The Commissioner Of Income Tax (Exemptions), Chandigarh V. M/s Apeejay Education Society, Jalandhar

MA 45/ASR/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4207 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-05-2016
• Assessment Year: misc
• Appeal Filed On: 23-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: ANANYA KAP
• Keywords: Charitable institution; Question of law
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER M. A. NO.45 (ASR)/2015 (ARISING OUT OF ITA NO.228(ASR)/2013) ASSESSMENT YEAR: NIL CIT, JALANDHAR-II, JALANDHAR. VS. M/S APEEJAY EDUCATION SOCIETY, BHAGWAN MAHAVIR MARG, NEW JAWAHAR NAGAR, JALANDHAR. PAN: AAATA3534F (APPELLANT) (RESPONDENT) M. A. NO.46 (ASR)/2015 (ARISING OUT OF ITA NO.227(ASR)/2013) ASSESSMENT YEAR: NIL CIT, JALANDHAR-II, JALANDHAR. VS. M/S RAJESHWARI SANGEET ACADEMY TRUST, BHAGWAN MAHAVIR MARG, NEW JAWAHAR NAGAR, JALANDHAR. PAN: AAATR2403F (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.S. KANWAL (DR) RESPONDENT BY: SH. SALIL KAPOOR (ADV.) SH. NIRMAL MAHAJAN (CA.) & ANANYA KAPOOR (ADV.) DATE OF HEARING: 06.05.2016 DATE OF PRONOUNCEM ENT: 06.05.2016 ORDER PER T. S. KAPOOR (AM): THESE ARE TWO MISCELLANEOUS APPLICATIONS FILED BY R EVENUE AGAINST THE ORDER OF TRIBUNAL DATED 08.05.2014 IN ITA NOS.2 27 & 228 (ASR)/2013 RESPECTIVELY. THE TRIBUNAL IN THIS ORDER HAD ALLOWE D REGISTRATION TO THE 2. M.A. NOS 45 & 46(ASR)/2015 (ARISING OUT O F ITA NOS.228 & 227(ASR)/2013) ASST. YEARS. NIL ABOVE SOCIETIES U/S 12AA WHICH THE COMMISSIONER OF INCOME TAX, JALANDHAR HAD CANCELLED. 2. AT THE OUTSET, LEARNED DR SUBMITTED THAT THE HON BLE TRIBUNAL HAD PASSED THE ORDERS WITHOUT HEARING THE LEARNED DR AN D THEREFORE, THE ORDERS CONTAINED A MISTAKE APPARENT FROM THE RECORD WHICH NEEDS TO BE RECTIFIED. 3. THE LEARNED AR IN HIS REPLY FILED A COPY OF ORDER DATED 10.03.2015 PASSED BY HONBLE PUNJAB AND HARYANA HIGH COURT IN ITA NO. 402 & 403 OF 2014 IN RESPECT OF THE TWO SOCIETIES. THE LEARNED A R SUBMITTED THAT AGAINST THE ORDER OF TRIBUNAL THE REVENUE HAD FILED APPEALS BEFORE HONBLE HIGH COURT AND HONBLE HIGH COURT HAD DISMISSED THE APPE ALS OF REVENUE, THEREFORE, THE MISCELLANEOUS APPLICATIONS FILED BY REVENUE HAS BECOME INFRUCTUOUS AND NEEDS TO BE DISMISSED. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GON E THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN THE CASE OF THESE TWO SOCIETIES THE COMMISSIONER OF INCOME TAX HAD CANCELLED THE REGIST RATION U/S 12AA OF THE ACT AND ON AN APPEAL FILED BEFORE THE ITAT, THE HON BLE ITAT ALLOWED THE REGISTRATION AND SET ASIDE THE ORDERS OF LEARNED CI T. AGAINST THE ORDER OF TRIBUNAL THE REVENUE BESIDES FILING MISCELLANEOUS A PPLICATIONS FILED APPEALS BEFORE HONBLE PUNJAB & HARYANA HIGH COURT AND HON BLE HIGH COURT HAS DISMISSED THE APPEALS FILED BY REVENUE VIDE ITS ORD ER DATED 10.3.2015 IN ITA NOS. 402 & 403 OF 2014. THE OPERATIVE PART OF HONB LE HIGH COURT ORDER IS REPRODUCED BELOW. 3. M.A. NOS 45 & 46(ASR)/2015 (ARISING OUT O F ITA NOS.228 & 227(ASR)/2013) ASST. YEARS. NIL AFTER HEARING COUNSEL FOR THE APPELLANT-DEPARTMENT , WE ARE NOT CONVINCED THAT ANY SUBSTANTIAL QUESTION OF LAW WOULD ARISE AND THE ORDER OF THE TR IBUNAL IS WELL JUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. UNDER SECTION 12AA OF TH E ACT, THE COMMISSIONER, AT THE RELEVANT TIME IN THE YEAR 1999 HAD CALLED FOR ALL DOCUMENTS AND INFORMATION FROM THE RESPONDENT- ASSESSEE TO SATISFY HIMSELF ABOUT THE GENUINENESS O F THE ACTIVITIES OF THE INSTITUTION AND AFTER MAKING ENQUIRES HAD PASSED THE ORDER REGISTERING TH E SAID INSTITUTION AND GIVING IT THE BENEFIT UNDER SECTION 12A OF THE ACT, WHICH MADE THE INSTIT UTION ELIGIBLE FOR EXEMPTION FROM THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT. UNDER SECTION 12AA(3) OF THE ACT, THE COMMISSIONER WAS TO BE SATISFIED ABOUT THE ACTIVITIES OF THE SAI D INSTITUTION AND IF THEY WERE NOT GENUINE AND THE SAME WERE NOT BEING CARRIED OUT IN ACCORDANCE W ITH THE OBJECTS OF THE INSTITUTION HE COULD PASS THE ORDER CANCELLING THE REGISTRATION. ADMITTE DLY, THE RESPONDENT-SOCIETY IS RUNNING AS MANY AS 21 INSTITUTES WHICH ARE SPREAD OVER THE COU NTRY FROM PUNJAB, HARYANA AND U.P. AND ALSO EXTEND TO MUMBAI. THE DETAILS OF THE STUDENTS AND THE LIST OF INSTITUTES AFFILIATED WITH CBSE, AICTE, MDU AND PTU WOULD BE APPARENT FROM THE TABLE GIVEN BELOW:- SR. NO. NAME OF THE SCHOOL/HIGHER INSTITUTION AFFILIATED TO/APPROVED BY NO. OF STUDENTS AS ON TODAY 1 APPEEJAY SCHOOL, SHEIKH SARAI, NEW DELHI CBSE 2680 2 APPEEJAY SCHOOL, SAKET, NEW DELHI CBSE 1306 3 APPEEJAY SCHOOL, PITAMPURA, DELHI CBSE 2689 4 APPEEJAY SCHOOL, FARIDABAD CBSE 2656 5 APPEEJAY SVRAN GLOBAL SCHOOL, FARIDABAD - 189 6 APPEEJAY SCHOOL, NOIDA CBSE 3950 7 APPEEJAY INTERNATIONAL SCHOOL, GREATER NOIDA CBSE 493 8 APPEEJAY SCHOOL, NERUL, NAVI MUMBAI CBSE 2630 9 APPEEJAY SCHOOL, KHARGHAR, NAVI MUMBAI CBSE 2028 10 APPEEJAY SCHOOL, CHARKHI-DADRI CBSE 639 11 APPEEJAY SCHOOL, MAHAVIR MARG, JALANDHAR CBSE 3309 12 APPEEJAY SCHOOL, TANDA ROAD, JALANDHAR - 220 13 APPEEJAY SCHOOL, HOSHIARPUR ROAD, RAMA MANDI, JALANDHAR CBSE 391 14 APPEEJAY SCHOOL OF MANAGEMENT, DWARKA, NEW DELHI AICTE APPROVED 340 15 APPEEJAY INSTITUTE OF MASS COMMUNICATION, DWARKA, NEW DELHI - 47 16 AIT-SCHOOL OF COMPUTER SCIENCE, GREATER NOIDA AICTE APPROVED 32 17 AIT-SCHOOL OF MANAGEMENT, GREATER NOIDA AICTE APPROVED 276 18 AIT-SCHOOL OF ARCHITECTURE & PLANNING, GREATER NOIDA UO TECHNICAL UNIVERSITY, AICTE APPROVED 332 4. M.A. NOS 45 & 46(ASR)/2015 (ARISING OUT O F ITA NOS.228 & 227(ASR)/2013) ASST. YEARS. NIL 19 APEEJAY COLLEGE OF ENGINEERING, SOHNA MDU, ROHTAK 208 20 APEEJAY SARASWATI COLLEGE OF GIRLS, CHARKHI-DADRI MDU, ROHTAK 1145 21 APEEJAY INSTITUTE OF MANAGEMENT TECHNICAL CAMPUS, JALANDHAR PTU, JALANDHAR, AICTE APPROVED 744 [ THUS, IT CANNOT BE DISPUTED THAT THE RESPONDENT-ASS ESSEE IS ENGAGED IN CARRYING OUT ITS OBJECTS AND THE GENUINESS OF THE SAME HAS BEEN DOUBTED. THE ALLEGATION IS REGARDING THE ALLEGED SUPPLY OF THE INSTALLATION OF THE SOFTWARE AND WHET HER THE SAME WAS DONE BY M/S. WSL OR NOT. MERELY BECAUSE SH. SANJAY D. SONAWANI HAD GIVEN A S TATEMENT, THE COMMISSIONER AS SUCH IS NOT JUSTIFIED IN CANCELLING THE REGISTRATION GRANTE D ON 13.05.1999 W.E.F. THE ASSESSMENT YEAR 2004-05. THE ASSESSEE HAD PLACED VARIOUS MATERIALS BEFORE THE TRIBUNAL TO SHOW THAT SOFTWARE MODULES PURCHASED WERE INSTALLED BETWEEN 2004 TO 20 11 AND THE ASSESSEE HAD INCURRED AS MUCH AS 91.71% OF THE RECEIPTS FOR THE ASSESSMENT Y EAR 2004-05. THE RELIANCE PLACED UPON THE JUDGMENT OF THE DIVISION BENCH OF THE HIGH COURT IN SANJEEVAMMA HANUMANTHA GOWDA CHARITABLE TRUST VS. DIRECTOR OF INCOME TAX (EXEMPT ION), (2006) 285 ITR 37 (KAR) IS OF NO AVAIL SINCE THE SAID CASE PERTAINS TO A CASE WHERE THE AU THORITIES HAD DENIED THE REGISTRATION AND IT OBSERVED THAT THE AUTHORITIES HAD NOT KEPT IN MIND THE MANDATORY PROVISIONS REGARDING THE APPLICATION OF THE INCOME OF THE TRUST AND HOW IT H AD BEEN EXPENDED AND WHETHER IT HAD BEEN UTILIZED TO ITS CHARITABLE AND RELIGIOUS PURPOSES. IN SUCH CIRCUMSTANCES, THE ORDERS HAD BEEN SET ASIDE AND IT HAD BEEN DIRECTED THAT FRESH CONSIDERA TION BE MADE. IN COMMISSIONER OF INCOME TAX VS. RED ROSE SCHOOL, (2007) 163 TAXMAN 19 (ALL), IT WAS HELD THAT THE INQUIRY REGARDING THE GENUINENESS OF THE ACTIVITIES HAVE TO BE SEEN WITH REGARD TO THE OBJECTS OF THE TRUST AND WHETHER THEY WERE IN C ONSONANCE WITH THE PUBLIC POLICY. ONLY ON THE GROUND OF MERE APPREHENSION, THE REGISTRATION C OULD NOT BE WITHDRAWN. ACCORDINGLY, THE ORDER OF THE TRIBUNAL ALLOWING THE APPEAL WAS UPHEL D. THE RELEVANT OBSERVATIONS READ THUS;- 19. THE OBJECTS OF THE TRUST CAN BE BAD FROM THE B YE-LAWS OR THE DEED OF TRUST, AS THE CASE MAY BE AND UNLESS, OF COURSE, THE OBJECTS OF THE TRUST APPARENTLY MAKE OUT THAT THEY WERE NOT IN CONSONANCE WITH THE PUBLIC POLICY OR THAT THEY WERE NOT THE OBJECTS OF ANY CHARITABLE PURPOSE, REGISTRATION CANNOT BE REFUSED ACCORDINGLY ON THIS GROUND. 20. IN REGARD TO THE GENUINENESS OF THE ACTIVITIE S OF THE TRUST OR THE INSTITUTION, WHOSE OBJECTS DO NOT RUN CONTRARY TO PUBLIC POLICY AND ARE, IN FA CT, RELATED TO CHARITABLE PURPOSES, THE CIT IS AGAIN EMPOWERED TO MAKE ENQUIRIES AS HE THINKS FIT. IN CASE THE ACTIVITIES ARE NOT GENUINE AND THEY ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH T HE OBJECTS OF THE TRUST/SOCIETY OR THE INSTITUTION, OF COURSE, THE REGISTRATION CAN AGAIN BE REFUSED. BUT ON MERE PRESUMPTIONS AND ON SURMISES THAT INCOME DERIVED BY THE TRUST OR THE IN STITUTION IS BEING MISUSED OR THAT THERE IS SOME APPREHENSION THAT THE SAME WOULD NOT BE USED I N THE PROPER MANNER AND FOR THE PURPOSES RELATING TO ANY CHARITABLE PURPOSE, REJECTION CANNO T BE MADE. 21. SECTION I2AA, WHICH LAYS DOWN THE PROCEDURE FO R REGISTRATION, DOES NOT SPEAK ANYWHERE THAT THE CIT, WHILE CONSIDERING THE APPLICATION FOR REGISTRATION, SHALL ALSO SEE THAT THE INCOME DERIVED BY THE TRUST OR THE INSTITUTION IS EITHER N OT BEING SPENT FOR CHARITABLE PURPOSE OR SUCH INSTITUTION IS EARNING PROFIT. THE LANGUAGE USED IN THE SECTION ONLY REQUIRES THAT ACTIVITIES OF THE TRUST OR THE INSTITUTION MUST BE GENUINE, WHICH ACC ORDINGLY WOULD MEAN, THEY ARE IN CONSONANCE WITH THE OBJECTS OF THE TRUST/ INSTITUTION, AND ARE NOT MERE CAMOUFLAGE BUT ARE REAL, PURE AND SINCERE, NOR AGAINST THE PROPOSED OBJECTS. THE PROF IT EARNING OR MISUSE OF THE INCOME DERIVED BY CHARITABLE INSTITUTION FROM ITS CHARITABLE ACTIVITI ES, MAY BE A GROUND FOR REFUSING EXEMPTION ONLY WITH RESPECT TO THAT PART OF THE INCOME BUT CANNOT BE TAKEN TO BE A SYNONYM TO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION. 5. M.A. NOS 45 & 46(ASR)/2015 (ARISING OUT O F ITA NOS.228 & 227(ASR)/2013) ASST. YEARS. NIL ACCORDINGLY, KEEPING IN VIEW THE PECULIAR FACTS AND CIRCUMSTANCES AS NOTICED ABOVE, WE ARE OF THE OPINION THAT THE COMMISSIONER OF INCOME TAX WAS NOT JUSTIFIED IN PASSING THE IMPUGNED ORDER FOR WITHDRAWING THE EXEMPTION AS ADMITTED, TH E RESPONDENT-ASSESSEE IS CARRYING OUT EDUCATIONAL ACTIVITIES BY RUNNING A LARGE NUMBER OF EDUCATIONAL INSTITUTIONS ALL OVER THE COUNTRY AND, THEREFORE, THE QUESTIONS OF LAW SOUGHT TO BE R AISED DO NOT ARISE. ACCORDINGLY, BOTH THE INCOME TAX APPEALS ARE DISMIS SED. IN VIEW OF THE ABOVE ORDER PASSED BY PUNJAB & HARYA NA HIGH COURT, THE ORDER OF TRIBUNAL STANDS MERGED WITH THAT OF HONBL E PUNJAB & HARYANA HIGH COURT AND THEREFORE, THE MISCELLANEOUS APPLICA TIONS FILED BY REVENUE HAS BECOME INFRUCTUOUS AND THEREFORE, THESE MISCELL ANEOUS APPLICATIONS ARE DISMISSED. 5. IN NUTSHELL, THE MISCELLANEOUS APPLICATIONS FILE D BY REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED:06.05.2015. /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER