Joginapally BR Educational Society V. Commissioner of Income Tax (Central) Hyderabad

ITTA/461/2012

AI Insights

The case involves M/s. Joginapally BR Educational Society, which appealed against the decision of the Income Tax Appellate Tribunal. The Tribunal had confirmed the Commissioner of Income Tax's order withdrawing the society's registration under Section 12AA of the Income Tax Act. The withdrawal was based on findings that the society was collecting capitation/donations for student admissions and was not adhering to its stated charitable objectives. The High Court, after reviewing the facts and the Tribunal's decision, agreed with the Tribunal's findings and dismissed the appeal, stating that the society's activities were not in accordance with the objects of the trust and were instead commercial in nature.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 796391 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 17-07-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Charitable Activities; Commercial activities; Income Tax; Withdrawal of registration; Capitation Donation
• Section: 12AA; 2(15); 12AA(3)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE SEVENTEENTH DAY OF JULY TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No. 461 OF 2012 Between: M/s. Joginapally BR Educational Society, Having its office at 6-3-248/3, Road No.1, Banjara Hills, Hyderabad, Rep. by its Secretary Sri J. Vamshidhar Rao ..... Appellant AND Commissioner of Income Tax (Central) Hyderabad .....Respondent The Court made the following : JUDGMENT: (per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is preferred against the judgment and order of the learned Tribunal dated 31.8.2012 and sought to be admitted on the following suggested questions of law. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in law in confirming an order of the Commissioner of Income Tax withdrawing registration granted to the Appellant under Sec.12AA of the Act by relying upon grounds that are not germane or relevant for exercise of powers of withdrawal conferred on the Commissioner under Sec. 12AA(3) of the Act? We have heard the learned counsel for the appellant and the gone through the impugned judgment and order of the learned Tribunal. The learned Tribunal on fact found as follows: In the present case, as seen from the facts narrated by the CIT (Central), Hyderabad, the assessee is collecting the capitation/donation for admitting the students to the institution and also the seized material reflects violation of object clause of the assessee. Again in paragraph No.14 of the judgment and order, the learned Tribunal held as follows: In these circumstances, the assessee cannot be considered as a trust engaged in charitable activities. The objects of the trust have been violated in a wholesome manner and the basis on which registration is granted no longer survives or hold good, would call immediate interference by the registration granting authority. In these circumstances, the registration authority cancels the registration...…….The CIT (Central), Hyderabad considering the entire facts of the case found that there is violation of the provisions of Section 2(15) of the Act and the case cannot be called as a trust and it is carrying on the activities in a commercial manner for which registration under Sec. 12A cannot be continued. Learned counsel for the appellant argued before us that the precondition for cancellation of the registration under Section 12AA(3) of the Income Tax Act has not been fulfilled. He says that there is no clear- cut fact finding that the activities of the trust or the institution are not genuine and not being carried out in accordance with the objects of the trust. In our view, the objects of the institution have been violated and in its place commercial activities have taken place. Therefore, the contention of the learned counsel for the appellant that the precondition for withdrawing the registration is not satisfied, is not correct, as it is held on fact that the activities of said trust are not being carried on in accordance with the objects of the trust. In view of the aforesaid finding, we dismiss the appeal. No order as to costs. ______________________ Kalyan Jyoti Sengupta, CJ. __________ G.Rohini, J. July 17, 2013 MAS "