M/s Nav Bharat Shiksha Samiti, Bhiwani V. CIT(E), Chandigarh

ITA 5952/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6273 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 22-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12AA; 6; 12

Judgement Text

FIT FOR PUBLICATION SD/- SD/- AS A NM (J.M.) (A. M.) IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: E: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 5952/DEL/2016 M/S NAV BHARAT SHIKSHA SAMITI, WARD NO. 13, SIWANI MANDI, BHIWANI (HARYANA). VS. COMMISSIONER OF INCOME TAX(E), SECTOR-17E, C.R. BUILDING, CHANDIGARH. PAN NO: AAAAN7755L APPELLANT RESPONDENT ASSESSEE BY : SHRI K. SAMPATH, ADV. AND SHRI V. RAJA KUMAR, ADV. REVENUE BY : MS. PRAMITA M. BISWAS, CIT(DR) ORDER PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 27.09.2016 OF LEARNED COMMISSIONER OF INCOME TAX (EX EMPTION) CHANDIGARH [LD. CIT(E), FOR SHORT), DENYING REGISTRATION TO THE ASS ESSEE UNDER SECTION 12A READ WITH SECTION 12AA OF INCOME TAX ACT (I.T. ACT, FOR SHO RT). THE APPEAL HAS BEEN FILED ON THE FOLLOWING GROUND: ITA NO.-5952/DEL/2016. M/S NAV BHARAT SHIKSHA SAMITI. PAGE 2 OF 7 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION), CHA NDIGARH REJECTING THE APPLICATION FOR REGISTRATION U/S 12A OF THE INCOME- TAX ACT, 1961 IS ARBITRARY, MISCONCEIVED, FALLACIOUS AND ILLEGAL AND HAVING BEE N DONE ON IMAGINARY, FICTITIOUS AND UNSUBSTANTIATED GROUNDS MUST BE QUASHED WITH FU RTHER DIRECTIONS TO GRANT THE REGISTRATION AS SOUGHT. (B) THE ASSESSEE FILED APPLICATION FOR REGISTRATION UN DER SECTION 12A OF I.T. ACT READ WITH SECTION 12AA OF I.T. ACT ON 30.03.2016. VIDE THE AFORESAID IMPUGNED ORDER DATED 27.09.2016, THE LD. CIT(E) REJECTED THE ASSESSEES A PPLICATION SEEKING REGISTRATION UNDER SECTION 12A OF I.T. ACT READ WITH SECTION 12A A OF I.T. ACT. THE LD. CIT(E), IN HIS AFORESAID IMPUGNED ORDER DATED 27.09.2016 NOTED THA T THE ASSESSEE HAD PAID SALARY PARTLY THROUGH BANK AND PARTLY IN CASH, BUT HAD NOT DEDUCTED TAX AT SOURCE IN CASE OF ANY OF THE EMPLOYEES. THE LD. CIT(E) FURTHER NOTED THAT THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION UNDER SECTION 12A READ WI TH SECTION 12AA OF I.T. ACT IS A CHANGE OF MIND BECAUSE FOR THREE PRECEDING YEARS BE FORE THAT, THE ASSESSEE HAD FILED RETURN AS A PURELY BUSINESS ENTITY. THE LD. CIT(E) OBSERVED THAT THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF I.T. ACT FROM ASSESSMENT YEARS 2008-09 TO 2011-12, AS LONG AS THE RECEIPTS OF THE ASSESSEE WE RE BELOW RS. 1 CRORE. HOWEVER, ONCE THE RECEIPTS EXCEEDED RS. 1 CRORE, THE ASSESSE E FILED RETURN AS A BUSINESS ENTITY FOR THREE YEARS, AND IT IS ONLY BECAUSE OF THE CHAN GE OF MIND, ACCORDING TO THE LD. CIT(E), THAT THE ASSESSEE HAS NOW APPLIED FOR REGIST RATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT. TAKING ADVERSE VIEW OF T HE AFORESAID, THE LD. CIT(E) HELD THAT THE STAND TAKEN BY THE ASSESSEE (SEEKING REGISTRATI ON UNDER SECTION 12A READ WITH 12AA ITA NO.-5952/DEL/2016. M/S NAV BHARAT SHIKSHA SAMITI. PAGE 3 OF 7 OF I.T. ACT) IS NOT COMMENSURATE WITH SCHEME OF THE ACT; AND HE REJECTED ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT. (B.1) DURING APPELLATE PROCEEDINGS IN INCOME TAX APPELL ATE TRIBUNAL, (ITAT, FOR SHORT) A PAPER BOOK CONTAINING THE FOLLOWING PARTIC ULARS WAS FILED FROM THE ASSESSEES SIDE: 1. COPY OF ITRA-5 & ITR-7 FOR AY 2016-17 WITH INSTR UCTIONS 2. COPY OF AFFILIATION CERTIFICATE GRANTED BY THE HARYANA SCHOOL EDUCATION BOARD 3. COPY OF CERTIFICATE REGISTRATION OF SOCIETY 4. COPIES OF BYE-LAWS AND MEMORANDUM OF ASSOCIATI ON OF THE SOCIETY WITH ENGLISH TRANSLATION (C) AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR ASSESSEE SUBMITTED THAT FOR THE PURPOSE OF REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT, IT IS OF NO RELEVANCE WHETHER OR NOT TAX WAS DEDUCTED AT SOU RCE FROM SALARY OF THE STAFF. HE ALSO CONTENDED THAT IT WAS OF NO RELEVANCE FOR THE PURPOSES OF REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT, THA T SALARY WAS PAID PARTLY BY CHEQUE AND PARTLY IN CASH. HE FURTHER SUBMITTED THAT IT I S OF NO RELEVANCE THAT THE ASSESSEE CHANGED MIND AND SOUGHT REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT AFTER THREE YEARS AND CONTENDED THAT THERE WAS NOTHING IN LAW TO PREVENT THE ASSESSEE FROM SEEKING REGISTRATION UNDER SECTION 12 A READ WITH SECTION 12AA OF I.T. ACT, AT A LATER STAGE, IF SUCH REGISTRATION WAS NOT SOUGHT BY THE ASSESSEE FOR EARLIER YEARS. HE SUBMITTED THAT WHAT IS OF RELEVANCE IS W HETHER THE CONDITIONS PRESCRIBED UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. AC T ARE FULFILLED BY THE ASSESSEE WHEN THE APPLICATION FOR REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT IS ITA NO.-5952/DEL/2016. M/S NAV BHARAT SHIKSHA SAMITI. PAGE 4 OF 7 MADE. HE SUBMITTED THAT IT WAS NOT IN DISPUTE THA T THE ASSESSEE WAS ENGAGED IN CHARITABLE ACTIVITY OF EDUCATION WHICH QUALIFIES AS CHARITABLE PURPOSE, WITHIN THE MEANING OF SECTION 2(15) OF I.T. ACT. HE FURTHER S UBMITTED THAT THE IMPUGNED ORDER DATED 27.09.2016 OF LD. CIT(E) CONTAINS NO REFERENCE WHATSOEVER TO ANY FACTS AND CIRCUMSTANCES WHICH CAN BE SAID TO BE VIOLATIVE OF PROVISION OF SECTION 12A READ WITH SECTION 12AA OF I.T. ACT. IN VIEW OF THE FOREGOING , THE LD. COUNSEL FOR ASSESSEE PLEADED THAT LD. CIT(E) BE DIRECTED TO GRANT REGISTR ATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT. THE LEARNED COMMISSIONER OF INCOME TAX (DEPARTMENTAL REPRESENTATIVE) [LD. CIT(DR), FOR SHORT) RELIED O N THE IMPUGNED ORDER DATED 27.09.2016 OF THE LD. CIT(E). SHE COULD NOT BRING A NY FACTS OR CIRCUMSTANCES TO OUR ATTENTION TO SHOW HOW ANY OF THE REQUIREMENTS UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT ARE NOT FULFILLED BY THE ASSESSEE. (D) WE HAVE HEARD BOTH SIDES PATIENTLY. WE HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF EDUCATION WHICH QUALIFIES AS CHARITABLE PURPOSE W ITHIN THE MEANING OF SECTION 2(15) OF I.T. ACT. IT IS ALSO NOT IN DISPUTE THAT THERE IS NO REFERENCE IN THE IMPUGNED ORDER DATED 27.09.2016 OF LD. CIT(E), WHATSOEVER, TO ANY FACTS AND CIRCUMSTANCES WHICH CAN BE SAID TO BE VIOLATIVE OF PROVISION OF SECTION 12A RE AD WITH SECTION 12AA OF I.T. ACT. NO MATERIALS HAVE BEEN BROUGHT TO OUR ATTENTION FROM T HE REVENUES SIDE EITHER IN THE IMPUGNED ORDER DATED 27.09.2016 OF LD. CIT(E) OR IN THE SUBMISSIONS MADE BY THE LD. CIT(DR), AT THE TIME OF HEARING BEFORE US; TO SHOW HOW ANY OF THE PROVISION UNDER SECTION 12A READ WITH 12AA OF I.T. ACT ARE NOT FULF ILLED BY THE ASSESSEE. IN THE FACTS ITA NO.-5952/DEL/2016. M/S NAV BHARAT SHIKSHA SAMITI. PAGE 5 OF 7 AND CIRCUMSTANCES OF THIS CASE, WE AGREE WITH THE C ONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT IT IS OF NO RELEVANCE, FOR THE PURPOSES OF REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT, WHE THER OR NOT TAX WAS DEDUCTED AT SOURCE FROM SALARY OF THE STAFF. IN THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE ALSO AGREE WITH THE CONTENTIONS OF LD. COU NSEL FOR ASSESSEE THAT, IT IS OF NO RELEVANCE, FOR REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT, IF SALARY HAS BEEN PAID PARTLY IN CASH AND PAR TLY BY CHEQUE . WE ALSO AGREE WITH THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT THERE IS NOTHING IN LAW TO PREVENT THE ASSESSEE FROM APPLYING FOR REGISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT, AT A LATER STAGE, IF SUCH REGISTRATION WAS NOT SOUGHT FOR BY THE ASSESSEE IN EARLIER YEARS . THE CONCLUSION OF LD. CIT(E), THAT THE STAND TAKEN BY THE ASSESSEE WAS NOT COMMENSURATE WI TH THE SCHEME OF THE ACT, HAS BEEN REACHED IN VACUUM WITHOUT ANY SPEAKING ORDER T O JUSTIFY AND WITHOUT MENTION OF ANY RELEVANT FACTOR TO WARRANT THIS DRASTIC CONCLUS ION. SUCH A CONCLUSION IS UNSUSTAINABLE. THE REASONS MENTIONED BY LD. CIT(E) IN HIS IMPUGNED ORDER DATED 27.09.2016, REJECTING ASSESSEES APPLICATION FOR RE GISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT, ARE TOTALLY IRRELEVA NT CONSIDERATIONS AS FAR AS DECISION GRANTING REGISTRATION UNDER SECTION 12A READ WITH S ECTION 12AA OF I.T. ACT IS CONCERNED. ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTI ON 12A READ WITH SECTION 12AA OF I.T. ACT CANNOT BE REJECTED BY LD. CIT(E) R ELYING ON IRRELEVANT CONSIDERATIONS, MERELY ON THE BASIS OF AN UNSUSTAIN ABLE CONCLUSION. ANY REJECTION OF ASSESSEES APPLICATION FOR REGISTRATIO N UNDER SECTION 12A READ ITA NO.-5952/DEL/2016. M/S NAV BHARAT SHIKSHA SAMITI. PAGE 6 OF 7 WITH SECTION 12AA OF I.T. ACT HAS TO BE SUPPORTED B Y A SPEAKING ORDER STATING IN CLEAR TERMS IN WHAT MANNER THE REQUIREME NTS UNDER SECTION 12A READ WITH SECTION 12AA OF I.T. ACT HAVE NOT BEEN FU LFILLED BY THE ASSESSEE. AS LD. CIT(E) HAS FAILED IN THESE RESPECTS, HIS IMPUGNE D ORDER DATED 27.09.2016 CANNOT BE UPHELD. IN VIEW OF THE FOREGOING, WE DIRECT THE LD . CIT(E) TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12A READ WITH SECTION 12AA O F I.T. ACT. (E) IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10/02/2020. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH M ISSHRA) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 10/02/2020 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.-5952/DEL/2016. M/S NAV BHARAT SHIKSHA SAMITI. PAGE 7 OF 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER