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TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 364
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....tion 12A of the Act on 25,05.1999 and clause (i) of the Proviso to section 12A(1)(a) stood attracted to its case. 3. The learned CIT(E) has erred in not considering the fact that the amendments to the VTU Act, which were wrongly insisted upon by the department as a precondition for grant of registration, had been enacted by the State Legislature with retrospective effect from 01.04.1998 and, as the earlier applications filed by the Appellant were not considered favourably only for want of such amendments, registration under section 12A ought to be granted from the date from which the amendments are effective, and not prospectively. 4. The learned CIT(E) has erred in failing to appreciate that grant of registration from a prospective date would lead to miscarriage of justice and cause loss to the public at large, by resulting in an absurd situation where the income of the Appellant, which is a public institution, would be exempt from tax in the years to come, but taxable in earlier years, even though there has been no change in the charitable nature of its objectives or activities since its inception. 5. The learned CIT(E), having been satisfied, on the basis of the documen....
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....e audit report are laid before both the Houses of the State Legislature. Thus the function of the University including the quantum of fees charged to the students is wholly controlled by the Government of Karnataka. As of now, 203 engineering colleges located throughout the State are affiliated to the University and more than four lakh students are studying therein in various undergraduate and post-graduate courses, including inter alia, Bachelor of Engineering, Bachelor of Technology, Bachlor of Architecture, Master of Engineering, Master of Technology, etc. 3. The University had filed an application on 08.10.1998 seeking registration on the ground that university is exempted from income tax under section 10(23C)(iiiab). The learned CIT vide letter dated 18.07.2002 not only accepted the University's claim of being exempt under section 10(23C)(iiiab) and granted recognition under section 80G for a period of 5 years from 01.04.1998 to 31.03.2003 but also renewed recognition twice for a period of 3 years from22 06.2004 to 31.03.2007 and subsequently for a period from 01.04.2007 to 31.03.2010 vide order dated 30.03.2007. However, when the University filed an application on 28.04.2010....
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....on was rejected by the CIT vide its order dated 26.12.2012 on sole ground that the University had failed to incorporate certain clauses in the VTU Act. The appeal filed against the said order of the CIT was also dismissed for the same reason. The AO has also reopened the assessment under section 147 of the Act for the assessment years 2008-09 and 2009-10, 2004-05 to 2007-08 and 2010-11 to 2013-14. During the reassessment proceedings, the assessee has again filed the third application for registration under section 12A on 5.11.2014 along with the resolution passed by the Execute Council of the University approving certain amendments to the VTU Act, as desired by the CIT. However, the CIT insisted on production of the amendments enacted by the state legislature. According to the assessee, this constrained him to withdraw the application on 27.05.2015 with a liberty to file a fresh application. The amendment came to be eventually enacted by the state legislature on 13.08.2015 and shortly thereafter on 25.08.2015 the assessee filed its 4th application for registration under section 12A of the Act. After the amendments approved by the University's Executive Council, enactment was made b....
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....tion. Consequently, the assesse has moved an application for registration under section 12A on 26.05.2012 which was rejected by the CIT on the ground that certain provisions were not incorporated in the VTU Act. Later on when the requisite amendment was done in the VTU Act w.e.f. 01.04.1998 and fresh application was filed along with required documents, the Registration under section 12A ought to have been granted with retrospective effect i.e., the date of inception of University. The learned Counsel for the assesse further contended that assessee is a University and is governed by the statutory provisions of the VTU Act. Since the Revenue has not specifically made out a case that University is engaged in other than the charitable activities i.e., imparting education, the Registration under section 12A should not have been denied from the retrospective effect. It was further contended that assessee case is covered with the proviso to section 12A(1)(a)(i) of the IT Act in as much as the application for Registration under section 12A have been filed as for back as 25.09.1999. In support of his contention, he placed reliance upon the order of the Tribunal in the case of Darshan Goswam....
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.... Karnataka Golf Association * ADIT v. Shushrutha Educational Trust [2016] 75 taxmann.com 194 (Beng. Trib.) * CIT v. IILM Foundation Academy [2016] 75 taxmann.com 214 (P&H) * CIT v. Vijay Vargiya Vani Charitable Trust [2015] 58 taxmann.com 335 (Raj.) * Gayatri Charitable Trust v. CIT * ITA No.3815/Ahd/2007, Order dated 26.02.2010 * Ghaziabad Development Authority v. CIT [2016] 75 taxmann.com 226 (Del. Trib.) * CIT v. Society for Promotion of Education, Adventure Sport and Conservation of Environment, Allahabad [2016] 67 taxmann.com 264 (SC) * Society for the Promotion of Education, Adventure Sport 86 * Conservation of Environment v. CIT [2008] 171 Taxman 113 (All.) * Karnataka Golf Association v. DIT [2004] 91 ITD 1 (Beng. Trib.) * Poorna Prajna Vidya Peetha Prathisthana v. DDIT(E) I.T.A. No. 531 to 534/Bang/2015, dated 21.10.2016 * Harshit Foundation v. CIT [2013] 38 taxmann.com 309 (Luck. Trib.) * Nosegay Public School Management Committee v. CIT [2013] 33 taxmann.com 516 (Jodh. Trib.) * Rev. Father Trust Oscar Colasco Memorial Medical * Association v. CIT [2009] 31 SOT 1 (Mum. Trib.) * Bhagwad Swarup Shri Shri Devraha Baba Memorial ....
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....ng therein in various under graduate and post graduate courses including inter alia BE, B. Tech, B. Arch, ME, M. Tech, MBA and MCA. It is also an undisputed fact that assessee was granted recognition under section 80G of the Act on the ground that the University was exempted from income under section 10(23)(C)(iiiAB) of the Act w.e.f. 01.04.1998 for a period of 5 years. The recognition was further renewed for 3 years w.e.f. 22.06.2004 to 31.03.2007. The recognition certificates are available at page 82 as Annexure II and at page 84 as Annexure III. The recognition under section 80G of the Act was further extended upto 31.03.2010 vide order dated 30.03.2007. The certificate is available at page No. 86 as Annexure IV of the compilation. The recognition under section 80G was extended by the Revenue timely on applications moved by the assessee for renewal of recognition. On the expiry of the period of recognition, the assessee moved a further application for renewal of recognition under section 80G of the Act on 01.04.2010 vide its application dated 28.04.2010. This application was rejected by the CIT and withdrew the recognition altogether by holding that the University was neither el....
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....y in the stage of setting up and formation. The copies of these letters are placed on record as Annexure 10 at page 128 and as Annexure 11 at page 133 of the compilation of the assessee. During the course of hearing, the learned DR has disowned the application form filed on 25.05.1999 with the submission that it was never filed before the CIT. Since the acknowledging authority of both the applications and letter dated 21.02.2002 was same, we asked the assessee to file the original copies of these documents. Original letter dated 21.02.2002 was filed during the course of hearing and the same was also confronted to the DR. At that time, the learned DR could not controvert the receipt of this letter. The acknowledging authority of the letter and application is the same, therefore, contention of learned DR that this application was never filed by the assessee cannot be accepted. Accordingly, we hold that assessee has filed the first application for registration under section 12A of the Act on 25.05.1999 which was never acted upon by the CIT despite the reminder on 21.02.2002. Had the CIT not received that application for registration under section 12A of the Act, he could have responde....
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....assesseee but only from prospective dated w.e.f. 01.04.2016 without recording any reasons for not acceding the University's request for grant of registration w.e.f. 01.04.1998. The registration certificate granted by the CIT is available on record at page 241 of the compilation as Annexure 29. The correspondence and the evidence submitted by the CIT is also placed on record at page 174 to 240. 8. Aggrieved with the order of the CIT, the assessee is before us with the submission that at no point of time, the activities undertaken by the assessee were never doubted by the Revenue. The registration under section 12A was denied to the assessee on technical grounds whereas the recognition under section 80G was granted to the assessee since the inception of the University till 30.05.2014 when it was withdrawn by the CIT. 9. Keeping in view the facts, the Hon'ble Apex Court in the assessee's own case while adjudicating the issue, whether assessee is entitled for exemption under section 10(23)(c)(iiiAB) of the Act, has held "There can, however no manner of doubt the surplus accumulated over the years has ploughed back for educational purposes. In such situation, following the consistent ....
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.... notes on the activities of the trust with regard to various expenses debited in the income and expenditure account, the requisition made by the Commissioner was an extra-statutory requisition and the Tribunal rightly set aside the Commissioner's order rejecting the application for registration and remanded matter to him." 12. Similarly, in the case of New Life in Christ Evangelistic Associaiton (NLC) Vs. CIT [2000] 111 Taxman 16 (Mad.), the Hon'ble Madras High Court has held that "at the stage of grant of certificate under section 12A, the only enquiry which could possibly be made would be whether the Society has actually made an application in time and whether the accounts of society can be maintained in the manner as suggested by the sub section. Beyond that, the scope of enquiry would not go. In insisting upon the society in changing or amending its bye laws and refusing to consider the application on the ground that those bye laws had not been changed so as to exclude the religious aspect from those bye-laws, the Commissioner had clearly over-stepped his limits". In the case of CIT Vs. State Urban Development Agency [2013] 37 taxmann.com 193 (Allahabad), the Hon'ble High Cou....
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.... 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. 4. The learned Additional Solicitor General appearing for the appellants, has raised an apprehension that in the case of the respondent, since the date of application was of 24.02.2003, at the worst, the same would operate only after six months from the date of the application. 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. 6. Subject to the above clarification and leaving all other questions of law open, the appeal is disposed of with no order as to costs." 14. On the point of delay in filing of application, the learned Counsel for the assessee has invited our attention to judgment of jurisdictional High Court in the case of Karnataka Golf Association Vs. Director of Income-tax reported at [2014] taxmann.....
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....ue. The registration was finally granted to the assessee under section 12A w.e.f. 01.04.2016 without recording the reasons for not acceding to the university's request for grant of registration with retrospective effect from 01.04.1998 though assessee has specifically requested for registration in his application. Till date, the Commissioner has not adjudicated the application for registration under section 12A filed on 25.05.1999. They have chosen to remain silent on this application. During the course of hearing, the Revenue could not answer the query of the Bench as to why this application was not disposed off. The Revenue cannot take the benefit of its own wrong. As per the provisions of section 12AA, which was brought on statute by the Finance Act, 1996 w.e.f. 01.04.1997, all applications filed before 1st day of June 1998 shall stand transferred on that day to the Principal Commissioner/Commissioner and the Principal Commissioner/Commissioner may proceed to such application under that sub section from the stage at which they were on that day and as per provisions of sub section 2 of sub section 12AA, every order granting or refusing registration under clause (b) of sub section....