Sukhmani Society for Citizen Services, Barnala V. CIT (Exemptions), Chandigarh

ITA 866/CHANDI/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7509 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2015-2016
• Appeal Filed On: 30-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D. S. KALYAN
• Assessee Lawyers: D.K.GOYAL; PRADEEP GOYAL
• Keywords: Charitable institution; Competent authority
• Section: 12AA; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 866/CHD/2015 ASSESSMENT YEAR: 2015-16 M/S SUKHMANI SOCIETY FOR VS. CIT (EXEMPTIONS) CITIZEN SERVICES CHANDIGARH BARNALA-148101 PAN NO. AAFAS7948R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K.GOYAL & SHRI PRADEEP GOYAL, ADVOCAT E RESPONDENT BY : SHRI D. S. KALYAN, CIT DR DATE OF HEARING : 13.04.2018 DATE OF PRONOUNCEMENT : 11.07.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEAL HAS BEEN PREFERRED BY THE APPELLANT/APPLICANT AGAINST THE ORDER DATED 22.09.2 015 OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN THE FOLLOWING GROUNDS:- I) THE LEARNED CIT(EXEMPTIONS) HAS ERRED IN REFUSING THE REGISTRATION U/S 12AA TO THE ASSESSEE SOCIETY ON THE GROUND THAT ASSESSEE SOCIETY IS DOING BUSINESS BY CHARGING FACILITATION CHARGES FROM THE PUBLIC FOR THE SERVICES PROVIDED BY IT AND BY VIRTUE OF AMENDMENT MADE IN THE ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 2 DEFINITION OF CHARITABLE PURPOSE U/S 2(15) OF THE INCOME TAX ACT, 1961 BY FINANCE ACT, 2008 APPLICABLE W.E.F 01.04.2009 THE ASSESSEE IS DOING AN ACTIVITY IN THE NATURE OF A BUSINESS HENCE THE ACTIVITY NO LONGER FALLS IN THE AMBIT OF DEFINITION OF SECTION 2(15) OF THE ACT WITHOUT CONSIDERING THE LATEST JUDGMENTS OF HONORABLE HIGH COURTS AS RELIED UPON BY THE ASSESSEE IN HIS SUBMISSIONS ON THE ISSUE OF AMENDMENT MADE IN SECTION 2(15) BY FINANCE ACT, 2008. II) THE APPELLANT IS A PUBLIC SECTOR ORGANIZATION PERFORMING STATE FUNCTION HAVING NO PROFIT MOTIVE & IS PROVIDING PUBLIC UTILITY SERVICES TO THE SOCIETY AT A LARGE. III) THE LEARNED CIT (EXEMPTIONS) HAS ERRED IN INTERPRETATION OF LAW BY ERRONEOUSLY TREATING THE APPELLANT AS A COMMERCIAL ORGANIZATION CARRYING ON THE OBJECTS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. 3. THE BRIEF FACTS OF THE CASE RELEVANT TO THE ISSU ES UNDER CONSIDERATION ARE THAT THE APPELLANT BEFORE US IS A SOCIETY REGISTERED WITH THE ADDITIONAL REGISTRAR CUM GENERA L MANAGER, DISTT. INDUSTRIES CENTRE, BARNALA UNDER SO CIETIES REGISTRATION ACT 1860. AS PER MEMORANDUM OF THE SOC IETY, THE PRIMARY OBJECTIVE OF THE SOCIETY IS TO ESTABLIS H, MANAGE, OPERATE, MAINTAIN AND CONTROL THE SERVICE CENTRES, NAMELY SUKHMANI CENTRES IN THE DISTRICT BARNALA FOR PROVID ING INTEGRATED CITIZEN SERVICES PERTAINING TO ALL DEPAR TMENTS UNDER ONE ROOF TO THE PUBLIC IN EFFICIENT, TRANSPAR ENT, CONVENIENT AND FRIENDLY MANNER. ALL THE SERVICE CEN TRES IN THE DISTRICT HAVE BEEN ESTABLISHED, MANAGED AND RUN BY THE SUKHMANI SOCIETY ON A SELF-SUSTAINING REVENUE MODEL . SUKHMANI SOCIETY IS ONE STOP SHOP FOR ALL GOVERNMEN T ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 3 SERVICES IN AN INTEGRATED MANNER. THE APPELLANT APP LIED FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT TO THE CIT(E) PLEADING THAT IT HAS BEEN CARRYING OUT THE ACTIVITI ES TOWARDS ADVANCEMENT OF OBJECT OF GENERAL PUBLIC UTI LITY AND THE SAME FALLS WITHIN THE DEFINITION OF CHARITABLE PURPOSES AS DEFINED UNDER SECTION 2(15) OF THE INCOME TAX AC T. THE LD. CIT(E), HOWEVER, REJECTED THE APPLICATION OF TH E ASSESSE OBSERVING THAT AS PER CLAUSE 4(E) OF THE MEMORANDUM OF ASSOCIATION OF THE APPLICANT SOCIETY, THE OBJECTIV E OF SOCIETY WAS TO WORK OUT AND RECOMMEND THE SERVICE FEE OR USER CHARGES THAT COULD BE CHARGED FROM THE END CUS TOMERS FOR THE APPROVAL OF THE COMPETENT AUTHORITY AND CON CERNED DEPARTMENTS/ORGANISATIONS OVER AND ABOVE THE PRESCR IBED BILL AMOUNT/FEE/STATUTORY FEE FOR PROVIDING THE SER VICES THROUGH SUKHMANI CENTRES/ FINANCIAL INSTITUTIONS OR FRANCHISES. HE OBSERVED THAT THE ABOVE OBJECTIVE OF THE SOCIETY SHOWED THAT THERE WAS A SERVICE PROVIDER AN D CUSTOMER RELATIONSHIP BETWEEN THE SUKHMANI SOCIETY (APPELLANT) AND PUBLIC. THAT THE USER CHARGES BEIN G CHARGED FROM THE END CUSTOMERS WERE OVER AND ABOVE THE PRESCRIBED BILL AMOUNT/FEE/STATUTORY FEE. THE LD. C IT(E) HAS GIVEN THE DETAILS OF THE SOME OF THE USER CHARG ES CHARGED BY THE APPELLANT SOCIETY FOR FY-2014-15 IN A CHART WHICH IS REPRODUCED AS UNDER: ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 4 SERVICE FEE CHARGED FROM THE END CUSTOMER FOR FY 2014-15. SR. NAME OF SERVICE NO OF SERVICES RATE/FE E PER NO RENDERED SERVICE 1. NEW ADHAR CARD* 30249 0 2. RTI 234 0 3. INDEPENDENT CERTIFICATES 8 0 4. OLD AGE PENSION/WIDOW PENSION 406 0 5. SENIOR CITIZEN CARD 149 0 6. DISABLE CARD 69 0 7. IDENTITY CARD TO FREEDOM FIGHTERS 9 0 8. DEPENDENT CERTIFICATES 8 0 9. CHARACTER VERIFICATION 1 0 10. E-AADHAR (PRINTING OF CARDS)* 788 10 11. DUPLICATE RATION CARD * 50 20 12. UPDATION AADHAR CARD 2008 15 13. LATE BIRTH CERTIFICATE 1986 20 14. LATE DEATH CERTIFICATE 118 20 15. RATION CARD 1934 20 16. BIRTH/DEATH CERTIFICATE 21603 30 17. NAME ENTRY IN BIRTH CERTIFICATE 1977 30 18. CORRECTION IN BIRTH/DEATH CERTIFICATE 1947 30 19. RURAL AREA CERTIFICATE 3219 30 20 SCHEDULE CASTE CERTIFICATE 8175 30 21. OTHER BACKWARD CLASS CERTIFICATE 2908 30 22. CASTE CERTIFICATE 3487 30 23. RESIDENCE CERTIFICATE 6068 30 24. NON ENCUMBRANCE CERTIFICATE 17482 30 25. AFFIDAVIT 8573 30 26. INDEMNITY BOND 74 30 27. COPYING 1800 40 28. COPY OF OLD REGISTRY 1463 50 29. INCOME CERTIFICATE 4920 70 30. SURETY BOND 62 70 31. WATER SUPPLY CONNECTION 186 70 32. NOC FOR USE OF LOUD SPEAKER 118 70 33. DEMARCATION OF LAND 1629 150 ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 5 34. AGRICULTURAL RELATED SERVICES 903 150 35. COUNTER SINGING OF DOCUMENTS 293 150 36. UNMARRIED CERTIFICATES 13 150 37. NO DUE/ NOC ON BUILDING PLANS 78 150 38. AREA CERTIFICATE 9 150 39. ISSUE OF NO DUES CERTIFICATE * 115 150 40. RENEWAL OF ARMS LICENSE AND OTHERS 4020 300 41. TRANSFER OF OWNERSHIP 115 300 42. TS-1 (MUNICIPAL COUNCIL) 74 300 43. NO OBJECTION CERTIFICATE 166 300 44. NEW ARMS LICENSE 231 700 45. RENEWAL OF LICENSE OF DEALERS 8 700 46. MARRIAGE CERTIFICATE 720 700 47. ISSUANCE OF LICENSE FOR TICKETING AGENT 1 1000 48. ISSUANCE OF NOC FOR PETROL PUMPS 3 1400 49. SANCTION OF BUILDING PLANS/ REVISED PLANS 226 1400 50. NOC ON BUILDING PLAN BY LOCAL BODIES 275 1400 THE LD. CIT(E) FROM THE ABOVE CHART OBSERVED THAT T HE ABOVE SERVICES CHARGES WERE APART FROM STATUTORY FE E/OTHER FEE FIXED BY VARIOUS GOVERNMENT DEPARTMENTS. HE OBS ERVED THAT THAT THE USER CHARGES BEING COLLECTED BY THE S OCIETY WERE AS HIGH AS RS 1400/-. WHERE THE USER CHARGES O N SERVICES LIKE AADHAR CARDS OR E-AADHAR CARDS WERE N IL, THE SOCIETY HAD BEEN GETTING COMMISSION FROM VARIOUS AGENCIES. THAT AS PER INCOME AND EXPENDITURE STATEM ENT FILED, THE SOCIETY HAD GOT RS 9,50,544/-FROM E-AADH AR AND RS 1,25,320/ - FROM ELECTRICITY BILLS AS COMMISSION . ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 6 4. THE LD. CIT(E) WHILE RELYING UPON THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT (W.E.F. 01.0 4.2009) OBSERVED THAT AN OBJECT OF GENERAL PUBLIC UTILITY W HICH INVOLVED CARRYING ON OF AN ACTIVITY IN THE NATURE O F TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECT IVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY HAD CEASED TO BE A CHARITABLE PU RPOSE. HE OBSERVED THAT SINCE THE SOCIETY HAD BEEN GIVING SERVICES BY CHARGING FEES AND THUS IT WAS AN ACTIVITY IN THE NATURE OF A BUSINESS AND HENCE BY VIRTUE OF THIS AMENDMENT , THE ACTIVITY DID NOT FALL WITHIN THE AMBIT OF THE DEFI NITION OF SECTION 2(15) OF THE ACT. HE ALSO OBSERVED THAT THE APPLICANT SOCIETY HAD BEEN EARNING HUGE PROFITS AND ITS APPLICATION OF INCOME ON SOCIETY WAS MUCH BELOW 85% AS IS ENVISAGED IN THE ACT. THE LD. CIT(E) FURTHER RELIED UPON THE DECISION OF THE AMRITSAR BENCH OF THE TRIBUNAL IN T HE IDENTICAL CASES OF SUKHMANI SOCIETY FOR CITIZEN SE RVICES VS. CIT. BATHINDA IN I.T.A. NO. 551/ASR-2011 AND SUKHMANI SOCIETY FOR CITIZEN SERVICES SAHEED BHAGA T SINGH NAGAR, NAWANSHAHAR IN I.T.A. NO. 297(ASR)/20 12) WHEREIN THE TRIBUNAL HAS UPHELD THE ORDERS IN FAVO UR OF THE DEPARTMENT. HE THEREFORE CONCLUDED THAT THE ACT IVITIES OF THE ASSESSEE-SOCIETY WERE NOT CHARITABLE IN NATU RE WITHIN THE MEANING OF PROVISIONS OF SECTION 2(15) OF THE A CT AND ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 7 ACCORDINGLY REJECTED THE APPLICATION OF THE APPELLA NT FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT. 5. BEING AGGRIEVED BY THE ABOVE REJECTION OF ITS APPLICATION FOR REGISTRATION BY THE LD. CIT(E), THE APPELLANT SOCIETY HAS COME IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE AL SO GONE THROUGH THE RECORD. A PERUSAL OF THE OBJECTS O F THE SOCIETY, REVEALS THAT IT HAS BEEN ESTABLISHED TO PR OVIDE/ FACILITATE SERVICES OF THE GOVERNMENT DEPARTMENTS A GAINST RECEIPT OF FEES. THE FEES FOR VARIOUS ITEMS AS HAS BEEN LISTED IN THE IMPUGNED ORDER OF CIT(E) SHOWS THAT I N SOME CASES, IT IS VERY MUCH EXCESSIVE AND SEEMS TO BE UNREASONABLE. EVEN THE FEES RECEIVED BY THE APPELLA NT SOCIETY ARE IN ADDITION TO THE NOMINAL STATUTORY/ GOVERNMENT FEES PAYABLE BY THE CITIZENS FOR AVAILIN G THE SERVICES. THE GOVT. DEPARTMENTS CANNOT CHARGE MORE THAN THE STATUTORY/GOVERNMENT FEES PRESCRIBED FOR SUCH SERVICES/FUNCTIONS DISCHARGED BY THEM ON BEHALF OF THE GOVERNMENT. HOWEVER, BY WAY OF, ESTABLISHING THE AS SESSEE SOCIETY, THE CITIZENS ARE FORCED TO APPLY FOR THE R EQUISITE WORKS / SERVICES THROUGH THE APPELLANT SOCIETY AND SUBJECT TO THE PAYMENT OF FEES/ PROCESSING CHARGES FIXED BY THE APPELLANT SOCIETY. IT IS A COMMONLY AND WELL KNOWN FACT THAT THERE ARE UNWRITTEN INSTRUCTIONS TO EVERY DEPA RTMENT THAT THEY SHOULD NOT DIRECTLY ACCEPT THE APPLICATIO NS OF THE ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 8 CITIZENS FOR PROVIDING SERVICES RATHER IT HAS BEEN MADE MANDATORY FOR THE CITIZENS TO AVAIL/APPLY FOR CERTA IN TYPE OF SERVICES, AS DETAILED IN THE CHART ABOVE, THROUGH T HE SERVICE CENTERS OF THE APPELLANT SOCIETY ON PAYMENT OF CHARGES FIXED BY THE SOCIETY OVER AND ABOVE THE STATUTORY/GOVERNMENT FEES PRESCRIBED FOR SUCH FUNCTIONS/SERVICES. THE COUNSEL FOR THE APPELLANT C OULD NOT BRING BEFORE US ANY DATA SHOWING THAT THE SERVICES AS ENUMERATED IN THE CHART ABOVE ARE ALSO OFFERED / PR OVIDED BY THE CONCERNED DEPARTMENTS DIRECTLY TO THE CITIZE NS WITHOUT INTERVENTION OF THE SOCIETY. IN OUR VIEW, RATHER THAN RENDERING ANY SERVICES FOR CHARITY, THE APPELL ANT SOCIETY IS CAUSING EXTRA FINANCIAL BURDEN UPON THE CITIZENS IN RESPECT OF SERVICES TO WHICH THEY ARE OTHERWISE STATUTORILY ENTITLED TO AT MUCH LOWER NOMINAL GOVER NMENT / STATUTORY FEES/CHARGES. IN RELATION TO CERTAIN SERV ICES, THE ADDITIONAL CHARGES COLLECTED BY THE SOCIETY ARE EXO RBITANT E.G. FOR PROCESSING APPLICATIONS FOR NOC BUILDING P LAN OF LOCAL BODIES, FEE HAS BEEN FIXED AT RS.1,400/. SIMI LARLY A FEE OF RS.1,400/- HAS BEEN FIXED THE PROCESSING THE APPLICATION FOR ISSUANCE OF NOC FOR PETROL PUMP AND FOR APPLICATIONS FOR SANCTION BUILDING PLANS/REVISED PL ANS. THE FEES FOR PROCESSING APPLICATION OF LICENSE FOR TICK ETING AGENT HAS BEEN FIXED AT RS. 1,000/- AND THAT FOR MARRIAGE CERTIFICATE AT RS. 700/-. THE FEES FOR SENDING APPL ICATION TO THE DEPARTMENT FOR ISSUE NEW ARMS LICENSE HAS BEEN FIXED ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 9 AT RS. 700/-. THERE IS NO EXPLANATION OFFERED AS TO WHY SUCH HEFTY FEES HAS BEEN FIXED FOR MERELY PROCESSIN G THE APPLICATIONS. NOT ONLY AFORESAID FEES BUT APART FRO M THAT THE ASSESSEE SOCIETY HAS BEEN RECEIVING COMMISSION FROM VARIOUS AGENCIES. THIS CLEARLY SHOWS THAT THE PREDO MINANT OBJECT OF THE APPELLANT SOCIETY IS TO EARN PROFIT O R INCOME AND NOT CHARITY. 7. FURTHER, A PERUSAL OF THE MEMORANDUM OF ASSOCIAT ION OF THE APPELLANT SOCIETY FURTHER REVEALS THAT CONCE RNED DEPUTY COMMISSIONER OF THE DISTRICT/ HAS BEEN MADE THE CHAIRMAN (CEO) OF THE SOCIETY AND THE CONCERNED ADDITIONAL DEPUTY COMMISSIONER AS MEMBER SECRETARY OF THE SOCIETY. IN OUR VIEW, TO MAKE AVAILABLE THE REQ UISITE GOVERNMENT SCHEMES AND SERVICES TO THE CITIZEN OF T HE COUNTRY IS THE STATUTORY FUNCTION OF THE GOVERNMENT AND THE CONCERNED DEPUTY COMMISSIONERS/ADDITIONAL DEPUT Y COMMISSIONERS BEING GOVERNMENT SERVANT ARE DUTY BOU ND TO ARRANGE FOR / PROVIDE FOR THE REQUISITE SERVICES OFFERED BY THE CONCERNED GOVERNMENT DEPARTMENTS UNDER THEIR JURISDICTION. THEY ARE SUPPOSED TO ENSURE THAT THE GOVERNMENT DEPARTMENT UNDER THEIR JURISDICTION SHOU LD DISCHARGE THEIR FUNCTIONS/DUTIES TO THE PUBLIC WITH OUT ANY HARASSMENT TO THE PUBLIC, BUT, SURPRISINGLY, THEY I NSTEAD ACTING AS OFFICIALS OF THE APPELLANT SOCIETY ARE CO LLECTING CHARGES THROUGH AND IN THE NAME OF THE SOCIETY FOR PROCESSING THE APPLICATIONS OF THE CITIZENS TO THE CONCERNED ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 10 DEPARTMENTS. THIS, IN OUR VIEW, IS IN CONFLICT TO T HEIR STATUTORY FUNCTIONS. 8. THE CONTENTION OF THE LD. COUNSEL FOR THE APPEL LANT THAT THE APPELLANT SOCIETY HAS BEEN BROUGHT INTO EXISTEN CE AS ONE STOP SHOP FOR ALL GOVERNMENT SERVICES TO BE PRO VIDED IN WHOLE DISTRICT IN AN INTEGRAL MANNER AND IS TASKED TO ACT AS AGENCY OF THE STATE IN PUBLIC DUTIES WHICH CANNOT B E DISCHARGED BY PRIVATE BODIES, AND THEREFORE, THE AP PELLANT SOCIETY PERFORMS SOVEREIGN AND REGULATORY FUNCTION IN ITS CAPACITY AS AN INSTRUMENTALITY OF THE STATE GOVERNM ENT AND ITS DESIGNATED FUNCTIONS FALL UNDER THE CATEGORY OF ADVANCEMENT OF OBJECT OF GENERAL PUBLIC UTILITY, I N OUR VIEW, IS MISCONCEIVED. IN OUR VIEW, IN DEMOCRATIC COUNTRY, THERE CANNOT BE AND SHOULD NOT BE ANY SHOP FOR ALL GOVERNMENT SERVICES FROM WHERE THE PEOPLE SHOULD BE FORCED TO PURCHASE THE GOVERNMENT SERVICES ON PAYME NT OF PRICE IN ADDITION TO AND OTHER THAN THE STATUTORY GOVERNMENT FEES PRESCRIBED FOR ISSUANCE OF SUCH SER VICES LIKE ISSUE OF CERTIFICATES ETC. EVEN THE APPELLANT SOCIETY, IS NOT PERFORMING ANY SOVEREIGN FUNCTIONS OF THE STATE . EVEN SOVEREIGN FUNCTIONS ARE NOT SUPPOSED TO BE DONE BY THE STATE FOR A PRICE OR FEES. SOVEREIGN FUNCTIONS ARE THOSE ACTIONS OF THE STATE FOR WHICH IT IS NOT ANSWERABLE BEFORE THE COURT OF LAW. MATTERS SUCH AS DEFENCE OF THE CO UNTRY, RAISING AND MAINTAINING ARMED FORCES, MAKING PEACE IN RETAINING TERRITORY, POLICE FUNCTIONS INCLUDING MAI NTENANCE ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 11 OF LAW AND ORDER, LEGISLATIVE FUNCTIONS ETC. ARE SO VEREIGN FUNCTIONS AND ARE PRIMARILY INALIENABLE FUNCTIONS, WHICH THE STATE ONLY COULD EXERCISE. THE STATE IS ENGAGED WITH VARIOUS FUNCTIONS, BUT ALL OF THEM CANNOT BE CONSTR UED AS PRIMARY INALIENABLE FUNCTIONS. THE SOVEREIGN FUNCTI ONS OF THE STATE CANNOT BE AND SHOULD NOT BE DELEGATED TO A THIRD PARTY OR A SOCIETY. THE DEPUTY COMMISSIONER AND THE OTHER GOVT. OFFICERS THROUGH WHOM THE GOVT. IS SUPPOSED T O CARRY OUT ITS FUNCTIONS INCLUDING SOVEREIGN FUNCTIONS ARE SUPPOSED TO PROVIDE THE GOVT. SERVICES TO THE CITIZ ENS AND MAKE THE GOVERNMENT DEPARTMENT FUNCTION IN NORMAL COURSE WITHOUT HARASSMENT TO THE PUBLIC, RATHER THA N TO DELEGATE THESE FUNCTIONS TO A SOCIETY LIKE APPELLAN T OF WHICH THEY THEMSELVES ARE THE CONTROLLING OFFICERS AND THAT TOO AGAINST CHARGING OF HEFTY FEES. IN OUR VIEW, IT IS NOTHING BUT A MODUS OPRANDI TO CHARGE CITIZENS MORE THAT TH EY ARE BOUND TO PAY. EVEN THE AMOUNT COLLECTED DOES NOT GO TO THE GOVT. TREASURY SO THAT IT MAY BE UTILIZED FOR THE W ELFARE OF THE CITIZENS OF THE COUNTRY. THIS ACTIVITY OF CHARG ING OF FEES FROM THE CITIZENS OF THE COUNTRY IN THE NAME OF FAC ILITATION TO AVAIL OF GOVT. SERVICES, WHICH THE CITIZENS OTHE RWISE ARE NOT SUPPOSED TO PAY, IN OUR VIEW, INVOLVES NO CHARI TY. THE CO-ORDINATE AMRITSAR BENCH OF THE TRIBUNAL IN THE C ASES OF SUKHMANI SOCIETY FOR CITIZEN SERVICES VS. CIT, BAT HINDA VIDE ORDER DATED 26.09.2012 PASSED IN IN ITA NO. 551/ASR/2011 HAS RIGHTLY HELD THAT THE ACTIVITY OF THE ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 12 ASSESSE SOCIETY WERE NOT CHARITABLE IN NATURE WITHI N THE MEANING OF THE PROVISIONS OF SECTION 2(15) OF THE A CT. SIMILAR OBSERVATIONS HAVE BEEN MADE BY THE AMRITSAR BENCH IN THE CASE OF SUKHMANI SOCIETY FOR CITIZEN SERVICES VS. CIT, JALANDHAR IN ITA NO. 297/AMRITSAR/2012 VI DE ORDER DATED 22.04.2013, RELEVANT PART OF THE SAID O RDER IS REPRODUCED AS UNDER: 'WE HAVE ALSO THOROUGHLY GONE THROUGH THE OBJECT OF THE ASSESSEE-SOCIETY WHICH CLEARLY MENTIONS THAT THE ASSESSEE SOCIETY IS CHARGING SERVICE FEE OR USER CH ARGERS FROM THE CUSTOMERS FOR THE APPROVAL OF THE COMPETEN T AUTHORITY AND THE CONCERNED DEPARTMENTS/ORGANIZATIO NS OVER AND ABOVE THE PRESCRIBED BILL AMOUNT / FEE /STATUTORY FEE FOR PROVIDING THE SERVICES THROUGH SUKHMANI CENTRES/FINANCIAL INSTITUTIONS OR FRANCHIS EES. FOR THE SAKE OF CONVENIENCE, ONE OF THE MAIN OBJECT S OF THE SOCIETY FROM THE WRITTEN SUBMISSION DATED 03.04.2013 I.E (E) IS REPRODUCED AS UNDER: '(E) TO WORK OUT AND RECOMMEND THE SERVICE FEE OR U SER CHARGES THAT COULD BE CHARTED FROM THE END CUSTOMER S FOR THE APPROVAL OF THE COMPETENT AUTHORITY / AND CONCE RNED DEPARTMENTS/ORGANIZATIONS OVER AND ABOVE THE PRESCRIBED BILL AMOUNT/FEE/STATUTORY FEE FOR PROVID ING THE SERVICES THROUGH SUKHMANI CENTRES/FINANCIAL INSTITUTIONS OR FRANCHISEES.' 20) KEEPING IN VIEW THE AFORESAID OBJECT OF THE SOC IETY, WE ARE OF THE VIEW THAT THIS SOCIETY HAS BEEN ESTAB LISHED FOR MAINTAINING THE AGENCIES AND FRANCHISEES IN THE DISTRICT TO CONDUCT BUSINESS OF THE SOCIETY, WHICH CLEARLY ESTABLISHES THAT THE PRESENT SOCIETY IS DOING BUSIN ESS WITH OTHER AGENCIES AND FRANCHISEES IN THE DISTRICT . WE HAVE NOT SEEN ANY OBJECT OF THE SOCIETY WHICH SHOWS THAT THE PRESENT SOCIETY IS DOING ANY CHARITABLE ACTIVIT IES FOR ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 13 THE GENERAL PUBLIC UTILITY. EVEN OTHERWISE THE ASSE SSEE- SOCIETY HAS FAILED TO ESTABLISH BEFORE THE CIT-I, JALANDHAR, AS WELL AS BEFORE US THAT ASSESSEE-SOCIE TY IS DOING ANY CHARITABLE WORK KEEPING IN VIEW ITS OBJEC T. MERELY, MENTIONING ABOUT VARIOUS OBJECTS IN THE NAT URE OF CHARITABLE ACTIVITIES IN THE MEMORANDUM OF ASSOCIAT ION, DOES NOT MEAN THAT THE SOCIETY IS DOING ANY CHARITA BLE ACTIVITIES FOR THE 21 GENERAL PUBLIC UTILITY AND IS ENTITLED FOR REGISTRATION UNDER SECTION 12A(A) OF THE ACT. 21) KEEPING IN VIEW OF THE AFORESAID DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT THE ACTIVITIES OF THE ASSESSEE-SOCIETY ARE NOT CHARITABLE IN NATURE WITHI N THE MEANING OF PROVISIONS OF SECTION 2(15) OF THE ACT I T DOES NOT QUALIFY TO TREAT AS CHARITABLE INSTITUTION. SIN CE THE ASSESSEE HAS NOT ESTABLISHED THAT ITS SOCIETY IS FO RMED WITH OBJECTS OF ANY CHARITABLE PURPOSE, THEN THE QU ESTION OF DISCUSSION OF CITATION RELIED UPON BY THE ASSESS EE'S COUNSEL DOES NOT ARISE, EVEN OTHERWISE THESE JUDGME NTS ARE DIFFERENT FROM THE FACTS OF PRESENT CASE AND AR E NOT HELPFUL TO THE SOCIETY. THE PRESENT SOCIETY IS DOIN G ITS BUSINESS AND CHARGING HUGE FEES FROM THE PUBLIC WHI CH IS IN ADDITION TO THE PRESCRIBED FEE OF THE PUNJAB GOVERNMENT. EVEN OTHERWISE, THE FEES CHARGED BY THE PRESENT SOCIETY ARE IN ADDITION TO THE BURDEN FORCE D UPON THE COMMON MAN. BECAUSE OF THIS, SERVICE HAS TO BE RENDERED BY THE PUNJAB GOVERNMENT FREE OF COST TO T HE PUBLIC AGAINST THE FEE PRESCRIBED IN THE CHART AS REPRODUCED IN TIRE FOREGOING PARAGRAPHS. WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED F OR IN THE WELL-REASONED ORDER PASSED BY LEARNED CIT-L, JALANDHAR. THEREFORE, WE UPHOLD THE IMPUGNED ORDER DATED 26.04.2012 BY DISMISSING THE PRESENT APPEAL F ILED BY THE ASSESSEE-SOCIETY.' ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 14 9. WE AGREE WITH THE ABOVE OBSERVATIONS MADE BY TH E CO- ORDINATE BENCHES OF THE TRIBUNAL IN THE ABOVE MENTI ONED CASES (SUPRA). 10. SO FAR AS THE RELIANCE OF THE LD. COUNSEL FOR T HE ASSESSEE ON THE DECISION OF THE TRIBUNAL IN THE CAS E OF KAPURTHALA IMPROVEMENT TRUST VS. CIT IN ITA NO. 732/AMRITSAR/2013 DATED 11.06.2015 AND IN THE CASE OF IMPROVEMENT TRUST BATHINDA VS. CIT, BATHINDA IN I TA NO. 366/AMRITSAR/2012 DATED 31.08.2015 IS CONCERNED, IN OUR VIEW, THE SAID DECISIONS ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THIS CASE. IN VIEW OF THE DISCUSS ION MADE ABOVE, THE APPELLANT SOCIETY, IN OUR VIEW, IS NOT CARRYING OUT ANY OBJECT OF GENERAL PUBLIC UTILITY AND ITS AC TIVITIES CANNOT BE SAID TO BE CHARITABLE IN NATURE. WE, THER EFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(E) I N REJECTING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/ S 12(AA) OF THE INCOME TAX ACT. IN THE RESULT, APPEAL OF THE APPELLANT SOCIETY IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.07.2018. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11.07.0218 GANESH KUMAR ITA NO. 866/CHD/2015- SUKHMANI SOCIETY FOR CITIZEN SERVICES, BARNALA 15 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR