I.T.O. (EXEMPTION)II(1), MUMBAI V. K.C. MAHINDRA EDUCATION, MUMBAI

ITA 5988/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71902 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: H P MAHAJANI
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO.5988/MUM/2012 ( ASSESSMENT YEAR: 2009-10) I.T.O. (EXEMPTION) II(1), ROOM NO.509, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400 012 VS. K.C. MAHINDRA EDUCATION CECIL COURT, 3 RD FLOOR, KAHAKAVI BHUSHAN MARG, MUMBAI 400 001 ! ' ./PAN/GIR NO. AAATK 0315Q ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#& / APPELLANT BY : SHRI M.L. PERUMAL $%!#'& / RESPONDENT BY : SHRI H.P. MAHAJANI ( )*'+, DATE OF HEARING : 04.12.2013 -./'+, / DATE OF PRONOUNCEMENT : 11.12.2013 0 O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE AGITATING THE ORDE R BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MUMBAI (CIT(A) FOR SHORT) DATED 13.07.2012, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2009-10 VIDE ORDER DATED 15.12.2011. 2 ITA NO.5988/MUM/2012 (A.Y. 2009-10) ITO (EXEMPTION) V. K.C.MAHINDRA EDUCATION 2. THE FACTS IN BRIEF ARE THAT THE ASSESSE IS A TRU ST, REGISTERED WITH THE CHARITY COMMISSIONER AS WELL AS U/S.12A OF THE ACT SINCE FE BRUARY, 1974, HAVING BEEN FORMED VIDE TRUST DEED DATED 15.04.1954. ASSESSMENT UNDER THE ACT FOR THE RELEVANT YEAR STANDS MADE BY DENYING THE ASSESSEE THE BENEFIT OF EXEMPTI ON OF INCOME UNDER SECTIONS 11, 12 & 13 OF THE ACT ON THE GROUND THERE HAS BEEN SINCE AN AMENDED TO THE TRUST DEED ON 26/11/1984 BY SUBSTITUTING CLAUSES 2, 3, & 4 OF THE ORIGINAL TRUST DEED AND BY ADDING A NEW CLAUSE (5). THE ASSESSE WAS THUS FUNCTIONING OR OPERATING UNDER A CHANGED CHARTER. WHEN THE TRUST DEED, WHICH FORMED THE BASIS FOR THE GRANT OF REGISTRATION U/S.12A, STANDS ALTERED AFTER THE GRANT OF REGISTRATION, THE VERY F OUNDATION OF REGISTRATION HAVING BEEN REMOVED BY A VOLUNTARY ACT, THE REGISTRATION WOULD NOT SURVIVE. ACCORDINGLY, DECISION BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ALLAHABAD AGRICULTURAL INSTITUTE VS. UNION OF INDIA , 291 ITR 116 (ALL), HOLDING LIKEWISE, WOULD HAVE A DIRECT APPLICATION IN THE FACTS OF THE INSTANT CASE. IN APPEAL, THE ASSES SEE FOUND FAVOUR WITH THE LD. CIT(A) IN VIEW OF THE DECISION BY THE TRIBUNAL IN ITS CASE FO R A.YS. 2007-08 AND 2008-09. AGGRIEVED, THE REVENUE IS IN APPEAL. 3. BEFORE US, THE LD. AR WOULD PLACE ON RECORD THE ORDER BY THE TRIBUNAL IN ITS CASE FOR A.Y. 2007-08 (IN ITA NO.5350/M/2010 DATED 08.06.201 2), ADVERTING TO THE RELEVANT PART THEREOF (PARA 6 AT PAGE 4). THE TRIBUNAL OBSERVED T HAT THE CHANGES TO THE OBJECT CLAUSE OF THE TRUST DEED HAD BEEN MADE ON THE BASIS OF A DECR EE PASSED BY THE BOMBAY CITY CIVIL COURT (ON 29.01.1983), AND THE SAID CHANGES WERE ON LY WITH A VIEW TO FURTHER THE MAIN OBJECTS OF THE TRUST, I.E., TO PROMOTE EDUCATION. F URTHERMORE, THE SAME HAD BEEN BROUGHT TO THE NOTICE OF THE DEPARTMENT, EVEN AS OBSERVED BY T HE FIRST APPELLATE AUTHORITY. ACCORDINGLY, THERE WAS NO REASON TO DENY THE ASSESS EE THE BENEFIT OF REGISTRATION AND, CONSEQUENTLY, EXEMPTION U/SS. 11 & 12. THE SAME WAS , THEREFORE, PRAYED FOR BEING ALLOWED FOR THE CURRENT YEAR AS WELL; THERE BEING N O CHANGE IN LAW OR IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. DR ON BEING CONFRONTED WITH THE MATTER DID NOT DISPUTE THE AFORESAID CONTENTIONS BY THE LD. AR. 3 ITA NO.5988/MUM/2012 (A.Y. 2009-10) ITO (EXEMPTION) V. K.C.MAHINDRA EDUCATION 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. OUR FIRST OBSERVATION IN THE MATTER IS THAT THE BEN EFIT OF SECTIONS 11 & 12 OF THE ACT COULD NOT BE DENIED IN ASSESSMENT ON THE GROUND OF THE ENTITY BEING NOT LIABLE FOR REGISTRATION U/S.12A, I.E., WITHOUT CANCELLING OR W ITHDRAWING THE SAID REGISTRATION. THE ONLY COURSE AVAILABLE IN LAW FOR THE REVENUE, WHERE IT IS OF THE VIEW THAT THE ASSESSEE IS NO LONGER ELIGIBLE FOR REGISTRATION UNDER THE ACT A S A CHARITABLE OR RELIGIOUS INSTITUTION, AS THE CASE MAY BE, OR, RATHER, ITS CONTINUATION, IS TO EITHER CANCEL OR WITHDRAW THE SAME. THAT HAVING ADMITTEDLY NOT BEEN DONE, IT IS NOT OPE N FOR THE REVENUE TO DENY THE BENEFIT OF REGISTRATION TO THE ASSESSEE IN ASSESSMENT, FRAM ING IT OVERLOOKING THE SAME. ON FACTS, THE TRIBUNAL FOUND THE CHANGES EFFECTED B Y THE ASSESSEE IN ITS TRUST DEED TO BE BASED ON A DECREE BY THE COMPETENT COURT, AND AL SO OTHERWISE ONLY ENABLING IN NATURE, SO THAT THERE WAS NO MERIT IN THE STAND OF THE REMO VAL OF THE VERY BASIS OF REGISTRATION, AS BEING STATED BY THE REVENUE, AND WHICH FORMS THE FU LCRUM OR THE TERRA FIRMA OF ITS CASE. IN THIS VIEW OF THE MATTER, WE FIND THE ORDER BY TH E TRIBUNAL TO BE FIRM, AND NEITHER ANY REASON FOR NOT FOLLOWING THE SAME HAS BEEN BROU GHT TO OUR NOTICE. WE HAVE FURTHER, I.E., APART FROM ITS MERITS, OBSERVED THE DENIAL OF THE BENEFIT OF REGISTRATION BY THE REVENUE TO BE ALSO WITHOUT FOLLOWING THE PRESCRIBED PROCEDURE UNDER LAW AND, THUS, NOT VALID IN LAW. WE THEREFORE CONFIRM THE ACTION OF TH E LD. CIT(A) IN CANCELLING THE IMPUGNED ASSESSMENT FRAMED UNDER THE REGULAR PROVIS IONS OF THE ACT, DENYING THE EXEMPTION U/SS. 11 & 12. THE REVENUE HAS NOT RAISED ANY OTHER GROUND OR PLEA BEFORE US, SO THAT NO FURTHER INTERFERENCE AT OUR END IS CALLE D FOR. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 11, 2013 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( 1* MUMBAI; 2 DATED : 11.12.2013 4 ITA NO.5988/MUM/2012 (A.Y. 2009-10) ITO (EXEMPTION) V. K.C.MAHINDRA EDUCATION . 3 . ./A.K.PATEL, PS ! ' #$%& '&$ / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( 4+ ( ) / THE CIT(A) 4. ( 4+ / CIT CONCERNED 5. 5)67 $3+389 , , 89/ , ( 1* / DR, ITAT, MUMBAI 6. 7: ;* / GUARD FILE ! ( / BY ORDER, ) / (* + (DY./ASSTT. REGISTRAR) , ( 1* / ITAT, MUMBAI