M/s U.P Advocates Welfare Fund Trustee Committee, Lucknow V. Commissioner of Income Tax-I, Lucknow

ITA 756/LKW/2013

• Counselvise Citation: 75623714 RSA 2013
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-02-2014
• Assessment Year: misc
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GARG SHRI VIVEK MISH
• Keywords: Charitable institution; Question of law; Benefit of exemption
• Section: 143(3); 80G; 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.756/LKW/2013 ASSESSMENT YEAR:N.A. U.P. ADVOCATES WELFARE FUND TRUSTEE COMMITTEE, 24, DARULSHAFA, HAZARATGANJ, LUCKNOW. PAN:AAATU1733A VS. C.I.T. - 1, LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED ON BEHALF OF ASSESSEE AGAINST THE DENIAL OF REGISTRATION U/S 12A OF THE I NCOME T AX ACT BY REJECTING THE APPLICATION MOVED IN FORM NO. 10 ON 21/03/2013. 2. THE FACTS, IN BRIEF, BORNE OUT FROM THE RECORD, ARE THAT THE ASSESSEE APPELLANT COMMITTEE WAS CREATED ON 16/04/1974 UNDER THE UTTAR PRADESH ADVOCATE WELFARE FUND ACT, 1974 AND AN APPLICATION IN FORM 10A ALONG WITH THE COPIES OF AUDIT REPORT AND FINAL ACCOU NTS FOR THE ACCOUNTING YEAR ENDING 31/03/2010, 31/03/2011 AND 31/03/2012 WERE FILED. HAVING OBTAINED THE COMMENTS OF THE ASSESSING OFFICER, THE CIT DENIED THE REGISTRATION U/S 12AA OF THE ACT ON THE GROUND THAT THE BENEFITS UNDER THE SCHEMES OF THE APPELL ANT COMMITTEE ARE INTENDED SOLELY FOR THE WELFARE OF THE ADVOCATES AND THAT TOO ONLY FOR SUCH ADVOCATES WHO BECAME MEMBERS APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI VIVEK MISHRA, CIT, D.R. DATE OF HEARING 24/02/2014 DATE OF PRONOUNCEMENT 1 1 / 0 4 / 2 0 1 4 2 AFTER DUE COMPLETION OF THE PROCEDURE LAID DOWN AND ON PAYMENT OF ADMISSION FEE AND SUBSCRIPTION AS SPECIFIED IN THE PROVISIONS OF SE CTION 11 OF THE ACT. THE CIT HAS ALSO OBSERVED THAT THE BENEFICIARIES CONSTITUTE A GROUP OF INDIVIDUALS WHO ARE UNITED TOGETHER BY A COMMON TIE I.LE. BEING ADVOCATES AND BEING NECESSARILY MEMBERS OR NOMINEES, HEIRS ETC. OF SUCH MEMBERS. THUS, THE BENEFIT , THOUGH DISCERNIBLE, IS ONLY TO A SPECIFIED CLASS OF POTENTIAL BENEFICIARIES AND NOT TO PUBLIC. WITH REGARD TO PURCHASE AND SUPPLY OF BOOKS AND JOURNALS TO VARIOUS BAR ASSOCIATIONS, THE CIT HAS OBSERVED THAT NO BOOKS OF ACCOUNT, BILLS AND VOUCHERS WERE P RODUCED AND THE INCOME & EXPENDITURE ACCOUNT FOR THE ACCOUNTING YEAR ENDING ON 31/03/2010, 31/03/2011 AND 31/03/2012 DO NOT SHOW ANY EXPENDITURE ON ACCOUNT OF PURCHASE OF BOOKS AND JOURNALS ETC. 3. AGAINST THE DENIAL OF REGISTRATION, THE PRESENT APPEAL HA S BEEN PREFERRED BY THE ASSESSEE WITH THE SUBMISSION THAT THE APPELLANT COMMITTEE WAS CREATED ON 16/04/1974 UNDER THE UTTAR PRADESH ADVOCATE WELFARE FUND ACT, 1974 TO PROVIDE FOR ESTABLISHMENT AND OPERATION OF THE FUND FOR THE PROMOTION OF WELFARE OF THE A DVOCATES OF UTTAR PRADESH WITH THE OBJECTS OF THE GENERAL PUBLIC UTILITY. IN THE EARLIER YEARS, THE EXEMPTION U/S 11 WAS CLAIMED AND WAS ALLOWED BY THE REVENUE AUTHORITIES. THE ASSESSEE HAS FILED THE COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1 982 - 83 TO 1986 - 87 AND 1988 - 89 IN SUPPORT OF ITS CONTENTION THAT DURING THIS PERIOD, THE ASSESSMENTS WERE FRAMED U/S 143(3) OF THE ACT AND EXEMPTION U/S 11 WAS GRANTED TO THE ASSESSEE. IN ASSESSMENT YEAR 1988 - 89, INITIALLY THE EXEMPTION WAS DENIED BY THE A SSESSING OFFICER BUT LATER ON THE TRIBUNAL HAS GRANTED EXEMPTION U/S 11 OF THE ACT VIDE ORDER DATED 25/11/1991, WHICH WAS LATER ON APPROVED BY HON'BLE ALLAHABAD HIGH COURT. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THE APPELLANT COMMITTE E HAD BEEN TREATED AS CHARITABLE INSTITUTION WITHIN THE MEANING OF SECTION 2(15) OF THE ACT AND 3 FULFILLED ALL THE CONDITIONS FOR GRANT OF EXEMPTION U/S 11 OF THE ACT, THEREFORE, THERE IS NO REASON FOR DENIAL OF REGISTRATION U/S 12AA OF THE ACT. IN RESPONS E TO A QUERY AS TO WHEN THE REGISTRATION WAS ALREADY GRANTED TO THE ASSESSEE, WHY ANOTHER APPLICATION WAS MOVED FOR GRANT OF REGISTRATION VIDE APPLICATION DATED 21/03/2013, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT AT THE TIME OF CHANGE OF HEADQUARTE R IN 1989 FROM ALLAHABAD TO LUCKNOW, SOME PARTS OF RECORD WERE LOST AS A RESULT OF WHICH COMPLETE DETAILS OF EARLIER YEARS ARE NOT AVAILABLE. THUS, THE ASSESSEE WAS ADVISED TO SEEK REGISTRATION U/S 12AA TO KEEP THE RECORD INTACT. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS IN SUPPORT OF HIS CONTENTION THAT T HOUGH THE PRINCIPLES OF RES JUDICATA WILL NOT APPLY TO INCOME TAX PROCEEDINGS BUT WHEN A QUESTION OF LAW OR FACT IS DECIDED IN THE ASSESSEES OWN CASE IN EARLI ER ASSESSMENT YEARS AND THE IDENTICAL QUESTION COMES FOR CONSIDERATION IN LATER YEAR, THE AUTHORITIES SHOULD NOT TAKE A CONTRARY VIEW IN THE ABSENCE OF ANY NEW MATERIAL OR CHANGE IN CIRCUMSTANCES. ( I ) RADHASOAMI SATSANG VS COMMISSIONER OF INCOME - TAX [1992] 1 93 ITR 321 (SC) ( II ) COMMISSIONER OF INCOME - TAX VS VELIMALAI RUBBER CO. LTD. [1990] 181 ITR 299 (KER) ( III ) DCIT VS. JAIPRAKASH INVESTMENT PVT. LTD. 2006 (8) MTC 133 (I.T.A.T., LKO.) ( IV ) COMMISSIONER OF INCOME - TAX VS NATIONAL BEARING CO. LTD. [1994] 208 ITR 872 (RAJ) (V) CIT VS. HARIG CRANK SHAFTS LTD. [2008] 173 TAXMAN 152 (DEL) 4. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF TAX PRACTITIONERS BENEVOLENT FUND VS. CIT [2004] 188 CTR 26 WITH T HE SUBMISSION THAT UNDER THE SIMILAR FACTS, EXEMPTION U/S 80G WAS GRANTED. IN THAT CASE, THE TAX PRACTITIONERS BENEVOLENT FUND WAS CREATED FOR THE BENEFIT TO PROVID E ASSISTANCE TO NECESSITOUS PERSON OR TAX PRACTITIONERS OR THEIR WIDOWS, 4 CHILDREN AND DEPEN DENT AND CARRY ON ANY OTHER ACT FOR THE ADVANCEMENT OF GENERAL PUBLIC UTILITY WITHOUT DISTINCTION OF SEX, COLOUR, CASTE CREED OR RELIGION. THEREFORE, THE REGISTRATION U/S 12A MAY BE GRANTED TO THE ASSESSEE. 5. THE LEARNED CIT, D.R. PLACED RELIANCE UPON TH E ORDER OF CIT WITH THE SUBMISSION THAT THE ASSESSEE COMMITTEE WAS SET UP/CREATED TO PROVIDE ASSISTANCE TO THE DEPENDENTS OF THE ADVOCATES AND NOT TO PROVIDE ASSISTANCE TO GENERAL PUBLIC. 6. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF ORDERS OF THE LOWER AUTHORITIES AND THE DOCUMENTS PLACED ON RECORD, WE FIND THAT DURING THE ASSESSMENT YEAR 1982 TO 1986 - 87 AND 1988 - 89, THE ASSESSEE HAS BEEN EN JOYING THE BENEFIT OF EXEMPTION U/S 11 OF THE ACT AS IS EVIDENT FROM THE ASSESSMENT ORDERS OF THESE ASSESSMENT YEARS PLACED ON RECORD AT PAGE NO. 66 TO 78 OF THE COMPILATION OF THE ASSESSEE. BENEFIT OF SECTION 11 CAN ONLY BE GRANTED TO THE ASSESSEE WHEN O RDER U/S 12AA IS PASSED IN FAVOUR OF THE ASSESSEE GRANTING REGISTRATION U/S 12AA OF THE ACT. IT HAS BEEN CONTENDED ON BEHALF OF THE ASSESSEE THAT AT THE TIME OF CHANGE OF HEADQUARTER IN 1989 FROM ALLAHABAD TO LUCKNOW, SOME PARTS OF RECORDS WERE LOST AS A RESULT OF WHICH COMPLETE DETAILS OF EARLIER ASSESSMENT YEARS WERE NOT AVAILABLE. IN ORDER TO KEEP THE RECORD STRAIGHT , THE ASSESSEE HAS APPLIED FOR FRESH REGISTRATION U/S 12AA OF THE ACT. WHILE GRANTING REGISTRATION, THE CIT SHOULD HAVE EXAMINED THE PAST RECORD OF THE ASSESSEE AND THE ASSESSMENTS FRAMED U/S 143(3) OF THE ACT FOR EARLIER ASSESSMENT YEARS. IT HAS BEEN REPEATEDLY HELD BY THE HON'BLE APEX COURT AS WELL AS THE OTHER HIGH COURTS THAT WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS. THE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE. LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT 5 REST JUDICIAL AND QUASI - JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTI VITY. IN THE CASE OF RADHASOAMI SATSANG VS. CIT (SUPRA) IT HAS BEEN HELD THAT EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEA RS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND THE PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. IN THE ABSENCE OF ANY DI STINGUISHING FEATURE/ FACTS AND CIRCUMSTANCES, EARLIER VIEW SHOULD NOT BE DEPARTED IN IDENTICAL CIRCUMSTANCES. 6.1 IN THE LIGHT OF AFORESAID JUDGMENTS, WE ARE OF THE VIEW THAT ONCE THE BENEFIT OF SECTION 11 WAS GRANTED TO THE ASSESSEE IN EARLIER ASSESSMENT YEARS, IT SHOULD NOT BE WITHDRAWN BY DENYING REGISTRATION U/S 12AA OF THE ACT UNDER SIMILAR SET OF FACTS AND CIRCUMSTANCES. WE HAVE ALSO CAREFULLY EXAMINED THE OBJECTS OF THE APPELLANT COMMITTEE AND WE FIND THE OBJECTS OF THE APPELLANT COMMITTEE ARE FOR THE WELFARE OF THE ADVOCATES AND THEIR DEPENDENTS AND ALSO FOR CONSTRUCTION OF CHAMBERS, SHEDS FOR THE ADVOCATES AND DIFFERENT BAR ASSOCIATION WITHOUT ANY DISTINCTION OF SEX, CASTE, COLOUR OR RELIGION. UNDER SIMILAR SET OF FACTS, THE HON'BLE BOMBAY HIGH C OURT HAS CONSIDERED THE ACTIVITIES OF THE TAX PRACTITIONERS BENEVOLENT FUND AS CHARITABLE IN NATURE AND GRANTED RECOGNITION U/S 80G OF THE ACT. THE COPY OF THE JUDGMENT IS ALSO PLACED ON RECORD. IN THAT JUDGMENT THE RELIANCE WAS PLACED IN THE CASE OF THE CHARTERED ACCOUNTANTS BENEVOLENT FUND, WHICH WAS ALSO CONSIDERED TO BE CHARITABLE TRUST AND ALLOWED RECOGNITION U/S 80G OF THE ACT. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED FOR REGISTRATION U/S 12A OF THE ACT AS IT H AS ALREADY BEEN ALLOWED BENEFIT OF EXEMPTION OF SECTION 11 IN EARLIER ASSESSMENT YEARS. WHATEVER REASONS ARE ILLUSTRATED BY THE CIT FOR DENIAL OF REGISTRATION ARE NOT SUSTAINABLE AS NOTHING HAS 6 BEEN BROUGHT ON RECORD THAT THE ASSESSEE WAS ENGAGED IN THE A CTIVITIES OTHER THAN THE CHARITABLE. THEREFORE, WE SET ASIDE THE ORDER OF CIT AND DIRECT HIM TO GRANT REGISTRATION U/S 12AA OF THE ACT BY PASSING A SEPARATE ORDER. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER WAS PRONOUNCED IN THE OP EN COURT ON 1 1 / 0 4 / 2 0 1 4 ) SD/. SD/. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 1 / 0 4 / 2 0 1 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