M/s St. Paul Province Society, V. THE CIT , Rajahmundry

ITA 575/VIZ/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9021 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 23-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 57 5 / VIZ /201 3 M/S. ST. PAUL PROVINCE SOCIETY, D.NO. 8 - 185, DEVARAPALLI MANDAL, YERNAGUDEM, W.G. DIST. V . CIT, RAJAHMUNDRY . PAN NO. AAJJS 6565 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI G. GURUS W AMY CIT DR DATE OF HEARING : 2 1 / 0 3 /201 7 . DATE OF PRONOUNCEMENT : 12 / 0 4 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMM ISSIONER OF INCOME TAX , RAJAHMUNDRY , DATED 30/05/2013 . 2. THE APPEAL FILED BY THE ASSESSEE WAS DELAYED BY 1 8 DAYS, FOR WHICH ASSESSEE FILED AN APPLICATION ALONG WITH AN AFFIDAVIT FOR CONDONATION OF DELAY. THE REVENUE HAS NOT RAISED ANY OBJECTION TO CONDONE THE DELAY . THE ASSESSEE HAS EXPLAINED SUFFICIENT CAUSE FOR NOT TO FILE APPEAL IN TIME. THUS, WE FIND THAT IT IS A FIT CASE TO CONDONE THE DELAY AND ACCORDINGLY DELAY IS COND ONED AND APPEAL IS ADMITTED. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE - SOCIETY NAMELY , M/S. ST. PAUL PROVINCE SOCIETY, ST. JOSEPHS ENGLISH MEDIUM SCHOOL , 2 ITA NOS. 575/VIZ/2013 ( M/S. ST. PAUL PROVINCE SOCIETY ) YERNAGUDEM REGISTERED UNDER THE R E GISTRATION OF SOCIETIES ACT , 2001 . THE ASSESSEE FILED AN APPLICATION IN FORM NO.10 A , DATED 20/08/2009 FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT . THE APPLICATION FILED BY THE ASSESSEE WAS REJECTED BY THE COMMISSIONER OF INCOME TAX ON THE GROUND THAT OBJECTS MENTIONED IN MEMORANDUM ARE MIXED OBJECTS I.E. BOTH RELIGIOUS AND CHARITABLE . WITH THIS OBSERVATION , HE DENIED REGISTRATION UNDER SECTION 12AA OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE ITAT, VISAKHAPATNAM . THE ITAT, VISAKHAPATNAM VIDE ITS ORDER DATED 01/11/2012 , DIRECTED THE COMMISSIONER OF INCOME TAX TO CONSIDER THE APPLICATION OF THE ASSESSEE AFRESH FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THEREAFTER , COMMISSIONER OF INCOME TAX ISSUED A SHOW - CAUSE NOTICE AND ASKED TO FILE CERTAIN DETAILS, WHICH ARE PLAC ED AT PAGE NO.50 OF THE PAPER BOOK. IN RESPONSE TO THAT , ASSESSEE FILED A REPLY DATED 12/04/2013, WHICH IS PLACED AT PAGE NOS. 51 & 52 . THE COMMISSIONER OF INCOME TAX AFTER CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE OBSERVED THAT ASSESSEE - SOCIETY FAILED TO FILE AGREEMENT BETWEEN HERALD S OF GOOD NEWS AND THE ASSESSEE - S O C IETY I.E. M/S. ST. PAUL PROVINCE SOCIETY . HE ALSO OBSERVED THAT HERALDS OF GOOD NEWS, ELURU HAVE TWO SETS OF ACCOUNTS , ONE IS FOREIGN SET AND ANOTHER IS INDIAN SET AND THERE APPEARS TO BE SOME RELIGIOUS ACTIVITIES . WITH THE ABOVE OBSERVATION , COMMISSIONER OF INCOME TAX CAME TO A CONCLUSION THAT THE ACTIVITIES OF THE SOCIETY ARE NOT GENUINE , THEREFORE, REJECTED REGISTRATION UNDER SECTION 12AA OF THE ACT. 3 ITA NOS. 575/VIZ/2013 ( M/S. ST. PAUL PROVINCE SOCIETY ) 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HERALDS OF GOOD NEWS SOCIETY, WHICH IS ENJOYING 12A REGISTRATION HA D TRANSFERRED SOME OF THE SCHOOLS TO THE ASSESSEE - SOCIETY I.E. M/S. ST. PAUL PROVINCE SOCIETY , YER NA GUDEM FOR ADMINISTRATIVE CONVENIENCE. TO THAT EFFECT, GOVERNING BODY PASSED A RESOLUTION ON 05/04/2009 , WHICH IS PLACED AT PAGE NO. 54 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE - SOCIETY IS MAINLY EXISTED F OR THE PURPOSE OF CARRYING ON EDUCATIONAL ACTIVITIES IN A RURAL UNDER DEVELOPED AREA AND, T HEREFORE, COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN REJECTING THE APPLICATION FOR GRANT OF REGIS TRA TION UNDER SECTION 12A A ON THE GROUND OF NON - FURNISHING OF AGREEMENT BETWEEN HERALDS OF GOOD NEWS AND THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE FILED ALL THE DETAILS CALLED BY THE COMMISSIONER OF INCOME TAX . THE COMMISSIONER OF INCOME TAX , AFTER EXAMI NING THE SAME , REJECTED REGISTRATION UNDER SECTION 12AA , WHICH IS ARBITRARY AND UNJUSTIFIED. 6 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX. 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE - SOCIETY NAMELY , M/S. ST. PAUL PROVINCE SOCIETY WAS REGISTERED UNDER THE REGISTRATION OF SOCIETIES ACT AND FILED AN APPLICATION IN FORM 4 ITA NOS. 575/VIZ/2013 ( M/S. ST. PAUL PROVINCE SOCIETY ) NO. 10A FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT WITH THE FOLLOWING OBJECTS: - A ) TO ESTABLISH, SUPPORT AND MAINTAIN EDUCATIONAL, MEDICAL, SOCIAL, CULTURAL AND C HARITABLE INSTITUTIONS AND ACTIVITIES FOR THE BENEFIT OF GENERAL PUBLIC IRRESPECTIVE OF RELIGION, CASTE, COMMUNITY AND SOCIAL STATUS. B ) TO UNDERTAKE THE CONDUCT AND MANAGEMENT OF EDUCATIONAL AND NON - EDUCATIONAL INSTITUTIONS BELONGING TO OTHER SOCIETIES/ INDIVIDUAL S/GOVERNMENT, CENTRAL OR STATE, FOR SUCH PERIODS AND ON SUCH TERMS AND CONDITI ONS AS THE GOVERNING BODY OF THE SOCIETY MAY DEEM FIT. C ) TO PRINT, PUBLISH, EDIT, ISSUE AND EXHIBIT ANY LITERATURE, BOOKS, JOURNALS, MAGAZINES, PERIODICALS, PAPERS, PAMPHLETS, ADVERTISEMENTS, REPORTS AND LECTURES AND ALL OTHER READING MATERIALS FOR THE DIFFUSION OF USEFUL KNOWLEDGE AND FOR THE PROMOTION, BENEFIT AND A DVANCEMENT OF THE EDUCATIONAL, CULTUR AL, SOCIAL, SCIENTIFIC, TECHNICAL, CHARITABLE AND RELIGIOUS IDEALS, INSTITUTIONS WORKS AND ACTIVITIES OF THE SOCIETY. D ) TO PROMOTE MORAL, SOCIAL AND CULTURAL ADVANCEMENTS OF THE GENERAL PUBLIC BY PROVIDING THEM WITH BOOKS, JOURNALS, NEWS PAPERS, PERIODICALS ETC., AND BY ARRANGING MEETINGS FOR DISCOURSE ON LITERARY, CHARITABLE AND SOCIAL SUBJECTS. E ) TO SERVE OLD AND THE POOR AND HELP THEIR UPLIFTMENT IRRESPECTIVE OF CASTE AND RELIGION. F ) TO VISIT THE HELPLESS, THE DISABLED AND THE OLD TO ENCOURAGE - THEM IN THEIR SPIRITUAL AND PHYSICAL LIFE. G ) TO CO - OPERATE, AMALGAMATE AND CO - ORDINATE WITH OTHER BODIES, SOCIETIES, ASSOCIATIONS, BOARDS OR AGENCIES NATIONAL OR INTERNATIONAL, HAVING SIMILAR AIMS OR OBJECTS WHICH ARE NOT INCONSISTENT WITH THE OBJECTS OF THIS SOCIETY FOR THE PURPOSE OF PROMOTING OR ACHIEVING THE OBJECTS OF THE SOCIETY. H ) TO APPLY FOR, RECEIVE, ACCEPT AND UTILIZE ANY GOVERNMENT, UNIVERSITY AND / OTHER GRANTS AND / ALL OTHER ALLOWANCE IN CONNECTION WITH ANY OF THE INSTITUTIONS, EDUCATIONAL/ OTHERWISE, WORK AND ACTIVITIES CONDUCTED, PROPERTIES HELD BY THE SOCIETY AND TO DEAL WITH THE SAME IN ACCORDANCE WITH THE TERMS AND CONDITIONS THERE OF AND TO EXECUTE SUCH DOCUMENTS THEREFORE OVER ALL OR ANY OF THE PROPERTIES AND ASSETS OF THE SOCIETY AS MAY BE REQUIRED. I ) TO PROVIDE SHELTER FOR THE DESTITUTE S AND ORPHANS AND TO ESTABLISH, CONDUCT AND MAINTAIN POOR HOUSES, ORPHANAGES AND BOARDING HOUSES. IN FIRST ROUND OF LITIGATION , THE COMMISSIONER OF INCOME TAX REJECTED THE REGISTRATION UNDER SECTION 12AA ON THE GROUND THAT OBJECTS OF THE SOCIETY ARE MIXED I.E. RELIGIOUS AS WELL AS CHARITABLE. ON APPEAL, 5 ITA NOS. 575/VIZ/2013 ( M/S. ST. PAUL PROVINCE SOCIETY ) ITAT DIRECTED THE COMMISSIONER OF INCOME TAX TO CONSIDER THE CASE OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. THEREAFTER, COMMISSIONER OF INCOME TAX HAS ISSUED A NO TICE CALLING VARIOUS DETAILS FROM THE ASSESSEE. ASSESSEE HAS FILED ALL THE DETAILS EXCEPT AGREEMENT BETWEEN HERALDS OF GOOD NEWS AND THE ASSESSEE - SOCIETY , HENCE , COMMISSIONER OF INCOME TAX HAS DOUBTED THE GENUINENESS OF THE SOCIETY AND REJECTED THE REGIST RATION UNDER SECTION 12A OF THE ACT. 8 . WE HAVE GONE THROUGH THE OBJECTS OF THE ASSESSEE - SOCIETY AND FIND THAT ASSESSEE - SOCIETY MAINLY EXISTED TO CARRY THE EDUCATIONAL ACTIVITIES, PARTICULARLY IN RURAL UNDER DEVELOPED AREA. THE HERALDS OF GOOD NEWS SOCIETY IS RUNNING EDUCATIONAL INSTITUTIONS AT YERNAGUDEM , B Y RESOLUTION DATED 05/04/2009 , THREE SCHOOLS NAMELY, ST.JOSEPH E.M. PRIVATE SCHOOL, ST. JOSEPH E.M. ELEMENTARY SCHOOL & ST. JOSEPH E.M. HIGH SCHOOL HAVE BEEN TRANSFERRED TO THE ASSESSEE - SOCIETY I .E. M/S. ST.PAUL PROVINCE SOCIETY, YERNAGUDEM, WEST GODAVARI DISTRICT. THE ASSESSEE HAS FILED ASSESSMENT ORDER OF HERALDS OF GOOD NEWS WHEREIN IT IS DECLARED NIL INCOME BY CLAIMING EXEMPTION. IT IS CLEAR FROM THE ASSESSMENT ORDER THAT HERALDS OF GOOD NEWS SCHOOL ENJOYING REGISTRATION UNDER SECTION 12A OF THE ACT. THE ASSESSING OFFICER HAS CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT THE SOCIETY IS REGISTERED UNDER SEC TION 12AA IN THE ASSESSMENT YEAR 2006 - 07 . THE ASSESSEE ALSO FILED INCOME TAX RETURNS OF THE HERALDS OF GOOD NEWS EDUCATIONAL SOCIETY, INCOME & EXPENDITURE AND ALSO RECEIPTS UPTO 31/03/2010 . THE ASSESSEE ALSO FILED ITS DETAILS OF OPENING BALANCE , RECEIPTS , PAYMENTS 6 ITA NOS. 575/VIZ/2013 ( M/S. ST. PAUL PROVINCE SOCIETY ) AND BALANCE IN SCHOOL DURING THE YEAR 2011 - 12 AND ALSO FILED BALANCE SHEET BEFORE THE COMMISSIONER OF INCOME TAX. HOWEVER, THE COMMISSIONER OF INCOME TAX IS OF THE OPINION THAT THE ASSESSEE - SOCIETY IS NOT A GENUINE SOCIETY. WE FIND THAT THE ORDER PASSED BY THE CIT IS WITHOUT LOOKING INTO THE OBJECTS OF THE SOCIETY AND WITHOUT ANY BASIS. THE CIT IS NOT ABLE TO POINT OUT WHAT IS THE VIOLATION COMMITTED BY THE ASSESSEE - SOCIETY AND HOW THE SOCIETY IS NOT ELIGI BLE FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. T HEREFORE, CONSIDERING THE OBJECTS AND DETAILS FILED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA. ACCORDINGLY, WE GRANT REGISTRATION TO THE SOCIETY UNDER SECTION 12AA OF THE ACT. ORDERED ACCORDINGLY. 9 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 1 2 T H DAY OF APRIL , 201 7 . S D / - S D / - ( G. MANJUNATHA ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 2 T H APRIL , 201 7 . VR/ - COPY TO: 1 . THE ASSESSEE - M/S. ST. PAUL PROVINCE SOCIETY, D.NO. 8 - 185, DEVARAPALLI MANDAL, YERNAGUDEM, W.G. DIST. 2 . THE REVENUE - CIT, RAJAHMUNDRY. 3 . THE D. R., VISAKHAPATNAM . 4 . GUARD FILE. BY ORDER