Commissioner Of Income Tax, Alwar v. M/S Himalaya Shiksha Samiti, Bhakera

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 472/ 2011 Commissioner of Income Tax, Alwar ----Petitioner Versus M/s Himalaya Shiksha Samiti, Bhakera C/o Silver Oak School, Jaipur Road, Alwar ----Respondent _____________________________________________________For Petitioner(s) : Mr. Daksh Pareek on behalf ofMr. Sameer Jain For Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 30/11/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasallowed the appeal of the assessee. 2.Counsel for the appellant has framed the followingsubstantial questions of law:- “1.Whether under the facts andcircumstances of the case and in law theTribunal was justified in directing torestore the registration u/s. 12A(a) ofthe I. T. Act ? 2. Whether under the facts andcircumstances of the case and in law, theorder of Tribunal is erroneous as it hasquashed the order passed u/s. 263 of theI. T. Act ignoring the material facts whichindicates that the activities of the assessare not charitable in nature? 3. Whether under the facts andcircumstances of the case andin law, the order of the Tribunalis perverse in not consideringthe material evidence whichindicates that the activities ofthe society were not charitablebut were purely commercial innature? 4. Whether under the facts andcircumstances of the case andin law, the society is eligible forregistration u/s. 12A(a) of theAct when the mandatoryprovisions of Section 11, 12 and13 of the I. T. Act were notcomplied with? 5. Whether under the facts andcircumstances of the case andin law, the Tribunal hascommitted an error of law byupholding the assessmentunder u/s. 143(3) dated30.1.2006 which was clearlyerroneous and prejudicial to theinterest of revenue?” 3.Recently in the case of Rajasthan CricketAssociation in Income Tax Appeal No. 257/2017 dated21.11.2017. This court has held that the non observationof any of the conditions of bye-laws is a ground forrejection of the expenses of the income and expenses ofthe income would be considered exempted but it is not aground of rejection under Section 12AA of the IncomeTax Act. While deciding the said case the court held asunder:- “In our considered opinion, the contentionwhich has been raised pursuant to theobservations and amendment which ismade under Section 12AA of the IncomeTax Act and proviso which is impressed bythe counsel for the department andSection 2(15) of the Act and proviso to Section 12AA which has been amendedw.e.f. 1.4.2009 which has been introducedin the Finance Act w.e.f. 1.4.2012, will notapply in the present case inasmuch as allproceedings are for the financial year2005-06, 2008-09 & 2009-10. However, it is true that in one of the casewhere it has been made effective from1.4.2009 therefore, in one of the appealfor the assessment year 2009-10 thesame will apply to proviso. Whileconsidering the matter, the real purposeof registration is to be seen that theobject falls within the definition of Section12AA and proviso. If there is any breach of any condition/sthen they may cancel the registration,however, they have to follow theprocedure. The contention that noncommunication of changes of purpose willautomatically cancel the registration, inour considered opinion, is not a validargument. However, in view of the specificclause which has been there under Form10A, we are of the considered opinion thatit will be open for the department whilemaking assessment to follow provision ofSection 11(5) and Section 13 to disallowthe expenses of the income as the casemay be, if the same is not income inexpenses as per the approved bye-lawsbutnonethelesscancellationofregistration is uncalled for. If there is any breach of any condition/sthen they may cancel the registration,however, they have to follow theprocedure. The contention that noncommunication of changes of purpose willautomatically cancel the registration, inour considered opinion, is not a validargument. However, in view of the specificclause which has been there under Form10A, we are of the considered opinion thatit will be open for the department whilemaking assessment to follow provision ofSection 11(5) and Section 13 to disallowthe expenses of the income as the casemay be, if the same is not income inexpenses as per the approved bye-lawsbutnonethelesscancellationofregistration is uncalled for. In that view of the matter, all the issuesare answered in favour of the assesseeand against the department. However, wemake it clear that earlier order which hasbeen passed by the High Court, we arenot modifying in any manner whatsoever,it will be open for the department to takeappropriate proceedings in accordancewith law. The appeals stand dismissed.” 4Therefore, no substantial question of law arises, the appeal stands dismissed. (VIJAY KUMAR VYAS)J. B.M.G/Gourav/12