TaxTMI 
TaxTMI 
2016 (6) TMI 35
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....y material or adverse finding for any period before the year 2012; 4. On the facts and in the circumstances of the case and in law, the CIT erred in relying on material which was extraneous, irrelevant, and which was not properly confronted to the Assessee. 2. We have heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the queries relied upon. 3. The brief facts of the case are that the Appellant Society was registered on 25.02.2004 for the promotion of education. The facts in details are at pages 336 to 343 of the Paper Book. On that basis that it was running educational institutions in terms of its objectives imparting of education on a charitable basis, the appellant moved an application to the Ld. Commissioner of Income-tax u/s 12AA of the Income Tax-Act, 1961 (the Act) for registration. The registration was granted by Ld. CIT vide file No. F.CIT/HSR/Tech./12AA/2008-09/4304-06 dated 22/23.09.2008. Since then the society has been carrying on educational activities in its several institutions known as i) Kalpana Chawla College of Education for Women; ii) New Kalpana Chawla College of Educatio....
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.... follow the allegations made in the impugned order of withdrawal of registration. The assessment order is the subject matter of the appeal before Ld. CIT(A). In the orders for A.Y. 2009-10 to 2011-12 benefit of section 11 has been refused only on the ground that the registration u/s 12AA has been withdrawn. 4. The Learned AR contended that during the survey documents and papers found had to be sorted out and analyzed both for their origin and for their ultimate destination. Yet they have been arbitrarily and summarily considered by the Learned CIT for the purpose of withdrawal of the registration by culling the state of affairs on the basis of such accounting documents as fictitious and unreliable. Several alleged irregularities on the financial fronts from page Nos. 4 to 70 of the order impugned are arising out of a mis-appreciation and convoluted understanding of the several day book entries and vouchers of the various educational institutions run from one central office of the society. All these documents and papers had to be sorted out and analyzed both for their origin and for their ultimate destination. Yet they were arbitrarily and summarily considered for the purpose of wi....
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....aid years are the subject matter of appeal before the Appellate Authorities and are currently pending for want of an order of the Tribunal on the point regarding the validity of the withdrawal of registration. 4.1 The Learned AR submitted further that in all the assessments framed so far it has been held that the Society is only into the activity of the education. Even in the withdrawal order there is not whisper about any activity other than educational activity being carried out by the Appellant Society. 4.2 The several other allegations of financial irregularities which are contained in the withdrawal order have been the subject matter of consideration in the various assessments. As stated above the assessment for the A.Ys. 2009-10, 2010-11 & 2011-12 are all clean assessments and addition made and demands created on MMR basis are entirely because of the non-availability of benefit under section 11 of the Act. If the accounts were truly unreliable, manipulated or interpolated or whatever also then how was it that the Assessing Officers thought that such could be limited to just Rs. 1 lakh in the first two years and to Rs. 1,50,000/- in the third year. Be that as it may, any fin....
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....ther excessive nor unreasonable. This has been ruled specifically in the case of CIT vs. Idicula Trust Society (2014) 104 DTR 9(P&H) by the Hon'ble jurisdiction High Court itself. So any complaint on this point is meaningless unless either excessiveness or unreasonableness is specifically pointed out. The authorities running the institutions can device their own ways and procedure for carrying out the activities. The department cannot prescribe the method by which an entity would carry out its activities. So clause 1 para is without any substance. ii. No fabrication has ever been done. This is baseless allegation made with the purpose of supplying strength to an order which is otherwise weak and emaciated. It is categorically denied that Sri Sunil Sharma has siphoned off any cash. If it was so, then why is it, that in none of the assessment orders framed for the AYs 2009-10 to 2011-12 after the Survey such propensity is pointed out. The allegation is fallacious. iii. All fees receipts are regularly issued in the normal course of collection. There is absolutely no fabrication. None has been brought on record in the assessment orders framed after the Survey. This allegation is thus....
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....iv. Discrepancy, mis-appreciation, violation of law etc. as stated in the impugned cancellation order are all false and fictitious. Those allegations do not find their echo in the regular assessment orders framed by the respective authorities. The complaint is totally erroneous. xv. No proper opportunity was given by the Commissioner. He was bent upon ensuring the closure of the Society's educational institutions for the reasons best known to him. xvi. The Society has been carrying out its activities in the most appropriate manner as known to Society and to law and entirely in terms of the constitution/memo of the Society and always in the conformity with the law of the land. All allegation made in this contest are false and misleading. 4.6 The Learned AR submitted that the Society enjoys registration by many other authorities including the governmental and educational authorities. So long as the educational authorities have not found any discrepancy, deficiency or irregularity in the activity of imparting education by the Society there was just no authority or power with Commissioner to cancel the Registration u/s 12AA of the Act. The Learned AR cited the judgment of the Hon'bl....
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....criminately the records were impounded and further that no proper opportunity was ever provided during the survey to reconcile and explain the entries in the several documents belonging to the various educational institutions which are being managed by the Society. All the papers recovered during the survey pertain to assessment years 2009-10 to 2012-13. The assessments for the AYs 2009-10 to 2011-12 are all clean assessments. Thus the charge as foisted on the Society by the Learned Commissioner in the withdrawal order is all erroneous and unsustainable. So far as the assessment year 2012-13 is concerned the Assessing Officer refused to go by the book version and the records of the Society. He preferred to adopt the observations and findings of the Learned CIT as made in the withdrawal order. That was patently erroneous. Nevertheless against that order an appeal is pending. There is no finding anywhere in any record that the Society has not carried out its objective of imparting education. Equally true is the fact that there is no finding at all anywhere of any activity other than education having not been pursued by the Society. In the circumstances, therefore, the cancellation of....
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.... the negative balances of cash was tendered. The third party verification done in respect of the purchases from certain parties supplying goods/services to the Society revealed that they were bogus. They were mere entries made siphoning off cash. 5.5 The Learned CIT(DR) contended that the salary paid to the staff was different than the one shown in the regular books of account the balance of which obviously was pocketed by the persons controlling the affairs of the society. The designation of the Administrator himself was dubious and misleading. There was ample evidence of the fact that the society existed only on paper and was used as a veil to cover the misdeeds of the person controlling the affairs of the Society. Private properties were procured by the Administrators out of the Society's funds for personal benefit. The President and his wife did not have any ostensible source of income commensurate with their high standard of living. The Society was used as a milch-cow to pay for the personal needs of the President and his wife. Even the installments of the loan for the purchase of a Tata Safari vehicle owned by Shri Sharma was paid by the Society. The running cost of such veh....
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....ives was not genuine. In the given case the charitable nature of the objectives have been appraised at the time of the grant of registration by the then Commissioner. Since inceptions and up to AY 2011-12 the assessment framed after scrutiny were all clear cases where the authenticity of the educational pursuits had been conceded by the Assessing Officers themselves. No other activity had even been alleged. Such findings of the Assessing Officer could not be overturned by the CIT-DR without relevant material being brought on record. As to the genuineness of the educational activities, there was no doubt for in all the assessment orders including the last one for AY 2012-13 the AO's have repeatedly confirmed that the Society's activity was only educational and the pursuit was to run the educational institutions. Ld. AR for the Appellant concluded his arguments by submitting the objections as raised in the cancellation order and now being reiterated by the learned CIT-DR superfluous and irrelevant and were completely devoid of merit and that the cancellation order as passed by the Commissioner ought to be quashed and the four grounds of appeal as raised in the appeal be allowed. 7. ....
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....on Trust vs. CIT (supra), the assessee trust was imparting education by running a school. It was granted registration under sec. 12A(a) of the Act. Subsequently, the Learned CIT in exercise of power under sec. 12AA(3) of the Act cancelled the registration mainly on the ground that funds of trust were misused by not accounting for receipts as well as expenses. It was held that application of income and utilization of funds would be subject to scrutiny by Assessing Officer at the time of assessing the income of the trust under sec. 11 and 12 of the Act. It was not justifiable on the part of the Learned CIT to deny registration. 7.1 In the present case before us, while cancelling the registration under sec. 12AA(3) of the Act, it is nowhere alleged in specific terms by the Learned CIT that the appellant-assessee is not imparting education or not doing the other activities as a part of its objects on the basis of which registration under sec. 12A(a) of the Act was granted earlier. The trust being undisputedly running educational institution and imparting education, therefore, it was not justifiable on the part of Learned CIT to withdraw the registration as the application of income an....