Beant College of Engineering & Tecjmp;pgu, Gurdaspur V. The Commissioner of Income Tax (Exemption), Chandigarh

ITA 592/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7724 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 29-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: P N ARORA
• Keywords: Charitable institution; Opportunity of being heard; Application of stay; Question of law; Reasonable cause
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. RAVISH SOOD, JUDICIAL MEMBER I.T.A. NO. 592/(ASR)/2016 & S. A. NO. 05/(ASR)/2017 ASSESSMENT YEAR: PAN: AABAB8322L M/S. BEANT COLLEGE OF ENGINEERING & TECHNOLOGY, GURDASPUR. VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA (ADV .) RESPONDENT BY: SH. S. S. KANWAL (D.R.) DATE OF HEARING: 15.11.2017 DATE OF PRONOUNCEMENT: 05.12.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(E) CHANDIGARH DATED 30.09.2016 PASSED U/S 12AA OF THE ACT. 2. THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEAL , HOWEVER THE CRUX OF GROUNDS OF APPEAL IS THE ACTION OF LD. CIT( E) BY WHICH HE HAS REJECTED THE APPLICATION MADE BY ASSESSEE FOR GRANT OF EXEMPTION U/S 12AA OF THE ACT. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT DUE APP LICATION ALONGWITH NECESSARY DOCUMENTS WERE FILED FOR REGISTRATION U/S 12AA OF THE ACT. ON VARIOUS DATES, THE LD. CIT(E) REQUIRED ASSESSEE TO SUBMIT INFORMATION/DOCUMENTS AND WHICH WERE DULY FILED AND REPLIES WERE ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 2 SUBMITTED BUT THE LD. CIT(E) DID NOT GRANT EXEMPTIO N U/S 12AA OF THE ACT BY HOLDING IRRELEVANT FINDINGS. THE LD. AR SUBM ITTED THAT THE FIRST OBJECTION TAKEN BY LD. CIT(E) IS THAT EARLIER THE A SSESSEE WAS GETTING EXEMPTION U/S 10(23C)(IIIAB) AND NOW THE SHIFTING F ROM THE APPLICABILITY OF SECTION 10(23C)(IIIAB) TO SECTION 12AA WAS NOT J USTIFIED IN VIEW OF THE FACT THAT THERE WAS NO CHANGE IN THE BYELAWS OR OTH ER CIRCUMSTANCES. IN THIS RESPECT THE LD. AR SUBMITTED THAT AS REGARDS T HE EXEMPTION U/S 10(23C)(IIIAB), THE ASSESSEE WAS ENTITLED FOR EXEMP TION ONLY WHEN THE RECEIPTS WERE BELOW RS. 1 CRORE AND SINCE THE RECEI PTS HAD CROSSED MORE THAN RS.1 CRORE, THEREFORE THE ASSESSEE HAD RIGHT T O APPLY FOR REGISTRATION U/S 12AA OF THE ACT. THE OTHER OBJECTION RAISED BY LD. CIT(E) WAS THAT ASSESSEE HAD BEEN DECLARED AS AUTONOMOUS BODY BY TH E TECHNICAL EDUCATION DEPARTMENT AND THEREFORE IT SHOULD HAVE R EVISED MOA/ BYELAWS WHICH THE ASSESSEE HAD NOT DONE. IN THIS RE SPECT, THE LD. AR SUBMITTED THAT THERE WAS NO CHANGE IN THE COMPOSITI ON OF THE SOCIETY BEFORE AND AFTER THE SOCIETY WAS INSTRUCTED TO RUN THE COLLEGE AS AUTONOMOUS BODY AND EVEN OTHERWISE THE DEPARTMENT H AS TAKEN A NARROW MEANING OF THE WORD AUTONOMOUS. IT WAS SUBMI TTED THAT MEANING OF AUTONOMOUS BODY IS TO RUN THE ADMINISTRATION IND EPENDENTLY ON THE BASIS OF BY LAWS AND THE ADMINISTRATION OF THE COLL EGE HAS TO BE GOVERNED BY THE LAWS LAID DOWN BY THE ALL INDIA COUNCIL OF T ECHNICAL EDUCATIONS. IT WAS SUBMITTED THAT THE COLLEGE WAS DECLARED AS AUTO NOMOUS BODY FOR THE WORKING OF COLLEGE FOR THE PURPOSE OF EDUCATION AND NOT FOR ANY OTHER PURPOSES AS ASSUMED AND PRESUMED BY THE DEPARTMENT AND THERE WAS ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 3 NO NEED TO AMEND MEMORANDUM OF ASSOCIATION AS OBJEC TS OF THE SOCIETY REMAINED SAME ARE TO PROVIDE EDUCATION. OUR ATTENTI ON WAS INVITED TO THE OBJECTS OF THE SOCIETY AS PLACED IN P.B PAGE 6 TO 1 0 AND OUR ATTENTION WAS ALSO INVITED TO A LETTER DATED 22.12.1994 ISSUED BY DIRECTOR TECHNICAL EDUCATION AND INDUSTRIAL TRAINING, PUNJAB WHERE IT HAS BEEN MENTIONED THAT THE ASSESSEE WAS ESTABLISHED BY THE PUNJAB GOV ERNMENT TO BE RUN AS AN ENGINEERING AND TECHNOLOGY COLLEGE THROUGH A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 AND THER EFORE IT WAS SUBMITTED THAT THE OBJECTION RAISED BY LD. CIT(E) IS NOT RELE VANT. ON OUR ASKING AS TO WHETHER NOW THE BYELAWS HAS BEEN AMENDED, THE LD . AR STATED THAT THE SAME HAS BEEN AMENDED AND IN THIS RESPECT OUR A TTENTION WAS INVITED TO P.B. PAGE 112 TO 128 WHERE COPY OF AMENDED RULE OF THE SOCIETY WAS PLACED. THE LD. AR SUBMITTED THAT THE THIRD OBJECTI ON OF LD. CIT(E) IS THAT SOCIETY WAS SET UP TO SPECIFICALLY RUN A COLLEGE AN D NO WHERE IN THE BYELAWS HAS BEEN MENTIONED THE RUNNING OF A SCHOOL AND THE SOCIETY WITHOUT EFFECTUATING THE NECESSARY CHANGES IN THE B YELAWS ETC. HAS BEEN RUNNING BSS SCHOOL AFFILIATED WITH PUNJAB SCHOOL ED UCATION BOARD, AND LD. CIT(E) FURTHER HELD THAT MOA OF THE SOCIETY TO THAT EXTENT IS NOT APPLICABLE TO THE SCHOOL AS THE RECEIPTS ALSO INCLU DES RECEIPTS FROM SCHOOL. IN THIS RESPECT, THE LD. AR SUBMITTED THAT LD. CIT(E) HAS MISERABLY FAILED TO APPRECIATE THE FACTS OF THE CAS E AND OUR ATTENTION WAS INVITED TO A NOTIFICATION 12.02.2009 ISSUED BY THE GOVT. OF PUNJAB, DEPARTMENT OF TECHNICAL EDUCATION. IT WAS SUBMITTED THAT THROUGH THIS NOTIFICATION THE GOVERNOR OF PUNJAB ACCORDED SANCTI ON TO ASSESSEE AND ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 4 OTHER SOCIETIES TO ESTABLISH NEW MULTI DISCIPLINARY ACADEMY AT VARIOUS PLACES AND UPGRADE POLYTECHNIC/ENGINEERING COLLEGES INTO MULTI DISCIPLINED ACADEMIES IN THE EXISTING CAMPUS AND TH E SCHOOL WAS STARTED IN ACCORDANCE WITH THE NOTIFICATION OF GOVT. OF PUN JAB AND RUNNING OF SCHOOL IS ALSO AS CHARITABLE ACTIVITY. IT WAS SUBMI TTED THAT THERE WAS NO NEED TO INCLUDE RUNNING OF SCHOOL IN THE MEMORANDUM OF ASSOCIATION AS OBJECTS CLAUSE ALREADY INCLUDED PROVIDING OF EDUCAT ION AND PROVIDING OF EDUCATION IS NOT LIMITED TO PROVIDING TECHNICAL EDU CATION ONLY. THE LD. AR FURTHER SUBMITTED THAT THERE WAS ANOTHER SOCIETY BY THE NAME OF SBS COLLEGE OF ENGINEERING FEROZEPUR WHEREIN UNDER THE SAME AND SIMILAR CIRCUMSTANCES, THE REGISTRATION HAS BEEN GRANTED. I T WAS SUBMITTED THAT SOCIETY WAS ALSO RUNNING SCHOOL AS PER THE ORDER OF GOVT. OF PUNJAB AND THEREFORE THE NON GRANT OF REGISTRATION TO THE SOCI ETY WAS A STEP MOTHERLY TREATMENT WITH THIS INSTITUTION. IN VIEW OF THE ABO VE, IT WAS SUBMITTED THAT THE LD. CIT(E) HAS RAISED IRRELEVANT OBSERVATI ONS FOR REFUSING TO GRANT THE REGISTRATION. THE LD. CIT(E) DID NOT APPR ECIATE THAT ONLY TWO CONDITIONS HAVE TO BE SATISFIED WHILE GRANTING THE REGISTRATION U/S 12AA OF THE ACT, THAT THE OBJECTS OF THE SOCIETY SHOULD BE CHARITABLE IN NATURE AND THE ACTIVITIES SHOULD BE GENUINE. IT WAS ARGUED THAT FROM THE PLAIN READING OF THE ORDER IT IS CLEAR THAT THE LD. CIT(E ) HAS NEITHER OBJECTED TO THE OBJECTS OF THE TRUST WHICH ARE CHARITABLE AND C IT(E) HAS NEVER DOUBTED THE GENUINENESS OF THE ACTIVITIES OF THE TR UST AND AS SUCH, THE LD. CIT(E) WAS NOT JUSTIFIED IN REFUSING TO GRANT T HE REGISTRATION AND RELIANCE IN THIS RESPECT WAS PLACED ON THE JUDGMENT OF PUNJAB & ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 5 HARYANA HIGH COURT IN THE CASE OF CIT(E) VS. SHRI S IRDI SAI DARBAR CHARITABLE TRUST IN ITA NO. 38 OF 2017 DATED 27.03. 2017. THE LD. AR PLACED HIS RELIANCE ON A NUMBER OF DECISIONS PLACED IN P.B. PAGE 1 TO 34 FOR THE PROPOSITION THAT AT THE TIME OF GRANTING RE GISTRATION, THE LD. CIT(E) IS REQUIRED TO EXAMINE ONLY THE OBJECTS OF THE SOCI ETY AND THE GENUINENESS OF ITS ACTIVITIES WITH RESPECT TO OBJEC TS. FURTHER RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENTS: 1. DECISION OF SUPREME COURT OF INDIA IN THE CASE OF QUEENS EDUCATIONAL SOCIETY VS. CIT, REPORTED IN 372 ITR 699 (SC) 2. DECISION OF PUNJAB & HARYANA HIGH COURT IN THE C ASE OF PINEGROVE EDUCATIONAL & CHARITABLE TRUST AND ORS VS. UOI REPO RTED IN 327 ITR 73. 4. THE LD. DR ON THE OTHER HAND SUBMITTED THAT ON R ECEIPT OF APPLICATION BY AN ASSESSEE, THE LD. CIT(E) IS EMPOW ERED TO CALL FOR ANY DOCUMENTS AND INFORMATION AND AFTER SATISFYING HIMS ELF ABOUT THE OBJECTS OF SOCIETY AND GENUINENESS OF ITS ACTIVITIES, THE L D. CIT(E) SHALL PASS AN ORDER FOR REGISTRATION OF THE SOCIETY OR FOR REFUSI NG THE GRANT OF REGISTRATION TO THE SOCIETY. IT WAS SUBMITTED THAT APEX COURT IN THE CASE OF DENTAL COUNCIL OF INDIA VS. SUBHARTI KKB CHARITA BLE TRUST (2001) HAD HELD THAT EDUCATION HAS NEVER BEEN COMMERCE IN THIS COUNTRY AND AT PRESENT THERE IS TREMENDOUS CHANGE IN SOCIAL ENVIRO NMENT AND VALUES AND PRIVATE INSTITUTIONS CANNOT BE PERMITTED TO HAV E EDUCATIONAL SHOPS IN THIS COUNTRY. IT WAS SUBMITTED THAT APEX COURT I N A MOST RECENT JUDGMENT IN THE CASE OF MODERN DENTAL COLLEGE AND R ESEARCH CENTRE AND HAS HELD THAT COMMERCIALIZING OF EDUCATIONAL SECTOR IS NOT PERMISSIBLE. ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 6 THE LD. DR FURTHER SUBMITTED THAT THAT THE ASSESSEE HAS BEEN AVAILING EXEMPTION U/S 10(23)(IIIAB) OF THE ACT AND AS THE R ECEIPTS OF ASSESSEE HAD EXCEEDED RS. 1 CRORE IT HAD TO APPLY FOR REGISTRATI ON U/S 10(23)(C)(VI) AND IT IS THE REQUIREMENT OF THAT SECTION THAT SOCIETY SHOULD EXIST SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PROFIT AND THAT IS WHY THE SOCIETY HAS OPTED FOR REGISTRATION U/S 12A OF THE ACT AS THE SO CIETY IS NOT SOLELY FOR EDUCATIONAL PURPOSES. THE LD. DR FURTHER SUBMITTED THAT THE DESPITE BEING DECLARED AUTONOMOUS BODY, THE ASSESSEE DID NO T ALTER ITS MEMORANDUM OF ASSOCIATION AND BYELAWS AND ALSO IN T HE BYELAWS, THERE WAS NO MENTION OF RUNNING OF A SCHOOL AND THEREFORE THE FEE RECEIVED BY THE SCHOOL WAS NOT IN TUNE WHICH THE OBJECTS STATED IN THE MEMORANDUM OF ASSOCIATION. 5. THE LD. AR IN HIS REJOINDER SUBMITTED THAT THE C ASE LAWS RELIED ON BY LD. DR ARE NOT APPLICABLE TO THE FACTS AND CIRCU MSTANCES OF THE PRESENT CASE AS THE ASSESSEE DID NOT CHARGE ANY CAP ITATION FEE AND EXISTED FOR THE PURPOSE OF EDUCATION ONLY WHICH IS APPARENT FROM THE OBJECTS CLAUSE OF THE MEMORANDUM OF ASSOCIATION. AS REGARDS THE ARGUMENT OF LD. DR THAT ASSESSEE SH OULD HAVE APPLIED EXEMPTION U/S 10(23)(II)(VI) OF THE ACT, TH E LD. AR SUBMITTED THAT IN VIEW OF ALTERNATIVE REMEDIES, THE ASSESSEE WAS F REE TO AVAIL EXEMPTION UNDER ANY OF THESE ALTERNATIVE PROVISIONS AND ASSES SEE CHOOSE TO GET EXEMPTION U/S 12 AA OF THE ACT AND IF THE ASSESSEE FULFILLED THE ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 7 CONDITIONS FOR GRANT OF REGISTRATION U/S 12AA THE L D. CIT(A) IS BOUND TO GRANT REGISTRATION. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH OUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE OBJECTIONS RAISE D BY LD. CIT(E) FOR REFUSING TO REGISTER THE SOCIETY U/S 12AA OF THE AC T ARE NOT RELEVANT FOR CONSIDERING THE REGISTRATION UNDER THAT SECTION. TH E OBJECTIONS OF LD. CIT(E) THAT ASSESSEE HAD BEEN CLAIMING EXEMPTION U/ S 10(23)(IIIAB) AND THEREFORE HE SHOULD NOT HAVE FILED THE APPLICATION U/S 12AA OF THE ACT HAS NO FORCE AS THE ASSESSEE IS FREE TO AVAIL REGIS TRATION UNDER ANY ALTERNATIVE PROVISIONS IF MORE THAN ONE ALTERNATIVE S ARE AVAILABLE AND IF IN ACCORDANCE WITH THE PROVISIONS OF LAW, THE ASSESSEE IS ELIGIBLE FOR REGISTRATION U/S 12A OF THE ACT WHICH IT HAD APPLIE D, THE LD. CIT(E) SHOULD NOT HAVE RAISED THIS OBJECTION AND SHOULD HA VE EXAMINED THE CONTENTIONS FOR GRANT OF REGISTRATION. THE SECOND O BJECTION OF LD. CIT(E) THAT ASSESSEE WHEN DECLARED AS AUTONOMOUS BODY SHOU LD HAVE CHANGED THE OBJECTS AND MEMORANDUM OF ASSOCIATION ALSO DO N OT HAVE ANY FORCE AS THE FACTS AND CIRCUMSTANCES OF SOCIETY AND CONST ITUTIONS OF MEMBERS REMAINED SAME AND OBJECTS OF THE SOCIETY ALSO REMAI NED SAME AND THE ONLY PURPOSE OF DECLARING THE SOCIETY AS AUTONOMOUS BODY WAS THAT IT SHOULD BE RUN AS AN AUTONOMOUS BODY IN LINE WITH TH E RULES LAID DOWN BY ALL INDIA COUNCIL OF TECHNICAL EDUCATION. THE AMEND MENT IN THE BYELAWS OF SOCIETY HAS NOTHING TO DO WITH THE OBJECTS OF SO CIETY WHICH UNDOUBTEDLY ARE CHARITABLE IN NATURE. THE OBJECTS O F THE SOCIETY AS CONTAINED IN THE ORIGINAL MEMORANDUM OF ASSOCIATION AS PLACED IN P.B. ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 8 PAGE 6 AND AS CONTAINED IN AMENDED MEMORANDUM OF AS SOCIATION AS PLACED IN P.B. PAGE 113 ARE SIMILAR EXCEPT THE FACT THAT SOCIETY HAD ENLARGED ITS OPERATIONS TO INCLUDE EDUCATION UP TO 10+2 LEVEL ALSO. MOREOVER THE ASSESSEE HAS ALREADY AMENDED ITS BYELA WS TO MATCH WITH THE RULES AND REGULATIONS LAID DOWN BY ALL INDIA CO UNCIL OF TECHNICAL EDUCATION AND COPY OF AMENDED BYELAWS IS PLACED IN P.B. PAGE 112 TO 128. AS REGARDS THE OBJECTION OF LD. CIT(E) THAT ASSESS EE WAS RUNNING A SCHOOL WHICH HAS NOT BEEN MENTIONED IN THE BYELAWS, WE FIND THAT THE OBJECTS OF THE SOCIETY AS CONTAINED IN THE MEMORAND UM OF ASSOCIATION PLACED AT P.B. PAGE 6 TO 10 ARE TO PROVIDE FOR INST RUCTION AND RESEARCH IN SUCH BRANCHES OF ENGINEERING AND TECHNOLOGY AS THE COLLEGE MAY THINK FIT AND FOR THE ADVANCEMENT OF LEARNING AND DISSEMI NATION OF KNOWLEDGE IN SUCH BRANCHES. THE OBJECT CLAUSE NOTED ABOVE IS FOR PROVIDING EDUCATION AND EDUCATION DOES INCLUDE RUNNING OF SCH OOL ALSO. IN FACT IN ACCORDANCE WITH THE INSTRUCTIONS OF DIRECTOR OF TEC HNICAL EDUCATION AND INDUSTRIAL TRAINING, GOVT. OF PUNJAB VIDE NOTIFICAT ION DATED 12.02.2009 HAD ACCORDED ITS SANCTION TO ESTABLISH NEW MULTI DI SCIPLINARY ACADEMY AND SUCH MULTI DISCIPLINARY ACADEMIES WERE ALSO REQ UIRED TO PROVIDE 10+2 COURSE TO THE STUDENTS ALSO AND THEREFORE IN A CCORDANCE WITH THE INSTRUCTIONS OF PUNJAB GOVERNMENT, THE SCHOOL WAS A LSO SET UP TO PROVIDE EDUCATION UP TO 10+2 LEVEL AND SUCH SCHOOL WAS ALSO REGISTERED WITH PUNJAB SCHOOL EDUCATION BOARD. MERE NON MENTIONING OF ALL SCHOOLS AND COLLEGES IN THE MEMORANDUM OF ASSOCIATION DOES NOT DISENTITLE THE ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 9 ASSESSEE FOR GETTING REGISTRATION U/S 12A OF THE AC T. THE COPY OF THE NOTIFICATION AS PLACED IN P.B. PAGE 132 HAS BEEN MA DE PART OF THIS ORDER. ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 10 THE ABOVE SAID NOTIFICATION LIST INCLUDES THE ASSE SSEE ALSO WHICH IS INDICATED AT COLUMN NO. 1 AND THEREFORE THE OBJECTI ONS OF LD. CIT(E) IS NOT RELEVANT. MOREOVER WE FIND THAT UNDER SIMILAR F ACTS AND CIRCUMSTANCES, ANOTHER ASSESSEE AT FEROZEPUR BY THE NAME OF SBS COLLEGE OF ENGINEERING AND TECHNOLOGY HAS BEEN GRAN TED REGISTRATION VIDE ORDER DATED 19.09.2016 PLACED AT P.B. PAGE 156 TO 1 57. THE NAME OF SAID ASSESSEE IS APPEARING AT COLUMN NO. 2. THEREFORE UN DER SAME FACTS AND CIRCUMSTANCES THE LD. CIT(A) SHOULD HAVE GRANTED RE GISTRATION TO THE SOCIETY. IT HAS BEEN HELD BY VARIOUS COURTS INCLUDING BY HO N'BLE SUPREME COURT OF INDIA THAT AT THE TIME OF REGISTRATION OF A SOCIETY U/S 12A OF THE ACT, THE ONLY REQUIREMENT IS THAT LD. CIT(E) SHOULD BE SATISFIED ABOUT THE OBJECTS OF SOCIETY AND SHOULD BE SATISFIED WITH THE GENUINENESS OF ACTIVITIES OF THE SOCIETY WITH RESPECT TO OBJECTS O F THE SOCIETY. IN THE PRESENT CASE THE LD. CIT(E) HAS NOT DOUBTED THE OBJ ECTS OF THE SOCIETY WHICH UNDOUBTEDLY ARE CHARITABLE IN NATURE AND GENU INENESS OF ACTIVITIES OF THE SOCIETY HAS ALSO NOT BEEN DOUBTED. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF SH. SHIRDI SAI DARBAR CHARITABLE TRUST IN ITA NO. 38 VI DE ITS ORDER DATED 27.03.2017 HAS HELD AS UNDER: 3. WE HAVE HEARD LEARNED COUNSEL FOR THE APPELLANT -REVENUE. 4. THE MATTER HAS BEEN EXAMINED BY THE TRIBUNAL AF TER PERUSING THE RELEVANT STATUTORY PROVISIONS. IT HAS BEEN CATEGORI CALLY RECORDED BY THE TRIBUNAL THAT THE CIT (E) HAS TO SATISFY TWO CONDIT IONS WHILE GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT. FIRSTLY , WHETHER THE OBJECTS OF ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 11 THE ASSESSEE ARE CHARITABLE IN NATURE AND THUS, THE ACTIVITIES ARE GENUINE. IT CANNOT BE CONCLUDED ON THE BASIS THAT THE ASSESS EE HAS NOT FILED ITS INCOME TAX RETURNS IN EARLIER YEARS THAT THE ACTIVI TIES OF THE ASSESSEE ARE NOT GENUINE. IT HAS BEEN FURTHER RECORDED THAT SECT ION 13 OF THE ACT COMES INTO PLAY AT THE TIME OF GRANTING EXEMPTION UNDER S ECTION 11 OF THE ACT AND NOT AT THE TIME OF GRANTING REGISTRATION UNDER SECT ION 12AA OF THE ACT. NO ADVERSE REMARKS HAVE BEEN RECORDED BY THE CIT (E) W ITH REGARD TO THE OBJECTS CONTAINED IN THE MEMORANDUM OF THE ASSESSEE -TRUST TO COME TO THE CONCLUSION THAT ITS ACTIVITIES ARE NOT GENUINE. THU S, IT HAS BEEN RIGHTLY DIRECTED BY THE TRIBUNAL TO THE CIT (E) TO GRANT RE GISTRATION UNDER SECTION 12AA OF THE ACT. THE RELEVANT OBSERVATIONS RECORDED BY THE TRIBUNAL READ THUS:- WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERE D THE MATERIAL AVAILABLE ON RECORD. THE FIRST REASON ON THE BASIS OF WHICH T HE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS REFUSED TO GRANT REGIST RATION TO THE ASSESSEE IS THAT THE ASSESSEE HAS NOT BEEN FILING ITS INCOME -TAX RETURNS IN THE EARLIER YEARS. WE DO NOT FIND THAT IT IS A GOOD REASON TO R EJECT THE APPLICATION FOR REGISTRATION SINCE THE TWO CONDITIONS WHICH THE COM MISSIONER OF INCOME TAX (EXEMPTIONS) HAS TO SATISFY WHILE GRANTING THE REGISTRATION UNDER SECTION 12A OF THE ACT, ARE THAT THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE AND THE ACTIVITIES ARE GENUINE. JUST BECA USE THE ASSESSEE HAS NOT FILED ITS INCOME TAX RETURNS IN EARLIER YEARS, IT CANNOT BE SAID THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE. RELIANC E PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE JUDGMENT OF THE ALL AHABAD HIGH COURT AS WELL AS THE ORDER OF THE CHENNAI BENCH OF THE TRIBU NAL ARE NOT OUT OF PLACE, WHEREBY IT HAS BEEN HELD THAT NON-FILING OF RETURN CANNOT BE ONE OF THE REASONS FOR DENYING REGISTRATION UNDER SECTION 12A OF THE ACT. WITH REGARD TO THE SECOND OBJECTION RAISED BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) THAT AS PER CLAUSE 12 OF THE MEMORANDU M OF TRUST, THE TRUSTEES HAVE BEEN GIVEN ABSOLUTE POWERS TO MANAGE THE PROPERTY. WE HAVE PERUSED THE CLAUSE-12 OF THE MEMORANDUM OF THE TRUST, WHEREBY THE TRUSTEES ARE AUTHORIZED TO DEMISE THE IMMOVABLE PRO PERTY OR PROPERTIES OF THE TRUST EITHER FROM YEAR TO YEAR OR FOR ANY FIXED TERM OR FOR ANY TERM OF YEARS OR ON MONTHLY BASIS AT SUCH RENT AND SUBJECT TO SUCH CONDITIONS AS THEY DEEM FIT AND PROPER AND ALSO ACCEPT SURRENDER OF LEASE AND MAY MANAGE THE PROPERTY AS THEY THINK PROPER. FROM THE PERUSAL OF THIS CLAUSE, WE OBSERVE THAT THE TRUSTEES HAVE BEEN GIVEN POWERS TO GIVE PROPERTY OF THE TRUST ON LEASE OR ON RENT. WE DO NOT FIND ANYTH ING WRONG IN THIS CLAUSE SO AS TO DENY THE ASSESSEE THE REGISTRATION UNDER S ECTION 12A OF THE ACT. AS REGARDS THE APPREHENSION OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) THAT HIS CLAUSE MAY ATTRACT THE PROVIS IONS OF SECTION 13 (1)(C) OF THE ACT, WE ARE OF THE VIEW THAT THE CONDITIONS AS PROVIDED IN SECTION 13 OR ELSEWHERE ARE TO BE SEEN BY THE ASSESSING OFFICE R AT THE TIME OF ASSESSMENT PROCEEDINGS ON YEARLY BASIS AND NOT BY T HE CIT (APPEALS) WHILE GRANTING REGISTRATION UNDER SECTION 12A OF TH E ACT. 8. SECTIONS 13 COMES INTO PLAY AT THE TIME OF GRANT ING EXEMPTION UNDER SECTION 11 OF THE ACT AND NOT AT THE TIME OF GRANTI NG REGISTRATION UNDER SECTION 12A OF THE ACT. THE ONLY TWO REQUIREMENTS A S STATED HEREINABOVE WHILE GRANTING REGISTRATION UNDER SECTION 12A OF TH E ACT ARE WITH RESPECT TO THE CHARITABLE NATURE OF THE OBJECTS OF THE ASSESSE E AND GENUINENESS OF THE ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 12 ACTIVITIES. SINCE WE OBSERVE THAT NO ADVERSE REMARK S HAVE BEEN MADE BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) WITH RE GARD TO THE OBJECTS CONTAINED IN MEMORANDUM AND AS STATED HEREINABOVE T HAT THE OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX (EXE MPTIONS) DO NOT LEAD TO THE CONCLUSION THAT THE ACTIVITIES OF THE ASSESS EE ARE NOT GENUINE, WE HEREBY DIRECT THE COMMISSIONER OF INCOME TAX (EXEMP TIONS) TO GRANT REGISTRATION UNDER SECTION 12A OF THE ACT TO THE AS SESSEE. 5. LEARNED COUNSEL FOR THE APPELLANT-REVENUE HAS N OT BEEN ABLE TO SHOW THAT THE FINDINGS RECORDED BY THE TRIBUNAL ARE IN A NY WAY ILLEGAL OR PERVERSE WARRANTING INTERFERENCE BY THIS COURT. CON SEQUENTLY, NO SUBSTANTIAL QUESTION OF LAW ARISES AND THE APPEAL S TANDS DISMISSED. SIMILARLY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI MAHAVIR JAIN SOCIETY (REGD.) IN APPEAL NO. 231 VIDE ORDER DATED 11.09.2017 HAS ALSO HELD THAT AT THE TIME OF GRANTI NG REGISTRATION U/S 12A OF THE ACT THE LD. CIT(E) HAS TO EXAMINE THE OB JECTS OF SOCIETY AND GENUINENESS OF ITS ACTIVITIES WITH RESPECT TO ITS O BJECTS. THE FINDINGS OF THE HON'BLE COURT ARE REPRODUCED BELOW: 3. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. 4. SECTION 12AA OF THE ACT READS THUS:- 12AA.(1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ON RECE IPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUT ION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUBSECTION (1) OF SECTION 12 A, SHAL L (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SU CH ORDER SHALL BE SENT TO THE APPLICANT: PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (IF) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASON ABLE OPPORTUNITY OF BEING HEARD. (1A) ALL APPLICATIONS, PENDING BEFORE THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER ON WHICH NO ORDER HAS BEEN PASSE D UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999 , SHALL STAND TRANSFERRED ON THAT DAY TO THE PRINCIPAL COMMISSIONER OR COMMIS SIONER AND THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY PROCEED WITH SUCH ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 13 APPLICATIONS UNDER THAT SUB-SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUSE (B) OF SUB- SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY OF SI X MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UND ER CLAUSE (A) OR CLAUSE (AD) OF SUB-SECTION (1) OF SECTION 12A. (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTE D REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGIS TRATION AT ANY TIME UNDER SECTION 12A AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996) AND SUBSEQUENTLY THE PRINCIPAL CO MMISSIONER OR COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SU CH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDA NCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SH ALL PASS AN ORDER IN WRITING CANCELING THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSE D UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONABLE OP PORTUNITY OF BEING HEARD. (4) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (3), WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 19 96 (33 OF 1996) AND SUBSEQUENTLY IT IS NOTICED THAT THE ACTIVITIES OF T HE TRUST OR THE INSTITUTION ARE BEING CARRIED OUT IN A MANNER THAT THE PROVISIO NS OF SECTIONS 11 AND 12 DO NOT APPLY TO EXCLUDE EITHER WHOLE OR ANY PART OF THE INCOME OF SUCH TRUST OR INSTITUTION DUE TO OPERATION OF SUB-SECTION (1) OF SECTION 13, THEN, THE PRINCIPAL COMMISSIONER OR THE COMMISSIONER MAY BY A N ORDER IN WRITING CANCEL THE REGISTRATION OF SUCH TRUST OR INSTITUTIO N: PROVIDED THAT THE REGISTRATION SHALL NOT BE CANCELLED UNDER THIS SUB- SECTION, IF THE TRUST OR INSTITUTION PROVES THAT TH ERE WAS A REASONABLE CAUSE FOR THE ACTIVITIES TO BE CARRIED OUT IN THE SAID MA NNER. (5) SECTION 12AA OF THE ACT PRESCRIBES PROCEDURE F OR REGISTRATION OF TRUST OR INSTITUTION BY THE PRINCIPAL COMMISSIONER OR THE COMMISSIONER OF INCOME TAX AFTER PERUSING THE OBJECTS OF THE TRUST OR INST ITUTION AND THE GENUINENESS OF ITS ACTIVITIES. THE ORDER IS REQUIRE D TO BE PASSED IN WRITING. (6) IN THE PRESENT CASE, THE ASSESSEE HAD FILED AN APPLICATION ON 26.02.2013 FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT BEFORE THE CIT. VIDE ORDER DATED 27.08.2013 (ANNEXURE A-L) , THE CIT REFUSED TO GRANT REGISTRATION TO THE ASSESSEE-SOCIETY, INTER A LIA, ON THE GROUND OF NON- PRODUCTION OF DOCUMENTARY EVIDENCE IN RESPECT OF AI MS AND OBJECTS OF THE SOCIETY, ABSENCE OF AUDITED FINANCIAL STATEMENTS AN D NON-EXPLANATION REGARDING REGISTRATION OF THE SOCIETY TWICE WITH TH E REGISTRAR OF FIRMS AND SOCIETIES, CHANDIGARH, AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. THE MATTER WAS CONSIDER ED IN DETAIL BY THE TRIBUNAL. IT HAS BEEN CATEGORICALLY RECORDED BY THE TRIBUNAL THAT ONE OF THE OBJECTS OF THE SOCIETY AS MENTIONED IN ITS BYE-LAWS WAS TO PROVIDE FREE MEDICAL AID BY OPENING HOSPITALS, DIAGNOSTIC CENTER S, MATERNITY HOME AND BY ORGANIZING SPECIAL MEDICAL CAMPS. THESE ACTIVITI ES HAD ALSO BEEN DEMONSTRATED IN THE PREVIOUS THREE YEARS BY THE RES PONDENT-ASSESSEE IN ITS BALANCE SHEET, INCOME & EXPENDITURE ACCOUNT, RE CEIPT & PAYMENT ACCOUNT WHICH WERE PRODUCED BEFORE THE CIT. FURTHER , THE CIT HAD NOT ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 14 COMMENTED ADVERSELY ON THE DOCUMENTS PLACED BEFORE IT. WITH REGARD TO THE REASON THAT THE ASSESSEE HAD NOT FURNISHED AUDI TED FINANCIAL STATEMENTS, IT HAS BEEN RECORDED BY THE TRIBUNAL TH AT THE SAME WERE NOT RELEVANT FOR ESTABLISHING THE FACT WHETHER THE ACTI VITIES OF THE TRUST WERE GENUINE OR NOT. EVEN THE PROVISIONS OF THE ACT DO N OT REQUIRE AUDITED FINANCIAL STATEMENTS TO BE FURNISHED WHILE SEEKING REGISTRATION UNDER SECTION 12AA OF THE ACT. RULE 17A OF THE INCOME TAX RULES, 1962, PROVIDES THE DOCUMENTS WHICH SHOULD ACCOMPANY THE APPLICATIO N UNDER SECTION 12A OF THE ACT FOR REGISTRATION OF CHARITABLE OR RELIGI OUS TRUST OR INSTITUTION. AS REGARDS THE PLEA THAT THE ASSESSEE HAD OFFERED NO E XPLANATION ABOUT THE REGISTRATION OF THE SOCIETY TWICE, IT WAS RECORDED BY THE TRIBUNAL THAT REGISTRATION OF A SOCIETY WAS NOT A PRE-CONDITION F OR GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT. THUS, IT WAS RIGHTLY CONCLUDED BY THE TRIBUNAL THAT THE CIT WAS NOT JUSTIFIED IN REJECTIN G THE APPLICATION FOR REGISTRATION OF THE ASSESSEE-SOCIETY BY INSISTING O N THE CONDITIONS NOT CONTEMPLATED BY THE STATUTE. THE RELEVANT FINDINGS RECORDED BY THE TRIBUNAL IN THIS REGARD READ THUS:- 13. WE FIND THAT ONE OF THE OBJECTS OF THE ASSESSE E SOCIETY AS STATED AT POINT NO.6 IN THE BYE LAWS REPRODUCED ABOVE WAS TO PROVIDE FREE MEDICAL AID, BY OPENING HOSPITALS, DIAGNOSTIC CENTERS, MATE RNITY HOME AND BY ORGANIZING SPECIAL MEDICAL CAMPS. WE ALSO FIND THAT THE ASSESSEE SOCIETY HAD CLEARLY DEMONSTRATED THE CARRYING ON OF THIS AC TIVITY IN THE PREVIOUS THREE YEARS THROUGH ITS BALANCE SHEET, INCOME & EXP ENDITURE ACCOUNT, RECEIPT & PAYMENT ACCOUNT, FILED BEFORE THE LD. CIT . THE LD. CIT HAS NOT CONTROVERTED OR COMMENTED ADVERSELY ON THESE DOCUME NTS PLACED BEFORE IT. THEREFORE WE FIND THAT THE GENUINENESS OF THE ACTIV ITIES OF THE ASSESSEE SOCIETY IS ALSO ESTABLISHED. FURTHER WE FIND THAT T HE LD. CIT HAS ERRED IN STATING THAT NO DOCUMENTARY EVIDENCES WERE FILED TO SUBSTANTIATE THE CARRYING ON OF THE OBJECTS OF THE SOCIETY, DESPITE THE VOLUMINOUS DOCUMENTS AND INFORMATION PLACED BEFORE HIM DURING THE PROCEE DINGS AS STATED ABOVE. 14. WE ALSO FIND THAT THE LD. CIT HAS ERRED IN REJE CTING THE ASSESSEE'S APPLICATION U/S 12A, FOR THE REASON THAT THE ASSESS EE HAD NOT FURNISHED AUDITED STATEMENT AND THAT THE ASSESSEE SOCIETY WAS REGISTERED TWICE. WE FIND THAT AFORESTATED REASONS ARE NOT PERTINENT FOR THE PURPOSE OF ESTABLISHING WHETHER THE ACTIVITIES OF THE ASSESSEE SOCIETY WERE GENUINE OR NOT. AUDITED FINANCIAL STATEMENTS ARE NOT RELEVANT FOR ESTABLISHING THE FACT WHETHER THE ACTIVITIES OF THE TRUST WERE GENUINE OR NOT, WHICH IS CORROBORATED BY THE FACT THAT EVEN THE PROVISIONS O F THE INCOME TAX ACT, 1961, DO NOT REQUIRE AUDITED FINANCIAL STATEMENTS T O BE FURNISHED, WHILE SEEKING REGISTRATION UNDER SECTION 12AA. RULE 17A O F THE INCOME TAX RULES, 1962, LIST THE DOCUMENTS WHICH SHOULD ACCOMP ANY THE APPLICATION UNDER SECTION 12A FOR REGISTRATION OF CHARITABLE OR RELIGIOUS TRUST OR INSTITUTION. AT POINT NO.(B) OF THE RULES IT IS STA TED THAT WHERE THE TRUST OR INSTITUTION HAS BEEN IN EXISTENCE DURING ANY YEAR O R YEARS PRIOR TO THE FINANCIAL YEAR IN WHICH THE APPLICATION FOR REGISTR ATION IS MADE, TWO COPIES OF THE ACCOUNTS OF THE TRUST OR INSTITUTION RELATIN G TO SUCH PRIOR YEAR OR YEARS (NOT BEING MORE THAN THREE YEARS IMMEDIATELY PRECED ING THE YEAR IN WHICH THE SAID APPLICATION IS MADE) FOR WHICH SUCH ACCOUN TS HAVE BEEN MADE UP HAVE TO BE SUBMITTED. CLEARLY AS PER THE RULES, THE REQUIREMENT IS FURNISHING OF ONLY THE ACCOUNTS OF THE TRUST OR INS TITUTION SEEKING REGISTRATION AND NOWHERE THE WORD AUDITED ACCOUNT S HAVE BEEN USED. ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 15 THEREFORE THE NON FURNISHING OF AUDITED FINANCIALS CANNOT BY ITSELF BE A CRITERIA FOR HOLDING THE ACTIVITIES OF A TRUST OF S OCIETY AS NOT BEING GENUINE AND THEREFORE REFUSING GRANT OF REGISTRATION UNDER SECTION 12AA. MOREOVER, THE LD. AR DEMONSTRATED BEFORE US BY REFERRING TO I TS PAPER BOOK PAGE NO.61-65, THAT REASON FOR NON-FURNISHING OF AUDITED RESULTS WAS DULY EXPLAINED TO THE LD. CIT. THE LD. AR STATED THAT TH E ASSESSEE HAD APPOINTED M/S SHAMMI GARG & CO. C.A., LUDHIANA AS I TS AUDITORS FOR THE 2009-10, AND REFERRED TO PAGE NO.61 OF THE PAPER BO OK, WHICH WAS THE APPOINTMENT LETTER ISSUED BY THE ASSESSEE SOCIETY T O THE CA FIRM. THE LD. AR, THEREAFTER REFERRED TO PAPER BOOK NO.62, WHICH WAS THE COMMUNICATION OF THE NEW AUDITORS, WITH THE PREVIOUS AUDITORS I.E . M/S S.S. PERIWAL & CO., SEEKING NO OBJECTION TO THEIR APPOINTMENT AS AUDITO RS OF THE SOCIETY. AT PAPER BOOK NO.63, THE LD. AR REPRODUCED THE LETTER SENT BY THE PREVIOUS AUDITORS TO THE NEW AUDITORS, OBJECTING TO THEIR AP POINTMENT. AT PAPER BOOK 64, WAS PLACED THE LETTER SENT BY THE ASSESSEE SOCI ETY TO THE PREVIOUS AUDITORS, STRONGLY OBJECTING TO THEIR REFUSAL TO GR ANT NOC TO THE NEW AUDITORS. THE LD. AR FURTHER DREW OUR ATTENTION TO THE LETTER WRITTEN BY THE ASSESSEE SOCIETY TO THE PRESIDENT OF THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA TO RESOLVE THE DISPUTE OF APPOINTMENT OF A UDITORS. THE LD. AR ALSO STATED BEFORE US THAT THE DISPUTE HAD NOT BEEN RESO LVED TO DATE. THE LD. AR STATED THAT IN VIEW OF THE SAME THE ASSESSEE WAS PREVENTED FROM GETTING ITS BOOKS AUDITED. WE FIND THAT THE LD. CIT HAS NOT CONTROVERTED THE EXPLANATION OF THE ASSESSEE. IN VIEW OF THE ABOVE F ACTS AND DISCUSSION, WE HOLD THAT NON-FURNISHING OF AUDITED FINANCIALS CANN OT BE A PERTINENT CONSIDERATION FOR HOLDING THE ACTIVITIES OF THE ASS ESSEE SOCIETY AS INGENUINE. WE THEREFORE HOLD THAT THE SAME CANNOT B E TREATED AS A CONSIDERATION FOR REFUSING TO GRANT REGISTRATION TO THE ASSESSEE SOCIETY U S 12AA. 15. WE FURTHER FIND THAT THE REFUSAL OF GRANT OF RE GISTRATION TO THE ASSESSEE SOCIETY FOR OFFERING NO EXPLANATION REGARDING REGIS TRATION OF THE SOCIETY TWICE IS ALSO INCORRECT. THE LD. AR, DURING THE COU RSE OF ARGUMENTS DREW OUR ATTENTION TO PAPER BOOK 52, 58 AND 60 WHEREBY T HE ASSESSEE SOCIETY HAD VIDE ITS LETTER DT.27/05/2013 AND 22/08/2013 EX PLAINED AS FOLLOWS: NO ENCLOSURE OF CERTIFICATES DATED 17/09/1974 AND 30/04/2009 ARE THERE AS NOTED IN YOUR LETTER DATED 21/05/2013. THE SOCIETY IS WORKING UNDER THE CERTIFICATE ISSUED ON 17/09/1974 AND THE PRESENT WORKING IS ALSO UNDER GOING UNDER IT. NO BAD INTENTIONS ARE TH ERE. THE SOCIETY IN YEAR 2009 WAS FORMED BY THE EX-PRESIDENT AND FINANCE SEC RETARY BUT WHICH HAS NO RELEVANCE AS ON DATE AND THE SOCIETY DOCUMEN TS I.E. GOVERNING BODY LIST ON YEARLY BASIS IS BEING SUBMITTED TO REG ISTRAR OF FIRMS & SOCIETIES, CHANDIGARH FOR SOCIETY REGISTERED ON 17/ 09/1974. WE THEREFORE FIND THAT THE CONTENTION OF THE LD . CIT THAT THE ASSESSEE HAD OFFERED NO EXPLANATION ABOUT THE REGISTRATION O F THE SOCIETY TWICE IS NOT CORRECT. IN ANY CASE REGISTRATION OF A SOCIETY IS N OT A PRE CONDITION FOR GRANTING REGISTRATION UNDER SECTION 12AA. A PERUSAL OF RULE 17A OF THE INCOME TAX RULES 1962, REFERRED TO ABOVE WOULD SHOW THAT THE ONLY REQUIREMENT IS TO FURNISH THE DOCUMENTS EVIDENCING THE CREATION OF THE TRUST OR ESTABLISHMENT OF THE INSTITUTE IN ORIGINAL, WHIC H WE FIND, THE ASSESSEE SOCIETY HAS FURNISHED IN THE FORM OF TRUST DEED. ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 16 16. IN VIEW OF THE FACTS STATED ABOVE WE HOLD THAT LD. CIT WAS NOT RIGHT IN REFUSING REGISTRATION TO THE ASSESSEE SOCIETY FOR N ON-FURNISHING OF EXPLANATION REGARDING REGISTRATION OF THE ASSESSEE SOCIETY TWICE. IN CASE OF CIT VS. R.M.S. TRUST (MADRAS) [2010] 326 ITR 310 IT WAS HELD AS UNDER: AT THIS STAGE OF CONSIDERING APPLICATION FOR REGIS TRATION WIDER S. 12A, ONLY INQUIRY> WHICH COULD POSSIBLY BE MADE WOULD BE WHET HER THE APPLICANT- TRUST HAS MADE APPLICATION AND WHETHER THE ACCOUNTS ARE MAINTAINED IN THE MANNER AS SUGGESTED IN THE SAID SECTION CIT WAS NOT JUSTIFIED IN REJECTING APPLICATION FOR REGISTRATION FOR WANT OF AMENDED TRUST-DEED SINCE IT IS NOT A PREREQUISITE CONDITION FOR REGISTERING THE APPLICANT AS A TRUST, TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER O F CIT AND REMITTING THE MATTER FOR DECISION AFRESH. WE THEREFORE HOLD THAT THE CIT WAS NOT JUSTIFIED IN REJECTING THE APPLICATION FOR REGISTRATION OF THE ASSESSEE SOCIET Y BY INSISTING ON CONDITIONS NOT CONTEMPLATED BY THE STATUTE. 6. LEARNED COUNSEL FOR THE APPELLANT-REVENUE HAS N OT BEEN ABLE TO SHOW THAT THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. H E HAS ALSO NOT BEEN ABLE TO PRODUCE ANY MATERIAL ON RECORD TO SHOW THAT THE APPROACH ADOPTED BY THE TRIBUNAL IS LEGALLY UNSUSTAINABLE. THUS, NO SUBSTANTIAL QUESTION OF LAW ARISES. CONSEQUENTLY, THE APPEAL STANDS DISMISS ED. THEREFORE FOLLOWING THE ABOVE JUDICIAL PRECEDENTS RELIED ON BY LD. AR AND KEEPING IN VIEW THE FACTS OF THE PRESENT CAS E, WE DIRECT THE LD. CIT(E) TO GRANT REGISTRATION TO THE SOCIETY U/S 12A A OF THE ACT. THE STAY APPLICATION FILED BY ASSESSEE HAS THUS BEC OME INFRUCTUOUS. 7. IN NUTSHELL, THE APPEAL FILED BY ASSESSEE IS ALL OWED AND STAY APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.12.2017 SD/- SD/- (RAVISH SOOD) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05.12.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE ITA NO.592/(ASR)/2 016 & SA NO.05/ASR/2017 ASSESSMENT YEAR: 17 (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER