Income Tax Appellate Tribunal - Panji
Beant College Of Engineering And ... vs Commissioner Of Income Tax ... on 5 December, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER
AND SH. RAVISH SOOD, JUDICIAL MEMBER
I.T.A. No. 592/(Asr)/2016
&
S. A. No. 05/(Asr)/2017
Assessment Year:
PAN: AABAB8322L
M/s. Beant College of Vs. Commissioner of Income Tax
Engineering & Technology, (Exemptions), Chandigarh.
Gurdaspur.
(Appellant) (Respondent)
Appellant by : Sh. P. N. Arora (Adv.)
Respondent by: Sh. S. S. Kanwal (D.R.)
Date of Hearing: 15.11.2017
Date of Pronouncement: 05.12.2017
ORDER
PER T. S. KAPOOR (AM):
This is an appeal filed by assessee against the order of Ld. CIT(E) Chandigarh dated 30.09.2016 passed u/s 12AA of the Act.
2. The assessee has taken various grounds of appeal, however the crux of grounds of appeal is the action of Ld. CIT(E) by which he has rejected the application made by assessee for grant of exemption u/s 12AA of the Act.
3. At the outset, the Ld. AR submitted that due application alongwith necessary documents were filed for registration u/s 12AA of the Act. On various dates, the Ld. CIT(E) required assessee to submit information/documents and which were duly filed and replies were 2 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
submitted but the Ld. CIT(E) did not grant exemption u/s 12AA of the Act by holding irrelevant findings. The Ld. AR submitted that the first objection taken by Ld. CIT(E) is that earlier the assessee was getting exemption u/s 10(23C)(iiiab) and now the shifting from the applicability of section 10(23C)(iiiab) to section 12AA was not justified in view of the fact that there was no change in the byelaws or other circumstances. In this respect the Ld. AR submitted that as regards the exemption u/s 10(23C)(iiiab), the assessee was entitled for exemption only when the receipts were below Rs. 1 crore and since the receipts had crossed more than Rs.1 crore, therefore the assessee had right to apply for registration u/s 12AA of the Act. The other objection raised by Ld. CIT(E) was that assessee had been declared as autonomous body by the Technical Education Department and therefore it should have revised MOA/ byelaws which the assessee had not done. In this respect, the Ld. AR submitted that there was no change in the composition of the society before and after the society was instructed to run the college as autonomous body and even otherwise the department has taken a narrow meaning of the word autonomous. It was submitted that meaning of autonomous body is to run the administration independently on the basis of by laws and the administration of the college has to be governed by the laws laid down by the All India Council of Technical Educations. It was submitted that the college was declared as autonomous body for the working of college for the purpose of education and not for any other purposes as assumed and presumed by the department and there was 3 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
no need to amend Memorandum of Association as objects of the society remained same are to provide education. Our attention was invited to the objects of the society as placed in P.B page 6 to 10 and our attention was also invited to a letter dated 22.12.1994 issued by Director Technical Education and Industrial Training, Punjab where it has been mentioned that the assessee was established by the Punjab Government to be run as an Engineering and Technology College through a society registered under the Societies Registration Act, 1860 and therefore it was submitted that the objection raised by Ld. CIT(E) is not relevant. On our asking as to whether now the byelaws has been amended, the Ld. AR stated that the same has been amended and in this respect our attention was invited to P.B. page 112 to 128 where copy of Amended Rule of the society was placed. The Ld. AR submitted that the third objection of Ld. CIT(E) is that society was set up to specifically run a college and no where in the byelaws has been mentioned the running of a school and the society without effectuating the necessary changes in the byelaws etc. has been running BSS school affiliated with Punjab School Education Board, and Ld. CIT(E) further held that MOA of the society to that extent is not applicable to the school as the receipts also includes receipts from school. In this respect, the Ld. AR submitted that Ld. CIT(E) has miserably failed to appreciate the facts of the case and our attention was invited to a notification 12.02.2009 issued by the Govt. of Punjab, Department of Technical Education. It was submitted that through this notification the Governor of Punjab accorded sanction to assessee and 4 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
other societies to establish new multi disciplinary academy at various places and upgrade Polytechnic/Engineering Colleges into multi disciplined academies in the existing campus and the school was started in accordance with the notification of Govt. of Punjab and running of school is also as charitable activity. It was submitted that there was no need to include running of school in the Memorandum of Association as objects clause already included providing of education and providing of education is not limited to providing technical education only. The Ld. AR further submitted that there was another society by the name of SBS College of Engineering Ferozepur wherein under the same and similar circumstances, the registration has been granted. It was submitted that society was also running school as per the order of Govt. of Punjab and therefore the non grant of registration to the society was a step motherly treatment with this institution. In view of the above, it was submitted that the Ld. CIT(E) has raised irrelevant observations for refusing to grant the registration. The Ld. CIT(E) did not appreciate that only two conditions have to be satisfied while granting the registration u/s 12AA of the Act, that the objects of the society should be charitable in nature and the activities should be genuine. It was argued that from the plain reading of the order it is clear that the Ld. CIT(E) has neither objected to the objects of the trust which are charitable and CIT(E) has never doubted the genuineness of the activities of the trust and as such, the Ld. CIT(E) was not justified in refusing to grant the registration and reliance in this respect was placed on the Judgment of Punjab & 5 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
Haryana High Court in the case of CIT(E) Vs. Shri Sirdi Sai Darbar Charitable Trust in ITA No. 38 of 2017 dated 27.03.2017. The Ld. AR placed his reliance on a number of decisions placed in P.B. page 1 to 34 for the proposition that at the time of granting registration, the Ld. CIT(E) is required to examine only the objects of the society and the genuineness of its activities with respect to objects. Further reliance was placed on the following judgments:
"1. Decision of Supreme Court of India in the case of Queen's Educational Society Vs. CIT, reported in 372 ITR 699 (SC)
2. Decision of Punjab & Haryana High Court in the case of Pinegrove Educational & Charitable Trust and Ors Vs. UOI reported in 327 ITR 73."
4. The Ld. DR on the other hand submitted that on receipt of application by an assessee, the Ld. CIT(E) is empowered to call for any documents and information and after satisfying himself about the objects of society and genuineness of its activities, the Ld. CIT(E) shall pass an order for registration of the society or for refusing the grant of registration to the society. It was submitted that Apex Court in the case of Dental Council of India Vs. Subharti KKB Charitable Trust (2001) had held that education has never been commerce in this country and at present there is tremendous change in social environment and values and private institutions cannot be permitted to have educational 'shops' in this country. It was submitted that Apex Court in a most recent judgment in the case of Modern dental College and Research Centre and has held that commercializing of educational sector is not permissible. 6 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017
Assessment Year:
The Ld. DR further submitted that that the assessee has been availing exemption u/s 10(23)(iiiab) of the Act and as the receipts of assessee had exceeded Rs. 1 crore it had to apply for registration u/s 10(23)(c)(vi) and it is the requirement of that section that society should exist solely for educational purposes and not for profit and that is why the society has opted for registration u/s 12A of the Act as the society is not solely for educational purposes. The Ld. DR further submitted that the despite being declared autonomous body, the assessee did not alter its Memorandum of Association and byelaws and also in the byelaws, there was no mention of running of a school and therefore the fee received by the school was not in tune which the objects stated in the Memorandum of Association.
5. The Ld. AR in his rejoinder submitted that the case laws relied on by Ld. DR are not applicable to the facts and circumstances of the present case as the assessee did not charge any capitation fee and existed for the purpose of education only which is apparent from the objects clause of the Memorandum of Association.
As regards the argument of Ld. DR that assessee should have applied exemption u/s 10(23)(ii)(vi) of the Act, the Ld. AR submitted that in view of alternative remedies, the assessee was free to avail exemption under any of these alternative provisions and assessee choose to get exemption u/s 12 AA of the Act and if the Assessee fulfilled the 7 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
conditions for grant of registration u/s 12AA the Ld. CIT(A) is bound to grant registration.
6. We have heard the rival parties and have gone though the material placed on record. We find that the objections raised by Ld. CIT(E) for refusing to register the society u/s 12AA of the Act are not relevant for considering the registration under that section. The objections of Ld. CIT(E) that assessee had been claiming exemption u/s 10(23)(iiiab) and therefore he should not have filed the application u/s 12AA of the Act has no force as the assessee is free to avail registration under any alternative provisions if more than one alternatives are available and if in accordance with the provisions of law, the assessee is eligible for registration u/s 12A of the Act which it had applied, the Ld. CIT(E) should not have raised this objection and should have examined the contentions for grant of registration. The second objection of Ld. CIT(E) that assessee when declared as autonomous body should have changed the objects and Memorandum of Association also do not have any force as the facts and circumstances of society and constitutions of members remained same and objects of the society also remained same and the only purpose of declaring the society as autonomous body was that it should be run as an autonomous body in line with the rules laid down by All India Council of Technical Education. The amendment in the byelaws of society has nothing to do with the objects of society which undoubtedly are charitable in nature. The objects of the society as contained in the original Memorandum of Association as placed in P.B. 8 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
page 6 and as contained in amended Memorandum of Association as placed in P.B. page 113 are similar except the fact that society had enlarged its operations to include education up to 10+2 level also.
Moreover the assessee has already amended its byelaws to match with the rules and regulations laid down by All India Council of Technical Education and copy of amended byelaws is placed in P.B. page 112 to
128.
As regards the objection of Ld. CIT(E) that assessee was running a school which has not been mentioned in the byelaws, we find that the objects of the society as contained in the Memorandum of Association placed at P.B. page 6 to 10 are to provide for instruction and research in such branches of Engineering and Technology as the College may think fit and for the advancement of learning and dissemination of knowledge in such branches. The object clause noted above is for providing education and education does include running of school also. In fact in accordance with the instructions of Director of Technical Education and Industrial Training, Govt. of Punjab vide notification dated 12.02.2009 had accorded its sanction to establish new multi disciplinary academy and such multi disciplinary academies were also required to provide 10+2 course to the students also and therefore in accordance with the instructions of Punjab Government, the school was also set up to provide education up to 10+2 level and such school was also registered with Punjab School Education Board. Mere non mentioning of all schools and colleges in the Memorandum of Association does not disentitle the 9 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
assessee for getting registration u/s 12A of the Act. The copy of the notification as placed in P.B. page 132 has been made part of this order.10 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017
Assessment Year:
The above said notification list includes the assessee also which is indicated at column no. 1 and therefore the objections of Ld. CIT(E) is not relevant. Moreover we find that under similar facts and circumstances, another assessee at Ferozepur by the name of SBS College of Engineering and Technology has been granted registration vide order dated 19.09.2016 placed at P.B. page 156 to 157. The name of said assessee is appearing at column no. 2. Therefore under same facts and circumstances the Ld. CIT(A) should have granted registration to the society.
It has been held by various courts including by Hon'ble Supreme Court of India that at the time of registration of a society u/s 12A of the Act, the only requirement is that Ld. CIT(E) should be satisfied about the objects of society and should be satisfied with the genuineness of activities of the society with respect to objects of the society. In the present case the Ld. CIT(E) has not doubted the objects of the society which undoubtedly are charitable in nature and genuineness of activities of the society has also not been doubted.
The Hon'ble Punjab & Haryana High Court in the case of Sh.
Shirdi Sai Darbar Charitable Trust in ITA No. 38 vide its order dated 27.03.2017 has held as under:
"3. We have heard learned counsel for the appellant-revenue.
4. The matter has been examined by the Tribunal after perusing the relevant statutory provisions. It has been categorically recorded by the Tribunal that the CIT (E) has to satisfy two conditions while granting registration under Section 12AA of the Act. Firstly, whether the objects of 11 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
the assessee are charitable in nature and thus, the activities are genuine. It cannot be concluded on the basis that the assessee has not filed its income tax returns in earlier years that the activities of the assessee are not genuine. It has been further recorded that Section 13 of the Act comes into play at the time of granting exemption under Section 11 of the Act and not at the time of granting registration under Section 12AA of the Act. No adverse remarks have been recorded by the CIT (E) with regard to the objects contained in the memorandum of the assessee-trust to come to the conclusion that its activities are not genuine. Thus, it has been rightly directed by the Tribunal to the CIT (E) to grant registration under Section 12AA of the Act. The relevant observations recorded by the Tribunal read thus:-
"We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. The first reason on the basis of which the Commissioner of Income Tax (Exemptions) has refused to grant registration to the assessee is that the assessee has not been filing its income-tax returns in the earlier years. We do not find that it is a good reason to reject the application for registration since the two conditions which the Commissioner of Income Tax (Exemptions) has to satisfy while granting the registration under Section 12A of the Act, are that the objects of the assessee are charitable in nature and the activities are genuine. Just because the assessee has not filed its income tax returns in earlier years, it cannot be said that the activities of the assessee are not genuine. Reliance placed by the learned counsel for the assessee on the judgment of the Allahabad High Court as well as the order of the Chennai Bench of the Tribunal are not out of place, whereby it has been held that non-filing of return cannot be one of the reasons for denying registration under Section 12A of the Act. With regard to the second objection raised by the Commissioner of Income Tax (Exemptions) that as per clause 12 of the Memorandum of trust, the trustees have been given absolute powers to manage the property. We have perused the clause-12 of the Memorandum of the trust, whereby the trustees are authorized to demise the immovable property or properties of the trust either from year to year or for any fixed term or for any term of years or on monthly basis at such rent and subject to such conditions as they deem fit and proper and also accept surrender of lease and may manage the property as they think proper. From the perusal of this clause, we observe that the trustees have been given powers to give property of the trust on lease or on rent. We do not find anything wrong in this clause so as to deny the assessee the registration under Section 12A of the Act. As regards the apprehension of the Commissioner of Income Tax (Exemptions) that his clause may attract the provisions of Section 13 (1)(c) of the Act, we are of the view that the conditions as provided in Section 13 or elsewhere are to be seen by the Assessing Officer at the time of assessment proceedings on yearly basis and not by the CIT (Appeals) while granting registration under Section 12A of the Act.
8. Sections 13 comes into play at the time of granting exemption under Section 11 of the Act and not at the time of granting registration under Section 12A of the Act. The only two requirements as stated hereinabove while granting registration under Section 12A of the Act are with respect to the charitable nature of the objects of the assessee and genuineness of the 12 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
activities. Since we observe that no adverse remarks have been made by the Commissioner of Income Tax (Exemptions) with regard to the objects contained in Memorandum and as stated hereinabove that the observations of the Commissioner of Income Tax (Exemptions) do not lead to the conclusion that the activities of the assessee are not genuine, we hereby direct the Commissioner of Income Tax (Exemptions) to grant registration under Section 12A of the Act to the assessee."
5. Learned counsel for the appellant-revenue has not been able to show that the findings recorded by the Tribunal are in any way illegal or perverse warranting interference by this Court. Consequently, no substantial question of law arises and the appeal stands dismissed." Similarly the Hon'ble Punjab & Haryana High Court in the case of shri Mahavir Jain Society (Regd.) in appeal no. 231 vide order dated 11.09.2017 has also held that at the time of granting registration u/s 12A of the Act the Ld. CIT(E) has to examine the objects of society and genuineness of its activities with respect to its objects. The findings of the Hon'ble Court are reproduced below:
"3. We have heard learned counsel for the parties.
4. Section 12AA of the Act reads thus:-
"12AA.(1) 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 subsection (1) of section 12 A, 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 inquiries 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;
( i i ) 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: Provided that no order under sub-clause ( i f ) shall be passed unless the applicant has been given a reasonable opportunity of being heard.
(1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b ) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such 13 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
applications under that sub-section from the stage at which they were on that day.
(2) Every order granting or refusing registration under clause ( b ) of sub-
section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause ( a ) or clause (ad) of sub-section (1) of section 12A.
(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing canceling the registration of such trust or institution:
Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. (4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently it is noticed that the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then, the Principal Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution:
Provided that the registration shall not be cancelled under this sub- section, if the trust or institution proves that there was a reasonable cause for the activities to be carried out in the said manner." (5) Section 12AA of the Act prescribes procedure for registration of trust or institution by the Principal Commissioner or the Commissioner of Income Tax after perusing the objects of the trust or institution and the genuineness of its activities. The order is required to be passed in writing. (6) In the present case, the assessee had filed an application on 26.02.2013 for grant of registration under Section 12AA of the Act before the CIT. Vide order dated 27.08.2013 (Annexure A-l), the CIT refused to grant registration to the assessee-Society, inter alia, on the ground of non-
production of documentary evidence in respect of aims and objects of the society, absence of audited financial statements and non-explanation regarding registration of the society twice with the Registrar of Firms and Societies, Chandigarh, Aggrieved by the order, the assessee filed an appeal before the Tribunal. The matter was considered in detail by the Tribunal. It has been categorically recorded by the Tribunal that one of the objects of the Society as mentioned in its bye-laws was to provide free medical aid by opening hospitals, diagnostic centers, maternity home and by organizing special medical camps. These activities had also been demonstrated in the previous three years by the respondent-assessee in its Balance Sheet, Income & Expenditure account, Receipt & payment Account which were produced before the CIT. Further, the CIT had not 14 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017 Assessment Year:
commented adversely on the documents placed before it. With regard to the reason that the assessee had not furnished audited financial statements, it has been recorded by the Tribunal that the same were not relevant for establishing the fact whether the activities of the Trust were genuine or not. Even the provisions of the Act do not require audited financial statements to be furnished while seeking registration under Section 12AA of the Act. Rule 17A of the Income Tax Rules, 1962, provides the documents which should accompany the application under Section 12A of the Act for registration of charitable or religious trust or institution. As regards the plea that the assessee had offered no explanation about the registration of the Society twice, it was recorded by the Tribunal that registration of a society was not a pre-condition for granting registration under Section 12AA of the Act. Thus, it was rightly concluded by the Tribunal that the CIT was not justified in rejecting the application for registration of the assessee-Society by insisting on the conditions not contemplated by the statute. The relevant findings recorded by the Tribunal in this regard read thus:-
"13. We find that one of the objects of the assessee society as stated at point no.6 in the bye laws reproduced above was to provide free medical aid, by opening hospitals, diagnostic centers, maternity home and by organizing special medical camps. We also find that the assessee society had clearly demonstrated the carrying on of this activity in the previous three years through its Balance Sheet, Income & Expenditure account, Receipt & payment Account, filed before the Ld. CIT. The Ld. CIT has not controverted or commented adversely on these documents placed before it. Therefore we find that the genuineness of the activities of the assessee society is also established. Further we find that the Ld. CIT has erred in stating that no documentary evidences were filed to substantiate the carrying on of the objects of the society, despite the voluminous documents and information placed before him during the proceedings as stated above.
14. We also find that the Ld. CIT has erred in rejecting the assessee's application u/s 12A, for the reason that the assessee had not furnished audited statement and that the assessee society was registered twice. We find that aforestated reasons are not pertinent for the purpose of establishing whether the activities of the assessee society were genuine or not. Audited financial statements are not relevant for establishing the fact whether the activities of the trust were genuine or not, which is corroborated by the fact that even the provisions of the Income Tax Act, 1961, do not require audited financial statements to be furnished, while seeking registration under Section 12AA. Rule 17A of the Income Tax Rules, 1962, list the documents which should accompany the application under section 12A for registration of charitable or religious trust or institution. At point no.(b) of the Rules it is stated that "where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up"
have to be submitted. Clearly as per the Rules, the requirement is furnishing of only the accounts of the trust or institution seeking registration and nowhere the word "audited" accounts have been used. 15 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017
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Therefore the non furnishing of audited financials cannot by itself be a criteria for holding the activities of a Trust of society as not being genuine and therefore refusing grant of registration under section 12AA. Moreover, the Ld. AR demonstrated before us by referring to its paper book page no.61-65, that reason for non-furnishing of audited results was duly explained to the Ld. CIT. The Ld. AR stated that the assessee had appointed M/s Shammi Garg & Co. C.A., Ludhiana as its auditors for the 2009-10, and referred to Page no.61 of the Paper Book, which was the appointment letter issued by the assessee society to the CA firm. The Ld. AR, thereafter referred to paper Book No.62, which was the communication of the new auditors, with the previous auditors i.e. M/s S.S. Periwal & Co., seeking no objection to their appointment as auditors of the society. At Paper book No.63, the Ld. AR reproduced the letter sent by the previous auditors to the new auditors, objecting to their appointment. At paper book 64, was placed the letter sent by the assessee society to the previous auditors, strongly objecting to their refusal to grant NOC to the new auditors. The Ld. AR further drew our attention to the letter written by the assessee society to the President of the Institute of Chartered Accountant of India to resolve the dispute of appointment of auditors. The Ld. AR also stated before us that the dispute had not been resolved to date. The Ld. AR stated that in view of the same the assessee was prevented from getting its books audited. We find that the Ld. CIT has not controverted the explanation of the assessee. In view of the above facts and discussion, we hold that non-furnishing of audited financials cannot be a pertinent consideration for holding the activities of the assessee society as ingenuine. We therefore hold that the same cannot be treated as a consideration for refusing to grant registration to the assessee society u s 12AA.
15. We further find that the refusal of grant of registration to the assessee society for offering no explanation regarding registration of the society twice is also incorrect. The Ld. AR, during the course of arguments drew our attention to Paper Book 52, 58 and 60 whereby the assessee society had vide its letter dt.27/05/2013 and 22/08/2013 explained as follows:
"No enclosure of certificates dated 17/09/1974 and 30/04/2009 are there as noted in your letter dated 21/05/2013. The Society is working under the certificate issued on 17/09/1974 and the present working is also under going under it. No bad intentions are there. The Society in year 2009 was formed by the Ex-President and Finance Secretary but which has no relevance as on date and the Society documents i.e. Governing Body list on yearly basis is being submitted to Registrar of Firms & Societies, Chandigarh for Society registered on 17/09/1974. "
We therefore find that the contention of the Ld. CIT that the assessee had offered no explanation about the registration of the society twice is not correct. In any case registration of a society is not a pre condition for granting registration under Section 12AA. A perusal of Rule 17A of the Income Tax Rules 1962, referred to above would show that the only requirement is to furnish the documents evidencing the creation of the trust or establishment of the institute in original, which we find, the assessee society has furnished in the form of Trust Deed.
16 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017
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16. In view of the facts stated above we hold that Ld. CIT was not right in refusing registration to the assessee society for non-furnishing of explanation regarding registration of the assessee society twice.
In case of CIT vs. R.M.S. Trust (Madras) [2010] 326 ITR 310 it was held as under:
"At this stage of considering application for registration wider S. 12A, only inquiry> which could possibly be made would be whether the applicant- trust has made application and whether the accounts are maintained in the manner as suggested in the said section CIT was not justified in rejecting application for registration for want of amended trust-deed since it is not a prerequisite condition for registering the applicant as a trust, Tribunal was justified in setting aside the order of CIT and remitting the matter for decision afresh. "
We therefore hold that the CIT was not justified in rejecting the application for registration of the assessee society by insisting on conditions not contemplated by the statute."
6. Learned counsel for the appellant-Revenue has not been able to show that the view taken by the Tribunal is erroneous. He has also not been able to produce any material on record to show that the approach adopted by the Tribunal is legally unsustainable. Thus, no substantial question of law arises. Consequently, the appeal stands dismissed." Therefore following the above judicial precedents relied on by Ld. AR and keeping in view the facts of the present case, we direct the Ld. CIT(E) to grant registration to the society u/s 12AA of the Act.
The Stay Application filed by assessee has thus become infructuous.
7. In nutshell, the appeal filed by assessee is allowed and Stay Application is dismissed.
Order pronounced in the open court on 05.12.2017
Sd/- Sd/-
(RAVISH SOOD) (T. S. KAPOOR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 05.12.2017.
/GP/Sr. Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
17 ITA No.592/(Asr)/2016 & SA No.05/Asr/2017
Assessment Year:
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order