SOCIETY IF PETROLEUM ENGINEERS, MUMBAI V. DIT (E), MUMBAI

ITA 6083/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84483 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K ATRI
• Assessee Lawyers: H M SINGHVI; KSHIPRA H SINGHVI
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA; 11

Judgement Text

, , ,, , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , .. , ! BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO.6083/MUM/2011 ' ' ' ' #' #' #' #' / ASSESSMENT YEAR: 2009-10 SOCIETY OF PETROLEUM ENGINEERS, OA-3/005, ONGC COLONY, POONAM NAGAR, MAHAKALI CAVES ROAD, ANDHERI (EAST), MUMBAI-400093 VS . DIRECTOR OF INCOME-TAX(E), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012 ( $% / APPELLANT ) ( &'$% / RESPONDENT) P.A. NUMBER : AAITS1620C $% ( ) / APPELLANT BY: MS. KSHIPRA H. SINGHVI & SHRI H.M. SINGHVI &'$% ( ) / RESPONDENT BY : SHRI A.K.ATRI CIT-DR ( *+ / DATE OF HEARING : 11/12/2014 ,-# ( *+ / DATE OF PRONOUNCEMENT : 11/12/2014 O R D E R PER JOGINDER SINGH, JM: THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 29/06/2011 OF THE LD. DIRECTOR OF INCOME-TAX (EXEMP TION), MUMBAI, REJECTING THE APPLICATION OF THE ASSESSEE SOCIETY F OR REGISTRATION U/S 12A/12AA OF THE INCOME-TAX ACT, 1961(HEREINAFTER TH E ACT). 2 SOCIETY OF PETROLEUM ENGINEERS . 2. AT THE TIME OF HEARING, WE HAVE HEARD MS. KSHIPR A H. SINGHVI ALONGWITH SHRI H. M. SINGHVI, LD. COUNSEL FOR THE A SSESSEE AND SHRI A.K. ATRI, LD. CIT-DR. THE CRUX OF ARGUMENT ADVANC ED ON BEHALF OF THE ASSESSEE IS IDENTICAL TO THE GROUND RAISED, BROADLY SUBMITTING THAT THE ASSESSEE IS NON-PROFIT MAKING SOCIETY ENGAGED IN EN ERGY RESOURCES DEVELOPMENT/PRODUCTION, HAVING WORLD WIDE FORUM OF PROFESSIONAL ENGAGED IN EXCHANGE OF TECHNICAL KNOWLEDGE IN THE F IELD OF EXPLORATION AND PRODUCTION OF HYDRO CARBON RESOURCES. AS PER T HE ASSESSEE, IT IS A HOME FOR 92000 ENGINEERS, SCIENTISTS, MANAGERS AN D EDUCATIONIST AND IS A KEY RESOURCES FOR TECHNICAL KNOWLEDGE RELA TING TO OIL AND GAS EXPLORATION AND PRODUCTION WHICH PROVIDES OPPORTUNI TY OF QUALITY LEARNING/PROFESSIONAL SKILLS THOUGH ITS PROGRAMMES, PUBLICATIONS, CONFERENCES, TECHNICAL MEETING/KNOWLEDGE AND WORKSH OP ETC. THE ASSESSEE CLAIMED THAT THE OBJECTS OF THE ASSESSEE S OCIETY ARE PURELY OF CHARITABLE NATURE FOR THE BENEFIT OF THE PUBLIC AT LARGE. IT WAS ALSO PLEADED THAT THERE IS NO REQUIREMENT UNDER THE ACT THAT NECESSARILY THE SOCIETY HAS TO BE REGISTERED UNDER THE BOMBAY P UBLIC TRUST ACT, 1950, MORE SPECIFICALLY WHEN IT IS REGISTERED WITH THE REGISTRAR OF SOCIETIES. 2.1. ON THE OTHER HAND, THE LD. CIT-DR, SHRI A.K. A TRI, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY SUBM ITTING THAT FIRSTLY, THE ASSESSEE SOCIETY IS NOT REGISTERED UNDER THE BO MBAY PUBLIC TRUST ACT, 1950, AND SECONDLY, ITS OBJECTS ARE NOT OF CHA RITABLE NATURE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF ARE THAT THE ASSESSEE SOCIETY FILED AN APPLICATION FOR REGISTRATION U/S 1 2A AND 12AA OF THE 3 SOCIETY OF PETROLEUM ENGINEERS . ACT READ WITH RULE 17A OF THE RULES WITH THE LD. DI T (E) ON 30/12/2010 IN THE PRESCRIBED FORM NO. 10A ALONG WIT H FOLLOWING DOCUMENTS. I. MEMORANDUM OF ASSOCIATION AND RULES AND REGULATIONS OF THE APPELLANT SOCIETY. II. CERTIFICATE OF REGISTRATION UNDER SOCIETIES REGISTR ATION ACT, 1860; III. LIST OF THE FOUNDER MEMBERS AND PRESENT OFFICE BEAR ERS; IV. PAN CARD COPY OF PRESENT OFFICE BEARERS AND THE APP ELLANT SOCIETY; V. AUDITED BALANCE SHEET AND INCOME & EXPENDITURE ACCO UNT OF THE APPELLANT SOCIETY FOR THE F.Y.2006-07 AND 2007 -08, AND VI. NOTE ON OBJECTIVES OF THE APPELLANT SOCIETY. 2.3. WE FIND THAT THE LD. DIT(E) REJECTED THE APPL ICATION ON THE GROUND THAT THE ASSESSEE SOCIETY IS NOT REGISTERED WITH THE CHARITY COMMISSIONER UNDER THE BOMBAY PUBLIC CHARITABLE TRU ST ACT, 1950 , BY OBSERVING THAT IT IS NOT LEGAL WITH THE PROVISIO NS OF SECTION 2(15) OF THE ACT. WE ARE NOTE IN AGREEMENT WITH THIS OBSERV ATION OF LD. DIT(E) BECAUSE IT IS CONTRARY TO THE EXPRESS PROVISIONS OF SECTION, 11,12,12A, 12AA OF THE ACT READ WITH RULE 17A OF THE RULES, BE CAUSE ONCE THE SOCIETY IS REGISTERED WITH THE REGISTRAR BY FILING THE MEMORANDUM OF ASSOCIATION, CERTIFIED COPY OF THE RULES AND REGULA TION THEREOF, IT ENJOYS THE STATUS OF A LEGAL ENTITY. EVEN OTHERWIS E, THERE IS NO REQUIREMENT IN SECTION 12A OR 12AA OF THE ACT READ WITH RULE 17A THAT NECESSARILY REGISTRATION HAS TO BE GOT DONE UNDER T HE BOMBAY PUBLIC CHARITABLE TRUST ACT, MORE SPECIFICALLY, WHEN SECTI ON 12A/12AA 4 SOCIETY OF PETROLEUM ENGINEERS . ALONGWITH SECTION 11 OF THE ACT IS SELF CONTAINED M ECHANISM TO GOVERN THE ASSESSMENT OF CHARITABLE TRUST OR FOR GRANTING REGISTRATION. THE LD. DIT(E) WAS EXPECTED TO EXAMINE THE OBJECTS OF THE T RUST TO HIS SATISFACTION WHETHER THEY ARE CHARITABLE IN NATURE OR NOT FOR THE BENEFIT OF THE PUBLIC. REGISTRATION U/S 12AA OF TH E ACT DOES NOT AUTOMATICALLY ENTITLE THE ASSESSEE TO GET THE INCOM E EXCLUDED FROM THE INCOME OF THE PREVIOUS YEAR FOR DETERMINATION OF TA X LIABILITY, BUT IT ONLY ENTITLES THE ASSESSEE TO CLAIM SUCH EXEMPTION, WHICH OTHERWISE COULD NOT BE CLAIM IN THE ABSENCE OF REGISTRATION. FOR THE PURPOSES OF REGISTRATION U/S 12AA OF THE ACT BUT AUTHORITIES HA VE TO SATISFY THEMSELVES ABOUT ITS GENUINENESS OF ACTIVITIES AND HOW THE INCOME DERIVED FROM THE TRUST PROPERTY IS APPLIED TO CHARI TABLE OR RELIGIOUS PURPOSES. OUR VIEW IS FORTIFIED BY THE RATIO LAID DOWN IN THE FOLLOWING JUDICIAL PRONOUNCEMENT. A. CIT VS RED ROSE SCHOOL (2007)163 TAXMAN 19 (ALLAH.) B. S. H. GOWDA CHARITABLE TRUST VS DIT(E) 155 TAXMAN 4 66(KAR.) C. CIT VS SPRING DALE EDUCATIONAL SOCIETY (2011) 16 TA XMAN.COM 285(P & H) D. AGRICULTURAL PRODUCE & MARKET COMMITTEE, TELHARA VS CIT 97 TTJ (NAG) 165 (WHICH WAS LATER ON UPHELD BY HONBLE BOMBAY HIGH COURT IN 291 ITR 419 E. GRAMEEN INITIATIVE FOR WOMEN VS DIT(E) (ITA NO. 1937/MUM/2009)(WHEREIN RELIANCE WAS PLACED UPON THE DECISION IN AGRICULTURE PRODUCE & MARKET COMMITTEE AND LATER ON AFFIRMED BY HONBLE JURISDICTIONAL HIGH COURT). F. SHRI GYAN GANGA VOCATIONAL & EDUCATIONAL SOCIETY VS CIT (ITA NO.5706 & 5707/DEL/2012) G. DISHA INDIA MICRO CREDIT VS CIT (ITA NO.1374/DEL./2 010) 5 SOCIETY OF PETROLEUM ENGINEERS . H. DIT VS G.K.R. CHARITIES (ITA NO. 8210/MUM/2010) ORD ER DATED 10 TH AUGUST 2012. 2.4. IN VIEW OF THE ABOVE, BROADLY, WE FIND MERIT I N THE APPEAL OF THE ASSESSEE, THEREFORE, DIRECT THE LD. DIT(E) TO EXAMI NE THE APPLICATION OF THE ASSESSEE AFRESH, IN THE LIGHT OF THE AFORESAID DECISIONS IGNORING THAT THE ASSESSEE SOCIETY IS NOT REGISTERED UNDER T HE BOMBAY TRUST ACT, 1950 (BUT REGISTERED WITH THE REGISTRAR OF SOC IETIES UNDER THE SOCIETY REGISTRATION ACT). THE LD. DIT(E) IS EXPEC TED TO EXAMINE THE OBJECTS OF THE TRUST AND THEIR CHARITABLE NATURE TO HIS SATISFACTION. THE ASSESSEE BE PROVIDED DUE OPPORTUNITY OF BEING HEARD . THUS, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATI STICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F THE HEARING ON 11/12/2014. SD/- SD/- (B.R. BASKARAN) (JOGINDER S INGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED -11/12/2014 F{X~{T? P.S/. . . . . . . ( (( ( &*/ &*/ &*/ &*/ 0/#* 0/#* 0/#* 0/#* / COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &'$% / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 6 SOCIETY OF PETROLEUM ENGINEERS . 5. /2 &* , , / DR, ITAT, MUMBAI 6. 23' 4 / GUARD FILE. . . . . / BY ORDER, '/* &* //TRUE COPY// 5 55 5 / 6 6 6 6 7 7 7 7 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI