IMC OF ITI CHHABRA TECHNICAL EDUCATION, BARAN V. CIT-EXEMPTION, Jaipur

ITA 816/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4943 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 30-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENA CIT DR DHK
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHAR AT, JM VK;DJ VIHY LA-@ ITA NO. 816/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR :/ SECTION 12AA(1)(B) OF I.T. ACT, 1961 IMC OF ITI CHHABRA TECHNICAL EDUCATION, CHHABRA, BARAN CUKE VS. THE CIT (EXEMPTIONS) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAAA14700 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI VIJAY GOYAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI M.S. MEENA, CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 3 /11/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(EXEMPTIONS), JAIPUR DATED 22-09-2015 U/S 12AA (1)(B) OF I.T. ACT, 1961 RAISING THEREIN FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE WORTHY CIT (EXEMPTIONS), JAIPUR HAS GROSSLY ERRED IN REJECTING THE APPLICATION IN FORM NO. 12A FILED ON 31-03-2015 FOR SEEKING REGISTRATION U/S 1 2AA OF THE I.T. ACT, 1961 AND ERRED IN HOLDING THAT THE ACTIVI TIES OF THE ITA NO. 816/JP/2015 IBC OF ITI CHHABRA TECHNICAL EDUCATION, CHHABRA, BA REN VS. CIT (EXEMPTIONS) , JAIPUR . 2 SOCIETY ARE NOT CHARITABLE PURPOSE AS DEFINED U/S 2 (15) OF I.T. ACT. 2. THAT THE ORDER OF THE WORTHY CIT (EXEMPTIONS), JAIPUR REJECTING THE APPLICATION OF ASSESSEE SEEKIN G REGISTRATION OF SOCIETY U/S 12AA OF I.T. ACT IS ARB ITRARY, WHIMSICAL, CAPRICIOUS, PRESERVE AND AGAINST THE LAW AND FACTS OF THE CASE. THE ORDER OF THE CIT EXEMPTIONS, JA IPUR IN THIS REGARD DESERVES TO BE SET ASIDE AND DIRECTION BE GIVEN FOR GRANT OF REGISTRATION TO THE SOCIETY U/S 12AA OF I. T. ACT 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE S UBMITTED AN APPLICATION IN FORM NO. 10A FOR SEEKING REGISTRATION U/S 12AA O F THE I.T. ACT, 1961 ON 31-03-2015. TAKING INTO CONSIDERATION THE APPLIC ATION OF THE ASSESSEE AND CONCERNING DOCUMENTS AS TO THE AIMS AND OBJECTS OF THE TRUST/ SOCIETY, INCOME AND EXPENDITURE A/C AND GENUINENESS OF THE A SSESSEE'S ACTIVITIES, THE LD. CIT (EXEMPTIONS) DENIED THE REGISTRATION U/ S 12AA OF THE ACT TO THE ASSESSEE FOR THE REASON THAT ON EXAMINATION OF THE INCOME & EXPENDITURE ACCOUNT NONE OF THE EXPENDITURE WAS REL ATED TO ANY CHARITABLE ACTIVITIES AND DESPITE OF LAPSE OF FOUR YEARS THE S OCIETY HAD EARNED INTEREST INCOME ON INTEREST FREE LOAN RECEIVED FROM GOVT. OF INDIA. IN THAT VIEW, THE LD. CIT (EXEMPTIONS) OBSERVED THAT THE ACTIVITI ES OF THE PRESENT SOCIETY CANNOT BE HELD AS CHARITABLE WITHIN THE MEA NING OF SECTION. 2.2 BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFO RE US WITH THE PRAYER THAT LD. CIT (EXEMPTIONS) HAS ERRED IN NOT GRANTING THE REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE. ITA NO. 816/JP/2015 IBC OF ITI CHHABRA TECHNICAL EDUCATION, CHHABRA, BA REN VS. CIT (EXEMPTIONS) , JAIPUR . 3 2.3 THE LD. DR RELIED ON THE ORDER OF THE LD. CIT ( EXEMPTIONS) 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTICED FROM PAGE 4 OF T HE PAPER BOOK THAT THE IMC WAS REGISTERED WITH THE REGISTRAR OF SOCIETY W. E.F. 28-04-2011. THE DETAILS OF OBJECTS OF THE SOCIETY ARE MENTIONED IN OBJECT CLAUSE OF REGISTRATION DEED (PAGE 6 TO 10 PAPER BOOK OF THE A SSESSEE). THE SOCIETY WAS MAINLY ESTABLISHED WITH THE OBJECT FOR SKILL IM PARTING BY THE INDUSTRIAL TRAINING INSTITUTE AND TO KEEP PACE WITH QUALITATIVE AND TECHNOLOGICAL DEMANDS IN THE INDUSTRY. IT IS NOTICE D THAT ALL THE OBJECTS OF THE SOCIETY ARE FOR ADVANCEMENT OF BENEFIT OF GENER AL PUBLIC. THE ACTIVITIES OF THE SOCIETY ARE BEING RUN FOR NON-PRO FIT MOTIVE (PAPER BOOK PAGE 6 PARA 3(A)(III). THE PROFIT OF THE SOCIETY IS NOT DISTRIBUTED AMONG THE MEMBERS OF THE SOCIETY. AS PER REGISTRATION DOC UMENTS, THE SOCIETY CAN ONLY BE DISSOLVED WITH THE CONSTANT OF STATE GO VT. AND ON THE DISSOLUTION OF THE SOCIETY ITS ALL MOVABLE AND IMMO VABLE ASSETS ARE REQUIRED TO BE TRANSFERRED TO OTHER SOCIETY HAVING THE SAME OBJECTS. IT IS ALSO NOTED THAT THE GENUINENESS OF THE SOCIETY HAS NOT BEEN DOUBTED BY THE LD CIT (EXEMPTIONS). THE AIMS AND OBJECTS OF TH E SOCIETY ARE CHARITABLE IN NATURE AS PER SECTION 2(15) OF THE AC T WHICH COVERS THE DEFINITION OF CHARITABLE PURPOSES AS UNDER:- ITA NO. 816/JP/2015 IBC OF ITI CHHABRA TECHNICAL EDUCATION, CHHABRA, BA REN VS. CIT (EXEMPTIONS) , JAIPUR . 4 (A) RELIEF OF THE POOR. (B) EDUCATION MEDICAL RELIEF AND (D) ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY ON PERUSAL OF THE ORDER OF THE LD. CIT (EXEMPTION ), IT IS ALSO OBSERVED THAT HE HAS NOT GIVEN ANY FINDING ABOUT THE OBJECT OF THE SOCIETY WHETHER ANY AIMS AND OBJECTS ARE NOT CHARITABLE IN NATURE. IT IS NOTED THAT HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF FIFTH GENERAL E DUCATION SOCIETY VS. CIT , 185 ITR 634 HAD ALSO OPINED THAT AT THE TIME OF CONSIDERING THE APPLICATION FOR GRANT OF REGISTRATION U/S 12A, THE LD. CIT WAS NOT REQUIRED TO EXAMINE THE APPLICATION OF INCOME OR CARRYING ON OF ANY ACTIVITY BY THE TRUST. THE COURT FURTHER HELD THAT THE CIT MAY AT THIS STAGE EXAMINE WHETHER THE APPLICATION WAS MADE IN ACCORDANCE WITH THE REQUIREMENT OF SECTION 12A R.W.RULE 17A, AND FORM 10A WAS PROPERLY FILLED ALONGWITH THE DETERMINATION WHETHER THE OBJECTS OF THE TRUST WERE CHARITABLE OR NOT. IT IS ALSO OBSERVED THAT HON'BLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. FOUNDATION OF OPHTHALMIC AND OPT OMETRY RESEARCH EDUCATION CENTRE (2013) 355 ITR 361 HELD AS UNDER:- THE DIRECTOR OF INCOME-TAX (EXEMPTION) REFUSED TO GRANT REGISTRATION TO THE ASSESSEE ON THE GROUND THAT NO CHARITABLE ACTIVITY HAD IN FACT TAKEN PLACE SINCE THE ASSESSEE SOCIETY WAS A NEWLY ESTABLISHED ONE. ITA NO. 816/JP/2015 IBC OF ITI CHHABRA TECHNICAL EDUCATION, CHHABRA, BA REN VS. CIT (EXEMPTIONS) , JAIPUR . 5 THE TRIBUNAL HELD THAT NON-COMMENCEMENT OF CHARITAB LE ACTIVITY HAD NO JUSTIFICATION IN REJECTING THE CLAIM OF THE ASSESSE E. ON APPEAL : HELD, DISMISSING THE APPEAL, THAT UNDER SECTION 12A A OF THE INCOME-TAX ACT, 1961, THERE ARE NO RESTRICTIONS OF THE KIND WHICH THE REVENUE WAS READING INTO IN THIS CASE. IN OTHER WOR DS, THE STATUTE DOES NOT PROHIBIT OR ENJOIN THE COMMISSIONER FROM REGIST ERING A TRUST SOLELY BASED ON ITS OBJECTS, WITHOUT ANY ACTIVITY, IN THE CASE OF A NEWLY REGISTERED TRUST. THE STATUTE DOES NOT PRESCRIBE A WAITING PER IOD, FOR A TRUST TO QUALIFY ITSELF FOR REGISTRATION. IF THE REVENUES CONTENTIO NS WERE CORRECT THEN, NECESSARILY, A CONDITION WOULD HAVE TO BE READ INTO THE PROVISION THAT THE COMMISSIONER SHOULD BE SATISFIED THAT THE TRUST WAS IN FACT ENGAGED IN CHARITABLE ACTIVITIES WHICH WOULD IN TURN INJECT CO NSIDERABLE DEAL OF SUBJECTIVITY. IT IS QUITE POSSIBLE THAT IF SUCH FLE XIBILITY IS INTRODUCED, IT WOULD BE SUSCEPTIBLE TO VARIED INTERPRETATION BY TH E DIFFERENT AUTHORITIES, IN THAT SOME WOULD BE SATISFIED WITH THE ACTIVITY OF F EW MONTHS, WHILE OTHERS MAY WISH TO EXAMINE THE ACTIVITIES OF THE ORGANIZAT ION FOR LONGER TIME. DIRECTOR OF INCOME-TAX (EXEMPTIONS) V. MEENAKSHI AM MA ENDOWMENT TRUST [2013] 354 ITR 219 (KARN) FOLLOWED . FURTHER, THE ITAT JAIPUR BENCH VIDE ITS ORDER DATED 4-12-2015 IN ITA NO. 709/JP/2014 IN THE CASE OF CAREER POINT EDUCATI ON SOCIETY VS. CIT, KOTA OBSERVED AS UNDER:- 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE R ECORD. THE ASSESSEE HAD FILED APPLICATION IN FORM NO. 10A ALONGWITH REQUIRED DETAILS. THE SOCIETY IS REGISTER ED FROM 1998 UNDER THE SOCIETIES REGISTRATION ACT. THE COPY OF THE SOCIETY ARE CHARITABLE AND ACTIVITY ARE GENUINE. AT THE TIME OF REGISTRATION OF TRUST/ INSTITUTION, THE LD. CIT IS TO BE JUDGED THE OBJECT OF THE TRUST WHICH SHOULD BE CHARITABLE IN NATURE AS THE ASSESSEE IS IMPARTING THE EDUCATION PROGRAMM E THROUGH COLLEGE AND SCHOOL EDUCATION PROGRAMME AND HE ALSO PROVIDED VARIOUS CHARITABLE SERVICES TO THE SO CIETY AS PER OBJECT OF THE TRUST. THE CASE LAWS RELIED BY TH E ASSESSEE ARE SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE , ACCORDINGLY ORDER OF THE LD. CIT(A) IS SET ASIDE AN D DIRECTED ITA NO. 816/JP/2015 IBC OF ITI CHHABRA TECHNICAL EDUCATION, CHHABRA, BA REN VS. CIT (EXEMPTIONS) , JAIPUR . 6 TO GRANT REGISTRATION FROM THE FINANCIAL YEAR 2012- 12 AS PER APPLICATION FILED IN FORM 10A. 6. IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOW ED. IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES OF THE CA SE AND THE CASE LAWS CITED (SUPRA), THE CIT (EXEMPTIONS) IS DIRECTED T O GRANT REGISTRATION TO THE ASSESSEE SOCIETY. THUS THE APPEAL OF THE ASSESSEE I S ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 3 /11/2 016 SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 3/11/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- IMC OF ITI CHHABRA TECHNICAL EDUCATI ON, BARAN 2. IZR;FKHZ@ THE RESPONDENT- THE CIT (EXEMPTIONS) JAIPUR 3. VK;DJ VK;QDR@ CIT, 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO. 816/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR