Orissa Private Engineering School Association, Bhubaneswar V. CIT(Exemption), Hyderabad

ITA 351/CTK/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5153 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 31-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ AND ARUN KHODPIA, ACCOUNTANT MEMBER Orissa Private Engg. School Association, N 6/416, IRC Village, jaydev Vihar, Bhubaneswar PAN/GIR No. (Appellant Per C.M.Garg This is an appeal filed by the assessee against the or CIT(Exemptions), Hyderabad dated 28.6.2019 2019-2020. 2. Facts of the case are that the assessee filed application in Form No.10A seeking registration u/s.12A of the Income tax Act, on 28.12.2018. The society is engaged in activity of forming an association for technological advancement etc. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK S/SHRI CHANDRA MOHAN GARG, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.351/CTK/2019 Assessment Year : 2019-2020 Orissa Private Engg. School Association, N 6/416, IRC Village, jaydev Vihar, Bhubaneswar. Vs. CIT (Exemptions) Hyderabad No. (Appellant) .. ( Respondent Assessee by : Shri S.K.Sarangi Revenue by : Shri S.K.Mohapatra, Date of Hearing : 5 /4/ 20 Date of Pronouncement : 6 / O R D E R g, JM This is an appeal filed by the assessee against the or CIT(Exemptions), Hyderabad dated 28.6.2019 for the assessment year Facts of the case are that the assessee filed application in Form No.10A seeking registration u/s.12A of the Income tax Act, on 28.12.2018. The society is engaged in activity of forming an association for technological advancement etc. The ld (E) noted the objects of the society as under: Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER 2020 CIT (Exemptions) Respondent) S.K.Sarangi, AR S.K.Mohapatra, CIT (DR) / 2022 /4/2022 This is an appeal filed by the assessee against the order of the for the assessment year Facts of the case are that the assessee filed application in Form No.10A seeking registration u/s.12A of the Income tax Act, on 28.12.2018. The society is engaged in activity of forming an association for technological the objects of the society as under: ITA No.351/CTK/2019 Assessment Year : 2019-2020 Page2 | 5 “ i. To ensure the task of directing and coordinating with support services to the efforts of the members technical institutions to work together. ii. To put forth the problems of the member institutions for remedial measures before the appropriate authorities like AICTE DTE&T. SCTE&VT and Govt, of Orissa etc. iii. To ensure qualitative improvement in Technical Education for the Faculty Staff and Students of the member institutions through training, seminars, conference, workshop, research and innovative programmes. iv. To create a sense of awareness among the public for the value of Technical Education. v. To maintain co-ordination between the students of the members institutions and keep liasioning between the institution and different organizations like Govt, and Semi Govt, organizations / Public and private sector companies and to ensure Industry- Institute interaction. v. To ensure proper utilization of human resources. 3. Further, in the impugned order, Ld CIT (E) observed that the assessee has shown profit of Rs.9,14,495/- on income of Rs.16,67,958/-, which is 54.8%. Thus, the society is formed for profit earning motive. The objects of the society are purely commercial in nature as there is no charitable element involved in the activities of the society. He also observed that the objects are beneficial to the members of the society, which violates the section 13 of the Act. Thereafter, following some judicial pronouncements on this issue, the ld CIT(E) observed that the assessee is not eligible for registration u/s.12A of the Act and accordingly, rejected the application filed by the assessee for grant of registration u/s.12A of the Act. ITA No.351/CTK/2019 Assessment Year : 2019-2020 Page3 | 5 4. Ld counsel for the assessee submitted that the objects of the assessee are charitable in nature and there is no misuse of funds, therefore, the ld CIT(E) was not correct in rejecting application for registration u/s.12A of the Act. Ld A.R. drew our attention towards para 3 of the order and submitted that despite the fact that the ld CIT(E) noted the objects of the assessee but dismissed the same as alleging non-charitable. Ld A.R. submitted that for purpose of creating the society was to promote education in India including the State of Odisha, therefore, it was charitable purpose for the benefit of public at large. Therefore, the benefit should have been granted to the assessee. Ld A.R. submitted that there is no profit making activities of the trust, therefore, the ld CIT(E) was not correct in rejecting the application of the assessee. 5. Ld CIT DR drew our attention to relevant part of the impugned order and submitted that the objects does not reveal any beneficial to the public at large but the object clearly reveals that the society is formed for polytechnic colleges, suggestions to Government on modification of curriculum for technological advancement etc. He submitted that none of the objects are charitable in nature and the same are beneficial to the members of the society and not for the benefit of public at large. Therefore, it is a clear violation of section 13 of the Act and thus, the ld CIT(E) was correct in rejecting the grant of registration. Ld CIT DR submitted that from the income and expenditure account ending on ITA No.351/CTK/2019 Assessment Year : 2019-2020 Page4 | 5 31.3.2018, it was clearly revealed that the assessee has earned profit 54.8%, thus, the society has been formed for earning profit and the objects are purely commercial in nature.. There is no charitable element involved in the activities being carried out by the assessee and thus, the assessee is not eligible u/s.12A of the Act. 6. On careful consideration of rival submissions, we are of the considered view that ld A.R. could not controvert the findings recorded by ld CIT(E) in the impugned order and submissions made by the ld CIT DR during the arguments before us. From the objects noted by ld CIT(E) in para 3 of the impugned order, it is clearly discernible that the assessee society is engaged in forming an association of polytechnic colleges, suggestions to Government on modification of curriculum for technological advancement etc. From careful reading of objects, we are in agreement with the contention of ld CIT DR that none of objects are charitable in nature and these are only beneficial to the members of society, which is clear violation of section 13 of the Act. So far as the profit making and commercial in nature is concerned, we are of the considered view that when the assessee has applied for registration, the CIT(E) is empowered to verify the activities of the assessee in terms of financial results/income and expenditure of the assessee and the registration granting authority cannot be debarred and stopped from making such verification and examination of financial results of the assessee. in the present case, admittedly, the ITA No.351/CTK/2019 Assessment Year : 2019-2020 Page5 | 5 society was created in 2005 and application for grant of registration was submitted on 28.12.2018 i.e. after substantial time of more than 12 years time, therefore, it was the duty of the assessee to establish that funds/receipts/donation has been used by the assessee for the purpose of its objects and there is no element of profit making out of that activities but unfortunately, in the present case, the assessee failed to establish the charitable purpose. Therefore, se are compelled to hold that the CIT(E) is justified in rejecting the application for grant of registration u/s.12A of the Act. 7. In the result, appeal of the assessee is dismissed. Order pronounced on 6 /4/2022. Sd/- sd/- (Arun Khodpia) (Chandra Mohan Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 6 /04/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Orissa Private Engg. School Association, N 6/416, IRC Village, jaydev Vihar, Bhubaneswar. 2. The Respondent. CIT (Exemptions) Hyderabad 3. The CIT(A)-, Bhubaneswar 4. DR, ITAT, Cuttack 5. Guard file. //True Copy//