Rupantaran Society, Dehradun V. CIT, Dehradun

ITA 6184/DEL/2013

• Counselvise Citation: 618420114 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-03-2015
• Assessment Year: misc
• Appeal Filed On: 18-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Charitable institution; Opportunity of being heard; Capital expenditure
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F , NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 6184/DEL/2013 ASSESSMENT YEAR : RUPANTARAN SOCIETY, VS. CIT, 13-A, SUBHASH ROAD, THROUGH ITS CHAIRMAN AAYAKAR BHAWAN, DEHRADUN MR. ASHER H WASKER, 120/77, DAKPATTI, RAJPUR, DEHRADUN GIR / PAN:AABTR1412J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR, CA RESPONDENT BY : SHRI VIVEK WADEKAR, CIT DR DATE OF HEARING : 05.03.2015 DATE OF PRONOUNCEMENT : 11.03.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF CIT DATED 19.09.2013 U/S 12AA(1)(B)(II) OF THE I. T. ACT, 196 1. THE CIT DEHRADUN VIDE THIS ORDER HAD REJECTED THE APPLICATION FILED BY SOCIETY FOR REGISTRATION U/S 12A(A) OF THE ACT. THE CIT WANTED THE ASSESSEE TO FURNISH THE DETAILS AS MENTIONED ON PAGE 1 OF HIS ORDER IN RESPONSE TO WH ICH THE ASSESSEE FILED WRITTEN SUBMISSIONS. HOWEVER, FROM THE SUBMISSIONS FILED BY ASSESSEE, THE CIT HELD THAT ASSESSEE WAS ENGAGED IN EARNING FROM EDUCATION AND PRINTING OF STATIONERY AND BOOKS WHEREAS THE MAIN OBJECTIVE OF THE ASSESSEE WAS TO IMPART EDUCATION THEREFORE, HE DENIED REGISTRATION BY HOLDING AS UNDER: ITA NO.6184/DEL/2013 2 3. A PERUSAL OF THE ABOVE MATERIAL, HOWEVER, BRING S OUT THAT THE TRUST IS APPARENTLY A COMMERCIAL INSTITUTE, ENGAGED IN SA LE OF EDUCATION, SALE AND PRINTING OR STATIONERY AND BOOKS AND THE B USINESS IS EXPANDING YEAR AFTER YEAR. THERE IS AN INCREASE IN CAPITAL EXPENDITURE ALSO WHICH SHOWS THAT THE SOCIETY IS ENGAGED IN EXP ANSION AND EARNING MORE RECEIPT RATHER THAN CONCENTRATING ON T HE OBJECTIVE OF IMPARTING EDUCATION. THE ACTIVITIES OR THE SOCIETY, ARE COMMERCIAL IN CHARACTER AND NOT CHARITABLE PRECISELY AS CONCLUDED BY THE HON'BLE HIGH COURT OF UTTARAKHAND ON SIMILAR FACTS IN THE C ASE OF CIT VS. QUEENS EDUCATION SOCIETY REPORTED IN 177 TAXMAN 321 . 4. FURTHER, IN THE EASE OF NATIONAL INSTITUTE OR AE RONAUTICAL ENGINEERING EDUCATIONAL SOCIETY VS. CIT(2009) -184 TAXMAN 264(UTTARAKHAND) IT WAS OBSERVED THAT IN THE EXPRES SION 'CHARITABLE PURPOSE', 'CHARITY' IS THE SOUL OF THE EXPRESSION, MERE TRADE OR COMMERCE IN THE NAME OF EDUCATION CANNOT BE SAID TO BE A CHARITABLE PURPOSE, THE HONBLE HIGH COURT HELD THAT THE CIT WAS CORRECT IN REJECTING THE SECTION 12AA AS TH E SOCIETY WAS CHARGING SUBSTANTIAL FEES FROM THE STUDENTS AND MAK ING HUGE PROFITS, TO QUOTE THE HON'BLE HIGH COURT 'THE EXPRESSION 'NO T INVOLVING CARRYING ON OF ANY ACTIVITY FOR PROFIT' CANNOT BE R END WITH EXPRESSION 'EDUCATION', BUT THAT DOES NOT MAKE EVERY KIND OF P URE COMMERCIAL ACTIVITY IN THE NAME OF EDUCATION 'A CHARITABLE ONE . THEREFORE, ASSESSEE'S CASE IS A CLEAR CASE OF SALE OF EDUCATIO N, AND THEREFORE, IT COULD NOT BE CONSIDERED AS A CHARITABLE INSTITUTION U/S 2(15) BECAUSE THE PURPOSE OF THE ORGANIZATION AS A WHOLE IS TO MA KE PROFIT. 5. KEEPING IN VIEW THE ABOVE FACTS & DISCUSSION, T HE APPLICATION FILED BY THE SOCIETY FOR REGISTRATION U/S 12A (A) I S REJECTED. 2. LD. A.R. AT THE OUTSET SUBMITTED THAT THE ASSESS EE IS A DULY REGISTERED SOCIETY UNDER SOCIETIES REGISTRATION ACT AND WAS IN CORPORATED TO PROMOTE TRANSFORMATIONAL DEVELOPMENT OF COMMUNITIES AND IND IVIDUALS, IRRESPECTIVE OF CASTE AND CREED AND IT HAD BEEN ENGAGED FOR THE PURPOSE OF ACHIEVING ITS OBJECTIVES. THE ASSESSEE WAS ENGAGED IN VARIOUS AC TIVITIES WHICH INCLUDED CHILD AND ADULT EDUCATION, WOMEN EMPOWERMENT, MEDIC AL CAMPS ETC. IT WAS SUBMITTED THAT ALL DETAILS AS REQUIRED BY CIT WERE FILED BY ASSESSEE AND LD. ITA NO.6184/DEL/2013 3 CIT WITHOUT GIVING THE FINDINGS ON THE OBJECTS CLAU SE OF ASSOCIATION AND WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD, DE CIDED THE ISSUE AGAINST THE ASSESSEE. IT WAS SUBMITTED THAT AT THE TIME OF REGISTRATION, THE OBJECTS AS LISTED IN THE TRUST DEED, OUGHT TO HAVE BEEN CONSID ERED BY LD. CIT WHICH IN ANY CASE ARE CHARITABLE AND WHICH FACT HAS BEEN IGN ORED BY LD. CIT. 3. LD. D.R. SUPPORTED THE ORDER PASSED BY CIT. 4. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT SECTION 12AA GIVES THE PRO CEDURE FOR REGISTRATION AS A CHARITABLE SOCIETY. THE PROCEDURE FOR REGISTR ATION AS ENUMERATED IN SECTION 12AA IS REPRODUCED AS UNDER: S.12AA. (1) THE PRINCIPAL COMMISSIONER OR COMMISSI ONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRU ST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12A, SHALL: (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRU ST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THI S BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE T RUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE- (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUS T OF INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OF INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT: PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNI TY OF BEING HEARD. 5. FROM THE ABOVE PROVISIONS OF SECTION 12AA, WE FI ND THAT BEFORE GRANTING REGISTRATION/REFUSING REGISTRATION, THE CI T HAS TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUSTS / INSTITUTION AND A LSO HAS TO SATISFY THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE GENUINE. FURTHER, IF CIT IS NOT ITA NO.6184/DEL/2013 4 SATISFIED WITH THE GENUINENESS OF THE ACTIVITIES OR OBJECTS OF THE TRUST, THEN BEFORE REFUSING TO REGISTER UNDER THIS SECTION, HE HAS TO GIVE REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD, WHICH T HE COMMISSIONER HAS NOT PROVIDED. IN VIEW OF ABOVE FACTS, WE DEEM IT APPRO PRIATE TO SET ASIDE THE ISSUE TO THE OFFICE OF CIT, DEHRADUN WHO SHALL PASS SPEAKING ORDER AFTER PROVIDING APPROPRIATE OPPORTUNITY TO THE ASSESSEE O F BEING HEARD AND WILL DECIDE THE MATTER IN ACCORDANCE WITH LAW. LD. CI T WILL MAKE ENDEAVOR TO PASS SUCH ORDER WITHIN A PERIOD OF THREE MONTHS FRO M THE DATE OF RECEIPT OF THIS ORDER. THE ASSESSEE IS ALSO DIRECTED TO COOPE RATE AND ATTEND THE PROCEEDINGS BEFORE CIT SO THAT APPLICATION CAN BE D ISPOSED OFF WITHIN REASONABLE PERIOD OF THREE MONTHS. 6. IN VIEW OF ABOVE, APPEAL FILED BY ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. 7. ORDER AS PRONOUNCED ORALLY IN THE OPEN COURT ON THE CONCLUSION OF HEARING IS PRONOUNCED IN WRITING ON THIS 11 TH MARCH, 2015. SD./- SD./- ( DIVA SINGH) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 11 TH MARCH, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.6184/DEL/2013 5 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 5/3 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 5,9,9, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER