The Commissioner Of Income Tax, Exemption, Bhopal, (M.p v. Shri Sadhumargi Shantkranti Jain, Cg Orisa, C

(Tax Case No.191/2024) Digitallysigned by 2024:CGHC:45986-DBSISTASISTASOMAYAJULUSOMAYAJULUDate:2024.11.2917:00:18+0530HIGH COURT OF CHHATTISGARH AT BILASPUR 2024:CGHC:45986-DB NAFR TAXC No.191 of 2024 (Arising out of order dated 22-1-2024 passed by the Income TaxAppellate Tribunal, Raipur Bench, Raipur in ITA No.233/RPR/2023) The Commissioner of Income Tax, Exemption, Bhopal, (M.P.) ... Appellant versus Shri Sadhumargi Shantkranti Jain, CG Orisa, C-71, Sector-1, DevendraNagar, Raipur, (C.G.) ... Respondent For Appellant:Mr. Amit Chaudhari, Standing Counsel.For Respondent:Not noticed. -Division Bench: Hon'ble Shri Sanjay K. Agrawal andHon'ble Shri Radhakishan Agrawal, JJ. Judgment On Board(25/11/2024) Sanjay K. Agrawal, J. 1. Heard on admission and formulation of substantial question of law in this tax appeal preferred by the Revenue under Section 260A ofthe Income-tax Act, 1961 (for short, ‘the IT Act’) calling in questionlegality, validity and correctness of judgment & order dated 22-1-2024 passed by the Income Tax Appellate Tribunal, Raipur Bench, (Tax Case No.191/2024) Raipur (for short, ‘the ITAT’) in ITA No.233/RPR/2023, by whichthe appeal filed by the assessee / respondent herein has beenallowed by the ITAT with a direction to the appellant herein to grantexemption/approval to the assessee under Section 80G(5) of the ITAct. 2. The respondent assessee preferred an application under Section80G(5) of the IT Act which was considered by the Commissioner ofIncome Tax (Exemption) and by order dated 21-4-2023, it wasrejected finding no merit holding that the assessee is not establishedonly for charitable purposes, but also established for religiouspurposes. Feeling aggrieved against the order of the CIT(E), theassessee preferred an appeal before the ITAT and by the impugnedjudgment & order, the ITAT allowed the appeal holding that therespondent assessee was granted registration under Section 12AA ofthe IT Act by the CIT(E), therefore, the assessee is eligible for grantof approval under Section 80G(5) of the IT Act and directed the CIT(E) to grant exemption/approval to the assessee Society for grant ofapproval under Section 80G(5) of the IT Act.80G(5) of the IT Act which was considered by the Commissioner ofIncome Tax (Exemption) and by order dated 21-4-2023, it wasrejected finding no merit holding that the assessee is not establishedonly for charitable purposes, but also established for religiouspurposes. Feeling aggrieved against the order of the CIT(E), theassessee preferred an appeal before the ITAT and by the impugnedjudgment & order, the ITAT allowed the appeal holding that therespondent assessee was granted registration under Section 12AA ofthe IT Act by the CIT(E), therefore, the assessee is eligible for grantof approval under Section 80G(5) of the IT Act and directed the CIT(E) to grant exemption/approval to the assessee Society for grant ofapproval under Section 80G(5) of the IT Act. 3. Mr. Amit Chaudhari, learned Standing Counsel for the Income TaxDepartment appearing for the appellant herein / Revenue, wouldsubmit that the learned ITAT is absolutely unjustified in holding thatthe assessee Society is entitled for grant of exemption/approvalDepartment appearing for the appellant herein / Revenue, wouldsubmit that the learned ITAT is absolutely unjustified in holding thatthe assessee Society is entitled for grant of exemption/approval (Tax Case No.191/2024) under Section 80G(5) of the IT Act in view of the grant of itsregistration under Section 12AA of the IT Act. 4. It is not in dispute that the assessee’s application under Section12AA of the IT Act was granted and is continuing in operation andthat is the basis which has persuaded the learned ITAT to accept theappeal of the assessee and direct the CIT(E) to grant approval underSection 80G of the IT Act. (Tax Case No.191/2024) under Section 80G(5) of the IT Act in view of the grant of itsregistration under Section 12AA of the IT Act. 4. It is not in dispute that the assessee’s application under Section12AA of the IT Act was granted and is continuing in operation andthat is the basis which has persuaded the learned ITAT to accept theappeal of the assessee and direct the CIT(E) to grant approval underSection 80G of the IT Act. 5. The issue involved herein is no longer res integra and standsdecided by a decision of the Gujarat High Court in the matter of1-Hiralal Bhagwati v. Commissioner of IncomeTax and that hasbeen approved to be the correct law by a decision of the SupremeCourt in the matter of Assistant Commissioner of Income Tax v.2. Surat City Gymkhana 6.InHiralal Bhagwati(supra), application of the assessee therein forexemption under Section 80G of the IT Act was rejected and thecompetent authority refused to grant exemption which the assesseechallenged before the Gujarat High Court and the Gujarat HighCourt, considering the case of the assessee therein, held that oncethe registration under Section 12A(a) of the IT Act is granted, thegrant of benefit under Section 80G of the IT Act cannot be denied,and observed as under:- 1(2000) 246 ITR 188 2(2008) 14 SCC 169 (Tax Case No.191/2024) “18. It is also required to be noted that once theregistration under section 12A(a) of the Act is granted, thegrant of benefit cannot be denied. The Income-tax Officerwas not justified in refusing the benefits which wouldotherwise accrue under the registration. If there was noregistration, as contemplated under section 12A(a) readwith rule 17A, the Revenue would have been justified inmaking a submission that the benefit cannot be granted, butwhere the application for registration is submitted and theregistration has been granted, the benefit cannot be deniedon the ground that the scheme is not for the benefit of thepublic at large.” 7. The principle of law laid down by the Gujarat High Court inHiralal Bhagwati(supra) was considered by the Supreme Court in ’sSurat City Gymkhanacase (supra) in which two questions oflaw were framed, (A) whether the objects of the trust restrictingbenefit to the members of the club would fall within the purview ofthe act of ‘general public utility’ under Section 2(15) of the IncomeTax Act constituting as a section of public and not a body ofindividuals and (B) whether registration under Section 12-A was afait accompli to hold that assessing officer back from further probeinto the objects of the trust, and it has been held by their Lordshipsthat once application under Section 12A of the IT Act is granted,there is no need of further enquiry with regard to the parties to thelis, whether it is for charitable purposes or otherwise, and the twostated questions have been answered in paragraphs 4 and 5 of thereport as under: - (Tax Case No.191/2024) “4.This Court, on 22-7-2002, granted leave in respect ofQuestion ‘B’ only. The appeals were not entertained inrespect of Question ‘A’ and it was noted that the appealswere rightly dismissed by the High Court insofar asQuestion ‘A’ is concerned as the appellant did not challengethe correctness of the judgment in Hiralal Bhagwati[1]. 5.On a perusal of the judgment of the Gujarat HighCourt in Hiralal Bhagwati[1 ]we now find that Question ‘B’ isalso concluded by the said judgment (refer to the 1[st]paragraph of ITR p. 196). Since the Revenue did notchallenge the decision in the said case, the same hasattained finality. Question ‘B’, therefore, is to meet thesame fate as Question ‘A’ as this Court had declined togrant leave in respect of Question ‘A’ on the ground that theRevenue did not challenge the correctness of the decision inHiralal Bhagwati[1]. It appears that the fact, that Question‘B’ was also covered by the aforementioned judgment, wasnot brought to the notice of Their Lordships and, therefore,leave granted was restricted to Question ‘B’.” 5.On a perusal of the judgment of the Gujarat HighCourt in Hiralal Bhagwati[1 ]we now find that Question ‘B’ isalso concluded by the said judgment (refer to the 1[st]paragraph of ITR p. 196). Since the Revenue did notchallenge the decision in the said case, the same hasattained finality. Question ‘B’, therefore, is to meet thesame fate as Question ‘A’ as this Court had declined togrant leave in respect of Question ‘A’ on the ground that theRevenue did not challenge the correctness of the decision inHiralal Bhagwati[1]. It appears that the fact, that Question‘B’ was also covered by the aforementioned judgment, wasnot brought to the notice of Their Lordships and, therefore,leave granted was restricted to Question ‘B’.” 8. In view of the aforesaid legal position, since the respondent herein / assessee Society was registered under Section 12AA of the IT Act,therefore, in view of the aforesaid judgments (supra), no substantialquestion of law arises for consideration in this tax appeal and theinstant appeal deserves to be and is hereby dismissed in liminewithout issuing notice to the other side finding no substantialquestion of law involved therein. No order as to cost(s). Sd/- Sd/-(Sanjay K. Agrawal) (Radhakishan Agrawal)JUDGEJUDGE