TaxTMI 
TaxTMI 
2017 (7) TMI 615
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....owing two substantial questions of law: "1. Whether on the facts and in the circumstances of the case, Income Tax Appellate Tribunal was legally justified in upholding the order of Commissioner of Income Tax under section 12AA (3) of the Income Tax Act withdrawing registration granted under Section 12AA(1)(b)(i) of Act by Commissioner to the appellant by order dated 01.05.2008 in compliance to the order of Tribunal dated 31.01.2008? 2. Whether on the facts and in the circumstances of the case, Income Tax Appellate Tribunal was justified in allowing Commissioner to travel beyond the grounds taken by him in the show cause notice dated 27.02.2012 de hors the interpretation of amended deed dated 21.09.2002?" 3. Brief facts giving rise to present appeal are as under. 4. Dr. Bhim Rao Ambedkar Educational Society, Village Dharsania, Post Asaini, District Barabanki was registered as a "Society" under Societies Registration Act, 1860 (hereinafter referred to as the "Act, 1860") by Registrar of Societies, U.P. on 22.03.1994. Memorandum of Society was amended on 21.09.2002 with a view to establish a Dental College and a Dental Hospital for the benefit of local people in rural area....
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....see disclosed and surrendered an amount of Rs. 1.10 crores of anonymous donations towards construction cost of building for Assessment Years 2007-08 and 2008-09. The surrendered amount included amount invested in construction of building and also under miscellaneous heads. It also admitted and paid tax on said amount under Section 115BBC of Act, 1961. In consequence to survey, Assessing Officer made assessment order dated 31.12.2010 making addition of Rs. 4,14,19,828/-, apropose estimated higher cost of construction in Assessment year 2008-09. Assessing Officer further denied benefit of Section 11 of Act, 1961 for Assessment Year 2008-09 on the ground that anonymous donations are merely camouflaged capitation fee showing profit making activity hence Society is not running as a charitable institution and not eligible for exemption under Section 11 of Act, 1961. 8. In appeal preferred by Assessee, CIT(A) vide order dated 05.09.2011, not only deleted aforesaid addition but also held that it was a charitable institution under Section 2(15) and eligible for exemption under Section 11 of Act, 1961 and issued directions accordingly. Revenue preferred appeal but Tribunal dismissed same ....
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....satisfactory, hence registration was cancelled. Assessee then preferred appeal before Tribunal, who has rejected same vide order dated 31.03.2015. 11. Sri R.P. Shukla, Advocate holding brief of Sri A.R. Shukla, learned counsel appearing for appellant, has advanced submissions orally and also submitted written submissions. His contention is that Tribunal though found explanation of Assessee in respect of four issues which were not accepted by CIT-II still it has found a new ground for affirming order passed by CIT-II in respect whereto no opportunity was afforded to Assessee and, therefore, judgment of Tribunal is erroneous, illegal and in violation of principle of natural justice. He contended that Assessee did not get any opportunity to meet the new ground make out by Tribunal. It has also ignored the fact that on similar ground, earlier registration itself was cancelled and that judgment of CIT(A) was set aside by Tribunal. He stressed upon that Revenue authorities could not have travelled beyond show cause notice and reliance is placed on judgments in Commissioner of Customs, Mumbai vs. Toyo Engineering India Limited, 2006(7) SCC 592 (SC) and The Commissioner of Income Tax-XI....
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....P); Seshasayee Paper and Boards Ltd. vs. Inspecting Assistant Commissioner of Income Tax, 1986(157) ITR 342 (Mad.); Commissioner of Income Tax vs. Kamla Town Trust, 1992(198) ITR 191 (All.); Gorie Gouri Naidu (Minor) and another vs. Thandrothu Bodemma and others, AIR 1997 SC 808; S.I. Rooplal and Anr. vs. Lt. Governor and others, 2000(1) SCC 644; Sayaji Iron and Engg. Co. vs. Commissioner of Income Tax, 2002(253) ITR 749 (Guj.); Agrawal Warehousing and Leasing Ltd. (now Admanum Finance Ltd.) vs. Commissioner of Income Tax, 2002(257) ITR 235 (MP); and, Commissioner of Income Tax vs. Excel Industries Ltd., 2013(358) ITR 295 (SC). 12. Sri Alok Mathur, learned counsel appearing for Revenue submitted that order passed by Tribunal earlier, when application for registration was to be considered, based on different facts which order of cancellation has been passed looking into the facts which have actually been revealed in subsequent assessment proceedings as also survey conducted at the premises of Assessee, hence it is not based on mere objectives disclosed by Assessee in its Memorandum. He drew our attention to the order of CIT-II wherein it has referred to the amount shown by Assess....
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....dent of Society, showing advancement of certain funds to him without any satisfactory explanation about use of such funds for the purpose of Society. One of such illustration given by CIT-II is advancement of Rs. 5,50,000/- to Dr. C.P. Chaudhary on 28.08.2008. It was sought to be explained by Assessee as an advance made to one Sri Ram Naresh Koli, Member of Society, who possess certain piece of land. Assessee explained that funds were advanced to Dr. C.P. Chaudhary for further advancement of Sri Koli since he was Dalit and there is restriction of transfer of land possess by Dalit to a non-Dalit. This explanation and manner of advancement of such fund to Sri Koli has not been accepted by CIT-II. It has clearly recorded finding that books of Society do not show Sri Koli as Debtor to the extent of Rs. 4,50,000/-, who is said to have the funds advanced for purchase of land. CIT-II has held that said money was withdrawn by Dr. Chaudhary for some other purposes. CIT-II has further examined genuineness of explanation given by Assessee and has recorded its finding as under: "Another feature of the land purchased by Sri Koli is that the sale deed puts the price of the land at Rs. 4,50,00....
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....generated by Assessee in the course of pursuing objects of trust. It has also noticed that as a result of surrender of aforesaid amount of Rs. 1.10 crore, tax has also been paid by Assessee which means that it was not an exempted income under Section 11 of Act, 1961. CIT-II has taken this aspect showing activities of Society, which are neither genuine nor in accordance with objects of Society. 19. Next ground which has found favour against Assessee is that funds are used for the benefit of Members of Society and lastly that Society is not being run as a charitable organization but as a commercial organization. 20. Therefore, out of five grounds in respect of ground no. 2 only Assessee's explanation has been accepted by CIT-II but rest four grounds have been upheld for passing order of cancellation of registration. No part of findings of CIT-II has been reversed by Tribunal. It has affirmed view taken by CIT-II but for the purpose of discussion has relied more on the findings of CIT-II with respect to ground no. 5. It is not a new ground as it is already part of ground no. 5 mentioned in show cause notice. The contention of learned counsel for appellant that Tribunal has m....