Yadvindra Public School Association,, Patiala v. CIT,, Patiala

ITA 1094/CHANDI/2009 | 2010-2011
Pronouncement Date: 28-02-2011 | Result: Allowed

Appeal Details

RSA Number 109421514 RSA 2009
Assessee PAN EYEAR1979A
Bench Chandigarh
Appeal Number ITA 1094/CHANDI/2009
Duration Of Justice 1 year(s) 3 month(s) 9 day(s)
Appellant Yadvindra Public School Association,, Patiala
Respondent CIT,, Patiala
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-02-2011
Date Of Final Hearing 10-02-2011
Next Hearing Date 10-02-2011
Assessment Year 2010-2011
Appeal Filed On 19-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 1094/CHD/2009 (U/S 12AA OF I.T. ACT) YADVINDRA PUBLIC SCHOOL ASSOCIATION VS. THE CIT PATIALA PATIALA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.M.KHANNA RESPONDENT BY: SMT.JAISHREE SHARMA ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT PATIALA DATED 25.9.2009 RELATING TO ASSESSMENT YEAR 2010-11 AGAIN ST THE ORDER PASSED UNDER SECTION 12AA OF THE I.T. ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEA L ALL AGAINST THE REFUSAL OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT BY THE CIT PATIALA VIDE ORDER DATED 25.9.2009. THE ASSESSEE SOCIETY AS PER THE CIT HAD GENERATED SURPLUS FROM YEAR TO YEAR I.E. FROM A SSESSMENT YEAR 2006-07 TO 2008-09. THE PERCENTAGE OF THE SURPLUS GENERATE D WAS 20.22 % 18.77% AND 16.85% RESPECTIVELY OVER THE GROSS RECEI PTS SHOWN. THE CIT WAS OF THE VIEW THAT THE ASSESSEE SOCIETY WAS NOT C ARRYING ON ANY CHARITABLE ACTIVITY WITHIN THE MEANING OF SECTION 2 (15) OF THE ACT. THE ASSESSEE WAS SHOW CAUSED AS TO WHY ITS APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT BE NOT REJECTED. THE ASSESSEE CLAIMED THAT SIMILAR OBJECTIONS WERE RAISE D IN THE CONTEXT OF REVIEW OF APPROVAL GRANTED UNDER SECTION 10 (23C) ( VI) OF THE INCOME TAX ACT AND THE SAME WAS ALLOWED TO BE CONTINUED BY THE CCIT NWR 2 CHANDIGARH. THE ASSESSEE SOCIETY WAS ESTABLISHED IN PATIALA AND WAS RUNNING A SCHOOL AT MOHALI SINCE THE YEAR 1979 AND ANOTHER DAY CUM BOARDING SCHOOL AT PATIALA. THE CIT WAS OF THE VI EW THAT THE CLAIM OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT WAS BAS ED ON THE GROUND THAT THE ASSESSEE WAS RUNNING AN EDUCATIONAL INSTITUTION AND HAD BEEN GRANTED APPROVAL U/S 10(23C)(VI) BY THE CCIT CHANDIGARH. THE CIT FURTHER OBSERVED THAT MERELY BECAUSE APPROVAL HAD BEEN GRAN TED U/S 10(23C)(VI) DOES NOT AUTOMATICALLY ENTITLES THE ASSESSEE TO GRA NT OF REGISTRATION U/S 12AA OF THE ACT AS ONE OF THE CONDITION IS TO BE SA TISFIED FOR CLAIMING SAME IS THAT THE INSTITUTION MUST BE FOR CHARITABLE PURPOSE WHICH IS MISSING IN THE CASE OF APPROVAL U/S 10(23C)(VI) OF THE ACT WHEREAS FOR GRANTING APPROVAL U/S 10(23C)(VI) NO SUCH CONDITIO N EXISTS. THE CIT FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREM E COURT IN MUNICIPAL CORPORATION OF DELHI VS. CHILDREN BOOK TRUST [(1992 ) 3 SSC 390] FURTHER HELD THAT DEPRECIATION IS NOT TO BE CONSIDERED WHIL E WORKING OUT THE NET SURPLUSES EARNED AND THE NET SURPLUS REFLECTED BY THE ASSESSEE WAS FOUND TO BE NOT WITHIN THE LIMIT OF 15%. THE CLAIM OF T HE ASSESSEE THAT SURPLUS GENERATED HAD BEEN UTILIZED FOR THE PURPOSE OF IMPR OVEMENT OF EXISTING BUILDING AND INFRASTRUCTURE WAS ALSO FOUND TO BE I NCORRECT IN VIEW OF THE INCREASE IN INVESTMENT IN FDRS. THE FDRS STOOD AT RS. 13.54 CRORES IN FINANCIAL YEAR 2005-06 RS. 16.31 CRORES IN FINANC IAL YEAR 2006-07 AND RS. 22.33 CRORES IN FINANCIAL YEAR 2007-08. THE C IT(A) FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE UTTRAKHAND HIGH COUR T IN THE CASES OF CIT VS. QUEENS EDUCATIONAL SOCEITY HALDWANI AND M/S S T. PAUL SR. SECONDARY SCHOOL KATHGODAM (ITA NO. 103 AND 104 OF 2007) AND DENIED THE REGISTRATION U/S 12AA OF THE ACT. 3. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH E ISSUE NOW STANDS SETTLED BY THE RATIO LAID BY THE HON'BLE PUNJAB & H ARYANA HIGH COURT IN PINE GROVE INTERNATIONAL CHARITABLE TRUST VS. UNION OF INDIA & ANOTHER 3 IN CWT NO. 6031 OF 2009 (DATE OF DECISION 29.1.2010 ). THE LD. DR PLACED RELIANCE ON THE ORDER OF CIT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. WE FIND THAT IDENTICAL ISSUE HAS RAISED IN THE PRESENT APPEAL AROSE BEFORE THE CHANDIGARH BENCH OF THE TRIBUNAL IN BABA GANDHA SIN GH EDUCATION TRUST BARNALA VS. CIT (ITA NOS. 357/CHANDI/2010 & 803/CHA NDI/2009 ORDER DATED 29.9.2010) WHICH WAS LATER FOLLOWED IN S.D. COLLEGE EDUCATION SOCIETY BARNALA VS. ITO (ITA NO. 403/CHD/2010 ORDE R DATED 19.10.2010). FOLLOWING THE PARITY OF REASONING AS IN THE SAID ORDER OF THE TRIBUNAL WE SET ASIDE THE IMPUGNED ORDER OF COMMIS SIONER U/S 12AA OF THE ACT AND DIRECT THE CIT TO GRANT REGISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT. WE DIRECT THE REGISTRY TO ANNEX THE CO PY OF THE ORDER DATED 29.9.2010 IN ITA NOS. 357/CHANDI/2010 & 803/CHANDI/ 2009 IN THE CASE OF BABA GANDHA SINGH EDUCATIONAL TRUST BARNALA VS. CI T PATIALA TO THIS ORDER FOR READY REFERENCE. THUS THE GROUND OF APP EAL RAISED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF FEBRUARY 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH FEBRUARY 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 4