Vidya Sagar Charitable Trust, Bhubaneswar V. Pr.CIT-2, Bhubaneswar, Bhubaneswar

ITA 303/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5378 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-07-2017
• Assessment Year: misc
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUNAL SINGH
• Assessee Lawyers: B D OJHA
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

1 ITA NO.303/CTK/2016 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.303 /CTK/2016 VIDYA SAGAR CHARITABLE TRUST, PLOT NO.A/103, SAHID NAGAR, BHUBANESWAR VS. CIT, BHUBANESWAR. PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.D.OJHA, AR REVENUE BY : SHRI KUNAL SINGH, CIT DR DATE OF HEARING : 10 /10 / 2017 DATE OF PRONOUNCEMENT : 12 /10 / 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PR. CIT - 2, BHUBANESWAR DATED 4 TH JULY, 2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. BECAUSE THAT THE HONORABLE COMMISSIONER OF INCOME TAX ,BHUBANESWAR ERRED IN LAW AS WELL AS IN FACT BY REFUSING THE REGISTRATION U/S 12A OF THE I.T. ACT,1961 AFTER 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION FOR REGISTRATION U/S 12A WAS FILE D. 2. BECAUSE THAT THE HONORABLE COMMISSIONER OF INCOME TAX ,BHUBANESWAR ERRED IN LAW AS WELL AS IN FACT BY OBSERVING THAT NO EDUCATIONAL ACTIVITIES RELATING TO IMPARTING EDUCATION HAVE BEEN COMMENCED THOUGH THE CONSTRUCTION OF BUILDING FOR STARTING EDUCAT IONAL ACTIVITIES HAS STARTED AS ON 31.03.2002. 3. BECAUSE THAT THE HONORABLE COMMISSIONER OF INCOME TAX, BHUBANESWAR ERRED IN LAW AS WELL AS IN FACT BY OBSERVING THAT THE TRUST IS NOT 'SOLELY FOR EDUCATIONAL PURPOSES' WHICH IS THE 2 ITA NO.303/CTK/2016 CRITERIA FOR CLAIMING EXE MPTION U/S 10(23C)(IIIAD) AND NOT FOR THE PURPOSE OF REGISTRATION U/S 12A OF THE ACT. 4. BECAUSE THAT THE HONORABLE COMMISSIONER OF INCOME TAX, BHUBANESWAR BASED ON THE OBSERVATION OF NON - COMMENCEMENT OF EDUCATIONAL ACTIVITIES, 'EXISTING SOLELY FOR EDUCATIONAL PURPOSES' SHOULD NOT HAVE REFUSED THE REGISTRATION U/S 12A OF THE ACT RATHER THE DECISION SHOULD HAVE BEEN BASED ON THE CHARITABLE OBJECTIVES AND ACTI VITIES OF THE TRUST. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TRUST WAS REGISTERED ON 15.9.2001 WITH DISTRICT SUB - REGISTRAR, BHUBANESWAR BEARING REGISTRATION NO.5908. THE TRUST HAD FILED APPLICATION U/S.12A(A)OF THE ACT BEFORE THE COMMISSION ER OF INCOME TAX, BHUBANESWAR ON 3.9.2002, WHICH WAS WITHIN ONE YEAR FROM THE CREATION OF THE TRUST. THE CIT VIDE HIS ORDER DATED 11.2.2004 REFUSED GRANT OF REGISTRATION TO THE ASSESSEE TRUST BUT THIS WAS NOT COMMUNICATED TO THE ASSESSEE. 4. THE ASSESSEE TRUST FILED WRIT PETITION BEFORE THE HONBLE HIGH COURT OF ORISSA IN W.P. (C) NO.3633/2016 PRAYING FOR DISPOSAL OF THE APPLICATION DATED 3.9.2002 BY THE CIT, BHUBANESWAR. THE HONBLE HIGH COURT OF ORISSA DISPOSED OF THE SAID WRIT PETITION DIRECTI NG THE CIT VIDE ITS ORDER DATED 27.4.2016 TO DISPOSE OF THE APPLICATION FOR GRANT OF REGISTRATION U/S.12AA OF THE ACT. DATED 3.9.2002 OF THE ASSESSEE TRUST. THEREAFTER, THE CIT, BHUBANESWAR WITH HIS LETTER DATED 4.7.2016 SENT THE ORDER PASSED ON 11.2.2004 DISMISSING THE APPLICATION OF THE ASSESSEE TRUST, WHICH WAS RECEIVED BY THE ASSESSEE ON 14.7.2016. 3 ITA NO.303/CTK/2016 5. IN THE ABOVE BACKGROUND OF THE CASE, THE ARGUMENT OF LD A.R. OF THE ASSESSEE IS THAT AS PER PROVISIONS OF SECTION 12AA(2) OF THE ACT, EVERY ORDER GRANTI NG OR REFUSING RE GISTRATION UNDER CLAUSE (A) OF SUB - SECTION(1) OF SECTION 12AA S HOULD HAVE BEEN PASSED WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHI CH THE APPLICATION WAS RECEIVED BY THE CIT . THE ORDER HAS BEEN PASSED ON 11.2.2004 WHICH IS AFTER 16 MONTHS FROM THE END OF THE MONTH IN WHI CH THE APPLICATION WAS RECEIVED BY THE CIT AND, THEREFORE, THE ORDER IS NOT VALID . IT IS THE CONTENTION OF THE LD A.R. OF THE ASSESSEE THAT HONBLE SUPREME COURT IN THE CASE OF CIT VS SOCIETY FOR THE PROMOTION OF ED UCATION IN CIVIL APPEAL NO.1478 OF 2016 @ SPECIAL LEAVE PETITION (C) NO.9705 OF 2009 HAS HELD THAT ONCE AN APPLICATION IS MADE U/S.12AA OF THE ACT AND IN CASE THE SAME IS NOT RESPONDED TO WITHIN SIX MONTHS, IT WOULD BE TAKEN THAT THE APPLICATION IS REGISTE RED UNDER THE PROVISIONS. 6. LD D.R. HAS RELIED ON THE ORDER OF THE PR. CIT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT A PPLICATION FO R GRANT OF REGISTRATION WAS RECEIVED BY THE CIT, BHUBANESWAR ON 3.9.2002. THE SAID APPLICATION WAS REJECTED BY THE CIT ON 11.2.200 4. THUS, THE O RDER REFUSING REGISTRATION WAS PASSED ON 11.2.2004, WHICH WAS APPROXIMATELY AFTER 16 M ONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED BY THE CIT IS 4 ITA NO.303/CTK/2016 BARRED BY LIMITATION U/S.12AA (2) OF THE ACT, WHICH PROVIDES THAT EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUSE (A) OF SUB - SECTION(1) OF SECTION 12AA OF THE ACT SHOULD HAVE BEEN PASSED WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED BY THE CIT AND HENCE, NOT A VALID ORDER. FURTHER, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF VS SOCIETY FOR THE PROMOTION OF EDUCATION (SUPRA), WHEREIN, IT WAS HELD THAT ONCE AN APPLICATION IS MADE U/S.12AA OF THE ACT AND IN CASE THE SAME IS NOT RESPONDED TO WITHIN SIX MONTHS, IT WOULD BE TAKEN THAT THE APPLICATION IS REGIS TERED UNDER THE PROVISIONS. THEREFORE, WE HOLD THAT THE ORDER OF THE PR. CIT, BHUBANESWAR DATED 4.7.2016 IS BARRED BY LIMITATION AND NOT A VALID ORDER . FURTHER I N VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SOCIETY FOR TH E PROMOTION OF EDUCATION (SUPRA ) S INCE THE APPLICATION FOR GRANT OF REGISTRATION RECEIVED BY THE CIT IN HIS OFFICE ON 3.9.2002 WAS NOT ACTED UPON WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) OF SUB - SECTION ( 1) OF SECTION 12AA, THE REGISTRATION I S DEEMED TO HAVE BEEN GRANTED TO THE ASSESSEE. THUS, WE DIRECT THE PR. CIT , BHUBANESWAR TO GRANT REGISTRATION U/S.12AA OF THE ACT TO THE ASSESSEE AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUN CED ON 12 /10 /2017. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 12 /10 /2017 5 ITA NO.303/CTK/2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : VIDYA SAGAR CHARITABLE TRUST, PLOT NO.A/103, SAHID NAGAR, BHUBANESWAR 2. THE RESPONDENT. PR. CIT, BHUBANESWAR 3. THE CIT(A) - CONCERNED 4. PR.CIT - 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//