Kisan Degree College, Bahraich V. Commissioner of Income Tax (Exemption), Lucknow

ITA 477/LKW/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7855 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MADHUR
• Assessee Lawyers: P K KAPOOR
• Keywords: Set aside
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 477/LKW/2019 ASSESSMENT YEAR: N.A. KISAN DEGREE COLLEGE DHAPAIPURWA BAHRAICH V. CIT (EXEMPTIONS) LUCKNOW TAN/PAN: AACAK0996N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P. K. KAPOOR, C.A. RESPONDENT BY: SHRI S. K. MADHUR, CIT (DR) DATE OF HEARING: 23 01 20 20 DATE OF PRONOUNCEMENT: 27 01 20 20 O R D E R PER A. D. JAIN, V.P.: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE LD. CIT (EXEMPTIONS), LUCKNOW, DATED 24/6/2019, REJECTING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A(A) OF THE INCOME TAX ACT, 1961. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A(A) OF THE INCOME- TAX ACT, 1961 ON 14/12/2019 WITH THE CIT (EXEMPTIONS), LUCKNOW. THE LD. CIT (EXEMPTIONS) ISSUED A LETTER DATED 11/5/2019 TO THE ASSESSEE CALLING FOR SPECIFIC QUERIES REGARDING ITS APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, FOR COMPLIANCE ON 11/6/2019. ON THIS DATE, I.E., 11/6/2019, THE COUNSEL OF THE ASSESSEE APPEARED BEFORE THE LD. CIT (EXEMPTIONS) AND FILED PART REPLY WITH POWER OF ATTORNEY AND SOUGHT ADJOURNMENT FOR 18/6/2019 FOR PRODUCING THE BOOKS OF ACCOUNT AND VOUCHERS. ON THIS DATE, I.E., 22/6/2019, THE COUNSEL OF THE ASSESSEE ATTENDED BEFORE THE LD. CIT (EXEMPTIONS). THE LD. CIT ITA NO.477/LKW/2019 PAGE 2 OF 5 (EXEMPTIONS), HOWEVER, REJECTED THE APPLICATION MOVED BY THE ASSESSEE ON THE GROUND, AS MENTIONED AT PARAS 2 AND 4 OF HIS ORDER, THAT THE BOOKS OF ACCOUNT AND VOUCHERS WERE NOT AVAILABLE FOR VERIFICATION AND THUS THE GENUINENESS OF ACTIVITIES COULD NOT BE VERIFIED. 3. BEFORE US, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE LD. CIT (EXEMPTIONS), LUCKNOW HAD REJECTED THE APPLICATION OF THE ASSESSEE MECHANICALLY, WRONGLY OBSERVING THAT THE BOOKS OF ACCOUNT AND VOUCHERS WERE NOT AVAILABLE FOR VERIFICATION AND, THUS, THE GENUINENESS OF THE ACTIVITIES COULD NOT BE VERIFIED. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE, VIDE LETTER DATED 14/6/2019 [APB:110], FURNISHED ALL SUCH DOCUMENTS AS WERE SOUGHT FOR BY THE LD. CIT (EXEMPTIONS), SUCH AS, COPY OF COMPLETE AUDIT REPORT FOR THE FINANCIAL YEAR 2017-18, COPIES OF BOOKS AND STATEMENTS, DETAILS OF SALARY PAID TO THE TEACHERS, ALONG WITH GPF CHALLAN, AND THE COPIES OF RENEWED CERTIFICATE OF REGISTRATION OF THE SOCIETY AS ISSUED BY THE REGISTRAR FIRMS & SOCIETIES, U.P.; AND THAT THEREFORE, THE OBSERVATION OF THE LD. CIT (EXEMPTIONS) THAT THE BOOKS OF ACCOUNT AND VOUCHERS WERE NOT AVAILABLE FOR VERIFICATION, IS AGAINST THE FACTS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS PROVIDING EDUCATION THROUGH ITS DEGREE COLLEGE, NAMED KISAN DEGREE COLLEGE AND ALL THE REQUISITE EVIDENCES, PROVING THE ACTIVITIES OF PROVIDING EDUCATION WERE FURNISHED BEFORE THE LD. CIT (EXEMPTION); THAT HOWEVER, THE LD. CIT(E) FAILED TO CONSIDER THE SAME AND ILLEGALLY REJECTED THE APPLICATION OF THE ASSESSEE SUMMARILY. HE PRAYED THAT IN THESE FACTS AND CIRCUMSTANCES, THE LD. CIT (EXEMPTIONS) BE DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE SOCIETY UNDER SECTION 12AA OF THE ACT. 4. THE LD. D.R., ON THE OTHER HAND, PLACING RELIANCE ON THE ORDER OF THE LD. CIT (EXEMPTION), LUCKNOW, HAS SUBMITTED THAT THAT AS PER THE ORDER SHEET ENTRY DATED 22/6/2019 ON THE FILE OF ITA NO.477/LKW/2019 PAGE 3 OF 5 THE CIT (EXEMPTIONS)S RECORD, NO BOOKS OF ACCOUNT AND VOUCHERS WERE PRODUCED BY THE ASSESSEE; AND THAT THEREFORE, THE LD. CIT (EXEMPTIONS) HAS RIGHTLY REJECTED THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. 5. HEARD. WE FIND THAT THE ASSESSEE HAD FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, WHICH WAS REJECTED BY THE LD. CIT (EXEMPTIONS), OBSERVING THAT THE BOOKS OF ACCOUNT AND VOUCHERS WERE NOT AVAILABLE FOR VERIFICATION AND, THUS, THE GENUINENESS OF THE ACTIVITIES COULD NOT BE VERIFIED. THE ASSESSEE HAS FILED BEFORE US A COPY OF THE LETTER DATED 14/6/2019, WRITTEN BY IT TO THE LD. CIT (EXEMPTIONS), AS PER WHICH, THE ASSESSEE HAD FURNISHED THE COPY OF THE AUDIT REPORT FOR THE FINANCIAL YEAR 2017-18, COPIES OF THE BOOKS AND STATEMENTS, DETAILS OF SALARY PAID TO THE TEACHERS, ALONG WITH GPF CHALLAN, AND THE COPY OF RENEWED CERTIFICATE OF REGISTRATION OF THE SOCIETY AS ISSUED BY THE REGISTRAR FIRMS & SOCIETIES, U.P. THE LD. CIT (EXEMPTIONS) HAS OBSERVED IN PARA 2 OF HIS ORDER, THAT IN F.Y. 2017-18, GROSS RECEIPTS ARE RS.6.88 CRORES AND NO TAX HAS BEEN PAID. RATHER, THE FACT IS THAT THE ASSESSEE, FOR ASSESSMENT YEAR 2018-19, RELEVANT TO THE FINANCIAL YEAR 2017-18, HAD DULY FILED ITS RETURN OF INCOME (APB:14) AND HAD PAID DUE TAX ON THE INCOME DERIVED BY IT. 6. IT IS A SETTLED POSITION OF LAW THAT WHILE GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT, THE LD. CIT (EXEMPTIONS) IS REQUIRED TO EXAMINE THE OBJECTS OF THE ASSESSEE. IF THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE, REGISTRATION SHOULD BE GRANTED TO THE ASSESSEE. IT CAN ONLY BE DENIED, IF THE LD. CIT (EXEMPTIONS) BRINGS SOMETHING ON RECORD TO ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN ACTIVITIES OTHER THAN CHARITABLE ONES. THIS ASPECT WAS EXAMINED BY THIS BENCH OF THE TRIBUNAL IN VARIOUS CASES, WHEREIN, THE TRIBUNAL HELD THAT WHILE GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT, THE LD. CIT ITA NO.477/LKW/2019 PAGE 4 OF 5 (EXEMPTIONS) IS REQUIRED TO EXAMINE, AS TO WHETHER THE OBJECTS OF THE APPLICANT ARE OF CHARITABLE NATURE OR NOT. IN THE INSTANT CASE, THE LD. CIT (EXEMPTIONS) HAS NOT EXAMINED THE NATURE OF THE OBJECTS OF THE SOCIETY, BUT HE HAS DENIED THE REGISTRATION, OBSERVING THAT THE BOOKS OF ACCOUNT AND VOUCHERS WERE NOT AVAILABLE FOR VERIFICATION AND, THUS, THE GENUINENESS OF ACTIVITIES COULD NOT BE VERIFIED. BE THAT AS IT MAY, THE BOOKS OF ACCOUNT AND VOUCHERS ARE STATED TO BE ON RECORD BEFORE THE CIT(E). THE LD. CIT (EXEMPTIONS) SHOULD EXAMINE THE SAME. IN CASE THE BOOKS AND VOCHERS ARE NOT FOUND TO HAVE BEEN FILED, THE ASSESSEE SHOULD BE GRANTED AN OPPORTUNITY TO PRODUCE THE SAME, IN THE INTEREST OF JUSTICE. 7. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE LD. CIT (E) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE OF GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT IN THE LIGHT OF THE OBJECTS OF THE ASSESSEE-SOCIETY, AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE, DECIDING THE MATTER EXPEDITIOUSLY, PREFERABLY WITHIN TWO MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. THE ASSESSEE, NO DOUBT SHALL CO-OPERATE IN THE FRESH PROCEEDINGS BEFORE THE CIT(E) AND NOT SEEK UNNECESSARY ADJOURNMENT. ORDERED ACCORDINGLY. 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/01/2020. SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED:27/01/2020 JJ:2301 ITA NO.477/LKW/2019 PAGE 5 OF 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR