ARYA SAMAJ MANDIR ,BHILWARA vs. CIT(E) , JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B-Bench” JAIPUR

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BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 1015 & 1021/JPR/2024

Arya Samaj Mandir,
1, Dayanand Marg,
Bhilwara.
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Vs.

The Commissioner of Income-tax (Exemption),
Jaipur.
LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABAA7514R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri Devang Gargieya, Advocate &

Shri Hemang Gargieya, Advocate.
jktLo dh vksjls@Revenue by : Smt. Runi Pal, CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 18/02/2025
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 22/04/2025

vkns'k@ORDER

PER: DR. S. SEETHALAKSHMI, J.M.

These are two appeals filed by the assessee against two separate orders of the Ld. CIT (Exemption), Jaipur dated 27.06.2024& 28.06.2024 for the assessment year 2019-20 passed under section 12AA and 80G of the Income Tax
Act, 1961 respectively. The assessee has raised following grounds:-

ITA NO. 1015/JPR/2024 :
Arya Samaj Mandir, Bhilwara.

“1. The impugned order dated 28.06.2024 of the Act is bad in law and on facts of the case for want of juri iction and various other reasons and hence, the same kindly be quashed.

ITA NO. 1021/JPR/2024 :
“1. The impugned order dated 28.06.2024 of the Act is bad in law and on facts of the case for want of juri iction and various other reasons and hence, the same kindly be quashed.

Both these appeals are inter-related and inter-connected, therefore, first of all, we deal with the grounds of the assessee raised in ITA No.1015/JP/2024. 2. The brief facts of the case are that the assessee society had filed an online application under section 12AA dated 12.01.2019 in Form No.10A seeking registration under section 12AA of the IT Act, 1961. However, the said
Arya Samaj Mandir, Bhilwara.

application of the assessee rejected by the ld. CIT (Exemption) vide order dated
31.07.2019 on the ground that the assessee had not submitted original documents regarding the establishment of trust/society as well as evidences in support of its claim even after sufficient opportunities have been provided to the applicant to produce details and documents in support of his claim for registration under section 12AA of the IT Act, 1961.Aggrieved by the order of ld. CIT (Exemption), assessee preferred appeal before the ITAT Jaipur. The ITAT vide appeal no.
1081/JP/2019 dated 03.09.2020 set aside the matter to the file of ld. CIT
(Exemption) for afresh examination of the issue in question, along with 80G as approval under section 80G is inter-connected with the appeal relating to registration under section 12AA of the Act. Following the directions of the ITAT, notices were issued to the assessee and in compliance reply submitted by assessee.
The ld. CIT (Exemption) being not satisfied with the reply of the assessee, again denied registration under section 12AA vide his order dated 27.06.2024 on the ground of Non genuineness of activities and Non registration under the RPT Act,
1959. ITA No. 1021/JPR/2024 :
3. So far as the appeal in ITA No. 1021/JPR/2024, we note that the said application for registration u/s. 80G of the Act was rejected on the following grounds:-
Arya Samaj Mandir, Bhilwara.

 Approval u/s 80G cannot be granted without registration u/s 12AA.
 Religious objects violation of 80G(5)(ii).
 Meant expressed for benefit of particular community violating section80G(5(iii).
 Religious expenses are more than 5%, thus violation of section 80G(5B).

“Brief Facts: The appellant is a charitable society, established long back and engaged in promoting nationality, education, personality development of the students without any discrimination of caste, creed and sex (Refer amended trust deed at PB5-32).

The facts, of the 1st round, as noted by the ld. CIT(E).is that the appellant filed an online application u/s 12AA dt. 12.01.2019 in Form No.10A for seeking registration u/s 12AA of the Act along with application u/s 80G dt 12.01.2019. In response, the CIT(E) issued notice dt.
01.04.2019 requesting to submit certain documents/ explanations and also to produce original
RC/MOA for verification. In compliance thereto, Shri G.P. Singhal, CA/AR attended and furnished details on various dates. The CIT(E) vide its notice dt. 01/02.07.2019 asked the assessee-society to produce the certified copy of the MOA for verification, however upon non-
Arya Samaj Mandir, Bhilwara.

furnishing of the same, the CIT(E) rejected the application for registration u/s 12AA vide its order dated 31.07.2019, the relevant extract is under :

“05. As discussed above, the appellant did not submit original documents regarding establishment of the trust/society as well as evidences in support of his claim. Under Rule
17A of Income Tax Rules, 1962 the appellant is required, to produce original/ certified instrument regarding establishing of the trust/society for verification but the same has not be done by the appellant.

and also rejected the application for registration u/s 80G vide order dated 31.07.2019 stating that the approval u/s 12AA is a precondition for granting approval u/s 80G and thus, the assessee is not eligible for exemption u/s 80G.

Thus, the crux of the order of ld. CIT(E) is that as per Rule 17A r/w S.12AA(1)(b) of the Act, certified copy of instrument establishing the trust needs to be verified with original. The CIT(E) is empowered to call for such document/ information to satisfy himself of the genuineness of the activities or to make necessary enquires. U/r 17A appellant is required to produce original/
certified instrument establishing the institution for verification and alleging failure to comply this part, he denied the registration.

Thereafter, aggrieved by this order, appellant preferred appeals before the Hon’ble ITAT, Jaipur.
The Hon’ble ITAT in ITA No. 1081-82/JP/2019,vide order dated 03.09.2020, set-aside the above-mentioned orders of the CIT(E) and further observed that:

“In view of the above discussions, we are of the considered view that as per amended rule 17A of the Income Tax Rules, which are applicable in the case of the assessee, the assessee was not required to furnish the original copy of the documents rather self- attested or self-certified copy of each and every documents/instruments was sufficient for the purpose of verification by the ld. CIT (E). Therefore, taking into consideration all these facts and circumstances of the case, this appeal of the assessee society is restored to the file of the ld. CIT(E) for afresh examination of the issue in question and act accordingly. Thus the appeal of the assessee in ITA No. 1081/JP/2019 is allowed for Statistical purposes.”
Arya Samaj Mandir, Bhilwara.

Thereafter, in compliance of the directions of the Hon’ble ITAT, the ld. CIT(E) (in this 2nd round)issued Notice dt. 16.03.2022(PB 68-71), in response to which the assessee filed a detailed replie t. 21.03.2022& 10.06.2024 (PB 72-74& 79-82 respectively).Unfortunately, however, the CIT(E) without consider the same, again rejected the application for registration u/s 12AAvide impugned order on dt. 27.06.2024, on various new grounds (which were not raised during the 1st round) i.e (a) Non-genuineness of activities and (b) Non-registration of Rajasthan Public Trust
Act.

Similarly, the application for exemption u/s 80G was also rejected vide order dated 28.06.2024
on various grounds i.e (a) Approval u/s 80G cannot be granted without registration u/s 12AA (b)
Religious object violated u/s 80G(5)(ii) (c) meant for particular community (d) Religious Exp.
are more than 5%
Hence this appeal.

Submission:

GOA 1 : Impugned Order dt. 27.06.2024 is bad-in law :

“S. 153 (3) Notwithstanding anything contained in sub-sections (1) 42[, (1A)] and (2), an order of fresh assessment 43[or fresh order under section 92CA, as the case may be,] in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment, 43[or an order under section 92CA, as the case may be], may be made at any time before the expiry of nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the 44[Principal Chief
Arya Samaj Mandir, Bhilwara.

Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be] :

Provided that where the order under section 254 is received by the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the 44[Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be,] on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "nine months", the words "twelve months" had been substituted.

X

X

X

X

(5) Where effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 is to be given by the Assessing Officer [or the Transfer
Pricing Officer, as the case may be,] wholly or partly, otherwise than by making a fresh assessment or reassessment [or fresh order under section 92CA, as the case may be], such effect shall be given within a period of three months from the end of the month in which order under section 250 or section 254 or section 260 or section 262 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, the order under section 263 or section 264 is passed by the 48[Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, as the case may be]”

barred by limitation in the sense that the Appellant cannot be made to suffer because of the fault committed by the CIT(E) in not taking a decision. The issue of the registration, restored to him by the Hon’ble ITAT as dated 03.09.2020

“Section 12A, read with section 12AA of the Income-tax Act, 1961 - Charitable or religious trust - Registration of (Deemed registration) - Whether where assessee-society filed an application under section 12A for grant of registration on 24-2-2003 and same was not responded to within six months, registration of application was to be deemed to have taken effect from 24-8-2003 - Held, yes

Para 3. The short issue is with regard to the deemed registration of an application under Section 12AA of the Income Tax Act. The High Court has taken the view that once an application is made under the said provision and in case the same is not responded to within six months, it would be taken that the application is registered under the provision.

Para 5. We see no basis for such an apprehension since that is the only logical sense in which the Judgment could be understood. Therefore, in order to disabuse any apprehension, we make it clear that the registration of the application under Section 12AA of the Income Tax Act in the case of the respondent shall take effect from 24.08.2003.”

applicable which is also a case based on almost similar facts. In that case also, the Hon’ble
Tribunal remanded the matter back to the ld. CIT(E) on dt. 22.07.2011. The CIT(E), however passed fresh order only on dt. 09.10.2015 rejecting the application on certain grounds. In that context it was held as under,

“7. While arriving on the aforesaid conclusion, the Tribunal also relied upon the judgment of the Karnataka High Court in CIT v. Islamic Academy of Education [2015]
54 taxmann.com 255/229 Taxman 274 and decision of this Court in CIT v. Vijay Vargiya
Vani Charitable Trust [2015] 58 taxmann.com 335/232 Taxman340/[2014] 369 ITR 360
(Raj.). The Tribunal also noted that once the matter was remanded back to the CIT(E) then the limitation for passing the order/decision cannot be more than the limitation provided for deciding the application under section 12AA of the Act. There is no dispute that as per the provisions of section 12AA(2) of the Act, limitation for granting or refusing the registration is prescribed as before expiry of six months from the end of the month in which the application was received. Relying on the judgment of the Supreme
Court in CIT v. Society for the Promn. of Edn. [2016] 67 taxmann.com 264/238 Taxman
330/382ITR 6 which upheld the judgment of Allahabad High Court and judgment of this Court in CIT v. Sahitya Sadawart Samiti [2017] 88 taxmann.com 703/396 ITR 46 (Raj.), the Tribunal held that once the limitation prescribed under section 12AA of the Act expired and the consequential default on the part of the CIT(E) in deciding the application would result deemed grant of registration is a settled proposition. Therefore, it has been held by the Tribunal that the judgment of the CIT(E) is reversed on merits and registration would stand granted to the assessee by prescription of law made in section 12AA(2) of the Act. The Tribunal in this behalf relied on the judgment of Lucknow Bench of the Tribunal in Harshit Foundation v. CIT [2013] 38 taxmann.com 309/60 SOT 147
(URO) in which case it was held that where the Commissioner does not pass any order even after six months from receipt of Tribunal's order remitting the matter to him, the registration will be deemed to have been granted. This is subject to exercise of Commissioner's power under section12AA(3) of the Act in appropriate cases.”

II. Limited Scope under Remand Orders

“In view of the above discussions, we are of the considered view that as per amended rule
17A of the Income Tax Rules, which are applicable in the case of the assessee, the assessee was not required to furnish the original copy of the documents rather self attested or self certified copy of each and every documents/ instruments was sufficient for the purpose of verification by the ld. CIT (E). Therefore, taking into consideration all these facts and circumstances of the case, this appeal of the assessee society is restored to the file of the ld. CIT(E) for afresh examination of the issue in question and act accordingly. Thus the appeal of the assessee in ITA No. 1062/JP/2019 is allowed for Statistical purposes. 3.1 As regards the appeal of the assessee u/s 80G(5)(vi) of the Income Tax Act against the order 31-07-2019 of the ld. CIT(E), the Bench finds that the appeal of the assessee as to grant of approval u/s 80G is interconnected with the appeal of the assessee relating to registration u/s 12AA of the Act. Therefore, this appeal of the assessee is also restored to the file of the ld. CIT(E) for afresh consideration and act accordingly. Thus, the appeal of the assessee in ITA No. 1063/JP/2019 is allowed for Statistical purposes”.

Hence, the CIT(E) could not touch the other issues.

taxed receipts from 'ABMC' as Fees for Technical Services (FTS) as against bringing it to tax as 'royalty' in original assessment - Whether Assessing Officer had clearly exceeded his juri iction by taxing income of assessee as FTS which was not subject matter of appeal before Tribunal nor had Tribunal given an open remand to Assessing Officer - Held, yes - Whether since examination by Tribunal was limited to taxability of receipts only in light of judgment of Supreme Court in Engineering Analysis case (supra) which dealt with taxability of receipt as 'royalty' under section 9(1)(vi), impugned addition was to be deleted on technical grounds - Held, yes [Paras 9-
14] [In favour of assessee]”

“It is evident that the power of Commissioner under section 263 extends to such matters which had not been considered and decided in such appeal. The use of the word
'considered and decided' leaves no room for doubt that if some issue is decided by Commissioner (Appeals) in an appeal against the assessment order passed by the Assessing Officer, then, that issue cannot be subject matter of proceedings under section 263. Thus, it is evident from the above that the Explanation 1(c) to section 263 is based on the Doctrine of Merger, according to which there cannot he more than one decree or an operative order governing the same subject-matter at a given point of time... [Para
12]

ON MERITS

III. NON-GENUINESS OF ACTIVITIES

the appellant also made a request to the