Appeal details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 93815 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
10-06-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
03-06-2015
Assessment Year
misc
Appeal Filed On
23-05-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 712 /PN/201 1 ASSESSMENT YEAR : PUNE DISTRICT SECURITY GUARDS BOARD, 2 ND FLOOR, 29/2, SHNATI KUNJ, SOMWAR PETH, PUNE-411011 VS. COMMISSIONER OF INCOME TAX V, PUNE (APPELLANT) (RESPONDENT) PAN NO. AABTP3601M ASSESSEE BY: SHRI SHARAD SHAH REVENUE BY: MS. M.S. VERMA DATE OF HEARING : 03-06-2015 DATE OF PRON OUNCEMENT : 10-06-2015 ORDER PER VIKAS AWASTHY, JM:- THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX-V, PUNE DATED 21-12-2010 REJ ECTING APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION U/S. 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A BOARD ESTABLISHED WITH THE MAIN OBJECT OF R EGULATING EMPLOYMENT OF PRIVATE SECURITY GUARDS EMPLOYED IN FACTORIES AND OTHER ESTABLISHMENTS. FURTHER, IT ENDEAVORS TO MAKE BETTER PR OVISIONS FOR THEIR TERMS AND CONDITIONS OF EMPLOYMENT AND WELFARE. THE ASSES SEE BOARD HAS BEEN ESTABLISHED UNDER THE MAHARASHTRA PRIVATE SEC URITY GUARDS (REGULATION OF EMPLOYMENT AND WELFARE) ACT, 1981. THE ASSES SEE MADE 2 ITA NO. 712/PN/2011 AN APPLICATION FOR GRANT OF REGISTRATION U/S. 12A OF THE ACT . THE SAME WAS REJECTED BY THE COMMISSIONER OF INCOME TAX VIDE OR DER DATED 30-11-2007 FOR NON FURNISHING OF DOCUMENTS AS CALLED FOR B Y THE COMMISSIONER OF INCOME TAX AND CERTAIN OTHER DEFECTS. TH E ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL IN ITA NO. 583/PN /2008. THE CO-ORDINATE BENCH OF THE TRIBUNAL VIDE ORDER DATED 31-08 -2009 REMITTED THE MATTER BACK TO THE COMMISSIONER OF INCOME TAX TO R E-CONSIDER THE CASE OF THE ASSESSEE FOR GRANT OF REGISTRATION. AGAIN, TH E COMMISSIONER OF INCOME TAX VIDE IMPUGNED ORDER REJECTED THE APPLICATIO N OF ASSESSEE FOR GRANT OF REGISTRATION. THE COMMISSIONER OF INCOME TAX HELD THAT THE OBJECTS OF THE ASSESSEE FALL UNDER THE CATEGORY OF GENE RAL PUBLIC UTILITY. THE ASSESSEE IS CHARGING FEE IN LIEU OF SERVICES RENDERED. IN VIEW OF THE AMENDED PROVISIONS OF SECTION 2(15), THE ACTIVITIES OF THE ASS ESSEE/BOARD ARE NOT IN THE NATURE OF CHARITY. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TAX, TH E ASSESSEE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI SHARAD SHAH APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE IS IDENTICAL TO THE CASE DECIDED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 1379/PN/2010 IN THE CASE OF NASHIK DISTRICT SECURITY GUARDS BOARD VS. CIT DECIDED O N 20-02-2015. THE TRIBUNAL IN THE SAID CASE DIRECTED COMM ISSIONER OF INCOME TAX TO GRANT REGISTRATION TO THE ASSESSEE-APPELLANT. 4. ON THE OTHER HAND MS. M.S. VERMA REPRESENTING THE DE PARTMENT SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX AND P RAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE IMPUGNED ORDER. WE HAV E ALSO 3 ITA NO. 712/PN/2011 EXAMINED THE ORDER OF THE TRIBUNAL ON WHICH THE LD. AR HA S PLACED RELIANCE. 6. THE ASSESSEE BOARD HAS BEEN ESTABLISHED FOR REGULATIN G EMPLOYMENT OF PRIVATE SECURITY GUARDS EMPLOYED IN FACTORIES AND ESTABLISHMENT. THE ASSESSEE IS WORKING FOR THE WELFARE OF T HE AFORESAID PRIVATE SECURITY GUARDS. THE COMMISSIONER OF INCOME TAX HAS ADMITTED THE FACT THAT THE ASSESSEE HAS BEEN ESTABLISHED FOR CHA RITABLE PURPOSE AND THE NATURE OF ACTIVITIES CARRIED OUT FALL UNDER THE CAT EGORY GENERAL PUBLIC UTILITY. THE COMMISSIONER OF INCOME TAX DECLINED T O GRANT REGISTRATION U/S. 12AA OF THE ACT ON THE GROUND THAT TH E ASSESSEE IS PROVIDING SERVICES IN LIEU OF FEE. SINCE, THE ACTIVITIES CARRIE D OUT BY THE ASSESSEE FALL UNDER THE LAST LIMB I.E. ADVANCEMENT OF GENE RAL PUBLIC UTILITY OF CHARITABLE PURPOSE AS DEFINED U/S. 2(15) OF THE A CT, THE ASSESSEE CEASES TO BE A CHARITABLE ORGANIZATION. 7. WE FIND THAT IDENTICAL ISSUE HAD COME UP BEFORE THE CO -ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF NASHIK DISTRICT SECUR ITY GUARDS BOARD VS. CIT (SUPRA). THE BENCH HELD THAT EVEN IF THE AS SESSEE IS CHARGING FEE WHICH IS VERY NOMINAL, THE ASSESSEE DESERVE S TO BE REGISTERED U/S. 12AA OF THE ACT. THE FINDINGS OF THE TRIBUN AL ARE AS UNDER: 8. FURTHER, THE COMMISSIONER HAS REFERRED TO THE FIRS T PROVISO TO SECTION 2(15) OF THE ACT WHICH HAS BEEN INSERTED BY THE FINANCE (NO.2) ACT, 2009 W.R.E.F. 01.04.2009. IN TERMS OF THE SAID PROVISO WHERE THE OBJECT IS OF ADVANCEMENT OF GENERAL PUBLIC UTILITY, IT SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES THE CARRYIN G ON OF ANY ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDER ATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM 4 ITA NO. 712/PN/2011 SUCH ACTIVITIES. ON THE BASIS OF THE AFORESAID PROVIS O TO SECTION 2(15) OF THE ACT, IT IS SOUGHT TO BE MADE OUT BY THE COMMIS SIONER THAT SINCE THE ASSESSEE BOARD IS TO COLLECT A LEVY FROM THE COMPANIES/ESTABLISHMENTS REGISTERED WITH IT, THEREFOR E, ITS ACTIVITIES CAN NO LONGER BE TAKEN AS FOR CHARITABLE PURPOSE. 9. WE HAVE CONSIDERED THE AFORESAID OBJECTION AND FI ND THAT THE ACTIVITIES OF THE ASSESSEE BOARD HAVE NOT BEEN APPRE CIATED BY THE COMMISSIONER IN ITS CORRECT PERSPECTIVE. IT IS ABUNDA NTLY CLEAR AS PER THE PROVISIONS OF THE MAHARASHTRA PRIVATE SECURITY G UARDS (REGULATION OF EMPLOYMENT AND WELFARE) ACT, 1981 THAT THE SAID LEGISLATION IS INTENDED TO REGULATE THE EMPLOYMENT OF PRIVATE SECURITY GUARDS EMPLOYED IN FACTORIES AND ESTABLISHMENTS IN T HE STATE OF MAHARASHTRA FOR MAKING BETTER PROVISIONS IN THE TER MS AND CONDITIONS OF THEIR EMPLOYMENT AND WELFARE THROUGH TH E ESTABLISHMENT OF THE BOARDS. THE APPLICANT BOARD BE FORE US IS WITH REGARD TO THE NASHIK DISTRICT IN MAHARASHTRA. THE MA HARASHTRA PRIVATE SECURITY GUARDS (REGULATION OF EMPLOYMENT AND WELFARE) ACT, 1981 FURTHER PRESCRIBES THAT THE STATE GOVERNME NT BY MEANS OF A SCHEME PROVIDE FOR THE REGISTRATION OF THE EMPLOYE RS AND SECURITY GUARDS. THE SAID STATUE ALSO PROVIDES FOR DECIDING T HE RATE OF SERVICES, PAYMENT, OVERTIME PAYMENT, LEAVE WITH WAGES, G RATUITY, ETC.. THE STATUTE ALSO PROVIDES FOR DECIDING THE TIME W ITHIN WHICH SHOULD BE REGISTERED PRINCIPAL EMPLOYER ARE TO REMIT TH E WAGES PAYABLE TO THE REGISTERED SECURITY GUARDS. THE STATUT E ALSO PROVIDES FOR CONSTITUTION OF ANY FUND OR FUNDS INCLUDING, PROVI DENT FUND FOR THE SECURITY GUARDS. THE STATUTE ALSO PROVIDES FOR TH E SCHEME BY WHICH THE COST OF OPERATING THE SCHEME IS TO BE DEF RAYED. THE GOVERNMENT OF MAHARASHTRA IS ALSO EMPOWERED TO PROVI DE FOR CONSTITUTING THE AUTHORITY WHO SHALL BE RESPONSIBLE FOR THE ADMINISTRATION OF THE SCHEME. THE STATUTE ALSO PROVID ES FOR ESTABLISHMENT OF BOARDS, WHO ARE UNDER THE SUPERINTE NDENCE AND CONTROL OF THE GOVERNMENT OF MAHARASHTRA. IN-FACT, THE STATUTE ALSO PROVIDES THE MANNER IN WHICH THE PROPERTY, FUNDS AND ASSETS OF THE BOARD ARE TO BE HELD AND APPLIED SUBJECT TO THE PRO VISIONS AND FOR THE PURPOSES OF THE SCHEME FORMULATED UNDER THE SAI D STATUTE. WE ARE ENUMERATING THE AFORESAID CLAUSES OF THE MAHARA SHTRA PRIVATE SECURITY GUARDS (REGULATION OF EMPLOYMENT AND WELFARE ) ACT, 1981 ONLY TO POINT OUT THAT THE LEGISLATURE HAS ENACTED TH E AFORESAID 5 ITA NO. 712/PN/2011 STATUTE NOT WITH THE PURPOSE OF CARRYING OUT OF ANY TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE S IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS. OSTENSIBLY, THE SAID OBJECTI VES ARE FOR REGULATING THE EMPLOYMENT OF PRIVATE SECURITY GUA RDS EMPLOYED IN FACTORIES AND ESTABLISHMENTS IN THE STATE OF MAH ARASHTRA AND FOR MAKING BETTER PROVISION FOR TERMS AND CONDITIONS OF THEIR EMPLOYMENT AND WELFARE. CLEARLY, IT IS A WELFARE MEASUR E OF THE GOVERNMENT OF MAHARASHTRA AND IN OUR VIEW, THE ACTIV ITIES OF THE BOARD CANNOT BE SAID TO BE FALLING FOUL OF THE PROVISO TO SECTION 2(15) OF THE ACT, AS CONTENDED BY THE COMMISSIONER. WE ARE UNABLE TO AFFIRM THE AFORESAID STAND OF THE COMMISSIONER. 10. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE POIN TED OUT THAT SIMILAR TO THE MAHARASHTRA PRIVATE SECURITY GUARDS (R EGULATION OF EMPLOYMENT AND WELFARE) ACT, 1981, THE STATE OF MAHARA SHTRA ALSO ENACTED THE MAHARASHTRA MATHADI, HAMAL AND OTHER MAN UAL WORKERS (REGULATION OF EMPLOYMENT AND WELFARE) ACT, 19 69 UNDER WHICH AMRAVATI MATHADI AND UNPROTECTED LABOUR BOARD , AMRAVATI WAS CONSTITUTED. THE LD. REPRESENTATIVE POINTED OUT TH AT THE TWO STATUES ENACTED BY THE STATE OF MAHARASHTRA ARE SIMI LAR, AS ONE OF THEM DEALS WITH THE PRIVATE SECURITY GUARDS EMPLOYED IN FACTORIES AND ESTABLISHMENT IN THE STATE OF MAHARASHTRA AND O THER DEALS WITH UNPROTECTED MANUAL WORKERS EMPLOYED IN CERTAIN EMPLOY MENTS IN THE STATE OF MAHARASHTRA. IT WAS POINTED OUT THAT BOT H THE STATUES ARE PARI-MATERIA. THE LD. REPRESENTATIVE POINTED OUT T HAT AMRAVATI MATHADI AND UNPROTECTED LABOUR BOARD, AMRAVATI CONS TITUTED BY GOVERNMENT OF MAHRASHTRA U/S 6 OF THE MAHARASHTRA M ATHADI, HAMAL AND OTHER MANUAL WORKERS (REGULATION OF EMPLOYMEN T AND WELFARE) ACT, 1969 WAS GRANTED REGISTRATION BY THE CO MMISSIONER OF INCOME TAX-III, NAGPUR U/S 12AA OF THE ACT VIDE ORDE R DATED 27.09.2012. IT HAS ALSO BEEN POINTED OUT THAT THE AKOLA -WASHIM- BULDHANA DISTRICT MATHADI AND UNPROTECTED LABOUR BOA RD CONSTITUTED U/S 6 OF THE MAHARASHTRA MATHADI, HAMAL A ND OTHER MANUAL WORKERS (REGULATION OF EMPLOYMENT AND WELFARE) ACT, 1969 WAS ALSO GRANTED THE REGISTRATION BY THE COMMISSIONE R OF INCOME TAX-I, NAGPUR VIDE ORDER DATED 05.09.2012, COPIES OF WH ICH HAS BEEN PLACED ON RECORD. IT WAS, THEREFORE, CONTENDED THAT IN SIMILAR SITUATION THE IMPUGNED PASSED BY THE COMMISSIONER IS UNSUSTAINABLE. 6 ITA NO. 712/PN/2011 11. IN OUR CONSIDERED OPINION, THE OBJECTIONS RAISED BY THE COMMISSIONER ARE NOT GERMANE TO REJECT THE ASSESSEE S PLEA FOR REGISTRATION U/S 12A(1)(A) OF THE ACT. IN VIEW OF THE AFORESAID DISCUSSION AND HAVING REGARD TO THE ENTIRETY OF FAC TS AND CIRCUMSTANCES OF THE CASE, WE HEREBY SET-ASIDE THE IMPUGNED ORDER OF THE COMMISSIONER AND DIRECT HIM TO ALLOW REGISTRATI ON TO THE ASSESSEE U/S 12A(1)(A) OF THE ACT IN TERMS OF THE AP PLICATION MOVED BY THE ASSESSEE BEFORE HIM ON 31.03.2010. 8. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE DE CISION OF THE TRIBUNAL RENDERED IN THE CASE OF NASHIK DISTRICT SECURITY GUARDS BOARD VS. CIT (SUPRA). RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE COMMISSIONER TO GRANT RE GISTRATION TO THE ASSESSEE U/S. 12AA OF THE ACT ON THE APPLICATION ALREADY FILED BY IT. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 10 TH DAY OF JUNE, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 10 TH JUNE, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT - V, PUNE 4 5 THE DR, ITAT, A BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE
