Society For Betterment Of Education Midnapore, Paschim Midnapore V. CIT (Exemption), Kolkata , Kolkata

ITA 733/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0499 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 18-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 10AA; 12AA; 12

Judgement Text

1 ITA NO. 733/KOL/2018 SOCIETY FOR BETTERMENT OF EDUCATION MIDNAPORE , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 733/KOL/2018 ASSESSMENT YEAR: SOCIETY FOR BETTERMENT OF EDUCATION MIDNAPORE (PAN: AAHAS9354D) VS. COMMISSIONER OF INCOME-TAX (EXEMPTION), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 06.09.2018 DATE OF PRONOUNCEMENT 14.09.2018 FOR THE APPELLANT SHRI ANIKESH BANERJEE & MISS RAJ ASHREE DUTTA, ADVOCATES FOR THE RESPONDENT MD. USMAN, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE SOCI ETY AGAINST THE ORDER OF LD. CIT(E), KOLKATA DATED 28.03.2018 DENYING REGISTRATI ON U/S. 12AA OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SO CIETY CAME INTO EXISTENCE VIDE MEMORANDUM OF ASSOCIATION DATED 03.05.1975. THE SO CIETY FILED APPLICATION IN FORM 10AA FOR REGISTRATION U/S. 12AA OF THE ACT ON 01.09 .2017. THE LD. CIT(E) DURING THE HEARING TOOK NOTE OF THE FACT THAT THE ASSESSEE SOC IETY WAS HAVING SURPLUS FUND IN THE PAST FIVE YEARS FROM 2012-13 TO 2016-17 AND TAKING NOTE THAT SINCE ASSESSEES GROSS RECEIPT WAS MORE THAN RS. 1 CR. IT WAS NOT ELIGIBLE TO CLAIM U/ S. 10(23C)(IIIAD) OF THE ACT. ACCORDING TO THE LD. CIT(E), EVEN THOUGH THE ASSESSEE SOCIETY HA VING SURPLUS AMOUNT THEY HAVE NOT PAID THE TAXES VOLUNTARILY. EVEN THOUGH THE LD. CIT(E) ACKNOWLEDGED THE FACT THAT ASSESSEE SOCIETYS OBJECT FALLS UNDER THE AMBIT OF SEC. 2(15 ) OF THE ACT AND IT RUNS AN EDUCATIONAL 2 ITA NO. 733/KOL/2018 SOCIETY FOR BETTERMENT OF EDUCATION MIDNAPORE INSTITUTION, THE GENUINENESS OF ITS ACTIVITIES COUL D NOT BE SUBSTANTIATED BECAUSE IT DID NOT PAY TAXES BECAUSE IT DID NOT ENJOY REGISTRATION U/S. 12 AA OR 10(23C)(IIIAD) OF THE ACT, THEREFORE, THE LD. CIT(E) WAS PLEASED TO REJECT REGISTRATION U /S. 12AA OF THE ACT. AGGRIEVED, ASSESSEE IS BEFORE US. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. SINCE FACTS STATED ABOVE ARE NOT DISPUTED, T HE SAME ARE NOT REPEATED FOR THE SAKE OF BREVITY. THOUGH THE LD. CIT(E) ACKNOWLEDGES THE FAC T THAT THE ASSESSEE SOCIETYS OBJECTIVES FALL UNDER THE AMBIT OF SEC. 2(15) OF THE ACT AND I T RUNS AN EDUCATIONAL INSTITUTION, HE WAS NOT CONVINCED TO GRANT REGISTRATION U/S. 12AA OF THE AC T ON THE AFORESAID REASONS STATED HEREIN ABOVE. HOWEVER WE CANNOT COUNTENANCE THE ACTION OF THE LD. CIT(E) SINCE WE ARE OF THE OPINION THAT SO FAR AS GRANT OF REGISTRATION U/S. 1 2AA OF THE ACT IS CONCERNED, THE LD. CIT(E)S JURISDICTION IS ONLY TO VERIFY THE OBJECTS OF THE INSTITUTION/TRUST/SOCIETY AND LOOK INTO THE GENUINENESS OF THE ACTIVITIES, MEANING THE REBY THAT HE HAS TO SATISFY HIMSELF THAT THE OBJECTS ARE CHARITABLE IN NATURE AND THE ACTIVITIES BEING CARRIED ON OR TO BE CARRIED ON ARE GENUINE, MEANING THEREBY THAT THEY ARE IN CONSONANC E FOR ACHIEVING THE CHARITABLE OBJECT AND NOTHING ELSE. THE LD. CIT(E) WHILE DISCHARGING HIS DUTY FOR GRANT OF REGISTRATION U/S. 12AA OF THE ACT HAS TO RESTRICT HIMSELF IN THE FIEL D WHICH WE HAVE STATED ABOVE. 4. WE NOTE THAT THE LD. CIT(E) SHOULD HAVE EXAMINED THE GENUINENESS OF THE SOCIETY AND ITS ACTIVITIES. THERE WAS NO MATERIAL TO SHOW THAT THE ASSESSEE SOCIETY WAS NOT GENUINE OR THAT ITS ACTIVITIES WERE NOT AS PROFESSED IN THE MEMORANDUM OF ASSOCIATION. THERE WAS NO FINDING THAT THE ASSESSEE SOCIETY WAS A SHAM SOC IETY. SINCE THE PRIMARY OBJECT OF THE ASSESSEE/SOCIETY WAS TO GIVE EDUCATION AND THE OBJE CTIVE IS CHARITABLE IN NATURE AS SPECIFIED IN SEC. 2(15) OF THE ACT, THE LD. CIT(E) SHOULD HAV E EXERCISED HIS JURISDICTION WELL WITHIN THE AREA SPECIFIED ABOVE. IN THE LIGHT OF THE AFOR ESAID DISCUSSION, WE ARE INCLINED TO SET ASIDE THE ORDER OF LD. CIT(E) AND REMAND THE MATTER BACK TO HIS FILE TO CONSIDER THE APPLICATION FOR REGISTRATION OF THE ASSESSEE SOCIETY IN THE LIGHT O F THE AFORESAID OBSERVATION. THE QUESTION AS TO WHETHER THE PAST INCOME OF THE ASSESSEE SOCIETY IS LEVIABLE TO TAX IS THE LOOKOUT OF THE AO OF THE ASSESSEE AND IS NOT THE ISSUE BEFORE LD CIT( E). AT THE COST OF REPETITION, WE STATE THE 3 ITA NO. 733/KOL/2018 SOCIETY FOR BETTERMENT OF EDUCATION MIDNAPORE LD CIT(E) WHILE CONSIDERING THE APPLICATION OF A SO CIETY FOR REGISTRATION U/S. 12AA OF THE ACT HAS TO VERIFY THE OBJECTS OF THE INSTITUTION/TR UST/SOCIETY AND LOOK INTO THE GENUINENESS OF THE ACTIVITIES, MEANING THEREBY THAT HE HAS TO SATI SFY HIMSELF THAT THE OBJECTS ARE CHARITABLE IN NATURE AND THE ACTIVITIES BEING CARRIED ON OR TO BE CARRIED ON ARE GENUINE, MEANING THEREBY THAT THEY ARE IN CONSONANCE FOR ACHIEVING THE CHARI TABLE OBJECT AND NOTHING ELSE. THE LD. CIT(E) WHILE DISCHARGING HIS DUTY FOR GRANT OF REGI STRATION U/S. 12AA OF THE ACT HAS TO RESTRICT HIMSELF IN THE FIELD WHICH WE HAVE STATED ABOVE.IT HAS TO BE REMEMBERED THAT IF THE ASSESSEE SOCIETY HAS SURPLUS OR ANY INCOME HAS ESCA PED ASSESSMENT THERE ARE SUFFICIENT POWER VESTED WITH THE DEPARTMENT TO TAX THE ASSESSE E SOCIETY AS PER LAW AND IN ACCORDANCE TO LAW. WITH THE AFORESAID OBSERVATION, WE ARE INCLIN ED TO SET ASIDE THE ORDER OF THE LD. CIT(E) AND REMAND THE MATTER BACK TO HIS FILE FOR FRESH AD JUDICATION OF THE APPLICATION FOR REGISTRATION U/S. 12AA OF THE ACT. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14TH SEP TEMBER, 2018. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14TH SEPTEMBER, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SOCIETY FOR BETTERMENT OF EDUCATION MIDNAPORE OF SEPOY BAZAR, MIDNAPORE SADAR, PASCHIM MIDNAPORE-721101. 2 RESPONDENT CIT(E), KOLKATA 3. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY