M/S SPRING DEW PUBLIC SCHOOL, JAGRAON V. COMMISSIONER OF INCOME TAX (EXAMPTION), CHANDIGARH

ITA 492/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5687 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-03-2018
• Assessment Year: misc
• Appeal Filed On: 24-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY GOYAL LD
• Assessee Lawyers: GAURAV SHARMA LD
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.492(ASR)/2017 ASSESSMENT YEAR: M/S SPRING DEW PUBLIC SCHOOL G.T. ROAD, NANAKSAR, JAGRAON-142026 PAN:AAETS2427F VS. CIT(EXEMPTIONS), CR BUILDING, 5 TH FLOOR, SECTOR 17-E, CHANDIGARH-160017 (APPELLANT) (RESPONDENT) APPELLANT BY: SH. GAURAV SHARMA (LD. ADV .) RESPONDENT BY: SH. AJAY GOYAL (LD. DR) DATE OF HEARING: 13.03.2018 DATE OF PRONOUNCEMENT: 28.03.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORD ER DATED 30.05.2017 PASSED BY THE LD. CIT(EXEMPTION), CHANDIGA RH U/S 12AA(1)(B)(II) OF THE I.T. ACT, 1961 (HEREINAFTER CAL LED AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE ORDER OF LEARNED CIT IS BAD IN LAW. ITA NO.492/ASR/2017 M/S SPRING DEW PUBLIC SCHOOL VS. CIT(E) 2 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN HOLDING THAT THE APPELLANT HAS NOT BEEN CARRYING OU T ANY CHARITABLE ACTIVITY. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX H AS ERRED IN HOLDING THAT THE APPELLANT HAS NOT BEEN PROVIDING Q UALITY EDUCATIONAL SERVICES TO THE SOCIETY. 4. THAT, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN HOLDING THAT AN APPELLANT CANNOT SHIFT FROM ONE COD E (SECTION 10(23C) OF THE ACT) TO ANOTHER CODE (SECTION 12AA O F THE ACT). 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX HA S ERRED IN HOLDING THAT THE APPELLANT IS NEITHER A TRUST NOR A SOCIETY NOR A SECTION 25 COMPANY. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX H AS ERRED IN HOLDING THAT THE SOCIETY AND THE SCHOOL CANNOT BE H ELD TO BE COTERMINOUS AND ONE AND THE SAME. 7. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN HOLDING THAT THE APPELLANT DOES NOT QUALIFY FOR THE REGISTRATION UNDER SECTION 12AA OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THE INSTANT CASE , AN APPLICATION U/S 10A WAS FILED ON DATED 28.11.2016 SEEKI NG REGISTRATION U/S 12A OF THE ACT BY REVEALING THAT SOCI ETY IS AN ONGOING ENTITY SINCE 25.01.2000, WHICH WAS DECLINED BY THE LD. CIT(E) VIDE ITS ORDER IMPUGNED HEREIN DATED 30.05.20 17. FIRST REASON FOR REJECTION OF REGISTRATION WAS THAT ASSESSEE AFTE R CLAIMING EXEMPTION UNDER CODE, SHIFTED MIDWAY TO ANOTH ER BY DEFINING THE SCHEME LAID IN THE ACT. IT IS TRITE TO SAY THAT ONCE THE LAW PERMITS THE ASSESSEE TO CLAIM EXEMPTION UNDER DI FFERENT PROVISION THEN THE ASSESSEE CANNOT BE COMPELLED IN LAW, T O CLAIM EXEMPTION UNDER A PARTICULAR SECTION ONLY, HENCE, WE ARE ITA NO.492/ASR/2017 M/S SPRING DEW PUBLIC SCHOOL VS. CIT(E) 3 OF THE VIEW THAT THIS REASON OF THE LD. CIT(E) IS NOT CORRECT AND THEREFORE, REJECTED. SECOND REASON OF THE LD. CIT(E) IS THAT THE INTENTION OF THE APPELLANT SOCIETY IS AMPLY CLEAR THAT ITS EMPHASIS HA S BEEN TO CREATE ASSETS CONTINUOUSLY UNDER THE GARB OF CHARITY BY PRECLUDING ITS INCOME FROM TAX ANYHOW. IN OUR CONSIDERE D VIEW, THE AUTHORITY, WHILE CONSIDERING THE APPLICATION FOR R EGISTRATION , HAS TO SATISFY HIMSELF ABOUT THE OBJECT OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES IN ACCORDANCE WITH PARA METER S LAID DOWN U/S 12AA OF THE ACT. AS IN THE INSTANT CASE, THE OBJ ECTS OF THE SOCIETY ARE NOT IN CONTROVERSY, THEREFORE, WE DO NO T FIND THIS REASON AS PLAUSIBLE BECAUSE APPLICATION OF INCOME CAN BE SUBJECTED TO ASSESSMENT. WE HAVE IN FACT ALSO VERIFIED THIS ASPECT, BEING FACTUAL, FROM THE ASSESSEES BALANCE SHEETS AS ON 31.03.2014 TO 31.03.2016. THE ASSET CREATION IS NORMAL , AND THE ASSETS ACQUIRED ARE INTEGRAL TO THE IMPARTING OF EDUCAT ION (PB PGS. 15, 29 & 35). THE OBJECTION IS, THUS, CONSIDERED W HICHEVER WAY, WITHOUT SUBSTANCE. THIRD REASON OF THE LD. CIT(E) IS OF PAYING LESS SALARY TO THE EMPLOYEES, WHICH UNDERMINE / COMPROMISES THE QUALITY OF EDUCATION. IN THE INSTANT CASE FROM THE PAPER BOOK FILE D BY THE APPELLANT SOCIETY, IT REFLECTS THAT APPELLANT'S/SOCIETY'S SCHOOL IS DOING WELL IN THE EDUCATION FIELD AND RESULTS ARE APPR ECIABLE AND THE TEACHING STAFFS ARE MORE OR LESS, ADEQUATELY ADJU DICATED HAVING BASIC DEGREES/QUALIFICATIONS AS REQUIRED, THERE FORE, IN THE ABSENCE OF ANY MATERIAL ON RECORD QUA INFERIOR QUALITY OF ITA NO.492/ASR/2017 M/S SPRING DEW PUBLIC SCHOOL VS. CIT(E) 4 EDUCATION AND/OR COMPROMISES IN THE EDUCATION, NO ADVERSE INFERENCE CAN BE DRAWN AND HENCE, THE REASON DOES NOT SOU ND TO BE GOOD AND STANDS REJECTED. NEXT REASON FOR REJECTION BY THE LD. CIT(E) IS THAT THE APPELLANT SOCIETY IS NEITHER A TRUST NOR A SOCIETY OR A COMPANY U/S 25 OF THE COMPANIES ACT, HOWEVER, THE LD. AR HAS D RAWN OUR ATTENTION TO THE COPY OF THE REGISTRATION CERTIFICATE W HICH IS PART OF THE PAPER BOOK TO THE EFFECT THAT THE APPELLANT SO CIETY IS DULY REGISTERED UNDER THE REGISTRATION SOCIETY ACT., HENCE, THIS REASON ALSO DOES NOT STANDS IN THE GRANT OF REGISTRATION. LAST REASON OF THE LD. CIT(E) IS THAT THE NAME OF THE APPELLANT SOCIETY AND SCHOOL RUN BY IT ARE THE SAME AND THEREFORE, THE SOCIETY AND THE SCHOOL CANNOT BE HELD TO BE CO- TERMINUS AND ONE OF THE SAME, THIS REASON SEEMS TO BE ILL OGICAL AND PERVERSE BECAUSE IN THE LAW AS APPLICABLE TO THE IN STANT CASE, THERE IS NO SUCH EMBARGO ENSHRINED IN LAW AND/OR D ECLARED BY THE HIGHER COURTS, THEREFORE, THIS REASON IS ALSO NOT TENABLE. IN THE INSTANT CASE, THROUGH SHOW NOTICE, THE APPLICANT WAS ASKED TO FILE SOME DOCUMENTS AS MENTIONED IN PARA NO. 5 OF THE IMPUGNED ORDER ON 09.05.2017 WHICH WAS RESPONDED BY FILING A PART REPLY BY THE APPELLANT ON 09-05-2017, THEREAFTER, APPELLANT WAS FURTHER REQUESTED TO SUBMIT THE COPY OF T HE LEASE AGREEMENT AND SALARY DETAILS, WHICH WERE ALSO SUBMITTED BY THE APPELLANT ON 15.05.2017 AND THE LD. CIT(E) WHILE DE CIDING THE APPLICATION, PERUSED THE REPLY SUBMITTED BY THE APPELL ANT IN THE ITA NO.492/ASR/2017 M/S SPRING DEW PUBLIC SCHOOL VS. CIT(E) 5 LIGHT OF THE PROVISION OF THE INCOME TAX ACT FOR GRAN T OF APPROVAL U/S 12A. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESS EE DID NOT CO-OPERATE WITH THE PROCEEDING AND/OR DID NOT FIL E RELEVANT DOCUMENTS DEMANDED/REQUIRED BY THE LD. CIT(E). IN THE AFORESAID FACT, CIRCUMSTANCES, ANALYZATION, CONSIDERATION AND OBSERVATIONS, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(E) HAS WRONGLY DECLINED THE REGISTRAT ION U/S 12AA OF THE ACT , TO THE APPELLANT HEREIN WHICH OTHER WISE IT IS ENTITLED TO GET, THEREFORE, WE DIRECT THE LD. CIT(E) TO GRANT THE REGISTRATION U/S 12AA OF THE ACT TO THE APPELLANT HER EIN, HENCEFORTH, HOWEVER CAN BE SUBJECTED TO CONDITION, IF AN Y , THE LD. CIT(E), DEEMS FIT AND PROPER TO IMPOSE, IN ACCORDAN CE OF LAW. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 .03.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:28.03.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S SPRING DEW PUBLIC SCHOOL, JAGRAON (2) THE CIT(EXEMPTION), CHANDIGARH (3) THE CIT(EXEMPTION), CHANDIGARH (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER