J B Educational Society, Hyd, Hyderabad V. DCIT, Central Circle-1, Hyd, Hyderabad

ITA 989/HYD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98752 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: S RAMA RAO
• Keywords: Search and seizure; Benefit of exemption
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 987/H/2015 2011 - 12 JOGINAPALLY BR EDUCATIONAL SOCIETY, HYDERABAD PAN AAATJ4159P DCIT, C.C.1, HYDERABAD. 988/H/2015 2012 - 13 ITA.NO. A.Y. APPELLANT RESPONDENT 989/H/2015 2011 - 12 JB EDUCATIONAL SOCIETY, HYDERABAD PAN AAATJ3217A DCIT, C.C.1, HYDERABAD. 990/H/2015 2012 - 13 FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. J. SIRI KUMAR DATE OF HEARING : 15.10.2015 DATE OF PRONOUNCEMENT : 18 .11. 2015 ORDER PER BENCH : THESE FOUR APPEALS ARE DIRECTED AGAINST THE SEPARATE BUT IDENTICAL ORDERS PASSED BY THE LD. CIT (A)-XI, HYDERABAD AND THEY PERTAIN TO A.YS. 2011-12 AND 201 2- 13 IN THE CASE OF TWO IDENTICALLY SITUATED EDUCATIO NAL SOCIETIES WHOSE NAMES WERE MENTIONED IN THE CAUSE T ITLE. 2. THE SOCIETIES ARE REGISTERED UNDER THE PUBLIC SOCIETIES REGULATION ACT WITH THE MAIN OBJECT OF 2 ITA.NOS.987 & 988/H/2015 JOGINAPALLY BR EDUCATIONAL SOCIETY, HYDERABAD ITA.NOS.989 & 990/H/2015 JB EDUCATIONAL SOCIETY, HY DERABAD ESTABLISHING, MANAGING AND MAINTAINING EDUCATIONAL INSTITUTIONS WHICH FALLS WITHIN THE DEFINITION OF CHARITABLE ACTIVITY. THOUGH THE SOCIETIES WERE ORIGINALLY GRA NTED REGISTRATION UNDER SECTION 12AA OF THE ACT, IT WAS LATER ON WITHDRAWN BY THE DIT(E). THE CCIT WITHDREW THE APPR OVAL GRANTED UNDER SECTION 10(23)(C) OF THE ACT. THEREFO RE, THE ASSESSMENTS CAME TO BE MADE FOR THE A.Y. UNDER CONSIDERATION BY TREATING THE EXCESS OF INCOME OVER EXPENDITURE AS TAXABLE INCOME. IN OTHER WORDS, THE ASSESSEES HEREIN WERE HELD TO BE NOT ENTITLED TO TH E BENEFIT OF EXEMPTION EITHER UNDER SECTION 12AA OF THE ACT O R UNDER SECTION 10(23)(C) OF THE ACT. 3. SEARCH AND SEIZURE OPERATIONS WERE CARRIED ON THE GROUP OF THE ABOVE MENTIONED ASSESSEES AS WELL AS ON THE RESIDENCES OF SOME OF THE OFFICE BEARERS OF THE SOCIETY ON 10.09.2009 AND THEREAFTER, DGIT (INV.) WITHDREW THE APPROVAL ORIGINALLY GRANTED UNDER SECTION 10(23)(C) (VI), WHICH WAS UNSUCCESSFULLY CHALLENGED BEFORE THE HON BLE HIGH COURT. ACCORDINGLY, THE ASSESSMENTS WERE COMPL ETED BY TREATING THE ASSESSEES AS AOPS, BY DENYING THE C LAIM OF EXEMPTION. IT MAY BE NOTICED THAT THE REGISTRATION UNDER SECTION 12AA HAVING BEEN CANCELLED IN THE EARLIER Y EARS THE ASSESSEE CHALLENGED THE SAME BEFORE THE ITAT BU T THE APPELLATE TRIBUNAL DISMISSED THE APPEALS FILED BY T HE ASSESSEES HEREIN. SINCE EXCESS OF INCOME OVER EXPEN DITURE WAS TREATED AS TAXABLE IN THE YEARS UNDER CONSIDERA TION, IN RESPECT OF BOTH THE EDUCATIONAL SOCIETIES, THE A SSESSEES PREFERRED APPEALS BEFORE THE LD. CIT(A). IT WAS CON TENDED 3 ITA.NOS.987 & 988/H/2015 JOGINAPALLY BR EDUCATIONAL SOCIETY, HYDERABAD ITA.NOS.989 & 990/H/2015 JB EDUCATIONAL SOCIETY, HY DERABAD THAT THE ASSESSEES FILED AN APPLICATION IN FORM56D DATED 10.12.2012 FOR REGISTRATION UNDER SECTION 10(23)(C) (VI) OF THE I.T. ACT AND THEREFORE, ASSESSMENTS SHOULD NOT HAVE BEEN MADE BEFORE THE DISPOSAL OF THE APPLICATIONS. LD. CIT(A) OBSERVED THAT THERE IS NOTHING IN LAW TO SUG GEST THAT EXEMPTION SHOULD BE GRANTED SIMPLY BECAUSE APPLICATION HAS BEEN MADE FOR APPROVAL. HE ALSO OBS ERVED THAT AN APPLICATION HAD BEEN MADE BEFORE THE CCIT A ND NOT BEFORE THE A.O. AND ALSO NOTED THAT APPROVAL UN DER SECTION 10(23)(C) OF THE ACT WAS EARLIER GRANTED BU T WITHDRAWN IN THE LIGHT OF ADVERSE EVIDENCE FOUND DU RING THE SEARCH AND THUS MERE FILING OF AN APPLICATION B EFORE THE CHIEF COMMISSIONER, FOR GRANT OF REGISTRATION U NDER SECTION 10(23)(C), WOULD NOT GIVE THE ASSESSEES HER EIN A RIGHT TO SEEK EXEMPTION SINCE TAXATION IS A NORM AN D EXEMPTION IS AN EXCEPTION. AGGRIEVED ASSESSEES HERE IN PREFERRED APPEALS BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEES AS WELL AS THE LD. D.R. AND ALSO PERUSED THE WRITTEN SUBMISSIONS. FIRS T PROVISO TO SECTION 10(23)(C)(VI) MANDATES THAT AN INSTITUTION HAS TO MAKE AN APPLICATION IN THE PRESC RIBED FORM AND MANNER TO THE PRESCRIBED AUTHORITY FOR THE PURPOSE OF GRANT OF EXEMPTION. 14 TH PROVISO THERETO STATES THAT WITH REGARD TO ANY INSTITUTION REFERRED TO IN THE FIRST PROVISO IF AN APPLICATION IS MADE AFTER 1 ST DAY OF JUNE, 2006, FOR THE PURPOSE OF GRANT OF EXEMPTION, IT HAS TO BE ON OR BEFORE 30 TH DAY OF SEPTEMBER OF THE RELEVANT 4 ITA.NOS.987 & 988/H/2015 JOGINAPALLY BR EDUCATIONAL SOCIETY, HYDERABAD ITA.NOS.989 & 990/H/2015 JB EDUCATIONAL SOCIETY, HY DERABAD ASSESSMENT YEAR FOR WHICH EXEMPTION IS SOUGHT. IN T HE INSTANT CASE, IN BOTH THE CASES ON HAND, AS COULD B E NOTICED FROM THE WRITTEN SUBMISSIONS FILED ON BEHAL F OF THE ASSESSEES, AN APPLICATION FOR APPROVAL UNDER SECTIO N 10(23)(C) WAS FILED ON 01.10.2012 AND CERTAINLY NOT BEFORE 30.09.2012 AND THUS FOR BOTH THE YEARS UNDER CONSIDERATION THE ASSESSEES CANNOT CLAIM EXEMPTION. IN THIS CASE, ADMITTEDLY, EXEMPTION WAS NOT GRANTED BY THE SPECIFIED AUTHORITY UNDER SECTION 10(23)(C)(VI) OF THE ACT AND IN FACT APPLICATIONS WERE FILED ONLY ON 01.10.2 012 AND THEREFORE FOR BOTH THE YEARS UNDER CONSIDERATION AS SESSEES HEREIN ARE NOT ENTITLED TO GRANT OF EXEMPTION. UNDE R THESE CIRCUMSTANCES, WE AFFIRM THE ORDERS PASSED BY THE L D. CIT(A). 5. IN THE RESULT, APPEALS FILED BY BOTH THE ASSESSEES ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2 015. SD/- SD/- (S. RIFAUR RAHMAN) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDNET HYDERABAD, DATED 18 TH NOVEMBER, 2015 VBP/- 5 ITA.NOS.987 & 988/H/2015 JOGINAPALLY BR EDUCATIONAL SOCIETY, HYDERABAD ITA.NOS.989 & 990/H/2015 JB EDUCATIONAL SOCIETY, HY DERABAD COPY TO 1. JOGINAPALLY BR EDUCATIONAL SOCIETY, M/S. MAHESH VIRENDER & SRIRAM C.AS. 6-3-788/36 & 37A, AMEERPET, HYDERABAD. 2. JB EDUCATIONAL SOCIETY, HYDERABAD 3. DCIT, CENTRAL CIRCLE - 1, HYDERABAD. 4. CIT(A) - XI, HYDERABAD 5. CIT (CENTRAL), HYDERABAD 6. D.R. ITAT B BENCH, HYDERABAD 7. GUARD FILE