The Improvement Trust, Moga V. The Commissioner of Income Tax III, Ludhiana

ITA 365/ASR/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1421 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.R. MEENA HONBLE ACCOUNTANT MEMBER I.T.A. NO.365 (ASR)/2013 ASSESSMENT YEAR: 2009-10 PAN: AAA2L10024L THE I MPROVEMENT TRUST, MOGA OPP. GEETA THEATRE, G.T.ROAD MOGA. VS. THE COMMISSIONER OF INCOME TAX - III, LUDHIANA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AMIT HANDA, C.A RESPONDENT BY: SH. TARSEM LAL (DR DATE OF HEARING: 2 4.08.2015 DATE OF PRONOUNCEM ENT: 16.09.2015 ORDER PER A.D. JAIN (JM): THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 200 9-10, AGAINST THE ORDER DATED 30.03.2013, PASSED UNDER SECTION 12AA(3) OF T HE I. T ACT, PASSED BY THE LEARNED CIT(A)-III, LUDHIANA. THE ASSESSEE HAS RAIS ED THE FOLLOWING EFFECTIVE GROUNDS: 1. BECAUSE THE LD. COMMISSIONER OF INCOME TAX-III ERRED IN LAW AS WELL AS ON FACTS IN CANCELLING THE REGISTRATION U/S12AA OF THE INCOME T AX ACT, 1961 W.E.F A.Y.2009-10 IN VIEW OF THE JUDGEMENT OF THE HONBLE ITAT, AMRITSAR BENCH IN THE CASE OF JAMMU, ITA NO.30 (ASR) OF 2011 DT.14.06.2012. THE ACTION OF TH E CIT IS ILLEGAL, UNJUSTIFIED & ARBITRARY AND AGAINST THE FACTS OF THE CASE. 2. BECAUSE THE LD. CIT-III HAS ERRED IN OVERLOOKING AND IN SUMMARILY REJECTING THE DETAILED WRITTEN REPLY ALONG WITH VARIOUS DOCUMENTS AND EVIDENCE PLACED IN PAPER BOOK FILED WHILE TAKING THE LOP SIDED DECISION OF CANCEL LATION OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 2. ITA NO.365 (AS R)/2013 ASST. YEAR 2009-1 0 2. THE REGISTRATION GRANTED TO THE ASSESSEE WAS CA NCELLED BY THE LEARNED CIT(A) W.E.F ASST. YEAR 2009-10, IN VIEW OF THE DEC ISION OF THE AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE OF JAMMU DEVELOPMENT AUTH ORITY VS. COMMISSIONER OF INCOME TAX, JAMMU, ITA NO.30 (ASR)/2011, VIDE ORDE R DATED 14.06.2012. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED AT T HE OUTSET THAT THIS ISSUE NOW STANDS COVERED IN FAVOUR OF THE ASSESSEE BY TH E ORDER DATED 11.06.2015 PASSED BY THE AMRITSAR BENCH OF THE TRIBUNAL IN ITA NO.732(ASR)/2013, FOR ASST. YEAR 2009-10, IN THE CASE OF KAPURTHALA IMPR OVEMENT TRUST, A COPY OF THE SAID ORDER HAS BEEN PLACED ON RECORD. 3. ON THE OTHER HAND, THE LEARNED DR HAS FILED AND RELIED ON THE FOLLOWING WRITTEN SUBMISSIONS: IT IS SUBMITTED THAT THE LEARNED COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING YESTERDAY SUBMITTED A PHOTOCOPY OF AN ORDER IN THE NAME OF KAPURTHALA IMPROVEMENT TRUST, KAPURTHALA IN ITA NO. 732/ASR/20 13 DATED 11.06.2015. IT IS SUBMITTED THAT IN THE SAID ORDER THE DATE OF PRO NOUNCEMENT IS MENTIONED AS 11.06.2015 BUT ON THE SAID DATE, NO SUCH PRONOUNCEM ENT WAS MADE IN THE COURT AND AS SUCH THE SAID ORDER, IF ANY, IS NOT VA LID ORDER AND, THEREFORE, BE NOT FOLLOWED. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T THE ORDER PASSED IS NON-SPEAKING ORDER AS NOWHERE IN THIS ORDER, THE SU BMISSIONS OF THE DR HAVE BEEN DISCUSSED. THE DR HAD RELIED UPON A NUMBER OF DECISIONS OF THIS BENCH AND OTHER BENCHES VIDE WRITTEN SUBMISSIONS DATED 02 .06.2015 AND ALSO ELOBORATED HOW THE TRUSTS IN PUNJAB ARE INDULGING I NTO COMMERCIAL ACITIVITIES BUT THERE IS NOT EVEN A WHISPER OF THE SAID DECISIO NS AND SUBMISSIONS AND ALSO OF THE REASONS AS TO WHY THE SAID ORDERS ARE NOT BE ING FOLLOWED. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE AFOREME NTIONED ORDER RELIED UPON BY THE ASSESSEES COUNSEL IS NOT A VALID ORDER AND MAY NOT BE FOLLOWED. IN THE CIRCUMSTANCES, IT IS HUMBLY SUBMITTED THAT HEAR ING IN THIS CASE MAY KINDLY BE RE-FIXED SO THAT THE ISSUE IS ARGUED ON MERITS. 3. ITA NO.365 (AS R)/2013 ASST. YEAR 2009-1 0 4. ON A CONSIDERATION OF THE MATTER, WE FIND THAT I N KAPURTHALA IMPROVEMENT TRUST (SUPRA), IT HAS BEEN HELD, INTER ALIA, AS FOLLOWS: 9. WE FIND THAT, AS LEARNED COUNSEL RIGHTLY POINTS OUT, THE SCOPE OF POWERS OF THE COMMISSIONER UNDER SECTION 12AA(3) FOR CANCELLA TION OF REGISTRATION ALREADY GRANTED IS VERY LIMITED IN SCOPE IN AS MUCH AS IT C AN ONLY BE INVOKED ONLY WHEN (I) THAT THE ACTIVITEIS OF THE TRUST ARE NOT GENUIN E, AND (II) THAT THE ACTIVITIES OF THE TRUST OR THE INSTITUTION ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR THE INSTITUTION ARE NOT BEI NG CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR THE INSTITUTION. S ECTION 12AA(3) SPECIFICALLY PROVIDES THAT WHEN THE CIT IS SATISFIED THAT THE A CTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MA Y BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST O R INSTITUTION. IT IS NOT EVEN THE CASE OF CIT THAT THE ACTIVITIES OF THE ASSESSEE TRU ST ARE NOT GENUINE OR THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT BEING CARRIED O UT IN ACCORDANCE WITH THE OBJECTS OF THE ASSESSEE TRUST. THE CASE OF THE CIT RESTS ON THE FIRST PROVISO TO SECTION 2(15) COMING INTO PLAY ON THE FACTS OF THIS CASE BUT THEN SUCH A FACTOR CANNOT WARRANT OR JUSTIFY THE POWERS UNDER SECTION 12AA(3) BEING INVOKED. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASSESSEE THA T THE ACTION OF THE LEARNED COMMISSIONER, IN WITHDRAWING THE REGISTRATION UNDER SECTION 12AA(3), WAS WELL BEYOND THE LIMITED SCOPE OF THE POWERS CONFERRED ON HIM BY THE STATUTE. THE ASSESSEE, THEREFORE, MUST SUCCEED IN THE APPEAL FOR THIS SHORT REASON ALONE. 10. THERE IS, HOWEVER, A MUCH MORE FUNDAMENTAL REA SON FOR THE ASSESSEE SUCCEEDING IN THIS APPEAL. IN OUR CONSIDERED VIEW, THE CONSIDERATIONS WITH RESPECT TO THE FIRST PROVISO TO SECTION2(15) COMING INTO THE PLAY AND, FOR THAT REASON, THE OBJECTIS OF AN ASSESSEE TRUST OR INSTIT UTION BEING HELD TO BE NOT COVERED BY THE DEFINITION OF CHARITABLE PURPOSES, HAVE NO ROLE TO PLAY IN THE MATTERS RELATING TO REGISTRATION OF A TRUST OR INST ITUTION UNDER SECTION 12A OR 12AA-WHETHER IN RESPECT OF GRANTING OR DECLINING OF A REGISTRATION OR IN RESPECT OF CANCELLATION, EVEN IF OTHERWISE PERMISSIBLE, OF A REGISTRATION. THE PRESENT CASE IS SQUARELY COVERED BY THESE OBSER VATIONS, ON FACTS. THE DEPARTMENT HAS NOT REFUTED THE ABOVE OBSERVATIONS. IT HAS ONLY BEEN STATED THAT THE SAID ORDER, FOR THE REASONS MENTIONED, IS A NON-SPEAKING ORDER. NOW THIS ISSUE REQUIRES TO BE DECIDED IN THE CASE OF K APURTHALA IMPROVEMENT TRUST (SUPRA) ITSELF, IF CHALLENGED BY THE DEPARTMENT THE REIN. SO FAR AS REGARDS THE 4. ITA NO.365 (AS R)/2013 ASST. YEAR 2009-1 0 DEPARTMENTS OBJECTION THAT THE SAID ORDER WAS NEVE R PRONOUNCED, WE DO NOT FIND THIS OBJECTION TO THE CORRECT, AS PER THE RECO RD OF THAT CASE. 5. FOR THE ABOVE REASONS, SINCE THE ISSUE AT HAND S TANDS DECIDED IN FAVOUR OF THE ASSESSEE IN THE CASE OF KAPURTHALA IMPROVEM ENT TRUST (SUPRA), FOLLOWING THE SAID ORDER, THE GRIEVANCE OF THE ASSESSEE IS FO UND TO BE JUSTIFIED AND IS ACCEPED AS SUCH, CANCELLING THE ORDER PASSED BY THE LEARNED CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2015. SD/- SD/- (T. R. MEENA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 .09. 2015 /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:IMPROVEMENT TRUST, MOGA 2. THE COMMISSIONER OF INCOME TAX-III, LUDHIANA 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.