M/S GANESHI LAL EDUCATION SOCIETY vs. COMMISSIONER OF INCOME TAX ROHTAK

ITA/225/2012HC Punjab & HaryanaPHHC01099300201230 September 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA5 pages
AI SummaryDismissed

What were the facts?

The appellant, M/s Ganeshi Lal Education Society, challenged an order of the Income Tax Appellate Tribunal (ITAT) which had set aside the Commissioner of Income Tax's (CIT) order and remitted the matter back to the CIT for fresh consideration. The appellant argued that the ITAT should have granted exemption under Section 12AA(1)(b)(ii) of the Income Tax Act, 1961, instead of remanding the case. The appellant contended that it had provided the original instrument of establishment and complete information about the school, and the ITAT had found the CIT's inference against the society based on family members being part of the trust to be unjustified. The revenue argued that the appeal was misconceived as the ITAT had merely remanded the matter for reconsideration by the CIT.

What did the High Court hold?

The High Court held that the jurisdiction to allow or reject an application under Section 12AA of the Act rests with the CIT. The ITAT, having found that the CIT considered irrelevant facts, failed to conduct an independent inquiry, disregarded the fact that the appellant was allowed exemption under Section 10(23C)(iiiad), and raised inferences contrary to facts, was correct in remitting the matter back to the CIT. The Tribunal's decision not to impose its own opinion on merits and instead remitting the matter for a fresh decision by the CIT, who has the primary jurisdiction, could not be faulted. The High Court dismissed the appeal, directing the CIT to decide the petition under Section 12AA within three months.

What were the issues?

1. Whether the Income Tax Appellate Tribunal erred in remitting the matter to the Commissioner of Income Tax for fresh consideration instead of granting exemption under Section 12AA(1)(b)(ii) of the Income Tax Act, 1961, when it found the CIT's order to be flawed? (Question of law and fact, concerning Section 12AA(1)(b)(ii)) Assessee's contentions: The ITAT should have granted the exemption directly as it had found the CIT's reasoning flawed, particularly regarding the inference drawn from family members being part of the trust and the lack of independent inquiry by the CIT. The appellant had submitted all necessary documents and had been running the school since inception. Revenue's contentions: The appeal is misconceived because the ITAT has only remanded the matter, and the CIT will reconsider it in light of the Tribunal's findings. The appellant's apprehension of not receiving justice is unfounded.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12AA(1)(b)(ii)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Order: 30.09.2013 M/s Ganeshi Lal Education Society, GL Public School, Kosli Road, Kanina, Mahendergarh. ...Appellant Versus Commissioner of Income Tax, Rohtak. ..Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr. Sandeep Goyal, Advocate for the appellant.

Mr. Inderpreet Singh, Advocate, for the respondent. RAJIVE BHALLA, J (Oral)

The appellant challenges order dated 24.02.2012 (Annexure A-11), passed by the Income Tax Appellate Tribunal, Delhi, 'C' Bench (hereinafter referred to as 'the Tribunal).

Counsel for the appellant submits that as the learned Tribunal has accepted the appeal, set aside order passed by the Commissioner of Income Tax, it should have granting exemption under Section 12AA(1)(b)(ii) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), instead of remitting the matter. As the Kumar Naresh N 2013.10.21 14:07 I attest to the accuracy and integrity of this

The order continues below.

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