M/S The Improvement Trust Khanna v. Commissioner Of Income Tax, Ludhiana-Ii And Another

ITA-533-2017 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA-533-2017 (O&M) Date of Decision: 22.10.2018 M/s The Improvement Trust Khanna Versus ....Appellant. Commissioner of Income Tax, Ludhiana-II and another ...Respondents. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE AVNEESH JHINGAN. PRESENT: Mr. Sanjay Ghalawat, Advocate for Mr. Rohit Sud, Advocate for the appellant.Mr. Rohit Sud, Advocate for the appellant. Mr. Denesh Goyal, Sr. Standing Counsel for the respondents. *** AJAY KUMAR MITTAL, J. 1.Delay of 979 days in filing the appeal is condoned. 2.This appeal has been preferred by the assessee under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 26.11.2014 (Annexure A-3) passed by the Income Tax AppellateTribunal, Chandigarh Bench, Chandigarh (hereinafter referred to as “theTribunal”) in ITA No. 406/Chd/2013 for the assessment year 2009-10,claiming the following substantial questions of law:- i)Whether in the facts and circumstances of thepresent case, the respondent could have cancelledthe registration already granted to the trust whenno condition under Section 12AA(3) of the Actpresent case, the respondent could have cancelledthe registration already granted to the trust whenno condition under Section 12AA(3) of the Act had been satisfied? ii)Whether in the facts and circumstances of thepresent case, the respondent could have cancelledthe registration without recording any specificfinding that the activities of the trust or institutionare not genuine? iii)Whether in facts and circumstances of the presentcase, after the grant of registration under Section12A of the Act can the Assessing Officer go intothe objects and hold them to be non-charitable. Ifknow, whether the learned Tribunal was justifiedto hold that the activities done by the appellanttrust does not qualify for exemption? iv)Whether in facts and circumstances of the presentcase, the impugned orders are liable to be set asidethat on one hand it is observed that the case lawsrelied upon by the CIT were relating to grantingregistration under Section 12A of the Act and notrelating to the exemption provided under Sections11 and 12 of the Act and on the other hand the Ld.ITAT has itself heavily placed reliance on thejudgment of PUDA Vs. CIT which was relating tothe grant of registration under Section 12A of theAct making it contradictory? v) Whether in facts and circumstances of the presentcase, the action of the authorities below, the -3- impugned orders Annexures A-1 and A-2 arelegally sustainable in the eyes of law? 3.A few facts necessary for adjudication of the instant appeal asnarrated therein may be noticed. The assessee was granted registrationunder Section 12AA of the Act vide order dated 13.11.2009 (Annexure A-1)by the Commissioner of Income Tax-respondent No.1. The said registrationwas withdrawn by respondent No.1 vide order dated 7.2.2013 (Annexure A-2) on the ground that the assessee-Trust was not charitable in nature withinthe meaning of Proviso to Section 2(15) of the Act. Feeling aggrieved, theassessee filed an appeal before the Tribunal who vide order dated26.11.2014 (Annexure A-3) dismissed the appeal by relying upon the orderdated 27.3.2014 passed in ITA No. 380/Chd/2013 (Improvement TrustMalerkotla v. Commissioner of Income Tax) wherein identical issueswere considered. Against the order dated 27.3.2014, the assessee filed ITA-236-2015 in this Court and this Court vide order dated 16.3.2017 (AnnexureA-4) set aside the order of the Tribunal and remanded back the matter to theTribunal. Hence, the present appeal by the assessee. 4.We have heard learned counsel for the parties. 4.We have heard learned counsel for the parties. 5.It is not disputed that similar issues came up before this Courtin ITA-236-2015 (M/s The Improvement Trust, Malerkotla v.Commissioner of Income Tax, Ludhiana-II and another) wherein thisCourt vide order dated 16.3.2017 (Annexure A-4) while setting aside theorder of the Tribunal, had remanded the matter back to the Tribunal todecide afresh in the light of submissions made by the learned counsel for theparties therein after affording an opportunity of hearing to the parties inaccordance with law. ITA-533-2017 6.Accordingly, the present appeal is allowed, order dated26.11.2014 (Annexure A-3) passed by the Tribunal is set aside and thematter is remanded back to the Tribunal to decide afresh in terms of orderdated 16.3.2017 (Annexure A-4). (AJAY KUMAR MITTAL) JUDGE October 22, 2018(AVNEESH JHINGAN)gbsJUDGE Whether Speaking/ReasonedYes/NoWhether ReportableYes/No