M/s. SAINT PAUL CONVENT SAMITI, Ratlam V. The CIT, Ujjain

ITA 620/IND/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0444 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Charitable institution; Opportunity of being heard

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 620/IND/2014 ST. PAUL CONVENT SAMITI JAORA PAN AAGTS 4303Q ::: APPELLANT VS COMMISSIONER OF INCOME TAX UJJAIN ::: RESPONDENT APPELLANT BY SHRI SUMIT NEMA RESPONDENT BY S MT. ASHIMA GUPTA DATE OF HEARING 24.6.2014 DATE OF PRONOUNCEMENT 24. 6 . 2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL BY THE ASSESSEE EMANATES FROM THE ORDER DATED 31 ST JULY, 2014 PASSED BY THE CIT U/S 12A/12AA OF THE ACT. 2 2. THE SUM AND SUBSTANCE OF THE GROUNDS OF APPE AL TAKEN BY THE ASSESSEE IS THAT THE CIT WAS NOT JUSTIFIE D IN REFUSING TO GRANT REGISTRATION U/S 12A/12AA OF THE A CT ON THE BASIS THAT EXEMPTION U/S 10(23C)(VI) OF THE ACT I S REJECTED AND NO ACTIVITY ON THE OBJECT NO. 2 OF THE SOCIETY IS BEING CARRIED OUT BY THE ASSESSEE. 3. THE LEARNED CIT REJECTED THE APPLICATION BY OBS ERVING AS UNDER :- 17. FROM THE ABOVE IT IS THUS CLEAR THAT THE OBSERVATIONS MADE IN THE ORDER U/S 10(23C)(VI) WERE NOT UNFOUNDED AND THE APPLICANT SOCIETY HAS CANCELLED THE OLD BUS CONTRACT AND ENTERED INTO NEW CONTRACT AT REDUCED AMOUNT. HOWEVER, IN THE VERY PROCESS UNDUE BENEFIT WAS DEPRIVED BY THE TRUSTEES BY GIVING THEM A HEAD START IN 3 ATTACHING THE BUSES OWNED BY THEM AT DESIRED RATE AND CONDITION THUS PROVIDING THEM AN OPPORTUNITY TO ADD TO THEIR WEALTH AND DEVELOPING NEW SOURCE OF INCOME FOR THEM. 18. IT IS ALSO TO BE NOTED THAT THOUGH APPLICANT HAS STATED THAT SAINT PAUL NURSERY SCHOOL AND SAINT PAUL COMPUTER SCHOOL WERE STARTED BEFORE THE SCHOOL RUN BY THE APPLICANT SOCIETY AND THEY HAVE NO INTER RELATION WITH THE SAINT PAUL CONVENT SCHOOL RUN BY THE APPLICANT SOCIETY HOWEVER IT HAS BEEN ADMITTED THAT THESE SCHOOLS ARE FEEDER TO THE SCHOOL RUN BY THE SOCIETY I.E. THE SAINT PAUL CONVENT SCHOOL. THUS ANOTHER OPPORTUNITY HAS BEEN CREATED FOR THE BENEFIT OF THE TRUSTEES FOR ENSURING THAT THE SAINT PAUL NURSERY SCHOOL & THE SAINT PAUL COMPUTER SCHOOL ARE ASSURED OF ADMISSIONS IN VIEW OF 4 THEIR PROXIMITY TO THE SAINT PAUL CONVENT SCHOOL AND ASSURED ADMISSIONS TO THIS SCHOOL FROM BOTH THE CREATING ANOTHER ASSET WITH ASSURED INCOME. THE EDUCATIONAL INSTITUTE HAS THUS BECOME AN ACTIVITY OF GENERATING PROFITS FOR THE TRUSTEES AND THE AMASSING OF WEALTH. 19. IT IS FURTHER TO BE NOTED THAT THE OBJECT A T SL. NO. 02 VIZ. SAMAJIK GATIVIDHIYO ME YOGDAN CAN ALSO NOT BE CONSIDERED AS AN OBJECT FOR CHARITABLE PURPOSE. AS HELD IN THE CASE OF CIT VS. GANGA BAI CHARITIES; 142 ITR 718 (MAD) SUCH OBJECT LACKING CAPABILITY OR AMENABILITY TO BE PUT INTO OPERATION FOR THE PURPOSE OF ENABLING THE INCOME TO MEET THE OBJECT CANNOT BE CONSIDERED AS CHARITABLE PURPOSE. IN THE CASE OF CIT VS. KARIM BROTHER CHARITY FUND; 11 ITR 603 (BOM) IT HAS BEEN HELD THAT OBJECT OF CONDUCTING 5 MARRIAGE CEREMONY CANNOT BE HELD TO BE A CHARITABLE ACTIVITY. SOCIAL ACTIVITY CAN ENCOMPASS EVEN MARRIAGE CEREMONY. ALTHOUGH IT HAS BEEN ARGUED THAT NO SUCH ACTIVITY HAS BEEN CARRIED OUT THE SAME IS NOT MATERIAL AS IN THE REGISTERED DEED THE APPLICANT SOCIETY IS EMPOWERED TO CARRY OUT SUCH ACTIVITIES AT ANY POINT OF TIME. 20. IT THEREFORE CANNOT BE HELD AS CHARITABLE ORGANIZATION. THE APPLICATION FILED U/S12A/12AA ON 15.01.2014 IS THEREFORE REJECTED. 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE CIT WAS NOT JUSTIFIED IN REJECTING THE APPLICATION FILED BY THE ASSESSEE U/S 12A/12AA OF THE ACT ON THE BASIS THAT EXEMPTION APPLICATION U/S 10(23C)(VI) OF THE ACT IS REJECTED AND NO ACTIVITY ON OBJECT NO. 2 OF THE SOCIETY IS BEING CARRIED OUT. THE ASSESSEE IS RUNNING A 6 SCHOOL WHICH ITSELF IS A CHARITABLE ACTIVITY AS PER PROV ISIONS OF THE ACT. IT WAS ALSO SUBMITTED THAT THE ASSESSEE FI LED VARIOUS DOCUMENTS BEFORE THE CIT TO SHOW THAT THE ASSESSEE IS CARRYING OUT VARIOUS CHARITABLE ACTIVITIES BU T THE LD. CIT FAILED TO CONSIDER THE SAME. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN VIEW OF TH E DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. SOCIETY OF ADVANCED MANAGEMENT STUDIES; (20 13) 34 TAXMAN.COM 135 (ALLAHABAD) THE ASSESSEE IS ENTITLED TO REGISTRATION U/S 12A/12AA OF THE ACT. ON THE OTHER H AND, THE LEARNED CIT DR JUSTIFIED THE ORDER PASSED BY THE LD. CIT 4. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW THAT CIT HAS NOT CONSIDERED VARIOUS EVIDENCES FILED BY THE ASSESSEE FOR ESTABLISHING THE FACT THAT THE ASSESSEE IS CARRYING OUT CHARITABLE ACTIVITIES. THEREFORE, IN THE I NTEREST OF JUSTICE AND EQUITY, WE DEEM IT PROPER TO RESTORE T HIS 7 ISSUE TO THE FILE OF THE LEARNED CIT FOR DECIDING TH E SAME DE NOVO AND AFTER CONSIDERING THE OTHER EVIDENCES FILED BY THE ASSESSEE BEFORE HIM. THE ASSESSEE SHALL BE AFFORDED AN OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 24 TH JUNE, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 24 TH JUNE 2015 DN/-232426