M/s Commerce Teachers Association, New Delhi V. DIT (Exemptions), New Delhi

ITA 4927/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0363 (ITAT-DELHI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-01-2011
• Assessment Year: misc
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAOREM
• Assessee Lawyers: GURMEET S GREWAL RANJAN CHOPRA
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A NO. 4927/DEL/10 M/S. COMMERCE TEACHERS ASSOCIATION, C-206, PANDAV NAGAR, NEW DELHI AAAAC6679A VS. DIRECTOR OF INCOME TAX (EXEMPTIONS), DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI GURMEET S GREWAL, RANJAN CHOPRA , CA RESPONDENT BY: MS. BANITA DEVI NAOREM, SR. DR ORDER PER RAJPAL YADAV, JM: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. DIRECTOR OF INCOME TAX (EXEMPTION) NEW DELHI DATED 28 TH SEPTEMBER, 2010. THE ASSESSEE HAS PLEADED THAT LD. DIRECTOR OF INCOME TAX (EXEMPTIONS) WHILE GRANTING REGISTRATION U/S 12AA ( 1)(B)(I) OF THE INCOME ITA NO. 4927/DEL/10 2 TAX ACT HAS ERRED IN IMPOSING AN ADDITIONAL CONDITI ON VIDE CLAUSE NO. 11 IN THE ORDER. 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE IS AN ASSOCIATION OF COMMERCE TEACHER. IT IS REGISTERED U NDER SOCIETIES REGISTRATION ACT 1860 VIDE REGISTRATION NO. 60673/2 007. HE PLACED ON RECORD MEMORANDUM OF ASSOCIATION ON PAGES NO. 2-13 OF THE PAPER BOOK. HE POINTED OUT THAT ASSESSEE SOCIETY HAS BEEN FORMED FOR FULFILLMENT OF 54 OBJECTS. THE OBJECTS ARE MAINLY F OR PROMOTION OF COMMERCE EDUCATION. THE SOCIETY IS A WELFARE SOCIET Y WHOSE OBJECTS ARE OF CHARITABLE NATURE. LD. COUNSEL APPRISED US WITH MAIN OBJECTS FROM THE LIST OF 54 OBJECTS. HE POINTED OUT THAT LD. DIT HAS MADE AN ANALYSIS OF ASSESSEES ACTIVITIES AND WAS SATISFIED THAT THE SO CIETY DESERVES TO BE GRANTED A REGISTRATION U/S 12AA OF THE ACT. LD. DIT WHILE GRANTING THE REGISTRATION HAD PUT 11 CONDITIONS. THE CONDITION N O. FROM 1 10 ARE RELATED TO THE MAINTENANCE OF DOCUMENTS AND DETAILS FOR THE PURPOSE OF INCOME TAX. HOWEVER, AT SERIAL NO. 11 LD. DIT HAS I MPOSED THE FOLLOWING CONDITIONS :- THE SOCIETY SHOULD NOT CHARGE ANY FEE / AMOUNT FRO M THE BENEFICIARIES. ALSO SHALL NOT COLLECT ANY FEES ON A CCOUNT OF TALENT EXAM. 3. GRIEVANCE OF THE ASSESSEE RELATES TO IMPOSITION OF THIS CONDITION. LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT SECTI ON 12A DOES NOT ITA NO. 4927/DEL/10 3 STIPULATE ANY SUCH CONDITION. LD. DIT HAS NO POWER TO IMPOSE SUCH TYPE OF CONDITIONS. THE REGISTRATION NO. 12A IS TO BE GR ANTED TO THE ASSESSEE, IF IT FULFILS THE REQUIREMENT OF LAW. IN CASE THE A SSESSEE DOES NOT APPLY ITS INCOME FOR ITS AIMS AND OBJECTS OR VIOLATE THE PROV ISIONS OF INCOME TAX ACT THEN ALL SUCH ASPECTS WOULD BE LOOKED INTO BY T HE AO WHILE PASSING THE ASSESSMENT ORDER AND EXAMINING THE ISSUES IN TH E LIGHT OF SECTION 11,12 AND 13 OF THE INCOME TAX ACT. THERE ARE ALREA DY SUFFICIENT SAFEGUARDS AVAILABLE IN THE INCOME TAX ACT. FOR BU TTRESSING HIS CONTENTION HE RELIED UPON THE DECISION OF HONBLE D ELHI HIGH COURT IN THE CASE OF DIT (EXEMPTION) VS. JAPAN CHAMBER OF COMMER CE AND INDUSTRY (DELHI) REPORTED IN 221 CTR 145. HE ALSO RELIED UPO N DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF NEW LIFE IN CHRIST EVAN GELISTIC ASSOCIATION (NLC) VS. CIT. ON THE STRENGTH OF THIS DECISION SUBMITTED THAT LD. CIT(A) PERSUADED THE ASSESSEE TO EXCLUDE C ERTAIN ASPECTS FROM THE BYE LAWS OF THE SOCIETY HONBLE HIGH COURT HAS OBSERVED THAT THE COMMISSIONER HAS OVER STEPPED HIS LIMITS. HE PRAYED THAT CONDITION NO. 11 IMPOSED BY THE LD. DIT (EXEMPTIONS) BE EXPENSED FROM THE CERTIFICATE. 4. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER O F LD. DIT. SHE POINTED OUT THAT THIS CONDITION HAS BEEN VOLUNTARIL Y AGREED BY THE ASSESSEE. THE SOCIETY HAS FILED AN AFFIDAVIT TO THI S EFFECT. THEREFORE, LD. ITA NO. 4927/DEL/10 4 DIT HAS IMPOSED THIS CONDITION. IN REBUTTAL TO THE ARGUMENT OF LD. DR IT WAS POINTED OUT BY THE LD. COUNSEL THAT ASSESSEE SOCIETY WAS NOT AWARE ABOUT ITS RIGHT. LD. DIT MUST HAVE PREVAILED UPON THE SOCIETY FOR SUBMISSION OF SUCH EVIDENCE. OTHERWISE IN THE LAW T HERE IS NO REQUIREMENT TO FILE SUCH TYPE OF CONDITIONS. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGA RD TO THE FULFILLMENT OF RELEVANT CONDITIONS FOR CLAIM OF REGISTRATION U/S 1 2AA. LD. DIT HAS LOOKED INTO THE AIMS AND OBJECTS AVAILABLE IN THE MEMORAND UM OF ASSOCIATION OF THE ASSESSEES SOCIETY. HE WAS SATISFIED THAT ASSES SEE FULFILLED ALL THE REQUISITE CONDITION FOR GRANT OF A REGISTRATION U/S 12AA. WE HAVE PERUSED SECTION 12AA WHERE PROCEDURE FOR REGISTRATION HAS B EEN PROVIDED. IN THIS SECTION NOWHERE IT IS PROVIDED THAT LD. DIT WOULD G RANT THE REGISTRATION SUBJECT TO THE IMPOSITION OF CONDITION AS ENUMERATE D AT SERIAL. NO. 11 OF THE CERTIFICATE. IF ASSESSEE VIOLATES ANY RULES AND REGULATION ITS AIMS AND OBJECTS HAVE BEEN ALL THOSE ASPECTS WOULD BE LOOKED INTO BY THE AO AT THE TIME OF ASSESSMENT PROCEEDING. THE CASE OF THE ASSESSEE WOULD BE EXAMINED U/S 11,12 AND 13 OF THE INCOME TAX ACT. TH ESE SECTIONS CAN EASILY TAKE CARE OF ANY LAPSE AT THE END OF ASSESS EE. THEREFORE, IN OUR UNDERSTANDING THE CONDITION EXTRACTED SUPRA AT S. N O. 11 IS UNWARRANTED AND IT IS IMPOSED BY THE LD. DIT WITHOUT ANY BACKIN G FROM THE LAW. WE ITA NO. 4927/DEL/10 5 ALLOW THE APPEAL OF ASSESSEE AND EXPUNGE THE CONDIT ION NO. 11 FROM THE CERTIFICATE ISSUED BY THE DIT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11.2.2011 . SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11.2.2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT