M/s. Maharaja Agersen Kanya Mahavidhalya Samiti, Muzaffarnagar V. CIT (Exemptions), Lucknow

ITA 5386/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4628 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 05-06-2017
• Assessment Year: misc
• Appeal Filed On: 14-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GUDRUN NEHAR
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E , NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHALAYA SAMITI S/O SHRI PREM PRAKASH ADVOCATE 183/2, NORTH CIVIL LINES MUZAFFARNAGAR 251 001 PAN: AABAM5513C VS . CIT (EXEMPTIONS) LUCKNOW (APPELLANT) (RESPONDENT) APPELLAN T BY SHRI PREM PRAKASH, ADV. SH. ASHISH AGGARWAL, ADV. RESPONDENT BY MS.GUDRUN NEHAR, SR. DR DATE OF HEARING 0 3 RD AUGUST, 2017 DATE OF PRONOUNCEMENT . 12 TH SEPTEMBER , 2017 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT. 23.08.2016 OF THE LD. CIT(EXEMPTIONS), LUCKNOW WHEREIN THE APPLICATION OF THE ASSESSEE SOCIETY SEEKING ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 2 REGISTRATION/RECOGNITION U/S 80G(5)(VI) OF THE INCOME TAX ACT, 1961 (THE ACT) HAS BEEN REJECTED. THE ASSESSEE SOCIETY RAISED THE FOLLOWING GROUNDS. 1. THAT THE ORDER IS AGAINST LAW AND FACTS ON RECORD. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTI ONS) LUCKNOW W AS WRONG IN REJECTING APPLICATION U/S 80G (5) OF THE INCOME TAX ACT, 1961 WITHOUT ANY BASE. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) LUCKNOW WAS WRONG IN REJECTING APPLICATION U/S 80G (5) OF THE INCOME TAX ACT, 1961 WITHOU T ANY SHOW CAUSE NOTICE. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SUB - REGISTRAR OF SOCIETIES, SAHRANPUR SEEKING REGISTRATION U/S 80G(5)(VI) OF THE ACT AND APPLIED FOR REGISTRATION IN FORM NO.10G VIDE APPLICATION DT. 4.2.2016. THE CASE WAS FIXED FOR HEARING ON 05 TH AUGUST,2016 AND ON 17 TH AUGUST, 2016 SRI R AGHUVENDRA SINGH, ADVOCATE APPEARED AND FILED PART REPLY AND ON 23 RD AUGUST, 2016 HE APPEARED AND FILED A LETTER. THE LD. CIT(E) REFUSED REGISTRA TION UNDER S.80G(5)(VI) OF THE ACT BY HOLDING AS UNDER. ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD IT CAN BE SEEN THAT THE APPLICANT SOCIETY IS PRIMARILY ENGAGED IN RUNNING AN EDUCATIONAL INSTITUTE ON COMMERCIAL LINES AND CHARGES HEAVY FEES FROM THE STUDENTS. IT IS NOTICEABLE FROM THE INCOME AND EXPENDITURE ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 3 ACCOUNTS OF F.Y. 2012 - 13, F.Y. 2013 - 14, F.Y. 2014 - 15 AND F.Y. 2015 - 16 THAT HUGE AMOUNTS ARE BEING CHARGED AS FEES TO THE TUNE OF RS. 15,15,900/ - , RS. 21,42,500/ - AND RS. 16,63,317/ - RESPECTIVELY IN THE FYS MENTIONED ABOVE. CLEARLY A SUBSTANTIAL AMOUNT IS BEING LEVIED AS FEE ON COMMERCIAL BASIS WITHOUT PROVIDING ANY ELEMENT OF CHARITY TO THE SOCIETY. IN SPITE OF THE FACT THAT HUGE SUM IS BEING LEVIED AS FEE OVER THE PAST YEARS NONE OF THE DEBIT HEADS DIRECTLY RELATE TO ANY OF THE OBJECTS SET FORTH IN THE MEMORANDUM OF THE SOCIETY. HUGE PROFIT IS BEING MADE VIA RUNNING AN EDUCATIONAL INSTITUTE ON COMMERCIAL LINES AND CHANNELIZING THE PROFITS EARNED FOR AUGMENTING THE BUSINESS WITHOUT GIVING ANY ELEMENT OF CHARITY TO THE PUBLIC AT LARGE. REQUEST FOR REGISTRATION BY AN INSTITUTE THAT EXISTS FOR COMMERCIAL INTERESTS WITHOUT ANY ACT OF CHARITY WHEN VIEWED IN THE LIGHT OF THE PROVISIONS MANDATED BY LAW MEETS A DEAD END. THE ABOVE FACTS CLEARLY PROVE THAT THE APPLICANT SOCIETY IS PRIMARILY FOCUSED IN MAINTAINING AND AUGMENTING BUSINESS OF EDUCATION WITHOUT GIVING ANY ELEMENT OF CHARITY TO THE PUBLIC AT LARGE. WHEN ASKED ABOUT THE DETAILS OF PEOPLE RECEIVING THE SALARY FROM THE SOCIETY AND THEIR CORRESPOND ING ENTRIES IN THE BOOK OF ACCOUNTS, THE SOCIETY COULD NOT PROVIDE ANY DETAILS WHICH APPEARS AN ATTEMPT TO BYPASS SECTION 13(1)(C) OF THE INCOME TAX ACT,1961 WHICH AGAIN IS DETRIMENTAL TO THE CLAIM OF THE APPLICANT. IN THIS INSTANCE, THE BURDEN OF PROO F LAY ON THE APPLICANT BUT APPLICANT HAS FAILED TO PROVIDE ANY SATISFACTORY REPLY. RATHER THAN PURSUING THE OBJECTS SET FORTH IN THE MEMORANDUM, THE APPLICANT SOCIETY IS MORE CONCERNED ABOUT AUGMENTING ITS BUSINESS OF EDUCATION. THE APPLICANT SOCIETY CLAIM S TO HAVE PERFORMED CERTAIN PROGRAMMES IN ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 4 PURSUANCE OF THE OBJECTS SET FORTH IN THE MEMORANDUM OF THE SOCIETY LIKE THE PLANTATION EXPENSES ETC. HOWEVER IN ORDER TO VERIFY THE GENUINENESS OF THIS PARTICULAR ACTIVITY THE APPLICANT SOCIETY WAS ASKED TO PROVID E VOUCHERS/DOCUMENTARY EVIDENCES TO PROVE THAT THE SAID PROGRAMS WERE ACTUALLY CONDUCTED BY THE SOCIETY BUT UNFORTUNATELY THE APPLICANT FAILED TO PROVE THE SAME. THIS CLEARLY ESTABLISHES THAT THE ACTIVITIES OF THE APPLICANT SOCIETY AS CLAIMED TO BEING CARR IED OUT ARE NOT GENUINE AND IN THAT CASE THE APPLICANT FAILS TO PASS THE TEST MANDATED BY LAW FOR FORMATION OF SATISFACTION MANDATED BY LAW FOR ACCORDING THE REGISTRATION. IN ADDITION TO THAT NO PHOTOGRAPHS OR ANY OTHER CORROBORATING EVIDENCES HAVE BEEN PROVIDED BY THE APPLICANT FOR CERTAIN CAMPS/PROGRAMMES. IN AN ATTEMPT TO VERIFY THE CLAIM OF THE SOCIETY IT WAS ASKED TO PRODUCE THE VOUCHER WITH RESPECT TO THE EXPENSES INCURRED IN THE ABOVE MENTIONED PROGRAMMES BUT APPLICANT FAILED TO PROVIDED ANY. MER ELY DECLARING A SET OF LOFTY IDEALS WITH PIOUS INTENTIONS IS NOT ENOUGH FOR ACCORDING THE SAID RECOGNITION. IT IS ONLY WHEN ACTS OF CHARITY ARE SUBSTANTIATED BY COGENT EVIDENCES LIKE VOUCHERS AND PRODUCTION OF BOOKS THAT AN INSTITUTION CAN BE AWARDED RE COGNITION OF PURSUING GENUINE CHARITABLE ACTIVITIES. THE FACT THAT NEEDS CONSIDERATION HERE IS THAT DESPITE PROVIDING AMPLE OPPORTUNITIES THE APPLICANT HAS NOT BEEN ABLE TO SHOW CASE EVEN A SINGLE VOUCHER WITH RESPECT TO ANY ACTIVITY AS CLAIMED TO BE CARR IED OUT IN ADDITION TO THAT THE APPLICANT SOCIETY HAS NOT PROVIDED BOOKS OF ACCOUNTS DESPITE AMPLE OPPORTUNITIES BEING TENDERED. THIS CONSISTENT FAILURE ON THE PART OF THE APPLICANT TO BYPASS THE PRODUCTION OF GENUINE EVIDENCES IS A CLEAR INDICATIO N THAT THE SO CALLED CHARITABLE ACTS OF THE APPLICANT HAVE BEEN MERELY FABRICATED ON ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 5 PAPER TO SECURE THE SAID REGISTRATION. THE APPLICANT SOCIETY NEEDS TO RETROSPECT THE FACT THAT ENGAGING ITSELF IN BUSINESS OF EDUCATION ON COMMERCIAL LINES WITHOUT PROV IDING ANY ELEMENT OF CHARITY TO THE PEOPLE, DOING A FAKE DECLARATION OF CHARITY WITHOUT CARRYING OUT ANY GENUINE CHARITABLE ACTIVITIES IS NOT GOING TO EARN IT THE ELIGIBILITY FOR QUALIFYING THE TEST MANDATED BY LAW FOR ACCORDING THE REGISTRATION. IN LIGHT OF THE ABOVE FACTS IT IS QUITE CLEAR THAT NEITHER ARE THE ACTIVITIES OF THE APPLICANT SOCIETY GENUINE NOR ARE ITS BUSINESS PRACTICES INCIDENTAL TO THE ATTAINMENT OF ITS OBJECTS. THUS THE APPLICANT HAS NOT MADE A CASE FOR ACCORDING THE REGISTRATION. 5. IN THE PRESENT PROCEEDINGS THE APPLICANT HAS FAILED TO CORROBORATE HIS CLAIM OF CHARITABLE ACTIVITIES. THE DOCUMENTS FILED IN THE PROCEEDINGS SHOW THAT APPLICANT HAS NOT WORKED TOWARDS THE PERFORMANCE OF THE OBJECTS SET OUT IN THE MEMORANDUM OF THE SOCIETY. THUS THE APPLICANT HAS FAILED TO ACCOMPLISH THE GOALS SET BY THE LAW FOR ACCORDING THE SAID RECOGNITION. THE DOCUMENTS FILED IN THE PROCEEDINGS SHOW THAT THE APPLICANT HAS CLAIMED TO BE INVOLVED IN ACTIVITIES WHICH APPARENTLY ARE FOR PROFIT MAKING ON COMME RCIAL LINES AND ARE FAR AWAY FROM THE DEFINITION OF THE TERM 'CHARITABLE PURPOSE'. IT IS VERY CLEAR THAT THE APPLICANT IS DOING A MERE PRETENCE OF CHARITY. 6. THE HON'BLE ITAT LUCKNOW BENCH IN ORDER ITA NO. 809/LKW/2014 DATED 26.02.2015 HAS HELD THAT 'W E HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D. R. OF THE REVENUE, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE IMPUGNED ORDERS OF LEARNED CIT - II, KANPUR. IT IS NOTED BY THE LEARNED CIT IN THE ORDER PASSED BY HIM FOR REJECTING THE CLAIM FOR REGISTRATION U/S 12AA THAT THE MATERIAL REQUIRED FOR FORMATION OF ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 6 THE SATISFACTION MANDATED BY THE ACT IS UNAVAILABLE AND THEREFORE, IT IS HELD BY LEARNED CIT THAT THE ASSESSEE HAS FAILED TO FULFILL THE CONDITIONS FOR GRANT OF REGISTRATION U/S 12A O F THE ACT. SIMILARLY, IN HIS ORDER FOR REJECTING THE CLAIM OF THE ASSESSEE FOR REGISTRATION U/S 8OG, HE HAS GIVEN A FINDING THAT THE ASSESSEE HAS FAILED TO FULFILL THE CONDITIONS FOR APPROVAL U/S 8OG OF THE ACT. HENCE, WE DO NOT FIND ANY JUSTIFICATION TO I NTERFERE IN THESE ORDERS OF LEARNED CIT OR FILE ANY REPLY TO QUERIES RAISED. 7. IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT THE APPLICANT IS NOT ENGAGED IN ANY 'CHARITABLE PURPOSE' WHICH IS THE PREREQUISITE FOR APPROVAL U/S 80G OF THE ACT. UNDER THESE CIRCUMSTANCES AND FOR THESE REASONS, I HEREBY REJECT THE APPLICATION OF THE SOCIETY U/S 80G(5) OF THE INCOME TAX ACT, 1961. 3. THE LD. A.R. SUBMITTED THAT THE LD. CIT(E) HAS WRONGLY NOTED FINDINGS IN HIS ORDER WHICH ARE QUITE DIFFERENT FROM THE F ACTS OF THE CASE AND HE DID NOT ALLOW PROPER OPPORTUNITY BEFORE REJECTING THE APPLICATION FOR REGISTRATION. THE LD. CIT(E) HAS ALSO NOT CONSIDERED THE SUBMISSIONS OF THE SOCIETY AND THE CASE LAW RELIED UPON BY THE LD. CIT(E) IS ALSO NOT APPLICABLE. HE REQ UESTED THAT THE MATTER MAY KINDLY BE SENT BACK TO LD. CIT(E) FOR FRESH ADJUDICATION . HE ALSO SUBMITTED AN AFFIDAVIT OF SH.AMIT KUMAR SINGHAL DATED 29.07.2017. HE HAS SUBMITTED A BRIEF SYNOPSIS WHICH IS AS UNDER. ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 7 1. THE ASSESSEE SUBMITS THAT CIT MENTIONED IN PARA NO. 4, THE INCOME APPLIES TO A SET OF DISTINGUISHED INDIVIDUALS RATHER THAN THE PUBLIC AT LARGE. SUBMISSIONS THE ASSESSEE SUBMITS THAT S.13 OF THE LT. ACT 1961 APPLIES TO PERSONS WHO ARE MENTIONED IN S.13 (3) OF THE ACT, 1961 AND IN THE PRESENT APPEAL, THERE IS NOT SUCH PERSON INVOLVED. THUS THE REJECTION OF APPLICATION IS NOT VALID. 2. LD. CIT MENTIONED THAT SOCIETY IS ENGAGED IN RUNNING AN EDUCATIONAL INSTITUTION ON COMMERCIAL BASIS AND CHARGES HEAVY FEES FROM THE STUDENTS. SUBMISSIONS. : - LD. CIT DID NOT MENTION AMOUNT OF FEES PER STUDENT CHARGED BY THE ASSESSEE AND ALSO FEES CHARGED BY OTHER INSTITUTIONS IN ORDER TO SEE WHETHER FEES CHARGED BY THE ASSESSEE IS HIGHER OR NOT AND THUS BASE IS NOT A BASE. 3. LD. CIT MENTIONED THAT WHEN ASKED ABOUT THE BOOKS OF ACCOUNT, THE SOCIETY COULD NOT PROVIDE ANY DETAIL WHICH APPEAR AN ATTEMPT TO PASS S.L3(1)(C) OF THE LT. ACT, 1961. SUBMISSIONS: - THE ASSESSEE SUBMITS THAT THE ASSESSEE PRODUCED SALARY REGISTERS AND OTHER ALE BOOKS THROUGH ITS CLERK SH. AMIT KUMAR SINGHAL AND LD CIT ALSO CHECKED THEM AND AFFIDAVIT OF EMPLOYER SH. AMIT KUMAR SINGHTAL IS ATTACHED HEREWITH . THE ASSESSEE MENTIONED IN HIS SUBMISSIONS BEFORE LD. CIT ON 24.07.2016 AS UNDER ABOUT S.13 OF THE LT. ACT, 1961 AS UNDER : - '(XVII) THERE IS NO PERSON SPECIFIED U/S 13(3) FOR WHICH INCOME/PROFIT APPLIED' 4. LD. CIT RELIED UPON ORDER OF ITAT, LUCKNOW I N ITA NO. 8091LKU/20 14 DT. 26.02.2015. SUBMISSIONS LD. CIT DID NOT A COPY OF THE ABOVE RULING TO THE ASSESSEE AND SEEKS HIS EXPLANATION ON THE SAME. THE ASSESSEE SUBMITS THAT HE OBTAINED COPY OF ORDER OF ITA NO.809/LKW/2014 FROM NET AND FROM THE SAME, IT IS CLEAR THAT APPEAL HAS BEEN WITHDRAWN BY THE ASSESSEE AND HENCE APPEAL WAS DISMISSED. ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 8 5. THE ASSESSEE SUBMITS THAT LEASE DEED IS FROM A SOCIETY NAMED M/S PRABHA SABHA SOCIETY, CHARTHAWAL AND NOT FROM AN INDIVIDUAL. 6. THE ASSESSEE ALSO SUBMITS THAT LIFE OF A BUILDING IS 50 - 60 YEARS AS IS CERTIFIED BY A GOVT. APPROVED VALUER. THE LEASE OF THE ASSESSEE WILL EXPIRE ON 22.08.2096 AND THE ASSESSEE REQUESTS THAT EXEMPTION U/S 80 - G MAY BE ALLOWED UPTO 22.08.2096 I.E. BEFORE 60 YEARS OF THE END OF LEASE DEE D. 4. LD. D.R. RELIED ON THE ORDER OF THE LD. CIT(E). 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED. WE FIND THAT THE LD. A.R. HAS FILED AN AFFIDAVIT OF SHRI AMIT KUMAR SINGHAL WHO IS AN EMPLOYEE OF THE SAMITI IN WHICH HE HAS STATED THAT HE WAS FULLY ACQUAINTED WITH THE FACTS OF THE CASE AND PRODUCED SALARY REGISTERS AND OTHER BOOKS OF ACCOUNTS BEFORE THE LD. CIT(E) WHICH HAVE BEEN EXAMINED BY THE LD. CIT(E) . IT WAS ALSO SUBMITTED THAT VOUCHER OF TRAVEL EXPENSES OF RS.4,970/ - INCURRED FOR TRAVEL TO LUCKNOW ON 22.8.2016 WAS ALSO FILED . THE LD. CIT(E) HAS CLEARLY STATED THAT NO BOOKS OF ACCOUNTS, SALARY DETAILS AND THAT THE SOCIETY HAS NOT PROVIDED ANY DETAILS. IN VIEW OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE MATTER IS SENT BACK TO LD. CIT(E) FOR A FRESH HEARING IN ITA NO. 5386 /DEL/201 6 MAHARAJA AGERSEN KANYA MAHAVIDHYALAYA SAMITI, MUZAFFARNAGAR 9 ACCORDANCE WITH LAW AFTER AFFORDING AN OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE LD. CIT(E) , AND NOT TO SEEK ADJOURNMENT. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE SOCIETY IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12.09.2017. SD/ - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 12 TH SEPTEMBER , 2017 * GMV COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES NEW DELHI