M/s. Asha Jain Educational Society, Saharanpur V. CIT, Muzaffarnagar

ITA 479/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91141 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-06-2015
• Assessment Year: misc
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA MISHRA
• Keywords: Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.479/DEL./2014 ASHA JAIN EDUCATIONAL SOCIETY, VS. CIT, ASHA MODERN PUBLIC SCHOOL, MUZAFFARNAGAR. AHMAD BAGH, BEHIND PETROL PUMP, COURT ROAD, SAHARANPUR 247 001. (PAN : AABTA7912J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE REVENUE BY : SMT. ANURADHA MISHRA, CIT DR DATE OF HEARING : 10.06.2015 DATE OF PRONOUNCEMENT : 12.06.2015 O R D E R PER GEORGE GEORGE K. : THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX, MUZAFFARNAGAR DATED 26.11.2013. 2. THE ASSESSEE IS RUNNING A SCHOOL UNDER THE NAME AND STYLE OF ASHA MODERN PUBLIC SCHOOL, COURT ROAD, SAHARANPUR. THE SOCIETY IS REGISTERED WITH THE REGISTRAR OF SOCIETIES. THE SOCIETY IS NOT CAR RYING OUT ANY ACTIVITY OTHER THAN EDUCATION AS ITS OBJECT. 3. THE ASSESSEE FILED AN APPLICATION IN FORM NO.10A FOR REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961. THE ASSESSEES APPLIC ATION FOR REGISTRATION AS PER ITA NO.479/DEL./2014 2 THE PROVISIONS OF SECTION 12A WAS REJECTED BY THE C OMMISSIONER OF INCOME-TAX, SAHARANPUR BY HOLDING AS UNDER :- DURING THE COURSE OF 12A PROCEEDINGS, THE ASSESSE E WAS REQUIRED TO FILE LEASE DEED FOR LAND AND BUILDING A ND ALSO TO FURNISH WHETHER EXPANSION / CONSTRUCTION / RENOVATI ON AND OTHER WORK DONE BY THE SOCIETY AND TO STATE WHETHER IT IS IN THE FORM OF DIVERSION OF PROFIT TO INTERESTED PERSONS / PARTIES AND WHAT IS THE SOCIETY'S EXPLANATION FOR THE SAME. IN RESPONSE THE ASSESSEE FURNISHED LEASE DEED FOR T HE LAND AND BUILDING OF THE SCHOOL. IT HAS BEEN STATED THAT THE PRESIDENT OF THE SOCIETY HAS LEASED HIS PROPERTY TO THE SOCIE TY WHICH WAS ALREADY FULLY CONSTRUCTED OUT OF HIS OWN FUNDS AND THE SOCIETY HAD TO INVEST ABOUT RS.700000/- OVER THE YEARS ON T HE BUILDING TO MAKE IT FIT AND APPROPRIATE FOR SCHOOL PURPOSES LIKE EXPENSES HAVE BEEN INCURRED ON LABS AND STORE ROOMS. IT HAS BEEN FURTHER STATED THAT CONSIDERING THE OVERALL MARKET VALUE AND MARKETABLE LEASE VALUE OF THE PROPERTY WHICH RUNS I NTO SEVERAL CRORES, THE AFORESAID AMOUNT IS ONLY MEAGER AND CAN NOT BE CALLED ANY DIVERSION OR BENEFIT OR PROFITS TO THE P ROMOTERS. THE ASSESSEE HAS ALSO STATED THAT THE MEAGER ADDITION T O THE BUILDING WAS MADE BY THE SOCIETY FOR ITS OWN PURPOS ES TO CARRY OUT ITS ACTIVITIES MORE APPROPRIATELY RATHER THAN T O BENEFIT TILE LESSOR AND THE SOCIETY HAS GIVEN ONLY NOMINAL AMOUN T OF RENT AS COMPARED TO THE MARKET VALUE TO THE LAND LORD. FROM THE ABOVE, IT IS CLEAR THAT THE LAND AND BUIL DING IS OWNED BY THE OFFICE BEARERS OF THE SOCIETY. THE SO CIETY IS A LEASE HOLDER OF THE LAND AND THE LEASE IS ONLY FOR 11 MONTHS AND WHEN THE RENT AGREEMENT COMES TO AN END, OBVIOUSLY THE INSTITUTION ON THE SAME CANNOT RUN BY THE SOCIETY A ND THE BENEFIT WOULD PASS TO THE OWNER / OCCUPANT. HENCE, THE ARGUMENT OF THE LD. COUNSEL DOES NOT SURVIVE. FURTH ER, THE SOCIETY HAS CHANGED ITS NAME FROM ASHA JAIN EDUCATI ONAL SOCIETY TO ASHA JAIN ALPASANKHYAK SOCIETY WITH THE REGISTRAR OF SOCIETY WHEREAS THE APPLICATION FOR REGISTRATION U/S 12AA HAS BEEN APPLIED IN THE OLD NAME I.E. ASHA JAIN EDU CATIONAL SOCIETY. IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSEE SOCI ETY IS NOT ENTITLED TO GET THE REGISTRATION U/S 12AA OF TH E I.T. ACT, 1961. ACCORDINGLY, THE APPLICATION OF THE ASSESSEE SOCIETY IS HEREBY REJECTED. ITA NO.479/DEL./2014 3 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE PAPER BOOK SUBMITTED B Y THE ASSESSEE THAT ASSESSEE SOCIETY IS ONLY RUNNING A SCHOOL AND ALSO NOT CARRY ING ANY ACTIVITY OTHER THAN EDUCATION. THE CIT HAS NOT DEALT WITH THE SUBMISSI ONS MADE BY THE ASSESSEE. WE ALSO FIND THAT THE CIT (A)S ORDER IS BRIEF, CRY PTIC AND NON-SPEAKING. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT IN THE INT EREST OF JUSTICE AND EQUITY, THE MATTER BE RESTORED TO THE FILE OF THE CIT TO DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF JUNE, 2015. SD/- SD/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF JUNE, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT, MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.