PRATHAM INSTITUTE FOR LITERACY EDUCATION AND VOCATIONAL TRAINING, MUMBAI V. DIT (E), MUMBAI

ITA 3784/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92783 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-03-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 13-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 3784 /MUM/ 2013 PRATHAM INSATITUTE FOR LITERACY EDUCATION & VOCATIONAL TRAINING, 4 TH FLOOR, Y.B. CHAVAN CENTRE, GEN J. BHOSALE MARG, NARIMAN POINT, MUMBAI - 400 021 / VS. THE DIRECTOR OF INCOME TAX(EXEMPTIONS), MUMBAI ./ ./ PAN/GIR NO. : AAGCP 2381Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI ANIL J. SATHE / RESPONDENT BY : SHRI PREMANAND J / DATE OF HEARING : 0 3 . 0 6 .2015 / DATE OF PRONOUNCEMENT : 0 3 .0 6 .2015 / O R D E R PER N.K. BILLAIYA, AM: WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE CORRECTNESS OF THE ORDER OF DIT(EXEM), MUMBAI DT. 28.3.2013. 2. THE ASSESSEE IS AGGRIEVED BY THE DENIAL OF REGISTRATION U/S. 12A OF THE A SSESSEE - T RUST. ITA. NO. 3784/M/2013 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED AN APPLICATION FO R REGISTRATION U/S. 12A OF THE ACT. AS PER THE PROVISIONS OF SEC. 12AA(1)(B), A TRUST IS TO BE GRANTED REGISTRATION, IF THE COMMISSIONER IS SATISFIED ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. IN THE LIGHT OF THESE PROVISIONS OF THE ACT, THE DIT CALLED FOR NECESSARY INFORMATION REQUIRED FOR GRANTING REGISTRATION. AFTER PERUSING THE MEMORANDUM OF ASSOCIATION, THE DIT (EXEM.) OBSERVED THAT AMONG ITS MAIN OBJECTS, THE ASSESSEE COMPANY HAS ALSO AN OBJECT OF EMPLOYMENT FACILITATI ON. THE DIT WAS OF THE FIRM BELIEF THAT THIS OBJECT CANNOT BE CONSTITUTED AS A CHARITABLE PURPOSE. THE DIT FURTHER OBSERVED THAT CERTAIN OBJECT OF THE ASSESSEE ALSO EXTEND TO THE TERRITORIES BEYOND INDIA. THE DIT (EXEM.) OBSERVED THAT SINCE THE ASSESSE E HAS POWER TO INCUR EXPENDITURE ABROAD, EXEMPTION WILL NOT BE ALLOWABLE U/S. 11 OF THE ACT. THE DIT (EXEM.) HAS FINALLY CONCLUDED BY HOLDING EACH AND EVERY OBJECT OF A PUBLIC CHARITABLE INSTITUTION MUST FALL WITHIN THE AMBIT OF CHARITABLE PURPOSE . THE DIT (EXEM) DECLINED GRANT OF REGISTRATION. 4. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT THE ASSESSEE IS CONSTITUTED BY A MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION DT. 2.6.2011. IT IS INCORPORATED U/S. 25 OF THE COMPANIES ACT, 1956 ON 26.9.2011. THE LD. COUNSEL FURTHER POINTED OUT THAT THE OBJECTS WHICH ARE CONSIDERED BY THE DIT (EXEM.) A S NOT CONFINED TO THE TERRITORIES IN INDIA ARE NOT THE OBJECTS OF THE COMPANY. THESE CLAUSES ONLY ENABLE THE DIRECTORS OF THE COMPANY TO CARRY OUT THE SMOOTH FUNCTIONING OF THE OBJECTS OF THE COMPANY. THESE ARE NOT THE PRIMARY OBJECT OF THE COMPANY. IT IS THE SAY OF THE LD. COUNSEL THAT THE TWO CLAUSES REFERRED TO BY THE DIT (EXEM.) ARE NOT OB JECTS BUT MERELY POWERS. THE LD. COUNSEL FURTHER STATED THAT THE ITA. NO. 3784/M/2013 3 DIT (EXEM) HAS DECLINED TO GRANT REGISTRATION MERELY ON ASSUMPTIONS AND PRESUMPTIONS. 5. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE DIT (EXEM.). 6. WE HAVE GI VEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ORDER OF THE DIT (EXEM.). A PERUSAL OF THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE COMPANY SHOW THAT THE MAIN OBJECTS OF THE COMPANY TO BE PURSUED BY THE COMPANY ON I TS INCORPORATION ARE: 1) TO CONDUCT NOT FOR PROFIT WORK IN THE AREAS OF RESEARCH, STUDIES, TRAINING AND EMPLOYMENT FACILITATION IN ALL SPHERES OF EDUCATION INCLUDING BUT NOT LIMITED TO PRE - PRIMARY EDUCATION, PRIMARY EDUCATION, SECONDARY EDUCATION, TERTIARY E DUCATION, ADULT EDUCATION, CONTINUING EDUCATION, HEALTH RELATED EDUCATION, TRAINING IN ATHLETICS/SPORTS , VOCATIONAL AND TECHNICAL EDUCATION, ALL EDUCATION THAT IS CRITICAL TO THE ECONOMIC, INTELLECTUAL, PHYSICAL, SPIRITUAL DEVELOPMENT OF AN INDIVIDUAL, F A MILY, COMMUNITY AND THE NATION. 2) NO OBJECTS OF THE COMPANY WILL BE CARRIED OUT WITHOUT OBTAINING PRIOR APPROVAL/NO OBJECTION CERTIFICATE FROM CONCERNED AUTHORITY WHEREVER REQUIRED. 3) NONE OF THE OBJECTS WILL BE CARRIED OUT ON FOR PROFIT BASIS. 7. A BARE PERUSAL OF THESE OBJECTS OF THE COMPANY SHOW THAT THE COMPANY IS INCORPORATED FOR CHARITABLE PURPOSE AND IT IS SPECIFICALLY MENTIONED THAT NONE OF THE OBJECTS WILL BE CARRIED OUT ON PROFIT BASIS. AT THE TIME OF GRANTING THE REGISTRATION OF THAT THE DIT (EXEM.) HAS TO SEE ITA. NO. 3784/M/2013 4 THE OBJECTS AND THE GENUINENESS OF THE TRUST. IN OUR CONSIDERED OPINION, THE ASSESSEE COMPANY IS A GENUINE COMPANY WHICH HAS BEEN INCORPORATED U/S. 25 OF THE COMPANIES ACT 1956 AND ALSO THE OBJECTS OF THE COMPANY DO NOT SUGGEST THAT TH E COMPANY HAS BEEN INCORPORATED WITH A PROFIT MOTI VE. THEREFORE, WE SET ASIDE THE ORDER OF THE DIT(EXEM.) WITH A DIRECTION TO ALLOW REGISTRATION TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OP EN COURT AT THE TIME OF HEARING ON 3 RD JUNE , 2015 SD/ - SD/ - ( JOGINDER SING H ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 3 RD JUNE , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI