TMI Blog2018 (6) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... dav, Judicial Member This appeal is preferred by the assessee against the order of the CIT, inter alia , on the following grounds: 1. The impugned order passed by the learned Commissioner of Income-Tax (Exemptions), Bengaluru [hereinafter referred to as the CIT(E)] under section 12A of Income-Tax Act, 1961 (hereinafter referred to as the I-T Act), to the extent it is not retrospective in effect, is arbitrary, erroneous, unreasonable and opposed to the facts and circumstances of the case and the law. 2. The learned CIT(E) has erred in not considering the fact that the Appellant's case is covered under the Proviso to section 12A(1)(a)(i) of the I-T Act, inasmuch as the Appellant had filed its first application for registration under section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the Government of Karnataka), the Vice-Chancellor, the Registrar (Academic), the Registrar (Evaluation) etc. The funds of the University consist of a General Fund, the Development Fund and such other funds as may be prescribed from time to time by the statutes of the Government of Karnataka which makes non lapsable lump sum grants to the University each year to cover the net expenditure incurred, the expenditure incurred on the pay and allowances of its staff, contingencies, supplies and services, and such non-recurring and additional items of expenditure as the Government may deem necessary for the proper functioning and development of the University. The annual accounts are audited by authorities appointed by the Government of Karnataka and the accounts and the 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, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. 4. Since the assessee is engaged in the activity of imparting education since its establishment, it moved two applications, one on 08.10.1998 seeking recognition under section 80G of the Act and other on 25.05.1999 seeking registration under section 12A with effect from 01.04.1998. However, while granting recognition under section 80G on 18.07.2002, the CIT did not take any action on application filed for registration under section 12A of the Act. Though the assessee had written a letter to CIT vide letter dated 21.02.2002 for grant of registration under section 12A and recognition for exemption under section 80G but no action was taken by the CIT. Later on the assessee has moved a new application for registration under section 12A on 26.05.2012 but this application 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 reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e preferred the present appeal. 5. The learned counsel for the assessee has invited our attention to the first application moved for registration on 25.05.1999 w.e.f. 01.04.1998. Copy of this application is placed at page 128 of the compilation but this application was not acted upon by the CIT. Thereafter, the assessee wrote a letter to CIT on 21.02.2002 requesting him to grant registration under section 12A of the Act and recognition under section 80G(5)(vi) of the Act. This letter was also not considered by the CIT. The learned Counsel for the assesse further contended that though the assesse has approached the CIT for disposal of his earlier application for registration under section 12A w.e.f. 01.04.1998, but the assessee was advised by the CIT to move a fresh application. 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 grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2014] 52 taxmann.com 168 (Mad.) * DIT (E) v. Vanchhara Tirthadhipati Chintamani * Paraswaprabhu [2015] 59 taxmann.com 417 (Guj.) * CIT v. Tapagachha Sangh Mota [2015] 59 taxmann.com 204 (Guj.) * Andhra Pradesh Pollution Control Board v. DIT(E) _ [2015] 59 taxmann.com 412 (Hyd. Trib.) * Improvement Trust v. CIT * Edith Wilkins Hope Foundation v. DIT(E) * Kailashanand Mission Trust v. ACIT * Ramkishin Textiles (P.) Ltd. v. ITO * Kadayanallur Cholia Brahmana Mahajana Trust v. ITO * CIT v. O.P.Jindal Global University * PIMS Medical 86 Education Charitable Society v. CIT * Dashnam Goswami Bawa Trust v. ITO * Sanatan Dharm Mahaveer Dal v. CIT [2002] 120 Taxman 674 (Raj.) * Chotak Singh Memorial Society v. ITO [2012] 20 taxmann.com 114 (Luck. Trib.) * DIT(E) v. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Council of Scientific 8s Industrial Research v. DIT(E) [2010] 123 ITD 401 (Del. Trib.) * Shrimanta Shankar Academy v. ITO [2007] 107 ITD 99 (Gau. Trib.) * Sree Sree Ramkrishna Samity v. DCIT [2015] 64 tax 330(Kol. Trib.) The learned DR placed a reliance upon the order of the CIT. 6. Having given a thoughtful consideration to the rival submissions and from the careful perusal of the record, we find that undisputedly assessee is a University established by the Government of Karnataka on 01.04.1998 under an Act of the State Legislature i.e., VTU Act, 1994 for the purpose of ensuring proper and systematic instructions/training and research and development of engineering technology and allied sciences in the State of Karnataka and matters connected therewith. According to assessee, it has now 203 engineering colleges located throughout the State of Karnataka which are affiliated to the University and more than 4 lakh students are studying 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue vide order dated 08.12.2015 w.e.f. 08.12.2015 having noted that registration under section 12AA was granted to the assesse. These facts are illustrated herein above only with an intention to understand the nature of activities undertaken by the assessee and also recognized by the Revenue though grant or non grant of recognition under section 80G is not an issue in dispute. 7. So far as registration under section 12A are concerned, we find that assessee has moved an application for registration under section 12A on 25.05.1999 seeking registration from 01.04.1998 from the inception of the University. But this application was not taken cognizance by the CIT and it was kept pending with him. Thereafter, assesse has wrote a letter to the CIT vide letter dated 21.02.2002 requesting him to grant registration w.e.f. 01.04.1998 as the delay in application dated 25.05.1999 was only for 2 months which may kindly be condoned since the University was initially 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 learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture with retrospective effect from 01.04.1998 and received the assent of Hon ble Governor of Government of Karnataka on 01.08.2015. The Government of Karnataka has notified the same as a VTU Amendment Act 2015 (Amendment Act). Within a week of the amendment being enacted, the University filed its 4th application in form No. 10A before the learned CIT on 25.08.2015 seeking registration with retrospective effect from 01.04.1998. Copy of the application is placed on record at page 172 as Annexure 22. The relevant requisite documents were filed along with this application with a specific request for grant of registration with retrospective effect from 01.04.1998. The learned CIT vide its order dated 31.08.2015 asked the assessee to furnish some more documents and accordingly the requirements was complied with and the CIT, after making detailed investigation and enquiry, was convinced with the activities of the assesses and finally granted the registration to the 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id institution .. 11. In the case of CIT Vs. RMS Trust, 326 ITR 310, the Hon ble High Court of Madras has held that condition precedent mentioned for registration under section 12A is that the application for registration should be made in time and the account of institution should be audited and enquiry into object of institution cannot be made under section 12A. The production of amended trust deed is not a pre-requisite and it is also not a pre-requisite condition for registering the applicant as a trust. The relevant catch note is extracted hereunder for the sake of reference: Where while considering the assessee trust s application under section 12A the Commissioner noticed that the requisite clause indicating that any amendment to the trust deed would be carried out after obtaining approval from the Commissioner, had not been incorporated, and on that ground directed the assessee-trust to file an amended deed, which was duly registered, along with 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of statutory conditions of sections 11, 12 and 13 is not relevant for purpose of grant of registration under section 12A r.w.s. 12AA. He should satisfy himself only about genuineness of activities of trust in accordance with its objects and not about credential, capacity and qualification, etc., of trust. 13. Our attention was also invited to judgments of Apex Court in the case of CIT Vs. Society for promotion of education [2016] 67 Taxmann.com 264 (SC.) in which their Lordship have held that where the application for registration is not responded to within six months, application for registration was deemed to have been taken effect from the end of the 6 month from the date of filing of application. The relevant observation of the Hon ble Apex Court is extracted hereunder for the sake of reference: 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 Additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not engaged in educational activities. Assessee is a university established by the Government of Karnataka and Act of State Legislature i.e., VTU Act, 1994, for the purpose of ensuring proper and systematic instructions, teaching, training and research development of engineering technology and allied sciences in the state of Karnataka and matters connected therewith. Even the Apex Court, while adjudicating the issue of exemption under section 10(23)(c)(IIIAB) of the Act, has categorically observed in para 9 of its judgment that the surplus accumulated over the period has been ploughed back for the educational purposes and the University exists solely for the educational purpose and not for the purpose of profit. The contention of the assessee that as of now 203 engineering colleges located throughout the state of Karnataka are affiliated to the assessee universtiy and more than 4 lakh students are studying in various under graduate and post graduate course are not disputed by the Revenue. 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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