Saife Eduction Society, V. The CIT,

ITA 56/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1427 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2009
• Assessment Year: misc
• Appeal Filed On: 16-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: MANUBHAI PATEL
• Section: 12AA

Judgement Text

PAGE 1 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAHTS0814R I.T.A.NO. 56/IND/2009 U/S 12A/12AA/254 SAIFEE EDUCATION SOCIETY, CIT, BHARATPUR, SUWASARA, VS UJJAIN DISTT. MANDSAUR. APPELLANT RESPONDENT PAN NO. : AABTM9918-Q I.T.A.NO. 59/IND/2009 U/S 12A/12AA/254 MADARSA TAIYABA COMMITTEE, RATLAM. CIT, BHARATPUR, UJJAIN. VS APPELLANT RESPONDENT PAN NO. : AABTT4700B I.T.A.NO. 61/IND/2009 U/S 12A/12AA/254 TALIM SAMITI MADARSA MOHAMMEDIYAH, CIT, BHARATPUR, MANDSAUR VS UJJAIN APPELLANT RESPONDENT PAGE 2 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS PAN NO. : AABTP3625M I.T.A.NO. 62/IND/2009 U/S 12A/12AA/254 PRABHANDAK COMMITTEE SAFIYAH CIT, BHARATPUR, HIGHER SECONDARY SCHOOL, VS UJJAIN RATANGARH, DIST. NEEMUCH APPELLANT RESPONDENT PAN NO. : AABTM9919R I.T.A.NO.197/OMD/2009 U/S 12A/12AA/254 MOHAMMEDIYAH MADHYAMIK SHALA, PRABHANDAK COMMITTEE, RAMPURA (MP) CIT, BHARATPUR, UJJAIN VS APPELLANT RESPONDENT APPELLANTS BY : SHRI MANUBHAI PATEL, C.A. RESPONDENT BY : SMT.APARNA KARAN, SR. DR DATE OF HEARING : 26/11/2009 O R D E R PER V.K. GUPTA, A.M. ALL THESE APPEALS BELONG TO CONNECTED ASSESSEES AND INVOLVE COMMON ISSUES, HENCE, THEY WERE HEARD AND THESE WER E DISPOSED OF THROUGH THIS CONSOLIDATED ORDER FOR THE SAKE OF CON VENIENCE. PAGE 3 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE THE GROUN DS OF APPEAL IN I.T.A.NO. 56/IND/2009. 1. THE LD. CIT, UJJAIN, HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN NOT GRANTING REGISTRATION OF THE APPELL ANT SOCIETY U/S 12A/12AA OF THE INCOME-TAX ACT, 1961. 2. THE LD. CIT, UJJAIN, HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN HOLDING THAT THE REGISTRATION U/S 12AA CANNOT BE GRANTED IN VIEW OF THE FACT THAT ADVANCE WAS GIVEN TO PERSON U/S 13(1)(C) OF THE INCOME-TAX ACT, 1961. 3. THE LD. CIT, UJJAIN, HAS ERRED IN LAW AS WELL AS O N FACTS OF THE CASE IN HOLDING THAT THE PROVISIONS OF SECTION 13(1)(B) ARE APPLICABLE IN THIS CASE AND HENCE REGISTRATION CANNOT BE GRANTED. 4. THE LD. CIT, UJJAIN, HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN NOT CONSIDERING THE APPLICATION FOR CON DONATION OF DELAY. HE MAY NOW BE DIRECTED TO ISSUE THE REGISTRA TION U/S 12A/12AA OF THE INCOME-TAX ACT, 1961, WITH EFFECT F ROM 5.6.1976. PAGE 4 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS 5. YOUR APPELLANT, THEREFORE, PRAYS THAT THE APPELLANT BE GRANTED REGISTRATION U/S 12A/12AA OF THE INCOME-TAX ACT, 1961. 4. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE APPLICANT SOCIETY(IES) WAS/WERE RUNNING SCHOOL(S) ON THE PREMISES/BUILDING BELONGING TO SHIA DAWOODI BOHRA J AMAT A SEPARATE TRUST. THE INCOME OF CERTAIN PROPERTIES OWNED BY SU CH TRUST HAD BEEN ASSIGNED TO THE SOCIETY AND IN RESPECT OF OTHER PRO PERTIES, THE INCOME BY WAY OF RENT THEREFROM WAS THE INCOME OF SUCH TRUST. LEARNED COUNSEL FURTHER POINTED OUT THAT THE ASSESSEE APPLIED FOR G RANT OF REGISTRATION U/S 12A, BY FILING REQUISITE DOCUMENTS AND ALSO REQUEST ED THE LD. CIT TO CONDONE THE DELAY FOR FILING OF APPLICATION MEANING THEREBY, HE SHOULD HAVE GRANTED THE REGISTRATION U/S 12A/12AA, WITH EF FECT FROM 5.6.1976. HE FURTHER SUBMITTED THAT THE LD. CIT, HOWEVER, REJ ECTED THE REGISTRATION APPLICATION FOR THE REASON THAT THE ASSESSEE HAD NO T SHOWN RENTAL INCOME CORRECTLY AND ALSO WHETHER THE SAME WAS BEING USED FOR THE OBJECTS OF THE TRUST OR NOT. HENCE, SHE DOUBTED THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. HE FURTHER SUBMITTED THAT THE LD. CIT ALSO A PPLIED THE PROVISIONS OF SECTION 13(1)(C) IN RESPECT OF TRANSACTIONS OF THE SOCIETY WITH ONE SHRI SHEIKH BAQAR ALI KURBAN HUSSAIN ANSHUMAN-E-SAIFAYAH JAMAT COMMITTEE. HOWEVER, THE NATURE OF SUCH TRANSACTION WAS NOT PROPERLY PAGE 5 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS APPRECIATRED AS IN THE CASE OF TRANSACTION WITH SHE IKH BAQR ALI KURBAN HUSSAIN ALI, THE ASSESSEE HAD EARLIER CREDITED THE DONATION PROMISED BY HIM AND HAD MADE HIM A DEBTOR FOR THE AMOUNT TO BE RECEIVED OUT OF SUCH PROMISE. HE FURTHER CONTENDED THAT THE PROVISIONS O F SECTION 13(1)(B) WERE ALSO NOT APPLICABLE AS THE ASSESSEES OBJECTS WERE NOT RESTRICTED FOR THE BENEFIT OF A PARTICULAR COMMUNITY ONLY. AS REGA RDS THE NON- APPLICABILITY OF PROVISIONS OF SECTION 13(1)(B), TH E LEARNED COUNSEL ALSO CONTENDED THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF DAWOODI BOHRA SAMAJ WAS ALSO CITED BEFORE THE LD. CIT WHEREIN THE TRIBUNAL UNDER THE SAME SET OF FACTS, HAD HELD THAT THE PROVISIONS OF SECTION 13(1)(B) WERE NOT APPLICABLE. HOWEVER, THE LD. CIT DID NOT FOLLOW THIS ORDER OF THE TRIBUNAL MERELY FOR THE REASON THAT THE DEPARTMENT HAD NOT ACCEPTED THIS DECISION OF THE TRIBUNAL BY FILING AN APPEAL BEFORE THE HON'BLE HIGH COURT, WHICH HAD BEEN ADMITTED, BUT SUCH ACTION OF THE LD. CIT WAS NOT CORRECT IN LAW AS AT THAT POINT OF TIME DECISION OF THE TRIBUNAL WAS BINDING ON THE LD. CIT. 5. THE LD. CIT DR, ON THE OTHER HAND, NARRATED THE FAC TS AND CONTENDED THAT SEVERAL CONTENTIONS WERE SUBMITTED A ND, THEREFORE, THE MATTER NEEDED A FRESH EXAMINATION. THE LD. CIT DR A LSO SUBMITTED THAT IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT I N THE CASE OF PALGHAT SHADI MAHAL TRUST, THE PROVISIONS OF SECTION 13(1)( B) WERE ATTRACTED. PAGE 6 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS 6. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 7. ADMITTEDLY, THE LD. CIT HAS HELD THAT INCOME BY WAY OF RENTAL RECEIPTS HAVE NOT BEEN PROPERLY ACCOUNTED FOR. HOWE VER, THE LEARNED COUNSEL FOR THE ASSESSEE HAS POINTED OUT SOME MISTA KES IN THE ORDER OF THE LD. CIT IN THIS REGARD AND HAS ALSO CONTENDED THAT THE STRUCTURE OF RELATIONSHIP BETWEEN THE ASSESSEE SOCIETY AND SHIA DAWOODI BOHRA JAMAT HAS NOT BEEN PROPERLY ANALYZED, WHICH HAS RESULTED INTO SUCH KIND OF OBSERVATION AND CONSEQUENT DENIAL OF GRANT OF REGIS TRATION. SIMILARLY, IN RESPECT OF OTHER TRANSACTIONS, THE ASSESSEE HAS ALS O GIVEN FURTHER DETAILS, WHICH ALSO NEEDED VERIFICATION. AS REGARDS, THE APP LICABILITY OR OTHERWISE OF PROVISIONS OF SECTION 13(1)(B), WE ARE OF THE VI EW THAT THE SAME CAN AGAIN BE LOOKED INTO BY THE LD. CIT, IN VIEW OF TH E DECISION CITED BY THE ASSESSEE OR OTHER SUBSEQUENT JUDICIAL DECISION ON T HE SAME SUBJECT AND THE LD. CIT MAY TAKE A VIEW THEREON ACCORDINGLY. THUS, IN VIEW OF THE ABOVE FACTS, WE RESTORE ALL THE ISSUES RAISED, IN THESE A PPEALS, TO THE FILE OF LD. CIT FOR CONSIDERATION THEREOF AFRESH AND DECISION T HEREON AS PER LAW AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE(S), WHO SHALL BE AT LIBERTY TO FILE NECESSARY EVIDENCES/DETAILS TO SUBS TANTIATE ITS CLAIM. THUS, ALL THE GROUNDS RAISED IN THESE APPEALS STAND ALLOW ED FOR STATISTICAL PURPOSES. PAGE 7 OF 7 - I.T.A.NO. 56, 59, 61, 62 & 197/IND/ 2009 SAIFI EDUCATION SOCIETY, SUWASARA, DIST MANDSAUR AND OTHERS 8. IN THE RESULT, ALL THESE ASSESSEES APPEALS STAND A LLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH NOVEMBER, 2009. CPU* 26D26