Coimbatore Indo German Cultural Association, Coimbatore V. CIT, Coimbatore

ITA 611/CHNY/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1067 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2013
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 26-02-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 30-04-2010
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA SR
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 12AA

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.611/MDS/2012 ASSESSMENT YEAR : 2009-10 COIMBATORE INDO GERMAN CULTURAL ASSOCIATION, 734, PRESIDENT HALL, AVANASHI ROAD, COIMBATORE 641 018. [PAN:AAAAC5029N] VS. THE COMMISSIONER OF INCOME TAX-I COIMBATORE. (APPELLANT) (RESPONDENT) A PPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE RESPONDENT BY : SHRI S. DAS GUPTA, SR. A.R. DATE OF HEARING : 26.02.2013 DATE OF PRONOUNCEMENT : 08.03.2013 ORDER PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL CHALLENGES THE ORDER OF THE COMMISSIONER OF INCOME TAX-I, COIMBATORE DATED 25.01.2010 IN C.NO. 127(194)/2009- 10/C.I.T.-I/CBE, PASSED UNDER SECTION 12AA OF THE I NCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THE I NSTANT APPEAL: (1) THE COMMISSIONER OF INCOME TAX-I, COIMBATORE, HAS ERRED IN RENDERING THAT THE ACTIVITIES OF THE APPELLANT TRUS T ARE NOT CHARITABLE, FOR REASONS STATED IN THE IMPUGNED ORDER AND THEREF ORE, NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.611 611611 611/M/ /M/ /M/ /M/1 11 10 00 0 2 (2) THE LEARNED CIT-I, COIMBATORE, HAS ERRED IN RE JECTING THE APPLICATION FILED FOR REGISTRATION U/S 12AA OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. (3) THE REASON ON WHICH THE LEARNED CIT-I, COIMBATO RE, HAS ERRED IN CONCLUDING THAT THE APPELLANT IS NOT ENTITLED TO RE GISTRATION U/S 12AA OF THE ACT, IN LAW AND UNSUSTAINABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. (4) FOR THESE AND OTHER ADDITIONAL GROUNDS OF APPE AL THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE LEARNED CIT -I, COIMBATORE, OUGHT TO HAVE HELD THAT THE APPELLANT IS A PUBLIC CHARITA BLE TRUST AND ENTITLED TO REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. 3. IN THE COURSE OF HEARING, THE ASSESSEE VEHEMENT LY REITERATES AFORESAID PLEADINGS AND ARGUES THAT THE CIT HAS ERRED IN REJE CTING ITS APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. A SHO RT PAPER BOOK CONTAINING THE CASE LAW OF [2009] 308 ITR 76 (DELHI) DIT(E) VS . JAPAN CHAMBER OF COMMERCE AND INDUSTRY IN INDIA, [1981] 130 ITR 184 (SC) CIT VS. ANDHRA CHAMBER OF COMMERCE, COPY OF THE ORDER DATED 30.11. 2006 PASSED BY THE DIT(E), CHENNAI GRANTING REGISTRATION TO INDO-KOREA N CULTURAL AND INFORMATION CENTRE, CHENNAI AND BYE-LAWS & OBJECTS OF SAID BODY HAVE BEEN FILED BY THE ASSESSEE. IN THE LIGHT THEREOF, IT PRA YS FOR ACCEPTANCE OF THE APPEAL. 4. IN REPLY, THE REVENUE STRONGLY ARGUES THAT THE CIT HAS RIGHTLY REJECTED THE APPLICATION FILED BY THE ASSESSEE SEEKING REGIS TRATION UNDER SECTION 12AA OF THE ACT. IT SUPPORTS THE REASONS CONTAINE D THEREIN AND PRAYS FOR REJECTION OF THE APPEAL. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.611 611611 611/M/ /M/ /M/ /M/1 11 10 00 0 3 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A TRUST FORMED WITH FOLLOWING OBJECTS: A) TO ESTABLISH, MAINTAIN AND MANAGE A GERMAN LANG UAGE CENTRE AND TO OFFER TRAINING AND EDUCATION IN GERMAN LANGU AGE AND CONDUCT CLASSES AND/ OR TO ASSIST IN THE PROVISION OF FACILITIES FOR THE TEACHING AND STUDY OF THE GERMAN LANGUAGE AND L ITERATURE. BY DOING THIS THE ASSOCIATION WILL CONTRIBUTE CONSI DERABLY FOR THE MUTUAL BENEFIT OF BOTH THE COUNTRIES. B) TO ENCOURAGE LINGUISTIC AND CULTURAL CONTACTS BE TWEEN THE TWO COUNTRIES AS WELL AS PROVIDE ACADEMIC COUNSELING WH ICH WILL ENHANCE THE PROSPECTS OF MORE DEALINGS ON ACCOUNT O F INFORMATION AND TECHNOLOGY ACTIVITIES, EDUCATIONAL OPPORTUNITIES, TOURISM IN BOTH COUNTRIES. C) TO PARTICIPATE IN EVENTS OF LINGUISTIC AND CULTU RAL INTEREST. D) TO PROVIDE AND ARRANGE FOR LITERARY, SCIENTIFIC AND OTHER LECTURES TO BE GIVEN IN GERMAN AND/OR OTHER LANGUAGES. E) TO PROVIDE AND/OR ASSIST IN THE PROVISION OF SCH OLARSHIPS TO ENABLE OR ENCOURAGE STUDENTS TO STUDY GERMAN LANGUA GE, LITERATURE AND CULTURE. F) TO PROVIDE INFORMATION ON HIGHER EDUCATION IN GE RMANY AND VICE VERSA. G) TO ORGANIZE FOR SPECIAL SEMINAR RELATING TO GERM AN CULTURE, ETHICS, TECHNOLOGY ECONOMICS, LITERATURE ETC. H) TO ADVICE ON INDIA IN THE FIELD OF ECONOMICS, GO VERNMENT POLICIES, MEDIA ETC. I) TO ARRANGE AND/OR SPONSOR VISITS AND TOURS FOR I TS DESERVING MEMBERS TO GERMANY AND OTHER COUNTRIES AND, VICE VE RSA WELCOME ANY SUCH VISITS OF PEOPLE TO INDIA FROM GER MANY AND OTHER COUNTRIES, ON NON PROFIT BASIS. J) TO BE PLATFORM TO PROMOTE AND FACILITATE TRADE AND INDUSTRIAL ESTABLISHMENTS IN TAMILNDAU AND INDIA. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.611 611611 611/M/ /M/ /M/ /M/1 11 10 00 0 4 K) TO ESTABLISH AND /OR MAINTAIN AN INFORMATION CE NTER ON THE ABOVE KIND OF EVENTS. L) TO OWN, PURCHASE, LEASE, CONSTRUCT, ALTER, REPAI R AND MANAGE ANY BUILDINGS AND APARTMENTS OR PART THEREOF AND AN Y OTHER MOVABLE AND IMMOVABLE PROPERTY FOR THE PURPOSE OF C ARRYING OUT THE OBJECT OF THE ASSOCIATION. M) TO PROVIDE AND /OR ARRANGE SUCH OTHER ACTIVITIE S BY WHICH THE AIMS AND OBJECTIVES OF THE ASSOCIATION CAN BE FURTH ERED. A PERUSAL OF THE CASE FILED REVEALS THAT ON 22.05. 2008, THE ASSESSEE HAD FILED AN APPLICATION IN FORM 10A SEEKING REGIST RATION UNDER SECTION 12AA OF THE ACT, WHICH WAS REJECTED ON 24.11.2008. THE REAFTER, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL, WHEREIN THE MATTER WAS RESTORED BACK FOR ADJUDICATION AFRESH. 6. IN CONSEQUENTIAL PROCEEDINGS, THE CIT AGAIN TOO K UP THE MATTER. AS WE FIND FROM THE IMPUGNED ORDER, THE ASSESSEE FILED A REPRESENTATION ON 19.01.2010 STATING THEREIN THAT IT IS TEACHING GERM AN LANGUAGE COURSE TO THE INTERESTED CANDIDATES AND COLLECTS AMOUNT IN LIEU T HEREOF WHICH IS PAID TO THE INSTRUCTOR AND OTHER EXPENSES INCURRED. IT DENIED T O HAVE RECEIVED EXCESS COLLECTION LEADING TO ANY PROFIT. HOWEVER, IN CITS OPINION, THE SAME AMOUNTED TO A BUSINESS ACTIVITY UNDER ADVANCEMENT O F ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY WHICH IS HIT BY PROVISO TO 2 (15) OF THE ACT. IN THE LIGHT THEREOF, HE REJECTED ASSESSEES APPLICATION SEEKING REGISTRATION. THEREFORE, THE ASSESSEE IS IN APPEAL. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.611 611611 611/M/ /M/ /M/ /M/1 11 10 00 0 5 7. WE HAVE HEARD BOTH SIDES AT LENGTH AND PERUSED THE IMPUGNED ORDER AS WELL AS PAPER BOOK (SUPRA) SUBMITTED BY THE ASSE SSEE. IT TRANSPIRES THAT THIS IS SECOND ROUND OF LITIGATION IN THE TRIBUNAL ON THE ISSUE OF REGISTRATION SOUGHT BY THE ASSESSEE UNDER SECTION 12AA OF THE A CT. THE SOLE GROUND FOR REJECTION OF THE APPLICATION OF THE ASSESSEE QUOTED BY THE CIT IS THAT IT IS PERFORMING BUSINESS ACTIVITIES WHICH DO NOT FORM CH ARITABLE PURPOSE. IN OUR OPINION, HE HAS ERRED IN NOT AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF HEARING BEFORE ARRIVING TO THE AFORESAID CONCLUSION . FURTHER, THE ASSESSEES BOOKS OF ACCOUNT, BALANCE SHEET AS WELL AS OTHER RE LEVANT DOCUMENTS HAVE ALSO NOT BEEN CONSIDERED BY THE CIT. THEREFORE, WE ARE OF THE VIEW THAT THE MATTER REQUIRES YET ANOTHER ROUND OF RE-EXAMINATION BY THE CIT. HENCE, IN THE LARGER INTEREST OF JUSTICE, WE RESTORE THE ISSU E TO THE CIT FOR ADJUDICATION AFRESH IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 8 TH OF MARCH, 2013 AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 08.03.2013 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.611 611611 611/M/ /M/ /M/ /M/1 11 10 00 0 6 IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.611/MDS/2010 ASSESSMENT YEAR : 2009-10 COIMBATORE INDO GERMAN CULTURAL ASSOCIATION, 734, PRESIDENT HALL, AVANASHI ROAD, COIMBATORE 641 018. [PAN:AAAAC5029N] VS. THE COMMISSIONER OF INCOME TAX-I COIMBATORE. (APPELLANT) (RESPONDENT) CORRIGENDUM PER S.S. GODARA, JUDICIAL MEMBER IN THE CAUSE TITLE OF THE ORDER OF THE TRIBUNAL DA TED 08.03.2013, INSTEAD OF I.T.A. NO. 611/MDS/2012, THE SAME MAY BE READ AS : I.T.A. NO. 611/MDS/2010 . ORDERED ACCORDINGLY. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 05.04.2013 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.