Loading judgment…
Facts
The assessee, Satyam Sumiran Yoga Research Foundation, applied for registration under Section 12A of the Income Tax Act. The CIT(E) rejected the application, stating that the assessee's activity of conducting meditation courses for a fee is a commercial/business activity rather than a charitable one.
Held
The Tribunal noted that the CIT(E)'s order did not adequately consider the assessee's details and object clause. Therefore, the Tribunal restored the matter back to the CIT(E) for fresh adjudication, allowing the assessee three effective opportunities of hearing.
Key Issues
Whether the assessee's activity of conducting meditation courses for a fee constitutes a charitable activity or a commercial/business activity for the purpose of Section 12A registration.
Sections Cited
Sec.12A, Sec.2(15), Sec.12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “G” BENCH : MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI OMKARESHWAR CHIDARA
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA.No.2135/Mum./2024 [Sec.12AB/(I)(b)(ii) of I.T. Act, 1961] Satyam Sumiran Yoga The CIT (Exemptions), Research Foundation, Flat 6th Floor, MTNL Telephone No.B1, Keshav Vasant Apt Exchange Bldg., Cumbala Abhasaheb Panhale Marg, vs. Hill, Peddar Road, Panvel- 410 206. Raigad Mumbai – 400 026. Maharashtra. Maharashtra. PAN AABCU9712F (Appellant) (Respondent) For Assessee : Shri Dinesh Kukreja For Revenue : Shri Dr Kishor Dhule, CIT-DR Date of Hearing : 22.07.2024 Date of Pronouncement : 24.07.2024 ORDER PER SATBEER SINGH GODARA, J.M.
This assessee’s appeal arises against the order of the learned CIT(E)m Mumbai, Mumbai’s DIN & Notice no. ITBA/EXM/F/EXM45/2023-24/1063198032(1) dated 22.03.2024, in proceedings u/s.12AA of the Income Tax Act, 1961 (in short “the Act”).
2 ITA.No.2135/MUM./2024 Heard both the parties. Case file perused.
Learned counsel invited our attention to the CIT(E) impugned order refusing sec.12A registration to the assessee as under :
“1. M/s Satyam Sumiran Yoga Research Foundation (hereinafter the assessee or the applicant) filed an application in Form 10AB seeking approval under section 12A of the Act 2. On verification of the application in Form 10AB filed by the assessee, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vide DIN & Notice No. ITBA/EXM/F/EXM43/2023-24/ 1059153163(1) dated 28.12.2023 requesting the assessee to furnish the complete set of documents mentioned in the notice. The assessee has filed submission vide letter dated 12.01.2024.
3 ITA.No.2135/MUM./2024 3. On perusal of the submission of the assessee it is seen that the assessee is receiving fee from participants for meditation courses. The activity of foundation is commercial/business activity instead of charitable activity. Further, as per the Income Tax Act, activity of the foundation the nature of activity are in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fees or any other consideration.
In view of the above the activity of the foundation is business activity instead of charitable activity, hence this application for registration u/s 12A is hereby rejected.
For statistical purposes, this application for approval under section 12A is non- maintainable and stands rejected.”
It is in this factual backdrop that the assessee vehemently argued that the CIT(E) herein has erred in law and on facts in rejecting it’s sec.12A registration thereby
4 ITA.No.2135/MUM./2024 treating it to have been carrying out commercial/business activity(ies) under the last limb of sec.2(15) i.e., general public utility read with 1st proviso thereof. Learned counsel’s case is that once the assessee is carrying out “yoga” activity(ies), it itself forms a specific limb u/sec.2(15) going by the statutory amendment inserted by the Finance Act 2015 w.e.f. 01.04.2016 than to be covered under the last limb of general public utility and therefore, the CIT(E)’s foregoing findings are no more sustainable in the eye of law.
4. Learned CIT-DR has drawn strong support from the CIT(E)’s above extracted findings refusing sec.12A registration to the assessee.
5. We have given our thoughtful consideration to the foregoing vehement rival submissions and see no reason at this stage to accept either of the said stand(s) in entirety. This is for the precise reason that the learned CIT(E)’s impugned findings have not considered the assessee’s alleged details as well as it’s object clause(s) whilst refusing the sec.12A registration herein. Faced with this situation,
5 ITA.No.2135/MUM./2024 we deem it appropriate in the larger interest of justice to restore the assessee’s sole substantive grievance back to the CIT(E) for his afresh, appropriate adjudication as per law, preferably within three effective opportunities of hearing, subject to the rider that it shall be the taxpayer’s onus and responsibility only to file and prove all the relevant facts in consequential proceedings. Ordered accordingly.
This assessee’s appeal is allowed for statistical purposes in above terms.
Order pronounced in the open Court on 24.07.2024