Income Tax Appellate Tribunal - Amritsar
M/S Sant Merry Educational Trust, ... vs Commissioner Of Income Tax, ( ... on 6 September, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND
SH. N.K.CHOUDHRY, JUDICIAL MEMBER
ITA No.710(Asr)/2017
Assessment Year:
M/s. St. Mary's Education Trust, Vs. CIT(Exemptions),
Kala Chak Road, Sujanpur, Chandigarh
Pathankot
PAN:AAGTS 0669B
(Appellant) (Respondent)
Appellant by : Sh. P.N. Arora (Ld. Adv.)
Respondent by : Smt. Prabhojot Kaur (Ld. DR)
Date of hearing: 05.07.2018
Date of pronouncement: 06.09.2018
ORDER
PER N.K.CHOUDHRY, JM:
The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 29.09.2017 passed by the Ld. CIT(Exemption), Chandigarh, u/s. 10(23C)(vi) of the I.T. Act, 1961 (hereinafter called as 'the Act').
2. The grounds of appeal raised by the assessee are under.
"1. That the order passed by the Commissioner of Income Tax (Exemptions), Chandigarh, u/s 10(23C)(vi) of the IT Act, 1961, therein refusing to grant approval for exemption u/s 10(23C)(vi) of the IT Act, 1961, is against the facts of the case and is untenable in law .
2. That no proper & reasonable opportunity of being heard was allowed before refusing to grant approval for exemption u/s 10(23C)(vi) of the IT Act, 1961. As such, the order passed is bad in law and the same is liable to be cancelled
3. That the Ld. CIT(E), Chandigarh refused the registration on flimsy grounds without appreciating the facts of the case and without applying his mind.2 ITA No.710/Asr/2017
M/s. St. Mary's Educational Trust v. CIT(E)
4. That the CIT(E) did not appreciate that the society solely existed for the purpose of imparting education and not for the purpose of profit as observed by the CIT(E). Thus the approval for grant of exemption u/s 10(23C)(vi) of the IT Act, 1961, as claimed should have been allowed as all the conditions therein were completely fulfilled.
5. That on the facts and circumstances of the case, the Ld. CIT(E) was only required to see if the objects of society are charitable and whether the society is genuine or not.
6. That the worthy CIT(E) did not appreciate that the society solely existed for education purposes and was clearly entitled for deduction as claimed u/s 10(23C)(vi) of the IT Act, 1961"
3. The brief facts of the case are that an application in Form No.56D for grant of exemption/approval u/s 10(23C)(vi) of the Act was filed by the assessee/applicant on 30.09.2016 which was taking into consideration by the ld. CIT(E) while affording an opportunity of being heard to the Applicant trust, vide letter dated 17.08.2017 fixing the case for 04.09.2017 and the assessee was asked to submit various documents/details to substantiate the nature and genuineness of its activities by the fixed date i.e., 04.09.2017, which was replied by the representative of the applicant trust vide reply dated 08.09.2017. Thereafter, the ld. CIT(E) declined to grant approval u/s 10(23C)(vi) of the Act mainly on the various grounds inter-alia mainly on the ground that the applicant society having its registered office at Chennai and having got its registration u/s 12AA of the Act from the Exemption Office at Chennai, therefore, the present application has been filed at the wrong jurisdiction. The order impugned herein was challenged by the applicant trust and is in consideration before us.
4. Having heard the parties and after perusing the material on record, it reflects that the assessee is running a school namely St. Mary's School, Kala Chak Road, Sujanpur, Pathankot and had applied for approval u/s 10(23C)(vi) of the Act. During the proceedings before the ld. CIT(E), Ms. Madhu Bala, Managing Director of the trust filed an 3 ITA No.710/Asr/2017 M/s. St. Mary's Educational Trust v. CIT(E) affidavit dated 06.09.2017 to effect that the trust was created with the object to educate the public by establishing schools, professional and technical colleges and other institutions or such educational purposes. The trust had only deals in educational services and had not doing any other activities other than the educational services. However, the ld. CIT(E) did not consider the claim of the applicant trust and observed in para no.7 that the aims and object of the applicant trust include several clauses which are not for the purposes of education. The object clauses such as............................................................................................... .................................................................................................. are not at all related to education and therefore, the activities of the applicant trust do not remain "solely for education" pre-requisite for approval u/s. 10(23C) (vi) of the I.T. Act.
5. Recently ITAT Bench at Amritsar in the case of Sutlej Educational Charitable Trust v. CIT(E), Chandigarh in ITA No.676(Asr)/2017 decided on 9th May, 2018 dealt with the identical issue and directed the grant of approval u/s. 10(23C)(vi) to the assessee trust qua SPSS, an educational institution existing solely for the purposes of education and not for the purposes of profit. The relevant part of the order is reproduced herein below.
"5. In view of the foregoing, we, vacating the findings by the ld. CIT(E), direct the grant of approval under section 10(23C) (vi) to the assessee trust qua SPSSS, an education institution existing solely for the purposes of education and not for the purposes of profit. This, of course, would be subject to the capital/funds of the school being not used for any other (non-educational) activity (object) by the assessee-trust, or any other condition deemed fit and proper, viz. as to maintenance and audit of school accounts separately, etc., in accordance with and as contemplated by law, that the competent authority may impose while granting the said approval. We decide accordingly."4 ITA No.710/Asr/2017
M/s. St. Mary's Educational Trust v. CIT(E) Hence, considering the issue in hand as the assessee trust although having many objects including to educate the public by establishing schools, professional and technical colleges or other educational institutions for such educational purposes as the applicant trust through its Managing Director of the trust filed affidavit to the effect that the trust was created with the object of educate the public by establishing school by professional and technical colleges or other educational institutions for such educational purpose and the trust had only deals in educational services and had not doing any other activities other than the educational services.
The co-ordinate bench at Amritsar has already dealt with the similar and identical issue and directed to grant the approval, hence, in view of the above as well as in view our thoughtful considered view, the aforesaid reason of rejection by the Ld. CIT(E) cannot be approved.
6. Another main reason for declining of approval u/s. 10(23C)(vi) of the Act was that the society having its registered office at Chennai and got its registration u/s 12A from the Exemption Office at Chennai, the present applicant has been filed at the wrong jurisdiction.
Let us to peruse the notification qua jurisdiction of CIT(Exemption) for grant of approval under section 10(23C)(vi) and other provisions of the Act:
NOTIFICATION NO. 52/2014, Dated : October 22, 2014 (Income-Tax) S.O. 2754 (E).--In exercise of the powers conferred by sub-section (1) and (2) of section 120 of the Income-Tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India, Central Board of Direct Taxes number S.O.880(E), dated the 14th September, 2001, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub section (ii), dated the 14th September, 2001, except 5 ITA No.710/Asr/2017 M/s. St. Mary's Educational Trust v. CIT(E) as respects things done or omitted to be done before such supersession, the Central Board of Direct Taxes hereby -
(a) directs that the Commissioners of Income-tax specified in column (2) of the Schedule annexed hereto having their headquarters at the places specified in the corresponding entries in column (3) of the said Schedule shall exercise the powers and perform all the functions in respect of such cases or classes of cases as specified in column (5), in such territorial areas specified in the corresponding entries in column (4) of the said Schedule;
(b) authorises the Commissioners of Income-tax referred to in this notification to issue orders in writing for the exercise of the powers and performance of the functions by the Additional Commissioners of Income-tax or Joint Commissioners of Income-tax and Tax Recovery Officers, who are subordinate to them, in respect of cases or classes of cases specified in column (5) in such territorial areas specified in the corresponding entries in column (4) of the said Schedule in accordance with the orders issued by the respective Commissioners of Income-tax.
(c) authorises the Additional Commissioners of Income-tax or Joint Commissioners of Income-tax referred to in clause (b) above, to issue orders in writing for the exercise of the powers and performance of the functions by the Assessing Officers, who are subordinate to the said Additional Commissioners of Income-tax or Joint Commissioners of Income-tax in respect of cases or classes of cases, in respect of which such Additional Commissioners of Income-tax or Joint Commissioners of Income-tax are authorised by the Commissioners of Income-tax under clause (b) above.
SCHEDULE S.No. Designation Headquarters Territorial Cases or classes of cases Area (1) (2) (3) (4) (5)
1. Commissioner of Ahmedabad State of Gujarat, All cases of persons in the territorial area Income-tax Union Territory specified in column (4) claiming exemption (Exemption), of Daman and under clauses (21), (22), (22A), (22B), (23), Ahmedabad Diu, Union (23A), (23AAA), (23B), (23C), (23F), (23FA), Territory of Dadra (24,) (46) and (47) of section 10, section 11, and Nagar Haveli section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 1 to 20 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
2. Commissioner of Bangalore States of All cases of persons in the territorial area Income-tax Karnataka and specified in column (4) claiming exemption (Exemption), Goa under clauses (21), (22), (22A), (22B), (23), Bangalore (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or 6 ITA No.710/Asr/2017 M/s. St. Mary's Educational Trust v. CIT(E) assessable by an Income-tax authority at serial numbers 21 to 34 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
3. Commissioner of Bhopal States of Madhya All cases of persons in the territorial area Income-tax Pradesh and specified in column (4) claiming exemption (Exemption), Chhattisgarh under clauses (21), (22), (22A), (22B), (23), Bhopal (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 35 to 45 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
4. Commissioner Chandigarh States of All cases of persons in the of Income-tax Jammu and territorial area specified in column (Exemption), Kashmir, (4) claiming exemption under Chandigarh Himachal clauses (21), (22), (22A), (22B), Pradesh, (23), (23A), (23AAA), (23B), (23C), Punjab, (23F), (23FA), (24), (46) and (47) of Haryana and section 10, section 11, section 12, Union section 13A and section 13B of the Territory of Income-tax Act, 1961 and assessed Chandigarh or assessable by an Income-tax authority at serial numbers 50 to 68 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
5. Commissioner of Chennai State of Tamil All cases of persons in the territorial area Income-tax Nadu and Union specified in column (4) claiming exemption (Exemption), Territory of under clauses (21), (22), (22A), (22B), (23), Chennai Puducherry (23A), (23AAA), (23B), (23C), (23F), (23FA), (excluding (24), (46 and (47) of section 10, section 11, Yanam and section 12, section 13A and section 13B of Mahe district) the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 69 to 87 specified in the notification of government of India bearing number S.O. _ dated the _ th th October, 2014.
6. Commissioner of Delhi National Capital All cases of persons in the territorial area Income-tax Territory of specified in column (4) claiming exemption (Exemption), Delhi under clauses (21), (22), (22A), (22B), (23), Delhi-2 (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46 and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 88 to 111 specified in the 7 ITA No.710/Asr/2017 M/s. St. Mary's Educational Trust v. CIT(E) notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
7. Commissioner of Hyderabad (i) states of All cases of persons in the territorial area Income-tax Telangana, specified in column (4) claiming exemption (Exemption), Odisha and under clauses (21), (22), (22A), (22B), (23), Hyderabad Andhra Pradesh (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46 and (47) of section 10, section 11,
(ii) Yanam section 12, section 13A and section 13B of district of the the Income-tax Act, 1961 and assessed or Union Territory assessable by an Income-tax authority at of Puducherry Serial numbers 46 to 49 and 117 to 130 specified in the notification of government of India bearing number S.O. _ dated the _ th October, 2014.
8. Commissioner of Jaipur State of All cases of persons in the territorial area Income-tax Rajasthan specified in column (4) claiming exemption (Exemption), under clauses (21), (22), (22A), (22B), (23), Jaipur (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46 and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 131 to 140 specified in the notification of government of India bearing number S.O. _ dated the _ th October, 2014.
9. Commissioner of Kochi (i) State of All cases of persons in the territorial area Income-tax Kerala, specified in column (4) claiming exemption (Exemption), under clauses (21), (22), (22A), (22B), (23), Kochi (ii) Mahe (23A), (23AAA), (23B), (23C), (23F), (23FA), district of the (24), (46 and (47) of section 10, section 11, Union Territory section 12, section 13A and section 13B of of Puducherry, the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at
(iii) Union serial numbers 152 to 157 specified in the Territory of notification of Government of India Lakshadweep & bearing number S.O. _ dated the _ th Minicoy Islands October, 2014.
10. Commissioner of Kolkata States of West All cases of persons in the territorial area Income-tax Bengal, Assam, specified in column (4) claiming exemption (Exemption), Meghalaya, under clauses (21), (22), (22A), (22B), (23), Kolkata Arunachal (23A), (23AAA), (23B), (23C), (23F), (23FA), Pradesh, (24), (46 and (47) of section 10, section 11, Nagaland, section 12, section 13A and section 13B of Manipur, the Income-tax Act, 1961 and assessed or Mizoram, assessable by an Income-tax authority at Tripura, Sikkim serial numbers 158 to 181 specified in the and Union notification of Government of India Territory of bearing number S.O. _ dated the _ th Andaman and October, 2014.
8 ITA No.710/Asr/2017M/s. St. Mary's Educational Trust v. CIT(E) Nicobar Islands
11. Commissioner of Lucknow States of Uttar All cases of persons in the territorial area Income-tax Pradesh and specified in column (4) claiming exemption (Exemption), Uttarakhand under clauses (21), (22), (22A), (22B), (23), Lucknow (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46 and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 141 to 151 and 182 to 189 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
12. Commissioner of Mumbai Area Covered All cases of persons in the territorial area Income-tax by Municipal specified in column (4) claiming exemption (Exemption), Corporation of under clauses (21), (22), (22A), (22B), (23), Mumbai Greater (23A), (23AAA), (23B), (23C), (23F), (23FA), Mumbai and (24), (46 and (47) of section 10, section 11, Navi Mumbai section 12, section 13A and section 13B of Municipal the Income-tax Act, 1961 and assessed or Corporation assessable by an Income-tax authority at serial numbers 190 to 224 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
13. Commissioner of Patna States of Bihar All cases of persons in the territorial area Income-tax and Jharkhand specified in column (4) claiming exemption (Exemption), under clauses (21), (22), (22A), (22B), (23), Patna (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46 and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 228 to 235 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
14. Commissioner of Pune State of All cases of persons in the territorial area Income-tax Maharashtra specified in column (4) claiming exemption (Exemption), excluding under clauses (21), (22), (22A), (22B), (23), Pune Mumbai and (23A), (23AAA), (23B), (23C), (23F), (23FA), Navi Mumbai (24), (46 and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 227 and 236 to 241 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014.
9 ITA No.710/Asr/2017M/s. St. Mary's Educational Trust v. CIT(E)
2. This notification shall come into force with effect from the 15th day of November, 2014.
F.No.187/38/2014 (ITA.I)] (Deepshikha Sharma) Director
6. From Sr. no. 4 of the aforesaid notification, Commissioner of Income-tax (Exemption), Chandigarh having jurisdiction of all cases of persons in the territorial area specified in column (4) claiming exemption under clauses (21), (22), (22A), (22B), (23), (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income- tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 50 to 68 specified in the notification of Government of India bearing number S.O. _ dated the _ th October, 2014, falls within the States of Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana and Union Territory of Chandigarh.
7. Further from the aforesaid notification, it is clear that all classes of persons assessed or assessable by an Income-tax authority at States of Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana and Union Territory of Chandigarh, can be subjected to Commissioner of Income-tax (Exemption) for appropriate approval.
8. In the instant case, from the documents available on record it is apparent that the assessee trust has been assessed regularly at the office of ITO, Ward-6 at Pathankot, since, A.Y: 2011-12 and the School which is run by the applicant trust is also approved in Punjab state and situated within the jurisdiction of Income Tax department, Pathankot (Punjab) and in the application the applicant trust had mentioned the administrative office at Kala Chak Road, Sujanpur, Pathankot.
10 ITA No.710/Asr/2017M/s. St. Mary's Educational Trust v. CIT(E)
9. According to Rule 2CA(1), an application for approval u/s 10(23C) (vi) & (via) of the Act shall be made in Form No.56D by any university or other educational institutions or any hospital or other medical institution refer to in sub-clause (vi) of Sub-clause (via) of clause 23C of Sec.10.
10. Further, according to Rule-2CA(1), the prescribed authority under sub-clause (vi) (via) of clause (23C) of Sec.10 shall be the Chief Commissioner or Director General, to whom the application shall be made as provided sub-rule (2).
According to proviso to sub-section 1 of 2CA of the Act w.e.f, 15.11.2014 prescribed authority is Commissioner of Income Tax (Exemptions) before whom the application shall be made as provided in sub-rule-2.
11. Notes No.1 in Form No.56D clearly specified that the application form-A filed before the specified date, should be sent to the Chief Commissioner. According to the note no.1 as mentioned in Form No.56D, the application for grant of exemption u/s 10(23C)(vi) & (via) can be filed before the Commissioner of Income Tax or Director of Income Tax, Exemption having jurisdiction over the university or other educational institution or hospital or other medical institution refer to in Serial No.1 of Form No.56D. Further prescribes that name and address of registered office of university or other educational institution or the office or other medical institution refer to in sub- clause (vi) or sub-clause (via) of clause 23C of Sec.10.
12. While coming to the instant case as per mandate of Form No.56D as well as Rule-2CA, the name and address of registered office of university or other educational institution has to be given, therefore, in the instant case as the school is registered in Punjab and operating 11 ITA No.710/Asr/2017 M/s. St. Mary's Educational Trust v. CIT(E) at KalaChak Road, Sujanpur, Pathankot which comes under the jurisdiction of CIT(E), Chandigarh. Even the Asseeee since 2011-12 is regularly assessed at Pathankot and therefore according to the notification referred above, the jurisdiction vest with the CIT(E) to grant approval under section 10(23C)(vi) of the act. Hence on the aforesaid analyzation and consideration, we do not have any hesitation to held that the ld. CIT(E), Chandigarh is having jurisdiction to decide the application under consideration filed by the appellant.
13. We also observed that after getting reply from the Applicant trust, the ld. CIT(E) has not given any opportunity to the applicant trust either to establish its case and/or to substantiate the documents relied upon by the Applicant. As reasonable opportunity is mandatory before declining the approval, so on this aspect also, the impugned order is liable to be set aside. In overall consideration, we consider it appropriate to remand back the case to the file of ld. CIT(E) to decide afresh within 03 months of this order, in view of the observations and analyzations made in this order, while affording reasonable opportunity of being heard to the applicant/appellant,
6. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 06.09.2018.
Sd/- Sd/-
(SANJAY ARORA) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 06.09.2018
/PK/ Ps.