TaxTMI 
TaxTMI 
2022 (4) TMI 162
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....t the Ld. CIT (A) appeal was wrong in sustaining an arbitrary and illegal action' of the Assessing officer ITO (exemption) Rohtak, in initiating the reassessment proceedings u/s 147 against the appellant deemed exempted public charitable society in order to hold the same being non exempted/unregistered entity and as such the same is liable to be quashed being, arbitrary, illegal, without jurisdiction and any justification / reasons. 3. That the Learned CIT (A) was not justified in brushing aside the contention of the appellant that the A.O. does not have jurisdiction over the appellant to issue notice u/s 148 after four years and initiating the reassessment proceedings u/s 147 of the Act, without any basis, reasons or material or record, specifically when all material facts and informations were on record as adduced by the appellant assessee at the time of processing/assessment. In as much as, the action of reopening/reassessment was initiated at the instant of Audit to the action law may not permit for that reason also the orders requires to be Quashed. 4. That the Ld. CIT (A) erred in holding that the A.O. ITO (exemption) is vested with relevant jurisdiction....
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.... sustaining the finding of the A.O. ITO (exemption) Rohtak, that the appellant charitable society do not fulfill the conditions for claiming deduction u/s 11 of the IT Act 1961 without appreciating that all the conditions for the purpose stand fulfilled as mandate under the provisions of the Act. As such the orders require to be quashed. 9. That the Ld. CIT (A) as well as A.O. ITO exemption also misdirected themselves in not following the law laid down by the Allahabad High Court in the case "Society for The Promotion of Education V/S CIT(2015)372 ITR 222 A11 and the Honourable Apex Court in the case "CIT V/S Kanpur society for the promotion of Education( 2016) 67 Taxman.com264 S.C. and denied the status of deemed charitable society, by narrating wrong facts action being bad in law and void ab- initio requires to be annulled. 10. That the authorities below were also wrong and misdirected themselves by holding that activities of the society were not charitable and was that of commercial nature, contrary to the facts, assuming the donations of paltry sums received as voluntarily donations against use of Dharamshala hall for Condolence, Meetings like Rasam Pagrees, S....
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....ication seeking registration u/s 12A was moved to the Competent Authority on 3.11.1989, but no formal order was passed by the concerned authority. The Assessing Officer issued a notice u/s 148 of the Income-tax Act, 1961, hereinafter referred to as the "Act" on 30.3.2015. In response to the notice, the counsel for the assessee sought reasons for issuance of notice. The assessee stated before the Assessing Officer that the return of income filed on 30.9.2008 vide acknowledgement no. 09454 may be treated as return filed in response to notice u/s 148 of the Act. Thereafter, the Assessing Officer proceeded to make assessment. The Assessing Officer noticed that a perusal of income expenditure account and ledger of rent receipts revealed that during the year under appeal the assessee had earned income from rent receipts at Rs. 8,59,018/-, interest at Rs. 2,44,601/- and donation at Rs. 3,71,963/-. After debiting various expenses the net surplus was arrived at Rs. 6,54,889/-. The Assessing Officer observed that the assessee society was not registered u/s 12AA of the Act and, therefore, he was of the view that the assessee was not entitled for exemption u/s 11 & 12 of the Act. The Assessing....
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....delays taken by the department in deciding the application u/s 12A. Therefore, unless the said application was specifically rejected, the trust/institution ought to be considered compliant with the section 12A. The appellant, complied with the aforesaid condition and mandate of section 12A by making an application for registration u/s 12A on 03.11.1989 to the then jurisdictional authority, Commissioner of Income Tax, Rohtak which is duly acknowledged vide letter dated 08.06.1999 and 06.07.1999 from the department (refer pg. no. 29-30 of paper book). The assessee has complied with the letters/notices of the concerned authority(s) for evaluation of the application (refer pg. no. 31-39 of paper book). The assessee has filed multiple request letters/reminders times with the concerned authority for grant of registration document in physical form (refer pg. no. 31-39 of paper book). The department has perused and examined the application on multiple occasions and even thereafter, has consciously taken the decision to not reject the application of the assessee (refer pg. no. 29-39 of paper book). The letter from the office of JCIT, Hisar throug....
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.... that it was pending before the concerned authority and stood transferred u/s 12AA (refer pg. no. 29, 30, 34 of paper book). Further, CBDT vide Instruction No.16/2015 [F.No.l97/38/2015-Ita.l], dated 06.11.2015 prescribes that the aforesaid time limit of six months is to be strictly followed by the Commissioner of Income Tax (Exemptions) while passing order under section 12AA and in case of any laxity suitable administrative action may be initiated by the CCIT(Exemptions). There is no alternative available with the department once the limitation period of six months has been expired, the concerned authority becomes Functus Officio as regards the application under consideration before him. If the worthy Commissioner does not pass an order either granting or refusing the registration within the prescribed six months period u/s 12AA, then the application is deemed to have been granted. The aforesaid view has been upheld by the hon'ble Supreme Court, various High Courts and the Special bench of ITAT Delhi. Reliance in this regard is placed on the following case laws: Commissioner of Income-tax v. Society for Promotion of Education, Adventure ....
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....regard thereof, no adverse view was taken by the department in the assessment of income upto original assessment of AY 2014-15 (refer pg. no. 44-61 of paper book). There is no change in the facts and circumstances justifying the revenue to take a different view of the matter. This not only is unjust to the assessee being against the principles of consistency but also to the members of the society whose personal reputation in the society would take a setback if the society is termed non charitable. Reliance in this regard is placed on the decision of the hon'ble Supreme Court in the case of Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) and in the case of Godrej & Boyce Manufacturing Company Ltd. v. DCIT [2017] 394 ITR 449 (SC). In regard thereof, the Id. CIT(A) erred in law and on facts of the case to upheld the assessment order deeming the appellant society as non-registered u/s 12A of the Act and thereby, denying the benefit of exemption u/s 11 and 12 of the Act. Accordingly, it is respectfully submitted that the CIT(A)'s order being contrary to the provisions of law and against the intent of the legislature ought to be set aside. Ground of Appeal no. 10-1....
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....the trust/institution is created for charitable purpose which can be allowed the exemption u/s 11 and 12, one has to refer to the definition of charitable purposes in section 2(15) which provides an inclusive definition of the word charitable purposes which includes relief of the poor and advancement of any other object of general public utility. The purpose of assessee to manage and run dharamshala provided free of cost to the general public can be said to fit into these two specific references. Further the first proviso to section 2(15) provides that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business. The expression business is of wide scope and has been held, by the hon'ble Supreme Court in multiple cases, to denote an activity carried on with the intention of earning profit. Reliance in this regard is placed on the decision of the hon'ble Supreme Court in the case of Senairam Doongarmall v. CIT [1961] 42 ITR 392 (SC) wherein it ....
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....e transferred to the members directly or indirectly. Further the members are also barred from being appointed to any salaried office of the society. In regard thereof, no activity being carried in the nature of trade, commerce or business whereas there is no profit motive in providing the facility of dharamshala. The donations received are voluntary in nature and covers only part of the electricity and cleaning charges used by the concerned person. Without prejudice to the above, the second proviso to section 2(15) provides that first proviso will not be applicable in case the aggregate value of the receipts from such activities referred to therein is twenty-five lakh rupees or less in the previous year. The amount alleged to be linked towards booking, electricity and cleaning charges by the AO in aggregate is much less than this prescribed limit as stated below: Assessment year Donation alleged towards booking and maintenance 2008-09 Rs. 3,64,202 2009-10 Rs. 6,56,711 2010-11 Rs. 4,63,144 2012-13 Rs. 4,40,146 2014-15 Not dealt by the AO. Denied exemption only on the basis of absence of registration certificate in physical form. ....
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.... the provisions of the Societies Registration Act, 1860 vide certificate no. 2 of 1988-89 and is engaged in charitable work including maintaining and running a Dharamshala for the benefit of the general public. The assessee had filed its return of income u/s 139 of the Income Tax Act, 1961 ("the Act") for the relevant assessment year(s) at the total income of Rs. Nil which was processed u/s 143(1) of the Act. The income of the assessee for the assessment years 2008-09 and 2009-10 was however reassessed u/s 143(3) r.w.s. 147 of the Act at Rs. 6,54,890 and Rs. 7,67,320 respectively. For the remaining assessment years, that is, 2010- 11, 2012-13 and 2014-15, the case of the Appellant was selected for scrutiny and assessed under section 143(3) of the Act at an income of Rs. 11,27,795 for AY 2010-11, Rs. 10,99,430 for AY 2012-13 and Rs. 12,49,170 for AY 2014-15. The above additions in the relevant assessment years have been made by disallowing the exemption under section 11 of the Act by deeming the assessee as a nonregistered charitable society u/s 12A of the Act and by wrongly assuming the society as being run on a commercial venture by linking the scanty sum of Rs. ....
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....o the [Chief Commissioner or Commissioner] before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later: ........... . ........... . It is pertinent to point out that section 12A as it stood at the time of it becoming applicable to the charitable society mandated only that an application for registration is made in the prescribed form and in the prescribed manner. The legislature did not stress upon getting a registration certificate as a necessary condition for application of provisions of section 11 and 12, deliberately, on account of inordinate delays taken by the department in deciding the application u/s 12A. Therefore, unless the said application was specifically rejected, the trust/institution ought to be considered compliant with the section 12A. The aforesaid claim of the assessee is further strengthened by the amendment made by the Finance (No. 2) Act, 1996 which substituted the words "whichever is later" with the words "whichever is later and such trust or institution is registered under section 12AA " The r....
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.... acknowledged vide letter dated 08.06.1999 and 06.07.1999 from the department (refer pg. no. 29-30 of paper book). Subsequently, the jurisdiction and the application were transferred to the CIT, Panchkula and thereafter to the CIT(Exemption), Chandigarh. The assessee has complied with all the letters/notices of the concerned authority(s) and has filed request letters/reminders multiple times with the concerned authority for grant of registration document in physical form (refer pg. no. 31-39 of paper book). It is important to point out that even after perusing and examining the aforesaid application for registration u/s 12A on multiple occasions, the application has never been rejected by the concerned authority (refer pg. no. 29-39 of paper book). It is also relevant to mention here that the intention of the Legislature is to give the persons engaged in charitable activities relief in the matter of payment of tax on the income applied for charitable purposes. If a person applies for registration and does everything, on its part, in compliance with the requirements of the Act, then the Legislature does not want it to be burdened with tax on its income and therefore, relief....
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....ch further proves that the concerned authority had consciously taken the decision to not reject the application of the assessee There has been a dereliction of duty or lapse on the part of the concerned authority to not issue a registration certificate in physical form. On the other hand, there is no lapse on the part of the assessee. Therefore, if the department was to be allowed to deem the society as non-registered u/s 12A and deny the associated exemption u/s 11 and 12, for a failure on its part to carry out its duty to explicitly accept or reject the application, would not only tantamount to going against the intent of the legislature and object of the provisions of the Act but also would be synonymous to making the assessee pay for the lapse on the part of the department. It is respectfully submitted that the case of the assessee is one in which the application has been examined multiple times and the concerned authority based on the examination has consciously not rejected the application of the assessee. Therefore, it would not be wrong to say that in actuality the application of the assessee has been accepted and there is a lapse on the part of the concerned autho....
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.... all applications pending on which no order has been passed before 01.06.1999 shall stand transferred on 01.06.1999 before the concerned authority to decide. The relevant extract of section 12AA is reproduced hereunder: "Procedure for registration. 12AA. (1) The [***] Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant: Provided that no order under sub-clause (ii) shall be passed unless the applicant has been giv....
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.... the following case laws: Decision of hon'ble Supreme Court in the case of Commissioner of Income-tax v. Society for Promotion of Education, Adventure Sport & Conservation of Environment [2016] 382 ITR 6 (SC) wherein the hon'ble Apex Court held that once an application is made under section 12AA and in case the same is not responded to within six months, it would be taken that the application is registered under the provision. Relevant extract of the decision is as under: "3. The short issue is with regard to the deemed registration of an application under Section 12AA of the Income Tax Act. The High Court has taken the view that once 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 th....
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.... hold that the effect of non-consideration of the application for registration within the time fixed by section 12AA(2) would be a deemed grant of registration. We do not find any good reason to make the assessee suffer merely because the Income-tax Department is not able to keep its officers under check and control, so as to take timely decisions in such simple matters such as consideration of applications for registration even within the large six month period provided by section 12AA(2) of the Act. 19. We accordingly direct the respondents, subject to any order which may be passed under section 12AA(3), to treat the Petitioner Society as an Institution duly approved and registered under section 12AA and to recompute its income by applying the provision of section 11 of the Act. Accordingly, a formal certificate of approval will be issued forthwith to the petitioner by the respondent No. 2. " Decision of the hon'ble Karnataka High Court in the case of Director of Income-tax, (Exemptions) v. ST. Ann's Education Society [2020] 425ITR 642 (Karnataka) wherein the application of assessee for registration u/s 12A was rejected after a period of six months and the q....
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....cally on expiry of six months period as specified in section 12AA(2). Relevant extract of the decision is as under: "5. It cannot but be noticed that Section 12AA(2) specifically provides that on an application, an order granting or refusing registration shall be passed before the expiry of the six months of the date on which the application was received. We also directed the revenue to produce the files, which are before us. We see from the files that the application was filed on 10.10.2006. A report was called for from the Income-Tax officer which was submitted only on 24.07.2007, after almost nine months. The communication of the Commissioner of Income-Tax based on which such report was made also is seen to be dated 12.01.2006 referred to in the report of the Income- Tax Officer. The Income-Tax Officer has recommended the registration under Section 12AA(2). However an adverse report is seen authored by the Joint Commissioner of Income-Tax dated 31.07.2007 addressed to the Commissioner of Income- Tax. There has been some adjournments later and eventually the order impugned before the Tribunal dated 29.11.2007 was passed. We cannot but notice that there was unreasonable d....
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....f law as found in the decision of the Hon'ble Supreme Court and a mere concession made by the learned Counsel appearing for the Department. It cannot be taken as a concession on behalf of the Department or being the opinion of the Department is the argument. It is also urged that this Court should be concerned with the interpretation of the provision to advance the course of law and not a mere concession by a Counsel before the Hon 'ble Supreme Court in a solitary instance. 9. On a reading of the order passed in Society for the Promotion of Education case (supra) we are not convinced that there was any concession made by the learned Additional Solicitor General who appeared in the matter for the Income- Tax Department. As we discern from the order, the Commissioner of Income-Tax, Kanpur had filed an appeal from the deemed registration granted under Section 12A for reason solely of an application under Section I2AA of the Act having not been acted upon for six months. The appeal arose from the judgment dated 03.04.2008 of the High Court of Judicature, Allahabad. When the matter was considered by the Hon 'ble Supreme Court, the Full Bench decision of the Allahaba....
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....on. " Decision of the hon'ble special bench of the ITAT Delhi in the case of Bhagwad Swarup Shri Shri Devraha Baba Memorial Shri Hari Parmarth Dham Trust v. CIT [2007] 111 TTJ (Delhi) (SB) 424/17 SOT 281 (Delhi) (SB) wherein it was held that the CIT has to mandatorily pass an order within 6 months from the end of the month in which the application for registration is filed. In case the CIT fails to pass an order within 6 months, then it must be deemed to have been allowed, because if the application is to be treated as pending, then the CIT would be getting an extended period of limitation which the Act does not allow. If it is to be held that the application must be deemed to have been rejected then the assessee would not be able to file an appeal against the refusal to the Tribunal in the absence of a written order containing the reasons for refusal and the remedy of appeal will be rendered illusory. Therefore, it is clear that the orders have to be passed within the time-limit prescribed and if not, the application should be deemed to have been granted. The Tribunal further justified such an action as the rights of the department would still be protected even after such....
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....ficate in physical form. It is pertinent to point that in addition to the examination of application u/s 12 A, the issue of deemed registration had also been scrutinized and examined for the assessment of income of AY 2000-01, 2001-02 and 2002-03 (refer pg. no. 40-49 of paper book) by the respective AOs. In the statement of statutory income attached to the Income tax return and the reply to the query letters, it had been responded that the assessee had filed an application on 03.11.1989 and details of proceedings and examination were supplied. It was further stated in the response that based on the examination that has been conducted and time period that has expired the assessee should be deemed as a registered charitable society. This position had been accepted by the then AOs and had been the accepted position of the department upto original assessment of AY 2009-10. In regard thereof, no adverse view was taken by the department in the assessment of income upto original assessment of AY 2014-15 (refer pg. no. 44-61 of paper book). By deeming the assessee as non registered u/s 12A and terming it non charitable amounts to taking a different stand by the revenue ev....
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....pply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made:] [Provided that where registration has been granted to the trust or institution undersection 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year: Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year: Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12A....
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....ranted in subsequent year, the benefit of the same has to be applied in the earlier assessment years for which assessment proceedings are pending before the Id. A.O., unless the registration granted earlier is cancelled or refused for specific reasons. The statute also goes on to provide that no action u/sl47 could be taken by the AO merely for non registration of trust for earlier years. In the present case: The notice for reassessment of income for the AY 2008-09 and AY 2009-10 was issued after the date of application clearly contrary to the provisions of section 12A quoted above. Section 2(8) defines assessment to include reassessment The assessment proceedings for AY 2014-15 were also initiated after the deemed date of registration. The appeal against the assessment orders for the AY 2010-11 and 2012-13 were pending in appeal before the CIT(A). Those appeals were the continuation of the original proceedings and that the power of the Commissioner of Income-tax was co-terminus with that of the assessing officer were two well established principles of law. In view of the above and going by the principle of purposive interpretation of statues, an....
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....n at the hall owned by the assessee. The arguments of the AR that banquet charges huge amount in thousand and lacs is not relevant here because the charge will depend upon the facilities provided, the ambiance, the area, the location and such other factors. Once, a price is charged for allowing the use of space owned by the assessee then it cannot be termed as donation. The AO has duly brought on record and it has not been denied by the AR also that the assessee society was booking the space for marriage and ring ceremonies etc. and at the time of booking itself a receipt was issued on which the amount deposited is also mentioned. The AR has filed the list of such bookings for marriage and ring ceremonies, Rasam Pagdi etc. during the appellate proceedings also. The AR has filed copies of 'RULES AND REGULATION OF THE BHARAT MANDAL, RAMLILA AND DHARMSHALA SOCIETY HANSI. (HISAR) HARYANA' some of which are reproduced below. 14. The booking of the Ram Lila and Dharamshala follows the rules of first come first serve. No preference should be given to any particulars case. 15. The funds of the society will not be used by any members for the personal gain of the member. ....
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....t halls charge some thousands and lakhs for bookings is not relevant and charges depend upon location, ambience, area and other factors, is clear mockery of judicial position and responsibility provided upon them. Such statements reflect lack of practical knowledge, apathetic attitude towards one's duties, devoid of rationality and abuse of position. Clearly the Id. CIT(A) does not know that the dharamshala is located in one of the small but prominent cities of Haryana which is under process of being declared as a district, on the main road that enters into the city and in the main market. The donation receipt linked to bookings of social ceremonies is mostly of nominal amount covering part of electricity and cleaning expenses which also is made by the concerned party voluntarily as a surety that sufficient diesel for electricity and person for cleaning is available beforehand. Further, to understand whether the trust/institution is created for charitable purpose which can be allowed the exemption u/s 11 and 12, one has to refer to the definition of charitable purposes in section 2(15) as it stood on before amendment made by Finance Act, 2015 relevant for the AYs in appeal....
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....urther placed on the decision of the hon'ble Supreme Court in the case of Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC) wherein it has been held that: "Ordinarily profit motive is a normal incident of business activity and if the activity of a trust consists of carrying on of a business and there are no restrictions on its making profit, the court would be well justified in assuming in the absence of some indication to the contrary that the object of the trust involves the carrying on of an activity for profit. The expression "business", as observed by Shah J., speaking for the court in the case of State of Gujarat v. Raipur Mfg. Co. [1967] 19 STC 1 (SC), though extensively used in taxing statutes, is a word of indefinite import. In taxing statutes, it is used in, the sense of an occupation, or profession which occupies the time, attention and labour of a person, normally with the object of making profit. To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure. Whether a person carries on business in a particular commodity must dep....
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.... Delhi, etc. which charges in thousands to write exams or for getting enrolled or for annual membership fees have been held to be charitable because there is no profit motive. Reliance in this regard is placed on the decision of the hon'ble Delhi High Court in the case of Institute of Chartered Accountants of India v. Director General of Income-tax (Exemptions) [2013] 358 ITR 91 (Delhi) wherein it has been held that: "67. The expressions "trade", "commerce" and "business" as occurring in the first proviso to section 2(15) of the Act must be read in the context of the intent and purport of section 2(15) of the Act and cannot be interpreted to mean any activity which is carried on in an organised manner. The purpose and the dominant object for which an institution carries on its activities is material to determine whether the same is business or not. The purport of the first proviso to section 2(15) of the Act is not to exclude entities which are essentially for charitable purpose but are conducting some activities for a consideration or a fee. The object of introducing the first proviso is to exclude organizations which are carrying on regular business from the sco....
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....fit out of the society. The objects of the society provide clearly that income of the society if any is to be used for the objects of the society and no portion thereof is to be transferred to the members directly or indirectly. Further the members are also barred from being appointed to any salaried office of the society. In regard thereof, no activity being carried in the nature of trade, commerce or business whereas there is no profit motive in providing the facility of dharamshala. The donations received are voluntary in nature and covers only part of the electricity and cleaning charges used by the concerned person. In regard thereof it is respectfully prayed that the Id. CIT(A) erred in holding the assessee to be a commercial venture and the order of the CIT(A) ought to be set aside. Without prejudice to the above, the second proviso provides that first proviso will not be applicable in case the aggregate value of the receipts from such activities referred to therein is twenty-five lakh rupees or less in the previous year. The amount alleged to be linked towards booking, electricity and cleaning charges by the AO in aggregate is much less than this ....
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....ed that the assessment proceedings u/s 147 are without jurisdiction and the order of the CIT(A) upholding the assessment order ought to be set aside. Ground of Appeal no. 13 : The assessee being taxed at wrong rates of tax Consequential. Ground of Appeal no. 12 and 15 : General Ground of Appeal no. 14 : Consequential Thus, it is respectfully prayed to your Honour, in light of aforesaid submissions, to allow the exemption u/s 11 and delete the impugned additions upheld by the CIT(A)." 7. On the contrary, learned DR opposed these submissions and supported the orders of authorities below. Learned Sr. DR vehemently argued that it was incumbent upon assessee to furnish the certificate of Registration u/s 12A of the Act. He contended that for claiming exemption u/s 11 and benefit of Section 12 of the Act, the assessee is required to get itself registered u/s 12 of the Act. He contended that merely making of an application is not sufficient for getting exemption u/s 11 and 12 of the Act. Moreover, the assessee failed to produce copy of application and other relevant supporting evidences. Therefore, he submitted that the authorities below were jus....
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....as disallowed purely on the basis that the assessee was not granted registration u/s 12A of the Act. It would be appropriate to reproduce the relevant sections 12 & 12A of the Act for the sake of clarity: "[Income of trusts or institutions from contributions. 12. Any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and section 13 shall apply accordingly.] [Conditions as to registration of trusts, etc. 12A. The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- The person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the [Ch....
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....before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that subsection from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b ) of subsection (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) of section 12A.]" 11. The Revenue has not disputed the fact regarding issuance of the letters dated 08.06.1999, 6.7.1999 and 16.3.1999. Therefore, it can be safely inferred that application seeking registration u/s 12A was pending before the Competent Authority on 6.7.1999. It is also noticed that in response to the letter dated 6.7.1999 the assessee filed a letter dated 13.7.1999. It goes to demonstrate in unequivocal terms that the application of the assessee was pending consideration before the learned Commissioner at that point of time. As per sub-section (1A) of Section 12AA, all applications pending before the Competent Authority at relevant t....
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....he Hon'ble Allahabad High Court held that the effect of non-consideration of the application for registration within the time fixed by section 12AA(2) would be a deemed grant of registration, by observing as under: "Considering the pros and cons of the two views, we are of the opinion that by far the better interpretation would be to hold that the effect of non-consideration of the application for registration within the time fixed by section 12AA(2) would be a deemed grant of registration. We do not find any good reason to make the assessee suffer merely because the Income-tax Department is not able to keep its officers under check and control, so as to take timely decisions in such simple matters such as consideration of applications for registration even within the large six month period provided by section 12AA(2) of the Act. We accordingly, direct the respondent, subject to any order which may be passed under section 12AA(3), to treat the petitioner society as an institution duly approved and registered under section 12AA and to recomputed its income by applying the provision of section 11 of the Act. Accordingly, a formal certificate of approval will be issu....
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.... slumber, issues notices for reopening of assessment purely on the ground that the assessee could not furnish the requisite certificate of registration u/s 12AA of the Act and proceeded to make assessment. I am conscious of fact, there are divergent views on the issue of deemed registration amongst the Hon'ble High Courts of Allahabad, Madras, Karnataka, Rajasthan and Kerala. The Hon'ble High Court of Karnataka, Rajasthan and Kerala have ruled in favour of the assessee on the other hand Hon'ble High Courts of Gujrat, Madras and Full Bench of Hon'ble Allahabad High Court have ruled against the assessee. Hence, the issue in hand is debatable and two views are possible. The Hon'ble Apex court however affirmed the decision of the Hon'ble Division Bench of Allahabad High Court in the case of Society for Promotion of Education Adventure Sports and Conservation of Environment (supra) by declaring that the registration of the application under section 12AA of the Act shall be with effect from 24.08.2003. It is seen that the case of the assessee stands at better footing as in the present case the Revenue itself has been treating the income of the assessee as exempt treating the assessee as ....
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.... to be quashed. 4. That the Ld. CIT (A) erred in holding that the A.O. ITO (exemption) is vested with relevant jurisdiction under the provisions of Income Tax Act 1961 to reassess the appellant deemed exempted society as an unexempted/ unregistered one by merely rejecting the contentions of the appellant and holding the same being non exempted charitable society. 5. That as per the provisions of the Income Tax Act, Income Tax authorities can exercise powers and functions conferred on, or, as the case may be assigned to such authority by or under the Act. Since in the instant case the decision of holding public charitable society being exempted or not exempted only vests with CIT(exemption) only for that reason also the impugned orders of the authorities below i.e. CIT (A) and that of A.O. ITO (exemption) Rohtak deserves to be annulled. 6. That the Ld. CIT (A) was also wrong in sustaining wrongly the self assumed authority jurisdiction for holding deemed exempted society as an non exempted one, since such authority vests with CIT (exemption) only for that reason also the order deserves to be annulled and the appellant society requires to be assessed as a d....
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....ons of paltry sums received as voluntarily donations against use of Dharamshala hall for Condolence, Meetings like Rasam Pagrees, Shok Sabhas and other ceremonial social functions and gatherings etc. and assuming notional ly that the donations received were similar to the charges as received by owners of banquet hall, findings being perverse requires to be annulled, since no normal person can believe in this modem age that a commercial banquet hall can be made available with petty sums/donations ranging from Rs. 100 to Rs. 1100 or as per the wishes of the donners and so on from which even the Electric expenses are not met. 11. That the Ld. CIT (A) Hisar was wrong in sustaining the action of A.O. ITO (exemption) Rohtak in holding that the purpose of society being not a charitable purpose, in spite of the fact that maintaining Dharamshala/ Inn/ Sarai for any public ceremonial purpose like Condolence meetings (RassamPagdi, Shok Sabhas) and other social ceremonies etc. for the public at large which in itself certainly is a charitable purpose. The A.O. ITO (exemption) has no authority to interpret the purpose of the registered society in its own arbitrary way as such the impugn....
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....ssessee has taken following grounds of appeal: "1. That the orders of the Authorities below CIT(A)Hisar and that of the Assessing officer ITO(Exemption) Rohtak are liable to be quashed, being arbitrary, illegal, without jurisdiction and justification so far as impugned and additions as being sustained are concerned. 2. That the Ld. CIT (A) erred in holding that the A.O. ITO (exemption) is vested with relevant jurisdiction under the provisions of Income Tax Act 1961 to assess the appellant deemed exempted society as an unexempted/ unregistered one by merely rejecting the contentions of the appellant and holding the same being non exempted charitable society. 3. That as per the provisions of the Income Tax Act, Income Tax authorities can exercise powers and functions conferred on, or, as the case may be assigned to such authority by or under the Act. Since in the instant case the decision of holding public charitable society being exempted or not exempted only vests with CIT(exemption) only for that reason also the impugned orders of the authorities below i.e. CIT (A) and that of A.O. ITO (exemption) Rohtak deserves to be annulled. 4. That the Ld. ....
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....cts action being bad in law and void ab- initio requires to be annulled. 8. That the authorities below were also wrong and misdirected themselves by holding that activities of the society were not charitable and was that of commercial nature, contrary to the facts, assuming the donations of paltry sums received as voluntarily donations against use of Dharamshala hall for Condolence, Meetings like Rasam Pagrees, Shok Sabhas and other ceremonial social functions and gatherings etc. and assuming notional ly that the donations received were similar to the charges as received by owners of banquet hall, findings being perverse requires to be annulled, since no normal person can believe in this modem age that a commercial banquet hall can be made available with petty sums/donations ranging from Rs. 100 to Rs. 1100 or as per the wishes of the donners and so on from which even the Electric expenses are not met. 9. That the Ld. CIT (A) Hisar was wrong in sustaining the action of A.O. ITO (exemption) Rohtak in holding that the purpose of society being not a charitable purpose, in spite of the fact that maintaining Dharamshala/ Inn/ Sarai for any public ceremonial purpose lik....
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....he Ld. CIT (A) erred in holding that the A.O. ITO (exemption) is vested with relevant jurisdiction under the provisions of Income Tax Act 1961 to assess the appellant deemed exempted society as an unexempted/ unregistered one by merely rejecting the contentions of the appellant and holding the same being non exempted charitable society. 3. That as per the provisions of the Income Tax Act, Income Tax authorities can exercise powers and functions conferred on, or, as the case may be assigned to such authority by or under the Act. Since in the instant case the decision of holding public charitable society being exempted or not exempted only vests with CIT(exemption) only for that reason also the impugned orders of the authorities below i.e. CIT (A) and that of A.O. ITO (exemption) Rohtak deserves to be annulled. 4. That the Ld. CIT (A) was also wrong in sustaining wrongly the self assumed authority jurisdiction for holding deemed exempted society as an non exempted one, since such authority vests with CIT (exemption) only for that reason also the order deserves to be annulled and the appellant society requires to be assessed as a deemed exempted society as before sin....