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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. LALIET KUMAR & DR. M. L. MEENA
ORDER Per Dr. M. L. Meena, AM:
This appeal of the assessee trust is directed against the order dated 31.08.2018 passed by the CIT(E).
“1 That the order of Id. Commissioner of Income Tax (Exemptions), Chandigarh is barred by limitation.
2 That the Id. Commissioner of Income Tax (Exemptions), Chandigarh has erred in law and on facts in rejecting assessee’s application on Form no.10A for registration u/s 12A.
3 That the Id. Commissioner of Income Tax (Exemptions), Chandigarh has erred in law and on facts in holding that the assessee does not fulfill the conditions laid down for registration u/s 12A.
4 That the Id. Commissioner of Income Tax (Exemptions), Chandigarh has erred in law and on facts in rejecting the assessee’s application on the ground that since the assessee was claiming exemption from Income Tax u/s 10(23C)(3)(iii)(ad) hence it had no locus standie to claim registration u/s 12A.
5 That the order is bad in law and on facts.
6 That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.”
The assessee society has submitted an application in form No. 10A in the office of the CIT(E) on 27.02.2018 seeking registration u/s 12A of the Income Tax Act, 1961. The applicant trust was created on 17.12.1999 with the aims and to undertake, promote, encourage and assist the study of all aspect of education need related problems of the young children, adults, aged persons and to train students on modern lines after importing good education. So that they may be good citizens of India Republic with the spirit of patriotism. One of the objective was that Special attention will be given upon character building of the students, to prepare the students for various examination conducted by various education departments which includes any educational institution, college, university, board, academy and any other institution, Government or Private, national or international, educational or any other field.
The CIT observed that it’s the fact of finding of the case that it's also the 3. case that no evidence has been adduced in the regard to put forth the case that the said surpluses have been re-deployed into education. It must be remembered that for clauses beneficial to the assessee the onus, to prove its claims, lies entirely on the assessee. He further discussed that the applicant does not fulfil the conditions laid down for grant of registration u/s 12A of the IT Act as the applicant's shift from section 10 to section 12 is actually the opposite of the intent of the legislature.
The reason propounded that on crossing the threshold of Rs. 1 Crore the Act calls for compulsory registration u/s 12AA is not tenable. The application for registration u/s 12AA of the Act, with the present state of affairs, is accordingly rejected.
The ld. Counsel Sh. Rohit Kapur, submitted that the Id. Commissioner of Income Tax (Exemptions), Chandigarh has erred in law and on facts in rejecting assessee’s application filed in Form no.10A for registration u/s 12AA by holding that the assessee does not fulfill the conditions laid down for registration u/s 12A and that since the assessee was claiming exemption from Income Tax u/s 10(23C)(3)(iii)(ad) hence it had no locus standie to claim registration u/s 12A.
Having heard both the sides and perusing the relevant material on record, we note that the Ld. CIT has been wrong in holding that since the assessee was claiming exemption from Income Tax u/s 10(23C)(3)(iii)(ad) hence it had no locus standie to claim registration u/s 12A. It is the right of the assessee to avail either of the benefit of exemptions u/s 10 (23c) or 12AA of the act available to it, however the assessee has to fulfilled the conditioned prescribed for availing such benefits.
We have noted the material fact as mentioned by the CIT that One of the objectives of the applicant society was that Special attention has been given upon character building of the students, to prepare the students for various examination conducted by various education departments which includes any educational institution, college, university, board, academy and any other institution, Government or Private, national or international, educational or any other field. It is worthy mention here that whether the object of the assessee society to prepare the students for various examination conducted by various education departments that includes any educational institution, college, university, board, academy and any other institution, Government or Private, national or international, educational contemplates to running coaching institute on commercial pattern for profit emotive needs to be examined.
Considering the facts of the case in totality, we deem it fit to restore the matter back to the file of the CIT(Exemption) to examine the objects and activities of the assessee society afresh for the issue of grant of registration u/s 12AA of the act, afresh, as per amended provisions of law, after taking into consideration the material evidence and after affording sufficient opportunity of being heard to the assessee trust. Accordingly, the case is restored to the CIT, for afresh consideration and examination of the application of assessee under section 12A(a), with the following observation:
I. To ascertain the material facts regarding charitable nature of objectives of the assessee society. II. Consider the veracity of evidence claimed to be submitted before the then CIT. III. Verify the genuineness of the activities of the assessee society in the light of evidences prima facie relevant, for the year under consideration for the purpose of grant of registration u/s 12AA of the Act. IV. Aassessee shall cooperate in the proceedings, before the CIT.
V. All pleas available under the law shall remain so available to the assessee in the fresh proceedings before the Ld. CIT.
In result, the appeal is treated allowed for statistical purposes in the terms indicated as above.
Order pronounced in the open court on 16.08.2021