Vani Educational Society, Chittoor, Chittoor V. Commissioner of Income Tax, Tirupathi

ITA 461/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61963 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GNANAPRAKASH
• Assessee Lawyers: SESHAGIRI RAO
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 461/HYD/2012 VANI EDUCATIONAL SOCIETY, APPELLANT PUTHALPATTU, CHITTOOR DT. VS. THE COMMISSIONER OF INCOME-TAX, RESPONDENT K.T. ROAD, HYDERABAD. APPELLANT BY : MR. SESHA GIRI RAO RESPONDENT BY : MR. K. GNANA PRAKASH DATE OF HEARING : 03/07/2012 DATE OF PRONOUNCEMENT : 30/07/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT, TIRUPATHI, DATED 20/01/2010 PASSED U/S 12AA O F THE INCOME- TAX ACT, 1961. 2. THE ASSESSEE SOCIETY WAS FORMED ON 01/06/1991 UN DER REGISTRATION OF SOCIETIES ACT. IT HAD FILED APPLICA TION ON 05/07/2011 SEEKING GRANT OF REGISTRATION U/S 12A OF THE IT ACT AND RECOGNITION FOR EXEMPTION U/S 80G OF THE ACT. ON BEING ASKED B Y THE DEPARTMENT VIDE LETTER DATED 14/12/2011 & 10/01/201 1 TO THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT AND VOUCHERS F OR THE LAST ITA NO. 461/HYD/12 VANI EDUCATIONAL SOCIETY 2 THREE YEARS, ORIGINAL TRUST DEED/MOA FOR VERIFICATI ON, INCORPORATED ESSENTIAL CLAUSES IN THE MOA, NOTE ON IMMEDIATE PLA N OF ACTION AND THE ASSESSEE HAD ALSO BEEN ASKED TO FURNISH DETAILS OF CHARITABLE ACTIVITIES CONDUCTED BY THE SOCIETY AND EVIDENCE TH ERE ON ETC., FIXING THE DATE OF HEARING ON 28/12/2001 & 18/01/2011, THE ASSESSEE APPEARED AND FILED THE REQUIRED INFORMATION. ON EXA MINATION, THE CIT NOTICED THAT THE BOOKS OF ACCOUNT APPEAR TO HAV E BEEN PREPARED AND DOCTORED TO SUIT THE PURPOSE, NOT DONE IN REGUL AR COURSE AND ALSO IT WAS NOT KNOWN HOW LONG THE SCHOOL IS BEING RUN AND WHAT HAPPENED TO THOSE PROFITS. THE CIT, THEREFORE, REJE CTED THE APPLICATION FOR REGISTRATION U/S 12A AND REJECTED T HE APPLICATION FILED FOR RECOGNITION U/S 80G OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE CIT, THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL:- THE LEARNED CIT IS NOT LEGALLY CORRECT AND PROPER I N REJECTING 12A & 80G. THE CONCLUSION OF THE CIT FOR REJECTION IS NOT PUT TO APPELLANT AT THE TIME OF HEARING. HAD HE ASKED, HIS MISAPPREH ENSION WOULD HAVE BEEN CLEARED. NO PROPER OPPORTUNITY WAS GIVEN TO THE APPELLANT. THE ORDER IS BIASED. THE APPELLANT FILED 12A APPLICATION ON 05/07/2011. THE ORDER SHOULD HAVE BEEN PASSED BY 05/01/2012. THE ORDER WA S PASSED ON 31/01/2012. HENCE 80G/12A IS DEEMED TO HA VE BEEN ALLOWED AS PER INCOME TAX APPELLATE TRIBUNAL D ECISION IN THE CASE OF S. LAKHANI SINGH BAHRA CHARITABLE TRUST VS. CIT [2011] 133 ITD 201 (ASR.) 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDER OF THE CIT. THE PRELIMINARY CONTENTION OF THE ASSESSEE IN THE GROUN DS OF APPEAL IS ITA NO. 461/HYD/12 VANI EDUCATIONAL SOCIETY 3 THAT THE APPELLANT FILED 12A APPLICATION ON 05/07/2011. THE ORDER SHOULD HAVE BEEN PASSED BY 05/01/2012. THE ORDER WA S PASSED ON 31/01/2012. HENCE 80G/12A IS DEEMED TO HAVE BEEN AL LOWED AS PER INCOME TAX APPELLATE TRIBUNAL DECISION IN THE CASE OF S. LAKHANI SINGH BAHRA CHARITABLE TRUST VS. CIT [2011] 133 ITD 201 (ASR.) . 5. IN THE CASE OF SOCIETY FOR THE PROMOTION OF EDUC ATION ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS. CIT & ORS., [2008] 5 DTR (ALL.) 329, THE HONBLE ALLAHABAD HIGH COURT HELD A S UNDER:- CHARITABLE TRUST-REGISTRATION U/S 12A EFFECT OF N ON-PASSING OF ORDER WITHIN THE TIME-LIMIT- TAKING THE VIEW THA T NON- CONSIDERATION OF THE REGISTRATION APPLICATION WITH IN THE TIME FIXED BY S. 12AA(2) WOULD RESULT IN DEEMED REGISTRA TION, MAY AT THE WORST CAUSE LOSS OF SOME REVENUE OR INCOME-T AX PAYABLE BY THE INDIVIDUAL ASSESSEE ON THE OTHER HAND, IF A CONTRARY VIEW IS TAKEN, IT WOULD LEAVE THE ASSESSEE TOTALLY AT THE MERCY OF THE IT AUTHORITIES INASMUCH AS THE ASSESSEE HAS NOT BEEN PROVIDED ANY REMEDY UNDER THE ACT AGAINST NON-DECIS ION MOREOVER, THE FORMER VIEW FURTHERS THE OBJECT AND P URPOSE OF THE STATUTORY PROVISION THUS, THE BETTER INTERPRE TATION WOULD BE TO HOLD THAT THE EFFECT OF NON-CONSIDERATION OF THE APPLICATION FOR REGISTRATION U/S 12A WITHIN THE TIM E FIXED BY S. 12AA(2) WOULD BE A DEEMED GRANT OF REGISTRATION. 6. IN THE CASE OF SARDARILAL OBERAI MEMORIAL CHARTI ABLE TRUST VS. ITO, 3 SOT 229 (DELHI), IT HAS BEEN HELD THAT THE C IT(A) HAVING PASSED NO ORDER OF REFUSAL WITHIN THE TIME PERIOD O F SIX MONTHS PRESCRIBED IN SECTION 12AA(2) OF THE ACT, APPLICATI ON U/S 12A FOR REGISTRATION OF TRUST SHALL BE DEEMED TO HAVE BEEN ALLOWED. ITA NO. 461/HYD/12 VANI EDUCATIONAL SOCIETY 4 7. IN THE CASE OF REV FATHER TRUST OSCAR COLASCO M EMORIAL MEDICAL ASSOCIATION VS. CIT, [2009] 31 SOT 1 (MUMBA I), THE HONBLE MUMBAI HIGH COURT HELD THAT AS THE CIT IN THE PRESE NT CASE HAS FAILED TO INITIATE THE ENQUIRY IN TIME TO COMPLETE THE PROCESS OF GRANT OF REGISTRATION WITHIN THE STIPULATED PERIOD OF SIX MONTHS AND AS THE ORDER HAS NOT BEEN PASSED WITHIN THE TIME-LI MIT PRESCRIBED, THE APPLICATION IS DEEMED TO HAVE BEEN GRANTED. THE ORDER OF THE CIT REFUSING THE REGISTRATION IS A NULLITY AND IS Q UASHED. THE REGISTRATION IS DEEMED TO HAVE BEEN GRANTED TO THE ASSESSEE. CIT VS. SOHAN LAL CHHAJAN MAL [2009] 222 CTR (P&H) 190: [2008] 307 ITR 53 (P&H), BHAGWAD SWARUP SHRI SHRI DEVRAHA BABA MEMORIAL SHRI HARI PARMARTH DHAM TRUST VS. CIT [2007] 111 TT J (DEL)( (SB) 424: [2007] 17 SOT 281 (DEL)(SB) AND DHARMA SANSTHA PAK SANGH (NIYAS) VS. CIT [2008] 118 TTJ (DEL) 823 FOLLOWED. 8. IN THE CASE UNDER CONSIDERATION, THE ASSESSEE FI LED 12A APPLICATION ON 05/07/2011 AND THE ORDER WAS PASSED ON 31/01/2012, INSTEAD ON 05/01/2012, AS PER THE STATU TORY LIMIT. IN VIEW OF THE RATIO LAID DOWN IN THE ABOVE DECISIONS, THE EFFECT OF NON- CONSIDERATION OF THE APPLICATION FOR REGISTRATION U /S 12A WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD BE A DEEMED GRA NT OF REGISTRATION. THUS, THE GROUNDS RAISED BY THE ASSES SEE IN THIS REGARD ARE ALLOWED. ITA NO. 461/HYD/12 VANI EDUCATIONAL SOCIETY 5 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 30/07/2012. SD/- SD/- (D. KARUNAKARA RAO) (ASHA VIJAYARAGHAVAN ) ACCOUNTANTMEMBER JUDICIAL MEMBER HYDERABAD, DATED: 30 TH JULY, 2012 KV COPY TO:- 1) VANI EDUCATIONAL SOCIETY, C/O M/S KGM GUPTA & CO., CHARTERED ACCOUNTANTS, 10/67, GANDHI ROAD, CHITTOOR 517 001. 2) CIT, TIRUPATHI. 3) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HDE RABAD