Karnataka High Court
The Director Of Income-Tax Exemptions vs Sri Jain Educational Social Cultural on 11 July, 2014
Bench: N.Kumar, B.Manohar
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 11TH DAY OF JULY 2014
PRESENT
THE HON'BLE MR.JUSTICE N. KUMAR
AND
THE HON'BLE MR. JUSTICE B. MANOHAR
ITA NO. 790 OF 2009
BETWEEN:
1. THE DIRECTOR OF INCOME-TAX,
EXEMPTIONS, C. R. BUILDING
QUEENS ROAD
BANGALORE
2. THE DIRECTOR OF INCOME TAX,
EXEMPTIONS, C. R. BUILDING
QUEENS ROAD
BANGALORE
... APPELLANTS
(BY SRI. K V ARAVIND, ADV.)
AND
SRI JAIN EDUCATIONAL SOCIAL CULTURAL
WELFARE CHARITABLE TRUST
NO.179/899, INDIRANAGAR
BANGARPET-KGF MAIN ROAD
BANGARPET 563 114
... RESPONDENT
(NOTICE TO RESPONDENT HELD SUFFICIENT
V/O/DTD 8/7/2014)
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THIS ITA IS FILED U/S.260-A OF I.T.ACT, 1961 ARISING
OUT OF ORDER DATED 10-07-2009 PASSED IN ITA
NO.176/BNG/2009, PRAYING TO I. FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II.
ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY
THE ITAT BANGALORE IN ITA NO.176/BNG/2009,DATED 10-
07-2009,AND CONFIRM THE ORDER OF THE APPELLATE
COMMISSIONER CONFIRMING THE ORDER PASSED BY THE
DIRECTOR OF INCOME TAX, EXEMPTIONS, BANGALORE IN THE
INTEREST OF JUSTICE AND EQUITY.
THIS ITA COMING ON FOR ADMISSION THIS DAY,
N. KUMAR J. DELIVERED THE FOLLOWING:
JUDGMENT
Though the respondents are served, they have remained absent.
2. The assessee filed an application seeking for registration under Sec.12A of the Income Tax Act, 1961. The said application was rejected by the Director of Income Tax on the ground that one of the objects of the Trust is, establishment of small scale industries and carry on commercial activities and therefore the assessee is not entitled to the registration under Sec.12A of the Act. The said order came to be passed on 13/1/2009. Aggrieved by the said order, the -3- assessee preferred an appeal before the Tribunal. The Tribunal, on consideration of the material on record, held the Trust was established on 9/4/2008, application for registration is filed on 18/7/2008 and the objects of the Trust are charitable in nature and therefore granted registration. It made it clear that it is open to the revenue to cancel the registration invoking Sec.12AA(3) of the Act, if it is satisfied that the activities of the Trust are not genuine and not being carried out in accordance with the objects of the Trust. Thus the application filed under Sec.12A for registration was granted by its order dated 10/7/2009. In the meanwhile the assessee had filed an application before the Director of Income Tax seeking recognition under Sec.80G of the Act. As the application filed for registration under Sec.12A had been rejected, the said application came to be dismissed by the Director of Income Tax. The Tribunal, while granting registration under Sec.12A, also granted recognition under Sec.80G -4- on the ground that once registration is granted under Sec.12A of the Act, as a consequential order, recognition under Sec.80G is to be granted. Aggrieved by that portion of the order, the Revenue is in appeal before this court.
3. The substantial question of law that arise for our consideration is, grant of recognition under Sec.80G, is it automatic on the assessee being granted registration under Sec.12A of the Act?
4. The law on the point is well settled. Both these provisions are exclusive. In order to get recognition under Sec.80G, mere registration under Sec.12A is not sufficient. Further the assessee has to satisfy the requirement mentioned under Sec.80G. Though grant of registration under Sec.12A is a condition precedent, unless the conditions stipulated in Sec.80G are fulfilled, the recognition under Sec.80G cannot be granted. -5-
5. In that view of the matter, that portion of the order is erroneous and requires to be set aside. Accordingly we pass the following order:
The appeal is allowed. The impugned order is set aside. The matter is remitted to the Director of Income Tax for consideration of the application for recognition under Sec.80G of the Act, in accordance with law and then to pass appropriate orders.
Ordered accordingly.
SD/-
JUDGE SD/-
JUDGE Rd/-