACT IN CASE NO ACTIVITY IS STARTED BY THE APPELLANT, THEN THE OBJECTS CLAUSE OF THE APPELLANT HAS TO BE SEEN FOR THE GENUINENESS OF THE ACTIVITIES 8. THE LD . COMMISSIONE R OF INCOME TAX (EXEMPTIONS) HAS GROSSLY ERRED IN NOT CONSIDERING THE VARIOUS JUDICIAL I TA NO. 266 /HYD /20 20 ST. JOHN ANTONY FARINA EDUCATIONAL AND CHARITABLE SOCIETY, AMARAVATHI. : - 3 - : DECISIONS WHICH ARE IN FAVOR OF THE APPELLANT AS SUBMITTED VIDE ITS LETTER DATED 3 - 2 - 2020 . 2. THE ASSESSEE FILED E - APPLICATION IN FORM NO. 10A SEEKING REGISTRATION U/ S 12A OF THE ACT ON 25/09/2019. CIT(E) ISSUED A NOTICE ON 30/12/2019 TO PRODUCE ITS ORIGINAL MEMORANDUM OF ASSOCIATION/TRUST DEED FOR VERIFICATION AND TO FURNISH A DETAILED REPLY ON SPECIFIC POINTS ON 27/01/2020. THE AR OF THE ASSESSEE ATTENDED AND FILED THE REQUIRED INFORMATION. 2.1 THE CIT(E) NOTED THAT THE ASSESSEE SOCIETY IS REGISTERED ON 29/07/2019 AND NO ACTIVITY HAS BEEN STARTED SO FAR. THE ASSESSEE FILED A WRITTEN SUBMISSIONS DATED 03/02/2020 STATING THAT COMMENCEMENT OF ACTIVITY IS NOT A PRECON DITION FOR GRANT OF 12AA REGISTRATION. HOWEVER, THE CIT(E) REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF 12AA REGISTRATION ON THE GROUND THAT THE ASSESSEE DID NOT UNDERTAKE ANY CHARITABLE WORK AND THEREFORE, THE GENUINENESS OF THE ACTIVITIES COULD NOT BE ESTABLISHED. 3. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT AND CONTENDED THAT THE CIT(E) HAS GROSSLY ERRED IN LAW IN REJECTING THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT SOLELY ON THE BASIS OF THE FACT THAT THE APPELLANT HAS NOT STARTED ANY ACTIVITY AND HENCE NOT ABLE TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE APPELLANT. HE, I TA NO. 266 /HYD /20 20 ST. JOHN ANTONY FARINA EDUCATIONAL AND CHARITABLE SOCIETY, AMARAVATHI. : - 4 - : FURTHER, SUBMITTED THAT THE CIT(E) HAS NOT PASSED ANY ADVERSE COMMENTS ON THE CHARITABLE NATURE OF THE OBJECTS CLAUSE OF THE A SSESSEE WHICH WILL FIT INTO THE SECTION 2(15) OF THE ACT. 4. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF CIT(E). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. THE HONBLE SUPREME COURT IN THE CASE OF ANANDA SOCIAL EDUCATIONAL TRUST VS. CIT , 2020 - LL - 0219 - 77 HAS HELD AS UNDER: REGISTRATION CAN BE APPLIED FOR BY A NEWLY REGISTERED TRUST. THERE IS NO STIPULATION THAT THE TRUST SHOULD HAVE ALREADY BEEN IN EXISTENCE AND SHOULD HAVE UNDERTAKEN ANY ACTIVITIES BEFORE MAKING THE APPLICATION FOR REGISTRATION. THE TERM ACTIVITIES IN S. 12AA INCLUDES PROPOSED ACTIVITIES. THE CIT MUST CONSIDER WHETHER THE OBJECTS OF THE TRUST ARE GENUINELY CHARITABLE IN NATURE AND WHETHER THE ACTIVITIES WHICH THE TRUST PROPOSED TO CARRY ON ARE GENUINE IN THE SENSE THAT THEY ARE IN LINE WITH THE OBJECTS O F THE TRUST. HOWEVER, HE CANNOT REFUSE REGISTRATION ON THE GROUND THAT NO ACTIVITIES ARE CARRIED OUT 5.1 RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE ABOVE, CASE , WE REMIT THE FILE BACK TO CIT(E) WITH A DIRECTION TO GRANT REGISTRATION U/S 12AA TO THE ASSESSEE FOLLOWING THE SAID DECISION. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES . I TA NO. 266 /HYD /20 20 ST. JOHN ANTONY FARINA EDUCATIONAL AND CHARITABLE SOCIETY, AMARAVATHI. : - 5 - : 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE , 2021 . SD/ - SD/ - ( S.S. GODARA ) (L . P . SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 30 TH JUNE , 20 2 1 . K V C OPY TO : 1 M/S ASPIRING ENTERPRISES PVT. LTD., C/O P. MURALI & CO., CAS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82 2 IT O , WARD 1 ( 2 ) , HYDERABAD. 3 C I T(A) 1 , GUNTUR 4 PR. CIT - 1 , HYDERABAD 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.