DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD., NEW DELHI V. CIT (EXEMPTION), NEW DELHI

ITA 4881/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1270 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 09-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Section: 12AA

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B: NEW DELHI SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 4881/DEL/2018 ASSTT. YEAR: - O R D E R PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST ORDER DATED 27.6.2018 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION), NEW DELHI {CIT E)} REFUSING THE ASSESSEES SOCIETY REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD. 263, TAGORE PARK, NEW DELHI 110 009 PAN AABAD5274 VS. CIT (EXEMPTION) NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI SAMEER KAPOOR, CA DEPARTMENT BY : SHRI M BARNWAL SR, DR DATE OF HEARING 07/02 /20 20 DATE OF PRONOUNCEMENT 01 / 05 /20 2 0 ITA NO. 4881/DEL/2018 DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD. VS CIT(E) 2 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY INCORPORATED IN THE YEAR 1947. IT WAS FORMED TO ACQUIRE LAND FROM GOVERNMENT AUTHORITIES LIKE DDA AND DISTRIBUTE/ALLOCATE THE SAME TO THE VARIOUS MEMBERS FOR CONSTRUCTION OF HOUSES IN THE COLONY BY THE NAME OF TAGORE PARK. IN THE YEAR 2002, DDA ALLOTTED LAND MEASURING 600 SQ. MTS. FOR CONSTRUCTION OF A COMMUNITY HALL IN THE COLONY TO THE ASSESSEE SOCIETY. THE ASSESSEE APPLIED BEFORE THE LD. CIT (EXEMPTION) FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. THE LD. CIT (EXEMPTION), HOWEVER, REJECTED THE ASSESSEES APPLICATION ON THE GROUND THAT THE SOCIETY INTENDED TO PROVIDED BENEFIT ONLY TO ITS RESIDENTS/MEMBERS WHICH WERE A GROUP OF INDIVIDUALS AND NOT TO THE GENERAL PUBLIC OR TO A SECTION OF PUBLIC AND, THUS, THIS VIOLATED THE PROVISIONS OF SECTION 2(15) OF THE ACT. 2.1 THE ASSESSEE SOCIETY HAS NOW APPROACHED THE ITAT AND HAS CHALLENGED THE ACTION OF THE LD. CIT (EXEMPTIONS) IN REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 3.0 THE LD. AR SUBMITTED THAT THE DDA, WHILE ALLOTTING THE LAND FOR THE CONSTRUCTION OF COMMUNITY HALL, HAS IMPOSED A RESTRICTION IN CLAUSE VIII OF THE ALLOTMENT LETTER DATED 3.1.2002 THAT THE COMMUNITY HALL IS TO BE USED BY THE RESIDENTS OF COLONY ITA NO. 4881/DEL/2018 DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD. VS CIT(E) 3 AND OFFICERS OF THE DDA RESIDING IN NEARBY COLONIES WITHIN AN AREA OF 8 KMS AND, THEREFORE, WHATEVER RESTRICTION ON THE LETTING OUT OF THE COMMUNITY HALL HAS BEEN PLACED, HAS BEEN PLACED BY THE DDA BUT IT CANNOT BE SAID THAT THE COMMUNITY HALL CANNOT BE USED BY THE PUBLIC AT LARGE AND IT IS NOT A VALID REASON FOR DENYING THE BENEFIT OF REGISTRATION TO THE ASSESSEES SOCIETY. IT WAS FURTHER SUBMITTED THAT ORIGINALLY THERE WERE 315 MEMBERS IN THE SOCIETY BUT OVER THE PERIOD THE MEMBERS HAVE REDUCED TO APPROX. 20 MEMBERS AS MOST OF THE EARLIER MEMBERS HAVE EITHER SOLD THEIR PROPERTY OR HAVE PASSED AWAY BUT ALL THE SAME, DUE TO RE- DEVELOPMENT AND SUB DIVISION OF THE PROPERTIES THERE ARE APPROX 1000 FAMILIES OR APPROX 3000 TO 4000 RESIDENTS PRESENTLY RESIDING IN THE COLONY AND, THUS, THE BENEFIT OF THE COMMUNITY HALL IS NOT RESTRICTED TO MEMBERS ONLY BUT ALSO TO THE RESIDENTS AT LARGE IRRESPECTIVE OF ANY INDIVIDUAL, CASTE, CREED OR RELIGION. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(E), AT THE TIME OF CONSIDERING THE ASSESSSEES APPLICATION FOR GRANT OF REGISTRATION U/S 12AA, HAS TO PRIMARILY SATISFY HIMSELF ABOUT THE OBJECTS OF THE SOCIETY AND THE GENUINENESS OF THE ACTIVITIES RATHER THAN APPLYING THE PROVISIONS OF SECTION 2(15) OF THE ACT. THE LD. AR DREW OUR ATTENTION TO THE OBJECTS MENTIONED IN THE VARIOUS CLAUSES OF THE ITA NO. 4881/DEL/2018 DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD. VS CIT(E) 4 OBJECTS CLAUSE AND SUBMITTED THAT THEY INTER ALIA INCLUDE WELFARE ACTIVITIES INCLUDING CONSTRUCTION, MANAGING AND CONTROL OF COMMUNITY CENTRES FOR THE MEMBERS AND OTHERS. IT WAS SUBMITTED THAT THE TERM GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE ACT IS NOT TO BE INTERPRETED IN A NARROW WAY BECAUSE AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC IS ALSO AN OBJECT OF GENERAL PUBLIC UTILITY AND IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE ENTIRE MANKIND OR EVEN ALL THE PERSONS LIVING IN A PARTICULAR COUNTRY OR PROVINCE. IT WAS SUBMITTED THAT IT IS SETTLED LAW THAT IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF PUBLIC AS DISTINGUISHED FROM SPECIFIED INDIVIDUALS. THE LD. AR PLACED RELIANCE ON NUMEROUS CASE LAWS WHICH HAVE BEEN PLACED IN THE PAPER BOOK AND SUBMITTED THAT THE LD. CIT (EXEMPTION) WAS NOT JUSTIFIED IN SUMMARILY REJECTING THE ASSESSEES APPLICATION FOR GRANT OF REGISTRATION. 4.0 IN RESPONSE, THE LD. CIT (DR) SUBMITTED THAT THE LD. CIT (EXEMPTION) HAD RIGHTLY DENIED THE BENEFIT OF REGISTRATION TO THE SOCIETY AND THAT THE ASSESSSEE HAD BEEN UNABLE TO SATISFY THE LD. CIT (EXEMPTION) THAT THE SOCIETY WAS NOT FORMED TO BENEFIT ONLY THE RESIDENTS OF THE SOCIETY. IT WAS PRAYED BY THE LD. CIT (DR) THAT THE REFUSAL TO GRANT REGISTRATION SHOULD BE UPHELD. ITA NO. 4881/DEL/2018 DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD. VS CIT(E) 5 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD AS WELL AS THE IMPUGNED ORDER. WE HAVE ALSO GONE THROUGH THE PAPER BOOK CONTAINING SUBMISSIONS AND DOCUMENTS FILED BY THE ASSESSEE IN RESPONSE TO THE QUESTIONNAIRE ISSUED BY THE OFFICE OF THE LD. CIT (E). IT IS SEEN THAT THE LD. CIT (E) HAS NOT TAKEN A HOLISTIC VIEW OF THE DOCUMENTS AND SUBMISSIONS SUBMITTED BY THE ASSESSEE SOCIETY. THE LD. CIT (E)ALSO HAS NOT CONSIDERED THE ENTIRE OBJECTS CLAUSE OF THE ASSESSEE SOCIETY BUT HAS HAND-PICKED ONLY TWO CLAUSES OF THE OBJECTS CLAUSE TO ARRIVE AT A CONCLUSION THAT THE ACTIVITIES OF THE SOCIETY WERE AIMED AT PROVIDING BENEFIT ONLY TO ITS MEMBERS/ RESIDENTS AND NOT TO PUBLIC AT LARGE OR THE GENERAL PUBLIC. IT IS ALSO APPARENT THAT LD. CIT (E) HAS NOT ENQUIRED INTO THE GENUINENESS OF THE OBJECTS OF THE ASSESSEES SOCIETY WHICH IS SINE QUA NON AT THE TIME OF CONSIDERING ANY APPLICATION FOR GRANT OF REGISTRATION U/S 12AA. HAVING GONE THROUGH THE ENTIRE GAMUT OF RECORD IN THIS CASE, WE ARE OF THE CONSIDERED OPINION THAT LD. CIT (E) SHOULD RE-CONSIDER THE ASSESSEES APPLICATION IN LIGHT OF THE VARIOUS SUBMISSIONS BY IT MADE EARLIER AND ALSO IN LIGHT OF THE SETTLED JUDICIAL PRECEDENTS IN THIS REGARD AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. THE LD. CIT (E) IS ITA NO. 4881/DEL/2018 DELHI BENGALI HINDU COOPERATIVE HOUSING SOCIETY LTD. VS CIT(E) 6 DIRECTED TO TAKE A HOLISTIC VIEW OF THE ENTIRE FACTUAL MATRIX OF THE CASE BEFORE ARRIVING AT A CONCLUSION. 6. IN THE FINAL RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MAY, 2020. SD/- SD/- (O.P. KANT) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 01/05/2020 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI