M/s. SARKAR MANSAROVAR EDUCATION SOCIETY, Bhopal V. The CIT, Bhopal

ITA 711/IND/2014

• Counselvise Citation: 71122714 RSA 2014
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2015
• Assessment Year: misc
• Appeal Filed On: 11-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Assessee Lawyers: N D PATWA
• Section: 12A

Judgement Text

SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNA L INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 711/IND/2014 SARKAR MANSAROVAR EDUCATION SOCIETY BHOPAL PAN AACTS-8349E ::: APPELLANT VS COMMISSIONER OF INCOME TAX BHOPAL ::: RESPONDENT APPELLANT BY SHRI ASHISH GOYAL AND SHRI N.D. PATWA RESPONDENT BY SHRI RAJIV VARSHNEY DATE OF HEARING 27.8.2015 DATE OF PRONOUNCEMENT 4 . 9 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT, BHOPAL, DATED 25.9.2014. SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 2 2. THE ASSESSEE IS A SOCIETY WHICH WAS FORMED ON 12.9.2002. THE MAIN OBJECT OF THE ASSESSEE IS TO IMPAR T QUALITY EDUCATION TO POOR SECTION OF PEOPLE OF MADHYA PRADESH. THE ASSESSEE IS A REGISTERED EDUCATIONAL SOCIET Y AND IT IS RUNNING RAVI SHANKAR COLLEGE OF PHARMACY SINCE 2003-04 AND IMPARTING THE COURSES OF B. PHARMA DEGREE, APPROVED WITH ALL INDIA TECHNICAL EDUCATION AND GOVERNMENT OF MADHYA PRADESH. IN THE F.Y. 2004-05 THE ASSESSEE HAS ALSO ESTABLISHED RAVI SHANKAR TEACHERS TRAINING INSTITUTE WHICH IMPARTS B.ED. DEGREE RECOGNI ZED BY BARKATULLA UNIVERSITY OF BHOPAL AND GOVT. OF M.P. FRO M THE YEAR 2008-09 THE ASSESSEE ALSO STARTED M. PHARMA COURSES APPROVED FROM AICTE, GOVT. OF M.P. AND RGPV. THE ASSESSEE APPLIED FOR REGISTRATION U/S 12A OF THE ACT ON 29.3.2014 IN PRESCRIBED FORM NO. 10A. THE CIT REFU SED TO REGISTER THE SOCIETY. THE CIT CALLED FOR A REPORT FR OM THE ASSESSING OFFICER THROUGH THE ADDITIONAL CIT, RANGE-I , SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 3 BHOPAL AND THE REPORT OF THE ASSESSING OFFICER REPROD UCED BY THE CIT IS ALSO REPRODUCED HEREUNDER :- THE SOCIETY SARKAR MANSAROVER EDUCATION SOCIETY COMES UNDER MADHYA PRADESH SOCIETY REGISTRATION ACT, 1973. AFTER RECEIVING THE APPLICATION OF THE APPLICANT FROM THE O/O CIT, BHOPAL A LETTER THROUGH SPEED POST WAS SENT ON 28.05.2014 AT THE GIVEN ADDRESS TO FURNISH THE REQUIRED DOCUMENT ON 05.06.2014. THE APPLICANT SOCIETY HAS FILED REPLY ON 05.09.2014. ON VERIFICATION OF APPLICATION FILED BY THE APPLICANT IT IS FOUND THAT THE APPLICANT SOCIETY IS RUNNING RAVISHANKAR COLLEGE OF PHARMACY. FURTHER ON VERIFICATION OF ACCOUNTS PRODUCED BY THE APPLICANT IT IS FOUND THAT NO OTHER CHARITABLE ACTIVITIES ARE BEING CARRIED OUT BY THE APPLICANT SOCIETY AS PER BYE LAWS PRODUCED BY THEM AND SOCIETY HAS ALSO SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 4 NOT PRODUCED ANY PROOF IN SUPPORT TO CHARITABLE ACTIVITIES. ACCORDINGLY THE ASSESSING OFFICER HAS REPORTED THAT THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY MAY BE TAKEN AS NON SATISFACTORY. THIS REPORT OF THE ASSESSING OFFICER SHOWS THAT HE W AS CONVINCED WITH THE FACT THAT THE ASSESSEE IS RUNNING R AVI SHANKAR COLLEGE OF PHARMACY. THE ASSESSING OFFICER ALSO NOTED THAT ACCOUNTS WERE PRODUCED BY THE ASSESSEE. HOWEVER, HE HAS REPORTED THAT THE ASSESSEE IS NOT DOI NG OTHER CHARITABLE ACTIVITIES. ASSESSING OFFICER ALSO NO TED THAT THE ASSESSEE HAS NOT PRODUCED ANY PROOF IN SUPPORT OF OTHER CHARITABLE ACTIVITIES. ON THESE FACTS, THE GENUIN ENESS OF THE ACTIVITIES WERE HELD TO BE NON-SATISFACTORY. TH E ADDL. CIT DID NOT RECOMMEND THE REGISTRATION AND THE CIT ACC EPT THE SAME AND REFUSED REGISTRATION. 3. BEFORE US IT WAS CLAIMED THAT IT IS AN UNDISPUTED F ACT THAT THE ASSESSEE WAS RUNNING RAVI SHANKAR COLLEGE OF SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 5 PHARMACY FOR IMPARTING EDUCATION. THE FIRST OBJECT OF THE SOCIETY WAS TO PROVIDE EDUCATION. THE FACT THAT THE ASSE SSEE WAS RUNNING COLLEGE IS ACCEPTED BY THE ASSESSING OFFI CER HIMSELF. THE ONLY ISSUE RAISED BY THE ASSESSING OFFI CER IS THAT THE ASSESSEE SOCIETY IS NOT CARRYING ON OTHER CHAR ITABLE ACTIVITIES. IN OUR CONSIDERED OPINION, THIS CANNOT BE A BASIS FOR REFUSAL OF REGISTRATION U/S 12A OF THE ACT. ONE OF THE MAIN AIMS AND OBJECTS OF THE ASSESSEE IS TO PROVIDE EDUCATION WHICH THE ASSESSEE IS DOING. THE SAME FACT HAS BEEN ACCEPTED BY THE REVENUE AUTHORITIES. THE ASSESSEE IS RUNNING A COLLEGE FOR EDUCATION. THERE IS NO REPORT T HAT THE ASSESSEE IS NOT FOLLOWING ITS RULES AND REGULATIONS. N OT DOING ANY OTHER CHARITABLE ACTIVITY CANNOT BE A BASIS FOR REFUSAL OF REGISTRATION. THEREFORE, WE ARE OF THE VIE W THAT THE ASSESSEE DESERVES FOR REGISTRATION U/S 12A OF THE ACT. WE DIRECT THE CIT TO REGISTER THE SOCIETY U/S 12A O F THE ACT. SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 6 4. ALTHOUGH IT WAS NOT COMING OUT FROM THE ORDER OF THE CIT FOR REFUSAL OF REGISTRATION BUT THE LD. DR RAISED AN ISSUE REGARDING SURPLUS GENERATED BY THE ASSESSEE IN VARIOUS YEARS AND PLACED RELIANCE ON THE DECISION OF THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF YASH SOCIETY IN W.P. NO. 2565 OF 2010 DATED 12.3.2015 AND ITAT DECISION IN THE CASE OF HOSHANGABAD SHANTI NIKETAN MONTESSORI SCHOOL SOCIETY DATED 31.10.2012 IN ITA NO. 309/IND/2012. ON THIS ISSUE WE HOLD THAT IN THE CASE OF THE ASSESSEE TH ERE IS NO ALLEGATION OF SIPHONING OF ANY SURPLUS GENERATED DU RING THE ACTIVITIES FOR PROVIDING EDUCATION. IN THE ASSESSE ES CASE, THE SURPLUS GENERATED WAS 8.77% IN F.Y. 2011-12, 12.52% IN F.Y.2012-13 AND 14.12% IN F.Y. 2013-14, WH ILE IN THE CASE OF HOSHANGABAD SHANTI NIKETAN MONTESSORI SCHOOL SOCIETY THE SURPLUS WAS MORE THAN 20% OF THE GROSS RECEIPTS. FURTHER, THE DECISION OF THE HON'BLE BOMB AY HIGH COURT IN THE CASE OF YASH SOCIETY (SUPRA) IN THE WRIT SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 7 PETITION FILED BY THE ASSESSEE WAS FOR NOT GRANTING APP ROVAL U/S 10(23C)(VIA) WHEREIN THE PRIMARY REQUIREMENT WAS T HAT THE INSTITUTION IS ESTABLISHED FOR PHILANTHROPIC PURP OSES WHILE IN THE ASSESSEES CASE IT WAS A SOCIETY REGISTERE D FOR EDUCATIONAL PURPOSES AND THE APPLICATION OF THE ASSESSEE WAS FOR REGISTRATION U/S 12A OF THE ACT AND NOT FOR EXEMPTION SOUGHT U/S 10(23C) OF THE ACT. FOR GRANTIN G REGISTRATION TO THE ASSESSEE WE GET SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F QUEENS EDUCATION SOCIETY; 55 TAXMANN 255. THE ASSESSING OFFICERS REPORT SUBMITTED TO ADDITIONAL C IT HAS BEEN MADE THE BASIS FOR REJECTION OF THE ASSESSEES APPLICATION FOR GRANTING REGISTRATION U/S 12A OF THE AC T ITSELF ESTABLISHES THAT THE ASSESSEE WAS ENGAGED IN PROVIDING EDUCATION AND NO OTHER ACTIVITIES WERE CARRIE D OUT EXCEPT RUNNING EDUCATIONAL INSTITUTIONS. ALL THESE SARKAR MANSAROVER EDUCATIONAL SOCIETY ITA 711/IND/2014 8 CUMULATIVE FACTS MAKE US TO DIRECT THE REVENUE TO GRANT REGISTRATION TO THE ASSESSEE SOCIETY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. PRONOUNCED IN OPEN COURT ON 4 TH SEPTEMBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 4 TH SEPTEMBER, 2015 DN/-