NEW HORIZON EDUCAITON SOCIETY, NAVI MUMBAI V. DIT (E), MUMBAI

ITA 6805/MUM/2012

• Counselvise Citation: 680519914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Competent authority
• Section: 12A; 12AA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUD ICIAL MEMBER . / ITA NO. 6805 /MUM./ 2012 ( / ASSESSMENT YEAR : N.A. ) NEW HORIZON EDUCATION SOCIETY FLAT NO.1401, EXCEL RESIDENCY SECTOR B, AIROLI NAVI MUMBAI 400 708 .. / APP ELLANT V/S DIR ECTOR OF INCOME TAX (EXEMPTION) PIRAMA CHAMBERS, PAREL MUMBAI 400 012 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AABTN2615F / ASSESSEE B Y : DR. K. SHIVARAM A/W MS. NEELAM C . JHADHAV / REVENUE BY : MR. PREETAM SINGH / DATE OF HEARING 0 9 .0 1 .201 4 / DATE OF ORDE R 15.01.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PR ESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, CHALLENGING THE IMPUGNED ORDER DATED 28 TH SEPTEMBER 2012, PASSED BY THE LEARNED DIRECTOR OF INCOME TAX (EXEMP.) (FOR SHORT DIT(E) , MUMBAI, UNDER SECTION 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (FOR NEW HORIZON EDUCATION SOCIETY 2 SHOR T THE ACT ) , REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTION 12A ON THE FOLLOWING GROUNDS: 1. THE LEARNED DIT (EXEMPTIONS) ERRED IN REJECTING THE APPLICATION MADE FOR REGISTRATION U / S . 12AA, WITHOUT APPRECIATING THE FACT THAT MAIN O BJECTS OF THE TRUST IS TO IMPART EDUCATION WHICH IS COVERED WITHIN THE AMENDED DEFINITION O F ' CHARITABLE PURPOSE ' U / S. 2(15) OF THE ACT, THEREFORE INTERPRETATION MADE BY THE LEARNED DIT(E) IS CONTRARY TO THE OBJECT AND PURPOSE OF SEC. 2(15) OF THE ACT . 2. THE LEARNED DIT (EXEMPTIONS) FAILED TO APPRECIATE THAT EDUCATION ACTIVIT Y INCLUDE WHOLESOME DEVELOPMENT OF STUDENTS FOR WHICH V OCATIONAL TRAINING , GYMNASIUM, HEALTH CLUB, CELEBRATING FESTIVALS AND INDEPENDENCE DAY ARE PART OF EDUCATIONAL ACTIVITY AND THE REFORE, ' THE ORDER OF DIT(E) TREATING THE OBJECTS AS MIXED CHARITABLE AND RELIGIOUS IS BAD IN A LAW AND ORDER MAY BE SET - ASIDE AND REGISTRATION U/S. 12AA MAY BE ALLOWED. BESIDES THIS, THE ASSESSEE HAS ALSO RAISED ADDITION AL GROUND, WHICH READS AS UNDER : THE LEARNED DIT(EXEMPTION) ERRED IN PASSING THE ORDER WITHOUT GIVING ANY PERSONAL HEARING. ALL THE HEARING WAS CONDUCTED BY OTHER OFFICER, THEREFORE, THE ORDER PASSED BY THE DIT(EXEMPTION) IS BAD IN LAW AND LIABLE TO QUASHED. 2 . B EFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE DID NOT WISH TO PRESS THIS ADDITIONAL GROUND. ACCORDINGLY, WE DISMISS THIS GROUND AS NOT PRESSED . 3 . THE BRIEF FACTS ARE THAT THE ASSESSEE IS A SOCIETY WHICH HAS BEEN REGISTERED UNDER SOCIETY REGISTRATION ACT, 186 0, WITH THE COMPETENT AUTHORITY OF THANE AND HAS ALSO BEEN ISSUED CERTIFICATE OF REGISTRATION BY THE CHARITY COMMISSIONER, THANE, UNDER CHARITY COMMISSIONER OF MAHARASHTRA ACT. THE ASSESSEE HAD APPLIED FOR REGISTRATION UNDER SECTION 12A IN THE PRESCRIBED F ORM NO.10A ON 2 ND MARCH 2012. IN THE MEMORANDUM OF ASSOCIATION SIGNED ON 1 ST JANUARY 2009, THE AIMS AND OBJECTS OF THE ASSESSEE TRUST WERE AS UNDER: NEW HORIZON EDUCATION SOCIETY 3 3. AIMS & OBJECTS : 1 ) TO PROMOTE EDUCATIONAL ACTIVITIES BY WAY OF VARIOUS TYPES OF EDUCATIONAL COURSES, C URRICULUM, I.E., TO OPEN BALAWADI, ANGANWADI, PRIMARY SCHOOLS, SECONDARY SCHOOLS, JUNIOR COLLEGES, AGRICULTURAL COLLEGES, LAW COLLEGES, B.ED., D.ED., COLLEGES, ENGINEERING COLLEGES, MEDICAL COLLEGES & RUN BUSINESS MANAGEMENT COLLEGES, ETC. 2 ) TO OPEN ASHRAMS HALA, RESIDENTIAL SCHOOL, MILITARY SCHOOL, HOSTEL, GURUKOOK ASHRAM, AND TO OPEN E NGINEERING C OLLEGE CUM H OSTEL FOR THE HANDICAPPED AND PHYSICALLY DISABLED STUDENTS. 3 ) TO IMPART TRAINING TO NEEDY HARDWORKING IN RESPECT OF INFORMATION TECHNOLOGY, AS WELL AS T O EXTEND EXPERT EDUCATIONAL TRAINING TO THE NEEDY STUDENTS SUCH AS TO DISTRIBUTE NOTE BOOKS, UNIFORM ETC., ETC. 4 ) TO BEGIN LIBRARY AS WE AS READING HALL AS READING LIBRARY. 5 ) TO IMPART VOCATIONAL TRAINING COURSES SUCH AS COMPUTER TRAINING, TAILORING, TURNER, ELECTRICIAN AND I.T.I. COURSES POLYCLINIC, ETC. 6 ) TO IMPART DOMESTIC AS WELL AS INTERNATIONAL SPORTS TRAINING, TO ORGANIZE SPORTS COMPETITIONS, LOCAL LEVEL, DISTRICT LEVEL, STATE LEVEL AS WELL AS NATIONAL, INTERNATIONAL LEVEL. TO ORGANIZE SPORTS COMPETITIO NS TO EXTENT HELP THE SPORTSMAN TO ARRANGE LODGING OF SPORTSMAN. 7 ) TO ORGANIZE THE FACILITIES SUCH AS PLAYGROUND, SWIMMING TANK FACILITIES TO PROVIDES SPORTS EQUIPMENTS ETC. ETC. 8 ) TO IMPART TRAINING AND TO PROMOTE SPORTSMANSHIP TO BEING HEALTH CLUB, GYMNASI UM. CARRAM, CHEESE, SNOOKER, HOLY BALL, CRICKET, GOLF, KABBADI, KHO KHO ETC. ETC. 9 ) TO IMPART TRAINING TO WOMEN, AS WELL AS TO GIRLS, AS WELL AS TO DESERTED WOMEN, WINDOW AND ECONOMICALLY AND SOCIALLY BACKWARDS WOME, TO IMPART TRAINING OF STITCHING, HANDCRA FT EMBROIDERY COURSES ETC. ETC. 10 ) TO OPEN HOSTEL FOR THE WORKING WOMEN, ASHRAMSHALA AND MAKE ARRANGEMENT AND TO MAKE AVAILABLE FACILITIES TO THE NEEDY WOMEN FOR THE UPLIFTMENT OF WOMENS LIFE. 11 ) TO MAKE ARRANGEMENT OF MEDICAL FACILITIES TO THE NEEDY PERSONS TO RUN DISPENSARY AND EQUIPMENTS REQUIRED FOR THE HOSPITAL, TO ARRANGE FOR MEDICAL CAMPS AND TO CARRYOUT VACCINATION PROGRAMME TO ORGANIZE BLOOD DONATION CAMP ETC. ETC. 12 ) FOR THE AVAILING OF THE FACILITIES FOR FOOD, SHELTER AND CLOTHS THE INSTITUTIONS SHALL MAKE EVERY ATTEMPT TO ACHIEVE THE SAME. NEW HORIZON EDUCATION SOCIETY 4 13 ) TO IMPART TRAINING AS WELL AS HELP TO BLIND HANDICAPPED, DUM DEAF PERSONS TO NEEDY PERSONS, FOR THE DEVELOPMENT OF THE ABOVE REFERRED PERSON, TRAINING SCHOOL FOR THE HANDICAPPED PERSONS. 14 ) TO GENERATE EMPLOYMENT OPP ORTUNITIES TO THE UNEMPLOYED YOUTH AS PER THEIR QUALIFICATION, GUIDANCE TO BE IMPARTED TO THE UNEMPLOYMENT YOUTH. 15 ) TO PROMOTE TRAINING CENTRE FOR THE TECHNICAL TRAINING, TYPING SHORTHAND AND COMPUTER TRAINING, ETC. ETC. 16 ) TO HELP DURING FLOODS DROUGHT, EART H QUAKE AND NATURAL CALAMITIES. 17 ) TO CELEBRATE FESTIVALS SUCH AS GANESH UTSAV, NAVRATRI, 15 TH AUGUST INDPENDENCE DAY, 26 TH JANUARY REPUBLIC DAY AND TO ORGANIZE PROGRAM ME BIRTHDAY OF RENOWNED AND GREAT MARTYRS AND TO COMMEMORATE DEATH ANNIVERSARY OF GREA T MARTYRS. 4 . THE DIT(E) OBSERVED THAT THERE IS ADMIXTURE OF CHARITABLE AND NON CHARITABLE RELIGIOUS AND COMMERCIAL OBJECTS. FOR DRAWING THESE INFERENCES, HE HAS REFERRED TO VARIOUS OBJECTS GIVEN IN SOME OF THE CLAUSES LIKE VOCATIONAL TRAIING IN COMPUTER, T AILORING, ELECTRICIAN, ITI COURSES, ETC., AND CAME TO THE CONCLUSION THAT THEY ARE IN THE NATURE OF COMMERCIAL. HE ALSO OBSERVED THAT THERE IS A CLAUSE FOR CELEBRATING RELIGIOUS FESTIVALS WHICH WOULD FALL IN THE CATEGORY OF RELIGIOUS OBJECTS. FOR DENYING R EGISTRATION, HE HAS ALSO REFERRED TO CERTAIN DECISIONS OF THE HON'BLE SUPREME COURT AND HIGH COURT TO COME TO THE CONCLUSION THAT SUCH AN OBJECT CANNOT BE HELD TO BE FOR A CHAR ITABLE PURPOSE S . ACCORDINGLY, HE DENIED THE REGISTRATION UNDER SECTION 12A TO TH E ASSESSEE. 5 . BEFORE US, THE LEARNED COUNSEL, DR. K. SHIVARAM, ON BEHALF OF THE ASSESSEE, SUBMITTED THAT, FIRST OF ALL, NO PROPER OPPORTUNITY OF HEARING WAS GIVEN IN PERSON BY THE DIT(E) AND VARIOUS OBSERVATIONS HAVE BEEN MADE WITHOUT CONFRONTING TO THE ASS ESSEE AND WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE TO CLARIFY THE SAME. THE ENTIRE OBJECT AN D DOCUMENTS FILED BEFORE HIM HAVE NOT BEEN PROPERLY EXAMINED IN A NEW HORIZON EDUCATION SOCIETY 5 CORRECT PERSPECTIVE. THEREFORE, PROPER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO EXP LAIN ITS CASE BEFORE THE DIT(E) AND THE MATTER SHOULD BE RESTORED TO BACK TO HIM. 6 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON THE ORDER OF THE DIT(E), SUBMITTED THAT PROPER OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE WHICH IS EV IDENT FROM THE FACT THAT THE DATE OF HEARING WAS FIXED ON 28 TH SEPTEMBER 2012 AND ON THAT DATE, THE ASSESSEE HAD SUBMITTED HIS REPLY. MOREOVER, THE DIT(E) HAS LOOKED INTO THE OBJECTS OF THE ASSESSEE AND HAS COME TO A DEFINITE CONCLUSION THAT SOME OF ITS OB JECTS ARE NOT FOR THE CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15). THEREFORE, THE REGISTRATION HAS RIGHTLY BEEN DENIED TO THE ASSESSEE. 7 . WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RELEVANT FINDINGS OF THE IMPUGNED ORDER AND THE MATERIAL AVA ILABLE ON RECORD. ON A PERUSAL OF THE IMPUGNED ORDER, IT IS SEEN THAT THE DIT(E) HAS PICKED UP PART OF THE OBJECTS FROM DIFFERENT DIFFERENT CLAUSES TO ARRIVE AT A CONCLUSION THAT THE ASSESSEES OBJECTS ARE NOT FOR CHAR ITABLE PURPOSE S AS DEFINED IN SECTION 2(15). FROM THE RECORDS, IT IS SEEN THAT A LETTER WAS ISSUED FROM THE OFFICE OF THE DIT(E) , WHEREIN , ONLY ROUTINE DETAILS WERE ASKED FOR. IN COMPLIANCE, THE ASSESSEE HAD SUBMITTED ALL THE RELEVANT DETAILS. IN CASE, THERE WAS ANY CLARIFICATION WHICH WAS REQ UIRED ON SOME OF THE OBJECTS, THE DIT(E) OUGHT TO HAVE ISSUED SHOW CAUSE NOTICE OR GIVEN AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE. PRIMA FACIE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY TO EXPLAIN ITS CASE IN RELATION TO THE OBJECTS AND THE ACTIVITIES CARRIED OUT BY IT IN PURSUANCE OF SUCH OBJECTS. IT IS ONLY AFTER SEEKING PROPER EXPLANATION / CLARIFICATION, ANY ADVERSE INFERENCE C AN BE DRAWN. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DIT( E) AND RESTORE THE ENTIRE MATTER TO HIS FILE FOR NEW HORIZON EDUCATION SOCIETY 6 DENOVO ADJUDICATION AND IN ACCORDANCE WITH THE PROVISIONS OF LAW AND AFTER PROVIDING DUE AND EFFECTIVE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. 8 . 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 15 TH JANUARY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY 2015 SD/ - . D. KARUNAKARA RAO ACCOUNTAN T MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 15 TH JANUARY 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI