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The Commissioner of Income Tax-II, Jalandhar Versus M/s. Apeejay Education Society

2015 (4) TMI 303 - PUNJAB & HARYANA HIGH COURT

Registration u/s 12AA(3) rejected by CIT(A) - activities of the society found non-genuine during the years involved as the funds of the assessee society were being siphoned off by debiting bogus purchase of software - Tribunal allowed registration - Held that:- In case the activities are not genuine and they are not being carried out in accordance with the objects of the trust/society or the institution, of course, the registration can again be refused. But on mere presumptions and on surmises t .....

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country and, therefore, the questions of law sought to be raised do not arise. - Decided in favour of assessee. - ITA No. 402 of 2014 (O & M) - Dated:- 10-3-2015 - S. J. Vazifdar, Acting Chief Justice And G. S. Sandhawalia,JJ. For the appellant Present: Mr. Vivek Sethi, Advocate,. ORDER G. S. Sandhawalia (J.) The present judgment shall dispose of two Income Tax Appeals i.e. ITA Nos. 402 and 403 of 2014, as common questions of facts and law are involved in both the appeals. For the purpose of con .....

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of Income Tax-II, Jalandhar withdrawing the registration granted under Section 12AA(3) of the Act to the assessee w.e.f. assessment year 2004-05 was set aside. Accordingly, the following substantial questions of law are sought to be raised by filing of the present appeals:- (i) Whether on the facts and circumstances of case, the Hon'ble Tribunal was right in law in allowing registration rejected by CIT u/s 12AA(3) of the Income-tax Act, 1961 in view of the activities of the society found no .....

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? (iii) Whether on the facts and circumstances of the case, the Hon'ble Tribunal was right in law in holding that since the assessee institute is imparting education, it is eligible for registration u/s 12AA of I.T. Act ignoring the fact that while granting registration, the CIT should satisfy himself not only about the objects and main activity of imparting education but also about the genuineness of all the activities of the institution? The necessary facts for the decision of the present .....

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modation entries to the needy persons. One M/s. Washington Softwares Ltd. (M/s. WSL) was being run by Sanjay D. Sonawani, which was a bogus company and the statement of the said person was recorded on 12.05.2011 who also further admitted that he had provided accommodation entries to the assessee through his company. Accordingly, survey operations were also conducted on the business entities of the educational group of the respondent-assessee and the genuineness of purchase of software by the ass .....

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ities of the society were not genuine and its funds were misutilized for many years after the registration was granted and accordingly the registration was withdrawn and cancelled. The basis, thus, being that the funds of the assessee-society were not being utilized for the objects of the society for the past many years. The matter was taken to the Tribunal by the assessee wherein, it was held that admittedly 21 institutions were engaged in the activities of imparting education to the students u .....

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Counsel for the appellant-department has vehemently argued that it was consistent conduct of the assessee from the year 2003-04 till 2010-11 and, therefore, the Commissioner of Income Tax was well justified in passing the order dated 25.03.2013 which has wrongly been set aside. He accordingly submitted that the substantial question of law would arise that the activities of the society were not genuine and once accommodation entries had been taken from M/s. WSL, therefore, the order of the Tribun .....

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had passed the order registering the said institution and giving it the benefit under Section 12A of the Act, which made the institution eligible for exemption from the provisions of Sections 11 and 12 of the Act. Under Section 12AA(3) of the Act, the Commissioner was to be satisfied about the activities of the said institution and if they were not genuine and the same were not being carried out in accordance with the objects of the institution he could pass the order cancelling the registratio .....

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E 1306 3 Appeejay School, Pitampura, Delhi CBSE 2689 4 Appeejay School, Faridabad CBSE 2656 5 Appeejay Svran Global School, Faridabad - 189 6 Appeejay School, NOIDA CBSE 3950 7 Appeejay International School, Greater Noida CBSE 493 8 Appeejay School, Nerul, Navi Mumbai CBSE 2630 9 Appeejay School, Kharghar, Navi Mumbai CBSE 2028 10 Appeejay School, Charkhi-Dadri CBSE 639 11 Appeejay School, Mahavir Marg, Jalandhar CBSE 3309 12 Appeejay School, Tanda Road, Jalandhar - 220 13 Appeejay School, Hoshi .....

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of Girls, Charkhi-Dadri MDU, Rohtak 1145 21 Apeejay Institute of Management Technical Campus, Jalandhar PTU, Jalandhar, AICTE approved 744 Thus, it cannot be disputed that the respondent-assessee is engaged in carrying out its objects and the genuineness of the same has never been doubted. The allegation is regarding the alleged supply of the installation of the software and whether the same was done by M/s. WSL or not. Merely because Sh. Sanjay D. Sonawani had given a statement, the Commission .....

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e Tax (Exemption), (2006) 285 ITR 37 (Kar) is of no avail since the said case pertains to a case where the authorities had denied the registration and it observed that the authorities had not kept in mind the mandatory provisions regarding the application of the income of the Trust and how it had been expended and whether it had been utilized to its charitable and religious purposes. In such circumstances, the orders had been set aside and it had been directed that fresh consideration be made. I .....

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om the bye-laws or the deed of trust, as the case may be and unless, of course, the objects of the trust apparently make out that they were not in consonance with the public policy or that they were not the objects of any charitable purpose, registration cannot be refused accordingly on this ground. 20. In regard to the genuineness of the activities of the trust or the institution, whose objects do not run contrary to public policy and are, in fact, related to charitable purposes, the CIT is aga .....

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