TMI Blog2021 (4) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Member And Shri A.T. Varkey, Judicial Member For the Asessee : Shri Soumitra Choudhury, Advocate For the Revenue : Shri Imokaba Jamir, CIT, appeared ORDER PER SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER:- Both these appeals are filed by the assessee. ITA No. 232/KOL/2020 is filed against the order of ld. Commissioner of Income Tax (Exemptions), Kolkata dated 18. 12.2019, wherein the application of the assessee for grant of registration under section 12AA of the Income Tax Act, 1961 ( the Act ) was rejected vide order dated 18. 12. 2019. ITA No. 233/KOL/2020 is filed against the order of ld. Commissioner of Income Tax (Exemptions), Kolkata dated 26.12.2019, wherein the application of the assessee under section 80G(5)(vi) for grant of approval was also rejected. 2. We first take up the ITA No. 232/KOL/2020. The assessee is a Society engaged in imparting education as educational Institution through different units i.e. Institute of Science Technology (IST), Primary Teachers Training Institute (PTTI) and Bengal College of Teachers Education (BCTE) under the aegis of Gopsai Avinandan Sangha (GAS), which is the head office. Application for registration und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following grounds:- (i) Shri Pradip Ghosh and Shri Pravash Ghosh withdrew of Trust money in cash for personal purposes in the name of miscellaneous and fuel expenses. (ii) Large amount was spent on personal charities out of the Trust funds. Thus the funds of the assessee were not utilized for applying solely educational purposes. (iii) Cash was withdrawn from the Trust and no entry was found in the cash book. (iv) Trust paid commission on account of admission. (v) Cash was withdrawn for personal purposes in the name of payments to AICTE, WBUT, Plantation, Bricks, etc. (vi) Income/fund/property of the Trust was utilized for construction of personal residences of Shri Pradip Ghosh. (vii) Fund of the Trust was utilized for personal travel purposes, which could not be correlated with education activities. (viii) Several instances were there in which Trust fund was not utilized for education purposes. (ix) Huge expenditure was incurred on advertisement, hence it was inferred that the trust was running commercial activities. (x) Expenditure on placement was found to be non- educational activity. (xi) Suppression of receipts was found in the accounts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pounding of all books and related documents by the Ld. CCIT-X, Kolkata for the proceedings u/s. 10 (23 C)(vi), Ld. CIT-XIX, Kolkata issued the letter No. 1065 dated 24.06.2013 inter-alia mentioning that for non- production of books of account the application for registration u/s. 12 A shall be rejected. This is absolutely a case of violation of natural justice as well as arbitrariness and unjustified. iv) At the stage of grant of certificate u/s. 12 A, the only enquiry which could possibly be made would be whether the Society has actually made an application in time and whether the accounts of the Society are maintained in the manner as suggested by the said section. Beyond that the scope of enquiry would not go (Please refer New Life in Christ Evangelistic Association (NLC) Vs. CIT (2000) 111 Taxman 16 (Mad). In the instant case of your appellant, we have made the application for registration u/s. l 2 A in t ime and all the books of accounts of our Society had been maintained in the manner as suggested by the provisions of the Section - 12 A. 2.. While considering granting of registration u/s. l 2 AA, your honour shall satisfy yourself only about genuineness of acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts can never be taken to be a synonym to the genuineness of the activities of the Institution. [ Please refer the case CIT Vs. Red Rose School (2007) 163 Taxmann 19 (AIl.)]. While considering the application for registration, Section 12 AA does not speak anywhere that the CIT shall also see that the income derived by the institution is not being spent for charitable purpose. Also pertinent that consequent upon the order of Ld. CCIT-X. Kolkata dated 22.07. 2013. regular assessment of the Society either u/s. 147 or u/s. 143 (3) have been made continuously from Assessment Year 2009 -20 onwards i.e., from Assessment Years 2009 -2010, 2010 -2011, 2011 -2012, 2012 -2013, 2014 -2015, 2015-16 2016 - 17. In all such regular assessments, the Assessing Officer categorically found and mentioned that the Applicant - Society has been engaged in the field of Educational Activity only. Copies of all such assessment orders are enclosed herein for your kind perusal and marked as page - 87 to 117. The relevant portion of each order (page nos. 87, 91, 98,104,109 114) is marked in fluorescent colour to prove the genuineness of our activities in the field of imparting education so as to corrobo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects of the Society are charitable in nature and whether the Trust of the Society is genuine. He further submitted as follows:- It is pertinent that consequent upon the order of Ld. CCIT-X. Kolkata dated 22.07. 2013. regular assessment of the Society either u/s. 147 or u/s. 143 (3) have been made continuously from Assessment Year 2009 -20 onwards i. e., from Assessment Years 2009 -2010, 2010 -2011, 2011 -2012, 2012 -2013, 2014 - 2015, 2015 -16 2016 - 17. In all such regular assessments, the Assessing Officer categorically found and mentioned that the Applicant - Society has been engaged in the field of Educational Activity only. Copies of all such assessment orders are enclosed herein for your kind perusal and marked as page - 87 to 117. The relevant portion of each order (page nos. 87, 91, 98,104,109 114) is marked in fluorescent colour to prove the genuineness of our activities in the field of imparting education so as to corroborate our claim as well. We, once again, claim that the object of our Society is only education and thus genuine. Moreover, we also claim that the activities are always carried out in accordance with the objects of our Society . 6. Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the ld. CIT(Exemptions) in the impugned order and supported his arguments with the findings of the Assessing Officer. 9. The ld. CIT(DR), on the other hand, opposed the contention of the assessee and submitted that the Revenue collected numerous evidences during the course of survey and basing on these evidences came to a conclusion that the assessee has not applied its income, wholly for educational purposes. The ld. D. R. pointed out that the claim of the assessee for granting registration under section 10(23C) was also rejected by the ld. PCCIT, Kolkata. He relied on the pages 1 2 of his impugned order dated 26. 12.2019. He relied on the points raised by the ld. CIT(Exemptions) towards the end of his order and submitted that the activities of the assessee are not genuine. The ld. DR supported the order of the ld. CIT(Exemptions) and submitted that registration under section 12AA of the Act cannot be granted to the assessee. 10. Both parties agreed that ITA 233/KOL/2020 is consequential to the finding of the ITAT in the appeal ITA 232/KOL/2020 for granting registration. 11. Rival contentions heard. On a careful consideration of the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ened on the basis of the material found during the survey. In the order passed under section 143(3) read with section 147 dated 28.03. 2015 for the assessment year 2010- 11, the Assessing Officer observed that the Hon ble Calcutta High Court passed an order on 10.12.2013 directing the department to provide an opportunity to the assessee for inspection of documents impounded during the course of survey operation and also furnish the copies thereof. This order of the Hon ble High Court proves that the observations of the ld. CCIT were without giving opportunity to the assessee and without furnishing copies of seized documents to it. These observations of the ld. CCIT formed the foundation of the finding of the ld. CIT(Exemptions). 13. In all the orders passed under section 143(3) of the Act, the Assessing Officer s categorical finding is that the assessee is engaged in educational activities. The ld. CIT(Exemptions) has also not alleged that the objects of the assessee are not charitable in nature. He was only guided by the findings of ld. Chief CIT by rejecting the grant of registration under section 10(23C) of the Act. The orders of the assessment passed under section 143(3) are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso see that the income derived by the Trust or the Institution is either not being spent for charitable purpose or such Institution is earning profit. The language used in the section only requires that activities of the Trust or the Institution must be genuine, which accordingly would mean that they are in consonance with the objects of the Trust/Institution, and are not mere camouflage but are real, pure and sincere and not against the proposed objects. The profit earning or misuse of the income derived by charitable institution from its charitable activities may be a ground for refusing exemption only with respect to that part of the income but cannot be taken to be a synonym to the genuineness of the activities of the Trust or the Institution . 17. In all these cases, it is laid out that the ld. CIT(Exemption) should examine whether the objects of the Trust or Institution are charitable in nature or not and as to whether the activities of the Trust/Institution are in consonance with these objects. We find that the objects of the Society are charitable in nature. We also find that the activities of the Society are in accordance with the objects. The Assessing Officers in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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