SAINT MAHAPRAYAG EDUCATIONAL SOCIETY, LUDHIANA V. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH

ITA 521/ASR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5372 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-08-2019
• Assessment Year: 2018-2019
• Appeal Filed On: 29-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P SINGH
• Keywords: Charitable institution; Opportunity of being heard; Set aside
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. B. R. BASKARAN, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 521/ASR/2018 A SSESSMENT YEAR: 2018-19 SAINT MAHAPRAGYA EDUCATIONAL SOCIETY, RAIKOT ROAD, JAGRAON 142026, DISTT. LUDHIANA (PUNJAB) [PAN: AADAS 0870Q] VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), 5 TH FLOOR, SECTOR 17-E, CHANDIGARH- 160017 (APPELLANT) (RESPONDENT) I.T.A. NO. 523/ASR/2018 A SSESSMENT YEAR: 2018-19 ROOP VATIKA, NEAR SHANI MANDIR, DISPOSAL ROAD, 142026, DISTT. LUDHIANA (PUNJAB) [PAN: AABAR 8285L] VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), 5 TH FLOOR, SECTOR 17-E, CHANDIGARH- 160017 (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SH. M. P. SINGH CIT-DR DATE OF HEARING: 22.08.2019 DATE OF PRONOUNCEMENT: 22.08.2019 ITA NOS. 521&523/ASR/2018 (AY 2018-19) SAINT MAHAPRAGYA EDU. SOCIETY & ORS V. THE CIT(E) 2 ORDER PER BENCH: BOTH THE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE DIRECTED AGAINST THE ORDERS BY LD CIT(EXEMPTIONS) IN THEIR RESPECTIVE HA NDS REJECTING THE APPLICATION FILED BY THEM SEEKING REGISTRATION U/S 12AA OF THE ACT. 2. THE LD COUNSEL OF THE ASSESSEE HAS FILED LE TTERS SEEKING ADJOURNMENT. HOWEVER, CONSIDERING THE ISSUES CONTESTED IN THESE APPEALS, WE REJECTED THE REQUEST FOR ADJOURNMENT AND PROCEED TO DISPOSE OF THESE TWO APPEALS. SINCE THE ISSUE URGED BY THESE ASSESSEES IS COMMON IN NATURE, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER. 3. WE HEARD LD CIT-DR AND PERUSED THE RECORD. BOTH THESE ASSESSEE ARE CHARITABLE TRUSTS AND FILED APPLICATION SEEKING REG ISTRATION U/S 12AA OF THE ACT. WE NOTICE FROM THE ORDERS PASSED BY LD CIT(E) THAT BOTH THESE ASSESSEES HAVE FURNISHED VARIOUS DETAILS CALLED FOR BY HIM. THE L D CIT(E) NOTICED THAT THESE ASSESSEES HAVE EARLIER CLAIMED EXEMPTION U/S 20(23C ) OF THE ACT. HOWEVER, THEY HAVE FILED APPLICATIONS NOW SEEKING REGISTRATION U/ S 12AA OF THE ACT, AFTER EXPIRY OF CONSIDERABLE TIME FROM THE DATE OF FORMATION OF TRUSTS. THE LD CIT(E), ACCORDINGLY, TOOK THE VIEW THAT THE ASSESSEE SHOULD HAVE SOUGHT REGISTRATION U/S 10(23C)(VI) OF THE ACT. THE LD CIT(E) ALSO EXAMINE D THE FINANCIAL STATEMENTS AND FOUND CERTAIN DEFICIENCIES. IN THE CASE OF SAINT M AHAPRAYAG EDUCATIONAL SOCIETY, THE LD CIT(E) WAS OF THE VIEW THAT THE ASSESSEE HAS MADE DEPOSIT OF DEMONETIZED CURRENCY INTO THE BANK ACCOUNT AND FURTHER THE PAYM ENT OF SALARY TO TEACHERS WAS VERY LOW. IN THE CASE OF ROOP VATIKA, THE LD CIT(E ) WAS OF THE VIEW THAT THE SALARY PAID TO TEACHERS WAS VERY LOW. ACCORDINGLY, THE LD CIT(E) TOOK THE VIEW ITA NOS. 521&523/ASR/2018 (AY 2018-19) SAINT MAHAPRAGYA EDU. SOCIETY & ORS V. THE CIT(E) 3 THAT BOTH THESE ASSESSEES HAVE NOT FULFILLED THE CO NDITIONS LAID DOWN IN SEC.12A OF THE ACT. ACCORDINGLY THE LD CIT(E) REJECTED THE AP PLICATIONS OF BOTH THE PARTIES. 4. WE HAVE CAREFULLY PERUSED THE PROVISIONS OF SEC.12AA OF THE ACT AND NOTICE THAT THE ACT DOES NOT BAR AN ASSESSEE, WHO HAD CLAI MED EXEMPTION U/S 10(23C) OF THE ACT, FROM SEEKING REGISTRATION U/S 12AA OF THE ACT. HENCE THIS REASONING GIVEN BY LD CIT(E) WOULD FAIL. WITH REGARD TO THE OBSERVATIONS REGARDING DEPOSIT OF DEMONETIZED CURRENCY INTO THE BANK ACCOUNT AND P AYMENT OF LOW SALARY, WE ARE OF THE VIEW THAT THE SAME MAY NOT BE RELEVANT MATTE RS TO BE CONSIDERED AT THE TIME OF GRANTING REGISTRATION. A CAREFUL PERUSAL OF THE PROVISIONS OF SEC.12AA WOULD SHOW THAT THE LD CIT HAS TO SATISFY HIMSELF ABOUT T HE OBJECTS OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES. IN THE IMPUGNED ORD ERS, IT IS NOT SHOWN THAT THE LD CIT(E) WAS NOT SATISFIED WITH THE OBJECTS OF THE TR USTS AND GENUINENESS OF ACTIVITIES. IN THIS VIEW OF THE MATTER, WE ARE UNABLE TO SUSTAI N THE ORDERS PASSED BY LD CIT(E) IN THE HANDS OF BOTH THE ASSESSEES. 5. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER S PASSED BY LD CIT(E) AND RESTORE ALL THE ISSUES TO HIS FILE WITH THE DIRECTI ON TO PROCESS THE APPLICATIONS FILED BY BOTH THE ASSESSEES AFRESH IN ACCORDANCE WITH THE LAW, AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN CO URT ON AUGUST 22, 2019 SD/- SD/- (N. K. CHOUDHRY) (B. R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 22.08.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: ITA NOS. 521&523/ASR/2018 (AY 2018-19) SAINT MAHAPRAGYA EDU. SOCIETY & ORS V. THE CIT(E) 4 (2) THE RESPONDENT: (3) THE CIT(APPEALS) (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER