O.P. Jindal Global University, New Delhi V. CIT, Rohtak

ITA 3204/DEL/2011

• Counselvise Citation: 320420114 RSA 2011
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 22-12-2011
• Assessment Year: misc
• Appeal Filed On: 14-06-2011
• Court: TRIBUNAL
• Department Lawyers: R S NEGI SENIOR
• Assessee Lawyers: ROHIT JAIN; AJAY VOHRAAD V
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA; 6; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI B.C. MEENA ITA NO. 3204/DEL/2011 ASSESSMENT YEAR: - - - O.P. JINDAL GLOBAL UNIVERSITY, VS, COMMISSIONER O F INCOME-TAX, JATHERI ROAD, ROHTAK NEAR BAROTA PLOLICE CHECK POST, (HARYANA) VILALGE JAGDISHPUR. SONEPAT. (PAN: AAATO2224L) (APPELLANT) (RESPONDENT) APPELLANT BY: SH.AJAY VOHRA,AD V. & SH. ROHIT JAIN, CA RESPONDENT BY: SHRI RS NE GI, SENIOR DR DATE OF HEARING : 22.12.2012 DATE OF PRONOUNCEMENT : 29.02.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED COMMISSIONER DATED 25.4.2011 PASSED UNDER SECTION 8 -G OF THE INCOME-TAX ACT, 1961. THE GRIEVANCE OF THE ASSESSEE IS THAT TH E LEARNED COMMISSIONER HAS ERRED IN DENYING THE APPROVAL UNDER SEC. 80-G O F THE INCOME-TAX ACT, 1961. THE BRIEF FACTS OF THE CASE ARE THAT HARYANA PRIVATE UNIVERSITIES ACT, 2006 WAS ENACTED WITH A VIEW TO REGULATE THE INCORP ORATION OF PRIVATE UNIVERSITIES IN THE STATE. SECTION 6 OF THE HARYANA PRIVATE UNIVERSITIES ACT PROVIDES FOR THE ESTABLISHMENT OF PRIVATE UNIVERSIT Y, AS MAY BE SPECIFIED IN THE SCHEDULE. THE ASSESSEE WAS INCLUDED IN THE SCHE DULE ON 27.01.2009 VIDE 2 ORDINANCE NO.3 OF 2009. THUS, THE ASSESSEE UNIVERSI TY WAS CONSTITUTED ON 27.01.2009 WITH THE OBJECTIVES TO PURSUE EDUCATIONA L ACTIVITIES. IT HAS MOVED APPLICATION FOR GRANT OF REGISTRATION UNDER SEC. 12 AA AS WELL AS UNDER SEC. 80-G OF THE INCOME-TAX ACT, 1961 VIDE FORM NOS. 10A ON 2 ND OF FEBRUARY 2009 AND IN FORM NO. 10G ON 11.05.2009 RESPECTIVELY . LEARNED COMMISSIONER HAD REJECTED BOTH THE APPLICATIONS OF THE ASSESSEE AND THE ISSUE TRAVELED UP TO ITAT IN ITA NOS. 3981 & 3180/D EL/09. THE ITAT HAS DECIDED BOTH THESE APPEALS BY A COMMON ORDER ON 28. 5.2010. THE ITAT HAS GRANTED THE REGISTRATION UNDER SEC. 12AA OF THE ACT AND ALLOWED THE APPLICATION OF THE ASSESSEE. HOWEVER, THE ITAT DID NOT GRANT APPROVAL UNDER SEC. 80-G(5) OF THE ACT. THE MAIN REASON ASSIGNED B Y THE ITAT IS THAT ON DISSOLUTION OF THE UNIVERSITY, ITS NET ASSETS AFTER MEETING THE LIABILITY WERE TO BE HANDED OVER TO THE SPONSORING BODY, NAMELY, OM P RAKASH JINDAL GRAMIN JANKALYAN SANSTHAN. ACCORDING TO THE ITAT, THE SPON SORING BODY CAN UNDERTAKE RELIGIOUS FUNCTIONS AS PROVIDED IN ITS AI MS AND OBJECTS AND, THEREFORE, IN VIEW OF THE HON'BLE SUPREME COURTS D ECISION IN THE CASE OF UPPER GANGES SUGAR MILLS LTD. & ORS VS. CIT REPORTE D IN 229 ITR 578, IF ONE OF THE OBJECTS IS WHOLLY OR SUBSTANTIALLY IS OF A RELIGIOUS CHARACTER, THE INSTITUTION OR FUNDS WOULD FALL OUTSIDE THE SCOPE O F SEC. 80G(5). IN THIS WAY, ITAT HAS UPHELD THE DENIAL OF APPROVAL UNDER SEC. 8 0G(5) OF THE ACT. 3 2. THE SPONSORING BODY THEREAFTER AMENDED ITS MEMOR ANDUM OF ASSOCIATION AND ELIMINATED THE CLAUSES WHICH AUTHOR IZE THE SPONSORING BODY TO UNDERTAKE RELIGIOUS FUNCTIONS. ASSESSEE FILED A MISCELLANEOUS APPLICATION UNDER SECTION 254(2) OF THE ACT BEFORE THE ITAT ON THE GROUND THAT VIDE FINANCE ACT, 2009, SECTION 80G(5) HAS BEEN AMENDED W.E.F. 1.10.2009. BY VIRTUE OF THIS AMENDMENT ONE TIME APPROVAL WOULD BE GRANTED TO THE ASSESSEE. THE SPONSORING BODY HAS ALREADY AMENDED I TS AIMS AND OBJECTS CONTAINED IN MEMORANDUM, THEREFORE, THE ORDER OF TH E ITAT BE RECTIFIED AND ASSESSEE BE GRANTED APPROVAL. THE MISCELLANEOUS APP LICATION WAS REGISTERED AS MISCELLANEOUS APPLICATION NO.439/DEL/2010. ITAT HAS REJECTED THE APPLICATION OF THE ASSESSEE ON THE GROUND THAT THER E IS NO APPARENT ERROR IN ITS ORDER. IT HAS DECIDED THE APPEAL OF ASSESSEE ACCORD ING TO THE FACTS AVAILABLE ON RECORD. HOWEVER, THE ITAT OBSERVED THAT IT WILL BE MORE APPROPRIATE FOR THE ASSESSEE TO MOVE AN APPLICATION BEFORE THE LEAR NED DIRECTOR OF INCOME- TAX FOR GRANT OF APPROVAL ON THE BASIS OF CHANGED O BJECTS OF THE SPONSORING BODY. THE PARAGRAPH 10 OF THE ITATS ORDER IN THE A PPEAL VIDE WHICH DENIAL OF APPROVAL WAS UPHELD AS WELL AS CONCLUDING PARAGR APH OF THE ORDER PASSED IN THE MISCELLANEOUS APPLICATION ARE WORTH TO NOTE: 10. WE HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSIONS MADE BEFORE US. THE RELEVANT PROVISIONS OF SEC. 80G(5) A ND S. 80G(5B) READ AS UNDER: 4 '(II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED DOES NOT, OR THE RULES GOVERNING THE INSTITUTION OR FUND DO NOT, CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT AN Y TIME OF THE WHOLE OR ANY PART OF THE INCOME OR ASSETS OF THE INSTITUT ION OR FUND FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE; (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED A S A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRA TION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT ACT I N FORCE IN ANY PART OF INDIA OR UNDER S. 25 OF THE COMPANIES ACT, 1956 (1 OF 1956), OR IS A UNIVERSITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUC ATIONAL INSTITUTION RECOGNIZED BY THE GOVERNMENT OR BY A UNIVERSITY EST ABLISHED BY LAW, OR AFFILIATED TO ANY UNIVERSITY ESTABLISHED BY LAW, OR IS AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNMENT OR A L OCAL AUTHORITY; 80G(5B) NOTWITHSTANDING ANYTHING CONTAINED IN CL. ( II) OF SUB-S. (5) AND EXPLN. 3, AN INSTITUTION OR FUND WHICH INCURS E XPENDITURE, DURING ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE F OR AN AMOUNT NOT EXCEEDING FIVE PER CENT OF ITS TOTAL INCOME IN THAT PREVIOUS YEAR SHALL BE DEEMED TO BE AN INSTITUTION OR FUND TO WHICH THE PROVISIONS OF THIS SECTION APPLY.' 10.1 THE PROVISION CONTAINED IN S. 80G(5)(II) MAKES IT CLEAR THAT THE APPROVAL CAN BE GRANTED ONLY IF THE INSTITUTION IS FORMED WHOLLY FOR CHARITABLE PURPOSES AND NONE OF ITS OBJECTS IS OF R ELIGIOUS NATURE. SEC. 80G(5B) GRANTS SOME CONCESSION IN THIS MATTER THAT APPROVAL CAN BE GRANTED IF NOT MORE THAN 5 PER CENT OF THE TOTAL IN COME OF A YEAR IS 5 APPLIED TOWARDS RELIGIOUS PURPOSES. WE FIND THAT TH ERE IS NO CEILING ON RELIGIOUS EXPENDITURE IN THE OBJECTS OF THE SPONSOR ING BODY. 10.2 THE CASE OF THE LEARNED COUNSEL IS THAT IT IS ONLY A THEORETICAL PROPOSITION THAT THE INCOME WILL BE APPLIED FOR THE OBJECTS OF THE SPONSORING BODY BECAUSE THE ASSESSEE-UNIVERSITY HAS A PERPETUAL EXISTENCE. THE SPONSORING BODY HAS ALSO BEEN GRANTE D APPROVAL UNDER S. 80G BY THE DIRECTOR OF IT (EXEMPTION), DELHI ON 25TH APRIL, 2005. THEREFORE, IT IS AGITATED THAT THE APPROVAL MAY BE GRANTED IN THIS CASE ALSO. WE ARE UNABLE TO AGREE WITH THE AFORESAID SUBMISSIO NS. THE QUESTION BEFORE US IS NOT REGARDING CORRECTNESS OR OTHERWISE OF THE APPROVAL GRANTED TO THE SPONSORING BODY. WE ARE CONCERNED WITH THE ASSE SSEE-UNIVERSITY. THE HONBLE SUPREME COURT EXAMINED THIS MATTER IN THE C ASE OF UPPER GANGES SUGAR MILLS LTD.. VS. CIT (1997) 141 CTR (SC) 384 : (1997) 227 ITR 578 (SC). AFTER EXAMINING THE PROVISION CONTAINED IN TH E STATUTE, THE COURT CAME TO THE CONCLUSION THAT EVEN IF ONE OF THE OBJECTS I S WHOLLY OR SUBSTANTIALLY WHOLLY OF A RELIGIOUS CHARACTER, THE INSTITUTION OR FUND FALLS OUTSIDE THE SCOPE OF S. 80G(5). FOR THE SAKE OF READY REFERENCE, THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED BELOW : 'THE HIGH COURT DID NOT ACCEPT THE ASSESSEES ARGUM ENT THAT THE ESTABLISHMENT OR MAINTENANCE OF PRAYER HALLS WAS NO T A RELIGIOUS OBJECT. THE HIGH COURT ALSO DID NOT ACCEPT THE ASSE SSEES ARGUMENT THAT THE OBJECT OF CL. 2(H) OF THE TRUST D EED SHOULD NOT BE CONSIDERED TO BE A RELIGIOUS OBJECT, BECAUSE THE TRUSTEES WERE NOT EMPOWERED TO SET UP PLACES OF WORSHIP AND PRAYE R HALLS OF A 6 PARTICULAR COMMUNITY OR RELIGION; IT TOOK THE VIEW THAT EVEN IF A TRUST WAS SET UP FOR THE ADVANCEMENT OF ALL THE REL IGIONS IN THE WORLD, IT WOULD BE A TRUST OF A RELIGIOUS NATURE. T HE HIGH COURT REJECTED THE ASSESSEES ARGUMENT THAT THE TRUST WAS NOT SET UP WHOLLY OR SUBSTANTIALLY FOR A RELIGIOUS PURPOSE; ON E OF THE PURPOSES, IT SAID, WAS TO ESTABLISH, MAINTAIN AND GRANT AID TO PUBLIC PLACES OF WORSHIP AND PRAYER HALLS, WHICH W AS AN ENTIRELY RELIGIOUS PURPOSE. SECTION 80G APPLIES TO DONATIONS TO ANY INSTITUTION OR FUND ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE. C HARITABLE PURPOSE, FOR THE PURPOSES OF THE SECTION, DOES NOT INCLUDE ANY PURPOSE THE WHOLE OR SUBSTANTIALLY THE WHOLE OF WHI CH IS OF A RELIGIOUS NATURE (EMPHASIS, ITALICIZED IN PRINT, S UPPLIED). EXPLANATION 3, WHICH USES THIS PHRASEOLOGY, TAKES N OTE OF THE FACT THAT AN INSTITUTION OR FUND ESTABLISHED FOR A CHARITABLE PURPOSE MAY HAVE A NUMBER OF OBJECTS. IF ANY ONE OF THESE OBJECTS IS WHOLLY, OR SUBSTANTIALLY WHOLLY, OF A RE LIGIOUS CHARACTER, THE INSTITUTION OR FUND FALLS OUTSIDE TH E SCOPE OF S. 80G AND A DONATION TO IT DOES NOT SECURE THE ADVANT AGE OF THE DEDUCTION THAT IT GIVES. THE JUDGMENT OF THIS COURT IN ADDL. CIT VS. SURAT A RT SILK CLOTH MANUFACTURERS ASSOCIATION (1979) 13 CTR (SC) 378 : (1980) 121 ITR 1 (SC), CITED BY LEARNED COUNSEL FOR THE ASSESSEE, WAS DELIVERED WITH REFERENCE TO THE TRUE MEANING OF THE WORDS NOT INVOLVING THE CARRYING ON OF ANY ACT IVITY FOR 7 PROFIT OCCURRING AT THE END OF THE DEFINITION OF CHARITABLE PURPOSES IN S. 2(15) OF THE IT ACT. THIS COURT SAI D THAT IF THE PRIMARY OR DOMINANT PURPOSE OF THE TRUST WAS CHARIT ABLE, ANOTHER OBJECT WHICH BY ITSELF MAY NOT BE CHARITABL E BUT WHICH WAS MERELY ANCILLARY OR INCIDENTAL TO THE PRIMARY O R DOMINANT PURPOSE WOULD NOT PREVENT THE TRUST OR THE INSTITUT ION FROM BEING A VALID CHARITY. THE JUDGMENT IS OF NO ASSIST ANCE IN CONSTRUING EXPLN. 3 OF S. 80G. TO REITERATE, EXPLN. 3 DOES NOT REQUIRE THE ASCERTA INMENT OF WHETHER THE WHOLE OR SUBSTANTIALLY THE WHOLE OF THE INSTITUTION OR FUNDS CHARITABLE PURPOSE IS OF A RELIGIOUS NATU RE. IF IT DID, IT WOULD READ DIFFERENTLY. IT REQUIRES THE ASCERTAINME NT OF WHETHER THERE IS ONE PURPOSE WITHIN THE INSTITUTION OR FUND S OVERALL CHARITABLE PURPOSE WHICH IS WHOLLY, OR SUBSTANTIALL Y WHOLLY, OF A RELIGIOUS NATURE. THERE IS LITTLE DOUBT THAT CL. 2( H) OF THE TRUST DEED WHICH PERMITS THE TRUSTEES TO SUPPORT PRAYER H ALLS AND PLACES OF WORSHIP SETS OUT A PURPOSE THE WHOLE OR S UBSTANTIALLY THE WHOLE OF WHICH IS OF A RELIGIOUS NATURE, AND TH IS HAS NOT BEEN SERIOUSLY DISPUTED. THEREFORE, IN OUR VIEW, TH E TRUST AND THE DONATION BY THE ASSESSEE TO IT FALL OUTSIDE THE SCOPE OF S. 80G.' 10.4 COMING TO THE FACTS OF THIS CASE, IT IS TRUE T HAT NONE OF THE OBJECTS OF THE ASSESSEE-UNIVERSITY PERTAINS TO RELI GIOUS ACTIVITIES. HOWEVER, ON ITS DISSOLUTION, ALL ITS ASSETS SHALL V EST IN THE SPONSORING BODY. SEC. 80G(5)(II) CONTAINS THE WORDS 'DO NOT CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATI ON AT ANY TIME 8 (EMPHASIS, ITALICIZED IN PRINT, SUPPLIED) OF THE WH OLE OR ANY PART OF THE INCOME OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE'. WE HAVE S UPPLIED EMPHASIS TO THE WORDS 'AT ANY TIME' FOR THE REASON THAT TRANSFER OF ITS ASSETS AND LIABILITIES ON DISSOLUTION WILL F ALL WITHIN THE AMBIT OF THE WORDS 'AT ANY TIME'. THE RULES GOVERNI NG THE ASSESSEE-UNIVERSITY CONTAIN A PROVISION FOR TRANSFE R OF ITS ASSETS TO THE GOVERNING (SIC SPONSORING) BODY, WHOSE OBJE CTS INCLUDE A MANIFESTLY RELIGIOUS OBJECT. IN VIEW THER EOF AND IN VIEW OF THE AFORESAID DECISION RENDERED BY HONBLE SUPREME COURT, WE ARE OF THE VIEW THAT THE ASSESSEE-UNIVERS ITY IS NOT ENTITLED TO APPROVAL UNDER S. 80G. 3. THE ASSESSEE FILED A FRESH APPLICATION UNDER FOR M NO. 10G ON 9.11.2010 BEFORE THE LEARNED COMMISSIONER, ROHTAK. THE APPLICATION OF THE ASSESSEE HAS BEEN REJECTED VIDE ORDER DATED 24.4.20 11. 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER OF LEARNED COMMISSIONER CONTENDED THAT THE LEARNED COM MISSIONER HAS MADE REFERENCE TO THE FEES STRUCTURE OF THE ASSESSEE AND THEREAFTER OBSERVED THAT FEE CHARGES ARE SO HIGH WHICH WOULD CLOSE THE DOORS OF THIS UNIVERSITY NOT ONLY FOR THE POOR BUT FOR LOWER MIDDLE CLASS AND UPPER M IDDLE CLASS OF THE COUNTRY. IT IS ONLY MEANT FOR RICH PEOPLE AND, THER EFORE, IT CANNOT BE TERMED 9 AS A CHARITABLE INSTITUTION. IT WILL NOT SERVE ANY FRUITFUL PURPOSE FOR THE EXPANSION OF EDUCATION TO THE PUBLIC AT LARGE. THE SECOND REASON ASSIGNED BY THE LEARNED COMMISSIONER IS THAT AGAINST THE ORDER OF THE ITAT, APPEAL OF THE ASSESSEE IS PENDING IN THE HON'BLE HIGH COURT. THE NEXT REASON ASSIGNED IS THAT EVEN AFTER AMENDMENT IN THE AIMS AND OBJECT S OF THE SPONSORING BODY, THESE AMENDMENTS ARE OF GENERAL NATURE AND WOULD NO T BE APPLICABLE SPECIFICALLY. HE ALSO OBSERVED THAT OP JINDAL GRAMI N JANKALYAN SANSTHAN HAD A CONTROL OVER THE APPOINTMENT OF A REGISTRAR O F THE APPLICANT UNIVERSITY AND IN THIS WAY, THIS SPONSORING BODY WILL EXERCISE CONTROL OVER THE APPLICANT. THE LEARNED COUNSEL FOR THE ASSESSEE WHI LE DEMOLISHING THE REASONS ASSIGNED BY THE LEARNED COMMISSIONER, SUBMI TTED THAT ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SEC. 12AA OF THE IN COME-TAX ACT, 1961 MEANING THEREBY IT IS A CHARITABLE INSTITUTION WITH THE MAIN OBJECTIVE TO PURSUE EDUCATIONAL ACTIVITIES. LEARNED COMMISSIONER WHILE ADJUDICATING THE APPLICATION FOR GRANT OF APPROVAL UNDER SEC. 80-G, CANNOT REWRITE THE FATE OF THE ASSESSEE BY OVERRULING THE DECISION OF HIGHER F ORUM. AS FAR AS THE PENDENCY OF APPEAL IN RESPECT OF REJECTION OF EARLI ER APPLICATION FOR GRANT OF APPROVAL UNDER SEC. 80G IS CONCERNED, HE SUBMITTED THAT THE ITAT HAS UPHELD THE DENIAL OF APPROVAL ON THE BASIS OF CERTA IN FLAWS IN THE AIMS AND OBJECTS OF THE SPONSORING BODY. THE SPONSORING BODY HAS ALREADY AMENDED 10 THOSE AIMS AND OBJECTS AND, THEREFORE, FRESH APPLIC ATION HAS BEEN FILED UNDER THE CHANGED CIRCUMSTANCES. HE TOOK US THROUGH PRE-A MENDED AIMS AND OBJECTS OF THE SPONSORING BODY AT SR. NOS. 27 AND 2 8 AND THEREAFTER HE DREW OUR ATTENTION TOWARDS THE AMENDED AIMS AND OBJECTS. BOTH READ AS UNDER: PRE-AMENDED: 27) TO CONSTRUCT, ALTER, MAINTAIN, IMPROVE, DEVELOP , MANAGE AND CONTROL DHARMSHALAS, ASHRAMS, AUDITORIUMS AND TEMPL ES AND PROVIDE ALL KIND OF REQUIRED FACILITIES AND WORSHIP MATERIALS TO DEVOTEES. 28) TO ESTABLISH, MAINTAIN, MANAGE AND CONTROL THE SHELTERS FOR THE USE OF CELEBRATING PUBLIC AT THE TIME OF FESTIVALS, REL IGIOUS FUNCTIONS AND MELAS ETC. WITH THE PERMISSION OF THE CONCERNED AUT HORITIES. POST-AMENDED: 27) TO CONSTRUCT, ALTER, MAINTAIN, IMPROVER, DEVELO P, MANAGE AND CONTROL AUDITORIUMS AND PROVIDE ALL KIND OF REQUIRE D FACILITIES FOR EDUCATIONAL PURPOSES. 28) TO ESTABLISH, MAINTAIN, MANAGE AND CONTROL THE SHELTERS FOR THE USE OF CELEBRATING, PUBLIC AT THE TIME OF GATHERINGS, M EALS, ETC., TO CELEBRATE NATIONAL DAYS LIKE INDEPENDENCE DAY, REPU BLIC DAY, GANDHI JYANTI ETC. WITH THE PERMISSION OF THE CONCERNED AU THORITIES WITHOUT DISCRIMINATION FOR ANY CASTE, RACE, CREED ETC. 11 5. HE FURTHER CONTENDED THAT SINCE ASSESSEE IS EXIS TING SOLELY FOR EDUCATION PURPOSES AND NOT FOR THE PURPOSE OF EARNI NG PROFIT. ITS TOTAL RECEIPTS EXIST RS. 1 CRORE, THEREFORE, IT WAS REQUI RED TO AVAIL APPROVAL UNDER SEC. 10(23C)(VI) OF THE ACT. THIS APPROVAL WAS DENI ED TO THE ASSESSEE BY THE CCIT(EXEMPTION), PUNCHKULA ON 18.1.2010. DISSATISFI ED WITH THE ORDER, ASSESSEE FILED A CIVIL WRIT PETITION BEARING NO. 61 71 OF 2010 IN THE HON'BLE PUNJAB AND HARYANA HIGH COURT. HON'BLE HIGH COURT H AS ALLOWED THE WRIT PETITION OF THE ASSESSEE VIDE ITS JUDGMENT DATED 11 .11.2011 AND DIRECTED THE CCIT TO PASS AN ORDER GRANTING APPROVAL UNDER SEC. 10(23C)(VI) OF THE ACT. HE PLACED ON RECORD COPY OF THE HON'BLE HIGH COURT S DECISION. ON THE STRENGTH OF ALL THESE MATERIAL, HE CONTENDED THAT A SSESSEE IS A CHARITABLE INSTITUTION WITH THE MAIN OBJECTIVE TO PURSUE EDUCA TIONAL ACTIVITIES. IT IS ENJOYING APPROVAL UNDER SECTION 10(23C)(VI) OF THE ACT. IT IS ENJOYING REGISTRATION UNDER SEC. 12AA OF THE ACT. THE AUTHOR ITIES HAVE ACCEPTED THAT ITS ACTIVITIES ARE FOR THE PURPOSE OF EDUCATION AND GENUINE IN NATURE. THEREFORE, IN SUCH SITUATION, THE APPROVAL UNDER SE C. 80G CANNOT BE DENIED TO THE ASSESSEE. HE PRAYED FOR THE GRANT OF THE APPROV AL. LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE LEARNED COM MISSIONER AND SUBMITTED THAT IT IS PRE-MATURE TO ADJUDICATE THE F RESH APPLICATION OF THE ASSESSEE WHEN AN APPEAL IS ALREADY PENDING AGAINST THE DENIAL OF SUCH 12 APPROVAL BEFORE THE HON'BLE HIGH COURT. HE ALSO SUB MITTED THAT FEES STRUCTURE OF THE ASSESSEE IS OF SUCH A NATURE WHIC H PROHIBITS A LARGE POPULATION FROM TAKING ANY BENEFIT OF ITS ACTIVITY. IT DEMONSTRATES THAT ITS OBJECTS ARE NOT OF CHARITABLE NATURE AND, THEREFORE , IT IS NOT ENTITLED FOR GRANT OF APPROVAL UNDER SEC. 80-G OF THE ACT. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ITAT WHILE CONSIDERING THE AP PLICATION OF THE ASSESSEE IN THE FIRST ROUND HAD TAKEN COGNIZANCE OF SEC. 80G IN THE FINDINGS EXTRACTED SUPRA. ITAT HAS CONSIDERED IN DETAIL THE AIMS AND O BJECTS OF THE ASSESSEE WHILE ALLOWING GRANT OF REGISTRATION UNDER SEC. 12A A OF THE ACT VIDE ITS ORDER DATED 28.5.2010 IN ITA NO. 3981/DEL/2009. THE ONLY REASON WEIGH WITH THE ITAT FOR DENYING THE APPROVAL UNDER SEC. 8 0G IS THAT ON DISSOLUTION OF THE ASSESSEE UNIVERSITY, THE NET ASSETS AFTER ME ETING THE LIABILITIES WERE TO BE HANDED OVER TO THE SPONSORING BODY WHICH INVOLVE D TO UNDERTAKE RELIGIOUS ACTIVITIES WHOLLY OR SUBSTANTIALLY IN ITS AIMS AND OBJECTS. ACCORDING TO THE ITAT, HON'BLE SUPREME COURT IN THE CASE OF U PPERGANGES SUGAR HAS HELD THAT IF ONE OF THE OBJECTS OF SUCH AN TRUST OR INSTITUTION IS OF RELIGIOUS CHARACTER THEN THE INSTITUTION OR FUND FALLS OUTSID E THE SCOPE OF SEC. 80G(5) OF THE ACT. THIS LACUNA IN THE AIMS AND OBJECTS HAVE BEEN REMOVED BY THE 13 SPONSORING BODY. THE SPONSORING BODY IS ALSO ENJOYI NG REGISTRATION UNDER SEC. 12AA AS WELL AS UNDER SEC. 80G. THEREFORE, TAK ING INTO CONSIDERATION ALL THESE ASPECTS AND CONSIDERING THE CHANGED CIRCUMSTA NCES, WE ARE OF THE VIEW THAT LEARNED COMMISSIONER HAS ERRED IN REFUSING APP ROVAL UNDER SEC. 80G OF THE ACT TO THE ASSESSEE. LEARNED COMMISSIONER SHALL PASS A FRESH ORDER GRANTING APPROVAL TO THE ASSESSEE UNDER SEC. 80G OF THE INCOME-TAX ACT, 1961 IN ACCORDANCE WITH THE PROVISIONS. DECISION PRONOUNCED IN THE OPEN COURT ON 29.02.2012 SD/- SD/- ( B.C. MEENA ) ( RAJ PAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/02/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR