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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. LALIET KUMAR & DR. M. L. MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. LALIET KUMAR, JUDICIAL MEMBER AND DR. M. L. MEENA, ACCOUNTANT MEMBER I.T.A. No. 463/Asr/2016 Assessment Year:2016-17 M/s Joseph’s School Dugri Vs. CIT(E), Dhandra Road, Ludhiana. Chandigarh. [PAN: AAATJ3850H] (Appellant) (Respendent)
Appellant by Sh. Sudhir Sehgal, Adv. Respondent by Sh. Sanjay Dhariwal, DR
Date of Hearing 13.09.2021 Date of Pronouncement 16.09.2021
ORDER Per Dr. M. L. Meena, AM: This appeal by the assessee is directed against the order dated 29.07.2016 passed by the CIT(E) whereby the application of the assessee for seeking registration u/s 12A of the Act has been rejected.
At the outset, the ld. Counsel for the assessee has submitted that the assessee has been carrying on the charitable activities of imparting education as per section 2(15) of the Act in the name of Joseph’s School Dugri, Dhandari Road, Ludhiana through Joseph’s School management society. He further submitted that the assessee has been maintaining regular books of account for the society, duly audited year after year which have been filed before the CIT(E) alongwith the copy
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of registration of the society, constitution/bye laws, letter and registration etc. and that ld. CIT(E) had neither point out any defects in the financial statements/accounts nor doubted the genuineness of its activities. He has filed a copy of registration certificate of society (APB page-1) and copy of Rules and Regulation of society (APB page-2 to 9). The ld. Counsel for the assessee has also submitted that the CIT(E) had not commented adversely regarding the aims, objects of the assessee society as earlier the asessee has been availing exemption u/s 10(23C) (iiiad) for many years on the income earned and that had never been questioned in any of the previous year and the case of the assessee for assessment year 2010-11 was also assessed by the Department u/s 143(3) of the Act where no defect was pointed out. He has prepared his pointwise arguments on the findings of the CIT(E) in the tabular form as under:
The request for registration u/s 12AA was rejected by the CIT(Exemption) by giving the following points which are met as under: S.NO Finding of the CIT(Exemptions) Our Arguments 1 1. Difference in name on PAN, Income Tax At the outset it is submitted that the reason as given by Returns and on Aims and the Worthy CIT is not sufficient to reject the application u/sec Obiectives, Society certificate. 12AA of the Act. 2. The CIT has held that the name on PAN card The defect is merely a clerical defect. The exact name of and Income Tax Returns is “Joseph’s the Society is “Joseph’s School, Management Society” and it is only School”, whereas the aims and objectives at the time of making the PAN that part of the name was printed. and the Society certificate carries the name But that would not conclude that the Society and the School are as “Joseph’s School, Management Society”. different. The name in the Income Tax Returns are according to the So he held that the both the entities are same name as per PAN and even the address is the same. different. 3. The case of the Assessee has been assessed as per the provisions of section 143(3) of the Act and no such defect was pointed out by the department. The returned income was accepted during the assessment proceedings and no doubt had been raised as such. 4. It is also a matter of fact that there is no other School run by the Society other than the one which is mentioned in the return filed. 5. The case of the Assessee is even audited and proper books of accounts are maintained by the Assessee year after year and the same balances of each and every item of Balance Sheet is carried forward as such. (Audited Balance Sheet Pg-12-17 PB)
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2 (a) From the rules and regulations of the Society The provisions of section 11 and 10(23c) are two parallel it is clear that the whole emphasis is on regimes and operate independently. running the Josephs’s School so the (b) Though the main object of the Society is to impart application u/sec 12AA of the Act is not education but that would not debar the Society to get itself correct rather the application must have registered u/sec 12AA of the Act. Had the intention be so, no been filed as per the provisions of section Educational Institution would have got registration u/sec 12AA of 10(23c)(vi) of the Act. the Act. (c) Moreover, the Worthy CIT has himself stated ostensible aims and objects of the society are to
In support, the ld. Counsel has further reliance on the Hon”ble Juridictional 3. High Court in the case of CIT(Exemption) Vs. Beant College of Engineering and Technology, [2019] 108 taxmann.com 196 (Punjab & Haryana) and the case laws listed as below:
i. CIT(E) vs. Khatu Ji Para Medical Technology Educational & Research Society, 106 taxmann.com 344 (P & H). ii. M/s Arya Shiksha Mandal K.M.V. vs. CIT (E) ITA No.522/ASR/2016 dated 27.03.2017 iii. M/s Markandeshwar Educational Society, vs. CIT(E) in ITA No.1015/CHD/2016 order dated 15.11.2017 4. Per contra, the ld. DR supported the order of the CIT(E) and he contended that the subject registered society and the school are the different entities.
We have heard the rival contentions and perused the material on record in case law relied upon by both the sides. The assessee filed an application in Form No. 10A for seeking registration u/sec 12AA of the Act was made before the Ld. CIT (E) on 06.01.2016. It is noted that the assessee society is an Educational Institution, which has been in operation since 12.05.1988 and claiming exemption u/s 10(23c)(iiiad) of the Act since past many years. The CIT(E) has rejected the
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application of the Assessee by holding that there are certain alleged defects in the basic documents like PAN and rules and regulations and held that the application as per the provisions of section 10(23c)(vi) of the Act is more appropriate as compared to section 12AA of the Act.
It is undisputed fact that the Charitable purpose of objectives and genuineness of the activities of the assessee society are not in doubted. The main objection of the CIT(Exemption) was that the Joseph’s registered 7. society/ school are two different entities. He stated that in view of the Rules and Regulation of the society that the whole emphasis was given to running the Joseph’s School, so the application u/s 12AA of the Act filed was procedural not correct rather the application must have been filed as per the provision of section 10(23C) (vi) of the Act. The ld. Counsel contended that as a matter of fact there was no other school run by the society other than the one which is mention in the return filed and that the assessee has regularly maintained books of account and got the same audited year after year showing carry forward balances of each and every item in the balance sheet (APB page 12 to 17). He further contended that the main object of society was to impart education through the Josesh School that would not debar the society to get registration u/s 12AA of the Act. The provisions of section 11 and 10(23C) (vi) are two parallel regimes and operate independently and the assessee is entitled to avail the benefit under one of them which is more beneficial to it. The counsel has argued that the CIT(E) has himself state ostensible aims and objects of the society were to manage the existing school as Joseph’s School, Dugri Road Opposite Bhagat Singh Nagar, Ludhiana.
As regards to the observation of the CIT(E) that no other limb as narrated u/s 2(15) of the Act as forming part object of society, the ld. AR contended that
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nowhere it is required under the provisions that the object of the society must contain more than one ingredient of section 2(15) of the Act. He further contended that the CIT(E) has himself stated “that on page 2 of the impugned order that “Admittedly judiciary has laid down that applicants are free to alternatively claim registration u/sec 12AA or 10(23C)”. Thus, the CIT(E) has admitted the fact that the assessee can alternatively claim registration u/s 12AA or 10(23C) of the Act. In view of the matter, no adverse action would be required to be taken against the assessee, so far grant of registration u/s 12AA of the Act is concerned. On the observation of different PAN, the counsel argued that the exact name of the Society was “Joseph’s School, Management Society” and it is only at the time of making the PAN that part of the name was printed. Considering the name in the Income Tax Returns and the address are being same according to the same name as per PAN and therefore in our view, it would not be justified to conclude that the Society and the School are different entities. Mere mentioning of typing mistake in the name of society does not disentitle the assessee for getting registration u/s 12AA of the Act.
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 12AA of the Act, the only requirement is that Ld. CIT(E) should be satisfied about the objects of society and the genuineness of activities of the society with respect to objects of the society. In the present case the Ld. CIT(E) has neither doubted the objects of the society which undoubtedly are charitable in nature and genuineness of activities of the society.
In the case of Beant College of Engineering & Technology (Supra), the Hon’ble Jurisdictional Punjab & Haryana High Court has held as under:
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Section 12AA, read with section 10(23C)(iiiad) of the Income-tax Act, 1961 - Charitable or religious trust - Registration procedure (Scope of) - Assessee- trust, running a school, filed application for registration under section 12AA - Commissioner (Exemptions) took a view that assessee had been claiming exemption under section 10(23C)(iiiad) and, therefore, should not have filed application under section 12AA - He further opined that assessee was running a school which had not been reflected in byelaws as objects of society as contained in Memorandum of Association - Accordingly, assessee's application for registration was rejected - As regards first objection, Tribunal was of view that assessee was free to avail registration under any alternative provision if more than one alternatives were available and, thus, assessee was eligible for registration under section 12AA for which it had applied - So far as second objection was concerned, Tribunal concluded that mere non- mentioning of schools and colleges in Memorandum of Association did not disentitle assessee for getting registration under section 12AA - Tribunal thus set aside order passed by Commissioner (Exemptions) - Whether since no illegality or perversity could be pointed out by revenue in findings recorded by Tribunal, impugned order allowing assessee's application for registration was to be upheld - Held, yes [Para 5] Under similar facts and circumstances, and respectfully following Hon’ble 11. Jurisdictional Punjab & Haryana High Court, we are of the considered opinion that the assessee is entitled to registration under section12AA of the Income Tax Act 1961. Accordingly, we direct the CIT(E) to grant registration to the assessee society from the date of its application.
Order pronounced in the open court on 16.09.2021
Sd/- Sd/-
(Laliet Kumar) (Dr. M. L. Meena) Judicial Member Accountant Member doc
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Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.