Vipan Langer Education Trust, Jammu V. The Commissioner of Income-tax, Jammu

ITA 519/ASR/2011

• Counselvise Citation: 51920914 RSA 2011
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-10-2012
• Assessment Year: misc
• Appeal Filed On: 17-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: VINAMAR GUPTACA
• Keywords: Charitable institution; Revenue expenditure; Capital expenditure
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.519 (ASR)/2011 ASSESSMENT YEAR: NIL PAN :AAAV9344A M/S. VIPAN LANGER EDUCATIONAL TRUST, VS.THE COMMISS IONER OF INCOME-TAX, RAJOURI, (J & K). JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. VINAMAR GUPTA,CA RESPONDENT BY:SH. AMRIK CHAND, DR DATE OF HEARING:09/10/2012 DATE OF PRONOUNCEMENT:22/10/2012S ORDER PER BENCH ; THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER OF LD. COMMISSIONER OF INCOME TAX, JAMMU, DATED 17. 08.2011 ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT, J & K JAMMU HAS BYE PASSED TH E PROVISIONS OF CLAUSE (A) AND CLAUSE (B) OF SUB SECTION 1 OF SE CTION 12AA OF THE I.T.ACT, 1961 BY NOT RESTRICTING HIMSELF TO THE OBJECTS OF THE APPELLANT TRUST AND ITS ACTIVITIES AND TRAVELED IN AN AREA BEYOND WHICH IS NOT RELATED TO THE GRANT OF REGISTRATION O F THE APPELLANT TRUST. 2 2. THAT THE LD. CIT, J & K JAMMU HAS ERRED IN LAW A ND ON FACTS IN REFUSING TO GRANT REGISTRATION TO THE APPELLANT TRU ST BY EXPRESSING HIS DIS-SATISFACTION REGARDING GENUINENESS OF THE A CTIVITIES OF THE APPELLANT TRUST ON THE GROUND THAT APPELLANT TRUST HAS EARNED SURPLUS PROFIT AFTER MEETING REVENUE EXPENDITURE AN D NOT CONSIDERING CAPITAL EXPENDITURE AS APPLICATION OF I NCOME. 3. THAT THE LD. CIT, J & K JAMMU HAS WRONGLY RELIED UPON THE DECISION OF THE HONBLE UTTARKHAND HIGH COURT IN TH E CASE OF CIT VS. QUEENS EDUCATIONAL SOCIETY (223 CTR 395), H ALDWANI AND CIT VS. ST. PAUL SR. SECONDARY SCHOOL, KATHGODA M DATED 24.09.2007, AS THESE DECISIONS PERTAINS TO CLAIM OF EXEMPTION U/S 10(23)(C)(IIIAD) OF THE INCOME TAX ACT, 1961 AN D NOT TO GRANT OF REGISTRATION U/S 12AA(1) OF THE INCOME TAX ACT, 1961. 4. THAT WITHOUT PREJUDICE TO GOA NO.3 ABOVE, LD. CI T, J & K, JAMMU IS NOT JUSTIFIED IN NOT RELYING UPON THE DECI SION OF THE HONBLE HIGH COURT OF THE PUNJAB & HARYANA IN THE C ASE OF PINE GROVE INTERNATIONAL CHARITABLE TRUST VS. UNION OF INDIA (230 CTR 477) FOR THE REASON THAT THE DEPARTMENT H AS FILED AN SLP IN THE HONBLE SUPREME COURT OF INDIA IN THIS C ASE, AS THE OPERATION OF THE DECISION OF THE HONBLE P & H HIGH COURT HAS NOT BEEN STAYED. 5. THAT THE LD. CIT, J & K JAMMU HAS NOT APPRECIAT ED THE ACTIVITIES CARRIED ON BY THE APPELLANT TRUST AS PER ITS OBJECTS WHICH IS PRIMARILY IMPARTING OF EDUCATION IN THE BA CKWARD AREA OF J & K STATE AND ACCORDINGLY IT SPENT ALMOST ITS ENTIRE INCOME ON ACHIEVING THIS OBJECT AND HAS NOT SPENT ANY INCO ME NOT GERMANE TO THE OBJECTS OF THE TRUST WHICH IS EVIDEN T FROM THE GROSS RECEIPTS AND EXPENDITURE STATEMENTS SUBMITTED TO THE LD. COMMISSIONER OF INCOME TAX FOR THE ACCOUNTING YEARS 2007-08, 2008-09, 2009-2010. 2. THE ASSESSEE TRUST CONSTITUTED ON 01.06.2007 AND FILED AN APPLICATION U/S 12A(A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) ON 17.03.2011, WHICH IS BELATED ONE. THE LD. CIT, JAM MU FIXED THE CASE OF THE 3 ASSESSEE FOR HEARING ON 02.08.2011 AND FURTHER ADJO URNED TO 16.08.2011 BY REQUESTING THE ASSESSEE TO FILE VARIOUS INFORMATION WHICH THE LD. CIT HAS MENTIONED AT PAGE 1 & 2 OF THE IMPUGNED ORDER BUT T HE ASSESSEE HAS NOT FURNISHED THE REQUIRED EVIDENCE TO THE LD. CIT, JAM MU. THE ASSESSEE HAS FILED ONLY A WRITTEN SUBMISSIONS DATED 16.08.2011 B Y STATING THAT THE ASSESSEE-TRUST IS RUNNING A SCHOOL UNDER THE NAME AND STYLE OF INTERNATIONAL SCHOOL AT RAJOURI FROM THE YEAR OF ITS CONSTITUTION . THE LD. CIT NOTICED THAT THERE IS EXCESS OF INCOME OVER EXPENDITURE IN EXCE SS OF 15% FOR THE YEAR ENDING 31.03.2009 AND 31.03.2010 AND CONFRONTED THE SAME TO THE LD. COUNSEL FOR THE ASSESSEE ALONGWITH ORDER OF THE HON BLE UTTRAKHAND HIGH COURT IN THE CASES OF CIT VS. QUEENS EDUCATIONAL SO CIETY, HALDWANI AND CIT VS. ST. PAULS SR. SECONDARY SCHOOL, KATHGODAM DATED 24.09.2007, IN WHICH THE HONBLE HIGH COURT HAS HELD THAT IF THE P ROFIT IS PROVED BY AN EDUCATIONAL SOCIETY THEN THAT WILL BE INCOME TO THE SOCIETY AS SURPLUS AMOUNT REMAINS IN THE ACCOUNT BOOKS OF THE SOCIETY AFTER M EETING ALL THE EXPENSES INCURRED TOWARDS IMPARTING THE EDUCATION AND THE HO NBLE HIGH COURT HAS REFUSED TO TREAT THEIR INCOME AS TAX EXEMPT. THE AS SESSEE HAS FILED THE REPLY WHICH THE LD. CIT, HAS REPRODUCED AT PAGES 2 & 3 OF THE IMPUGNED ORDER ALONGWITH TOTAL RECEIPT AND SURPLUS OF THE TRUST F OR THE FINANCIAL YEARS 2008- 09 & 2009-2010. AFTER CONSIDERING THE REPLY FILED B Y THE ASSESSEE ALONGWITH 4 THE STATEMENTS OF TOTAL INCOME AND EXPENDITURE IN T HE YEARS 2007-08, 2008- 09 & 2009-2010. THE LD. CIT REJECTED THE REQUEST OF THE ASSESSEE FOR GRANT OF REGISTRATION OF THE ASSESSEE-TRUST BY CITING VAR IOUS DECISIONS AGAINST THE ASSESSEE, WHICH IS AT PAGE 4 OF THE IMPUGNED ORDER. 3. AGGRIEVED BY THE IMPUGNED ORDER DATED 17.08.2011 , THE ASSESSEE FILED THE PRESENT APPEAL BY RAISING THE GROUNDS REPRODUCE D, AS ABOVE. 4. AT THE TIME OF HEARING, SH. VINAMAR GUPTA,CA AP PEARED AND FILED THREE PAPER BOOKS IN WHICH HE HAS ATTACHED TRUST DE ED, DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINE GR OVE INTERNATIONAL CHARITABLE TRUST (PB-1), AUDITED BALANCE SHEET AND INCOME & EXPENDITURE FOR THE YEARS ENDING 31.03.2008, 31.03.2009 & 31.03.201 0, INCOME TAX RETURN ACKNOWLEDGMENT FOR THE ASSESSMENT YEAR 2010-2011, COPY OF AOS REPORT, COPY OF REPORT OF ACTIVITIES , LETTER DATED 14.03.2 011, COPY OF REPLY DATED 2.8.2011 FILED BEFORE THE LD. CIT. ALL THESE DOCUME NTS, THE ASSESSEE HAS FILED BEFORE THE LD. CIT, AS PER CERTIFICATE GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE. THE ASSESSEE HAS ALSO FILED VARIOUS DECIS IONS IN SEPARATE PAPER BOOK TO SUPPORT ITS CONTENTION FOR GRANTING THE REG ISTRATION U/S 12AA OF THE ACT. 4.1 THE LD. COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TOWARDS THE AIMS AND OBJECTS OF THE ASSESSEE-TRUST ALONGWITH MA IN ORDER OF THE HONBLE 5 PUNJAB & HARYANA HIGH COURT PASSED IN THE CASE OF P INEGROVE INTERNATIONAL CHARITABLE TRUST VS UNION OF INDIA & ORS. (2010 32 7 ITR 73 AND SUBMITTED THAT THE LD. CIT HAS PASSED A NON-SPEAKING ORDER WH ICH DESERVES TO BE CANCELLED AND HE REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE ACCEPTED. 5. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DER PASSED BY THE LD. CIT, JAMMU. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE I MPUGNED ORDER PASSED BY THE LD. CIT, JAMMU ALONGWITH PAPER BOOKS FILED BY THE ASSESSEE, AS INDICATED ABOVE. AFTER GOING THROUGH THE CASE L AWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT, JAMMU HAS PASSED THE IMPUGNED ORDER, WHICH IS NON-S PEAKING ONE AND HE HAS ONLY REPRODUCED THE CONTENTIONS OF ASSESSEES C OUNSEL AND REQUESTED THE ASSESSEE TO FILE SOME INFORMATION. ON RECEIPT OF T HE SUBMISSIONS FILED BY THE ASSESSEE BEFORE HIM AS WELL AS TOTAL RECEIPTS AND S URPLUS OF THE TRUST FOR THE YEARS 2008-09 & 2009-2010 AND LASTLY BY CITING SOME DECISIONS AGAINST THE ASSESSEE, REJECTED THE REQUEST OF THE ASSESSEE FO R GRANT OF REGISTRATION, AS REQUESTED BY THE ASSESSEE. THE LD. CIT HAS NOT MENT IONED WHETHER HE HAS MADE ANY INQUIRY ABOUT THE OBJECTS OF THE TRUST AND WHETHER OBJECTS OF THE TRUST ARE CHARITABLE OR NOT. WE FIND THAT HE EMPHAS IZED HIS DECISION ON THE 6 NON-GENUINENESS OF ASSESSEES ACTIVITIES AND APPLIC ATION OF INCOME OF TRUST FOR CHARITABLE OR NON-CHARITABLE PURPOSES. AFTER P ERUSING THE EVIDENCE FILED BY THE ASSESSEE, WE ARE OF THE VIEW THAT WE ARE NOT COMMENTING UPON THE APPRECIATION OF THE EVIDENCE FILED BY THE ASSESSEE, AS INDICATED ABOVE. BUT IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER SHOULD BE RE-EXAMINED BY THE LD. CIT AND MAKE THE INQUIRY PERMISSIBLE UNDER SECTION 12AA OF THE ACT AND DECIDE THE APPLICATION OF THE ASSESSEE FOR GRANTING REGISTRATION AFTER GIVING FULL OPPORTUNIT Y TO THE ASSESSEE FOR SUBSTANTIATING ITS CLAIM. THEREFORE, THE ISSUE IN D ISPUTE IS SET ASIDE TO THE FILE OF THE LD. CIT, JAMMU, WHO WILL DECIDE THE ISSUE I N DISPUTE UNDER THE LAW AND AFTER GIVING OPPORTUNITY TO THE ASSESSEE. ACCO RDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND OCTOBER, 2012. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22ND OCTOBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. VIPAN LANGER EDUCATIONAL TRUST, R AJOPURI, 2. THE CIT, JAMMU. 3. THE SR DR, ITAT, AMRITSAR.