ORISSA PRIVATE ENGINEERING SCHOOL ASSOCIATION,BHUBANESWAR vs. CIT(EXEMPTION), HYDERABAD

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ITA 351/CTK/2019Status: DisposedITAT Cuttack06 April 2022AY 2019-205 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to establish that its activities were charitable and for the benefit of the public at large. The objects were found to be primarily for the benefit of the member institutions, violating Section 13 of the Act, and the profit motive was evident.

What were the facts?

The assessee, Orissa Private Engg. School Association, applied for registration under Section 12A of the Income Tax Act. The CIT(Exemptions) rejected the application, observing that the society's objects were commercial and beneficial only to its members, and that it had made a significant profit.

What were the issues?

Whether the objects of the assessee society are charitable in nature and for the benefit of the public at large, and whether the profit earned indicates a commercial motive, disqualifying it for registration under Section 12A.

Which sections of the Income-tax Act were involved?

Section 12A,Section 13

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

Before: ARUN KHODPIA & ARUN KHODPIA & ARUN KHODPIA

For Appellant: Shri S.K.Sarangi
For Respondent: Shri S.K.Mohapatra

O R D E R

Per C.M.Garg g, JM

1.

This is an appeal filed by the assessee against the or This is an appeal filed by the assessee against the or This is an appeal filed by the assessee against the order of the CIT(Exemptions), Hyderabad dated 28.6.2019 CIT(Exemptions), Hyderabad dated 28.6.2019 for the assessment year for the assessment year 2019-2020.

2.

Facts of the case are that the assessee filed application in Form Facts of the case are that the assessee filed application in Form Facts of the case are that the assessee filed application in Form No.10A seeking registration u/s.12A of the Income tax Act, on 28.12.2018. No.10A seeking registration u/s.12A of the Income tax Act, on 28.12.2018. No.10A seeking registration u/s.12A of the Income tax Act, on 28.12.2018. The society is engaged in activity of forming an association for technological The society is engaged in activity of forming an association for technological The society is engaged in activity of forming an association for technological advancement etc. advancement etc. The ld (E) noted the objects of the society as under: the objects of the society as under:

P a g e 1 | 5 “ i. To ensure the task of directing and coordinating with support services to the efforts of the members technical institutions to work together. ii. To put forth the problems of the member institutions for remedial measures before the appropriate authorities like AICTE DTE&T. SCTE&VT and Govt, of Orissa etc. iii. To ensure qualitative improvement in Technical Education for the Faculty Staff and Students of the member institutions through training, seminars, conference, workshop, research and innovative programmes. iv. To create a sense of awareness among the public for the value of Technical Education. v. To maintain co-ordination between the students of the members institutions and keep liasioning between the institution and different organizations like Govt, and Semi Govt, organizations / Public and private sector companies and to ensure Industry- Institute interaction. v. To ensure proper utilization of human resources.

3.

Further, in the impugned order, Ld CIT (E) observed that the assessee has shown profit of Rs.9,14,495/- on income of Rs.16,67,958/-, which is 54.8%. Thus, the society is formed for profit earning motive. The objects of the society are purely commercial in nature as there is no charitable element involved in the activities of the society. He also observed that the objects are beneficial to the members of the society, which violates the section 13 of the Act. Thereafter, following some judicial pronouncements on this issue, the ld CIT(E) observed that the assessee is not eligible for registration u/s.12A of the Act and accordingly, rejected the application filed by the assessee for grant of registration u/s.12A of the Act.

P a g e 2 | 5

4.

Ld counsel for the assessee submitted that the objects of the assessee are charitable in nature and there is no misuse of funds, therefore, the ld CIT(E) was not correct in rejecting application for registration u/s.12A of the Act. Ld A.R. drew our attention towards para 3 of the order and submitted that despite the fact that the ld CIT(E) noted the objects of the assessee but dismissed the same as alleging non-charitable. Ld A.R. submitted that for purpose of creating the society was to promote education in India including the State of Odisha, therefore, it was charitable purpose for the benefit of public at large. Therefore, the benefit should have been granted to the assessee. Ld A.R. submitted that there is no profit making activities of the trust, therefore, the ld CIT(E) was not correct in rejecting the application of the assessee.

5.

Ld CIT DR drew our attention to relevant part of the impugned order and submitted that the objects does not reveal any beneficial to the public at large but the object clearly reveals that the society is formed for polytechnic colleges, suggestions to Government on modification of curriculum for technological advancement etc. He submitted that none of the objects are charitable in nature and the same are beneficial to the members of the society and not for the benefit of public at large. Therefore, it is a clear violation of section 13 of the Act and thus, the ld CIT(E) was correct in rejecting the grant of registration. Ld CIT DR submitted that from the income and expenditure account ending on P a g e 3 | 5

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