The Ludhiana Improvement Trust, Ludhiana V. CIT III, Ludhiana

ITA 898/CHANDI/2014

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8394 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: ADITYA KUMAR
• Keywords: Cancellation of registration
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH , ! ' #$ % & ' ($ , ! BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.898/CHD/2014 / ASSESSMENT YEAR : 2009-10 LUDHIANA IMPROVEMENT TRUST, FEROZE GANDHI MARKET, LUDHIANA. THE C.I.T-III., LUDHIANA. ./PAN NO: AAATL4452F /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI ASHWANI KUMAR, CA & SHRI ADITYA KUMAR, CA ! / REVENUE BY : SMT.C.CHANDRAKANTA, CIT DR ' # $ /DATE OF HEARING : 16.08.2021 %&'( $ /DATE OF PRONOUNCEMENT : 19.08.2021 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX III, LUDHIANA DATED 19.08.2014 RELATING TO ASSESSMENT YE AR 2009-10, PASSED U/S 12AA(3) OF THE OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT), CANCELLING THE ITA NO.898/CHD/2014 A.Y. 2 009-10 PAGE 2 OF 5 REGISTRATION GRANTED TO THE ASSESSEE U/S 12AA OF TH E ACT. 2. IT TRANSPIRES FROM THE ORDER OF THE LD.CIT THAT THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12AA OF TH E ACT VIDE LETTER DATED 25.03.2011 IN THE COURSE OF GIVING EFFECT TO THE DECISION OF THE ITAT CHANDIGAR H BENCH IN THE CASE OF THE ASSESSEE ALLOWING THE APPE AL OF THE ASSESSEE FOR SEEKING REGISTRATION U/S 12AA O F THE ACT, WAS CANCELLED VIDE THE IMPUGNED ORDER IN CHALLENGE BEFORE US, BY THE COMMISSIONER OF INCOME TAX-III ON ACCOUNT OF HIS FINDING THAT THE ACTIVITI ES INDULGED IN BY THE ASSESSEE INVOLVED CARRYING ON AL L ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND ACCORDINGLY, THE CASE OF THE ASSESSEE WAS COVERED BY THE PROVISO TO SECTION 2(15) OF THE ACT AND THE ASSESSEE COULD NOT BE SAID TO BE CARRYING O N ANY CHARITABLE ACTIVITY. 3. THIS ISSUE, WE FIND, HAS ALREADY BEEN ADJUDICATE D BY THE ITAT IN A NUMBER OF DECISIONS IN FAVOUR OF THE ASSESSEE HOLDING THAT THE PROVISO TO SECTION 2(15) OF THE AC T HAS NO ROLE TO PLAY IN THE MATTERS RELATING TO REGISTRATIO N OF THE TRUST U/S 12A OF THE ACT IN RESPECT OF GRANTING OR DECLINING OR CANCELLING THE REGISTRATION. A COPY OF THE ORDER PASSED BY ITA NO.898/CHD/2014 A.Y. 2 009-10 PAGE 3 OF 5 THE COORDINATE BENCH OF THE ITAT IN THE CASE OF PAT IALA IMPROVEMENT TRUST VS. CIT IN ITA NO.1135/CHD/2014 D ATED 17.06.2016 WAS PLACED BEFORE US BY THE LD.COUNSEL F OR THE ASSESSEE IN RESPECT OF HIS CONTENTION TO THE ABOVE EFFECT. A PERUSAL OF THE SAME REVEALS THAT WHILE ADJUDICATING AN IDENTICAL ISSUE OF CANCELLATION OF REGISTRATION GRA NTED U/S 12AA OF THE ACT IN VIEW OF THE AMENDMENT TO SECTION 2(15) OF THE ACT, THE ITAT NOTED THAT THE AMRITSAR BENCH OF THE ITAT IN THE CASE OF KAPURTHALA IMPROVEMENT TRUST VS. CIT , 60 TAXMAN.COM 301 HAD LAID DOWN THAT; I) THE SCOPE OF POWER OF THE COMMISSIONER U/S 12AA(3) FOR CANCELLATION OF REGISTRATION ALREADY GR ANTED IS VERY LIMITED IN AS MUCH AS IT CAN BE INVOKING ON LY WHEN THE ACTIVITIES OF THE TRUST ARE NOT GENUINE OR THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST; II) THE CONSIDERATION OF THE 1 ST PROVISO TO SECTION 2(15) OF THE ACT HAVE NO ROLE TO PLAY IN THE GRANT OR CANCELLATION OF REGISTRATION U/S 12A OF THE ACT AND THAT THE 1 ST PROVISO TO SECTION 2(15) OF THE ACT COMES TO PLAY ONLY ON YEAR TO YEAR BASIS AND NOT IN ABSOLUTE TERM S; ITA NO.898/CHD/2014 A.Y. 2 009-10 PAGE 4 OF 5 III) THE SAFEGUARD OF THE OBJECTS OF THE TRUST BEIN G VITIATED IN SO FAR AS THEIR CHARACTER OF CHARITABLE ACTIVITIES IS SAME ON ACCOUNT OF THE 1 ST PROVISO TO SECTION 2(15) OF THE ACT IS IN BUILT IN THE PROVISI ONS OF SECTION 13(8) OF THE ACT, WHICH WAS BROUGHT IN EFFE CT FROM THE SAME POINT OF TIME WHEN THE 1 ST PROVISO TO SECTION 2(15) OF THE ACT WAS INTRODUCED. 4. THUS THE SAID JUDGMENT CATEGORICALLY LAID DOWN A ND HELD THAT THE 1 ST PROVISO TO SECTION 2(15) OF THE ACT, CANNOT BE ATTRACTED FOR THE PURPOSE OR CANCELLATION OF REG ISTRATION GRANTED U/S 12AA OF THE ACT. 5. THE ISSUE INVOLVED IN THE PRESENT CASE IS ADMITT EDLY IDENTICAL. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE BY THE REVENUE, NOR ANY DISTINGUISHING FACTS POINTED OUT TO US. 6. IN VIEW OF THE ABOVE, THE ISSUE STANDS SQUARELY COVERED BY THE JUDGEMENT OF THE ITAT IN THE CASE OF PATIALA IMPROVEMENT TRUST(SUPRA) FOLLOWING WHICH WE HOLD TH AT THE ORDER OF THE COMMISSIONER OF INCOME TAX-III CANCELL ING THE REGISTRATION IN THE PRESENT CASE ON ACCOUNT OF THE FIRST PROVISO TO SECTION 2(15 ) OF THE ACT IS NOT IN ACCO RDANCE WITH ITA NO.898/CHD/2014 A.Y. 2 009-10 PAGE 5 OF 5 LAW. THE ORDER OF THE LD.CIT(E) IS THEREFORE SET AS IDE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 19 TH AUGUST, 2021. SD/- SD/- % & ' ($ (SANJAY GARG) (ANNAPURNA GUPTA) ! /JUDICIAL MEMBER )* ! /ACCOUNTANT MEMBER , % /DATED: 19 TH AUGUST, 2021 * $ * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR