Shri Krishan Kanya Mahavidyala, Amritsar. V. The Commissioner of Income Tax (Exemption), Chandigarh

ITA 478/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7741 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2017
• Assessment Year: misc
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: V WADHWA
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.478(ASR)/2016 ASSESSMENT YEAR:... ... SH. KRISHAN KANYA MAHAVIDYALYA 622, CHINTPURNI, NIMAK MANDI, AMRITSAR. PAN:AAJT3-0463L VS. CIT(EXEMPTION), SECTOR-17E, CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. V. WADHWA RESPONDENT BY: SH. RAHUL DHAWAN (LD. D.R) DATE OF HEARING: 11.09.2017 DATE OF PRONOUNCEMENT:31.10.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 31.08.201 6 PASSED BY THE LD. CIT(EXEMPTION), CHANDIGARH U/S 12AA OF THE I.T. ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF I NCOME TAX (EXEMPTIONS) IS UNJUST ,NOT BASED ON FACTS, NOT IN ACCORDANCE WI TH LAW AND ARBITRARY . 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXEM PTIONS) HAS NOT CONSIDERED COMPLETELY THE INFORMATION/EVIDENCE BROU GHT ON RECORDS, IN CORRECT PERSPECTIVES WHILE DENYING THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EX EMPTION) HAS COMPLETELY NOT CONSIDERED THE REPLY TO SHOW CAUSE D ATED AUGUST, 3, 2016 FOR AUGUST 10 TH , 2016, WHILE THE SUBMISSIONS REACHED HIS OFFICE ON AUGUST 10 TH , 2016 AS PER THE POSTAL RECORDS . 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (E XEMPTIONS) ERRED WHILE HOLDING THAT THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT WERE ATTRACTED AND ITA NO.478 (ASR)/2016 2 IT WAS NOT CORRECT TO HOLD THAT ANY PART OF INCOME OR PROPERTY OF THE SOCIETY WAS USED IN ANY SUCH WAY. 5. WHILE DENYING THE REGISTRATION U/S 12AA OF THE ACT, THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) NEVER HELD THAT THE SOCIETY WAS NOT FOR CHARITABLE PURPOSES AS DEFINED U/S 2(15) OF THE ACT. 7. THAT WHILE DENYING REGISTRATION U/S 12AA OF TH E ACT, THE HUMBLE APPELLANT WAS NEVER GIVEN ANY SHOW CAUSE TO SUBMIT REGARDING ATTRACTION OF SECTION 13(1) (C) OF THE ACT IN ITS CASE. 8. THE APPELLANT SOCIETY PRAYS FOR REGISTRATION U /S 12AA OF THE ACT IN VIEW OF ITS OBJECTIVES AND ACTIVITIES AS PER RECORDS. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPLICANT TRUST HAS FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT ON 25.02.2016 IN T HE OFFICE OF LD. CIT(E) AND IN THE APPLICATION, IT WAS REVELE D THAT THE SOCIETY IS AN OWN GOING ENTITY AND HAS BEEN OPERATI ON SINCE 22 ND MARCH, 1947 AND AIM AND OBJECTS OF THE SOCIETY ARE MAINLY TO EDUCATE THE HINDU GIRLS IN HINDI AND SANS KRIT IN ACCORDANCE WITH SANATAN SCHOOL OF THINKING. IN ORDE R TO ACCORDED AN OPPORTUNITY WHILE CONSIDERING THE APPLI CATION FOR GRANT OF REGISTRATION U/S 12AA, THE APPLICANT W AS CALLED UPON ON 5 TH JULY, 2016, HOWEVER, ON REQUEST OF THE APPLICANT, THE CASE WAS ADJOURNED TO 19 TH JULY, 2016 AND FURTHER VIDE LETTER DATED 03.08.2016 THE APPLICANT/ APPELLANT WAS CALLED UPON TO PROVIDE CERTAIN DOCUMENTS/CLARIFICATIONS BY 10.08.2016. THAT ON EXAMINATION OF THE MATERIAL ON RECORD FROM THE MEMORANDUM OF ASSOCIATION (MOU), IT WAS OBSERVED BY THE LD. CIT(E) THAT AS PER THE MOU OF THE SOCIETY, THER E IS NO BENEFICIARY CLAUSE AND DISSOLUTION CLAUSE AND IT HA S NEITHER BEEN CLARIFIED IN ANY CLAUSE OF THE DEED THAT IN CA SE OF THE SOCIETY BECOMES DEFUNCT OR CEASES ITS OPERATIONS WH ERE THE ASSETS AND LIABILITIES OF THE SOCIETY WILL GO, THER EFORE, THE ITA NO.478 (ASR)/2016 3 LD. CIT(E) DENIED THE REGISTRATION TO THE APPLICANT SOCIETY IN THE ABSENCE OF DISSOLUTION CLAUSE AND BENEFICIARY C LAUSE OF THE APPLICANT SOCIETY. 4. ON FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE LD. CIT(E), THE ASSESSEE PREFERRED THE INSTANT APPEAL AND SUBMITTED THAT THE ORDER UNDER CHALLENGE WAS PASSED ON 31 ST AUGUST, 2016, HOWEVER, A RESOLUTION BY MAKING THE CLAUSE FOR THE DISSOLUTION SOCIE TY AND /OR CESSATION OF ITS OPERATION HAVE BEEN INCORPORATED VIDE RESOLUTION DATED 9 TH APRIL, 2017, THEREFORE, THE APPLICANT/APPELLANT IS ENTITLED TO GET REGISTRATION U/S 12AA OF THE ACT. 5. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDE R PASSED BY THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ORDER UNDER CHALLENGE DOES NOT SUFFER FROM ANY PERVERSITY, ILLEGALI TY AND IMPROPRIETY. 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTAN CES, AS WE REALIZE FROM THE IMPUGNED ORDER DATED 31 ST AUGUST, 2016 PASSED BY THE LD. CIT(E) THAT THE LD. CIT(E) DENIED THE REGIST RATION TO THE APPLICATION IN THE ABSENCE OF DISSOLUTION CLAUSE AS WELL AS BENEFICIARY CLAUSE IN THE MOU OF THE SOCIETY. HOWEVER, FROM THE RES OLUTION DATED 9 TH APRIL, 2017 PASSED BY THE SOCIETY, IT REFLECTS THAT SIGNI FICANCE OF THE DISSOLUTION OF THE SOCIETY AND/OR CESSATION OF ITS OPERATIO N HAVE ALREADY BEEN INCORPORATED VIDE RESOLUTION DATED 9 TH APRIL, 2017 WHICH IS REPRODUCED HEREIN BELOW. THAT IN THE EVENT OF THE DISSOLUTION OF THE SOCIET Y AND/OR CESSATION OF ITS OPERATIONS, ANY PROPERTY WHATSOEVE R, REMAINING AFTER THE SATISFACTION OF ALL ITS DEBTS A ND LIABILITIES, SHALL NOT BE PAID TO OR DISTRIBUTED AM ONG THE MEMBERS OF THE SOCIETY OR ANY OF THEM, BUT SHALL BE GIVEN TO SOME OTHER SOCIETY HAVING THE SIMILAR OBJECTS. ITA NO.478 (ASR)/2016 4 WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OBSERVAT ION OF THE LD. CIT(E), WHO HAS DENIED THE REGISTRATION ON TO ASPE CTS (I) IN ABSENCE OF DISSOLUTION CLAUSE AND (II) BENEFICIARY CLAUSE. HENCE, WE ARE OF THE CONSIDERED OPINION THAT DISSOLUTION CLAUSE HAS ONLY BEEN INCORPORATED ON 9 TH APRIL, 2017 WHICH IS MUCH BEYOND THE DATE OF THE IMPUGNED ORDER, HOWEVER, IT REFLECTS THAT BENEFICIARY CLAUSE HAS NOT BEEN INCORPORATED SO FAR. ON THE AFORESAID CONSIDERATION AND OBSERVATIONS, WE AR E OF THE CONSIDERED OPINION THAT THE LD. CIT(E) HAS RIGHTLY PASSE D THE ORDER UNDER CHALLENGE FOR DENYING THE REGISTRATION U/S 12AA OF THE ACT IN THE ABSENCE OF DISSOLUTION CLAUSE AND BENEFICIARY CLAUSE IN THE MOU OF THE SOCIETY. HOWEVER, IN THE INTEREST OF JUSTICE, WE GIVE OP PORTUNITY TO THE APPLICANT/APPELLANT TO APPROACH THE LD. CIT(E) BY MAK ING FRESH APPLICATION WHILE INCORPORATING THE DISSOLUTION CLAUSE A ND BENEFICIARY CLAUSE AND GETTING THE SAME REGISTERED IN THE OFFICE OF THE REGISTRAR OF THE SOCIETY OF REGISTRATION ACT AND THE LD. CIT(E) IS R EQUESTED TO EXPEDITE THE APPLICATION OF THE ASSESSEE, IF FILE AFRE SH AND ADJUDICATE THE SAME DE NOVO . 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:31.10.2017. /PK/ PS. ITA NO.478 (ASR)/2016 5 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER