Rama Educational Society, Kanpur V. CIT (centre), Kanpur

ITA 407/LKW/2011

• Counselvise Citation: 40723714 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-07-2014
• Assessment Year: misc
• Appeal Filed On: 30-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K GARG SHRI P K KAPOOR
• Keywords: Principle of natural justice; Benefit of exemption
• Section: 143(3); 12A; 12; 10; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.407/LKW/2011 ASSESSMENT YEAR:N.A. M/S RAMA EDUCATIONAL SOCIETY, 117/K/137, SARVODAYA NAGAR, KANPUR. PAN:AAATB3928A VS. C.I.T. (CENTRAL), KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. GARG, ADVOCATE SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI MANOJ KUMAR GUPTA, CIT, D.R. DATE OF HEARING 03/07/2014 DATE OF PRONOUNCEMENT 2 1 /08/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (CENTRAL), KANPUR DATED 29/04/2011 PASSED BY HIM U/S 80G(5) OF THE INCOME TAX ACT. 2. THE CONCISE GROUNDS OF APPEAL ARE AS UNDER: 1. BECAUSE THE OBJECTS OF THE 'APPELLANT' SOCIETY CONTINUE TO BE THE SAME ON THE BASIS OF WHICH IT HAD BEEN GRANTED REGISTRATION UNDER SECTION 12A (WHICH CONTINUES TO BE IN FORCE EVEN ON TODAY) AND REGISTRATION UNDER SECTION 80G(5) AS HAD BEEN GRANTED UPTO 31.03.2004 AND THE 'CIT' WAS NOT JUSTIFIED EITHER ON FACTS OR IN LAW TO HOLD THAT THE 'APPELLANT' SOCIETY DID NOT FULFILL THE CONDITION LAID DOWN IN SECTION 80G(5). 2 2. BECAUSE VARIOUS OBJECTS AS REFERRED TO IN THE IMPUGNED ORDER ( EXTRACTED FROM THE MEMORANDUM OF ASSOCIATION) WERE WHOLLY LINKED WITH THE EDUCATIONAL ACTIVITIES OF THE 'APPELLANT' SOCIETY AND IT IS ONLY UNDER A MISCONCEPTION/ MISREADING OF THE SAME THAT THE 'CIT' HAS HELD THE SAME TO BE REPUGNANT TO THE 'CHARITABLE PUR POSES' (WHICH INCLUDE EDUCATION) UNDER SECTION 2(15) OF THE ACT. 3. BECAUSE THE DECISION OF HON'BLE ANDHRA PRADESH HIGH COURT AS HAS BEEN REFERRED TO AND HEAVILY RELIED UPON BY THE 'CIT', FOR THE PURPOSES OF REJECTING THE APPLICATION FOR RENEWAL UNDER SEC TION 80G(5), IS DISTINGUISHABLE FROM THE FACTS OF THE 'APPELLANT' AND HIS VIEW(CIT'S) AS RESTED/ INTER ALIA/ ON THE SAME IS NOT TENABLE. 4. BECAUSE NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN/ MUCH LESS LEGITIMATELY AGAINST THE 'APPELLANT' ON THE BASIS OF ADDITIONAL INCOME OF RS.11.25 LACS AS HAD BEEN SURRENDERED BY THE 'APPELLANT' IN THE APPLICATION (NO.UP/KP51/06 - 07/98 - IT) FOR SETTLEMENT OF ITS CASE FOR THE ASSESSMENT YEARS 1999 - 2000 TO 2005 - 06. 5. BECAUSE GRANTING OF REGISTRATION UNDER SECTION 80G(5) AS ALSO RENEWAL THEREOF ARE INTER - LINKED AND CONNECTED WITH REGISTRATION UNDER SECTION 12A ALSO AND LOOKING TO THE FACTS THAT; ( A ) 'APPELLANT' HAS ALREADY BEEN GRANTED REGISTRATION UNDER SECTION 12A BY THE LEARNED 'CIT'; ( B ) ON THE STRENGTH OF SUCH CERTIFICATE OF REGISTRATION UNDER SECTION 12A IT HAS BEEN DULY GRANTED THE BENEFIT OF EXEMPTION UNDER SECTION 11 READ WITH SECTION 12 IN ITS REGULAR ASSESSMENTS, AS HAD BEEN MADE UNDER SECTION 143(3) UPTO THE ASSESSMENT YEAR 2008 - 09; ( C ) NOTIFICATION UNDER SECTION 10(23C)(VI ) WAS DULY ISSUED BY THE ID. CHIEF COMMISSIONER OF INCOME TAX, TILL THE ASSESSMENT YEAR 2003 - 04; ( D ) FOR THE SUBSEQUENT ASSESSMENT YEARS I.E. 2004 - 05 AND 2005 - 06 SUCH NOTIFICATION UNDER SECTION 10(23C)(VI) WAS DULY EXTENDED BY THE HON'BLE INCOME TAX SETTLEMENT COMMISSION VIDE ITS ORDER DATED 16.07.2008, 3 IT COULD NOT HAVE BEEN SAID OR HELD THAT THE 'APPELLANT' DID NOT FULFILL THE CONDITION LAID DOWN IN SECTION 80G(5) FOR RENEWAL OF RECOGNITION EARLIER GRANTED UPTO 31.03.2004. 6. BECAUSE ON THE FACTS AND CIRCUM STANCES OF THE CASE, AS ARE AVAILABLE ON THE RECORD THE 'APPELLANT' DESERVES TO BE GRANTED RENEWAL OF RECOGNITION UNDER SECTION 80G(5) WHICH, ON THE SAME FACTS, WAS IN FORCE UPTO THE PREVIOUS YEAR 2003 - 04. 7. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. IT IS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT COPY OF CONSOLIDATED ORDER DATED 16/07/2008 PASSED BY SETTLEMENT COMMISSION IS AVAILABLE ON PAGE NO. 93 TO 124 OF THE PAPER BOOK. IN PARTICUL AR, OUR ATTENTION WAS DRAWN TO P ARA 28 AVAILABLE ON PAGE NO. 108 OF THE PAPER BOOK WHERE IT WAS HELD BY SETTLEMENT COMMISSION THAT THE ASSESSEE IS SATISFYING THE CONDITION FOR GRANT OF REGISTRATION U/S 10(23C) AND THE SAME WAS GRANTED TO THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF CIT. HE ALSO SUBMITTED THAT THE REQUIREMENT OF SECTION 80G(5)(IV) WERE NOT MET AND THE REQUIREMENT OF SECTION 10 ( 23C ) ARE DIFFERENT. 5. IN REJOINDER, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THA T THE REQUIREMENT OF SECTION 10(23C) AND SECTION 80G(5) ARE SAME AND THEREFORE, ONCE EXEMPTION U/S 23C HAS BEEN ALLOWED TO THE ASSESSEE, THE ASSESSEES APPLICATION FOR APPROVAL U/S 80G(5) SHOULD ALSO BE ALLOWED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS . WE FIND THAT 7 TH PROVISO TO SECTION 10(2 3 C) IS SIMILAR TO THE REQUIREMENT AS PER SECTION 80G(5) OF THE ACT AND HENCE, FOR THE SAKE OF READY REFERENCE, THIS PROVISO IS REPRODUCED BELOW: 4 PROVIDED ALSO THAT NOTHING CONTAINED IN SUB - CLAUSE (IV) OR SUB - CLAUSE (V) [OR SUB - CLAUSE (VI) OR SUB - CLAUSE (VIA)] SHALL APPLY IN RELATION TO ANY INCOME OF THE FUND OR TRUST OR INSTITUTION [OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION], BEING PROFITS AND GAINS OF BUSINESS, UNLESS THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF ITS OBJECTIVES AND SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED BY IT IN RESPECT OF SUCH BUSINESS. 6.1 FROM THE ABOVE PROVISO, IT IS SEEN THAT FOR THE PURPOSE OF GRANTING EXEMPTION U/S 10(23C) ALSO, IT IS NECESSARY THAT THE ASSESSEE SHOULD MAINTAIN SEPARATE BOOKS OF ACCOUNT IN RESPECT OF BUSINESS ACTIVITIES, IF ANY, UNDERTAKEN BY THE ASSESSEE BEING INCIDENTAL TO ATTAINMENT OF ITS OBJECTS. AS PER THE ORDER PASSED BY SETTLEMENT COMMISSION IN ASS ESSEES OWN CASE ON 15/07/2008, SUCH REGISTRATION U/S 10(23C) WAS GRANTED BY SETTLEMENT COMMISSION TO THE ASSESSEE FOR ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 AS PER PARA 28 OF THE ORDER OF SETTLEMENT COMMISSION INSPITE OF THIS FACT THAT THE DISCLOSURE OF RS. 11.25 LAC WAS MADE BY THE ASSESSEE BEFORE SETTLEMENT COMMISSION AND THE SAME WAS ACCEPTED ALSO BY SETTLEMENT COMMISSION. THE RELEVANT PARA OF THIS ORDER OF SETTLEMENT COMMISSION IS PARA 28, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 28. REGARDING GRANTING OF REGISTRATION U/S 10(23C) FOR THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06. REPORT HAS BEEN RECEIVED FROM THE ADDITIONAL DIRECTOR OF INVESTIGATION, COMMISSION ON 09/07/2008. AS SEEN FROM THE REPORT, THE APPLICANT IS SATISFYING THE CONDIT IONS FOR GRANTING OF REGISTRATION U/S 10(23C). ACCORDINGLY, THE SAME IS GRANTED TO THE APPLICANT. 6.2 FROM THE ABOVE PARA OF ORDER OF SETTLEMENT COMMISSION, IT IS SEEN THAT IT IS NOTED BY SETTLEMENT COMMISSION THAT AS PER THE REPORT RECEIVED FROM ADDITIONAL DIRECTOR OF INVESTIGATION, COMMISSION ON 09/07/2008, IT IS SEEN THAT THE ASSESSEE IS SATISFYING THE CONDITIONS FOR GRANTING REGISTRATION U/S 1 0(23C) OF THE ACT. SINCE U/S 10(23C) ALSO, THE ASSESSEE HAS TO MAINTAIN SEPARATE 5 BOOKS OF ACCOUNT AND IT IS REPORTED BY ADDITIONAL DIRECTOR OF INVESTIGATION, COMMISSION ON 09/07/2008 THAT THE ASSESSEE IS SATISFYING THE CONDITION FOR GRANTING REGISTRATION U/S 10(23C) OF THE ACT, IT CANNOT BE SAID THAT THE ASSESSEE IS NOT SATISFYING SUCH CONDITION FOR THE PU RPOSE OF GRANTING APPROVAL U/S 80G(5) OF THE ACT. WE, THEREFORE, HOLD THAT THE ASSESSEE SHOULD BE GRANTED REGISTRATION U/S 80G(5) OF THE ACT. CIT (CENTRAL) IS DIRECTED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 /08/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR