TMI Blog2019 (8) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... that the inference drawn by the CIT(A) that the assessee had been granted registration u/s 12AA has to be upheld. Accordingly, we find no good reason available on record to vary the conclusion arrived at. - The departmental ground in view thereof is dismissed. Exemption u/s 10(23C)(iiiab) - request for remand as the said claims were never considered by the AO as no such claim was made before the AO - HELD THAT:- AO has examined the facts and rejected the claim holding that the assessee cannot change its stance and claim exemption in a different section and noting the fact that in earlier years, no such claim was made and in the year under consideration it was made, due to non-furnishing of Certificate u/s 12AA. He further took note of the fact that the term substantially financed by the Government has been defined from 01.04.2015 prospectively through explanation below section 10(23C)(iiiab). Considering the provisions, he holds that, No benefit of it can be claimed retrospectively for any earlier year. In view of this reasoning, he relies to hold that, I am not inclined to grant exemption u/s 12A or 10(23C)(iiiab) of the I.T.Act to the assessee - Thus, we see that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e two Cross Objections filed by the assessee are stated to be supportive of the orders passed wherein as per the submissions of the ld. AR, no new relief is being sought. 2. It was a common stand of the parties before the Bench that since the grounds raised in the two appeals are identical on same set of facts, circumstances and position of law, accordingly, the arguments advanced in ITA 237/CHD/2019 would fully apply to the issues addressed in ITA 238/CHD/2019 also. 3. In view of the aforesaid common stated stand of the parties, the grounds raised in ITA 237/CHD/2019 are reproduced hereunder : i. That on the facts circumstances of the case, the Id. CIT (Appeals) has erred in law in deleting the addition amounting to ₹ 1,16,11,419/-/ (₹ 1,91,84,322 in A.Y. 2014-15 A.Y.) despite the fact that the assessee failed to produce 12A registration certificate before the Assessing Officer as well as before the CIT(Appeals). ii) That on the facts circumstances of the case, the Id. CIT (Appeals) has erred in law in accepting the stance of the assessee that assessee's case was covered by the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be entitled for relief u/s 10(23C)(iiiab) ? 7. Addressing the facts relatable to the first issue framed by us, it is necessary to refer to the admitted fact that the assessee in the facts of the present case, could not file the Certificate of Registration granted u/s 12A. It is seen that the assessee as per facts on record claimed that 12A certificate of Registration had been lost/misplaced and instead furnished copy of Registration Certificate granted u/s 80G of the Income Tax Act. Relying upon the 80G certificate dated 10.11.2000, the assessee requested the AO that he may draw inference of availability of grant of registration u/s 12AA. The record show that the said claim was supported by way of an affidavit filed before the AO. 7.1.1 Being unsuccessful before the AO, the assessee carried the issue before the CIT(A) and reiterated the submissions advanced. Reference again was made to the fact that Registration u/s 12A had been granted to the assessee vide File No. 228(11C)/1982-83/J/dated 23.04.1982 and 80G registration had been granted vide File No. CIT/Panchkula/2000-2001/80-G/21/7321 dt. 20.11.2000. 7.1.2 It was re-i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Commissioner of Income Tax, so from the letters it is clear that the record is with your goodself or with The Commissioner of Income Tax(Exemptions), Panchkula . (emphasis supplied) 7.3 Be that as it may, where on facts the assessee expresses its inability to make available the original certificate on the grounds that the assessee has misplaced/lost it and pleads inability to procure the duplicate Certificate of Registration u/s 12A from the records of the tax Authorities on account of the fact that as communicated to him, the records are either destroyed or forwarded to the concerned CITs. As far as the assessee is concerned, despite all efforts from the records of the department, also the documents are not traceable. Apart from these arguments and submission on facts, the assessee admittedly has provided the specific file number and date of Registration of 12A Certificate. In these peculiar facts which remain unassailed, we are called upon to consider the merits of the conclusion drawn in favour of the assessee allowed on a consideration of the statutory framework permissible under the Act. 7.4 Examining the claim, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessee in the facts of the present case is concerned was a sine quo non. It is nobody s case that 80G Certificate has been granted in view of any notification u/s 10(23) or 10(23C). A perusal of sub-rule (5) of Rule 11AA makes it clear that if the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing . In the facts of the present case, admittedly 12A Certificate as required has been made in triplicate in Form No. 10G. It is no body s case that 80G Certificate on record is fraudulently obtained. Admittedly Certificate u/s 80G has been produced all along and is an admitted fact. To infer to the contrary i.e. 80G Certificate has been granted without the production of 12A Certificate, firstly no arguments or submission have been advanced to this effect by the Revenue. Secondly such an argument, if advanced, would tantamount to a case of total administrative failure. The file numbers and the dates of grant of the respective Certificates is available on record. 80G certificate has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal Commissioner or] 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 cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.] (emphasis supplied) 7.6 In the facts of the present case, nothing has been placed by the Revenue on record to show that the Registration granted to the assessee vide order dated 23.04.1982 has been subsequently cancelled or revoked. 7.7 When the above facts, submissions and the conclusion of the CIT(A) are taken into consideration we are of the view that the inference drawn by the CIT(A) that the assessee had been granted registration u/s 12AA has to be upheld. Accordingly, we find no good reason available on record to vary the conclusion arrived at. 7.8 Accordingly, in view of the detailed reasoning hereinabove, the issue posed in Ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee cannot change its stance and claim exemption in a different section and noting the fact that in earlier years, no such claim was made and in the year under consideration it was made, due to non-furnishing of Certificate u/s 12AA. He further took note of the fact that the term substantially financed by the Government has been defined from 01.04.2015 prospectively through explanation below section 10(23C)(iiiab). Considering the provisions, he holds that, No benefit of it can be claimed retrospectively for any earlier year. In view of this reasoning, he relies to hold that, I am not inclined to grant exemption u/s 12A or 10(23C)(iiiab) of the I.T.Act to the assessee. 8.4 Thus, we see that the departmental arguments that the claim was not made before the AO and the CIT(A) having considered the claim afresh warrants a remand, we find is not borne out from record. The prayer has to be rejected. 9. Addressing the second issue framed by us where we are called upon to decide whether the assessee educational institution can be considered to be on facts substantially financed by the Government of Haryana and hence the case of the assessee can be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the total receipts were ranging between 41% to 82% on individual institution basis and when the percentage for the Society was considered as a whole, it was found to be ranging between 44.52% and 45.15% for the two years being considered by the jurisdictional High Court, the departmental appeal, accordingly was dismissed holding as under : In view of the above, the Tribunal was right in holding that the aid given by the Government to the assessee constitutes substantial finance by the Government which had entitled the assessee to claim exemption under section 10(23C)(iiiab) of the Act. No infirmity or perversity could be pointed out by the learned counsel for the Revenue in the findings recorded by the Tribunal. The substantial questions of law as claimed by the Revenue are answered accordingly and consequently, finding no merit in the appeals, the same are hereby dismissed. 9.2 However, since today we have the benefit of the insertion of the Explanation to sub-clause (iiiab) and (iiiac) inserted by Finance (No.2) Act, 2014 w.e.f. 01.04.2015 it will be appropriate to extract the relevant provisions : Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to fulfillment of other conditions. However, after 01.04.2015 it is only an institution whose government grants were beyond the threshold limit of 50% of the total receipts which would be eligible for benefit u/s 10(23C)(iiiab). In the facts of the present case, the position on facts as considered and available on record is that about 60% of the institution s total receipts have been received from the Government. This finding of fact as noted has not been upset by the Revenue. Thus, where on facts the finding of fact arrived at by the CIT(A) that the assessee has received government aid to the tune of 60% of its receipts remains unrebutted by the Revenue, we find no merit in the departmental appeal. 10. Though we have concluded on a consideration of facts, provisions and position of law in favour of the assessee we may also make a reference to the decision of the Hon'ble Bombay High Court in the case of DIT(E) Vs Tata Institute of Social Sciences (2019) 413 ITR 305 (Bom.) in support of the conclusion drawn. 10.1 A perusal of the said decision shows that the Court therein had an occasion to consider the wording substantially financed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act were entirely different and thus reliance placed by the Revenue on the said Act for fixing the bar at 75% in the Income Tax Act was without any basis. Noting that the said Act had neither been incorporated nor cited in Section 10(23C)(iiiab) and the fact that the two Acts could not even remotely be said to be in pari materia referring to the decision of the Apex Court in Msco Pvt. Ltd. v. Union of In m [1985] 1 SCC 51 the Court held that, it would be hazardous to interpret a word in accordance with its definition in another statute, when it is not dealing with a cognate subject. Therefore, reading the provisions of one Act into another when not in pari materia will lead to what the courts has observed in Msco Pvt. Ltd. (supra) to a new terror in construction while quoting with approval Crais on Statute Law (6th Edition). (emphasis provided in the present proceedings). 10.8. Referring to the position prior to the Explanation to Section 10(23C)(iiiab) of the Act, their Lordships further observed that the method employed by the Officers of the Revenue was either to determine the percentage of grant received from the Government in the context of total receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m April 1, 2015 as retrospective is being used as an aid in construing the ambiguous provision. Therefore, in the present facts the Revenue s appeal is required to be dismissed. 11. Accordingly, on a reading thereof, it is unambiguously clear that even though the provision was held to be prospective, the Court held that the legislative intent could well be used as an aid in construing the provision which had remained ambiguous in the absence of the amendment. Thus, on a consideration of the facts, provisions and the position of law, we find that the second issue framed by us also has to be decided in favour of the assessee by way of an affirmative yes The departmental ground, accordingly, in view thereof fails. Said order was pronounced on the date of hearing itself in the presence of the parties. 12. ITA 237/CHD/2019, accordingly, is dismissed. 13. Since facts, circumstances and position of law remain identical in ITA 238/CHD/2019 wherein no separate arguments have been advanced by the parties, accordingly, for identical reasons as in ITA 237/CHD/2019 similar departmental ground fails. 14. In the result, the appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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