The Commissioner Of Income Tax (Exemptions), Chandigarh v. M/S Adesh Welfare Society (Regd.), Muktsar

ITA-119-2018 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA-119-2018 Date of Decision: 10.1.2019 The Commissioner of Income Tax (Exemptions), Chandigarh ....Appellant. Versus M/s Adesh Welfare Society (Regd.), Muktsar ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MRS. JUSTICE MANJARI NEHRU KAUL. PRESENT: Mr. Denesh Goyal, Senior Standing Counsel,for the appellant.for the appellant. *** AJAY KUMAR MITTAL, J. 1.This appeal has been filed by the revenue under Section 260Aof the Income Tax Act, 1961 (in short “the Act”) against the order dated26.9.2017 (Annexure A-2) passed by the Income Tax Appellate Tribunal,Amritsar Bench, Amritsar (hereinafter referred to as “the Tribunal”) in ITANo. 102/(Asr)/2017, claiming the following substantial questions of law:- I.Whether on the facts and circumstances of thecase, the Hon'ble ITAT has erred in directing theregistration to be accorded instead of reverting itback for re-examination following the spirit ofjudgment by the Hon'ble Allahabad High Court inappeal No. 112 of 2012 in the case of CIT Vs. A.R.Trust as per which the Hon'ble ITAT does not havecase, the Hon'ble ITAT has erred in directing theregistration to be accorded instead of reverting itback for re-examination following the spirit ofjudgment by the Hon'ble Allahabad High Court inappeal No. 112 of 2012 in the case of CIT Vs. A.R.Trust as per which the Hon'ble ITAT does not have -2- powers to direct registration even though theaverred decision was in respect of 12AA matters?II.Whether on the facts and in the circumstances ofthe case the Hon'ble ITAT is not perverse inholding that the CIT has not given valid reasonswhile not granting approval to the applicant andthereby directing to grant approval u/s 80G to theapplicant whereas the CIT had given clear findingsabout the real purpose that the applicant hadconsistently generated large scale surpluses andhas accumulated large amounts of investible fundsin the shape of FDRs and cash and therefore, therewas no rationale for another source of income?III.Whether on the facts and circumstances of the casethe ITAT has erred in placing reliance on the factof the assessee having 12AA registration and byignoring the statutory condition that 12AAregistration is merely a pre-condition for entities tobe eligible for approval u/s 80G(5) and that theprocedure involves examination of the real purposeas laid down by the Hon'ble Delhi High Court inthe case of M/s Kirti Chand Tarawati CharitableTrust vs. Director of Income Tax (Exemption) andOrs. [(1999) 152 CTR (Del) 322]?IV.Whether on the facts and circumstances of the casethe Hon'ble ITAT has misinterpreted the term 'approval' as envisaged in Section 80G(5) andtaken 'registration' to be conterminous with'approval' by insisting on registration as thekeyword in the entire text of its order?taken 'registration' to be conterminous with'approval' by insisting on registration as thekeyword in the entire text of its order? V.Whether on the facts and circumstances of thecase, the order of the Appellate Tribunal iscontrary to the evidence and material on the recordof the case and therefore, perverse?case, the order of the Appellate Tribunal iscontrary to the evidence and material on the recordof the case and therefore, perverse? 'approval' as envisaged in Section 80G(5) andtaken 'registration' to be conterminous with'approval' by insisting on registration as thekeyword in the entire text of its order?taken 'registration' to be conterminous with'approval' by insisting on registration as thekeyword in the entire text of its order? V.Whether on the facts and circumstances of thecase, the order of the Appellate Tribunal iscontrary to the evidence and material on the recordof the case and therefore, perverse?case, the order of the Appellate Tribunal iscontrary to the evidence and material on the recordof the case and therefore, perverse? 2.A few facts necessary for adjudication of the instant appeal asnarrated therein may be noticed. The assessee-society is registered underSection 12AA of the Act and was set up to run various educationalinstitutions. The assessee was granted approval under Section 80G of theAct vide order dated 1.9.2014. The said approval had lapsed on 31.3.2009.According to the assessee, as per Circular dated 27.10.2010, 'the existingapprovals expiring on or after Ist October, 2008, shall be deemed to havebeen extended in perpetuity unless specifically withdrawn.' An applicationwas filed for approval under Section 80G(5)(vi) of the Act on 28.7.2016.The Commissioner of Income Tax (E), Chandigarh vide order dated31.1.2017 (Annexure A-1) rejected the application of the assessee for grantof approval under Section 80G of the Act. Feeling aggrieved by the order,Annexure A-1, the assessee filed an appeal before the Tribunal. TheTribunal vide order dated 26.9.2017 (Annexure A-2) allowed the appeal anddirected the CIT(E) to allow the registration under Section 80G of the Act tothe assessee from the date of application. Hence, the present appeal by therevenue. After hearing learned counsel for the revenue, we do not find any merit in the appeal. 4.The assessee was registered under Section 12AA of the Actwhich still continues. It was granted registration under Section 80G of theAct on 1.9.2004 and the said registration had not been withdrawn. The saidregistration had expired on 31.3.2009. Thereafter, the assessee filed anapplication for grant of approval under Section 80G(5)(vi) of the Act on28.7.2016. The Tribunal had noticed that the assessment of the assessee forthe assessment year 2012-13 was completed under Section 143(3)of the Actwherein the benefit under Section 11 of the Act was allowed to the assessee.The assessee had filed its return of income for the assessment year 2016-17on 8.10.2016 declaring its income as 'Nil' by claiming exemption underSection 11 of the Act for whole of the income. There was no violation onthe part of the assessee which could lead to the withdrawal of registrationunder Section 12AA of the Act. Further, once the assessee was establishedas charitable institution by the revenue authorities at the time of grantingregistration under Section 80G of the Act, it cannot be denied registrationunder Section 80G of the Act. It was recorded by the Tribunal that as perCircular dated 27.10.2010, the registration was deemed to have beenextended in perpetuity had the registration expired on or after 1.10.2009, butdue to technical reason, the registration under Section 80G of the Act wasnot deemed to have been extended. Accordingly, the Tribunal vide orderdated 26.9.2017 (Annexure A-2) directed the CIT(E) to allow the assesseeregistration under Section 80G of the Act from the date of application. 5.No illegality or perversity could be pointed out by learnedcounsel for the revenue in the findings recorded by the Tribunal which maywarrant interference by this Court. No question of law, much less, ITA-119-2018-5-substantial question of law arise in the appeal. 6.Accordingly, finding no merit in the appeal, the same is herebydismissed.