Joginpally B.R. Educational Society, Hyderabad V. Commissioner of Income Tax (Central), Hyderabad

ITA 585/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66182 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 20-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALKA R JAIN
• Assessee Lawyers: B R MAHESH
• Keywords: Unexplained expenditure
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 585/HYD/2012 ASSESSMENT YEAR NA M/S. JOGINPALLY BR EDUCATIONAL SOCIETY, HYDERABAD PAN: AAATJ4159P VS. COMMISSIONER OF INCOME- TAX (CENTRAL), HYDERABAD APPELLANT RESPONDENT I.T.A. NO. 586/HYD/2012 ASSESSMENT YEAR NA M/S. JB EDUCATIONAL SOCIETY, HYDERABAD PAN: AAATJ3217A VS. COMMISSIONER OF INCOME- TAX (CENTRAL), HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI B.R. MAHESH RESPONDENT BY: SMT. ALKA R. JAIN DATE OF HEARING: 25.07.2012 DATE OF PRONOUNCEMENT: 31.08.2012 O R D E R PER CHANDRA POOJARI, AM: THESE TWO APPEALS BY DIFFERENT ASSESSEES ARE DIREC TED AGAINST DIFFERENT ORDERS OF CIT (CENTRAL), HYDERABA D DATED 29.3.2012 U/S. 12AA(3) OF THE ACT WHEREIN HE CANCEL LED THE REGISTRATION GRANTED U/S. 12AA OF THE ACT. SINCE T HE FACTS IN BOTH THE CASES ARE SIMILAR, THESE APPEALS ARE CLUBB ED TOGETHER, HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AS THE FACTS ARE SIMILAR, WE CONSIDER THE FACTS IN ITA NO. 585/HYD/2012. THE ASSESSEE, M/S JOGINPALLY BR EDUCA TIONAL SOCIETY, WAS GRANTED REGISTRATION U/S 12AA OF THE I NCOME TAX I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 2 ACT, 1961, BY THE DIRECTOR OF INCOME-TAX (EXEMPTION ), HYDERABAD'S PROCEEDINGS IN F. NO. H. QRS.-1/28/12A/ DIT(E) DATED 12.03.2004 W.E.F. 21.01.2004. THE SAID REGIST RATION WAS EFFECTIVE FROM 21.01.2004. THE MAIN ACTIVITIES OF T HE SOCIETY IS TO ESTABLISH AND RUN COLLEGES IN THE FIELD OF MEDIC AL, DENTAL, NURSING, ENGINEERING, COMPUTER AND INFORMATION TECH NOLOGY AND IMPART EDUCATION AND PREPARE STUDENTS FOR COLLEGE E XAMINATION AT STATE AND CENTRAL LEVEL. FOLLOWING ARE THE EDUCA TIONAL INSTITUTIONS RUN BY THE SOCIETY: I. JOGINPALLY BR ENGINEERING COLLEGE II. BHASKAR MEDICAL COLLEGE III. JOGINPALLY BR PHARMACY COLLEGE IV. MN RAO WOMEN'S ENGINEERING COLLEGE THE TRUSTEES HOLDING IMPORTANT AND DECISIVE POSITIO N IN THE SOCIETY ARE AS UNDER: (I) SRI J. BHASKAR RAO (II) SMT. J. VASUMATHI DEVI (III) SRI J.V. KRISHNA RAO (IV) SRI J. VAMSHIDHAR RAO OTHER FAMILY MEMBERS BEING MEMBERS OF THE SOCIETY A RE J. SUNITHA, D. DEEPIKA, CH. KRISHNA RAO AND CH. VIJAYA LAKSHMI. 3. IT WAS INFORMED BY THE ASSESSING OFFICER THAT DURIN G THE COURSE OF SEARCH CONDUCTED IN THE CASE OF THE ABOVE SOCIETY EVIDENCE RELATING TO COLLECTION OF FEES FROM STUDEN TS OVER AND ABOVE THE PRESCRIBED FEES IN THE FORM OF DONATION/C APITATION FEES WERE FOUND. THE SAID EXCESS FEES WERE COLLECTE D FOR GRANTING ADMISSION UNDER THE MANAGEMENT QUOTA INTO THE PROFE SSIONAL COURSES UNDERTAKEN BY THE INSTITUTIONS OF THE SOCIE TY. THE ASSESSING OFFICER HAS ALSO REFERRED TO VARIOUS EVID ENCES RELATING TO COLLECTION OF DONATIONS / CAPITATION FEE THAT WE RE FOUND AND I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 3 SEIZED DURING THE COURSE OF SEARCH FROM THE OFFICE PREMISES OF THE ASSESSEE-SOCIETY. THE EVIDENCE OF COLLECTION OF EXCESS FEES WAS FOUND IN THE SEIZED MATERIAL ANNEXURE-JB/AA/1 T O JB/AA/5. THE ASSESSING OFFICER HAS ALSO REFERRED TO THE STAT EMENT RECORDED FROM THE EMPLOYEES OF THE SOCIETY, WHO HAV E STATED THAT THE AMOUNT RECEIVED IN CASH WAS MENTION ED ON THE RIGHT HAND SIDE TOP PORTION OF EACH PAGE NEXT TO TH E NAME OF THE STUDENT. THE ASSESSING OFFICER REPORTED THAT FOR, T HE A.YRS. 2006-07 TO 2010-11, THE EXCESS FEES IN THE FORM OF DONATION/CAPITATION FEES AS EVIDENCED FROM THE SEIZ ED RECORDS AMOUNTS TO RS. 27,79,87,000. IT IS ALSO REPORTED TH AT THE FEES COLLECTED OVER AND ABOVE THE PRESCRIBED FEE HAS NOT BEEN DULY ACCOUNTED IN THE REGULAR BOOKS OF ACCOUNT OF THE SOCIETY AND THE SAME HAVE BEEN UTILIZED FOR THE BEN EFIT OF THE INTERESTED PERSONS OF THE SOCIETY. THE ASSESSING OF FICER HAS ALSO REPORTED ABOUT UNEXPLAINED EXPENDITURE INCURRED BY THE SOCIETY. CONSIDERING THE ABOVE, THE ASSESSING OFFICER WAS OF THE VIEW THAT DUE TO THE VIOLATIONS OF THE PROVISIONS OF SEC TION 11 & 13 OF THE INCOME TAX ACT, 1961, THE ASSESSEE-SOCIETY IS N OT ENTITLED FOR REGISTRATION U/S 12A/12AA OF THE INCOME TAX ACT, AN D HAS SUGGESTED THAT THE REGISTRATION GRANTED EARLIER TO THE SOCIETY SHOULD BE CANCELLED. 4. CONSIDERING THE PROPOSAL RECEIVED FROM THE ASSESSIN G OFFICER, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSE SSEE-SOCIETY AS TO WHY THE REGISTRATION GRANTED EARLIER U/S 12A/ 12AA BY THE COMMISSIONER OF INCOME-TAX-II, HYDERABAD SHALL NOT BE CANCELLED U/S 12AA(3) OF THE I.T. ACT. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE- SOCIETY FILED A WRITTEN SUBMISSION. IT WAS SUBMITTE D THAT THE SOCIETY EXISTS PURELY FOR EDUCATIONAL PURPOSE AND A LL THE ACTIVITIES OF THE SOCIETY ARE FOR RUNNING THE COLLE GES AND I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 4 INSTITUTIONS. IT WAS ALSO SUBMITTED THAT THE SOCIET Y HAD NOT COLLECTED ANY FEES IN ADDITION TO THE FEES PRESCRIB ED UNDER LAW. THE ADDITIONAL FEES WAS COLLECTED BY CONSULTANT AS PER THEIR DECLARATION UNDER SECTION 132(4). THE SAID FUNDS WE RE UTILIZED FOR THE PURPOSE OF EDUCATION ONLY. THIS WAS VALIDAT ED BY THEM IN THEIR APPLICATION BEFORE THE SETTLEMENT COMMISSION. IT WAS FURTHER STATED THAT NO FUNDS OF THE SOCIETY WERE UT ILIZED FOR PERSONAL BENEFITS OF THE TRUSTEES. THE ENTIRE FUNDS WERE CHANNELIZED FOR THE PURPOSE OF IMPARTING EDUCATION. THE A. R. ALSO ENCLOSED A COPY OF THE WRITTEN SUBMISSIONS, WH ICH WERE FILED BEFORE THE DGIT (INV.) REGARDING THE APPLICAT ION OF FUNDS FOR EDUCATION PURPOSE WITH DOCUMENTARY EVIDENCE AND IT WAS REQUESTED THAT THE SAID MAY TREATED AS PART OF SUBM ISSIONS TO THE EXTENT APPLICABLE. IT WAS THEREFORE REQUESTED T HAT THE REGISTRATION GRANTED EARLIER UNDER SEC. 12AA BE CON TINUED IN THE INTEREST OF THE EDUCATION INSTITUTION AND IN THE SP IRIT OF LAW. 5. ACCORDINGLY, CONSIDERING THE FACTS OF THE CASE, HE CANCELLED THE REGISTRATION GIVEN U/S. 12AA OF THE A CT AS THERE IS VIOLATION OF PROVISIONS OF SECTIONS 121 AND 13 OF T HE ACT. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX IN HIS ORDER DATED 29.03.2012, CANCELLED THE REGISTRATION OF THE SOCIETY U/S 12AA, STATING THAT THE SOCIETY HAS VIOLATED THE PROVISION OF SECTIONS 11 & 13 OF INCOM E TAX ACT, AND HAS NOT CONDUCTED ITSELF IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY. VARIOUS ISSUES WERE RAISED BY THE COMM ISSIONER IN HIS ORDER OF CANCELLATION WHICH ARE SUBJECT MATTER OF APPEAL IN THE CASE OF ASSESSEE AND ALSO IN RELATED CASES WHIC H ARE PENDING BEFORE CIT(A). THEY HAVE TO BE DEALT WITH UNDER NO RMAL ASSESSMENT/APPEAL PROCEEDINGS UNDER INCOME TAX ACT. A I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 5 STATUTORY AUTHORITY HAS NO POWER, JURISDICTION OR D ISCRETION TO GO BEYOND THE STATUTORY PROVISIONS. NO POWER CAN BE A SSUMED IN THE ABSENCE OF ANY SPECIFIC PROVISION. IT IS QUITE CLEAR THAT AS PER SUBSECTION (3) OF SECTION 12AA, CIT HAS POWER TO RE SCIND THE REGISTRATION ONLY ON BEING SATISFIED ABOUT EITHER O F THE TWO CONDITIONS PRESCRIBED THEREIN NAMELY: (A) ACTIVITIES ARE NOT GENUINE (B) ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH OBJECTS OF THE TRUST/INSTITUTION, AND NOT FOR ANY O THER REASON. 7. THE LEARNED AR FURTHER SUBMITTED THAT THE COMMISSIO NER INVOKING SECTION 11 & 13 OF THE ACT IS ULTRA VIRES OF HIS POWERS. THE ASSESSEE IS CARRYING OUT ITS ACTIVITIES IN ACCO RDANCE OBJECTS OF THE SOCIETY BY RUNNING A NUMBER OF COLLEGES AND IMPARTING EDUCATION, WHICH IS ALSO GOVERNED/CONTROLLED BY VAR IOUS STATUTORY AUTHORITIES OF THE GOVERNMENT. THE ACTIV ITY OF THE SOCIETY IS GENUINE AND EXISTS PURELY FOR EDUCATIONA L PURPOSE AND IS A RECOGNIZED INSTITUTION BEING INSPECTED BY VARI OUS GOVERNMENT AUTHORITIES FROM TIME TO TIME. SINCE THE COMMISSIONER HAS NOT SHOWN ANY EVIDENCE TO STATE TH AT THE SOCIETY IS NOT A GENUINE ENTITY NOR ANY EVIDENCE WA S BROUGHT ON RECORD THAT THE ACTIVITY OF SOCIETY ARE NOT IN ACCO RDANCE WITH THE OBJECTS, THE ORDER OF CANCELLATION OF ORDER U/S. 12 AA(3) IS BAD IN LAW. 8. FURTHER HE RELIED ON THE ORDER OF CHENNAI BENCH OF THIS TRIBUNAL IN THE CASE OF SARVODAYA HAKKIYA PANNAI IN ITA NO. 594/MDS/2011. HE SUBMITTED THAT THIS ORDER OF THE TRIBUNAL IS CONFIRMED BY THE MADRAS HIGH COURT REPORTED IN 20 T AXMAN 546. IN THE ABOVE ORDER THE CHENNAI BENCH HELD AS UNDER: I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 6 '5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ORDER OF THE LEARNED CIT SHOWS THAT WHEN THE RETURN OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2008-09 TO 2010-11 WERE VERIFIED, IT WAS NOTICED THAT THE ASSESSEE SOCIETY WAS ENGAGED IN TH E PURCHASE AND SALE OF BOOKS. IT WAS FOR THIS PURPOS E THAT THE LEARNED CIT HAD DECIDED TO LOOK INTO THE QUESTION OF SECTION 12A REGISTRATION 3 WHICH IS GRANTED TO THE ASSESSEE. THERE IS NO RECORDING IN T HE ORDER OF THE LEARNED CIT THAT THE ACTIVITIES OF THE ASSESSEE TRUST WERE NOT GENUINE OR THAT THE ASSESSE E SOCIETY WAS NOT DOING ANY ACTIVITIES IN LINE WITH TH E OBJECTS OF THE ASSESSEE SOCIETY FOR WHICH THE ASSES SEE HAD BEEN GRANTED THE REGISTRATION UNDER SECTION 12A . A PERUSAL OF THE PROVISIONS OF SECTION 12AA(3) OF T HE INCOME TAX ACT, 1961 WHICH GIVE POWERS TO THE LEARNED CIT TO CANCEL REGISTRATION GRANTED UNDER SECTION 12AA SHOWS THAT THERE ARE TWO CONDITIONS UNDER WHICH THE REGISTRATION U/S 12AA CAN BE REVOKED, THE FIRST BEING THAT THE ACTIVITIES WERE N OT GENUINE AND SECONDLY THAT THE ACTIVITIES CONDUCTED BY THE ASSESSEE ARE NOT IN LINE WITH THE OBJECTS OF T HE TRUST. THERE IS NO FINDING THAT EITHER OF THESE TWO CONDITIONS HAS BEEN VIOLATED. FURTHER IT HAS BEEN CATEGORICALLY ADMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE SOCIETY IS NOT DOI NG ANY ACTIVITY OTHER THAN THE ACTIVITY CONNECTED WITH THE SPREADING AND PROPAGATING OF GANDHIAN AND SARVODAYA IDEOLOGIES, THE PURPOSE FOR WHICH THE ASSESSEE HAD BEEN GRANTED REGISTRATION UNDER SECTIO N 12A EARLIER IN 1989. IN THE CIRCUMSTANCES, AS NO SPECIFIC VIOLATION HAD BEEN POINTED OUT, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO THE CONTINUAT ION OF REGISTRATION UNDER SECTION 12AA. CONSEQUENTLY THE ORDER OF THE LEARNED CIT CANCELLING THE REGISTRATION UNDER SECTION 12AA STANDS REVERSED. IN THE CIRCUMSTANCES, IT IS HELD THAT THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12A(A) VIDE ORDER IN C. NO. 464/51/89-90 DATED 6.11.04...' 9. THE DR SUBMITTED THAT THE SEIZED MATERIAL SHOWS THA T THE ASSESSEE COLLECTED CAPITATION FEE AND NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE SOCIETY. ON THE BASIS O F SEIZED MATERIAL, HE SUBMITTED THAT THERE WAS COLLECTION OF UNACCOUNTED CASH RECEIPT OF RS. 28.80 CRORES IN VARIOUS YEARS. HE ALSO I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 7 SUBMITTED THAT THE ASSESSEE IS HAVING SCANT REGARD TO THE PROVISIONS OF INCOME-TAX ACT AND ALSO ITS OWN BYE-L AWS. THE ASSESSEE HAS NOT CARRIED OUT ACTIVITIES IN ACCORDAN CE WITH THE OBJECTS FOR WHICH IT WAS ESTABLISHED. HE RELIED ON THE JUDGEMENT IN THE CASE SCIENTIFIC EDUCATIONAL ADVANCEMENT SOCI ETY VS. UNION OF INDIA & OTHERS, 323 ITR 84. HE SUBMITTED THAT T HE ORDER OF THE CIT HAS TO BE CONFIRMED. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ARGUMENT OF THE ASSESSEE IS TOTALLY MISCONCEIVED. THE REGISTRATION IS GRANTED BY THE DIT(E), HYDERABA D U/S. 12A OF THE ACT COULD BE CANCELLED AS PER PROVISIONS OF SEC TION 12AA(3) OF THE ACT. THE REGISTRATION AUTHORITY IS HAVING P OWER TO CANCEL THE SAME WHEN THE OBJECTS OF THE TRUST OR INSTITUTI ON REMAIN ON PAPER BUT ACTUAL ACTIVITIES OF SUCH TRUST OR INSTIT UTION ARE CONTRARY TO THE SAID OBJECTS OR FICTITIOUS OR FRAUD ULENT OR NOT GENUINE OR NOT WITHIN THE SCOPE OF ITS OBJECT CLAUS E, THE REGISTRATION AUTHORITY IS VESTED WITH THE POWER OF CANCELLATION. HOWEVER, WHERE THE OBJECTS OF THE TRUST OR INSTITUT ION, WHICH WERE THE BASIS OF GRANT OF REGISTRATION ARE ALTERED OR NOT ADHERED TO THE VERY FOUNDATION OF REGISTRATION COLLAPSES AN D IN THAT EVENT THE REGISTRATION AUTHORITY CANNOT CLOSE ITS EYES TO CONTINUE SUCH ACTIVITY OF THE ASSESSEE AND THEY HAVE TO BE AWAKE AND THE REGISTRATION HAS TO BE CANCELLED. IN THE PRESENT C ASE, AS SEEN FROM THE FACTS NARRATED BY THE CIT (CENTRAL), HYDER ABAD, THE ASSESSEE IS COLLECTING THE CAPITATION/DONATION FOR ADMITTING THE STUDENTS TO THE INSTITUTION AND ALSO THE SEIZED MAT ERIAL REFLECTS VIOLATION OF OBJECT CLAUSE OF THE ASSESSEE. 11. IT IS ALSO ON RECORD THAT THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH MARKED AS JB/AA/1 TO JB/AA5 TH AT THERE IS A COLLECTION OF DONATION/CAPITATION FEE. FURTHER U NEXPLAINED I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 8 CASH AND JEWELLERY WERE FOUND AND SEIZED FROM THE P REMISES OF THE ASSESSEE SOCIETY AS WELL AS FROM RESIDENTIAL PR EMISES OF SOME OF THE MEMBERS AS UNDER: SL. NO. PLACE WHERE FOUND DESCRIPTION FOUND (RS.) SEIZED (RS.) 1. RESIDENCE OF SRI J. BHASKAR RAO JEWELLERY 66,00,000 66,00,000 (SUBSTITUTED BY PAY ORDER) 2. RESIDENCE OF SRI J. BHASKAR RAO CASH 5,17,000 5,17,000 12. FURTHER, IT IS WORTHWHILE TO REFER TO PROVISIONS OF SECTION 132(4A) OF THE INCOME TAX ACT, 1961, AS PER WHICH A PRESUMPTION CAN BE DRAWN THAT THE DOCUMENTS FOUND F ROM THE PREMISES OF THE SOCIETY ARE TRUE AND IT BELONGS TO THE SOCIETY AND THE SOCIETY HAS TO EXPLAIN IT AND MENTION AS TO WHO HAS PREPARED THE DOCUMENTS. DURING THE COURSE OF SEARCH, STATEM ENT OF SRI ASHOK MEHTA REDDY AN EMPLOYEE OF THE SOCIETY, WAS R ECORDED, WHEREIN HE STATED THAT THE AMOUNT RECEIVED IN CASH IS MENTIONED ON THE RIGHT HAND SIDE, TOP PORTION OF EACH OF PAGE NEXT TO THE NAME' OF THE STUDENT. HE FURTHER CLARIFIED THAT THE AMOUNT MENTIONED THEREIN IS IN 'RS. LAKHS', THOUGH THE SAM E WAS WRITTEN IN THOUSANDS. FOR EXAMPLE THE AMOUNT OF RS. 25,000 MENTIONED AGAINST NAME K. VARUNIYA IN BOOK MARKED JB/AA/5,(SL . NO. 2 CANDIDATE), IS STATED TO BE RS. 25,00,000 AS CONFIR MED BY SRI ASHOK MEHTA REDDY. SRI J. VAMSIDHA RAO, SECRETARY OF THE SOCIETY WAS ALSO CONFRONTED WITH THE ADMISSION MADE BY SRI ASHOK MEHTA REDDY ON THE DATE OF SEARCH ITSELF. HE STATED THAT THE SEIZED BOOKS CONTAIN THE DETAILS OF FEES COLLEC TED BY WAY OF CHEQUES/DD AND ALSO IN CASH OVER AND ABOVE WHAT IS COLLECTED BY CHEQUES AND DDS AND ALSO THE MONEY IS COLLECTED IN CASH FOR WHICH NO RECEIPTS ARE ISSUED. THE FACT OF AMOUNT W RITTEN IN THOUSANDS, BY OMITTING TWO 'ZEROES' TO BE READ AS R S. LAKHS WAS CONFIRMED BY SRI J. VAMSIDHAR RAO. EVEN SRI J. BHA SKAR RAO, I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 9 CHAIRMAN OF THE SOCIETY WAS QUESTIONED ON THE ISSUE AND IN THE STATEMENT RECORDED ON 15.12.2009, HE STATED THAT HE WILL OFFER HIS COMMENTS IN A COUPLE OF DAYS BUT NO EXPLANATION WAS FURNISHED THEREAFTER. 13. THE SAMPLE COPIES OF THE EVIDENCES IN ANNEXURE JB/A A/1 TO 5 SEIZED DURING THE COURSE OF SEARCH INDICATE TH AT THE CAPITATION FEE WAS COLLECTED IN CASH WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE SOCIETY. THESE DOCUMENT S INDICATE THAT THE CAPITATION FEES WHICH WAS COLLECTED IN CAS H WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND ONLY THE REGUL AR FEES IS RECORDED IN THE BOOKS OF ACCOUNT. IT MAY BE SEEN T HAT THE DOCUMENT EVIDENCING PAYMENT OF CAPITATION FEES IN C ASH WAS ALSO FOUND THOUGH THE ASSESSEE HAS DENIED THE CLAIM . THIS MEANS THAT PART OF THE DOCUMENT RELATING TO REGULAR FEE IS ADMITTED WHEREAS THE PART CONTAINING DETAILS OF CAP ITATION FEES WHICH WAS RECEIVED IN CASH AND NOT RECORDED IN THE BOOKS OF ACCOUNT IS NOT ADMITTED EVEN THOUGH PLETHORA OF EVI DENCES ARE AVAILABLE IN THIS REGARD. 14. IN THESE CIRCUMSTANCES, THE ASSESSEE CANNOT BE CONSIDERED AS A TRUST ENGAGED IN CHARITABLE ACTIVIT IES. THE OBJECTS OF THE TRUST HAVE BEEN VIOLATED IN A WHOLES OME MANNER AND THE BASIS ON WHICH REGISTRATION IS GRANTED NO L ONGER SURVIVES OR HOLDS GOOD, WOULD CALL IMMEDIATE INTERFERENCE BY THE REGISTRATION GRANTING AUTHORITY. IN THESE CIRCUMST ANCES, THE REGISTRATION AUTHORITY CANCELS THE REGISTRATION. T HE ARGUMENT PLACED BEFORE US BY LEARNED AR IS SUPERFICIAL WHICH CANNOT BE CONSIDERED. THE CIT (CENTRAL), HYDERABAD CONSIDERI NG THE ENTIRE FACTS OF THE CASE FOUND THAT THERE IS VIOLATION OF THE PROVISIONS OF SECTION 2(15) OF THE ACT AND THE CASE CANNOT BE CALLED AS A TRUST AND IT IS CARRYING ON THE ACTIVITIES IN A COM MERCIAL MANNER I.T.A. NOS. 585 & 586/HYD/2012 M/S. JOGINPALLY BR EDUCATIONAL SOCIETY AND M/S. JB EDUCATIONAL SOCIETY =============================== 10 FOR WHICH REGISTRATION U/S. 12A CANNOT BE CONTINUED . IN OUR OPINION, THE CIT (CENTRAL), HYDERABAD HAS POWER TO CANCEL THE REGISTRATION GRANTED U/S. 12AA OF THE ACT AND CONSI DERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONFIRM THE ORDER OF THE CIT (CENTRAL), HYDERABAD. THE FACTS AND CIRCUMSTAN CES IN ITA NO. 586/HYD/2012 ARE SIMILAR. THEREFORE, THE GROUN D TAKEN IN THIS APPEAL IS ALSO DISMISSED. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES' A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2012. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 31 ST AUGUST, 2012 TPRAO COPY FORWARDED TO: 1. M/S. JOGINPALLY BR EDUCATIONAL SOCIETY, C/O. M/S . MAHESH, VIRENDER & SRIRAM, CHARTERED ACCOUNTANTS, 6-3-788/36 & 37A, AMEERPET, HYDERABAD. 2. M/S. JB EDUCATIONAL SOCIETY, C/O. M/S. MAHESH, V IRENDER & SRIRAM, CHARTERED ACCOUNTANTS, 6-3-788/36 & 37A, AMEERPET, HYDERABAD. 3. THE COMMISSIONER OF INCOME-TAX (CENTRAL), HYDERA BAD. 4. THE ACIT, CENTRAL CIRCLE-1, HYDERABAD. 5. THE ADDL. CIT, CENTRAL RANGE-1, HYDERABAD. 6. THE DR B BENCH, ITAT, HYDERABAD