Gyan Deep Public School, Shikohabad V. C.I.T.-II, Agra

ITA 445/AGR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0233 (ITAT-AGRA)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-02-2013
• Assessment Year: misc
• Appeal Filed On: 28-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Capital asset; Charitable institution; Opportunity of being heard
• Section: 80G; 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 445/AGRA/2012 GYAN DEEP PUBLIC SCHOOL, VS. COMMISSIONER OF SHANTI NAGAR, STATION ROAD, INCOME-TAX-II, AGRA SHIKOHABAD.(PAN:AABTG6514G). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 08.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 15.02.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 26.07.2012, REJECTING THE APPLICATION OF ASSESSEE FOR GRANT OF REGISTRATION U/S. 12AA OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED APPLICATION U/S. 12AA OF THE IT ACT DATED 09.01.2012 BEFORE THE LD. CIT-I I, AGRA FOR GRANT OF REGISTRATION UNDER THE ABOVE PROVISION ON 10.01.2012. THE ASSESS EE CLAIMED TO HAVE CONDUCTED EDUCATIONAL ACTIVITIES WHICH ARE CHARITABLE IN NATU RE. APART FROM EDUCATIONAL ACTIVITIES, THE ASSESSEE HAS OTHER CHARITABLE OBJEC TS IN THE MEMORANDUM OF ITA NO. 445/AGRA/2012 2 ASSOCIATION, BUT AT THE TIME OF FILING OF APPLICATI ON, THE ONLY ACTIVITIES WHICH THE ASSESSEE WAS ASSOCIATED WERE EDUCATIONAL ACTIVITIES . THE LD. CIT IN THE IMPUGNED ORDER NOTED THAT THE ASSESSEE HAS TOTAL STRENGTH OF ABOUT 2000 STUDENTS AND HAS ITS OWN LAND, BUILDING, TRANSPORT FACILITIES AND WELL F URNISHED LABS AND OTHER EDUCATIONAL AMENITIES. FEE IS RECEIVED FROM THE STU DENTS AND CONSIDERING THE SURPLUS OVER EXPENSES IN EARLIER YEARS, THE LD. CIT WAS OF THE VIEW THAT SURPLUS IS INVESTED IN EXPANSION OF SCHOOL THE ASSESSEE THOUGH IS IMPARTING EDUCATION TO THE STUDENTS IN LIEU OF PAYMENTS RECEIVED FROM THEM ON REGULAR BASIS BUT IT IS NOT SPENDING ANY OF THIS SURPLUS FUNDS ON CHARITABLE AC TIVITIES. IT WAS ALSO OBSERVED THAT EDUCATION PER SE IS NOT A CHARITABLE ACTIVITY AND APPARENTLY, THE A SSESSEE IS RUNNING THE EDUCATIONAL INSTITUTION ON PURELY COMMERCIAL LI NES AND NOT CONDUCTING ANY CHARITY ITSELF. THE ASSESSEE IS NOT PROVIDING FREE EDUCATION TO POOR AND NEEDY STUDENTS AND EVEN NO SCHOLARSHIP IS GIVEN TO PROVID E ANY FINANCIAL ASSISTANCE TO THE POOR AND ACCORDINGLY, THE REGISTRATION APPLICATION WAS REJECTED. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. COMMISSIONER AND FILED TWO PAPER BOOKS CONTAINI NG THE INFORMATION RECEIVED UNDER THE RTI ACT TO THE EFFECT THAT COMMISSIONER D ID NOT GRANT ANY OPPORTUNITY OF HEARING TO THE ASSESSEE. COPIES OF THE ORDER SHEETS OF THE LD. COMMISSIONER ARE FILED TO SHOW THAT THE PROCEEDINGS HAVE BEEN CONDUC TED ONLY BY ITO (TECH.) AND ITA NO. 445/AGRA/2012 3 THE COMMISSIONER HAS MERELY AGREED WITH THE DRAFT O RDER. THE RECOMMENDATION FROM ITO 5(1), FIROZABAD IS ALSO FILED IN THE PAPER BOOK IN WHICH THE CONCERNED ASSESSING OFFICER THROUGH ADDL. COMMISSIONER, RANGE -5, FIROZABAD RECOMMENDED FOR GRANT OF REGISTRATION TO THE ASSESSEE. FURTHER, THE DETAILS OF SCHOLARSHIP GIVEN TO POOR STUDENTS AND DETAILS OF SALARY PAID TO THE TEA CHERS ARE FILED IN THE PAPER BOOK. LARGE NUMBER OF CUTTINGS OF NEWSPAPERS AND CERTIFIC ATES ISSUED BY VARIOUS ORGANIZATIONS ARE FILED TO SHOW THAT THE STUDENTS P ARTICIPATED IN VARIOUS EDUCATIONAL ACTIVITIES. HE HAS SUBMITTED THAT AUDITOR HAS CERTI FIED THAT THE EXCESS OVER EXPENDITURE HAVE BEEN INVESTED IN CAPITAL ASSET AND SUCH EXCESS WAS LESS THAN 15% OF THE TOTAL INCOME. HE HAS, THEREFORE, SUBMITTED T HAT SINCE THE ASSESSEE HAS ONLY EDUCATIONAL ACTIVITIES, THEREFORE, THE REGISTRATION SHOULD NOT HAVE BEEN REJECTED IN THE CASE OF ASSESSEE AND ALSO RELIED UPON THE ORDER S OF ITAT, AGRA BENCH IN THE CASE OF SMT. BIMLA DEVI GOPAL PRASAD PRESS VS. CIT, GOSWAMI INDU BHUSHAN JI RAMAYANI SEWA SADAN VS. CIT AND KISHAN KAUR EDUCATI ONAL WELFARE SOCIETY VS. CIT. COPIES OF THE SAME ORDERS ARE FILED IN THE PAP ER BOOK. ON THE OTHER HAND, THE LD. DR RELIED UPON THE IMPUGNED ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. SECTION 11 & 12 OF THE IT ACT PROVIDES ABOUT THE IN COME WHICH DO NOT FORM PART OF THE TOTAL INCOME. SECTION 11 OF THE IT ACT REFERS T O INCOME FROM PROPERTY HELD FOR ITA NO. 445/AGRA/2012 4 CHARITABLE OR RELIGIOUS PURPOSE AND SECTION 12 OF T HE IT ACT REFERS TO INCOME OF TRUST OR INSTITUTION FROM CONTRIBUTIONS. SECTION 12 A OF THE IT ACT PROVIDES CONDITIONS FOR APPLICABILITY OF SECTION 11 & 12 OF THE IT ACT AND PROVIDES THAT SECTION 11 & 12 SHALL NOT APPLY IN RELATION TO INCO ME OF ANY TRUST OR INSTITUTION UNLESS SUCH TRUST OR INSTITUTION HAS FILED APPLICAT ION FOR REGISTRATION IN THE PRESCRIBED MANNER TO THE COMMISSIONER AND THAT REGI STRATION HAS BEEN GRANTED IN THEIR FAVOUR. AFTER AMENDMENT FROM 01.06.2007, THE PROVISIONS OF SECTION 11 & 12 SHALL APPLY IN RELATION TO INCOME OF SUCH TRUST OR INSTITUTION FROM ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH S UCH APPLICATION IS MADE. SECTION 2(15) OF THE IT ACT PROVIDES THE DEFINITION OF CHARITABLE PURPOSE INCLUDES RELIEF TO THE POOR, EDUCATION, MEDICAL RELIEF ETC. THUS, THE CHARITABLE PURPOSE INCLUDES THE EDUCATIONAL ACTIVITIES. SECTION 12AA O F THE IT ACT PROVIDES THE PROCEDURE FOR REGISTRATION AND READS AS UNDER : 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A)OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM TH E TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABO UT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY A LSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING TH E TRUST OR INSTITUTION; ITA NO. 445/AGRA/2012 5 (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORD ER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSE D UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNI TY OF BEING HEARD. (1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF COM MISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999, SHALL STAND TRANS FERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PROCEED W ITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS R ECEIVED UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SEC TION 12A. (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTE D REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGIS TRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996)]] AND SUBSEQUENTLY T HE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR I NSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SH ALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST O R INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSE D UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD. 4.1 ITAT, AGRA BENCH IN THE CASE OF SHIKSHA SANKALP SOCIETY VS. CIT IN ITA NO. 418/AGRA/2010 (REPORTED IN 53 SOT 26) VIDE ORDE R DATED 18.05.2012 HELD AS UNDER : ITA NO. 445/AGRA/2012 6 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E MATERIAL ON RECORD. SECTION 80G(5)(VI) PROVIDES THA T IN RELATION TO DONATIONS MADE AFTER 31.03.1992, THE INSTITUTION OR FUND IS FOR THE TIME BEING APPROVED BY THE COMMISSIONER IN ACCORDANCE WI TH THE RULES MADE IN THIS BEHALF. SECTION 80G(5) PROVIDES THAT BEFORE GRANTING APPROVAL UNDER THE ABOVE PROVISION, ASSESSEE/INSTIT UTION SHOULD EXIST FOR CHARITABLE PURPOSE AND FULFILL THE CONDITIONS P RESCRIBED IN SUB- CLAUSE (I) TO (V) OF SECTION 80G(5) OF THE IT ACT. NONE OF THESE CONDITIONS HAVE BEEN STATED TO BE VIOLATED BY THE A SSESSEE AS PER THE IMPUGNED ORDER. 5.1 RULE 11AA OF THE IT RULES PROVIDES REQUIREMENTS FOR APPROVAL OF INSTITUTION OR FUND U/S. 80G OF THE IT ACT AND S AME READS AS UNDER : REQUIREMENTS FOR APPROVAL OF AN INSTITUTION OR FUND UNDER SECTION 80G. 11AA. (1) THE APPLICATION FOR APPROVAL OF ANY INSTITUTION OR FUND UNDER CLAUSE (VI) OF SUB-SECTION (5) OF SECTION 80G SHALL BE IN FORM NO. 10G AND SHALL BE MADE IN TRIPLICATE. (2) THE APPLICATION SHALL BE ACCOMPANIED BY THE FOL LOWING DOCUMENTS, NAMELY : (I) COPY OF REGISTRATION GRANTED UNDER SECTION 1 2A OR COPY OF NOTIFICATION ISSUED UNDER SECTION 10(23) OR 10(2 3C) ; (II) NOTES ON ACTIVITIES OF INSTITUTION OR FUND SINCE ITS INCEPTION OR DURING THE LAST THREE YEARS, WHICHEVER IS LESS ; (III) COPIES OF ACCOUNTS OF THE INSTITUTION OR F UND SINCE ITS INCEPTION OR DURING THE LAST THREE YEARS, WHICHEVER IS LESS. (3) THE COMMISSIONER MAY CALL FOR SUCH FURTHER DOCU MENTS OR INFORMATION FROM THE INSTITUTION OR FUND OR CAUSE S UCH INQUIRIES TO BE MADE AS HE MAY DEEM NECESSARY IN ORDER TO SATISFY H IMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF SUCH INSTITUTION O R FUND. (4) WHERE THE COMMISSIONER IS SATISFIED THAT ALL TH E CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SUB-SECTION (5) OF SE CTION 80G ARE FULFILLED ITA NO. 445/AGRA/2012 7 BY THE INSTITUTION OR FUND, HE SHALL RECORD SUCH SA TISFACTION IN WRITING AND GRANT APPROVAL TO THE INSTITUTION OR FUND SPECI FYING THE ASSESSMENT YEAR OR YEARS FOR WHICH THE APPROVAL IS VALID. (5) WHERE THE COMMISSIONER IS SATISFIED THAT ONE OR MORE OF THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SUB-S ECTION (5) OF SECTION 80G ARE NOT FULFILLED, HE SHALL REJECT THE APPLICAT ION FOR APPROVAL, AFTER RECORDING THE REASONS FOR SUCH REJECTION IN W RITING. PROVIDED THAT NO ORDER OF REJECTION OF AN APPLICATION SHALL BE PASSED WITHOUT GIVING THE INSTITUTION OR FUND AN OPPORTUNI TY OF BEING HEARD. (6) THE TIME LIMIT WITHIN WHICH THE COMMISSIONER SH ALL PASS AN ORDER EITHER GRANTING THE APPROVAL OR REJECTING THE APPLI CATION SHALL NOT EXCEED SIX MONTHS FROM THE DATE ON WHICH SUCH APPLI CATION WAS MADE: PROVIDED THAT IN COMPUTING THE PERIOD OF SIX MONTHS, ANY TI ME TAKEN BY THE APPLICANT IN NOT COMPLYING WITH THE DIRECTIO NS OF THE COMMISSIONER UNDER SUB-RULE (3) SHALL BE EXCLUDED. 5.2 IT IS NOT IN DISPUTE THAT THE ASSESSEE TRUST/IN STITUTION RUNS AN EDUCATIONAL INSTITUTION AND ENJOYED CONTINUOUS REGI STRATION U/S. 12AA OF THE IT ACT. HE IS ALSO REGISTERED UNDER THE SOCI ETIES REGISTRATION ACT. IN EARLIER YEAR, IT WAS ALSO GRANTED APPROVAL U/S. 80G(5) OF THE IT ACT. THE ASSESSEE FILED REQUIRED DOCUMENTS ALONG WI TH APPLICATION, WHICH HAVE NOT BEEN DISPUTED IN THE IMPUGNED ORDER AND EVEN AS PER OBSERVATION OF THE IMPUGNED ORDER, ON EXAMINATION O F OBJECTS OF THE ASSESSEE INSTITUTION, THE SAME WERE PRIMA FACIE APP EARED TO BE CHARITABLE IN NATURE. THEREFORE, ACCORDING TO RULE 11AA OF THE IT RULES, THE ASSESSEE COMPLIED WITH THE REQUIREMENTS FOR EXTENSION OF THE APPROVAL. THE RULE FURTHER PROVIDES THAT THE CO MMISSIONER MAY CALL FOR FURTHER DOCUMENTS OR INFORMATION FROM THE INSTITUTION OR FUND OR TO CAUSE SUCH ENQUIRIES TO BE MADE AS HE MAY DEE M NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF T HE ACTIVITIES OF THE ASSESSEE INSTITUTION OR FUND. THE COMMISSIONER, ON SATISFYING WITH THE TERMS AND CONDITIONS OF SECTION 80G(5) (I) TO (V) O F THE ACT, MAY RECORD HIS SATISFACTION IN WRITING AND GRANT APPROV AL TO THE ASSESSEE/INSTITUTION. IF ONE OR MORE CONDITIONS OF THE ABOVE PROVISIONS ITA NO. 445/AGRA/2012 8 ARE NOT SATISFIED, THE COMMISSIONER MAY REJECT THE APPLICATION FOR APPROVAL. HOWEVER, NO ORDER OF REJECTION OF APPLICA TION SHALL BE PASSED WITHOUT GIVING THE INSTITUTION OR FUND AN OP PORTUNITY OF BEING HEARD. FURTHER, ACCORDING TO SUB-RULE (6) OF RULE 1 1AA OF THE IT RULES, THE COMMISSIONER SHALL HAVE TO PASS AN ORDER EITHER GRANTING APPROVAL OR REJECTING APPLICATION WITHIN 6 MONTHS F ROM THE DATE ON WHICH SUCH APPLICATION WAS MADE. THE PROVISO, HOWEV ER, PROVIDES THAT IN COMPUTING THE PERIOD OF SIX MONTHS, ANY TIM E TAKEN BY THE ASSESSEE IN NOT COMPLYING WITH THE DIRECTIONS OF TH E COMMISSIONER UNDER SUB-RULE (3), SHALL BE EXCLUDED. 5.3. ITAT AMRITSAR BENCH IN THE CASE OF S. LAKHA SI NGH BAHRA CHARITABLE TRUST VS. CIT (SUPRA) HELD CIT HAS TO PASS AN ORDER EITHER GRANTING THE APPRO VAL OR REJECTING APPLICATION WITHIN SIX MONTHS FROM THE DA TE ON WHICH SUCH APPLICATION FOR EXEMPTION IS MADE; REJECTION OF APP LICATION BEYOND SIX MONTHS MAKES THE ASSESSEE LEGITIMATELY ENTITLED FOR APPROVAL. 5.4 ITAT, DELHI BENCH IN THE CASE OF MAHARISHI DAYA NAND EDUCATION SOCIETY VS. CIT(SUPRA), FOLLOWING ITS EAR LIER DECISION, HELD THAT DURING THE SUBSISTENCE OF REGISTRATION U/S. 12 A, THE RENEWAL OF THE ASSESSEE U/S. 80G COULD NOT BE DENIED ON THE GROUND THAT THE ASSESSEE DOES NOT CARRY OUT CHARITABLE ACTIVITY. IT WAS, THE REFORE, HELD THAT RENEWAL OF APPROVAL U/S. 80G HAS WRONGLY BEEN REFUS ED TO THE ASSESSEE. THE CIT WAS DIRECTED TO GRANT THE SAME TO THE ASSESSEE. 5.5 ITAT DELHI BENCH IN THE CASE OF GAUR BRAHMIN VI DYA PRACHARINI SABHA VS. CIT (SUPRA) HELD ASSESSEE SOCIETY FORMED FOR THE PURPOSE OF ESTABLI SHING EDUCATIONAL INSTITUTION, NOT FOR ANY PARTICULAR REL IGION, COMMUNITY OR CAST HAVING BEEN GRANTED REGISTRATION UNDER S. 12AA AND ALL THE CONDITIONS LAID DOWN IN CLS. (I) TO (V) OF SUB-S. ( 5) OF S. 80G HAVING BEEN FULFILLED, ASSESSEE SOCIETY IS ELIGIBLE FOR RE GISTRATION UNDER S. 80G(5)(VI), NOTWITHSTANDING THE FACT THAT IT IS CHA RGING FEES FOR EDUCATION. 5.6 THE LD. COUNSEL FOR THE ASSESSEE FILED THE COPY OF ORDER SHEET DATED 08.07.2010 (PB-47 TO 49), WHICH IS PASSED BY THE ITO (TECH.). THE LD. DR ALSO PRODUCED THE RECORD WHICH CONFIRMS THAT THE ITO (TECH.) RECORDED THE ORDER SHEET ON 08.07.2010, IN WHICH THE SAME ITA NO. 445/AGRA/2012 9 FACTS HAVE BEEN NOTED AS NOTED IN THE IMPUGNED ORDE R AS HAVE BEEN MENTIONED BY THE ITO (TECH.). THE ITO (TECH.) AFTER NOTING THE SAME FACTS, AS HAVE BEEN OBSERVED IN THE IMPUGNED ORDER, RECOMMENDED THAT CONTINUATION OF APPROVAL U/S. 80G(5)(VI) WOULD NOT SERVE ANY PURPOSE AND APPLICATION FOR APPROVAL IS LIABLE TO B E REJECTED. IT IS ALSO NOTED BY THE ITO (TECH.) THAT DRAFT ORDER IS PUT UP FOR CONSIDERATION AND APPROVAL BY THE CIT. IN FURTHER PARA, ITO (TECH .) NOTED, IF YOUR HONOUR MAY APPROVE, A LETTER MAY ALSO BE WRITTEN TO ADDL. CIT, FARRUKHABAD FOR TAKING REMEDIAL ACTION IN A.Y. 2007 -08 & 2009-10 AS PER FACTS SATED IN PARAS 2 & 4. THE ABOVE NOTE/ORDER SHEET DATED 08.07.2010 OF ITO (TECH.) WAS PUT UP BEFORE THE LD. CIT, ALIGARH FOR HIS APPROVAL ON ITEM (A) AND ITEM (B) AND THE LD. C IT ALIGARH, SHRI VIRENDRA SINGH OBSERVED AS UNDER : A & B ABOVE ARE APPROVED. LETTER TO RANGE HEAD MAY BE PUT UP. THIS WAS SIGNED BY CIT, ALIGARH ON 22.07.2010, WHIC H CLEARLY PROVES THE CONTENTION OF THE ASSESSEE THAT ALL ENQUIRIES H AVE BEEN CONDUCTED BY THE ITO (TECH.) AT THE BACK OF THE CIT, ALIGARH AND EVEN THE DRAFT ORDER WAS PUT UP BY ITO (TECH.), WHICH IS ONLY APPR OVED BY THE LD. CIT, ALIGARH. THE LD. DR PRODUCED THE ORDER SHEET O F 18.02.2010, IN WHICH THE CIT, ALIGARH DIRECTED ENQUIRY TO BE CONDU CTED BY THE ADDL. CIT, WHICH IS ALSO REFERRED IN THE IMPUGNED ORDER, BUT IT WAS NOT EXPLAINED AS TO WHICH OF THE CIT HAS SIGNED THIS OR DER SHEET. THE LD. COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK FILED TH E PROFILES OF SHRI A.K. JAIN, SHRI VIRENDRA SINGH, CITS, IN WHICH IT I S MADE CLEAR THAT SHRI A.K. JAIN, CIT, ALIGARH REMAINED POSTED AT ALI GARH FROM 22.06.06 TO 28.01.2010 AND SHRI VIRENDRA SINGH, CIT REMAINED POSTED AS CIT, ALIGARH FROM 22.07.2010 TILL DATE. IN BETWE EN SHRI SURENDRAJIT SINGH, WAS HOLDING THE CHARGE OF CIT, ALIGARH DURIN G THE PERIOD 10.07.2010 TO 18.07.2010 AND NO SUCH INFORMATION WA S MAINTAINED BY THE DEPARTMENT WHETHER HE WAS PHYSICALLY PRESENT AT THE OFFICE OF CIT, ALIGARH. IN VIEW OF THE ABOVE FACTS, THE LD. DR WAS DIRECTED TO PRODUCE THE JURISDICTIONAL ORDER OF THE CIT, ALIGAR H. DESPITE GIVING SUFFICIENT TIME, NO JURISDICTIONAL ORDER OF CIT, AL IGARH DEALING WITH THE ABOVE MATTER WAS PRODUCED. THE LD. DR FILED COP IES OF SEVERAL LETTERS WHICH WERE WRITTEN BY HIM TO THE DEPARTMENT FOR DOING THE NEEDFUL AND JURISDICTION ORDER OF CIT, ALIGARH BETW EEN 19.01.2010 TO 27.07.2010, BUT NOTHING WAS PRODUCED IN THIS REGARD . THESE FACTS WOULD CLEARLY PROVE THAT THE ORDER SHEET WRITTEN BY ITO (TECH.) ON 08.07.2010 WAS NOT APPROVED BY SHRI A.K. JAIN, FORM ER CIT OR SHRI ITA NO. 445/AGRA/2012 10 SURENDRAJIT SINGH, OFFICIATING CIT, ALIGARH. SHRI V IRENDRA SINGH, CIT, ALIGARH WHO PASSED THE ORDER ON 27.07.2010 WAS POST ED AS CIT, ALIGARH ONLY ON 22.07.2010. THUS, THERE WAS NO REAS ON TO BELIEVE THAT ANY OF THE COMMISSIONERS, ABOVE, HAVE CALLED FOR AN Y DOCUMENTS OR INFORMATION FROM THE ASSESSEE INSTITUTION IN ORDER TO SATISFY THEMSELVES ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSE SSEE INSTITUTION OR THE FUNDS. THE IMPUGNED ORDER IS PASSED BY CIT, ALIGARH WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE IMPUGNED ORDER WAS ALSO PASSED BEYOND THE PERIOD OF 6 MONTHS FROM THE DATE OF FILING OF APPLICATION. SINCE NO ENQUIRIES HAVE BEEN CONDUC TED BY ANY OF THE CIT IN THE MATTER, THERE IS NO QUESTION OF NOT COMP LYING WITH THE DIRECTIONS OF COMMISSIONER UNDER SUB-RULE (3) OF RU LE 11AA SO AS TO EXCLUDE THE PERIOD DURING WHICH DIRECTIONS OF THE C OMMISSIONER WERE NOT COMPLIED WITH. THUS, NO DELAY CAN BE ATTRIBUTED TO THE ASSESSEE FOR NOT COMPLYING WITH THE DIRECTIONS OF THE LD. CIT IN THE MATTER. THESE FACTS WOULD CLEARLY PROVE THAT ENQUIRIES WERE DONE BY THE ITO (TECH.) WITHOUT ANY AUTHORITY OF LAW. EVEN IF, THE COMMISSI ONER MAY DIRECT THE ITO (TECH.) TO MAKE ENQUIRIES IN THE MATTER, BU T SUCH ENQUIRY REPORT SHALL HAVE TO BE CONFRONTED TO THE ASSESSEE AND ONLY THE COMMISSIONER WOULD CALL FOR THE DOCUMENTS FROM THE ASSESSEE IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF T HE ACTIVITIES OF THE ASSESSEE INSTITUTION OR FUNDS. THE POWERS OF THE LD . CIT ACCORDING TO RULE 11AA OF THE IT RULES TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE AND GIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE INSTITUTION, CANNOT BE DELEGATED TO TH E ITO (TECH.). SINCE THERE IS NO ORDER SHEET ENTRY RECORDED BY THE LD. C IT PRIOR TO 22.07.2010, IN WHICH ALSO, THE LD. CIT ONLY APPROVE D THE DRAFT ORDER OF THE ITO (TECH.), WOULD CLEARLY SUGGEST THAT THE IMP UGNED ORDER IS PASSED IN MOST MECHANICAL MANNER WITHOUT COMPLYING WITH THE PROVISIONS OF LAW. THE LD. CIT HOLDS THE OFFICE OF QUASI JUDICIAL AUTHORITY WHILE DEALING WITH SUCH MATTERS. THEREFOR E, SUCH A CASUAL APPROACH IN THE MATTER IS NOT APPRECIATED. EVEN ON MERITS, THE ASSESSEE HAS BEEN ABLE TO EXPLAIN EACH AND EVERY ISSUE DURIN G THE COURSE OF ARGUMENTS TO SHOW THAT THERE IS NO SUDDEN JUMP IN T HE DONATION AND THAT NONE OF THE PROVISIONS OF SECTION 11 HAVE BEEN VIOLATED WHICH ARE ALSO SUBJECT MATER OF REGULAR ASSESSMENT. SINCE THE OBSERVATION IN THE IMPUGNED ORDER ARE VERBATIM OF THE ORDER SHEET OF I TO (TECH.) AS PER ORDER SHEET DATED 08.07.2010, THEREFORE, THE FINDIN G OF ITO (TECH.) HAVE NO VALUE UNDER THE EYES OF LAW BECAUSE NO ENQU IRY OR PROCEEDINGS HAVE BEEN CONDUCTED BY CIT, ALIGARH. ITA NO. 445/AGRA/2012 11 6. CONSIDERING THE ABOVE DISCUSSION, THE IMPUGNED O RDER DATED 27.07.2010 CANNOT BE SUSTAINED IN LAW AND ACCORDING LY, WE HOLD (I). THAT THE CIT, ALIGARH HAS NOT CONDUCTED ANY EN QUIRY INTO THE MATTER IN ORDER TO SATISFY HIMSELF ABOUT THE GENUIN ENESS OF THE ACTIVITIES OF THE ASSESSEE INSTITUTION OR FUND; (II). THAT THE IMPUGNED ORDER IS PASSED BY THE LD. CIT WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE A ND IN MOST MECHANICAL MANNER, MERELY RELYING UPON THE ORDER SH EET DATED 08.07.2010 RECORDED BY ITO (TECH.); (III). THAT THE IMPUGNED ORDER IS PASSED BEYOND THE PERIOD OF 6 MONTHS FROM THE DATE OF FILING OF APPLICATION AND, THEREFORE, PROVISIONS OF RULE 11AA(6) OF THE IT RULES HAVE BEEN VIOLATED. NOTHING COULD BE ATTRIBUTED TO THE ASSESSEE FOR TAKING TIME IN NO T COMPLYING WITH THE DIRECTIONS OF THE LD. CIT BECAUSE THE LD. CIT NEVER ISSUED ANY DIRECTION AS PER ABOVE FINDINGS. THEREFORE, THE ASS ESSEE IS ENTITLED FOR GRANT OF RENEWAL OF APPROVAL U/S. 80G(5) OF THE IT ACT; (IV). THAT THE REASONS GIVEN BY ITO (TECH.) FOR REF USAL TO RENEW THE APPROVAL U/S. 80G(5)(VI) ARE NOT VALID IN THE EYES OF LAW AND SINCE THE ASSESSEE ENJOYED REGISTRATION U/S. 12AA OF THE IT A CT CONTINUOUSLY AND ALSO COMPLIED WITH THE PROVISIONS OF SECTION 80 G(5), THEREFORE, RENEWAL OF APPROVAL SHOULD NOT HAVE BEEN REJECTED. 7. IN VIEW OF THE ABOVE DISCUSSION AND FINDINGS, WE SET ASIDE THE ORDER OF THE LD. CIT, ALIGARH DATED 27.07.2010 AND DIRECT HIM TO GRANT RENEWAL OF APPROVAL U/S. 80G(5)(VI) OF THE IT ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 4.2 CONSIDERING THE ABOVE PROVISIONS, IT IS CLEAR T HAT EDUCATIONAL ACTIVITIES ARE PER SE CHARITABLE ACTIVITIES. THEREFORE, THE ASSESS EE HAS RIGHTLY APPLIED FOR GRANT OF REGISTRATION U/S. 12A/12AA OF THE IT ACT FOR CLAIMI NG INCOME OF THE ASSESSEE TO BE ITA NO. 445/AGRA/2012 12 EXEMPT U/S. 11 AND 12 OF THE IT ACT. IT IS FOR THE COMMISSIONER TO HAVE CONDUCTED THE ENQUIRY INTO THE MATTER IN ORDER TO SATISFY HIM SELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE INSTITUTION OR FUND. THE ASSESSEE FILED APPLICATION FOR REGISTRATION ON 10.01.2012 AND COPY OF THE ORDER SH EET IS FILED AT PAGE 24 OF THE PAPER BOOK IN WHICH THE MATTER WAS FORWARDED TO THE JCIT, RANGE-5, FIROZABAD WITH THE REQUEST TO SEND THE REPORT OF AO ALONG WIT H HIS COMMENTS. THEREAFTER, PROCEEDINGS WERE CONDUCTED BY THE ITO (TECH.) AND N O PROCEEDINGS HAVE BEEN CONDUCTED BY THE LD. CIT-II, AGRA. ITO-5(1), FIROZ ABAD THROUGH ADDL. COMMISSIONER OF INCOME-TAX, RANGE-5, FIROZABAD VIDE THEIR RECOMMENDATION DATED 28.03.2012 (PB-21 TO 23) RECOMMENDED TO THE C OMMISSIONER FOR GRANT OF REGISTRATION U/S. 12AA OF THE IT ACT. THE ITO STATE D IN HIS RECOMMENDATION THAT THE ASSESSEE SOCIETY IS ENGAGED IN THE CHARITABLE O BJECTS AND PROVIDING EDUCATION AS PER ITS MEMORANDUM AND BY-LAWS. ALL THE BOOKS OF AC COUNT AND RECORDS ARE MAINTAINED. ACTIVITIES OF THE ASSESSEE ARE CHARITAB LE AND FULFILLED THE CONDITIONS OF REGISTRATION U/S. 12A OF THE IT ACT AND THEREFORE, THE REGISTRATION U/S. 12AA WAS RECOMMENDED. UTILIZATION OF INCOME AND SURPLUS WAS ALSO CONSIDERED BY THE ITO BEFORE RECOMMENDATION OF REGISTRATION U/S. 12AA OF THE IT ACT. THE ORDER SHEET OF THE LD. COMMISSIONER REVEALS THAT DESPITE RECOMMEND ATION WAS MADE BY THE AO, NONE OF THE PROCEEDINGS WERE CONDUCTED BY THE COMMI SSIONER HIMSELF AND ON 26.07.2012 DRAFT ORDER WAS PUT UP BEFORE HIM FOR CO NSIDERATION AND SIGNATURE. ON ITA NO. 445/AGRA/2012 13 THE SAME DAY ON 26.07.2012, THE COMMISSIONER AGREED WITH THE DRAFT ORDER AND REJECTED THE APPLICATION OF REGISTRATION WITHOUT GI VING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IN THE PAPER BO OK ALSO FILED RTI INFORMATION RECEIVED FROM CIT-II, AGRA (PB-3), IN WHICH IT HAS BEEN INFORMED THAT THE COMMISSIONER-II, AGRA SHRI B.P.S. BISHT (WHO PASSED THE IMPUGNED ORDER) WAS NOT PRESENT IN THE OFFICE AT AGRA ON 17.07.2012, 23.07. 2012, 25.07.2012 AND 26.07.2012. IT WAS FURTHER REPORTED THAT CIT-II AGR A SHRI B.P.S. BISHT HAS NOT GIVEN ANY PERSONAL HEARING TO THE ASSESSEE. THE ABO VE FACTS WOULD CLEARLY REVEAL THAT THE COMMISSIONER DID NOT GRANT ANY HEARING TO THE ASSESSEE AND MERELY AGREED WITH THE DRAFT ORDER OF ITO (TECH.) WHICH IS AGAINS T THE PROVISION OF LAW AND THE ACTION OF THE COMMISSIONER WAS WHOLLY UNJUSTIFIED. ON THE OTHER HAND, THE ASSESSEE HAS PRODUCED SPECIFIC EVIDENCES AND MATERI AL ON RECORD TO PROVE THAT THE ASSESSEE IS ENGAGED IN GENUINE EDUCATIONAL ACTIVITI ES AND THE REPORT FROM CONCERNED AO THROUGH ADDITIONAL COMMISSIONER WAS CALLED FOR A ND THEY HAVE RECOMMENDED FOR GRANT OF REGISTRATION TO THE ASSESSEE. THERE WA S NO MATERIAL BEFORE THE LD. COMMISSIONER TO REJECT THE APPLICATION OF THE ASSES SEE FOR REGISTRATION OR HOLDING THAT THE ASSESSEE WAS DOING COMMERCIAL ACTIVITIES. THE LD. CIT HIMSELF DID NOT CONDUCT ANY ENQUIRY OR PROCEEDING IN THE MATTER AND HAS NOT GIVEN ANY REASONS WHY HE DIFFERED FROM THE RECOMMENDATION MADE BY THE CONCERNED AO TO WHOM HE HIMSELF FORWARDED THE MATTER FOR THEIR COMMENTS. FU RTHER, THE COPIES OF AUDIT ITA NO. 445/AGRA/2012 14 REPORTS AND INCOME AND EXPENDITURE ACCOUNT FOR LAST THREE YEARS FILED IN THE PAPER BOOK CLEARLY SUPPORT THE REPORT OF THE ITO, FIROZAB AD WHO HAS RECOMMENDED FOR GRANT OF REGISTRATION IN FAVOUR OF THE ASSESSEE. TH E AUDIT REPORT CLEARLY REVEALS THAT SUBSTANTIAL AMOUNTS HAVE BEEN SPENT FOR CONDUCTING EDUCATIONAL ACTIVITIES AND WHATEVER SURPLUS WAS LEFT WAS LESS THAN 15% OF THE TOTAL INCOME AND WAS INVESTED IN CAPITAL ASSETS FOR CHARITABLE PURPOSE. THE ASSES SEE ALSO IN THE PAPER BOOK FILED THE DETAILS OF SCHOLARSHIP GIVEN TO THE POOR STUDEN TS AND SALARY PAID TO THE TEACHERS. VARIOUS CERTIFICATES BY OTHER INSTITUTIONS IN FAVOU R OF THE STUDENTS OF THE ASSESSEE AND PAPER CUTTINGS FILED IN THE PAPER BOOK SHOW THA T THE ASSESSEE GENUINELY ENTERED INTO THE EDUCATIONAL ACTIVITIES. THE EVIDENCES AND MATERIAL CLEARLY PROVE THAT THE ASSESSEE GENUINELY ENTERED INTO THE EDUCATIONAL ACT IVITIES AS PER THEIR OBJECTS AND INCOME IS SPENT FOR ACHIEVING THE OBJECTS OF THE AS SESSEE INSTITUTION. THUS, THE ASSESSEE PROVED THAT IT HAS ENTERED INTO GENUINE AC TIVITIES OF EDUCATION AS PER ITS OBJECTS. THE CONCERNED AO THROUGH ADDITIONAL COMMIS SIONER REPORTED TO THE CIT ABOUT THE GENUINE EDUCATIONAL ACTIVITIES CONDUCTED BY THE ASSESSEE. THEREFORE, IF THE LD. COMMISSIONER WANTED TO DIFFER WITH THE REPO RT OF THE SUBORDINATE OFFICERS, HE SHOULD HAVE BROUGHT SOME MATERIAL ON RECORD AGAI NST THE ASSESSEE AND SHOULD HAVE GIVEN OPPORTUNITY OF BEING HEARD TO THE ASSESS EE BEFORE TAKING CONTRARY VIEW IN THE MATTER. THE LD. CIT INSTEAD OF DOING ANYTHIN G IN LAWFUL MANNER IN THE MATTER HAS MERELY AGREED WITH THE DRAFT ORDER OF ITO (TECH .) DESPITE HE HIMSELF WAS NOT ITA NO. 445/AGRA/2012 15 PRESENT ON THE DATE OF PASSING THE ORDER IN HIS OFF ICE AT AGRA. THEREFORE, THE IMPUGNED ORDER CANNOT BE SUSTAINED IN LAW. CONSIDER ING THE ABOVE DISCUSSION, IN THE LIGHT OF ORDER OF ITAT IN CASE OF SHIKSHA SANKA LP SOCIETY VS. CIT(SUPRA) WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED FOR R EGISTRATION U/S. 12AA OF THE IT ACT. WE ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER AND DI RECT THE CIT-II, AGRA TO GRANT REGISTRATION TO THE ASSESSEE AS PER LAW, FROM FINAN CIAL YEAR IN WHICH THE APPLICATION HAS BEEN MADE WITHIN ONE MONTH FROM THE DATE OF THE ORDER. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY