Sri Jayadev College of Pharmaceutical Science, Khurda V. CIT, Bhubaneswar

ITA 296/CTK/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4281 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 21-12-2009
• Court: TRIBUNAL
• Department Lawyers: ABHAYA NAYAKA S MONDAL DRS
• Assessee Lawyers: B PANDA
• Keywords: Charitable institution; Opportunity of being heard; Retrospective amendment
• Section: 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE HONBLE SHRI D.K.TYAGI, JUDICIAL MEMBER. /AND HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER . / I.TA.NO . 296/CTK/2009 SRI JAYADEV COLLEGE OF PHJARMACEUTICAL SCIENCE, AT/P.).NAHARKANTA, BALIANT, DIST.KHURDA AAFTS8620 P - - - VERSUS - . COMMISSIONER OF INCOME - TAX, BHUBANESWAR. / A PPE LLANT RESPONDENT FOR THE APPELLANT : SHRI B.PANDA, AR FOR THE RESPONDENT : SHRI ABHAYA NAYAK/A.S.MONDAL, DRS / ORDER SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THE ASSESSEE IS IN APPEAL AGITATING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX IN REJECTING THE APPLICATION FOR SEEKING REGISTRATION U/S.12A OF THE INCOME - TAX ACT,1961. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS RUNN ING A GENERAL COLLEGE FOR IMPARTING STUDIES IN ARTS, SCIENCE AND COMMERCE SINCE 1980. 3. IT HAD APPLIED FOR CLAIMING EXEMPTION UNDER THE PROVISIONS OF SECTION 10(23C)(VI) IN FORM NO.56D BEFORE THE CHIEF COMMISSIONER OF INCOME - TAX WAS REJECTED IN VIEW OF TH E LEARNED CCIT NOTING THAT SUCH REGISTRATION CANNOT BE GRANTED WITH RETROSPECTIVE EFFECT AND THERE WAS NO PROVISIONS FOR CONDONING THE DELAY. THE LEARNED CIT ON THE APPLICATION BY THE ASSESSEE IN FORM 10A ON 9.3.2009 APPLIED FOR GRANT OF REGISTRATION/S.12A WAS REFUSED BY HIS NOTING THAT THE ASSESSEE HAD O NLY FILED A TRIAL BALANCE WHICH INDICATE SURPLUS ACCUMULATED TO WHICH THE ASSESSEE COULD NOT / I.TA.NO .296/CTK/2009 2 EXPLAIN PERTAINING TO THE RELIGIOUS OR CHARITABLE PURPOSE OR EDUCATION PURPOSE IN SO FAR AS HUGE AMOUNT WAS HELD IN FIXED DEPOSITS WHICH COULD NOT BE SAID TO HAVE BEEN INCURRED FOR CARRYING OUT FOR EDUCATIONAL PURPOSE. 4. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED A PAPER BOOK WHICH INTE RALIA INCLUDES THE FINANCIAL STATEMENTS FOR THREE ASSESSMENT YEARS PRIOR TO TH E DATE OF FILING OF THE APPLICATION FOR REGISTRATION U/S.12A WHICH REMAINED TO BE CONSIDERED BY THE LEARNED CIT IN SO FAR AS THE AUDIT REPORTS IN FORM 10B HAD OBTAINED THEREAFTER. HE PRAYED THAT THE REASON NOTED BY THE LEARNED CIT FOR REJECTING THE APPLICA TION WAS ON THE BASIS OF ACTIVITIES CARRIED OUT NOW APPEARS TO BE FULLY EXPLAINED AS SUPPORTED BY THE AUDIT REPORT GIVEN ON FORM 10B IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 11 AND 13 THEREFORE, MAY KINDLY BE CONSIDERED BY AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. THE LEARNED DR HAS NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF CIT FOR CONSIDERATION AFRESH ON THE BASIS OF SUBMISSIONS OF THE LEARNED COUNSEL BEFORE THE BENCH. 6. AFTER HEARING THE RIVAL PARTIES, WE ARE INCLINED TO HOLD THAT THE INTENTION OF LEGISLATION FOR SEEKING REGISTRATION FOR REGISTRATION U/S.12A WAS TO BE FOR FINDING AN ACTIVITY CARRIED OUT WITH THE MAIN OBJECT INSCRIBED IN THE TRUST DEED ETC., WAS CONSIDERED BY THE LEARNED CIT ONLY ON THE BASIS OF A TRIAL BA LANCE INCORPORATING CERTAIN SUBSTANTIAL AMOUNT IN THE FORM OF FIXED ASSETS ETC. THE LEARNED COUNSEL BEFORE US SUBMITTED THAT THE SAME HAD BEEN RETAINED BY THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 11 AND 13 AND THEREFORE, ENTITLES THE ASSE SSEE OF EITHER SEEKING REGISTRATION U/S.12A IN VIEW OF THE APPROPRIATE AUTHORITY GRANTING EXEMPTION TO THE ASSESSEES INCOME BEING AN EDUCATIONAL INSTITUTION BEING REJECTED BY THE CCIT BEING / I.TA.NO .296/CTK/2009 3 THE APPROPRIATE AUTHORITY FOR NOT CONDONING THE DELAY IN SEEKING SUCH REGISTRATION FROM ASSESSMENT YEAR 2005 - 06. THEREFORE, THIS CRYSTALLIZED THE ISSUE IN FAVOUR OF THE ASSESSEE TO THE EXTENT THAT THE LEARNED CIT OUGHT TO HAVE CONSIDERED THE APPLICATION FOR SEEKING REGISTRATION BY THE ASSESSEE MORE IN THE LINE OF ADJUDI CATING ON WHETHER THE ASSESSEE WAS ACTUALLY IMPARTING EDUCATION AGAINST THE LEARNED DR POINTED OUT WAS DOUBTFUL WHEN THE FIXED DEPOSITS WERE HELD WITHOUT ANY PURPOSE. THE LEARNED COUNSEL HAS EXPLAINED THAT THE SAME HAS TO BE UTILIZED FOR THE PURPOSE OF IN CREASING EDUCATIONAL FACILITIES AND O THER LOANS TO THE STUDENTS CANNOT BE AGAINST THE SPIRIT OF THE MAIN OBJECT OF THE TRUST. HOWEVER, THE LEARNED CIT IS FREE TO VERIFY GRANTING REGISTRATION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 7. IN VIEW OF ABOVE, WE RESTORE THE ISSUE TO THE FILE OF THE LEARNED CIT FOR CONSIDERATION AFRESH AND AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL IS CONSIDERED AS ALLOWED FOR STATISTICAL PURPOSES. THI S ORDER IS PRONOUNCED IN OPEN COURT ON DT. 30.07.2010 SD/ - SD/ - ( ), D.K.TYAGI JUDICIAL MEMBER (K.K.GUPTA), ACCOUNTANT MEMBER. DATE: 30.07.2010 ( /) H.K.PADHEE SEN IOR.PRIVATE SECRETARY. / I.TA.NO .296/CTK/2009 4 - COPY OF THE ORDER FORWARDED TO : / THE APPELLANT : SRI JAYADEV COLLEGE OF PHJARMACEUTICAL SCIENCE, AT/P.).NAHARKANTA, BALIANT, DIST.KHURDA / THE R ESPONDENT : COMMISSIONER OF INCOME - TAX, BHUBANESWAR. THE CIT, THE CIT(A), DR, CUTTACK BENCH GUARD FILE TRUE COPY , BY ORDER , [ ] SENIOR PRIVATE SECRETARY