Society for Socio-Economic Reforms, Health and Education, Kanpur V. CIT, Kanpur

ITA 717/LKW/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75132 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-12-2013
• Assessment Year: misc
• Appeal Filed On: 02-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.717/LKW/2010 ASSESSMENT YEAR:N.A. SOCIETY FOR SOCIO - ECONOMIC REFORMS, HEALTH & EDUCATION, 117/H - 1/02, PANDU NAGAR, KANPUR. PAN:AABAS9333G VS. C.I.T. - I, KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI RAJIV JAIN, CIT, D.R. DATE OF HEARING 18/12/2013 DATE OF PRONOUNCEMENT 0 7 / 0 1 /2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT - I, KANPUR U/S 12A OF THE I.T. ACT DATED 30/09/2010. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE COMMISSIONER OF INCOME TAX - I, KANPUR HAS ERRED ON FACTS AND IN LAW IN ARBITRARILY REJECTING THE APPLICATION FOR GRANT OF REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961. 2. BECAUSE THE APPLICATION FOR GRANT OF REGISTRATION U/S 12A HAVING BEEN MADE IN THE PRESCRIBED FORM AND AS PER THE 2 PRESCRIBED PROCEDURE AS LAID DOWN IN SECTION 12A, READ WITH SECTION 12AA OF THE ACT, COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE ASSESSEE SOCIETY IS NOT ELIGIBLE FOR REGISTRATION U/S 12A. 3. BECAUSE ALL THE NECESSARY PARTICULARS HAVING BEEN FURNISHED, (REQUIRED FOR THE PURPOSE OF GRANT OF REGISTRATION), THE COMMISSIONER OF INCOME TAX - I, KANPUR HAS WRONGLY INTERPRETED THE FACTS OTHERWISE AND HAVING FOUND NO FAULT WITH THE OBJECTS AND ACTIVITIE S OF THE INSTITUTION OF THE SOCIETY HAS REJECTED THE REGISTRATION SOLELY FOR THE REASON THAT THERE IS A SURPLUS. SUCH CONCLUSION IS CONTRARY TO THE PROVISIONS OF LAW. THE ORDER PASSED REJECTING THE APPLICATION BE QUASHED. 4. BECAUSE THE OBJECTS OF THE ASSESSEE SOCIETY BEING THAT OF EDUCATION, THE COMMISSIONER OF INCOME TAX - I, KANPUR HAS ERRED ON FACTS AND IN LAW IN ARBITRARILY HOLDING THAT THERE BEING SURPLUS, THE SOCIETY IS NOT ELIGIBLE FOR REGISTRATION, WHICH FINDING IS MISCONCEIVED AND CONTRARY TO TH E PROVISIONS OF LAW, IN AS MUCH AS THE PROVISIONS FOR EXEMPTION OF INCOME WOULD COME INTO PLAY ONLY WHEN THERE IS SURPLUS. 5. BECAUSE ON A PROPER CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE ALL CONDITIONS AS LAID DOWN HAVING BEEN FULFILLED, THE R EGISTRATION AS SOUGHT FOR BE GRANTED. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE BASIS OF DECISION OF LEARNED CIT IS THAT THE ASSESSEE IS DECLARING PROFIT IN FINANCIAL YEAR 2007 - 2008, 2008 - 2009 AND 2009 - 2010. HE SUBMITTED THAT ON THI S BASIS, THE CIT CAME TO THE CONCLUSION THAT THERE IS NO ELEMENT OF CHARITY IN THE ACTIVITIES OF THE ASSESSEE. HE SUBMITTED THAT CIT HAS WRONGLY NOTED THESE FIGURES OF THREE YEARS AS PROFIT AND SURPLUS WHEREAS THE FACT IS THAT THERE IS LOSS AND THE AMOUNT NOTED BY CIT IS LOSS AND DEFICIT AND NOT PROFIT. IN SUPPORT OF THIS CONTENTION, HE DRAWN OUR ATTENTION TO THE AUDITED ACCOUNTS OF ALL THESE THREE YEARS I.E. FINANCIAL YEAR 2007 - 2008, 2008 - 2009 AND 2009 - 2010 AND POINTED OUT THAT THE SAME AMOUNT IS NOTED B Y THE CIT AS INCOME AMOUNT WHICH IS LOSS AND NOT PROFIT/SURPLUS. 3 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF LEARNED CIT AND WE FIND THAT THE BASIS OF THE DECISION OF LEARNED CIT IS THAT THE ASSESSEE WAS HAVING PROFIT/SURPLUS IN FINANCIAL YEAR 2007 - 200 8, 2008 - 2009 AND 2009 - 2010. BUT THIS IS NOT FACTUALLY CORRECT BECAUSE AS PER AUDITED ACCOUNTS, WE HAVE SEEN THAT AMOUNT NOTED BY THE CIT IS CORRECT BUT THE SAME IS THE AMOUNT OF EXCESS OF EXPENDITURE OVER INCOME I.E. LOSS/DEFICIT AND IT IS NOT PROFIT/SURP LUS. ON THE BASIS OF THIS THAT THE ASSESSEE IS HAVING PROFIT, CIT CAME TO THE CONCLUSION THAT THERE IS NO ELEMENT OF CHARITY IN THE ACTIVITIES OF THE ASSESSEE BUT THIS IS FACTUALLY INCORRECT. HENCE, W E DO NOT FIND ANY MERIT IN THIS FINDING OF LEARNED CIT AND CONSIDERING THE FACTS OF THE PRESENT CASE, WE DIRECT LEARNED CIT - I, KANPUR TO GRANT REGISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7 T H JANUARY , 201 4 . *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR