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S.J.A Alumni Association Versus The CIT, Dehradun

2016 (3) TMI 410 - ITAT DELHI

Eligibility of registration u/s 12A - approval u/s 80G(5)(vi) - whether the appellant society not being engaged in any charitable activities to deny it the approval u/s 80G(5)(vi)? - Held that:- Registration granted to the assessee u/s 12A of ht Act as charitable association is existing and has not been shown to have withdrawn or cancelled till date. It is the situation in our considered opinion the grant of approval u/s 80G of the Act cannot be denied or rejected. The preposition laid down by t .....

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the present case after getting registration u/s 12A of the Act the assessee has done what was expected from it under the relevant provisions of the Act and the Rules made thereunder. The competent authority should have acted vigilantly to pass an appropriate order in the matter within the prescribed time as per sub-rule (6) of the Rule 11AA of the Rules and having not done so, the competent authority has put the assessee in a helpless and embarrassing situation which caused jeopardy against the .....

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The Respondent : Shri Rakesh Gupta, Adv, Shri Sonil Agarwal, Adv, Shri Tarun Kumar, ADv ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal filed by the assessee is directed against the order of the CIT(A), Dehradun denying approval u/s 80G(5)(vi) of the Income-tax Act, 1961 [hereinafter referred to as the Act. ] 2. The assessee has taken the following two grounds of appeal: 1. That the ld. CIT has erred on facts and in law in his finding about the appellant society not being engaged in a .....

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ort, the Rules ] hence the order of rejection is barred by limitation and not sustainable in law. The ld. Counsel vehemently contended the impugned order may be set aside and the Revenue authorities may be directed to give approval u/s 80G of the Act. He also placed reliance on the proposition laid down by ITAT E Bench New Delhi in the case of Mayo College Old Boys Association ITA No. 2010/Del/2010 vide order dated 19.11.2010 and order of ITAT Amritsar Bench in the case of S. Lakha Singh Bahra I .....

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her contended that in this situation, the assessee is legitimately entitled for approval u/s 80G of the Act, as applied by the assessee. 4. The ld. DR pointed out that the proviso to section 80G(6)(vi) of the Act mandates to grant benefit and set off of time taken or consumed by the assessee during the proceedings hence, this fact maybe taken into consideration while deciding the issue of time barring order. 5. On careful consideration of the facts and circumstances of the present case admittedl .....

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ule 11AA of the Act. Hence we are inclined to hold that the assessee did not consume or waste any time during the proceedings which concluded beyond the prescribed time limit. Furthermore, at this juncture, it would be appropriate and necessary to consider the preposition laid down by the ITAT Amritsar Bench in the case of S. Lakha Singh [supra] wherein it was held as under: We have carefully perused the facts of the case, rival submissions and material available on records, including the case l .....

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pass an order either granting the approval or rejecting the application shall not exceed six months from the date on which such application was made. Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub-rule (3) shall be excluded." 5.1. Further, a bare perusal of the order passed by the Ld. CIT, reveals that there is no delay in complying with the direction of the Commissioner under sub-rule 3 .....

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(s) of the Act, vide order dated 30th April, 2010. However, as discussed earlier, the order was not passed within prescribed time limit. 5.2. The Ld. Counsel for the assessee placed reliance on the decision of Hon'ble Allahabad High Court, in the case of Society For the Promotion of Education Adventure Sport &Conservation of Environment Vs. Commissioner of Income Tax & Ors. 2008) 5 DTR (All) 329, which was rendered in the context of registration under section 12A of the Act. A bare p .....

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Income-tax authority. The relevant ratio of the decision is reproduced hereunder: "Effect of non-consideration of the application for registration under section 12A within the time fixed by section 12AA(2) would be a deemed grant of registration." 5.3. It is pertinent to reproduce relevant provisions of section 8oG(s)(vi) of the Act, hereunder: Section 8oG(s)(vi) "in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approve .....

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n as provided under section 12AA(3) reads as under: "12AA(3): Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing canceling the registration of such trust or institution. Provided that no order .....

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is no specific provision prescribing consequences for non-passing of such order. The assessee has done what was expected of it under the law. The department should have acted vigilantly to pass an appropriate order in the matter. Having not done so, the competent authority has placed the assessee in a jeopardy and helpless situation. Thus, negligence on the part of the revenue authority cannot be conferred judicial benediction. The assessee- appellant, cannot be kept at the mercy of the revenue .....

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e revenue is free, if so advised, to take appropriate action in the matter in terms of relevant provisions of the Act. Hence, the appeal of the assessee is allowed. 5.7. In the result, the appeal filed by the assessee stands allowed. 6. In the light of the above dicta given by the co-ordinate bench of the Tribunal we clearly observe that the where the competent authority, the ITO or CIT failed to take appropriate action in the mater within the prescribed limit u/r 11AA(6) of the Rules, then the .....

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priate to consider the proposition laid down by the ITAT É Bench, New Delhi in the case of Mayo College Old Boys Association Vs. DIT(E) [supra] wherein it was held thus: 3. After narrating the facts, it was submitted by the ld. AR that the main object of t society is to encourage education in a broader sense. Reference was made to the decision of Hon'ble Delhi High Court in the case of ICAI Accounting Research Foundation vs. Director General of Income-tax (Exemption) 321 ITR 73 and re .....

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emuneration was taken by the petitioner foundation for undertaking these projects would not alter the character of these projects. The amended definitions of charitable purpose would not alter these positions." 4. He contended that the activity carried on by the assessee fall within the definition of Section 2 (15) and he also relied upon the Circular No.395 dated 24th September, 1984 to contend that the object of general public utility also falls within the ambit of charitable purpose and, .....

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hat the assessee does not carry on any charitable activity. For this purpose, he has placed reliance on the following decisions:- "NN Desai Charitable Trust vs. CIT 246 ITR 452 (Guj) : authority examining the question whether a fund or institute is eligible to be certified for the purpose of Section 80G is not to act as an A.O.; once the applicant was registered u/s 12A and was granted approval u/s 80G (5) and also a renewal thereafter, CIT was not justified in refusing further renewal of a .....

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an institution u/s 12AA by itself is a sufficient proof that the institution is created or established for charitable/religious purposes. Gaur Brahman Vidya Pracharini Sabha vs. CIT (2010) 129 TTJ (Delhi) 627: It was held that when the assessee trust was granted registration u/s 12AA, it is testimony to the fact that the trust is established for charitable purposes. Assessee society formed for the purpose of establishing educational institution, not for any particular community or cost, having .....

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e donation of ₹ 3,50,000/- which clearly falls within the main objects of the assessee and the donation is given for the purpose of education only. He contended that the said donation of ₹ 3,50,000/- was advanced to the following parties and vide letter dated 9th February, 2010 it was informed to Ld. DIT (E) and copy of such letter is placed at page 11 and 12 of the paper book. "SI.No. Beneficiary Chq.No. Amount (in Rs) 1. Mayo College Ajmer-305008 434287 1,00,000 2. Sisters of .....

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idered the rival submissions in the light of the material placed before us. The certificate granted to the assessee u/s 12A treating it as charitable institution is subsisting and has not been shown to have been withdrawn till date. If it is so, then, in our considered opinion, renewal of exemption u/s 80G(5) could not be denied to the assessee and the case relied upon by Ld. AR and reproduced in the above part of this order fully supports such conclusion. Therefore, we find no justification in .....

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