Indian Public School Samiti, Basti V. Commissioner of Income Tax, Faizabad

ITA 71/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75139 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-01-2014
• Assessment Year: misc
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Keywords: Opportunity of being heard
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 71/LKW/2012 INDIAN PUBLIC SCHOOL SAMITI (NOW KNOWN AS KAPIL GANGA PUBLIC SCHOOL SAM ITI) BASTI V. CIT FAIZABAD PAN: AABAK0215F (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. VIVEK MISHRA, CIT (DR) DATE OF HEARING: 27.01.2014 DATE OF PRONOUNCEMENT: 31.01.2014 O R D E R PER SUNIL KUM AR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX, INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 . BECAUSE THE CIT HAS ERRED ON FACTS AND IN LAW IN DENYING REGISTRATION U/S 12AA OF THE I.T. A CT, 1961 TO THE ASSESSEE SOCIETY HOLDING IT AS NOT CARRYING ON CHARITABLE ACTIVITIES. 2 . BECAUSE THE CIT HAS FAILED TO APPRECIATE THAT THE ASSESSEE SOCIETY IS A CHARITABLE SOCIETY HAVING CHARITABLE OBJECTS, AS SUCH, WAS ELIGIBLE FOR REGISTRATION U/S 12AA OF T HE ACT. : - 2 - : 3 . BECAUSE THE ORDER PASSED BY THE CIT U/S 12AA OF THE ACT, DATED 23.12.2011 REJECTING THE PRAYER OF THE ASSESSEE SOCIETY FOR GRANT OF REGISTRATION U/S 12AA BE QUASHED/SET ASIDE AND THE ASSESSEE SOCIETY BE GRANTED REGISTRATION U/S 12AA. 4 . BECAUSE ON A P ERUSAL OF ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE FOUND THAT THE ASSESSEE SOCIETY IS ENGAGED IN CHARITABLE ACTIVITIES AND THE CIT WAS NOT JUSTIFIED IN REJECTING THE APPLICATION MOVED FOR REGISTRATION U/S 12AA OF THE ACT. 5 . BECAUSE THE ORDER R EJECTING THE REGISTRATION U/S 12AA IS BARRED BY LIMITATION FOR THE REASON THAT THE SAME HAS NOT BEEN PASSED WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF FILING OF PETITION FOR REGISTRATION. 6 . BECAUSE THE ORDER PASSED BY THE CIT U/S 12AA SHOULD - OUGHT TO HAV E BEEN PASSED WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION IS FILED. THE ORDER HAVING BEING PASSED BEYOND SIX MONTHS IS BARRED BY LIMITATION, WHEN READ WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT REPORTED IN 216 C TR (ALLD) 167 . 2 . DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS FURNISHED ALL THE RELEVANT EVIDENCE BEFORE THE LD. COMMISSIONER OF INCOME - TAX WHILE SEEKING REGISTRATIO N UNDER SECTION 12AA OF THE ACT, BUT HE HAS NOT PROPERLY LOOKED INTO IT AND HAS DENIED REGISTRATION HAVING RELIED UPON THE STATEMENT OF KAPIL GANGA CONSULTANCY AGENCY, A CONCERN RELATED TO THE APPLICANT - ASSESSEE, PURCHASE OF LAND AND CONSTRUCTION OF BUILDI NG. THE LD. COMMISSIONER OF INCOME - TAX HAS DENIED REGISTRATION ALSO FOR THE REASON : - 3 - : THAT THE SCHOOL BUILDING WAS UNDER CONSTRUCTION AND NO EDUCATIONAL ACTIVITIES WERE UNDERTAKEN BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT THE EDUCATIONAL INSTITUTION CANNOT BE SET UP WITHOUT HAVING A PROPER BUILDING AND WHILE GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT, THE LD. COMMISSIONER OF INCOME - TAX IS REQUIRED TO EXAMINE THE OBJECTS OF THE ASSESSEE. IF OBJECTS OF THE ASSESSEE ARE CHARITABLE AND THERE IS NO OTHER EVIDENCE AVAILABLE ABOUT THE ACTIVITIES OF THE ASSESSEE WHICH ARE OF NON - CHARITABLE PUR PO SES , REGISTRATION UNDER SECTION 12AA OF THE ACT SHOULD BE GRANTED. BUT THE LD. COMMISSIONER OF INCOME - TAX DID NOT EXAMINE THE OBJ ECTS OF THE ASSESSEE - SOCIETY AND WITHOUT BRINGING ANYTHING ON RECORD TO ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN ACTIVITIES OTHER THAN CHARITABL E ONE, HAS DENIED REGISTRATION UNDER SECTION 12AA OF THE ACT. 3 . THE LD. D.R., ON THE OTHER HAND HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX. 4 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THE LD. COMMISSIONER OF INCOME - TAX HAS TAKEN INTO ACCOUNT THE EXTRANEOUS CIR CUMSTANCES WHILE DENYING REGISTRATION UNDER SECTION 12AA OF THE ACT, WHEREAS THE LD. COMMISSIONER OF INCOME - TAX WAS REQUIRED TO EXAMINE THE OBJECTS OF THE ASSESSEE AND ALSO OTHER ACTIVITIES IN WHICH IT WAS ENGAGED. IF THE LD. COMMISSIONER OF INCOME - TAX IN TENDS TO DENY REGISTRATION UNDER SECTION 12AA OF THE ACT, HE IS REQUIRED TO BRING SOME EVIDENCE ON RECORD TO ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN ACTIVITIES OTHER THAN CHARITABLE ONE. THE ASSESSEES CONTENTION WAS THAT IT WANTS TO SET UP AN EDUCATIO NAL INSTITUTION AND THAT THE EDUCATIONAL INSTITUTION CANNOT BE SET UP WITHOUT HAVING A PROPER BUILDING. KEEPING IN VIEW THE FACTS OF THE CASE , WE ARE OF THE VIEW THAT THE LD. COMMISSIONER OF INCOME - TAX HAS NOT PROPERLY ADJUDICATED THE ISSUE IN THE LIGHT O F THE LEGAL PROVISIONS OF THE ACT. WE, : - 4 - : THEREFORE, SET ASIDE HIS ORDER AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE - ADJUDICATE THE ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WHILE ADJUDICATING THE ISSUE OF GRA NT OF REGISTRATION UNDER SECTION 12AA OF THE ACT, HE SHOULD EXAMINE THE OBJECTS OF THE ASSESSEE - SOCIETY. IF THE OBJECTS OF THE ASSESSEE A RE CHARITABLE IN NATURE, REGIST RATION IS TO BE GRANTED U NLESS AND UNTIL IT IS BROUGHT ON RECORD THAT ASSESSEE IS ENGAG ED IN THE ACTIVITIES OTHER THAN CHARITABLE ONE. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31.1.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 31.1.2014 JJ: 2901 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR