Indus Technical Education Society, Kanpur V. CIT, Kanpur

ITA 279/LKW/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5654 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-01-2014
• Assessment Year: misc
• Appeal Filed On: 21-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.279/LKW/2010 ASSESSMENT YEAR: N.A. M/S INDUS TECHNICAL EDUCATION SOCIETY, A - 1, ROOMA INDUSTRIAL AREA, KANPUR. PAN:AAATT4395L VS. C.I.T. - 1, KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI MANOJ KUMAR GUPTA, CIT, D.R. DATE OF HEARING 05/02/2014 DATE OF PRONOUNCEMENT 2 8 /02/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - I, KANPUR U/S 12AA(1) OF THE ACT ON 23/03/2010. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE COMMISSIONER OF INCOME TAX - 1, KANPUR HAS ERRED ON FACTS AND IN LAW IN ARBITRARILY REJECTING THE APPLICATION MOVED FOR REGISTRATION UNDER SECTION 12A OF THE INCOME TAX ACT, 1961. 2. BECAUSE ON A PROPER CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED UNDER SECTION 12AA(1) OF THE I.T. ACT, IS CONTRARY TO THE PROVISIONS OF LAW, BE QUASHED, AND THE REGISTRATION AS SOUGHT FOR BY THE APPELLANT SOCIETY, BE GRANTED. 3. BECAUSE ALL THE CONDITIONS AS LAID DOWN FOR GRANT OF REGISTRATION HAVING DULY BEEN COMPLIED WITH AND FULFILLED, THE COMMISSIONER OF INCOME TAX WAS NOT JUSTIFIED IN 2 REFUSING GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT TO THE APPELLANT SOCIETY. 4. BECAUSE THE COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW IN NOT FOLLOWING THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 30.10.2009 IN THE ASSESSEE'S OWN CASE WHEREIN THE HON'BLE TRIBUNAL HAD CATEGORICALLY HELD THAT THE ASSESSEE SOCIETY IS A CHARITABLE SOCIETY EXISTING FOR CHARITABLE PURPOSES AND DIRECTED THE CO MMISSIONER OF INCOME TAX TO CONSIDER THE PETITION FOR REGISTRATION AND TO GRANT REGISTRATION. 5. BECAUSE THERE BEING NO VIOLATION OF THE PROVISIONS OF SECTION 13 OF THE I.T. ACT, THE COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW AND HAS ACTED BEYOND HIS JURISDICTION IN NOT GRANTING REGISTRATION UNDER SECTION 12A, AS CLAIMED BY THE APPELLANT SOCIETY. 6. BECAUSE THE ORDER OF THE HON'BLE INCOME TAX TRIBUNAL BEING SPECIFIC AND LIMITED THE CIT HAS ERRED ON FACTS AND IN LAW IN CONSIDERING THE MATTE R AFRESH IGNORING, THE FINDING OF HON'BLE TRIBUNAL WHICH ACTION OF THE CIT IS CONTRARY TO LAW AND ERRONEOUS. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT IN THE PRESENT CASE, THE IMPUGNED ORDER IS PASSED BY LEARNED CIT AS PER THE TRIBUNAL DIRECTION IN ASSESSEES OWN CASE. HE SUBMITTED A COPY OF THE TRIBUNAL ORDER IN I.T.A. NO.298/LKW/09 DATED 30/10/2009 AND DRAWN OUR ATTEN TION TO PARA 12.4.3 ON PAGE NO. 73 AND ALSO TO PARA NO. 13.2.2 ON PAGE NO. 75 OF THE TRIBUNAL ORDER. HE POINTED OUT THAT AS PER THE DIRECTION OF THE TRIBUNAL, THE CIT WAS REQUIRED TO EXAMINE THE NATURE OF OBJECTS OF THE ASSESSEE AND IT WAS ALSO DIRECTED B Y THE TRIBUNAL THAT IF THE OBJECTS ARE FOUND TO BE CHARITABLE NATURE OR IMPARTING OF EDUCATION THEN THE ASSESSEE SHOULD BE GRANTED REGISTRATION U/S 12AA OF THE ACT FROM THE DATE IT WAS CONSTITUTED, IF SO REQUESTED AND IF DELAY IS CONDONED. HE FURTHER SUBM ITTED THAT THIS IS NOT THE FINDING OF LEARNED CIT IN THE IMPUGNED ORDER THAT THE OBJECTS OF THE ASSESSEE 3 ARE NOT OF CHARITABLE NATURE AND, THEREFORE, AS PER THE TRIBUNAL DIRECTION, THE REGISTRATION SHOULD HAVE BEEN GRANTED BY THE CIT. 4. THE LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE IMPUGNED ORDER OF LEARNED CIT - I, KANPUR, THE OBJECTION OF CIT IS THAT THE ASSESSEE WAS CHARGING EXCESSIVE FEES FROM THE STUDENTS AND WAS MAKING PROFITS AND, THEREFORE, HE HELD THAT THE ASSESSEE IS TRANSFERRING THE SURPLUS TO FOUNDER MEMBER AND THEREFORE, PRELIMINARY OBJECT CANNOT BE SAID TO BE CHARITABLE. AT THIS JUNCTURE , WE REPRODUCE THE RELEVANT PARA OF THE TRIBUNAL ORDER I.E. P ARA 12.4.3 FROM PAGE 73 OF THIS TRIBUNAL ORDER AS UNDER: 12.4.3 TO CONCLUDE, WE ARE OF THE OPINION THAT SO FAR AS REASONS/GROUNDS GIVEN BY THE CIT FOR REJECTING ASSESSEE'S REQUEST FOR GRANT OF REGISTRATION U/S 12AA ARE CONCERNED, NONE OF THE REASONS OR G ROUNDS WAS RELEVANT FOR DENYING THE ISSUE RELATING TO GRANT OF REGISTRATION U/S 12AA OF THE ACT AND THEREFORE, WE ARE OF THE OPINION THAT ASSESSEE'S REQUEST HAS BEEN REJECTED ON CONJECTURES AND SURMISES AND IN AN ARBITRARY MANNER . WE , THEREFORE, SET ASIDE THE ORDER OF THE CIT AND RESTORE THE ASSESSEES REQUEST FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT BACK TO THE FILE OF THE CIT WITH THE DIRECTION THAT HE WILL DECIDE THE ASSESSEE'S REQUEST AFTER VERIFYING AS TO THE NATURE OF OBJECTS AFTER ALLOWING THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD, MEANING THEREBY THAT IF THE OBJECTS OF THE ASSESSEE ARE FOUND TO BE OF CHARITABLE NATURE OR IMPARTING OF EDUCATIO N IS FOUND TO BE ONE OF THE OBJECTS THEN THE ASSESSEE SHALL BE GRANTED REGISTRATION U/S 12AA OF T HE ACT FROM THE DATE IT WAS CONSTITUTED IF SO REQUESTED AND DELAY IS CONDONED; OTHERWISE FROM THE 1 ST DAY OF APRIL 2008. 5.1 WE ALSO REPRODUCE PARA 13.2.2 OF THE TRIBUNAL ORDER, WHICH IS ALSO RELEVANT: 13.2.2 HAVING CONSIDERED THE RIVAL SUBM ISSIONS, FACTS AND CIRCUMSTANCES - , OF THE CASE, PROVISIONS OF LAW WITH RESPECT TO GRANT OF REGISTRATION U/S 12AA, WE ARE OF THE OPINION THAT SO FAR AS NATURE OF OBJECTS IS CONCERNED, NEITHER THE CIT HAS REFERRED 4 NOR THE ASSESSEE HAS PLACED THE COPY OF THE SAME BEFORE US AND, THEREFORE, WE ARE UNABLE TO DEAL WITH THE NATURE OF OBJECTS. HOWEVER, SO FAR AS NATURE OF ASSESSEE'S ACTIVITIES IS CONCERNED, WE, ON THE BASIS OF RECORDS BEFORE US AS WELL AS IN LAW, ARE OF THE OPINION THAT THE ASSESSEE ADMITTEDL Y IS RUNNING THE EDUCATIONAL INSTITUTION WHICH IS COVERED BY THE DEFINITION OF CHARITABLE PURPOSE AS GIVEN U/S 2(15) OF THE ACT, MEANING THEREBY THAT THE ACTIVITY CARRIED ON BY THE ASSESSEE IS GENUINELY FOR EDUCATION PURPOSE AND, THEREFORE, CONDITION RELAT ING TO GENUINENESS OF THE ACTIVITY STANDS JUSTIFIED. 5.2 FROM THE ABOVE TWO PARAS OF THE TRIBUNAL ORDER, WE FIND THAT THE MATTER WAS RESTORED TO THE CIT FOR FRESH DECISION AFTER EXAMINING AND VERIFYING AS TO WHETHER THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE OR IMPARTING EDUCATION AND IF SO, THEN THE A SSESSEE SHALL BE GRANTED REGISTRATION U/S 12AA OF THE ACT. THIS TRIBUNAL ORDER HAS ATTAINED FINALITY. AS PER THE IMPUGNED ORDER OF CIT, IT IS SEEN THAT HE IS NOT DISPUTING THIS FACT THAT THE ASSESSEE IS IMPARTING EDUCATION. HIS OBJECTION IS THAT THE ASS ESSEE IS CHARGING EXCESSIVE FEES. THESE FACTS REGARDING CHARGING OF FEES AND QUANTUM WERE VERY MUCH BEFORE THE TRIBUNAL IN THE FIRST ROUND AND AFTER THAT , IT WAS HELD THAT IF IT IS FOUND THAT THE ASSESSEE IS IMPARTING EDUCATION THEN THE ASSESSEE SHALL BE GRANTED REGISTRATION U/S 12AA OF THE ACT FROM THE DATE IT WAS CONSTITUTED IF DELAY IS CONDONED . SINCE THIS IS NOT DISPUTED BY LEARNED CIT THAT IMPARTING OF EDUCATION IS OBJECT OF THE ASSESSEE, WE FEEL THAT CIT WAS NOT JUSTIFIED IN NOT GRANTING THE REGISTR ATION U/S 12AA TO THE ASSESSEE. HENCE, WE SET ASIDE THE ORDER OF CIT ON THIS ISSUE AND HOLD THAT THE ASSESSEE SHOULD BE GRANTED REGISTRATION U/S 12A A OF THE ACT. REGARDING THE DATE FROM WHICH THE REGISTRATION SHOULD BE GRANTED, WE FIND THAT AS PER THE FI RST TRIBUNAL ORDER, SUCH REGISTRATION SHOULD BE GRANTED FROM THE DATE IT WAS CONSTITUTED IF SO REQUESTED AND DELAY IS CONDONED AND OTHERWISE FROM 1 ST DAY OF APRIL 2008. BEFORE US , NOTHING HAS BEEN BROUGHT ON RECORD TO JUSTIFY ANY CONDONATION OF DELAY. IT IS NOTED BY CIT ON PAGE NO. 9 THAT APPLICATION FOR REGISTRATION WAS MADE BY THE ASSESSEE ON 23/10/2008 AND HENCE, WE HOLD THAT THE 5 REGISTRATION SHOULD BE GRANTED WITH EFFECT FROM 01/04/2008. THE CIT IS DIRECTED ACCORDINGLY TO GRANT REGISTRATION TO THE AS SESSEE FROM 01/04/2008. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED IN THE TERMS INDICATED ABOVE. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 /02/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR