ITO, Jaipur V. CENTRE FOR DEVELOPMENT COMMUNICATION TRUST, Jaipur

ITA 93/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5251 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Maximum Marginal Rate; Cancellation of registration
• Section: 143(3); 12A; 12AA; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 93/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. THE INCOME TAX OFFICER, WARD 2(1), JAIPUR. CUKE VS. M/S. CENTRE FOR DEVELOPMENT COMMUNICATION TRUST, 16, SHREE GOPAL NAGAR, NEW SANGANER ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAAAC 0873 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DAGUR (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ADITYA VIJAY (ADVOCATE) & SHRI DEEPAK PAREEK (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14.06.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/06/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD.CIT(APPEALS)-I, JAIPUR DATED 20.12.2013 PERTAINING TO A.Y. 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN ALLOWING THE EXEMP TION U/S 11 AND 12 TO THE ASSESSEE TRUST. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN HOLDING THAT TAX C ANNOT BE CHARGED ON THE ASSESSEE AT MAXIMUM MARGINAL RATE. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND WHILE FRAMING THE ASSESSMEN T UNDER SECTION 143(3) OF THE IT ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), THE AO DISALLOWED THE EXEMPTION 2 ITA NO. 93/JP/2014 ITO VS. CENTRE FOR DEVELOPMENT COMMUNICATION TRUST ON THE BASIS THAT THE REGISTRATION GRANTED UNDER SE CTION 12AA HAS BEEN WITHDRAWN. THE ASSESSEE AGGRIEVED BY THIS ORDER, PREFERRED APP EAL BEFORE LD. CIT (A), WHO ALLOWED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED, THE REVENUE IS BEFORE US. 3.1. THE LD. D/R SUPPORTED THE ORDER OF THE AO. 3.2. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF COORDINATE BENCH IN ITA NO. 163/JP/2012 FOR THE A.Y. 2009-10 WHEREIN TH E TRIBUNAL HAS DECIDED THE ISSUE OF WITHDRAWAL OF REGISTRATION IN FAVOUR OF TH E ASSESSEE. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AO HAS DISALLOWED THE EXEMPTION ON THE GROUND THAT THE REGISTRATION HAS BEEN WITHDRAWN. 3.4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE EXEM PTION WAS DENIED ON THE GROUND THAT THE REGISTRATION UNDER SECTION 12AA HAS BEEN W ITHDRAWN. THE COORDINATE BENCH IN ITA NO. 163/JP/2012 IN PARA 5 OF ITS ORDER HAS D ECIDED THE ISSUE AS UNDER :- 5. HEARD PARTIES WITH REFERENCE TO MATERIAL ON REC ORD. THE PROVISIONS OF SECTION 12AA(3) OF THE IT ACT, WHICH ARE RELEVANT TO THE ISSUE ARE REPRODUCED AS UNDER :- (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB SECTION (1) (O R HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A (AS IT S TOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO.2) ACT, 1996 (33 OF 19 96) AND SUBSEQUENTLY THE COMMISSIONER IS SATISFIED THAT TH E ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NO T BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELING THE REGISTRATION OF SUCH TRUST OR INSTITUTION : 3 ITA NO. 93/JP/2014 ITO VS. CENTRE FOR DEVELOPMENT COMMUNICATION TRUST PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GI VEN A REASONABLE OPPORTUNITY OF BEING HEARD. THE PERUSAL OF THE AFORESAID LEGAL PROVISIONS REVEA LS ONLY TWO CIRCUMSTANCES UNDER WHICH THE LD. CIT IS EMPOWERED TO CANCEL THE REGISTRATION GRANTED UNDER SECTION 12AA(1) OF THE A CT. THESE CONDITIONS ARE (1) THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE; (2) THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDA NCE WITH THE OBJECTS OF THE INSTITUTION. IN THE PRESENT CASE IN APPEAL, THE LD. CIT, HOWEVER, BY APPLICATION OF PROVISO BELOW SECTION 2(15) TOOK DECISION IN CANCELING THE REGISTRATION GRANTED TO THE ASSESSEE AND DID NO T RESTRICT THE SCOPE OF HIS JURISDICTION AS CONTAINED UNDER SECTION 12AA (3) OF THE ACT. THE PROVISO BELOW SECTION 2(13) OF THE ACT IS RELEVANT FOR THE PURPOSE OF ASSESSMENT WHEREBY THE ASSESSING OFFICER UPON FINDI NG THAT THE ASSESSEES ACTIVITIES ARE IN THE NATURE OF BUSINESS OR TRADE, COULD DENY APPLICATION OF SUCH INCOME UNDER SECTION 11(1)(A)/1 2 OF THE ACT, FROM YEAR TO YEAR BASIS. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION IN THE CANCELLATION OF REGISTRATION BY THE LD. CIT WHICH WE HEREBY SET ASIDE AND ALLOW THE GROUND RAISED IN APPEAL. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE I NTO THE ORDER OF LD. CIT (A), THE SAME IS HEREBY AFFIRMED. 4. GROUND NO. 2 IS AGAINST THE FINDING THAT TAX CAN NOT BE CHARGED ON THE ASSESSEE AT MAXIMUM MARGINAL RATE. 4.1. THE LD. D/R SUPPORTED THE ORDER OF THE AO. 4.2. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF LD. CIT (A). THE LD. CIT (A) IN PARA 11 OF HIS ORDER DE CIDED THE ISSUE AS UNDER :- 11. I HAVE CONSIDERED FACTS OF THE CASE. THE TAX HAS BEEN CHARGED IN THIS CASE AT MAXIMUM MARGINAL RATE ON THE GROUND THAT THE APPELLANT HAS BEEN TREATED AS AN AOP AFTER DENIAL O F EXEMPTION U/S 11. HOWEVER, AS HAS BEEN DECIDED WITH REFERENCE OF GROU ND NO. 1 (SUPRA), THE APPELLANT IS ENTITLED TO EXEMPTION U/S 11 & 12. HENCE, THE ACTION OF THE AO IN TAXING THE APPELLANT AT MAXIMUM MARGIN AL RATE DOES NOT APPEAR TO BE CORRECT. THE APPEAL ON THIS GROUND IS, ACCORDINGLY, ALLOWED. 4 ITA NO. 93/JP/2014 ITO VS. CENTRE FOR DEVELOPMENT COMMUNICATION TRUST 4.3. SINCE WE HAVE AFFIRMED THE FINDING OF LD. CIT (A) IN RESPECT OF EXEMPTION UNDER SECTION 11, THEREFORE, WE DO NOT SEE ANY REAS ON TO INTERFERE WITH THE ORDER OF LD. CIT (A) WHICH IS HEREBY CONFIRMED. THIS GROUND OF THE REVENUE IS REJECTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16/06/2016 . SD/- SD/- VH-VKJ-EHUK] ( DQY HKKJR ) ( T.R. MEENA) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 16/06/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ITO WARD 2(1), JAIPUR. 2. THE RESPONDENT- CENTRE FOR DEVELOPMENT COMMUNICA TION TRUST, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 93/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 93/JP/2014 ITO VS. CENTRE FOR DEVELOPMENT COMMUNICATION TRUST