M/s Chandigarh Police Welfare Fund (Bank Deposit) Society, Chandigarh V. CIT I, Chandigarh

ITA 533/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95622 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-10-2015
• Assessment Year: misc
• Appeal Filed On: 10-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ MISHRA
• Assessee Lawyers: ANIL BATRA
• Keywords: Opportunity of being heard; Competent authority; Cancellation of registration
• Section: 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 533/CHD/2013 (ORDER U/S 12AA) M/S CHANDIGARH POLICE VS THE CIT-1, WELFARE FUND (BANK DEPOSIT)SOCIETY, CHANDI GARH. POLICE HEADQUARTERS, SECTOR 9,CHANDIGARH. PAN: AAAAC7228D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL BATRA RESPONDENT BY : SHRI MANOJ MISHRA DATE OF HEARING : 19.10.2015 DATE OF PRONOUNCEMENT : 21.10.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT-I, CHANDIGARH DATED 18/20.03.2013 UNDER SECTION 12AA(3) OF THE INCOME TAX ACT. 2. IN THE PRESENT APPEAL, ASSESSEE HAS CHALLENGED T HE IMPUGNED ORDER CANCELING THE REGISTRATION GRANTED U NDER SECTION 12A OF THE INCOME TAX ACT. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ORDE R GRANTING REGISTRATION UNDER SECTION 12A OF THE INCO ME TAX ACT WAS PASSED BY THE CIT PATIALA VIDE ORDER DA TED 2 5/24.06.1997. THE CIT NOTED IN THE IMPUGNED ORDER THAT THE SAID REGISTRATION WAS GRANTED SUBJECT TO THE FO LLOWING CONDITIONS I.E. (I) TO (VIII) AS IS NOTED AT PAGE 1 AND 2 OF THE IMPUGNED ORDER. THE CIT ALSO NOTED THAT THE DC IT CIRCLE 1(1) CHANDIGARH SUBMITTED THE PROPOSAL OF CANCELLATION OF REGISTRATION UNDER SECTION 12A MENT IONING THAT THE ASSESSEE WAS INTER-ALIA CARRYING OUT TRADI NG AND OTHER BUSINESS ACTIVITIES LIKE RUNNING OF PETROL PU MP ETC. AND ASSESSING OFFICER MENTIONED THIS FACT IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2010-11 DATED 31.01.2013 UNDER SECTION 143(3) OF THE ACT. THE ASSESSEE WAS, THEREFORE, DIRECTED TO EXPLAIN AS TO WHY THE REGISTRATION BE NOT CANCELLED. THE ASSESSEE EXPLAI NED THAT ASSESSEE WAS SET UP WITH THE PRIMARY AND MAIN OBJECT OF AUGMENTING FUNDS FOR WELFARE OF POLICE PERSONNEL. THE MAIN WELFARE ACTIVITIES UNDERTAKEN ARE DISBURSING PENSIONS TO WIDOW, FINANCIAL AID TO THE MEMBERS ETC. THE PETROL PUMP WAS ALLOTTED TO THE SOCIETY IN THE NAME OF INSPECTOR GENERAL OF CHANDIG ARH POLICE AND PROFIT WAS MEANT FOR WELFARE OBJECTIVES OF THE SOCIETY. THE CIT WAS NOT SATISFIED WITH THE EXPLAN ATION OF THE ASSESSEE AND FOUND THAT ASSESSEE'S ACTIVITIE S ARE NOT GENUINE AND COULD NOT BE TREATED AS CHARITABLE ACTIVITIES AND ACCORDINGLY CANCELLED THE REGISTRATI ON UNDER SECTION 12A OF THE ACT. 4. THE LD. COUNSEL FOR THE ASSESSEE RAISED THE PRELIMINARY OBJECTION THAT THE REGISTRATION GRANTED TO THE 3 ASSESSEE UNDER SECTION 12A WAS NOT SUBJECT TO ANY CONDITION. THEREFORE, CIT HAS WRONGLY NOTED VARIOU S CONDITIONS FROM (I) TO (VIII) IN THE IMPUGNED ORDER AND AS SUCH THE ORDER IS LIABLE TO BE SET ASIDE. HE HAS F URTHER SUBMITTED THAT SINCE PETROL PUMB WAS GRANTED IN THE NAME OF INSPECTOR GENERAL OF POLICE, CHANDIGARH WHI CH WAS LATER ON SURRENDERED. THEREFORE, THESE CONSIDER ATIONS SHOULD HAVE BEEN CONSIDERED BY THE CIT. HE HAS FUR THER SUBMITTED THAT EXCEPT FOR INCOME OF THE PETROL PUMP IN A SUM OF RS. 17,50,934/-, NO OTHER ADDITION IS MADE B Y THE ASSESSING OFFICER IN THE ORDER UNDER SECTION 143(3) OF THE ACT FOR ASSESSMENT YEAR 2010-11 AND AS SUCH, THE MA TTER REQUIRES RE-CONSIDERATION. 5. THE LD. CIT DR PRODUCED THE CIT FOLDER AND ON GO ING THROUGH THE SAME, HAS STATED THAT THE REGISTRATION GRANTED EARLIER TO THE ASSESSEE WAS NOT SUBJECT TO ANY CONDITIONS AS PER THE RECORD AND RELIED UPON IMPUGN ED ORDER. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THE MATTER REQUIRES RE-CONSIDERATION AT TH E LEVEL OF THE CIT-I CHANDIGARH. THE CIT IN THE IMPUGNED O RDER HAS MENTIONED THAT REGISTRATION WAS GRANTED TO ASSE SSEE SUBJECT TO CERTAIN CONDITIONS. THE REGISTRATION CERTIFICATE IS FILED AT PAGE 15 OF THE PAPER BOOK W HICH DOES NOT CONTAIN ANY SUCH CONDITIONS AS HAVE BEEN N OTED IN THE IMPUGNED ORDER. EVEN CIT-DR ON PRODUCTION O F THE RECORD BEFORE US HAS STATED THAT NO SUCH CONDIT IONS 4 HAVE BEEN POINTED OUT ALONGWITH THE REGISTRATION CERTIFICATE. IT WOULD, THEREFORE, SHOW THAT THE IM PUGNED ORDER ITSELF WAS PASSED BY CONSIDERING IRRELEVANT MATERIAL. SINCE NO CONDITIONS WERE ATTACHED TO THE REGISTRATION CERTIFICATE, WE DO NOT KNOW FROM WHERE THE CONDITIONS AT SR.NO. (I) TO (VIII) HAVE BEEN REPROD UCED BY THE CIT IN THE IMPUGNED ORDER. FURTHER, THE ASSESS ING OFFICER IN THE ORDER UNDER SECTION 143(3) OF THE AC T FOR ASSESSMENT YEAR 2010-11 HAS MADE ADDITION OF RS. 17,50,934/- ONLY. THE PRESENT PROCEEDINGS WERE TAK EN UP ON THE PROPOSAL MADE BY THE ASSESSING OFFICER FO R CANCELLATION OF THE REGISTRATION AND ACCORDING TO T HE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE, TH E PETROL PUMP WAS GRANTED IN THE NAME OF IG POLICE, CHANDIGARH WHICH WAS LATER ON SURRENDERED, WOULD CLEARLY SHOW THAT CIT PASSED THE ORDER WITHOUT CONSIDERING THE RELEVANT FACTS ON RECORD AND THE MA TTER REQUIRES RE-CONSIDERATION BECAUSE WRONG CONDITIONS OF REGISTRATION HAVE BEEN NOTED IN THE IMPUGNED ORDER AS WELL AS THE SURRENDER OF THE PETROL PUMP HAVE NOT B EEN TAKEN INTO CONSIDERATION. THE CIT DID NOT DISCUSS ANY OTHER CHARITABLE ACTIVITIES CARRIED OUT BY ASSESSEE IN THE IMPUGNED ORDER FOR CANCELLATION OF THE REGISTRATION GRANTED TO THE ASSESSEE. 7. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER IN ISSUE TO THE FILE OF CIT-I CHANDIGARH/ANY OTHER COMPETENT AUTHORITY FOR RE- 5 CONSIDERATION OF THE MATTER IN ACCORDANCE WITH LAW. THE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED TO THE ASSESSEE. SINCE IT IS AN OLD MATTER, THEREFORE, TH E AUTHORITY BELOW SHALL RECONSIDER THE MATTER IN ISSU E AND SHALL PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW WITHIN ONE MONTH FROM THE RECEIPT OF THE ORDER AND ASSESSEE SHALL NOT SEEK ANY UNNECESSARY ADJOURNMENT IN THE MATTER. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNES H SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST OCT., 2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD