M/S LALA FATEH CHAND BRIJ LAL EDUCATIONAL SOCIETY (REGD.), FEROZPUR CITY V. COMMISSIONER OF INCOME TAX (EXAMPTION), CHANDIGARH

ITA 563/ASR/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9775 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2019
• Assessment Year: 2017-2018
• Appeal Filed On: 31-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK KUMAR LD
• Assessee Lawyers: JASWINDER SINGH LD
• Keywords: Wrong claim; Benefit of exemption; Set aside
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.K.CHOUDHRY, JUDICIAL MEMBER AND SH. O.P.MEENA, ACCOUNTANT MEMBER ITA NO. 563/ASR/2017 ASSESSMENT YEAR: NIL LALA FATEH CHAND BRIJ LAL EDUCATIONAL SOCIETY (R), BHARAT NAGAR, FEROZPUR CITY. VS. CIT(EXEMPTIONS) CHANDIGARH. [PAN:AABTL 0124H] (APPELLANT) (RESPONDENT) APPELLANT BY: SH. JASWINDER SINGH (LD. CA) RESPONDENT BY: SH. ALOK KUMAR (LD. CI T- DR) DATE OF HEARING: 17.12.2019 DATE OF PRONOUNCEMENT: 17.12.2019 ORDER PER N.K.CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE APPELLANT SOCIE TY AGAINST THE ORDER DATED 29.06.2017 PASSED BY THE LD. CIT(EXEMPTIONS), CHANDIGARH, U/S 12AA(1)(B)(II) OF T HE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. IN THE INSTANT CASE AN APPLICATION U/S 12A OF THE ACT WAS FILED BY THE APPELLANT SOCIETY ON DATED 16.12.2016 BE FORE THE LD. CIT(E), CHANDIGARH BY DISCLOSING THE FACT THAT THE SOCIE TY IS AN ONGOING ENTITY AND IS IN OPERATION SINCE 08.09.2008. T HE APPELLANT ALSO DISCLOSED ITS AIMS AND OBJECTS TO PROVIDE QUALITY ED UCATION WITH MODERN EQUIPMENT, AUDIO VISUALS AIDS ETC; TO SPREAD EDUC ATION TO ALL AT COMPETITIVE RATES; TO PROVIDE UNIVERSAL IN ELEMENTA RY/TECHNICAL EDUCATION TO ALL IRRESPECTIVE OF CASTE AND CREEDS; TO HELP POOR ITA NO.563/ASR/ 2017 LALA FATEH CHAND B RIJ LAL EDUCATIONAL SOCIETY VS . CIT(E) 2 STUDENTS WITHOUT CASTE AND CREED BY AWARDING THEM SCHOLAR SHIPS, SUPPLY OF FREE BOOKS ETC. AND UNIFORMS; TO ORGANIZE FR EE CAMPS FOR EYES, BLOOD DONATIONS, AND MEDICAL CHECKUP OF THE STUDENT S AND PROVIDE FREE TREATMENT TO THE PERSONS FOUND SICK; TO A RRANGE FOR YOGA, JUDO AND KARATE CLASSES FOR BOTH BOYS AND GIRLS, M EN AND WOMEN SO AS TO TRAINING THEM FOR KEEPING GOOD HEALTH. THE APPLICATION OF THE APPELLANT WAS TAKEN INTO CONSID ERATION BY OFFERING AN OPPORTUNITY OF PERSONAL HEARING ON DATED 05.06.2017 AND THEREAFTER, THE APPELLANT WAS REQUESTED TO FILE/FURNI SH CERTAIN DETAILS/CLARIFICATIONS ON DATED 18.04.2017 AS MENTION ED IN PARA NO.5 OF THE ORDER. ULTIMATELY THE LD. CIT(E) REJECTED THE AP PLICATION OF THE APPELLANT. 3. THE APPELLANT BEING AGGRIEVED CHALLENGED THE IMPUGN ED ORDER BEFORE US. 4. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. FROM THE ORDER IT REFLECTS THAT T HE LD. CIT(E) DID NOT RAISE ANY DOUBT ABOUT THE OBJECTS OF THE ASSESSEE, HOW EVER, DISMISSED THE SAME ON THE FOLLOWING GROUNDS. (I) THAT THERE IS NO DISSOLUTION IN THE MOA OF THE SOCI ETY. THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE SUPPLEMENT TO THE MOA OF THE SOCIETY (PAGE N.1 OF SEPARATE PAPER BOOK FILED BEFORE US) WHEREBY THE APPELLANT SOCIETY HAS INCORPORATED THE DISSOLUTION CLAUSE . HENCE, THIS ISSUE NEEDS TO BE REFERRED TO THE LD. CIT(E) FOR DECISION AF RESH. (II) THE SECOND GROUND OF REJECTION IS THAT THE APPELLAN T SOCIETY SEEKING REGISTRATION U/S 12AA OF THE ACT AFTER A LA PSE OF 14 YEARS SINCE ITS CREATION . FURTHER THE REGISTRATION OF AN ENTITY IS A PROCESS WH ICH ITA NO.563/ASR/ 2017 LALA FATEH CHAND B RIJ LAL EDUCATIONAL SOCIETY VS . CIT(E) 3 NEEDS TO BE COMPLETED IMMEDIATELY IT IS FORMED. THERE IS NO RATIONALE FOR THE GAP OF 14 YEARS IN SEEKING REGISTRATION. WE HAVE CONSIDERED THIS GROUND OF REJECTION AND ARE OF THE VIEW THAT IN THE PROVISION OF SEC.12AA OF THE ACT, THERE IS NO SU CH CONDITION THAT REGISTRATION CANNOT BE SOUGHT AFTER A LAPSE OF 14 YEAR S SINCE ITS CREATION, HENCE, WE ARE UNABLE TO SUSTAIN THIS GROUND/REASON ALSO F OR REJECTION OF THE APPLICATION UNDER CONSIDERATION. (III) THIRD GROUND OF REJECTION BY THE LD. CIT(E) WAS THA T THE SOCIETY HAD BEEN CLAIMING EXEMPTION U/S 10(23C) (IIIAD) OF THE ACT IN THE PAST WRONGLY , WHICH DO NOT QUALIFY THE ENTITY AS EXISTING SOLELY FOR EDUCATION AND NOT FOR THE PROFIT AND THERE IS NO TR ACE OF ANY EDUCATIONAL ACTIVITIES UNDERTAKEN BY THE APPLICANT IN THE PAST . WE ARE UNABLE TO SUSTAIN THIS GROUND AS WELL BECAUSE THE LD. CIT( E) DID NOT DOUBT THE OBJECTS OF THE SOCIETY, WHICH HE IS EMPOWERED T O CONSIDER, EVEN HE IS TALKING ABOUT PAST AGAINST WHICH THE DEPARTMENT COULD HAVE TAKEN APPROPRIATE ACTION AS PER LAW, HOWEVER CAN NOT BE A G ROUND OF REJECTION OF THE APPLICATION FILED U/S 12AA OF THE ACT BECAUSE IT IS NOT THE CASE OF THE LD.CIT(E) THAT ANY ADVERSE ACTION HAS BEEN TAKEN AND F INALIZE BY THE DEPARTMENT AGAINST THE APPELLANT FOR WRONG CLAIMING BENEFIT OF EXEMPTION U/S 10(23C) (IIIAD) OF THE ACT . 4.1 IN CUMULATIVE EFFECT, WE ARE INCLINED TO SET ASIDE T HE ORDER PASSED BY THE LD. CIT(E) AND TO REMAND THIS CASE TO THE FILE OF THE LD. CIT(E) FOR DECISION AFRESH WHILE TAKING INTO CONSIDERATION THE SUPPL EMENT TO THE MOA OF SOCIETY, WHEREIN THE DISSOLUTION CLAUSE HAS BEEN INCORPOR ATED ON DATED 25.07.2017. ITA NO.563/ASR/ 2017 LALA FATEH CHAND B RIJ LAL EDUCATIONAL SOCIETY VS . CIT(E) 4 THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE LD. CIT(E) AS AND WHEN WOULD BE REQUIRED AND TO CO-OPERATE WITH THE PROCEEDI NGS AND SUBMIT THE RELEVANT DOCUMENTS WHICHEVER MAY BE REQUIRED BY THE L D. CIT(E) FOR JUST AND PROPER DECISION OF THE CASE, SUFFICE TO SAY THE LD. CIT(E) SHALL DECIDE THE APPLICATION OF THE ASSESSEE WITHIN THREE MONTHS OF TH IS ORDER WHILE AFFORDING AND REASONABLE AND PROPER OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE APPELLANT SOCI ETY STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17/1 2/2019 SD/- SD/- (O.P.MEENA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17/12/2019. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER