THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH vs. KUNDAN VIDYA MANDIR ALUMNI ASSOCIATION, LUDHIANA (PAN: AADAK0049H)

ITA/429/2017HC Punjab & HaryanaPHHC01117646201709 December 2019Author: MR. JUSTICE AJAY TEWARI,MR. JUSTICE LALIT BATRA3 pages
AI SummaryDismissed

What were the facts?

The assessee, Kundan Vidya Mandir Alumni Association, Ludhiana, applied for exemption under Section 12AA of the Income Tax Act, 1961, claiming to be a charitable institution. The Commissioner of Income Tax (Exemptions), Chandigarh (the Revenue), rejected the application. The assessee appealed to the Income Tax Appellate Tribunal (ITAT), presenting an order under Section 12A(a) granted to the main school approximately 15 years prior. The ITAT, by an order dated 22.02.2017, remanded the matter back to the Commissioner for reconsideration. The Revenue filed an appeal against the ITAT's order before the High Court of Punjab and Haryana.

What did the High Court hold?

The High Court held that the arguments of both sides were too extreme. It found that the certification of the main school as a charitable institution was not entirely irrelevant, nor did it automatically entitle the alumni association to exemption as a matter of right. The Tribunal's action of remanding the case to the Commissioner for reconsideration was deemed not illegal. The Tribunal had not reversed any finding but had directed the Commissioner to consider an additional document, the relevance of which the Commissioner would determine. Furthermore, the High Court noted that the respondent was a nascent organization when it initially filed its application, and additional time had passed, allowing the Commissioner to assess its current records to verify if it met the criteria under Section 12AA. Consequently, the High Court found no reason to interfere with the Tribunal's order.

What were the issues?

1. Whether the order of the Commissioner rejecting the assessee's application for exemption under Section 12AA was legal and whether the order under Section 12A(a) in favour of the main school was irrelevant. The Revenue argued that the Commissioner's order was legal and that the Section 12A(a) order for the main school had no bearing on the alumni association's application. The assessee contended that as the main school was recognized as a charitable institution, its alumni association, also not being a profit-making organization, should be entitled to exemption under Section 12AA.

Which sections of the Income-tax Act were involved?

Section 260A,Section 12AA,Section 12A(a)

AI-generated summary — verify with the full judgment below

222 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision : 09.12.2019 The Commissioner of Income Tax (Exemptions), Chandigarh. ...... Appellant versus Kundan Vidya Mandir Alumni Association, Ludhiana ...... Respondent CORAM : HON'BLE MR.JUSTICE AJAY TEWARI HON'BLE MR.JUSTICE LALIT BATRA *** Present :- Mr. Denesh Goyal, Advocate for the appellant. Ms. Radhika Suri, Sr. Advocate with Mr. M.S.Kanda, Advocate for the respondent. *** AJAY TEWARI, J. (Oral)

1.

The present appeal has been filed under Section 260A of the Income Tax Act, 1961 (in short 'the Act'), against the order dated 22.02.2017, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, in ITA No.582/(Asr.)/2016. 2. The claim of the respondent was that it was an alumni association of a school and was set up for charitable purposes and was therefore entitled to the exemption under Section 12AA. The Commissioner rejected the application. In appeal the assessee placed on record an order under Section 12 A(a) in respect of the main school which had been granted about 15 years ago. On the basis of this the Tribunal POOJA SHARMA

The order continues below.

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