The Revenue Is In Appeal Before Us In This It. Appeal Raising Thefollowing Substantial Question Of Law v. The Brief Facts Necessary For The Disposal Of The It. Appeal Areas Follows

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M. WEDNESDAY, THE 17 DAY OF JULY 2024 / 26TH ASHADHA, 1946 ITA NO. 31 OF 2019 AGAINST THE ORDER DATED 25.06.2018 IN ITA NO.50 OF 2017 OF INCOMETAX APPELLATE TRIBUNAL,COCHIN BENCH (ASSESSMENT YEAR 2017-18) APPELLANT/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX (EXEMPTIONS)KOCHI BY ADVS.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENTK.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT/APPELLANT/ASSESSEE: URSULA HOSPITAL SOCIETYURSULA HOSPITAL, KACHERIPPADY, AMBALAPUZHA. BY ADVS.SRI.ISSAC M.PERUMPILLILSRI.JIJO PAUL KALLOOKKARAN THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON17.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. The Revenue is in appeal before us in this IT. Appeal raising thefollowing substantial question of law:- 1. Whether on the facts and circumstances of the caseand in law, the Hon'ble ITAT is correct in directing theAssessing Officer to grant approval instead of reverting itback to the Commissioner of Income Tax (Exemptions) forre-examination in the light of judgment of the AllahabadHigh Court in appeal No.112 of 2013 in the case of CIT,Meerut v. M/s.AR Trust, Meerut wherein it was held that theTribunal could have ordered for setting aside the order ofthe Registering Authority refusing registration but it couldnot have directed for registration straight away in as muchas there has to be satisfaction recorded by the RegisteringAuthority which was lacking? 2. The brief facts necessary for the disposal of the IT. Appeal areas follows: The respondent Assessee M/s.Ursula Hospital Society is acharitable institution registered under Section 12 of the Income Tax Act ITA No.31 of 2019 (hereinafter referred to as 'the IT Act') and availing the benefit ofexemption in respect of its income in accordance with the provisions ofSections 11 to 13 of the IT Act. During the assessment year 2017-2018,with a view to obtaining tax free donations, it had preferred anapplication in Form 10G for the necessary approval under Section80G(5)(vi) of the IT Act on 23.06.2016. The application was preferredbefore the Commissioner of Income Tax (Exemptions) who was theauthority authorised to grant approvals in terms of Section 80G of theIT Act. By Annexure-A order dated 30.12.2016, the approval sought forby the respondent society was denied by the Commissioner on thefinding that the charitable activity done by the respondent assesseeduring the Financial year 2015-2016 was only 1 %, and therefore, theassessee was not entitled for the approval under Section 80G(5)(vi) ofthe IT Act. 3. Against the said order of the Commissioner, the assesseepreferred an appeal before the Appellate Tribunal. The AppellateTribunal found that the Department did not have a case that theregistration granted to the respondent assessee under Section 12AA ofthe IT Act merited cancellation, and hence it had to be presumed thatthe assessee complied with all the necessary pre-conditions for thecontinued registration under Section 12AA of the IT Act. As regards thecompliance with the conditions stipulated in Section 80G for the ITA No.31 of 2019 purposes of grant of approval, the Tribunal found that it was not thecase of the Commissioner at first instance that any of those conditionshad not been fulfilled by the assessee. The Tribunal, therefore, foundthat the reason cited by the Commissioner for denying the approval wasextraneous to the statutory provisions and could not have formed thebasis for a rejection of the approval that was sought for. This was moreso because the assessee continued to enjoy the exemption underSection 11 of the IT Act consequent to its registration under Section12AA of the IT Act. ITA No.31 of 2019 purposes of grant of approval, the Tribunal found that it was not thecase of the Commissioner at first instance that any of those conditionshad not been fulfilled by the assessee. The Tribunal, therefore, foundthat the reason cited by the Commissioner for denying the approval wasextraneous to the statutory provisions and could not have formed thebasis for a rejection of the approval that was sought for. This was moreso because the assessee continued to enjoy the exemption underSection 11 of the IT Act consequent to its registration under Section12AA of the IT Act. 4. In the appeal before us, the ground urged by the revenue isessentially with regard to the directions given by the Tribunal whilesetting aside the impugned order of the Commissioner. It is the stand ofthe revenue that by allowing the appeal preferred by the assessee theorder of the Commissioner has been set aside and the Tribunal ought tohave remitted the matter to the Commissioner for a fresh considerationof the issue with regard to grant of approval. In our view, such anexercise is not called for, on the facts of the instant case because eventhe commissioner at first instance did not have a case that the assesseehad not satisfied any of the conditions prescribed under Section 80G forthe grant of the necessary approval under Section 80G(5)(vi) of the ITAct. Inasmuch as the Appellate Tribunal had only set aside the findingof the Commissioner on an extraneous factor that was not germane to ITA No.31 of 2019 the issue of grant of approval under Section 80G of the IT Act, we donot deem it necessary to remand the matter to the Commissioner for afresh decision with regard to the grant of approval under Section 80G.We, therefore, dismiss this IT Appeal by answering the substantialquestion of law raised therein against the revenue and in favour of theassessee. Sd/- DR. A.K.JAYASANKARAN NAMBIAR JUDGE Sd/- SYAM KUMAR V.M. JUDGE mns APPENDIX OF ITA 31/2019 PETITIONER ANNEXURES ANNEXURE BCERTIFIED COPY OF THE ORDER OF THEINCOME TAX APPELLATE TRIBUNAL IN ITANO 50/COCH/2017 DATED 25.6.2018