INDIAN NUMASMATIC HISORICAL & CULTURAL RESEARCH FOUNDATION, MUMBAI V. DIT (E), MUMBAI

ITA 4935/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8540 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 27-01-2011
• Assessment Year: misc
• Appeal Filed On: 27-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: MANISH RESHAMWALA
• Keywords: Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI BEFORE SHRI. D.K. AGARWAL (J.M.) AND SHRI T.R. SOOD (A.M.) ITA NO.4935/MUM/2009 INDIAN NUMISMATIC HISTORICAL & CULTURAL RESEARCH FOUNDATION C/O. R.C. RESHMWALA & CO, CHARTERED ACCOUNTANTS 323, VARMA CHAMBERS, 11 HOMJI STREET, FORT, MUMBAI 400 001. PAN : AAATI1505N VS. THE DIRECTOR OF INCOME-TAX (EXEMPTION), 6 TH FLR., PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI FARROKH IRANI & MANISH RESHAMWALA RESPONDENT BY : SHRI S.K. SINGH O R D E R PER D.K. AGARWAL, J.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 09.07.2009 PASSED BY THE DIRECTOR OF INCOME TAX (EXEMPTION) [IN SHORT, DIT(E)], MUMBAI. 2. BRIEFLY STATED FACTS OF THE CASE AS OBSERVED BY THE D IT(E) ARE THAT IN THIS CASE APPLICATION HAS BEEN RECEIVED ON 20.11. 2008 FOR CHANGE OF NAME IN THE REGISTRATION U/S.12A(A) OF THE ACT. HE FURTHER OBSERVED THAT REGISTRATION U/S.12A WAS GRANTED BY THE D IT(E) VIDE ORDER DATED 17.06.1980 ON THE BASIS OF TRUST DEED DATE D 29.04.1980. THE APPLICANT MADE A RESOLUTION DATED 05.11.2007 STATI NG THAT, THERE IS A CHANGE IN NAME AS WELL AS CLAUSE 2(C)(I) & 2(L) OF TH E TRUST DEED DATED 20.04.1980. THE OBJECTS OF THE TRUST AS WELL AS APPOINTMENT OF COMMITTEES AND SUB COMMITTEES ARE CHANGED AS PER SCHEDULE- III OF ITA NO.4935/MUM/2009 A.Y.: 2003-2004 2 THE B.P.T. ACT, 1950 DATED 11.09.2007. WHEREAS APPLI CANTS AUTHORIZED REPRESENTATIVE FILED A LETTER ON 05.05.2 009 TO EXPLAIN AS TO WHY THESE CHANGES DO NOT PERSE EFFECT THE OLD AND THE NE W SYSTEM OF OPERATIONS AND FUNCTIONING OF THE TRUST. THEREAFTER T HIS CHANGES/AMENDMENT TO THE TRUST DEED AND RULES FOR THE MANAGEMENT AND ADMINISTRATION WERE ACCEPTED BY THE CITY CIVIL C OURT, MUMBAI ON 13.08.2007. THE ASST. CHARITY COMMISSIONER, MUMBAI H AVE ALSO PASSED AN ORDER DATED 20.10.2007 ACCEPTING THE CHANGES/ AMENDMENT IN THE TRUST DEED. HE FURTHER OBSERVED THAT THERE IS NO DISPUTE AS TO THE FACT THAT THERE ARE CHANGES IN THE OBJECT CLAUSE OF T HE TRUST. RELYING ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ALLAHABAD AGRICULTURAL INSTITUTE AND ANOTHER VS. UNION OF INDIA [291 ITR 116] WHEREIN IT HAS BEEN HELD THAT THERE IS CHANGE IN THE IN THE OBJECT TRUST AFTER THE RESOLUTION WAS GRANTED U/S.12A OF THE ACT, THE DIT(E) OBSERVED THAT THE APPLICANT HAS NOT INFORMED A BOUT THE CHANGE IN THE OBJECTS CLAUSE AND ACCORDINGLY HE HAS WITHDRAWN TH E REGISTRATION GRANTED U/S.12A FROM THE DATE OF CHANGE, VIDE ORDER DATED 09.07.2009. 3. BEING AGGRIEVED BY THE ORDER OF THE DIT(E) THE A SSESSEE IS IN APPEAL BEFORE US CHALLENGING BOTH THE GROUNDS WITHDRAW AL OF REGISTRATION U/S.12A. 4. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THIS CASE THERE IS NO DISPUTE THAT THE R EGISTRATION WAS GRANTED U/S.12A VIDE ORDER 17.06.1980 APPEARING ON PAGE 1 OF THE ASSESSEES PAPER BOOK. HE FURTHER SUBMITS THAT THERE WAS CHANGE/AMENDMENT TO THE TRUST DEED AND RULE FOR THE MANAGEMENT AND ADMINISTRATION. THE BOMBAY CITY CIVIL COURT A FTER EXAMINING THE ITA NO.4935/MUM/2009 A.Y.: 2003-2004 3 REASONS AND THE CHANGES MADE IN THE OBJECT AND NAME HAS ACCEPTED THE SAME, VIDE SUIT NO.5447 OF 2005 ORDER DATED 06.1 2.2006 APPEARING AT PAGE 18 TO 30 OF THE ASSESSEES PAPER BOOK. HE FURTHER SUBMITS THAT ABOVE CHANGES HAVE ALSO BEEN ACCEPTED BY THE CHARITY COMMISSIONER MUMBAI ORDER DATED 20.10.2007 APPEARING AT PAGE 34 OF ASSESSEES PAPER BOOK. HE FURTHER SUBMITS THAT THE ASSESSE E HAS DULY FILED THE APPLICATION FOR CHANGE OF THE NAME TO THE COMMISSIONER OF INCOME-TAX/DIT(E), MUMBAI VIDE APPLICATION DATED 0 8.11.2008 APPEARING AT PAGE 37 OF THE ASSESSEES PAPER BOOK. HE FU RTHER SUBMITS THAT THE DIT(E) HAS GRANTED SECTION 12AA(1)(B)( I) OF THE ACT TO THE ASSESSEES TRUST FROM 01.04.2009 VIDE CERTIFICATE DA TED 18.01.2010 APPEARING AT PAGE 43 OF THE ASSESSEES PAPER BOOK. HE FURTHER SUBMITS THAT THE ASSESSEE HAS COMPLIED WITH ALL TH E NECESSARY REQUIREMENTS THEREFORE, THE DIT(E) WAS NOT JUSTIFIED I N WITHDRAWING THE REGISTRATION GRANTED U/S.12A OF THE ACT. THE LEA RNED COUNSEL FOR THE ASSESSEE WHILE DISTINGUISHING THE DECISION RELIED ON TH E LEARNED DIT(E) IN THE CASE OF ALLAHABAD AGRICULTURAL INSTITUT E AND ANOTHER VS. UNION OF INDIA (SUPRA), ON THE GROUND THAT THERE IS N O WHOLESALE ALTERATION FOR THE OBJECT OF THE TRUST AND THE ASSESSEE H AS FILED APPLICATION TO THE COMMISSIONER WITHIN TIME, PLACED STRO NG RELIANCE ON DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE OXF ORD ACADEMY FOR CAREER DEVELOPMENT VS. C.C.I.T. [2009] (315 ITR 382) AND HONBLE UTTARANCHAL HIGH COURT IN THE CASE OF WELHAM BOYS SCHO OL SOCIETY VS. CBDT [2006] (285 ITR 74) (UTTARANCHAL). HE FURTHE R SUBMITS THAT THE TRIBUNAL IN KAPOOR EDUCATIONAL SOCIETY VS. CIT (13 4 TTJ 250) (LUCKNOW), AFTER RELYING ON THE ABOVE DECISION HAS HEL D THAT AMENDMENT OF SECTION 12AA(3) BY THE FINANCE ACT, 2010 W .E.F. 01.06.2010 IS PROSPECTIVE IN NATURE AND IF ANY TRUST/IN STITUTION HAS BEEN REGISTERED PRIOR TO 01.10.2004, EITHER U/S.12A O R 12AA, CIT HAS ITA NO.4935/MUM/2009 A.Y.: 2003-2004 4 NO POWER TO CANCEL THE REGISTRATION U/S.12AA(3). HE F URTHER SUBMITS THAT IT IS SETTLED LAW THAT THE LATER DECISION BY THE BENCH OF EQUAL STRENGTH IS BINDING ON THE HIGH COURT AND INCOME TAX AU THORITIES THEREFORE, THE LATER JUDGMENT PASSED BY THE HONBLE AL LAHABAD HIGH COURT IN THE OXFORD ACADEMY FOR CAREER DEVELOPMENT ( SUPRA) AND HONBLE UTTARANCHAL HIGH COURT IN THE CASE OF WELHAM BOY S SCHOOL SOCEITY (SUPRA) ARE BINDING. HE, THEREFORE SUBMITS THAT THE WITHDRAWAL OF REGISTRATION U/S.12A BE CANCELLED AND THE REGISTRATI ON ALREADY GRANTED ON 17.06.1980 BE ORDERED TO BE CONTINUED. 5. ON THE OTHER HAND THE LEARNED DR SUPPORTS THE ORD ER OF THE DIT(E). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIN D THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS GRANTED REGISTRATION U/S.12A BY CIT, MUMBAI VIDE ORDER DATED 17.06.1980. THERE IS NO DISPUTE THAT THE MINOR CHANG E IN THE NAME OF TRUST AND ON THE OBJECTS OF THE TRUST HAVE BEEN ACCEPT ED BY THE CIVIL COURT, MUMBAI VIDE ORDER DATED 06.12.2006 AND BY THE ASST. CHARITY COMMISSIONER, MUMBAI VIDE ORDER DATED 20.10. 2007. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS FILED AN APPLICATION FOR CHANGE BEFORE THE CIT(A)/DIT(E) VIDE APPLICATION DATED 08.1 1.2008 WHICH HAS BEEN RECEIVED ON 20.11.2008. FURTHER THERE IS NO DI SPUTE THAT THE DIT(E) HAS GRANTED REGISTRATION U/S.12AA TO THE TRUST W .E.F. 01.04.2009 VIDE CERTIFICATE DATED 18.01.2010. 7. IN ALLAHABAD AGRICULTURAL INSTITUTE AND ANOTHER (SU PRA) RELIED ON BY THE REVENUE THE REGISTRATION WAS DENIED BY THE ASSESSI NG OFFICER AS ITA NO.4935/MUM/2009 A.Y.: 2003-2004 5 THERE WAS CHANGE IN THE OBJECT OF THE SOCIETY AND THE SOCI ETY HAS NOT OBTAINED ANY FRESH REGISTRATION U/S.12A OF THE ACT WITH REGARD TO THE CHANGED OBJECTS. IT HAS BEEN HELD THAT IN A SITUATION WHERE THE OBJECTS OF THE TRUST OR INSTITUTION HAD BEEN ALTERED W HOLESALE AFTER THE GRANT OF REGISTRATION AND INTIMATION OF THE ALTERATI ON HAD NOT BEEN GIVEN TO THE COMMISSIONER, THE ORDER OF THE ASSESSING AUT HORITY ON THE ASSUMPTION THAT THE REGISTRATION, WHICH WAS GRANTED ON THE BASIS OF A PARTICULAR REPRESENTATION, HELD OUT BY THE ASSESSEE NO LO NGER SURVIVED OR HELD GOOD, WOULD NOT CALL FOR INTERFERENCE BY THE COURT IN THE EXERCISE OF ITS EQUITABLE AND DISCRETIONARY JURISDICTION. 8. WHEREAS IN THE CASE BEFORE US THERE IS ONLY MINOR ALTERATION IN THE OBJECT OF THE TRUST AND NOT WHOLE ALTERATION AS OB SERVED IN THE CITED CASE, SECONDLY THE ASSESSEE HAS DULY APPLIED FOR CHANG E TO THE CONCERNED AUTHORITIES INCLUDING CIT/DIT(E) WHICH HAS BE EN DULY CONSIDERED IN THE IMPUGNED ORDER THAT THE SAID APPLICAT ION WAS RECEIVED ON 20.11.2008 AND THIRDLY THERE IS NO MATERI AL ON RECORD TO SHOW THAT THE INSTITUTION WAS NOT RUNNING FOR CHARITAB LE PURPOSE BUT FOR THE PURPOSE OF PROFIT INASMUCH AS THE FRESH REGISTRATION HAS BEEN GRANTED BY THE DIT(E) W.E.F. 01.04.2009 VIDE CERITIF CATE U/S.12AA DATED 18.01.2010 THEREFORE THE DECISION RELIED ON BY THE DIT(E) IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE P RESENT CASE. 9. THAT BEING SO AND KEEPING IN VIEW THAT THE CO-ORDI NATE BENCH OF THE TRIBUNAL IN KAPOOR EDUCATION SOCIETY VS. CIT (SUPR A) ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE AFTER FOLLOWING THE DE CISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF OXFORD ACADE MY FOR CAREER DEVELOPMENT (SUPRA) HAS HELD VIDE FINDING RECOR DED IN PARA 9 OF ITS ORDER AS UNDER: ITA NO.4935/MUM/2009 A.Y.: 2003-2004 6 9. IN THE ABOVE DECISION, THE HONBLE HIGH COURT HAS CLEARLY HELD THAT S.12AA(3) HAS NO RETROSPECTIVE EFFECT AS IT IS NEITHER EXPLANATORY NOR CLARIFICATORY IN NATURE AND THE CIT HAS NO POWER TO RESCIND THE ORDER PASSED BY THE CIT PRIOR TO 1 ST OCT., 2004. NOW THERE IS AN AMENDMENT TO S.12AA(3) BY THE FINANCE A CT, 2010, WHICH HAS INSERTED THE PHRASE OR HAS OBTAINED REGI STRATION AT ANY TIME UNDER S.12A AFTER THE WORDS SUB S.(1) AS AP PEARING IN S.12AA(3). THIS AMENDMENT HAS BEEN MADE APPLICABLE AND EFFECTIVE FROM 1ST JUNE, 2010. KEEPING IN VIEW THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF OXFORD ACADE MY FOR CAREER DEVELOPMENT (SUPRA) AND ALSO THE AMENDMENT O F S.12AA(3) BY THE FINANCE ACT, 2010 W.E.F. 1 ST JUNE, 2010, IT IS AMPLY CLEAR THAT S.12AA(3) IS PROSPECTIVE IN NATURE AND IF ANY TRUST / INSTITUTION HAS BEEN REGISTERED PRIOR TO 1 ST OCT., 2004 EITHER UNDER S.12A OR 12AA, THE CIT HAS NO POWER TO CANCEL THE R EGISTRATION UNDER S.12AA(3). IN THE INSTANT CASE, REGISTRATION TO THE ASSESSEE SOCIETY WAS GRANTED ON 1 ST MARCH, 1999 I.E. MUCH PRIOR TO 1 ST OCT., 2004 WHEN S.12AA(3) WAS INTRODUCED AND MADE EFFECTI VE FROM 1 ST OCT., 2004 AND THE CIT HAD NO JURISDICTION TO CANCE L THE REGISTRATION GRANTED TO THE ASSESSEE SOCIETY UNDER S.12A AND THAT THE ORDER PASSED BY THE CIT UNDER S.12AA(3) IS WITH OUT JURISDICTION, BAD IN LAW AND LIABLE TO BE QUASHED. WE ACCORDINGLY QUASH THE IMPUGNED ORDER OF THE LEARNED CIT CANCELL ING THE REGISTRATION GRANTED TO THE ASSESSEE SOCIETY UNDER S.12A OF THE ACT ON 1 ST MARCH, 1999. THE APPEAL OF THE ASSESSEE STANDS ALL OWED. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT O N RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE AFORESAID DECISION S RELIED ON THE LEARNED COUNSEL FOR THE ASSESSEE HOLD THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE DIT(E) HAS NO JURISDICTION TO CA NCEL THE REGISTRATION GRANTED ON 17.06.1980 AND IMPUGNED ORDE R PASSED BY THE DIT(E) IS WITHOUT JURISDICTION, BAD IN LAW AND LIABLE TO BE QUASHED AND ACCORDINGLY WE QUASH THE IMPUGNED ORDER OF DIT(E) WITH DRAWING THE REGISTRATION GRANTED TO THE ASSESSEE U/S.12A OF THE ACT. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. ITA NO.4935/MUM/2009 A.Y.: 2003-2004 7 10. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED ON THIS 9 TH DAY OF FEBRUARY, 2011. SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 9 TH FEBRUARY, 2011. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- , MUM BAI 4. COMMISSIONER OF INCOME TAX, CITY- , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH , MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI