Lady Florence Education Society, Gurgaon V. CIT (Exemptions), Chandigarh

ITA 3761/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1372 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 24-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE, SHRI G. S. PANNU, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMB ER ITA NO.3761/DEL/2016 (ASSESSMENT YEAR-NIL) LADY FLOREANCE EDUCATION SOCIETY, 299/21, GALI NO.5, MADANPURI, GURGAON, HARYANA PAN AAAAL 5991Q VS. CIT(EXEMPTIONS) , CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY SH. P.C. YADAV ADV. RESPONDENT BY SH. J.K. MISHRA, CIT-DR DATE OF HEARING 17.02.2020 DATE OF PRONOUNCEMENT 19.05.2020 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER PASSED U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER C ALLED AS THE ACT.) BY THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CH ANDIGARH, {CIT (E)} WHEREIN THE LD. CIT(EXEMPTIONS) HAS REJECTED THE ASS ESSSES APPLICATION SEEKING GRANT OF REGISTRATION U/S 12AA OF THE ACT. 2.0 THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED TH AT THE LD. CIT (EXEMPTIONS) HAS DRAWN WRONG INFERENCES AND HAS MADE INCORRECT 2 ITA NO.3761/DEL/2016 LADY FLO RENCE EDUCATION SOCIETY VS. CIT(E) OBSERVATIONS IN THE IMPUGNED ORDER IN AS MUCH AS WHA T WAS REQUIRED AT THE TIME OF GRANT OF REGISTRATION WAS ONLY AN ENQUIR Y INTO THE OBJECTS OF THE SOCIETY AND TO VERIFY AS TO WHETHER THE ACTIVITIES W ERE EDUCATIONAL/CHARITABLE IN NATURE AND WERE GENUINE. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT IT WAS INCORRECT ON TH E PART OF THE LD. CIT(EXEMPTIONS) TO HAVE STATED THAT THERE WAS NO JUS TIFICATION FOR INCREASE IN SALARY EXPENDITURE FROM RS.21.73 LACS TO 70.43 L ACS AND THAT THERE WAS NO RATIONALE BEHIND SUCH HEFTY INCREASE IN SALARY. IT WAS ALSO SUBMITTED THAT IT WAS INCORRECT OBSERVATION OF THE LD. CIT (EX EMPTIONS) THAT THE GROSS RECEIPTS WERE RS. 1,04,71,867/- I.E., MORE THAN RS. 1 CRORE. HE DREW OUR ATTENTION TO PAGE 27 OF THE PAPER BOOK WHEREIN COPY OF THE INCOME EXPENDITURE ACCOUNT WAS PLACED AND POINTED OUT THAT THE GROSS RECEIPTS IN THIS YEAR WERE ONLY RS.94,02,738/- INCLUDING INTERE ST FROM BANK AMOUNTING TO RS.21,438/-. IT WAS ALSO SUBMITTED THAT THE LD. CIT (E) HAS NOT DOUBTED THAT THE ASSESSEE WAS RUNNING A SCHOOL B UT HAS ALSO CONCLUDED THAT THE ACTIVITIES OF THE ASSESSEE WERE NOT GENUINE WHICH WAS, THUS, CONTRADICTORY. IT WAS ALSO SUBMITTED THAT THE ASSESSEE SOCIETY HAS RECOGNITION FROM THE DEPARTMENT OF EDUCATION, HA RYANA UNDER RULE 3 ITA NO.3761/DEL/2016 LADY FLO RENCE EDUCATION SOCIETY VS. CIT(E) 34(6) OF HARYANA EDUCATION RULES, 2003. THE LD. AUT HORIZED REPRESENTATIVE SUBMITTED THAT THE LD. CIT (EXEMPTIO NS) HAS WRONGLY DECLINED THE REGISTRATION U/S 12AA OF THE ACT BASED ON MERE CONJECTURES AND SURMISES. IT WAS PRAYED THAT THE LD. CIT (EXEMPT IONS) BE DIRECTED TO GRANT THE APPROVAL OF REGISTRATION U/S 12AA OF THE ACT. 3.0 IN RESPONSE, THE LD. CIT-DR PLACED RELIANCE O N THE IMPUGNED ORDER AND SUBMITTED THAT A GRANT OF REGISTRATION HAS BEEN RIGHTLY DENIED. 4.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE P ERUSED THE MATERIAL ON RECORD. IT IS SEEN THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE SOCIETY HAS BEEN RUNNING A SCHOOL AND THAT THE SOCIETY IS A LSO HAVING RECOGNITION FROM THE DEPARTMENT OF EDUCATION, GOVERNMENT OF HAR YANA. WHAT HAS LED THE LD. CIT (E) TO REFUSE REGISTRATION U/S 12AA IS HIS SUSPICION THAT CASH FROM UNDISCLOSED SOURCES IS BEING INTRODUCED IN THE SOCIETY IN THE FORM OF SCHOOL FEES. IT HAS BEEN OBSERVED BY THE LD. CIT (E ) THAT THE SCHOOL WAS BEING RUN FROM PREMISES THAT CONSISTED OF ONE HALL AND EIGHT ROOMS ONLY AND WAS ACTUALLY SITUATED IN A GALI . THE LD. CIT (EXEMPTIONS) HAS OBSERVED THAT IT WAS UNBELIEVABLE THAT RECEIPTS TO T HE TUNE OF NEARLY RS. 1 CRORE ARE GENERATED FROM SUCH SMALL PREMISES. THUS, APPARENTLY THE LD. 4 ITA NO.3761/DEL/2016 LADY FLO RENCE EDUCATION SOCIETY VS. CIT(E) CIT (EXEMPTIONS) WAS HAVING DOUBTS REGARDING THE GEN UINENESS OF THE ACTIVITIES BUT INSTEAD OF HAVING THE SAME VERIFIED, HE CHOSE TO STRAIGHTWAY REFUSE THE GRANT OF REGISTRATION. THIS, IN OUR CONS IDERED OPINION, WAS NOT CORRECT. IF THE LD. CIT (EXEMPTIONS) WAS HAVING ANY KIND OF DOUBTS, HE SHOULD HAVE GOT THE SAME VERIFIED. WE FEEL THAT THE ISSUE NEEDS A RELOOK AND RECONSIDERATION BY THE LD. CIT (EXEMPTIONS) AND , THEREFORE, WE DEEM IT FIT TO RESTORE THE ISSUE TO THE FILE OF THE LD. CIT (EXEMPTIONS) FOR RECONSIDERING THE ASSESSEES APPLICATION AND, THERE AFTER, FOR PASSING APPROPRIATE ORDERS AFTER GETTING THE FACTS VERIFIED AND AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE IN THIS REGARD. 5.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSE SSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/05/2020. SD/- SD/- (G.S.PANNU) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEM BER DATED: 19 /05/2020 PK/PS COPY FORWARDED TO: 1. APPELLANT 5 ITA NO.3761/DEL/2016 LADY FLO RENCE EDUCATION SOCIETY VS. CIT(E) 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI