JPP ALUMNI FOUNDATION,PUNE V. COMMISSIONER OF INCOME TAX(EXEMPTION) PUNE, PUNE

ITA 1424/PUN/2024

AI Insights

The case involves the JPP Alumni Foundation, a non-profit company, which appealed against the decision of the CIT, Exemption, Pune, rejecting its application for registration under section 12AB of the Income Tax Act. The CIT had found certain objects in the foundation's memorandum of association (MoA) to be commercial in nature, thus not qualifying for charitable purposes under the IT Act. The foundation argued that it had amended the MoA to remove the contentious clauses and sought another opportunity to present the amended MoA. The Tribunal, considering the amendments and the need for a fair hearing, remanded the case back to the CIT for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474234 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: ABHAY AVACHAT
• Keywords: Condonation of delay; Charitable institution
• Section: 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1424/PUN/2024 JPP Alumni Foundation, 510, Sadashiv Peth, Hatti Ganpati, Pune- 411030. PAN : AAFCJ1183P Vs. CIT, Exemption, Pune Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 30.06.2023 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 12AB of the IT Act. 2. There is a delay of 176 days in filing of the present appeal. In this regard, the assessee company has furnished application for condonation of delay duly supported with an affidavit. We are satisfied with the reasons mentioned in application for condonation of delay and in the interest of justice as well as with the consent of Assessee by : Shri Abhay Avachat Revenue by : Shri Amol Khairnar Date of hearing : 17.02.2025 Date of pronouncement : 28.03.2025 ITA No.1424/PUN/2024 2 Ld. DR, we condone the delay of 176 days and admit the appeal for adjudication. 3. Facts of the case, in brief, are that the assessee is a non-profit company registered under the provisions of section 8 of the Companies Act, 2013. The asseseee company filed application for registration in Form No.10AB under clause (iii) of section 12(1)(ac) of the IT Act on 30.12.2022. With a view to verify the genuineness of activities of the assessee and compliance to requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects, a notice was issued by Ld. CIT, Exemption, Pune through ITBA portal on 15.03.2023 requesting the assessee to upload certain information/clarification. The desired information was furnished by the assessee. On verification of said information, Ld. CIT, Exemption, Pune found that object nos.17 to 24 are prima-facie commercial in nature and not for charitable purposes. In response to above notice, the assessee company furnished reply and assured that the company will get the memorandum of association amended. After considering the reply of the assessee, Ld. CIT, Exemption, Pune rejected the application for registration and also cancelled the ITA No.1424/PUN/2024 3 provisional registration granted u/s 12AB read with section 12A(1)(ac)(vi) of the IT Act by observing as under :- “The response of the assessee has been carefully perused. The assessee has contingent that the objects of the company and other lawful things are to distinct things. Though, it is understood that the other lawful things are defined separately than the objects, the very body of MoA at 3B clearly specifies such other lawful things to be necessary for furtherance of objects of the company. It is needless to mention that the objects and the means to achieve the said objects are expected to go hand in hand especially when aimed at arriving a charitable purpose. A careful perusal of all the objects especially from object no. 17 to object no. 20 and the ones mentioned at Sl. No. 23 and 24 clearly indicates that the same can clearly construed to be the objects aimed at commercial intent. The object no. 17 provides to sell, manage, improve, develop, exchange, loan, let, sublet, mortgage and even dispose off any property of the company. The object no. 18 provides for purchase or otherwise acquired contract and sub-contract. The object no. 19 directly provides acquisition for patents, rights and trademarks. The object no. 20 again provides for acquisition, holding, purchase and convergence in stocks, shares and securities. Object no. 24 goes to the extent of creation of the fund for redemption of debentures or redeemable preference shares. The way these objects and the activities for furtherance of the objects have been termed and worded is clearly indicative of a futuristic commercial intent. The very fact that the assessee company in the submission itself has stated to amend the MoA by deleting some of the clauses is a sufficient reason to establish that a sizeable number of the MoA have clearly drifted away from the charity and charitable purpose as defined in IT Act, 1961. The objects and other lawful things in its present form and forming part of the MoA can't be stated to be the ones aimed at charitable purpose. Hence, the undersigned is of the belief that the same do not qualify to be registered u/s 12AB of the IT Act, 1961. In view of the discussion above, the application filed by the assessee trust u/s 12A(1)(ac)(iii) of the IT Act, 1961 is hereby rejected and the provisional registration granted is also cancelled.” 4. It is this order against which the assessee is in appeal before this Tribunal. ITA No.1424/PUN/2024 4 5. Ld. AR appearing from the side of the assessee submitted before us that Ld. CIT, Exemption, Pune has not provided proper opportunity to the assessee and, therefore, the impugned order of Ld. CIT, Exemption, Pune is not justified. It was submitted that the assessee company has now got the memorandum of association amended and also got it registered with the Registrar of Companies, Pune. In this regard, the amended memorandum of association is furnished before the Bench in the paper book and certificate of registration issued by Registrar of Companies, Pune in this regard is also produced before the Bench. It was the sole prayer of the counsel of the assessee company to provide one opportunity to appear before Ld. CIT, Exemption with regard to registration u/s 12AB of the IT Act since the memorandum of association has already been amended. Accordingly, it was requested before the Bench to set-aside the impugned order passed by Ld. CIT, Exemption, Pune with a direction to provide at least one more opportunity to furnish the requisite documents/information and amended memorandum of association in support of application for registration u/s 12AB of the IT Act. ITA No.1424/PUN/2024 5 6. Ld. DR appearing from the side of the Revenue relied on the order of Ld. CIT, Exemption, Pune and requested to confirm the same. 7. We have heard Ld. Counsels from both the sides and perused the material available on record. We find that admittedly there were certain clauses in memorandum of association regarding which objection was raised by Ld. CIT, Exemption, Pune. Since the assessee company has removed those clauses from memorandum of association and has produced before us the registered amended memorandum of association, therefore, in the interest of justice, we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to decide the application for registration afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Pune and produce requisite documents/information/ submissions and amended memorandum of association in support of the application for registration u/s 12AB of the IT Act without taking any adjournment under any pretext, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass ITA No.1424/PUN/2024 6 appropriate order as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 28th day of March, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 28th March, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT, Exemption, Pune. 4. The Pr. CIT/CIT concerned. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "