Shiv Public School Managing Committee, Haryana V. CIT (Exemptions), Chandigarh

ITA 893/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3395 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: KAMAL JAITLEY S
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.892/DEL./2016 ITA NO.893/DEL./2016 SHIV PUBLIC SCHOOL MANAGING COMMITTEE, VS. CIT (EX EMPTIONS), OLD ALWAR ROAD, SOHNA, CHANDIGARH. DISTRICT GURGAON (HARYANA). (PAN : AADTS5003R) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI RHISHABH JAITLEY, S.M. MANZAR , SHUBHAM JAIN & KAMAL JAITLEY, ADVOCATES REVENUE BY : SMT. APARNA KARAN, CIT DR DATE OF HEARING : 06.02.2018 DATE OF ORDER : 19.02.2018 O R D E R PER BENCH : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN BOTH THE AFORESAID INTER CONNECTED APPEALS, THE SAME ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER TO AVOID R EPETITION OF DISCUSSION. 2. THE APPELLANT, SHIV PUBLIC SCHOOL MANAGING COMMI TTEE (HEREINAFTER REFERRED TO AS THE ASSESSEE SOCIETY) BY FILING THE ITA NO.892 & 893/DEL./2016 2 PRESENT APPEALS, SOUGHT TO SET ASIDE THE IMPUGNED O RDERS BOTH DATED 28.12.2012 PASSED BY LD. CIT (EXEMPTIONS), CHANDIGA RH ON THE GROUNDS INTER ALIA THAT :- ITA NO.892/DEL/2016 1. THE IMPUGNED ORDER OF THE APPLICANT MADE BY THE LEARNED CIT (E) UNDER SECTION 80G (5)(VI) OF THE IN COME TAX ACT, 1961 ('ACT') DATED 2STH DEC. 2015 IS BAD IN LA W AND ON FACTS AND VOID AB INITIO. 2. THAT THE LD. CIT ERRED IN REJECTING THE APPLICAT ION OF THE APPLICANT FOR REGISTRATION U/S 12AA AND THEREBY REJ ECTING THE APPROVAL U/S 80G ALTHOUGH THE APPLICANT'S SOCIETY F ULFILS ALL THE CONDITIONS FOR REGISTRATION AND APPROVAL. 3. THE LEARNED CIT (E) ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION OF THE APPLICANT FOR APPR OVAL U/S 80G ALTHOUGH THE APPLICANT'S SOCIETY OBJECTS AND ACTIVI TIES OF THE SOCIETY ARE ELIGIBLE FOR GRANT OF REGISTRATION U/S 80G OF THE ACT. ITA NO.893/DEL/2016 1. THE IMPUGNED ORDER OF THE APPLICANT MADE BY THE LEARNED CIT (E) UNDER SECTION 12AA OF THE INCOME TA X ACT, 1961 ('ACT') DATED 28 TH DEC. 2015 IS BAD IN LAW AND ON FACTS AND VOID AB INITIO. 2. THAT THE LD. CIT ERRED IN REJECTING THE APPLICAT ION OF THE APPLICANT FOR REGISTRATION U/S 12AA ALTHOUGH THE AP PLICANT'S SOCIETY FULFILS ALL THE CONDITIONS FOR REGISTRATION . 3. THE LEARNED CIT (E) ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION OF THE APPLICANT FOR REGI STRATION U/S 12AA ALTHOUGH THE APPLICANT'S SOCIETY OBJECTS AND A CTIVITIES OF THE SOCIETY ARE ELIGIBLE FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : THE APPLICATION MOVED BY THE ASSESSEE SOCIETY FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND FOR ACCORDING SANCTI ON U/S 80G(5)(VI) ITA NO.892 & 893/DEL./2016 3 OF THE ACT HAVE BEEN REJECTED BY THE LD. CIT (EXEMP TIONS) ON THE GROUNDS INTER ALIA THAT GROSS RECEIPTS IN ALL THE F IVE YEARS ARE FAR IN EXCESS OF RS.1 CRORE AND THE ASSESSEE SOCIETY HAS W RONGLY CLAIMED EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT; THAT ASSES SEE SOCIETY HAVE BEEN CHARGING FEE FROM STUDENTS UNDER VARIOUS DIFFE RENT HEADS FEATURING IN THE INCOME AND EXPENDITURE STATEMENT A ND THAT THE LAND IN QUESTION ON WHICH THE SENIOR WING OF THE SCHOOL IS BEING RUN HAS BEEN TAKEN ON LEASE FROM THE FOUNDER MEMBERS OF THE SOCIETY WHILE THE JUNIOR WING OF THE SCHOOL IS BEING RUN ON THE L AND WHICH WAS DONATED BY M/S. AGARWAL SABHA SOHNA; THAT SINCE THE LAND IN QUESTION ON WHICH THE MAIN SCHOOL IS RUNNING DOES N OT BELONG TO THE SOCIETY, THE PROPERTY IN QUESTION FOR CHARITABL E PURPOSE ALSO REMAINS IN QUESTION. CONSEQUENT UPON REJECTION OF REGISTRATION U/S 12AA, THE CIT (E) ALSO REJECTED THE APPLICATION MOV ED BY THE ASSESSEE SOCIETY U/S 80G OF THE ACT. 4. FEELING AGGRIEVED, THE ASSESSEE COMPANY HAS COME UP BEFORE THE TRIBUNAL BY CHALLENGING THE IMPUGNED ORDERS PAS SED BY LD. CIT BY WAY OF FILING THE PRESENT APPEALS . 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.892 & 893/DEL./2016 4 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, ASSESSEE SOCIETY BEING IN EXISTENC E SINCE 21.08.1987 HAS BEEN RUNNING A SCHOOL UNDER THE NAME AND STYLE AS SHIV PUBLIC SCHOOL. IT IS ALSO NOT IN DISPUTE THAT THE AMENDED MEMORANDUM OF ASSOCIATION OF THE ASSESSEE SOCIETY H AS BEEN REGISTERED WITH THE REGISTRAR OF SOCIETIES IN THE M ONTH OF 08.01.2014. IT IS ALSO NOT IN DISPUTE THAT THE ASS ESSEE SOCIETY HAS NOT BEEN GRANTED ANY KIND OF EXEMPTION SINCE ITS IN CEPTION FOR THE LAST SO MANY YEARS. IT IS ALSO NOT IN DISPUTE THAT ASSESSEE SOCIETY HAS CLAIMED EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT SINCE FY 2011-12 DESPITE THE FACT THAT ITS TOTAL RECEIPT DUR ING THE FYS 2011- 12 TO 2014-15 WAS MORE THAN RS.1 CRORE. 7. UNDISPUTEDLY, UNDER THE AMENDED PROVISIONS OF SE CTION 2(15) OF THE ACT IMPARTING EDUCATION FALLS WITHIN THE CHA RITABLE PURPOSE. NO DOUBT, FOR PROVIDING REGISTRATION U/S 12A OF THE ACT, COMMISSIONER IS EMPOWERED TO CALL FOR ANY INFORMATI ON/ DOCUMENTS FROM THE SOCIETY TO SATISFY HIMSELF ABOUT THE OBJECT OF THE SOCIETY AND THE GENUINENESS OF ITS ACTIVITIES, BUT AT THE SAME TIME, CIT IS NOT TO SIT OVER THE APPLICATION U/S 12 A AS AN ASSESSING OFFICER FOR THIS PURPOSE. ITA NO.892 & 893/DEL./2016 5 8. IN THE INSTANT CASE, LD. CIT (E) PERUSED THE DET AILS OF THE CORPUS FUNDS FOR THE LAST FIVE YEARS AND NOTICED TH AT THE ASSESSEE HAS CLAIMED SUO MOTU EXEMPTION U/S 10(23C)(IIIAD) W HICH WERE NOT ADMISSIBLE UNDER LAW, ITS RECEIPT BEING IN EXCESS O F RS.1 CRORE. CIT ALSO NOTICED FROM THE DETAIL OF CORPUS FUND FOR THE LAST YEAR THAT THE SCHOOL IS COLLECTING MONEY FROM THE STUDENTS IN THE NAME OF SPORTS FUNDS, MAINTENANCE FUND, TEACHERS WELFARE FUND ETC. WHICH APPEARS TO HAVE BEEN EXCLUDED FROM THE GROSS RECEIPT. 9. HOWEVER, WE ARE OF THE CONSIDERED VIEW THAT WHEN ASSESSEE SOCIETY IS ADMITTEDLY INTO IMPARTING EDUCATION FOR THE GENERAL PUBLIC UTILITY, THE REGISTRATION CANNOT BE DECLINED ON THE GROUND THAT THE ASSESSEE SOCIETY HAS BEEN COLLECTING MONEY FROM THE STUDENTS IN THE NAME OF VARIOUS FUNDS. MORE PARTICULARLY WHEN IT IS NOT THE CASE OF THE CIT (E) THAT THE ACTIVITIES BEING CARRI ED OUT BY THE ASSESSEE SOCIETY ARE FOR PROFIT MAKING. 10. MORE SO, IN CASE QUALITY EDUCATION IS TO BE PRO VIDED FUNDS FOR EXTRA-CURRICULAR ACTIVITIES TO ENHANCE THE OVER ALL PROFILE OF THE STUDENTS ARE REQUIRED. IN CASE COLLECTING OF SUCH FUNDS ARE FOUND TO BE NOT IN CONSONANCE WITH AIMS AND OBJECTS OF THE S OCIETY, THE AO CAN DISALLOW THE SAME WHILE MAKING ASSESSMENT ON YE AR TO YEAR BASIS. ON THE BASIS OF THE FACT THAT THE ASSESSEE SOCIETY HAS WRONGLY ITA NO.892 & 893/DEL./2016 6 CLAIMED EXEMPTION U/S 10(23C)(IIIAD), THE REGISTRAT ION CANNOT BE DECLINED. 11. THE LD. CIT (E) HAS ALSO EXPRESSED APPREHENSION THAT BUILDING ON WHICH SENIOR WING OF THE SCHOOL IS FUNC TIONING HAS BEEN TAKEN ON LEASE FROM THE FOUNDER MEMBER OF THE SOCIETY AND THERE IS A POSSIBILITY OF ACCRETION BEING MADE TO T HE SCHOOL BUILDING MAY DIRECTLY BE BENEFICIAL TO THE FOUNDER MEMBER IN THE EVENT OF TREATMENT OF LEASE DEED EXPIRING BUT THIS APPREHENS ION IS MERELY BASED UPON SURMISES AND CONJECTURES. AGAIN THESE FA CTS CAN BE EXAMINED ON YEAR TO YEAR BASIS BY THE AO AT THE TIM E OF ASSESSMENT. 12. SO, IN THESE CIRCUMSTANCES, WE ARE OF THE CONSI DERED VIEW THAT THE ORDER PASSED BY THE LD. CIT (E) FIRSTLY DE CLINING REGISTRATION U/S 12AA OF THE ACT AND CONSEQUENTLY, DECLINING THE PERMISSION U/S 80G(5)(VI) OF THE ACT IS NOT SUSTAINABLE IN THE EYE S OF LAW. HENCE, CIT (E) IS DIRECTED TO GRANT REGISTRATION TO THE AS SESSEE SOCIETY FORTHWITH ALSO WITH CONSEQUENT APPROVAL U/S 80G OF THE ACT. CONSEQUENTLY, BOTH THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF FEBRUARY, 2018. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 19 TH DAY OF FEBRUARY, 2018/TS ITA NO.892 & 893/DEL./2016 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.