M/s Prashar Shiksha Samiti, Sonepat V. CIT (E), Chandigarh

ITA 5134/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2994 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: misc
• Appeal Filed On: 29-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHYCIT
• Section: 12A; 12AA; 12

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 5134 /DEL/2016 A Y --- APPEAL AGAINST ORDER U/S 12AA OF THE ACT PRASHAR SHIKSHA SAMITI , SHAMBHU DAYAL SHIKSHA SADAN, SENIOR SECONDARY SCHOOL, VPO KHANDA, THE, KHARKHODA, SONEPAT PAN AA BTP2414N VS CIT ( EXEMPTIONS) CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TARUN ROHTAGI, CA RESPONDENT BY: MS. PARAMITA TRIPATHY,CIT (DR) DATE OF HEARING 09/01/2018 DATE OF PRONOUNCEMENT 1 9 /03/2018 O R D E R PER PRASHANT MAHARISHI, ACCOUNTANT MEMBER 1 . THIS APPEAL IS FILED BY ASSESSEE , AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTION), CHANDIGARH D ATED 30 / 07 / 2016 PASSED UNDER SECTION 12 A A OF THE INCOME TAX ACT (THE ACT) REJECTING THE APPLICATION OF REGISTRATION MADE BY THE 2 ASSESSEE TRUST. THE ASSESSEE HAS THOUGH RAISED 7 EFFECTIVE GROUNDS OF APPEAL HOWEVER, THE ONLY GRIEVANCE WITH RESPECT TO NON GRANTING OF R EGISTRATION. 2 . FOLLOWING GROUNDS OF APPEAL ARE RAISED : ( A ) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX WAS NOT JUSTIFIED IN REJECTING THE GRANT OF REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961. ( B ) THAT THE LE ARNED COMMISSIONER OF INCOME TAX HAVING HELD THAT THE SOLE OBJECT OF THE SOCIETY IS TO IMPART EDUCATION AS DEFINED IN SECTION 2(15) OF THE ACT OUGHT TO HAVE ALLOWED REGISTRATION U/S 12AA . ( C ) WHETHER THE LEARNED COMMISSIONER OF INCOME TAX WAS WITHIN HIS POWERS TO DENY THE REGISTRATION U/S 12AA ON THE GROUND THAT THE APPELLANT OUGHT TO HAVE ITSELF REGISTERED U/S 10(23 C ) (VI) INSTEAD OF MAKING APPLICATION U/S 12AA. ( D ) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME T AX HAS ERRED IN LAW IN APPLYING THE RIGHT TO EDUCATION ACT TO DENY THE REGISTRATION U/S 12A . ( E ) THAT THE FINDING RECORDED BY THE LEARNED COMMISSIONER THAT THE TRANSPORTATION CHARGES ARE' AS LARGE ' AS ANNUAL CHARGES' IS CONTRARY TO THE MATERIAL ON RECORD AND THE INFERENCE DRAWN IS PATENTLY ERRONEOUS . ( F ) THAT THE SALARY OF TEACHERS OF AN EDUCATIONAL INSTITUTION CANNOT BE A GROUND TO DENY REGISTRATION U/S 12A . ( G ) THAT IN VIEW OF THE MATERIAL PLACED ON RECORD REGARDING GENUINENESS OF THE ACTIVITIES OF THE TRUST AND OF ITS OBJECTS , THE LEARNED COMMISSIONER OUGHT TO HAVE GRANTED REGISTRATION U/S 12A R/W SECTION 12 AA OF THE ACT. 3 ( H ) THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, ALTER, MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AT THE TIME OF HEARING. 3 . THE ASSESSEE FILED ITS APPLICATION IN FORM NO. 10 A ON 13/1/2016. THE SOCIETY WAS IN OPERATION FROM 31.05.1995. THE OBJECT OF THE SOCIETY IS TO SPREAD EDUCATION AND TO RUN BED COLLEGES , ENGINEERING INSTITUTES ETC. IT IS ALSO RUNNING COMPUTER CENTERS AND OTHER COACHING CENTRES. THE LD. CIT (E) GRANTED THE ASSESSEE THE OPPORTUNITY OF HEARING ASKING IT TO FURNISH SEVERAL DETAILS. THE ASSESSEE SUBMITTED PART DETAILS ON 12. 07,2016. HOWEVER, ON EXAMINATION OF THE DETAILS THE LD. CIT WAS OF THE VIEW THAT ASSESSEE IS SOLELY EXISTING FOR THE PURPOSE OF EDUCATION IT SHOULD FILE ITS APPLICATION UNDER PROVISIONS OF SECTION 10 ( 23 C ) OF THE ACT RATHER THAN U/S 12AA. FURTHER IT WAS NOTED BY HIM THAT AS PER THE AUDITED ACCOUNTS IT REVEALS THAT OVER THE PERIOD OF TIME THE ASSESSEE TRUST HAS CREDIT ASSETS RATHE R THAN DEPLOYMENT OF FUNDS FOR THE EDUCATION . H E FURTHER NOTED THAT ASSESSEEE IS ALSO ADDING MANY VEHIC LES THE FIXED ASSETS AND TRANSPORTATION CHARGES ARE EQUAL TO THE ACTUAL CHARGES RECEIVED FROM THE STUDENTS . T HEREFORE, HE HELD THAT ASSESSEE IS GENERATING ANOTHER SOURCE OF INCOME WHICH IS NOT FROM EDUCATION. HE FURTHER HELD THAT THE SALARY AND FEE STRUCTU RE OF THE SOCIETY WAS NOT IN SYNC WITH INSTRUCTION ISSUED BY CBSE. THEREFORE, HE REJECTED THE APPLICATION OF THE ASSESSEE TRUST. 4 4 . THE LD. AR SUBMITTED THAT THE ASSESSEE IS S OLELY EXISTING FOR THE EDUCATIONAL ACTIVITIES. IT OBJECTS IS TO IMPART EDUCATION SINCE IT IS INCEPTION AND IS RUNNING SECONDARY SCHOOL FOR BOYS AND GIRLS. HE FURTHER STATED THAT THERE ARE 760 STUDENTS IN THIS SCHOOL AND ASSESSEE HA S ALSO PROVIDED FEE CONCESSIONS TO THE POOR, NEEDY AND DESERVING STUDENTS . HE FURTHER STATED THA T IT IS ALSO AFFILIATED WITH CBSE . HE FURTHER SUBMITTED THAT MERELY BECAUSE THE ASSESSEE IS ALSO ENTITLED TO EXEMPTION U/S 10 (23 C) , IT IS APPLICATION FOR REGISTRATION U/S 12 AA CANNOT BE REJECTED. IT WAS FURTHER SUBMITTED THAT TRANSPORT CHARGES RECEIVED FROM THE STUDENTS ARE BASED ON THE DISTANCE . HE FURTHER SUBMITTED THAT PURCHASES OF VEHICLES ARE OF BUSES TO TRANSPORT THE STUDENTS FROM THEIR RESPECTIVE VILLAGES TO THE SCHOOLS . IN VIEW OF THIS HE SUBMITTED THAT THE TRUST IS ELIGI BLE FOR REGISTRATION U/S. 12 AA OF THE ACT. HE FURTHER SUBMITTED THAT ON IDENTICAL FACTS THE ISSUE HAS BEEN DECIDED BY COORDINATE BENCH IN FAVOUR OF THE ASEESSEE IN ITA NO. 5706 AND 5707/D/12 DATED 18.01.2013. 5 . THE LD. CIT DR SUPPORTED THE ORDER OF THE L D. CIT (E). 6 . WE HAVE CAREFULLY EXAMINED THE RIVAL CONTENTIONS AS WELL AS PERUSED THE ORDER OF THE LD. CIT(E). THE ASSESSEE IS A SOCIETY ENGAGED IN EDUCATIONAL ACTIVITIES. ACCORDING TO SECTION 12 AA OF THE INCOME TAX ACT , T HE LD. CIT (E) HAS TO EXAMINE AND SATISFY HIMSELF ABOUT THE GENUINESS OF THE ACTIVITIES OF THE TRUST AND OBJECT OF THE TRUST . IN THE 5 PRESENT CASE WE DO NOT FIND ANY SUCH CONDITION THAT IF THE ASSESSEE QUALIFIES FOR EXEMPTION U/S 10 ( 23 C ) OF THE ACT . IT IS NOT ELIGIBLE FOR REGISTRATION U/S. 12 AA OF THE ACT . IT IS ADMITTED FACT THAT ASSESSEE HAS NOT MADE CLAIM THAT IT IS ELIGIBLE FOR EXEMPTION U/S 10 (23 C) OF THE ACT. FURTHER THE ACTIVITIES OF ACQUIRING THE BUSES BY THE ASSESSEE IS FOR TRANSPORTATION OF THE STUDENTS FR OM VARIOUS NEARBY VILLAGES TO THE SCHOOL. IT IS NOT THE CASE OF THE LD. CIT THAT TRANSPORT FACILITY IS USED BY NON STUDENTS ALSO. IT IS ALSO NOT THE CASE THAT TRANSPORT FACILITY PROVIDED TO THE STUDENTS IS NOT INCIDENTAL TO THE MAIN OBJECT OF EDUCATION OF THE ASSESSEE. THE LD. CIT ALSO DID NOT CONTROVERT THE SUBMISSION OF THE ASSESSEE THAT IT ALSO CHARGES CONCESSIONAL FEES FROM THE POOR AND NEEDY STUDENT. FURTHER THERE IS NO EVIDENCE THAT LOWER SALARY RESULT INTO LOWER QUA LITY OF EDUCATION. THE DECISION RELIED UPON BY THE ASSESSEE IN CASE OF SHRI G IAN GANGA VOCATIONAL & EDUCATIONAL SOCIETY IN IT A NO. 5706 AND 5707 /DEL/2012 IS ALSO ON THE IDENTICAL FACTS . IN VIEW OF THE ABOVE FACTS WE SET ASIDE THE WHOLE ISSUE OF REGISTRATION U/S 12 AA OF THE TRUST TO THE FILE OF THE LD. CIT (E) WITH A DIRECTION TO CONSIDER THE APPLICATION OF THE ASSESSEE TRUST ON ITS MERITS. THE LD. CIT (E) MAY ALSO GRANT APPROPRIATE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE DE CIDING THE ISSUE. 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED WITH ABOVE DIRECTION. 6 8. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 .03.2018 . S D / - S D / - ( SUDHANSHU SRIVASTAVA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 9 /03/2018 *NEHA* COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 7 1. DRAFT DICTATED ON 1 3 .0 3 .2018 PS 2. DRAFT PLACED BEFORE AUTHOR 14 .0 3 .2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.