Income Tax Appellate Tribunal - Ahmedabad
Rai University, , Ahmedabad vs Assessee on 10 June, 2015
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद यायपीठ ''ड
ड '
ड अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH, AHMEDABAD
BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER
AND SHRI KUL BHARAT, JUDICIAL MEMBER
आयकर अपील सं./
./ ITA No. 1246/Ahd/2014
The Rai University, Director of Income Tax
Saroda Post, Dholka, Vs (Exemption),
Ahmedabad Ahmedabad
PAN : AABAR 4376 A
अपीलाथ /
अपीलाथ / (Appellant) ू यथ
यथ /
थ / (Respondent)
Assessee(s) by : Smt. Arti N. Shah, AR
Revenue by : Shri Vimalendu Verma, CIT-DR
सुनवाई क$ तार ख/
/ Dateof Hearing : 08/05/2015
घोषणा क$ तार ख / Date of Pronouncement: 10/06/2015
आदे श/O R D E R
PER SHRI KUL BHARAT, JUDICIAL MEMBER:-
This appeal by the assessee is directed against the order of the Director of Income Tax (Exemption), Ahmedabad dated 03.04.2014 rejecting the application filed by the assessee u/s 12A of the Income-tax Act.
2. In this appeal by the assessee, following grounds were raised:-
"1. The learned Director of Income Tax (Exemption), Ahmedabad has erred in passing order giving effect to the order of I.T.A.T. in ITA No.815/Ahd/2013 though the Miscellaneous Application No. 15/And/2014 against the said order filed by the Appellant was kept pending by the Hon'ble I.T.A.T. for disposal.
2. The learned Director of Income Tax (Exemption), Ahmedabad has erred in rejecting the application for registration u/s.!2A holding that the Appellant does not have any Trust Deed or Memorandum of Association or Article of Association though the same is constituted and governed by the provisions of Gujarat Private Universities Act and is a body corporate in accordance with the same.ITA No. 1246/Ahd/2014
Rai University vs. DIT (Exemp) u/s 12A 2
3. The learned Director of Income Tax (Exemption), Ahmedabad has erred in not following the decision of the Supreme Court in the case of CIT vs. Gujarat Maritime Board - 295 ITR 561 granting exemption u/s.12A though the same was not constituted under separate Trust Deed or Memorandum of Association or Article of Association but the same was formed under Gujarat Maritime Board Act.
4. The learned Director of Income Tax (Exemption), Ahmedabad has erred in holding that there was no clause in the first statute that the university will not be dissolved and if at all it has to be dissolved, its assets will go to another trust carrying on similar activities of university education though the provisions of winding up of the University have been duly incorporated in section 41 of Chapter IX of Gujarat Private Universities Act.
5. The learned Director of Income Tax (Exemption), Ahmedabad has erred in holding that the asset of the Appellant on dissolution shall go to sponsoring body, which cannot be permitted in respect of any Charitable Institution inspite of the fact that sponsoring body is itself a Public Charitable Trust duly registered U/S.12A of the Act.
6. The learned Director of Income Tax (Exemption), Ahmedabad has erred in not considering the definition of sponsoring body contained in section 2(t) of the Gujarat Universities Act which requires the sponsoring body to be the society registered Societies Registration Act or Public Trust or company registered u/s.25 of the Companies Act, 1956.
7. The learned Director of Income Tax (Exemption), Ahmedabad has erred in holding that the Appellant was not a Charitable Institution and was for profit making though the statute No.21 restricts the admissions of students have to be based on merits or means and the structure and fees has to be as per existing provisions of the State Government and means have to be determined based on economic condition or situation of the students which amply proves that it carries out the object of education and it is not for profit making.
8. The learned Director of Income Tax (Exemption), Ahmedabad has erred in holding that the Appellant was not an individual body but almost absolutely controlled by the sponsoring body though even sponsoring body is also a Charitable Institution registered u/s.12A of the Act, and there cannot be any question of being governed by private individuals.ITA No. 1246/Ahd/2014
Rai University vs. DIT (Exemp) u/s 12A 3
9. The learned Director of Income Tax (Exemption), Ahmedabad has finally erred in holding that activities and objects of the Appellant are not genuinely charitable.
10. Your appellant reserves the right to add, alter, amend and/or withdraw any of the above Grounds of Appeal.
3. Briefly stated facts are that this is the second round of litigation. In the earlier round, the assessee had challenged the rejection of application for registration of the assessee-trust u/s 12AA by the DIT (Exemptions) before the Tribunal. The Tribunal was pleased to restore back the application of the assessee for fresh consideration by its order dated 19.12.2013 vide ITA No.815/Ahd/2013. The ld. DIT(Exemptions) vide impugned order dated 03.04.2014 once again rejected the application of the assessee. The assessee, therefore, being aggrieved by the aforesaid order of the DIT(Exemptions) has preferred the present appeal.
4. Both the representatives of the respective parties have made oral arguments as well as written submissions.
5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The assessee has filed written submissions dated 08.05.2014 and 12.05.2014, which read as under:-
"WRITTEN SUBMISSIONS FACTS OF THE CASE:
1. Rai Foundation had submitted a proposal for setting up a university in the name of Rai university in the State of Gujarat. The said proposal to set up this university was submitted by Rai Foundation to the Hon. Chief Minister of Gujarat, Shri Narendra Modi and the sponsoring body had showed their willingness to invest around 50 crores in 3 years for the same (Paper Book Page No 129 to 371). The Govt of Gujarat had thereafter executed an MOU on 13-01-2009 and the Principal Secretary , Education Department, Govt of Gujarat had vide letter dated 19-09-2011 ITA No. 1246/Ahd/2014 Rai University vs. DIT (Exemp) u/s 12A 4 allotted land to the Appellant (Paper Book Page No 372 & 373).
Thereafter the Education Department vide letter dated 22-02-2012 gave a letter of intent for setting up of the university under the Gujarat Private University Act Rules and Regulations (Paper Book Page No 375 to 377). On completion of the formalities relating to setting up of the University, the Gujarat Government Gazette amended the Gujarat Private University Act, 2009 on 11-04-2012 to include the name of Appellant - Rai University at Sr No 10 (Ppaer Book Page No 10) and confirmed the establishment of the said University in Gujarat to operate as per the provisions of the Gujarat Private University Act, 2009 (Paper Book Page No 8 & 9 ).
2. The Appellant was thus to be setup as a university- Rai University at Sanand, Ahmedabad under the Gujarat Private University Act. It was to be an independent organization established and operating as per the provisions contained in the Gujarat Private University Act.
3. The Appellant had then filed an application for registration u/s 12 A and exemption u/s 80G of the Income Tax Act, 1961 alongwith the necessary enclosures to the Director of Income Tax (Exemption) on 16-08-2012 (Paper Book Page 1 to 41).
4. Thereafter, in response to the queries raised by the Learned DIT, the Appellant had given responses vide letters dated 05-11-2012, 26-11-2012 and 18-02-2013 (Paper Book Page No 42 to 71). However, the said application was rejected by the Hon. DIT(E) vide his order dated 26-02- 2013 stating that in absence of any deed/memorandum of article/ memorandum of association, the application is rejected.
5. Thereafter an appeal was before the Hon Tribunal wherein a written submission was filed on 18-09-2013 (Paper Book Page No 99 to 103). It was pointed out in the said submission that a university in the name of The Ahmedabad University has been established in Gujarat under the Gujarat Private University Act and the details of the same were produced at Paper Book Page No 105 to 111. In the said case the University has been granted registration u/s 12A on 30-03-2010 and has also been approved u/s 10(23C) of the Income Tax Act 1961. The facts of the said university are exactly the same as the Appellant.
6. Further, during the course of hearing a similar university -OP Jindal University case law (38 taxmann.com 366 ) (P & H) (Judgement Paper Book Page No 1 to 4 ) was also cited which was established on similar lines in the State of Haryana. The Haryana Private University Act was also produced before the Hon. Bench in order to show the similarity with the Gujarat Private University Act. (Paper Book Page No 379 to 390).
ITA No. 1246/Ahd/2014Rai University vs. DIT (Exemp) u/s 12A 5
7. However, the Hon. Tribunal vide order dated 19-12-2013 set aside the case to Hon. DIT(E) with instructions " to consider the documents as filed by the assessee i.e. deed of Trust and decide this issue in light of various case laws cited by the assessee."
8. Since there was no trust deed by which the Appellant was set up and the said fact was mentioned during the hearing to the Hon. Bench, the Appellant filed a Miscellaneous Application against the said Order of the Hon. Tribunal. The Said MA has been heard on 17-04-2015 and the Order is awaited.
9. Meantime, in response to the letter filed by The Department Representative to the DIT(E) for expediating the set aside matter, the Appellant filed submissions dated 21-03-2014, 25-03-2014, and 01-04- 2014 (Paper Book Page No 391 to 423) to the Hon. DIT in response to the queries raised by him. However, the Hon.DIT passed Order dated 03-04- 2014 and once again rejected the application of the Appellant on various other grounds.
ARGUMENTS:
1. It is submitted that in light of above mentioned facts, the Appellant is a university established under the Gujarat Private University Act and Rai Foundation is its sponsoring body. The sponsoring body is a Trust created on 31-07-1996 and has been granted registration u/s 12A on 10-02-1997.
The Appellant is governed by the provisions of the Gujarat Private University Act, 2009 which mentions the rules regarding setting up of a University, Application process thereof, Officers of the University namely Registrar, CFO & other officers, Authorities of the University i.e Governing Body, Board of Management, etc, Statutes, Ordinances and Regulations, Regulation of University, Funds of University, Accounts Audit & Annual Report, Win ding Up and Miscellaneous Provisions. On inclusion of the Appellant's name in the Gujarat Government Gazette on 11-04-2012, the Appellant is said to have been set up on that date and is governed by the provisions of the Gujarat Private University Act.
2. It is further submitted that as per the provisions of Rule 17A of the Income Tax Rules 1962, the application for registration u/s.12A should be submitted in Form No.10A along with copy of instrument creating the Trust. However, it also states that if it is established otherwise than under the instrument, the document evidencing the creation of Trust or establishment of the Institution should be submitted. In the present case, the Institution viz. Rai University is established by the provisions of Gujarat Private Universities Act, 2009 and therefore, there cannot be any ITA No. 1246/Ahd/2014 Rai University vs. DIT (Exemp) u/s 12A 6 separate instrument for the creation of Rai University but none the less the same complies with the provisions of Rule 17A.
3. In support of the above contentions, we would like to place reliance on the following decisions:-
(i) CIT Vs O P Jindal Global University (38 taxmann.com 366 ) (P & H) which was constituted by the Haryana Private University Act.
(ii) CIT vs. Andhra Pradesh State Road Transport Corporation - 159 ITR 1 (SC), which was constituted by Road Transport Corporation Act, 1950 by the State of Andhra Pradesh.
(iii)CIT vs. Gujarat Maritime Board - 295 ITR 561 (SC), which was constituted under Gujarat Maritime Board Act.
(iv)UP. Forest Corporation vs. DCIT - 297 ITR 1 (SC), wherein it was established under UP, Forest Corporation Act, 1974. Registration u/s.12A has been granted in all the above cases on the basis of provisions of relevant Act though there was no separate Trust Deed or registration under Trust Act.
4. We would further like to point out the decision of M.P. High Court in the case of Laxminarayan Maharaj vs. CIT - 150 ITR 465, wherein it was held that where the Trust is not created under instrument, it is impossible to produce constitutional document, and hence, the Rule requires the production of evidentiary documents i.e. the documents evidencing the creation of Trust. In the present case, Gujarat Private Universities Act, 2009 contains provisions regarding running of institution by which Rule 17A is complied with.
In view of the above, we request the Hon'ble Members of the Bench to kindly consider the above and grant registration u/s.12AA of the IT. Act, 1961 to the Appellant.
Date: 08.05.2014 Sd/- Place: Ahmedabad. Appellant" "WRITTEN SUBMISSIONS
In support of our written submissions dated 07-05-2015 and the oral arguments put forward during the hearing dated 07-05-2015, we would like to put on record the following arguments:
ITA No. 1246/Ahd/2014Rai University vs. DIT (Exemp) u/s 12A 7
1. Any Trust who wants to avail of exemption u/s 11 & 12 of the Income Tax Act has to satisfy the conditions mentioned in section 12A of the Income Tax Act which states that:
"(1) The provisions of section 11 and 12 shall not apply in relation to income of any Trust or institution unless the following conditions are fulfilled, namely :-
(a)the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the [principal commissioner or] commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, [whichever is later and such trust or institution is registered under section 12AA]:"
2. Further as per the aforesaid provisions, Rule 17A of the Income Tax Rules 1962, shall be applicable and the application for registration u/s.12A should be submitted in Form No.10A along with copy of instrument creating the Trust. However, it also states that if it is established otherwise than under the instrument, the document evidencing the creation of Trust or establishment of the Institution should be submitted. In the present case, the Institution viz. Rai University is established by the provisions of Gujarat Private Universities Act, 2009 and therefore, there cannot be any separate instrument for the creation of Rai University but none the less the same complies with the provisions of Rule 17A.
3.Thus as per the above, any Trust/Institution who wants to avail exemption u/s 11 & 12 has to approach the Commissioner u/s 12AA and the procedure for obtaining registration is then stated in section 12AA of the Income Tax Act wherein it has been mentioned that:
"The [Principal Commissioner or] Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of sub-section (1)] of section 12A, shall -
(a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquires as he may deem necessary in this behalf; and
(b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he -
(i) shall pass an order in writing registering the trust or institution;ITA No. 1246/Ahd/2014
Rai University vs. DIT (Exemp) u/s 12A 8
(ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant:"
4. Hence, as per the above provisions of the Income Tax Act, it is clear that the Trust/Institution has to make an application -the Application has to be made in Form 10B - The same has to be vetted as per the prudence of the Hon. CIT as to whether the activities of the Trust are genuine or not.
5. The Appellant - Rai university is thus qualified to get the registration on the following grounds:
(1) It is a University established under the Gujarat Private University Act and is a institution by itself.
(2) It has a sponsoring body namely Rai Foundation which is registered Trust having 12A Registration.
(3) Rai University has made an application for registration within the time limit and in the prescribed Form 10B as per section 12A of the Income Tax Act read with Rule17A.
(4) The Gujarat Private University Act governing the University has all the necessary clauses required for the functioning of a charitable institution and several other universities are also established in the State of Gujarat on similar grounds which have been granted registration u/s 12AA. A copy of one such University namely Ahmedabad University has been placed on record during the hearing. (5) Rai University is at present functioning on full fledge basis and the activity can be witnessed from its website wyw.rajuniversity.edu The sponsoring body has already placed a deposit of Rs 5 crores as security with the Government of Gujarat as per the terms of setting up of the University. Apart from that it is also funding the University expenses in the initial years of operation.
6. Our contention is further supported by the following judgements (copy enclosed):
(1) Director of Income Tax Vs Garden City Educational Trust (330 ITR
480)(Karn)(HC): Wherein it has been held that manner of application of funds and as to whether assesses can claim benefit of exemption in terms of section 11 and 12 are questions which have to be examined by Assessing Officer at stage when it is urged and not by Commissioner while considering application for registration u/s 12A.ITA No. 1246/Ahd/2014
Rai University vs. DIT (Exemp) u/s 12A 9 (2) Hardayal Charitable & Educational Trust Vs CIT (355 ITR 534 (AII)(HC): Wherein it is held that enquiry of Commissioner at such preliminary stage should be restricted to genuineness of objects and not activities, unless such activities have commenced.
(3) Swargiya Jagannath Jatteshwar Shikshan Sanstha Vs CIT : (31 taxmann.com 321)(Nag)(Trib): Wherein it is held while granting registration to a charitable Trust, Commissioner has to examine genuineness of objects and activities of the Trust and application of income for charitable purposes which can be examined at a stage when the Trust files its return.
(4) Director of Income Tax Vs Foundation of Opthalmic & Optometry Research Education Centre (25 taxmann.com 376 )(Del)(HC) :
Wherein it is held that while examining application u/s 12AA concerned Commissioner is not required to examine question whether Trust has actually commenced and carried out charitable activities.
All the above judgements support our contention that while granting registration u/s 12AAthe Hon. DIT has to look into the genuineness of the activity of the Trust which in case of the Appellant can be seen directly from the present activities carried on by the university.
In view of the above, we request the Hon'ble Members of the Bench to kindly consider the above and grant registration u/s.12AA of the I.T. Act, 1961 to the Appellant.
Date: 12.05.2014 Sd/
Place: Ahmedabad. APPELLANT"
6. The Revenue has also filed written submissions which reproduced as under:
"Subject: written submission on importance of Dissolution clause Hon'ble Members, During the course of hearing the esteem members have desired to place on record any judgement to underscore the importance of dissolution clause.
Dissolution clause is very important so that upon dissolution the assets and funds are not usurped by the trustees donors etc. In a public charitable or ITA No. 1246/Ahd/2014 Rai University vs. DIT (Exemp) u/s 12A 10 religious trusts the money belongs to the public and trustees hold the same in trust for use as per the objects of the trust. In case of dissolution these must go to a trust carrying on similar activities as the public gave funds and Govt forgave revenue for carrying on the activities as per the objects of the trust. The CAs argue that under Bombay or Gujarat public trust Act dissolution of trust is not possible. Then the argument is that trustees function as per the trust deed and mostly ill equipped to read or even think of the Act Lastly it has been noticed that trusts have amalgamation clause in the deed which shows that despite the Bombay public trust act trustees do dissolve and merge trusts in any other trusts not having similar objects Deed should have a no-profit clause and dissolution clause- following judgement are quoted to support the importance of dissolution clause Mohanlal Kanjibhai Pansara Education & Charitable Trust - [2013] 36 taxmann.com 338 (Rajkot - Tfib.)/[2013] 59 SOT 169 (Rajkot -Trib.) - Section 12AA, of the Income-tax Act, 1961 - Charitable or religious trust - Registration procedure [Scope of provision] - Assessee-trust applied for registration under section 12AA - A perusal of trust deed submitted by assessee showed that activities proposed to be carried out were not charitable in nature - Neither there was any clause in trust deed imposing legal obligation on assessee to hold income for charitable purposes nor element of private gain excluded - Moreover, there was no provision in trust deed to ensure that properties of trust upon dissolution would be transferred to another trust having similar object - Whether in view of above, assessee-trust could not be treated as a charitable trust entitled for registration under section 12AA - Held, yes [Para 11] [In favour of revenue] IT : Where activities carried out by assessee-trust were not found to be charitable, assessee-trust could not be said to be charitable trust entitled for registration under section 12AA
2. The Supreme Court noted the dissolution clause in the case of Surat Art Silk Cloth Manufacturers Association 121ITR 1 in para 2 as "The amended objects, so far as material, were as follows:
(a).To promote commerce and trade in art silk yarn, raw silk, cotton yarn, art silk cloth, silk cloth and cotton cloth.
(b).To carry on all and any of the business of art silk yarn, raw silk, cotton yarn as well as art silk cloth, silk cloth and cotton cloth belonging to and on behalf of the members.
(c).To obtain import licences for import of art silk yarn, raw silk, cotton yarn and other raw materials as well as accessories required by the members for the manufacture of art silk, silk and cotton fabrics.ITA No. 1246/Ahd/2014
Rai University vs. DIT (Exemp) u/s 12A 11
(d).To obtain export licences and export cloth manufactured by the members.
(e).To buy and sell and deal in all kinds of cloth and other goods and fabrics belonging to and on behalf of the members.
(f) * *
(g) * *
(h) * *
(i) * *
(j) * *
(k) * *
(l) * *
(m) * *
(n). To do all other lawful things as arc incidental or conducive to the attainment of the above objects.
Clause 5 of the memorandum provided in sub-clause (2) that the income and property of the assessee wheresoever derived shall be applied solely for the promotion of its objects as set forth in the memorandum and sub-clause (2) directed that no portion of the income or property shall be paid or transferred, directly or indirectly, by way of dividend, bonus or otherwise by way of profit, to persons, who at any time are or have been members of the assessee or to anyone or more of them or to any person claiming through any one or more of them. What should happen to the assets in case of winding up or dissolution of the assessee, was set out in clause 10 of the memorandum and it provided that the property remaining after satisfaction of all the debts and liabilities shall not be distributed amongst the members of the assessee but shall be given or transferred to such other company having the same objects as the assessee, to be determined by the members of the assessee at or before the time of the dissolution or, in default, by the High Court of Judicature that has or may acquire jurisdiction in the matter. The income or property of the assessee were thus liable to be applied solely and exclusively for the promotion of the objects set out in the memorandum and no part of such income, or property could be distributed amongst the members in any form or under any guise or utilised for their benefit either during the operational existence of the assessee or on its winding up and dissolution."
3. In the case of Jammu Development Authority 52 SOT 153 ITAT Amritsar in para 7.6 stated as under:-
"Also as per clause 53 of the Jammu & Kashmir Development Act, on dissolution of all properties and funds to vest in the Government and for the purpose of realizing properties, the function of the Authority shall be ITA No. 1246/Ahd/2014 Rai University vs. DIT (Exemp) u/s 12A 12 discharged by the Government. We concur with the views of the Ld. CIT on transfer of the properties, funds and dues and liabilities etc. will vest in the Govt. There is no restriction, how the same arc to be utilized by the Government. There are other objects like sale and purchase, which makes the Authority a commercial organization. Therefore, in the facts and circumstances of the case, even on dissolution or winding up by not having any restriction on application of asset for charitable purpose, the objects pursued by the assessee cannot be said to be a charitable in nature."
In view of the absence of dissolution clause, It is, therefore, requested that the plea of appellant may be turn down to grant 12AA under the IT Act 1961.
Yours Sincerely Sd/-
(VIMALENDU VERMA) CIT(DR)-IV, 'D' Bench, Ahmedabad"
7. We find that the ld. Director of Income Tax (Exemptions) has rejected the application filed by the assessee u/s 12A of the Act, by observing as under:-
12. In view of the above, application u/s 12A is rejected for the following reasons:
(i) The applicant university does not have any deed. Memorandum of Article or Memorandum of Association. Even if the First Statute is treated as Rules &' Regulations, still there is no clause that the university will not be dissolved and if at all it has to be dissolved, its assets will go to another trust carrying on similar, activities of university education.
(ii) Gujarat Private University Act permits the Sponsoring Body to dissolve itself and only that, it permits the Sponsoring Body to dissolve the university and take back all its assets which would be public assets built by the university on the basis of tax exemption and public funds. This cannot be permitted in respect of any charitable institution. Further, if the Sponsoring Body dissolves itself where will the assets go.
(iii) Neither in the Gujarat Private University Act nor in the First Statute, is there any clause that the university is bound to act as a charitable institution and not for profit making. Education per se is not charily.
The charitable activity must reflect not only from the deed bur also from the activities.
ITA No. 1246/Ahd/2014Rai University vs. DIT (Exemp) u/s 12A 13
(iv) The university is not independent body but almost absolutely controlled by the Sponsoring Body with respect to appointments as well as funds.
In view of the above, the application u/s 12A is rejected as the activities and objects of the trust cannot be said to be genuinely charitable."
[
8. From the above finding of Ld. DIT(E), it is evident that the ld. DIT(E) is concerned about the assets of the University in the event of dissolution and what would be the fate of the assets created in the event of dissolution of University. Under the identical facts, the Hon'ble High Court of Punjab & Haryana in the case of CIT vs. O.P. Jindal Global University (supra), was pleased to decide the issue in favour of the assessee.
9. In the instant case, in case of dissolution of University, property would go to sponsoring body that itself is registered under section 12AA of the Act, subjected to the relevant provisions of the Act. Undisputedly, the education is included into the definition of charitable purpose as per Section 2(15) of the Act. It is settled position of law that at the time of registration u/s 12AA of the Act, the DIT(E) has to satisfy with regard to the genuineness of activities of the Trust. In our considered view, the DIT(E) ought to have given specific finding with regard to genuineness of the activities of the University. The DIT(E) has rejected the application on the ground that in case of dissolution there is no safeguard to the properties created by the University. There is no finding that the University is not imparting education, or otherwise imparting of such education on the basis of commercial consideration. It is pointed out by the ld. Counsel for the assessee that as per the Gujarat Government Gazette Notification under the provisions of the Gujarat Private Universities Act, 2009, the University cannot run commercially. The ld. DR could not controvert the contention of ITA No. 1246/Ahd/2014 Rai University vs. DIT (Exemp) u/s 12A 14 the ld. Counsel for the assessee that under the identical facts other Universities have been granted registration u/s 12AA by the Revenue. Under these facts, we are of the view that the ld. DIT(E) was not justified in declining the registration to the assessee u/s.12AA of the Income-tax Act, 1961. Moreover, the assessee has placed reliance on various judicial pronouncements. The ld. DIT(E) has not adverted on the submission of the assessee that the case of the assessee is also covered by the judgment of Hon'ble High Court of Punjab and Haryana in the case of CIT vs. O.P. Jindal Global University (supra), wherein the Hon'ble High Court has held as under:-
"13. In ITA No.701 of 2010 titled CIT v. Surya Educational & Charitbale Trust [2011] 203 Taxman 53/15 taxmann.com 123 (Punj & Har.) it has been held by this court that at the stage of registration under Section 12AA of the Act, the extent and nature of activities are not required to be examined. That question is required to be examined in assessment proceedings. The Court observed as under:
"Therefore, the object of Section 12AA of the Act, is to examine the genuineness of the objects of the Trust, but not the income of the Trust for charitable or religious purposes. The stage of application of income is yet to arrive i.e. when such Trust or Institution files its return. Therefore, we find that the judgment referred to by the learned counsel for the appellant are not applicable to the facts of the present case arising out of the question of registration of the Trust and not of assessment."
14. The issue has been examined that at the stage of registration and for exemption under Section 80G of the Act, the stated object of the trust is required to be examined. Whether the funds are properly applied or not, can be examined by the Assessing Officer at the time of framing the assessment."
ITA No. 1246/Ahd/2014Rai University vs. DIT (Exemp) u/s 12A 15 Therefore, we hereby set aside the order of the DIT(E) and direct him to grant the registration to the assessee-University. Thus, the assessee's appeal is allowed.
10. In the result, the assessee's appeal is allowed.
Order pronounced in the Court on 10th June, 2015 at Ahmedabad.
Sd/- Sd/-
(ANIL CHATURVEDI) (KUL BHARAT)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 10/06/2015
*Biju T.
षत Copy
आदे श क$ ूितिल,प अमे,षत/ of the Order forwarded to :
1. अपीलाथ / The Appellant
2. ू यथ / The Respondent.
3. संबंिधत आयकर आयु. / Concerned CIT
4. आयकर आयु.(अपील) / The CIT(A)
5. ,वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड3 फाईल / Guard file.
/ BY ORDER, आदे शानु सार TRUE COPY Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad