Income Tax Appellate Tribunal - Amritsar
Rajeshwari Sangeet Academy Trust ... vs Department Of Income Tax on 6 May, 2016
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, Vs. M/s Apeejay Education Society,
Jalandhar. 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, Vs. M/s Rajeshwari Sangeet Academy
Jalandhar. 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 pronouncement: 06.05.2016
ORDER
PER T. S. KAPOOR (AM):
These are two Miscellaneous Applications filed by Revenue against the order of Tribunal dated 08.05.2014 in ITA Nos.227 & 228 (Asr)/2013 respectively. The Tribunal in this order had allowed registration to the
2. M.A. Nos 45 & 46(Asr)/2015 (Arising out of 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 and 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 Hon'ble Punjab and Haryana High Court in ITA No. 402 & 403 of 2014 in respect of the two societies. The learned AR submitted that against the order of Tribunal the Revenue had filed appeals before Hon'ble High Court and Hon'ble High Court had dismissed the appeals 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 gone through the material placed on record. We find that in the case of these two societies the Commissioner of Income Tax had cancelled the registration 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 CIT. Against the order of Tribunal the Revenue besides filing Miscellaneous Applications filed appeals before Hon'ble Punjab & Haryana High Court and Hon'ble High Court has dismissed the appeals filed by Revenue vide its order dated 10.3.2015 in ITA Nos. 402 & 403 of 2014. The operative part of Hon'ble High Court order is reproduced below.
3. M.A. Nos 45 & 46(Asr)/2015 (Arising out of 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 Tribunal is well justified in the facts and circumstances of the case. Under Section 12AA of the 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 of the activities of the institution and after making enquires had passed the order registering the said institution and giving it the benefit under Section 12A of the Act, which made the institution 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 said institution and if they were not genuine and the same were not being carried out in accordance with the objects of the institution he could pass the order cancelling the registration. Admittedly, the respondent-society is running as many as 21 institutes which are spread over the country 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 No. of students as on to/Approved by today CBSE Appeejay School, Sheikh Sarai, New Delhi 1 2680 2 Appeejay School, Saket, New Delhi CBSE 1306 3 Appeejay School, Pitampura, Delhi CBSE 2689 4 Appeejay School, Faridabad CBSE 2656
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Appeejay Svran Global School, Faridabad 5 189 6 Appeejay School, NOIDA CBSE 3950 Appeejay International School, Greater CBSE Noida 7 493 CBSE Appeejay School, Nerul, Navi Mumbai 8 2630 CBSE Appeejay School, Kharghar, Navi Mumbai 9 2028 10 Appeejay School, Charkhi-Dadri CBSE 639 CBSE Appeejay School, Mahavir Marg, Jalandhar 11 3309
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Appeejay School, Tanda Road, Jalandhar 12 220 CBSE Appeejay School, Hoshiarpur Road, Rama 13 Mandi, Jalandhar 391 AICTE approved Appeejay School of Management, Dwarka, 14 New Delhi 340 Appeejay Institute of Mass -
15 Communication, Dwarka, New Delhi 47AIT-School of Computer Science, Greater AICTE approved 16 Noida 32 AIT-School of Management, Greater AICTE approved NOIDA 17 276 AIT-School of Architecture & Planning, UO Technical Greater NOIDA University, AICTE 18 approved 332
4. M.A. Nos 45 & 46(Asr)/2015 (Arising out of ITA Nos.228 & 227(Asr)/2013) Asst. Years. Nil MDU, Rohtak Apeejay College of Engineering, Sohna 19 208 Apeejay Saraswati College of Girls, MDU, Rohtak 20 Charkhi-Dadri 1145 Apeejay Institute of Management PTU, Jalandhar, 21 Technical Campus, Jalandhar AICTE approved 744 [ Thus, it cannot be disputed that the respondent-assessee 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 whether the same was done by M/s. WSL or not. Merely because Sh. Sanjay D. Sonawani had given a statement, the Commissioner as such is not justified in cancelling the registration granted 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 2011 and the assessee had incurred as much as 91.71% of the receipts for the assessment year 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 (Exemption), (2006) 285 ITR 37 (Kar) is of no avail since the said case pertains to a case where the authorities 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 had 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 consideration 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 consonance with the public policy. Only on the ground of mere apprehension, the registration could not be withdrawn. Accordingly, the order of the Tribunal allowing the appeal was upheld. The relevant observations read thus;-
"19. The objects of the trust can be bad from the bye-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 activities of the trust or the institution, whose objects do not run contrary to public policy and are, in fact, 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 the 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 institution is being misused or that there is some apprehension that the same would not be used in the proper manner and for the purposes relating to any charitable purpose, rejection cannot be made.
21. Section I2AA, which lays down the procedure for 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 not 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 accordingly 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 profit earning or misuse of the income derived by charitable institution from its charitable activities, 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 of 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, the 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 raised do not arise.
Accordingly, both the income tax appeals are dismissed."
In view of the above order passed by Punjab & Haryana High Court, the order of Tribunal stands merged with that of Hon'ble Punjab & Haryana High Court and therefore, the Miscellaneous Applications filed by Revenue has become infructuous and therefore, these Miscellaneous Applications are dismissed.
5. In nutshell, the Miscellaneous Applications filed by Revenue are dismissed.
Order pronounced in the open Court on 6th May, 2016.
Sd/- Sd/-
(A.D. JAIN) (T. S. KAPOOR)
JUDICIAL MEMBER ACCOUNTANT 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