Ashwini Sahakari Rugnalaya & Research Centre, Solapur V. Assistant Commissioner of Income-tax,

ITA 455/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7019 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-11-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Keywords: Charitable institution; Principle of natural justice; Benefit of exemption
• Section: 143(3); 80G; 12A; 12AA; 12; 10; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVE DI, AM . / ITA NOS.450, 452, 453 & 455/PUN/2014 / ASSESSMENT YEARS : 2004-05, 2006-07, 2007-08 & 2 009-10 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE, PLOT NO.108, NORTH SADAR BAZAR, SOLAPUR 413 003 PAN : AAAJA0041K . /APPELLANT VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, SOLAPUR . / RESPONDENT . / ITA NO.451/PUN/2014 / ASSESSMENT YEAR : 2005-06 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE, PLOT NO.108, NORTH SADAR BAZAR, SOLAPUR 413 003 PAN : AAAJA0041K . /APPELLANT VS. INCOME TAX OFFICER, WARD-1(2), SOLAPUR . / RESPONDENT . / ITA NO.454/PUN/2014 / ASSESSMENT YEAR : 2008-09 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE, PLOT NO.108, NORTH SADAR BAZAR, SOLAPUR 413 003 PAN : AAAJA0041K . /APPELLANT VS. DY. COMMISSIONER OF TAX OFFICER, CIRCLE-1, SOLAPUR . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : MS. NIRUPAMA KOTRU, CIT-DR / DATE OF HEARING : 28.11.2017 / DATE OF PRONOUNCEMENT: 30 .11.2017 ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 2 / ORDER PER SUSHMA CHOWLA, JM: THE BUNCH OF APPEALS FILED BY THE ASSESSEE ARE AGAI NST THE COMMON ORDER OF CIT(A)-III, PUNE, DATED 19-12-2013 RELATING TO A SSESSMENT YEARS 2004-05 TO 2009-10 AGAINST RESPECTIVE ORDERS PASSED BY ASSESSI NG OFFICER UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE A CT). 2. THIS BUNCH OF APPEALS FILED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 3. IDENTICAL GROUNDS WERE RAISED BY THE ASSESSEE IN ALL THESE APPEALS. THEREFORE, FOR THE SAKE OF REFERENCE TO FACTS AND I SSUES, WE REFER TO FACTS IN ITA NO.451/PUN/2014 RELATING TO ASSESSMENT YEAR 2005-06 . 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE CIT (APPEALS) ERRED ON FACTS AND IN LA W IN UPHOLDING THE ACTION OF THE A. O. IN DENYING EXEMPTION OF INCOME U/S. 11 AND 12 OF THE INCOME TAX ACT ('THE ACT'), ON THE GROUND THAT THE APPELLANT IS NO T REGISTERED AS CHARITABLE INSTITUTION UNDER THE BOMBAY PUBLIC TRUST ACT; THAT THE APPELLANT IS NOT A TRUST WHICH INCLUDES ANY OTHER LEGAL OBLIGATION TO APPLY THE INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WITHIN THE MEANING OF EXPLANATION 1 TO SECTION 13 OF THE ACT AND THAT THE APPELLANT'S ACTIVITIES ARE NOT CHARITABLE IN NATURE. 2. THAT THE CIT (APPEALS) FAILED TO APPRECIATE THE FUNDAMENTAL PREMISE THAT THE ASSESSMENT OF REGISTERED CHARITABLE ORGANIZATIO N U/S. 12AA HAS TO BE DONE BY APPLYING THE PROVISIONS OF SECTION 11 TO 13 AND THE AO HAS NO POWER TO WITHDRAW THE CHARITABLE STATUS AND GO BEYOND THE SCOPE OF SE CTIONS 11 TO 13 DURING ASSESSMENT UNDER SECTION 143 (3) OF THE ACT AND MOR EOVER IT WAS NEVER BEEN THE CONTENTION OF THE APPELLANT THAT THE EXEMPTION OF I NCOME U/S. 11 TO 13 IS AUTOMATIC ON REGISTRATION GRANTED U/S. 12AA. 3. THAT THE CIT (APPEALS) ERRED ON FACTS AND IN LAW IN FAILING TO APPRECIATE THAT THE ACTIVITIES BEING CARRIED OUT BY THE APPELLANT A RE IN FURTHERANCE OF ITS MAIN OBJECTIVE OF PROVIDING 'MEDICAL RELIEF' WITHIN THE MEANING OF SECTION 2(15) OF THE ACT FOR WHICH THE APPELLANT HAS BEEN SET UP AND ARE NOT COMMERCIAL IN NATURE AND THEREBY FAILED TO UNDERSTAND THE PREDOMINANT OBJECT OF THE INSTITUTION IN THE LIGHT OF DICTUM IN THE CASE OF ADDL. CIT V. SURAT ART SILK C LOTH MANUFACTURES ASSOCIATION (1980) 121 ITR 1. 4. THAT THE CIT (APPEALS) ERRED ON FACTS AND IN LAW IN FAILING TO APPRECIATE THE REVENUE AUTHORITIES HAD CONSISTENTLY ACCEPTED THAT THE APPELLANT HOSPITAL EXISTED 'SOLELY FOR PHILANTHROPIC PURPOSES AND NOT FOR PURP OSES OF PROFIT' AND ACCORDINGLY ENJOYED THE EXEMPTION OF INCOME UNDER SECTION 10 (2 2A) OF THE ACT (NOW REPLACED BY 10 (23C) (VIA) WHICH IS SIMILARLY WORDED WITH MO NITORING MECHANISM) AND NONE OF THESE ASSESSMENTS WERE RE-OPENED. SIMILARLY SHE FURTHER ERRED IN NOT ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 3 APPRECIATING THE FACT THAT APPELLANT SOCIETY WAS GR ANTED RECOGNITION U/S 80G ON THE STRENGTH OF OMITTED PROVISION OF SECTION 10(22A) OF THE ACT. 5. THAT THE CIT (APPEALS) ERRED IN APPRECIATING THE FACTS WHICH WERE ELABORATED BEFORE HER, WHICH SUPPORT THAT THE ACTIV ITIES OF THE APPELLANT ARE CHARITABLE AND NON- PROFIT MOTIVE. 6. THAT THE CIT (APPEALS) ERRED ON FACTS AND IN LAW IN HOLDING THE VIEW THAT' THERE IS NOTHING PROHIBITS THE APPELLANT SOCIETY FR OM DISTRIBUTING FUND OUT OF IT'S NET PROFITS AS PER EXISTING PROVISIONS IN THE BYE-LAWS OF THE SOCIETY, TO IT'S MEMBERS' IS CONTRARY TO THE PROVISIONS OF BYE-LAWS READ WITH CO -OPERATIVE SOCIETIES ACT AND FAILED TO APPRECIATE THAT THERE WAS NO DISTRIBUTION OF SURPLUS, IN ANY FORM, AMONGST THE MEMBERS SINCE ESTABLISHMENT OF THE APPELLANT'S INSTITUTION. 7. THE CIT (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT HONORABLE ITAT PUNE, HAS GRANTED THE REGISTRATION AND SUCH ACT OF GRANTING THE REGISTRATION IS FINAL AND ASSESSING OFFICER HAS TO SIMPLY ACCEPT THAT AND NOT TO LOOK INTO THE FACT THAT IT WAS DEEMED REGISTRATION SPECIALLY IN LIGHT OF THE F ACT THAT JURISDICTIONAL CIT HAS GOT THE POWER TO CANCEL THE REGISTRATION U/S 12AA(3) OF THE ACT FOR THE DEFAULT SPECIFIED. 8. THE CIT (APPEALS) ERRED IN UPHOLDING THE LEARNED ASSESSING OFFICER'S VIEW THAT THE MEMBER-DOCTORS ARE PAID SIZABLE PORTION OF GROSS RECEIPTS AND ACCORDINGLY OF ULTIMATE FINDING THAT PROFIT WAS HIVED AWAY BY M EMBER-DOCTORS. SUCH FINDING IS DEVOID OF ANY MERIT AND IS NOT SUPPORTED BY ANY REA SON WHAT SO EVER. 9. THE CIT (A) FAILED TO APPRECIATE THE PROPOSITION THAT RATES CHARGED BY THE APPELLANT SOCIETY CANNOT BE A GUIDING FACTOR IN DEC IDING WHETHER THE TRUST/INSTITUTION CARRY CHARITABLE ACTIVITIES. AND FURTHER ERRED IN CARRYING OUT THE COMPARATIVE ANALYSIS OF LIMITED NUMBER OF CASES WIT HOUT UNDERSTANDING TECHNICALITIES INVOLVED IN THE ISSUE. 10. THE CIT (A) ERRED ON FACTS BY UPHOLDING THE ALL EGED VIEW OF LEARNED ASSESSING OFFICER THAT THE CONCESSION GIVEN TO THE PATIENTS IS IN THE NATURE OF NORMAL TRADE OR BUSINESS OR PROFESSION IN ORDER TO PROMOTE BUSINESS OR TRADE AND NOT ON ACCOUNT OF ANY CHARITABLE INTENTION OF PROVI DING MEDICAL RELIEF. SPECIALLY BY FURTHER IGNORING THAT APPELLANT SOCIETY HAS FURNISH ED ENTIRE DETAILS WITH PERCENTAGE OF TOTAL CONCESSION, BILLS RAISED IN THIS REGARD ET C. 11. THAT THE CIT (APPEALS) OUGHT TO HAVE CONSIDERED THAT IN ORDER TO KEEP PACE WITH UP-GRADATION OF LATEST TECHNOLOGY IN FURT HERANCE OF BETTER MEDICAL FACILITIES AND FOR COVERAGE OF TREATING SIGNIFICANT NUMBER OF PATIENTS WITH SPEED AND ACCURACY, THE APPELLANT HOSPITAL BOUND TO SPEND HUG E FUNDS FOR INVESTMENT IN DEVELOPMENT AND EXPANSION OF HOSPITAL AND BEING THE SURPLUS WAS UTTERLY INADEQUATE, THE APPELLANT WAS HEAVILY RELIED ON BAN K BORROWINGS. 12. THAT THE CIT (APPEALS)TOTALLY MISCONSTRUED, BOT H ON PRINCIPLES AND JUDICIAL PRECEDENCE, WITH THE METHOD OF COMPUTATION OF SURPL US BASED ON 'COMMERCIAL PRINCIPLE' BY STATING THAT 'SURPLUS WOULD BE MUCH H IGHER IF WE TAKE INTO CONSIDERATION THAT SUBSTANTIAL EXPENSES HAVE BEEN I NCURRED BY WAY OF CAPITAL INVESTMENTS (BY OWN CONTRIBUTION), BORROWING FOR MA KING CAPITAL INVESTMENTS AND INTEREST COMPONENT THAT HAS BEEN PAID THEREON' AND MISCONCEIVED WITH THE MEANING OF 'OWN CONTRIBUTION' WHICH IS OUT OF SURPL US AND NOT OVER AND ABOVE THE SURPLUS. 13.THAT THE CIT (APPEALS) IS NOT JUSTIFIED IN HOLDI NG THE VIEW BASED ON FILING OF AUDIT REPORT IN FORM NO. 3CA AND 3CD (FILED ALONG W ITH FORM NO. 10B) THAT THE APPELLANT WAS NOT INTENDING TO CARRY OUT ANY CHARIT ABLE OR PHILANTHROPIC ACTIVITIES. ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 4 14.THAT THE CIT (APPEALS) IS NOT CORRECT IN CONFIRM ING ACTION OF THE A.O. IN DENYING EXEMPTION OF INCOME U/S 10(23C)(VIA) OF THE ACT WHE N THE MATTER IS SUBJUDICE AND ADMITTED SLP OF THE APPELLANT IS PENDING FOR FINAL HEARING BEFORE THE HON'BLE SUPREME COURT AND FURTHER FAILED TO NOTE THAT THE J UDGMENT OF KERALA HIGH COURT IN THE CASE OF CIT V. PULIKKAL MEDICAL FOUNDATION PVT. LTD (1994) 210 ITR 299 (KER.) IS APPROVED BY THE APEX COURT BY DISMISSING SLP OF THE REVENUE IN THE SAME CASE. 15. THAT THE INCOME OF THE APPELLANT WAS COVERED BY SECTION 11 AND 12 OF THE ACT AND THEREFORE, SECTION 40(A)(IA) OF THE ACT HAD NO APPLICATION, THE CIT(A) ERRED IN AFFIRMING THE DISALLOWANCE OF RS.29,77,142/- BEI NG PAYMENTS MADE TO CONSULTANTS AND CONTRACTORS BASED MERELY ON TAX AUD IT REPORT IN FORM NO. 3CD BY DISREGARDING CBDT'S CIRCULAR NO.14(XL-35) DATED 11/ 04/1955. THE APPELLANT CRAVES FOR TO LEAVE, TO ADD, TO ALTER , TO MODIFY, TO DELETE, ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME HEARING, IN THE INTEREST OF NATURAL JUSTICE. 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS RUNNING A HOSPITAL. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FUR NISHED RETURN OF INCOME AT NIL AFTER CLAIMING THE EXEMPTION UNDER SECTION 10(23C)( VIA) OF THE ACT AT RS.33,11,935/-. THE ASSESSEE HAD ENCLOSED A NOTE ALONG WITH THE RETURN OF INCOME THAT THE APPLICATION FILED FOR APPROVAL UNDE R SECTION 10(23C)(VIA) OF THE ACT TO THE CCIT, PUNE FOR THE PERIOD FROM ASSESSMENT YE ARS 1999-2000 TO 2001-02 WAS REJECTED BY HIM. THE ASSESSEE POINTED OUT THAT A WRIT PETITION WAS FILED AGAINST THE SAID ORDER BEFORE THE HONBLE HIGH COUR T AND THE SAME WAS PENDING FOR DISPOSAL. THE ASSESSEE ALSO CLAIMED TO HAVE FI LED AN APPLICATION FOR REGISTRATION OF THE INSTITUTION UNDER SECTION 12A O F THE ACT ON 13-05-2003 IN THE OFFICE OF THE CIT-IV, PUNE AND NO ORDER WAS PASSED BY HIM WITHIN THE TIME ALLOWED UNDER SECTION 12AA OF THE ACT. THE ASSESSEE THUS D ECLARED THAT IT IS DEEMED THAT THE HOSPITAL WAS GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT AND THE HOSPITAL WAS ELIGIBLE TO CLAIM ALTERNATE EXEMPTION TO ITS IN COME UNDER SECTION 11 OF THE ACT. 6. THE ASSESSING OFFICER TOOK UP THE CASE FOR SCRUT INY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE WRIT PETITION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CCIT, PUNE HA S BEEN REJECTED BY THE HONBLE BOMBAY HIGH COURT VIDE ITS JUDGMENT DATED 0 5-12-2005 IN WRIT PETITION ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 5 NO. 6530/2005. THE ASSESSEES APPLICATION FOR REGI STRATION OF THE HOSPITAL UNDER SECTION 12A FILED ON 13-05-2003 WAS DISPOSED OF BY THE CIT-IV, PUNE VIDE ORDER DATED 25-07-2006 REJECTING THE CLAIM OF REGISTRATIO N OF THE ASSESSEE. THE ASSESSING OFFICER FURTHER NOTED THAT THE TRIBUNAL H AS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE REJECTION OF REGISTRATION WAS BEY OND THE TIME ALLOWED UNDER SECTION 12A OF THE ACT AND DEEMED REGISTRATION SHOU LD BE TREATED AS GRANTED TO THE HOSPITAL. THE ASSESSING OFFICER NOTED THAT THE ASS ESSEE WAS A COOPERATIVE SOCIETY WHICH WAS REGISTERED UNDER THE MAHARASHTRA COOPERATIVE SOCIETIES ACT, 1960 VIDE REGISTRATION DATED 23-02-1983. THE ASSES SEE CLAIMS TO HAVE STARTED INDOOR FACILITIES IN 1988 WITH 30 BED HOSPITAL AND BY 2003 IT HAD EXPANDED TO 217 BEDS WITH ALL THE DIAGNOSTIC, SURGICAL, PATHOLOGICA L, REHABILITATION AND OTHER MEDICAL FACILITIES. THE COOPERATIVE SOCIETY HAD 2822 INDIV IDUAL MEMBERS IN 2004-05 ITSELF OUT OF WHICH 185 MEMBERS WERE DOCTORS. THE ASSESSI NG OFFICER NOTED THAT THE COOPERATIVE SOCIETY WAS NOT REGISTERED AS A CHARITA BLE INSTITUTION UNDER THE BOMBAY PUBLIC TRUST ACT. HE FURTHER NOTED THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE SOCIETY HAD CLAIMED ITS INCOME AS EXEM PT UNDER SECTION 10(23C)(VIA) OF THE ACT. HE FURTHER NOTED THAT THE ASSESSEE SOCIETY WAS A TAXABLE ENTITY BEING A COOPERATIVE SOCIETY WHOSE INCOME WAS NOT LIABLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT SINCE THE ACTIVITIES W ERE NOT COVERED UNDER SECTION 80P(2) OF THE ACT. 7. ANOTHER ASPECT WHICH WAS NOTED BY THE ASSESSING OFFICER WAS THAT AS PER THE BYE-LAWS OF THE SOCIETY, THE MANAGEMENT AND CON TROL OF THE HOSPITAL DURING THE YEAR WAS CARRIED ON BY THE BOARD OF DIRECTORS CONSI STING OF 19 DIRECTORS, OUT OF WHICH 5 WERE THE SPECIALIST DOCTORS WORKING IN THE HOSPITAL, 4 REPRESENTATIVES OF INDIVIDUAL SHARE HOLDERS, 2 DIRECTORS ELECTED FROM THE DOCTOR MEMBERS HAVING MEDICAL QUALIFICATION. THE ASSESSING OFFICER VIDE PARA 5.1 NOTED THAT THE ASSESSEE CLAIMED THAT THERE WAS NO PROVISION FOR DI STRIBUTION OF PROFITS IN THE BYE- ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 6 LAWS, EITHER IN THE FORM OF DIVIDEND OR ANY OTHER F ORM AMONGST THE MEMBERS OF THE SOCIETY. FURTHER, THERE WAS NO PROHIBITION OF DIST RIBUTION OF SURPLUS ARISING ON THE LIQUIDATION OF THE SOCIETY AMONG THE MEMBERS OF THE SOCIETY. FURTHER, CLAUSE 49 OF THE BYE-LAWS PROHIBITED PAYMENT OF BONUS OR DIVIDEN D OUT OF THE PROFITS OF THE SOCIETY. HOWEVER, CLAUSE 50(E) PROVIDED FOR PAYMEN T OF HONORARIA TO ITS MEMBERS OUT OF PROFITS/SURPLUS ON ACCOUNT OF THEIR SUPPORTI NG SERVICES. THE ASSESSING OFFICER THEREAFTER VERIFIED THE CLAIM OF THE ASSESS EE OF PHILANTHROPIC CHARITABLE PURPOSE AND NOTED THE VARIOUS ASPECTS OF THE OPERAT ION OF THE HOSPITAL. FIRST ASPECT WHICH WAS NOTED BY THE ASSESSING OFFICER WAS WITH REGARD TO THE RELIEF GIVEN TO THE POOR WHICH WAS VERY MEAGRE. THE SECON D ASPECT WHICH WAS NOTED WERE THE RATES CHARGED BY THE ASSESSEE HOSPITAL AND COMPARED IT WITH THE HOSPITALS AT PUNE FOR X-RAY, BLOOD INVESTIGATION AN D DIFFERENT SCANS. THE ASSESSING OFFICER HAD ALSO TAKEN INTO CONSIDERATION THE REMUNERATION PAID TO THE DOCTOR MEMBERS WORKING IN THE HOSPITAL AND TO OTHER DOCTORS AND WAS OF THE VIEW THAT THE HOSPITAL WAS NOT ENTITLED TO THE CLAIM OF EXEMPTION U/S.10(23C)(VIA) OF THE ACT SINCE THE SAME HAD BEEN REJECTED BY HONBLE BOM BAY HIGH COURT. 8. IN RESPECT OF THE ALTERNATE CLAIM OF EXEMPTION U NDER SECTION 11 OF THE ACT, THE ASSESSING OFFICER OBSERVED THAT AN ENTITY/INSTI TUTION TO GET THE SAID BENEFIT SHOULD HAVE ITS SOURCE OF INCOME/RECEIPTS AS PER ON E OF THE CATEGORIES MENTIONED IN SECTION 11 AND 12 OF THE ACT. THE ASSESSING OFF ICER HELD THAT THE INCOME/RECEIPT IN ASSESSEES CASE WAS NEITHER FROM THE PROPERTY HELD UNDER THE TRUST NOR THE INCOME/RECEIPT SHOULD BE CONSIDERED A S VOLUNTARY CONTRIBUTION REFERRED TO IN SECTION 12(1) OF THE ACT. THE PLEA OF THE ASSESSEE VIS-A-VIS APPLICABILITY OF SECTION 11(1) AND 12(1) WAS THUS R EJECTED. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE CIT-IV, PUNE HAD GRANTED REGISTRATION TO THE ASSESSEE BUT THE SAME WAS AS PER THE DIRECTIONS OF THE TRIBU NAL ON THE GROUND OF DELAY IN PASSING THE ORDER REJECTING THE REGISTRATION. HOWE VER, THE BASIC ISSUES RELATING TO ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 7 THE CASE THAT THE ASSESSEE WAS NOT A TRUST OR INSTI TUTION INVOLVED IN CHARITABLE ACTIVITIES, BUT RUNNING THE HOSPITAL FOR PURPOSE OF PROFIT AND ALSO THAT ITS INCOME/RECEIPTS WAS NOT OUT OF PROPERTY HELD UNDER THE CHARITABLE TRUST WAS NOT CONSIDERED. HE FURTHER NOTED THAT THE ASSESSEE IN THE RETURN OF INCOME FILED HAD CLAIMED ALTERNATE EXEMPTION UNDER SECTION 11 OF THE ACT. HOWEVER, FOR CLAIMING THE SAID EXEMPTION, AUDIT REPORT IN FORM NO.10B WAS REQUIRED TO BE FURNISHED ALONG WITH THE RETURN OF INCOME, HOWEVER, ASSESSEE FAILED TO FURNISH THE AUDIT REPORT AND WHEN THIS FACT WAS BROUGHT TO THE KNOWLE DGE OF THE ASSESSEE, IT WAS POINTED OUT BY HIM THAT THE SAID PROVISIONS WERE ON LY DIRECTORY AND NOT MANDATORY. FURTHER, THE ASSESSEE CLAIMED THAT IT WOULD BE SUFF ICIENT COMPLIANCE IF THE FORM IS DEPOSITED AT ANY STAGE DURING THE ASSESSMENT PROCEE DINGS TO CLAIM THE SAID EXEMPTION. THE ASSESSEE SUBMITTED THE AUDIT REPORT IN FORM NO.10B ON 04-12- 2007. THE ASSESSING OFFICER NOTED THAT THE DATE OF AUDIT REPORT WAS 04-12-2007 AS AGAINST THE DUE DATE FOR FILING THE RETURN OF IN COME UNDER SECTION 139(1) OF THE ACT ON 31-10-2005 AND FOR FILING RETURN UNDER SECTI ON 139(4) WAS 31-03-2007. THE ASSESSING OFFICER THUS HELD THAT THE SAID AUDIT REP ORT COULD NOT BE TREATED AS VALID. SINCE THE ASSESSEE HAD NOT FULFILLED THE BASIC COND ITIONS FOR APPLICATION OF PROVISIONS OF SECTION 11 AND 12 OF THE ACT, THE EXE MPTION CLAIMED BY THE ASSESSEE WAS NOT ALLOWED. THE INCOME WAS THUS ASSESSED IN T HE HANDS OF THE ASSESSEE. 9. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFF ICE ON THE GROUND OF LOW CONCESSION GIVEN TO THE WEAKER SECTIONS OF THE SOCI ETY. FURTHER, THE OBSERVATIONS OF THE ASSESSING OFFICER THAT THE ASSESSEE HOSPITAL WAS RUNNING ON COMMERCIAL LINES AND THE RATES CHARGED WERE MUCH MORE HIGHER F OR ROUTINE TESTS ALSO WAS CONSIDERED BY THE CIT(A) ELABORATELY AND THE PLEA O F THE ASSESSEE THAT THESE WERE DONE ON AUTOMATIC MACHINES AND HENCE THE RATES, WAS NOT ACCEPTED. THE CIT(A) ALSO CONSIDERED THE PAYMENTS MADE TO THE WORKING ME MBER DOCTORS VIS-A-VIS THE TOTAL PAYMENTS MADE TO DOCTORS OVER THE YEARS AND F OUND THAT THE AMOUNTS PAID TO ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 8 THE DOCTOR MEMBERS WAS MUCH HIGHER THAN PAID TO OTH ER DOCTORS. IN VIEW OF THE ASSESSEE HAVING SUBSTANTIAL PROFITS/SURPLUS IN ALL THE IMPUGNED ASSESSMENT YEARS, THE CIT(A) HELD THAT THE ASSESSEE TO BE RUNNING HOS PITAL FOR PROFIT AND NOT FOR CHARITABLE PURPOSES AND HENCE THE BENEFIT OF SECTIO N 11 AND 12 WAS DENIED TO THE ASSESSEE IN ALL THE IMPUGNED ASSESSMENT YEARS. THE ASSESSEE WAS HELD NOT ENTITLED FOR EXEMPTION UNDER SECTION 11 OR SECTION 10(23C)(VIA) OF THE ACT AND THE NET SURPLUS OF THE ASSESSEE WAS HELD TO BE TAXABLE IN THE HANDS OF THE ASSESSEE. 10. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). 11. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT ONCE REGISTRATION HAS BEEN GRANTED TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT, EVEN IF IT IS DEEMED REGISTRATION THEN ALSO, THE BENEFIT OF EXEMPTION UNDER SECTION 11 AND 12 CANNOT BE DENIED TO THE ASSESSEE. HE RELIED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SOCIET Y FOR THE PROMOTION OF EDUCATION, ALLAHABAD VIDE CIVIL APPEAL NO.1478 OF 2 016 JUDGMENT DATED 16-02-2016 WHEREIN THE HONBLE APEX COURT HAD DIREC TED THAT WHERE AN APPLICATION HAS BEEN MADE UNDER THE PROVISIONS OF S ECTION 12A OF THE ACT AND IF THE SAME IS NOT RESPONDED WITHIN 6 MONTHS THEN IT W OULD BE TAKEN THAT THE SAID APPLICATION IS REGISTERED UNDER THE PROVISIONS OF T HE ACT. THE HONBLE SUPREME COURT UPHELD THE ORDER OF HONBLE HIGH COURT AND AL SO HELD THAT THE REGISTRATION OF THE TRUST UNDER SECTION 12AA OF THE ACT WOULD TAKE EFFECT FROM THE DATE OF IT MAKING THE APPLICATION. THE LD. AUTHORISED REPRESE NTATIVE FOR THE ASSESSEE REFERRING TO THE ORDER OF THE AUTHORITIES BELOW FUR THER POINTED OUT THAT THE ASSESSEE WAS A COOPERATIVE SOCIETY WHICH WAS REGISTERED UNDE R THE COOPERATIVE SOCIETIES ACT AS A SOCIAL INSTITUTION AND ONCE THE COOPERATIV E SOCIETY IS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT, THEN THE QUESTION WH ICH ARISES IN THE PRESENT SET OF APPEALS IS THE DENIAL OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. THE ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 9 SECOND ISSUE IS THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT IN ASSESSMENT YEARS 2005-06 AND 2006-07. 12. REFERRING TO THE BYE-LAWS, THE LD. AUTHORISED R EPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THERE WAS A BYE-LAW THAT THE SURPLUS CANNOT BE DISTRIBUTED TO THE DOCTOR MEMBERS. HE STRESSED THA T THE SOLE PURPOSE OF THE COOPERATIVE SOCIETY WAS TO RUN HOSPITAL AT SOLAPUR AND IT WAS A MULTI-SPECIALITY HOSPITAL SET UP SINCE 1983. HE SUBMITTED THAT THE HONBLE HIGH COURT HAD DENIED THE EXEMPTION UNDER SECTION 10 (23C)(VIA) OF THE AC T BUT SLP AGAINST THE SAME WAS PENDING. HE FURTHER POINTED OUT THAT IN 2003, THE ASSESSEE APPLIED FOR REGISTRATION UNDER SECTION 12A OF THE ACT, WHICH WA S REJECTED BY THE CIT-IV, PUNE IN 2006. HOWEVER, THE TRIBUNAL VIDE ORDER DATED 15 -03-2007 HAD GRANTED DEEMED REGISTRATION TO THE ASSESSEE FOR NOT PASSING THE OR DER OF THE REGISTRATION WITHIN THE STIPULATED TIME. HE FURTHER POINTED OUT THAT IN AS SESSMENT YEAR 2004-05 THE CIT(A) AFTER THE ORDER OF THE TRIBUNAL GRANTING THE DEEMED REGISTRATION HAD SET ASIDE THE ISSUE TO THE ASSESSING OFFICER WHO DENIED THE EXEMPTION, SINCE NO RECOGNITION WAS GRANTED UNDER SECTION 10(23C) OF TH E ACT. THE EXEMPTION CLAIMED UNDER SECTION 11 AND 12 OF THE ACT WAS ALSO DENIED TO THE ASSESSEE. HE HOWEVER POINTED OUT THAT FROM ASSESSMENT YEAR 2005-06 ONWAR DS THOUGH THE ASSESSEE FILED COMPLETE DETAILS IN RESPECT OF ITS CLAIM OF E XEMPTION UNDER SECTION 11 AND 12 OF THE ACT, NECESSARY EVIDENCES IN RESPECT OF WHICH HAS BEEN FILED BEFORE US IN THE INDIVIDUAL PAPER BOOK FOR EACH OF THE YEAR, HE POIN TED OUT THAT THE ASSESSING OFFICER HAD AGAIN DENIED THE EXEMPTION UNDER SECTIO N 11 AND 12 OF THE ACT FOR CERTAIN REASONS. HE HAD FILED A CHART SHOWING THE STATUS OF THE DISPUTE AND POINTED OUT THAT THE APPEALS WHICH WERE SLATED BEFO RE US RELATES TO ASSESSMENT YEARS 2004-05 TO 2009-10. 13. IN RESPECT OF THE ASSESSMENT YEARS, I.E. 1999-2 000 TO 2003-04, HE POINTED OUT THAT THE REGISTRATION UNDER SECTION 12A OF THE ACT WAS ASKED FOR. HOWEVER, THE ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 10 MATTER WAS REMANDED BY THE TRIBUNAL AND THE SAME WA S PENDING BEFORE THE ASSESSING OFFICER. IN RESPECT OF THE SUCCEEDING AS SESSMENT YEARS 2010-11 AND 2012-13 THE ASSESSEE POINTED OUT THAT THERE WAS NO SCRUTINY AND HENCE THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT AS CLA IMED WAS GRANTED. IN RESPECT OF THE ASSESSMENT YEAR 2011-12, THE APPEAL WAS PEN DING BEFORE THE TRIBUNAL. IN RESPECT OF THE ASSESSMENT YEAR 2012-13, THE APPEAL WAS PENDING BEFORE THE CIT(A). HOWEVER, IN ASSESSMENT YEAR 2014-15, THE M ATTER WAS TAKEN UP FOR SCRUTINY AND VIDE ORDER DATED 19-12-2016 THE ASSESS ING OFFICER HIMSELF HAS GRANTED EXEMPTION UNDER SECTION 11 AND 12 OF THE AC T. HE POINTED OUT THAT THE STATUS OF THE ASSESSEE REMAINS TO BE A COOPERATIVE SOCIETY AND THE REGISTRATION WAS THE DEEMED REGISTRATION GRANTED TO THE ASSESSEE . HOWEVER, THE ASSESSING OFFICER VIDE ORDER PASSED UNDER SECTION 143(3) OF T HE ACT HAD GRANTED THE SAID EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. HE A LSO POINTED OUT THAT FOR ASSESSMENT YEAR 2015-16, SIMILARLY VIDE ORDER PASSE D UNDER SECTION 143(3) OF THE ACT ORDER DATED 17-11-2017, THE ASSESSING OFFICER H AS AGAIN GRANTED THE EXEMPTION TO THE ASSESSEE UNDER SECTION 11 AND 12 O F THE ACT. 14. ANOTHER ASPECT WHICH WAS POINTED OUT BY THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE CIT VIDE ORDER DATED 30-03-2017 HAD GRANTED RECOGNITION TO THE ASSESSEE UNDER SECTION 80G OF TH E ACT. HE POINTED OUT THAT THE ASSESSING OFFICER AND THE CIT(A) HAD DENIED THE SAI D EXEMPTION TO THE ASSESSEE ON THE FOLLOWING GROUNDS : (A) 12A REGISTRATION WAS TECHNICALLY GRANTED (B) COOPERATIVE SOCIETY NOT REGISTERED UNDER THE BO MBAY PUBLIC TRUST ACT (C) RATES CHARGES NOT RELEVANT (D) TRIBUNAL HAD NOT GONE INTO THE OBJECTS OF THE TRUST WHILE GRANTING DEEMED REGISTRATION ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 11 (E) WHEN EXEMPTION U/S.10(23C) OF THE ACT WAS NOT G RANTED, HOW THE EXEMPTION UNDER SECTION 11 AND 12 SHOULD BE GRANTED 15. IN REPLY, IT WAS POINTED OUT THAT FOR POINTS (A ) AND (D) THE ASSESSING OFFICER IS NOT EMPOWERED TO GO INTO THE OBJECTS ONCE REGIST RATION HAS BEEN GRANTED UNDER SECTION 12AA OF THE ACT. HE FURTHER REFERRED TO TH E OBJECTS OF THE ASSESSEE AND POINTED OUT THAT THE SAME WERE SPECIFIC, I.E. SPEND ING FOR RUNNING A HOSPITAL AND THERE WAS NO OTHER ACTIVITY. THE ASSESSEE WAS REGI STERED AS A SOCIAL INSTITUTION WHEREIN VERY CLEARLY, IN THE OBJECTS ITSELF, IT WAS POINTED OUT THAT THE PROFITS WERE NOT TO BE DISTRIBUTED AMONG THE MEMBERS AND HAD TO FLOW BACK TO THE SAME ACTIVITY. HE FURTHER REFERRED TO THE CBDT CIRCULAR WHICH CLARIFIED THAT EXEMPTION UNDER SECTION 10(23C) AND 11 WERE TO BE SEEN SEPARA TELY. VIS-A-VIS THE CHARGES OF THE ASSESSING OFFICER AND THE CIT(A) IN NOT ALLO WING THE CONCESSION TO THE POOR AND THE PAYMENTS TO THE DOCTOR MEMBERS BEING HIGH W ERE GENERAL IN NATURE. HE POINTED OUT THAT THE DOCTORS WHO WERE EXCLUSIVELY A SSOCIATED WITH THE HOSPITAL WERE BEING PAID HIGHER THAN THE DOCTORS WHO WERE H AVING EXTERNAL PRACTICE. 16. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE ON THE OTHER HAND POINTED OUT THAT THE FIRST ISSUE WAS OF DEEMED REGI STRATION GRANTED UNDER SECTION 12AA OF THE ACT, WHEREIN THE OBJECTS OF THE TRUST W ERE NOT LOOKED INTO AND THE SECOND ISSUE WAS THAT THE ASSESSEE WAS NOT REGISTER ED UNDER THE BOMBAY PUBLIC TRUST ACT. ANOTHER ISSUE WAS THE LESS CONCESSION T O THE POOR AND HIGH PAYMENTS TO THE DOCTORS. SHE FURTHER POINTED THAT PROCEEDIN GS FOR WITHDRAWAL OF REGISTRATION UNDER SECTION 12AA(3) OF THE ACT WERE PENDING AGAIN ST THE ASSESSEE. HOWEVER, SHE CLARIFIED THAT THE SAME HAD NOT REACHED THE CON CLUSION. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS WHETHER THE A SSESSEE IS ENTITLED TO CLAIM OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. THE ASSESSEE WAS A COOPERATIVE ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 12 SOCIETY WHICH WAS ESTABLISHED FOR RUNNING THE HOSPI TAL AND CARRYING ON DIFFERENT ACTIVITIES UNDER THE SAID HOSPITAL. THE MEMBERS OF THE COOPERATIVE SOCIETY WERE BOTH INDEPENDENT MEMBERS AND THE DOCTORS WORKING IN THE HOSPITAL. ONE OF THE BYE-LAWS OF THE ASSESSEE WAS THAT THE PROFITS WHICH WERE EARNED BY THE ASSESSEE WOULD NOT BE DISTRIBUTED AMONG THE MEMBERS AND THE SAME SURPLUS WOULD BE FLOWED BACK TO RUN THE HOSPITAL. THE ASSESSEE WAS RUNNING A MULTI-SPECIALITY HOSPITAL IN SOLAPUR WHICH WAS SET UP SINCE 1983. T HE AUTHORITIES BELOW HAVE ELABORATELY CONSIDERED THE SET UP OF OPERATIONS OF THE HOSPITAL. 18. THE ISSUE WHICH ARISES BEFORE US IS RELATED TO THE REGISTRATION GRANTED UNDER SECTION 12AA OF THE ACT. THE TRUST WHICH WAS RUNNI NG THE HOSPITAL FOR CHARITABLE PURPOSES IS REQUIRED UNDER THE ACT TO APPLY FOR REG ISTRATION UNDER SECTION 12A AND ONCE THE REGISTRATION IS GRANTED UNDER SECTION 12AA OF THE ACT, THEN THE ASSESSEE IS ENTITLED TO CLAIM THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. THE ASSESSEE IN THE PRESENT CASE HAD INITIALLY APPLIED FOR EXEMPTION U/S.10(23C(VIA) OF THE ACT WHICH WAS DENIED TO THE ASSESSEE AND THE WR IT PETITION FILED BY THE ASSESSEE WAS ALSO DISMISSED. HOWEVER, THE ASSESSEE FILED AN APPLICATION UNDER SECTION 12A OF THE ACT IN 2003 BEFORE THE COMMISSIO NER. THE SAID APPLICATION WAS REJECTED BY THE COMMISSIONER ON 25-07-2006. THE TR IBUNAL HOWEVER VIDE ITS ORDER DATED 15-03-2007 HELD THAT THE DEEMED REGISTRATION MERITS TO BE GRANTED TO THE ASSESSEE, SINCE THE CIT(A) HAD FAILED TO DISPOSE OF THE SAID APPLICATION WITHIN SIX MONTHS FROM THE DATE OF FILING OF THE APPLICATION, BY THE ASSESSEE. 19. THE FIRST GROUND ON WHICH THE ASSESSING OFFICER AND THE CIT(A) HAD DENIED THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE WAS THE DEEMED REGISTRATION GRANTED BY THE TRIBUNAL, CONSEQ UENT TO WHICH THE COMMISSIONER HAD PASSED THE ORDER GRANTING REGISTRA TION UNDER SECTION 12AA OF THE ACT. BOTH THE AUTHORITIES BELOW AGGRIEVED BY T HE AFORESAID DEEMED REGISTRATION GRANTED BY THE TRIBUNAL AND THE CONSEQ UENT ORDER PASSED BY THE ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 13 COMMISSIONER UNDER SECTION 12AA OF THE ACT ON THE G ROUND THAT THE OBJECTS OF THE TRUST WERE NEVER LOOKED INTO. HOWEVER, WE FIND THA T THE ISSUE NOW STANDS SETTLED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CAS E OF CIT VS. SOCIETY FOR THE PROMOTION OF EDUCATION (SUPRA) WHEREIN THE COURT HA D APPROVED THE ORDER OF THE HONBLE HIGH COURT WHICH HAD UPHELD THE GRANT OF DE EMED REGISTRATION TO A TRUST, WHEREIN THE COMMISSIONER HAD NOT DISPOSED OF THE AP PLICATION WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF FILING OF THE APPLICATI ON. THE HONBLE SUPREME COURT HAD FURTHER HELD THAT THE REGISTRATION WAS TO BE GR ANTED FROM THE DATE THE APPLICATION AS MOVED BY THE TRUST. IN VIEW OF THE SETTLED POSITION BY THE HONBLE SUPREME COURT WE HOLD THAT THE DEEMED REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT WAS A VALID REGISTRAT ION CONSEQUENT TO WHICH THE ASSESSEE WAS ENTITLED TO CLAIM THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. 20. NOW COMING TO THE SECOND OBJECTION OF THE AUTHO RITIES BELOW THAT THE ASSESSEE WAS NOT REGISTERED WITH THE BOMBAY PUBLIC TRUST. THE ASSESSEE WAS A COOPERATIVE SOCIETY AND HAD SPECIFIC OBJECT OF RUNN ING THE HOSPITAL WHEREIN IN THE BYE-LAWS IT WAS CLEARLY PROVIDED THAT THE SURPLUS A LSO WOULD FLOW BACK FOR THE ACTIVITIES OF THE TRUST AND WOULD NOT BE DISTRIBUTE D AMONG THE MEMBERS. THE PERUSAL OF THE ASSESSMENT ORDER REFLECTS THAT THE A SSESSING OFFICER CONSIDERED THE ISSUE OF GRANT OF EXEMPTION IN THE LIGHT WHETHER TH E ASSESSEE WAS CARRYING ON THE ACTIVITIES OF PHILANTHROPY OR NOT. HOWEVER, IN VIE W OF THE DEVELOPMENTS AFTER THE ORDERS PASSED BY THE AUTHORITIES BELOW, WE FIND NO MERIT IN THE SAID EXERCISE CARRIED OUT BY THE ASSESSING OFFICER, WHICH HAS BEE N CONFIRMED BY THE CIT(A). IN THE CASE OF THE ASSESSEE ITSELF, WHICH WAS A COOPER ATIVE SOCIETY ADMITTEDLY NOT REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT AND WA S RUNNING THE MULTI-SPECIALITY HOSPITAL IN THE YEARS UNDER APPEAL AND ALSO IN THE SUCCEEDING YEARS, THE ASSESSING OFFICER IN ASSESSMENT YEAR 2014-15 AND EV EN AS RECENT AS IN ASSESSMENT YEAR 2015-16 VIDE ORDER DATED 17-11-2017 HAD HELD THE ASSESSEE TO ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 14 BE ELIGIBLE FOR GRANT OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT, VIDE ORDERS PASSED UNDER SECTION 143(3) OF THE ACT. IN OTHER W ORDS, THE CLAIM OF THE ASSESSEE OF BEING REGISTERED UNDER SECTION 12AA OF THE ACT H AS BEEN ACCEPTED AND ADOPTED FOR GIVING RELIEF TO THE ASSESSEE BY WAY OF EXEMPTI ON UNDER SECTION 11 AND 12 OF THE ACT. THE SECOND ASPECT WHICH IS RELATED TO A T RUST IS ITS ENTITLEMENT TO CLAIM RECOGNITION UNDER SECTION 80G OF THE ACT. THE ASSE SSEE HAD BEEN GRANTED THE SAID RECOGNITION UNDER SECTION 80G OF THE ACT BY TH E COMMISSIONER VIDE ITS ORDER DATED 30-03-2017, COPY OF WHICH IS PLACED ON RECORD . IN VIEW OF THESE SUBSEQUENT EVENTS, WE HOLD THAT THE ASSESSEE AFTER RECEIVING T HE DEEMED REGISTRATION UNDER SECTION 12AA OF THE ACT, IS ENTITLED TO CLAIM THE E XEMPTION UNDER SECTION 11 AND 12 OF THE ACT. THE SAME CANNOT BE DENIED TO THE ASSES SEE ON THE ASPECT OF THE ASSESSEE HAVING RECEIVED DEEMED REGISTRATION OR THE ASSESSEE NOT BEING REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT OR ANY OTHER ISSUE IN THIS REGARD. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALL OW THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE IN THE YEARS U NDER APPEAL. 21. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSES SEE TIME AND AGAIN STRESSED THAT THE INCOME SHOULD BE ASSESSED AT NIL IN THE HANDS OF THE ASSESSEE AS IT WAS ENTITLED FOR THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT SINCE COMPLETE DETAILS WERE FILED BEFORE THE ASSESSING OF FICER, WHICH WERE VERIFIED BY HIM. HE ALSO POINTED OUT THAT THE DETAILS HAVE BEE N LOOKED INTO BY THE ASSESSING OFFICER AT LENGTH AND NO DISCREPANCY HAS BEEN FOUND IN THE SAID DETAILS. HOWEVER, IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS FAILED TO CONSIDER THE CONDITIONS OF SECTION 11 AND 12 OF THE ACT WHILE DENYING THE SAID EXEMPTION TO THE ASSESSEE IN ALL THE YEARS. SO FOR THE LIMITED PURPOSE OF VERIFICATION, WE RESTORE THIS MATTER TO THE FILE OF ASSESSING OFFICER WHO SHALL VERIFY THE EXPENDITURE CLAIMED BY THE ASSESSEE AS TO WHETH ER IT FALLS WITHIN THE SCOPE OF SECTION 11 AND 12 OF THE ACT AND RECOMPUTE THE BALA NCE INCOME, IF ANY, IN THE ITA NOS.450 TO 455/PUN/2014 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE 15 HANDS OF THE ASSESSEE, IN THE YEARS UNDER APPEAL. THE ASSESSING OFFICER SHALL AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASS ESSEE. BEFORE PARTING, WE MAY ALSO POINT OUT THAT THE COURTS HAVE HELD THAT THE A UDIT REPORT FOR CLAIMING EXEMPTION CAN BE FILED DURING THE ASSESSMENT PROCEE DINGS ALSO. SINCE THE ASSESSEE HAS SO FILED THE SAME, THERE IS NO MERIT I N STAND OF ASSESSING OFFICER AND THE SAME IS REVERSED. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE THUS ALLOWED. 22. THE FACTS AND ISSUE IN ITA NOS.450 AND 452 TO 4 55/PUN/2014 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.451/PUN/2014 AND O UR DECISION IN ITA NO. NO.451/PUN/2014 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS. 450 & 452 TO 455/PUN/2014. 23. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF NOVEMBER, 2017. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER PUNE; DATED : 30 TH NOVEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRIVAT E SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-III, PUNE 4. CIT-III, PUNE 5. , , B BENCH PUNE; 6. / GUARD FILE.