Etawah Sarari Parks Samiti, Lucknow V. Commissioner of Income Tax (Exemption), Lucknow

ITA 796/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4446 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 31-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: YOGESH AGRAWAL
• Keywords: Benefit of exemption
• Section: 143(3); 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 796/LKW/2015 ETAWAH SAFARI PARKS SAMITI UTTAR PRADESH V. CIT (EXEMPTION) LUCKNOW T A N /PAN : (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI. YOGESH AGRAWAL, ADVOCATE RESPONDENT BY: SHRI. A. K. SINGH, CIT (DR) DATE OF HEARING: 03 02 2016 DATE OF PRONOUNCEMENT: 13 04 2016 PER SUNIL KUMAR YADAV: O R D E R THIS APPEAL IS PREFERRED BY T HE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) DENYING REGISTRATION UNDER SECTION 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (HEREINAFTER IN SHORT THE ACT') ON VARIOUS GROUNDS WHICH ARE AS UNDER: - 1 . THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), LUCKNOW [HERE - IN - AFTER REFERRED TO AS THE LD. CIT] ERRED ON FACTS AND IN LAW IN REJECTING THE GRANT OF REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT, 1961 AND IN ALLEGEDLY HOLDING THAT THE CONDITION FOR GRANT OF REGISTRATION A RE NOT MET BY THE SOCIETY AS THE APPLICANT IS NOT ENGAGED IN ANY CHARITABLE ACTIVITY AS SUCH. 2 . ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE PRESET CASE THE LD. CIT WAS NOT AT ALL JUSTIFIED IN HOLDING THAT THE ACTIVITIES OF THE SOCIETY ARE NOT CHARI TABLE IN NATURE AND IN NOT APPRECIATING THE CHARITABLE NATURE OF THE APPELLANT'S ACTIVITIES : - 2 - : WHICH INCLUDE PRESERVATION OF ENVIRONMENT, FOREST AND WILD LIFE ETC. AND STATING THAT THE APPELLANT IS NOT CARRYING OUT ANY CHARITABLE ACTIVITY. 3 . THE LD. CIT FURTHER GROSSLY ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT SOCIETY DID NOT PRODUCE ANY MATERIAL ON RECORD OR BOOKS OF ACCOUNT, BANK STATEMENT AND VOUCHERS ETC. WHEREAS IN FACT THE BOOKS WERE DULY PRODUCED, BANK STATEMENT WAS ATTACHED WITH THE REPLY A ND THUS THE FINDING IN THE IMPUGNED BEING WHOLLY BASED ON FALSITY AND UNTRUTH MAY KINDLY BE ORDERED TO BE QUASHED AND REGISTRATION GRANTED TO THE APPELLANT SOCIETY. 4 . IN PASSING A STEREOTYPED AND CRYPTIC ORDER WITHOUT ANY BASIS THE LD. CIT HAS GROSSLY ERRED ON FACTS AND IN LAW AS BOTH THE CHARITABLE NATURE AND ACTIVITY AS WELL AS THE GENUINENESS THEREOF ARE DULY PROVED AND HENCE THE ORDER PASSED ONLY ON NOTIONS, CONJECTURES AND SURMISES NEEDS TO BE SET ASIDE AND THE REGISTRATION BE GRANTED TO THE APPELLANT SO CIETY. 5 . THE LD. CIT FURTHER GROSSLY ERRED ON FACTS AND IN LAW IN CONCLUDING THAT INCOME HAS BEEN APPLIED DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF PERSONS SPECIFIED IN SEC. 13(3) OF THE ACT WITHOUT ANY MATERIAL ON RECORD WHOLLY ON ASSUMPTIONS, AND THUS THE FINDING BEING MISCHIEVOUS MAY KINDLY BE ORDERED TO BE QUASHED. 6 . THAT THE LD. CIT FAILED TO APPRECIATE THAT THE OBJECTS AND THE ACTIVITIES OF THE APPELLANT SOCIETY ARE CHARITABLE IN NATURE AND FOR GENERAL PUBLIC UTILITY WHICH SUCH FACT WAS ALREADY ON RECOR D AND THUS THE REGISTRATION OUGHT TO HAVE BEEN GRANTED U/S 12AA OF THE I.T. ACT, 1961. 7 . THE LD. CIT DID NOT GIVE PROPER AND SUFFICIENT OPPORTUNITY TO THE APPELLANT SOCIETY TO HAVE ITS SAY OR MAKE NECESSARY : - 3 - : COMPLIANCE TO THE REASONS RELIED UPON BY HIM IN REJ ECTING THE APPLICATION U/S I2AA AND FURTHER IN NOT GIVING DUE AND SUFFICIENT IMPORTANCE TO THE DOCUMENTS PRODUCED AND SUBMISSIONS MADE BEFORE HIM AND THUS THE ORDER MAY KINDLY BE SET ASIDE AND REGISTRATION GRANTED U/S 12 AA. 2 . THE FACTS IN BRIEF BORNE OUT FR OM THE RECORD ARE THAT THE ASSESSEE - SOCIETY FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A(A) OF THE INCOME TAX ACT, 1961 ON 9.6.2015 WITH THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION ) VID E LETTER DATED 26.11.2015 ISSUED NOTICE CALLING SPECIFIC QUERIES REGARDING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT FOR 15.12.2015. THE LD. COUNSEL FOR THE ASSESSEE, SHRI. SHRISH DIXIT APPEARED ON 15.12.2015 AND FILED WRITTEN SUBMISSI ONS ALONG WITH DOCUMENTS. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) ON THE SAME DAY PASSED AN ORDER ON THIS APPLICATION DENYING REGISTRATION ON THE GROUND THAT THE ASSESSEE - - SOCIETY COULD NOT PRODUCE THE BOOKS, BANK STATEMENTS AND VOUCHERS IN RESPECT OF EXPENSES CLAIMED BY THE APPLICANT - SOCIETY FOR VERIFICATION OF THE ACTIVITIES OF THE SOCIETY. WHILE DENYING REGISTRATION, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) HAS OBSERVED THAT NO COGENT EVIDENCE IS PRODUCED TO ENABLE THE REGISTERING AUTHORIT Y TO ARRIVE AT THE SATISFACTION MANDATED BY LAW. 3 . AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE ASSESSEE - SOCIETY WAS REGISTERED WITH THE REGISTRAR OF SOCIETY ON 24.7.2014 AND THEREAFTER IT APPLIED FOR REGISTRATION UND ER SECTION 12A OF THE ACT ON 19.6.2015 . T HOUGH THERE WAS SUFFICIENT TIME AVAILABLE WITH THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) TO EXAMINE THE NATURE OF ACTIVITIES O F THE ASSESSEE AND THE ACCOUNTS, BUT HE CHOSEN TO ISSUE NOTICE ONLY ON 26.11.2015 F OR : - 4 - : 15.12.2015 AND ON 15.12.2015 THE LD. COUNSEL FOR THE ASSESSEE APPEARED BEFORE THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) AND FILED ALL THE RELEVANT DOCUMENTS INCLUDING REGISTRATION CERTIFICATE, BYLAWS, LIST OF MEMBERS OF THE SOCIETY, RESOLUTION PASS ED BY THE SOCIETY, PAN DETAILS, COPY OF STATEMENT OF ACCOUNT AND VARIOUS LETTERS AND OTHER EVIDENCE RELATING TO THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE, BUT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) DID NOT EXAMINE THE EVIDENCE FILED BEFORE HIM AND ON THE SAME DAY HE PASSED AN ORDER DENYING REGISTRATION. 4 . THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE - SOCIETY IS FORMED BY THE SENIOR OFFICERS OF THE STATE GOVERNMENT TO DEVELOP A SAFARI PARK WHERE WILD ANIMALS CAN BE KEPT AND PROTECTED . FROM THE OBJECTS OF THE SOCIETY, IT IS QUITE EVIDENT THAT THE SOCIETY WAS FORMED TO PRESERVE WILD ANIMALS AND TO PROVIDE BETTER ATMOSPHERE FOR THEIR DEVELOPMENT. HE HAS ALSO FURNISHED A LIST OF HIGH POWER COMMITTEE, WHICH IS HEADED BY THE CHIEF MINISTE R OF THE STATE AND ITS MEMBERS ARE VARIOUS MINISTERS, CHIEF SECRETARY OF THE STATE AND OTHER SENIOR OFFICERS OF THE STATE GOVERNMENT. THE GOVERNING BODY COMPRISES OF THE PRINCIPAL SECRETAR IES OF THE VARIOUS DEPARTMENTS OF THE STATE GOVERNMENT. SINCE THE SOCIETY IS IN FACT CONTROLLED BY THE STATE GOVERNMENT AND FUNDS WERE ALSO OBTAINED FROM THE STATE GOVERNMENT , THE OBJECT OF THE SOCIETY SHOULD NOT HAVE BEEN DOUBTED WITHOUT BRINGING ANY EVIDENCE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE STATEMENT OF ACCOUNTS, BALANCE SHEET, INCOME & EXPENDITURE ACCOUNT AND VARIOUS PAPER CUTTI NGS WHEREFROM IT IS EVIDENT THAT THE SOCIETY IS ENGAGED IN PRESERVING WILD ANIMALS. THE PAPER CUTTINGS IN THIS REGARD ARE AVAILABLE AT PAGES 65 TO 70 OF THE COMPILATION OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT IN THE LIGHT OF THESE EVIDENCE S , THE ACTIVITIES OF : - 5 - : THE ASSESSEE SHOULD NOT HAVE BEEN DOUBTED. MOREOVER, IT IS SETTLED POSITION OF LAW THAT WHILE GRANTI NG REGISTRATION UNDER SECTION 12A OF THE ACT , THE PRIMA - FACIE ACTIVITIES ARE TO BE EXAMINED AND IF ANY VIOLATION THERE IN, THE BENEFIT OF EXEMPTION CAN BE DENIED WHILE COMPLETING ASSESSMENT UNDER SECTION 143(3) OF THE ACT. 5 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION). 6 . HAVING CAREFULLY EXAMINED THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX IN THE LIGHT OF THE RIVAL SUBMISSIONS AND THE DOCUMENTS PLACED ON RECORD, WE FIND THAT UNDISPUTE DLY THE ASSESSEE - SOCIETY IS FORMED BY THE SENIOR OFFICERS OF THE STATE GOVERNMENT AND ITS MANAGEMENT IS ALSO CONTROLLED BY THE STATE GOVERNMENT THROUGH THEIR SENIOR OFFICERS. THE CORPUS FUND IS ALSO ALLOTTED BY THE STATEMENT GOVERNMENT. FROM THE DOCUMENT S AVAILABLE ON RECORD, IT IS EVIDENT THAT THE ASSESSEE - SOCIETY IS ENGAGED IN DEVELOPING SAFARI TO PRESERVE WILD ANIMALS AND ALSO TO PROVIDE PROPER ATMOSPHERE TO THEM. IT IS ALSO QUITE EVIDENT FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX THAT THE A SSESSEE HAS FILED AN APPLICATION FOR REGISTRATION ON 19.6.2015, BUT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) DID NOT OPT TO INITIATE PROCEEDINGS FOR GRANT OF REGISTRATION BY MAKING NECESSARY ENQUIRIES. THE TIME PERIOD PRESCRIBED FOR DISPOSAL OF THE APPLICATION IS SIX MONTHS AND THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) HAS ISSUED FIRST NOTICE ON 26.11.2015 FOR THE APPEARANCE OF THE ASSESSEE ON 15.12.2015 ALONG WITH CERTAIN DOCUMENTS. ON 15.12.2015 , THE LD. COUNSEL FOR THE ASSESSEE APPEARED AND FILED WRITTEN SUBMISSIONS AND ALSO FILED RELEVANT EVIDENCE, BUT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) DID NOT ASK ANYTHING FURTHER FROM THE ASSESSEE AND ON THE SAME VERY DAY HE DISMISSED THE APPLICATION F OR REGISTRATION ONLY FOR THE SIMPLE REASON THAT : - 6 - : THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT AND ACTIVITIES COULD NOT BE VERIFIED. WHEREAS FROM THE RECORD , IT IS EVIDENT THAT THE ASSESSEE HAS FILED COMPLETE DETAILS OF ITS ACTIVITIES, BYLAWS, AUDIT REPORT, BALANCE SHEET AND VARIOUS OTHER EVI DENCE TO ESTABLISH THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE. ALL THESE EVIDENCE S WERE NOT LOOKED INTO BY THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION). IF T HE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) FEELS THAT HE HAS TO MAKE NECESSARY ENQUIRIES INTO THE ACTIVITIES, HE SHOULD HAVE INITIATED PROCEEDINGS FOR GRANT OF REGISTRATION IN TIME AFTER RECEIPT OF APPLICATION FOR REGISTRATION , B UT HE HAS NOT DONE SO. HE HAS ISSUED ONLY ONE NOTICE TO THE ASSESSEE , WHICH WAS DULY COMPLIED WITH BY THE ASSESSEE BY F ILING RELEVANT EVIDENCE. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) DID NOT LOOK INTO IT AND HAS DENIED REGISTRATION. THEREFORE, WE ARE OF THE VIEW THAT DENIAL OF REGISTRATION UNDER SECTION 12A OF THE ACT IS NOT CORRECT. SINCE THE ASSESSEE HAS FILED ALL THE RELEVANT EVIDENCE ON RECORD WHEREFROM IT IS ESTABLISHED THAT IT IS ENGAGED IN CHARITABLE ACTIVITIES, THE REGISTRATION OUGHT TO HAVE BEEN GRANTED TO THE ASSESSEE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) AND DIRECT HIM TO GRANT REGISTRATION UNDER SECTION 12A(A) OF THE ACT WITHIN A PERIOD OF ONE MONTH FROM THE RECEIPT OF THIS ORDER. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE C APTIONED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH APRIL , 2016 JJ: 1703 : - 7 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR