St. Thomas Girls Senior Secondary School, New Delhi v. DIT(E), Delhi

ITA 3360/DEL/2008 | misc
Pronouncement Date: 30-04-2010 | Result: Allowed

Appeal Details

RSA Number 336020114 RSA 2008
Assessee PAN AAETS5424Q
Bench Delhi
Appeal Number ITA 3360/DEL/2008
Duration Of Justice 1 year(s) 5 month(s) 19 day(s)
Appellant St. Thomas Girls Senior Secondary School, New Delhi
Respondent DIT(E), Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 30-04-2010
Date Of Final Hearing 29-04-2010
Next Hearing Date 29-04-2010
Assessment Year misc
Appeal Filed On 11-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE SHRI R. P. TOLANI JM AND SHRI K. D . RANJAN AM I. T. APPEAL NO. 3360 (DEL) OF 2008. ASSESSMENT YEAR : ---- ST. THOMAS GIRLS SENIOR SECONDARY SCHOOL DIREC TOR OF INCOME-TAX M A N D I R M A R G VS. [ EXEMPTION ]; N E W D E L H I 110 001. N E W D E L H I. PAN / GIR NO. AAE TS 5424 Q / 131S. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI K. SAMPATH ADV.; DEPARTMENT BY : SHRI B. KISHORE SR. D. R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED UNDER SECTION 12-AA OF THE INCOME TAX ACT 1961 [HEREINAFTER REFERRED TO A S THE ACT] BY THE LD. DIRECTOR OF INCOME-TAX [EXEMPTION] NEW DELHI. 2. THE RELEVANT GROUND OF APPEAL RAISED BY THE ASS ESSEE IS REPRODUCED AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DIRECTOR OF INCOME- TAX (EXEMPTION) HAS MISCONSTRUED THE STATUS AND POS ITION OF THE SCHOOL AND HAS ERRONEOUSLY CANCELLED THE REGISTRATION UNDER SECTIO N 12-A OF THE INCOME-TAX ACT 2 I. T. APPEAL NO. 2305 (DEL) OF 2009. 1961. THE ORDER BEING ARBITRARY MISCONCEIVED CAP RICIOUS AND UNLAWFUL MUST BE QUASHED WITH DIRECTION FOR RESTORATION OF THE STATU S QUO ANTE WITH FULL BENEFITS OF REGISTRATION UNDER SECTION 12-A(A) OF THE ACT RESTO RED WITHOUT BREAK. 3. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT T HE ST. THOMAS GIRLS SR. SEC. SCHOOL (ASSESSEE) WAS GRANTED REGISTRATION UNDER SECTION 1 2-A VIDE ORDER DATED 1/06/2005 WITH EFFECT FROM 1/04/2004 BY THE DIT (EXEMPTION). DURING THE COURSE OF PROCEEDINGS UNDER SECTION 10(23-C) IT WAS DISCOVERED THAT THE ASSESSEE WAS NO T A LEGAL ENTITY. REGISTRATION UNDER SECTION 12-A OF THE ACT WAS GRANTED ONLY ON THE BASIS OF MA NAGEMENT COMMITTEE CONSTITUTED BY THE SCHEME OF MANAGEMENT AND NOT ON THE BASIS OF MEMORA NDUM OF ASSOCIATION CONSTITUTING A SOCIETY OR A TRUST OR CREATING A TRUST OR ANY OTHER INSTRUMENT CREATING A LEGAL PERSON. IT WAS ALSO NOTICED FROM THE SCHEME OF MANAGEMENT FILED IN FORM NO. 10 THAT THE SCHOOL WAS RUN BY THE MANAGEMENT COMMITTEE UNDER THE AUTHORITY OF DIOCESS E OF DELHI AND THE PROPERTIES OF SCHOOL VESTED WITH DELHI DIOCESAN TRUST ASSOCIATION REGIST ERED UNDER THE INDIAN COMPANIES ACT 1913. THE LD. DIT (EXEMPTION) WAS THEREFORE OF THE VIEW THAT THERE WAS NO INSTRUMENT IN THE FORM OF MEMORANDUM OF ASSOCIATION OR TRUST DEED CONSTITUTIN G ANY COMPANY SOCIETY OR TRUST OR ANY OTHER LEGAL ENTITY. 4. BEFORE THE LD. DIT (E) IT WAS ARGUED THAT THE SC HOOL ITSELF IS A PERSON BEING AN INSTITUTION BUT THIS CONTENTION OF THE ASSESSEE WAS REJECTED TH AT SECTION 2(31) OF THE I. T. ACT PROVIDES INCLUSIVE DEFINITION OF PERSONS WHICH INCLUDE INDIV IDUAL HUF COMPANY FIRM AOP OR BOI WHETHER INCORPORATED OR NOT LOCAL AUTHORITY AND EV ERY ARTIFICIAL JURIDICAL PERSON. LD DIT(E) FURTHER NOTED THAT BEFORE THE ASSESSEESCHOOL COULD BE CONSIDERED AS AN INSTITUTION IT HAS TO BE DEMONSTRATED THAT IT WAS EXISTED FOR ITSELF AND IT HAS ALL THE RIGHTS AND LIABILITIES TO PURCHASE AND SELL ITS PROPERTIES AND ACQUIRE NEW PROPERTIES. TH E LD. DIT (E) HOWEVER ON EXAMINATION OF SCHEME OF MANAGEMENT FOUND THAT IT WAS ONLY MEANT F OR PROPER RUNNING OF THE SCHOOL AND HAS NO PRETENCE BEING THE OWNER OF THE SCHOOL WITH POWERS TO ACQUIRE OR DISPOSE OF THE PROPERTIES OF THE SCHOOL. THE OWNER OF THE PROPERTIES WAS DELHI DIOC ESSION ASSOCIATION. THE LD. DIT (E) THEREFORE CONCLUDED THAT THE REGISTRATION COULD NO T BE ALLOWED TO BE CONTINUED AS THE ASSESSEE 3 I. T. APPEAL NO. 2305 (DEL) OF 2009. SCHOOL WAS NOT A LEGAL PERSON AT ALL. HE ACCORDING LY WITHDREW THE GRANT OF REGISTRATION UNDER SECTION 12-A OF THE ACT. 5. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE LD. DIT (E) HAS GRANTED REGISTRATION UNDER SECTION 12-A OF THE ACT AND HAS WITHDRAWN REGISTRATION ON THE GROUND THAT THE ASSESSEESCHOOL IS NOT A LEGAL ENTITY. REFERRING T O THE PROVISIONS OF SECTION 12-AA(3) OF THE ACT THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT WHER E A TRUST OR INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) AN D SUBSEQUENTLY THE LD. COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF THE TRUST OR INSTI TUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST. HE THEREFORE SUB MITTED THAT THE GENUINENESS OF THE ACTIVITIES OF THE SCHOOL HAS NOT BEEN DOUBTED. THE SCHOOL IS BEI NG RUN FOR THE LAST SO MANY YEARS. THEREFORE REGISTRATION ONCE GRANTED CANNOT BE DENIED. HE PLA CED RELIANCE ON THE DECISION OF THE ITAT PUNE BENCH IN THE CASE OF BHARTIVIDYA PEETH VS. ITO 28 SOT 32 (PUNE). ON THE OTHER HAND THE LD. SR. DR SUPPORTED THE ORDER OF THE LD. DIT (EXEM PTION). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE LD. DIT (E) HAS REJECTED THE CONTENTION OF THE ASSESSEE BEING AN INSTITUTION ON THE GROUND THAT THE SCHOOL DOES NOT HAVE POWER TO ACQUIRE OR DISPOS E OF THE PROPERTIES. THE EXPRESSION INSTITUTION HAS NOT BEEN DEFINED UNDER THE INCOME -TAX ACT. AS PER OXFORD DICTIONARY THE EXPRESSION INSTITUTION MEANS : AN ESTABLISHMENT ORGANIZATION OR ASSOCIATION INSTITUTED FOR THE PROMOTION OF SOME OBJECT ESPECIALLY ONE OF PUBLIC O R GENERAL UTILITY RELIGIOUS CHARITABLE EDUCATIONAL ETC. ACCORDING TO WEBSTERS NEW DICTI ONARY THE WORD INSTITUTION MEANS AN ESTABLISHED OR ORGANIZED SOCIETY OR CORPORATION; AN ESTABLISHMENT ESPECIALLY ONE OF A PUBLIC CHARACTER OR ONE EFFECTING A COMMUNITY; A FOUNDATI ON. HONBLE SUPREME COURT IN THE CASE OF VENKATA KRISHNA VS. SUB COLLECTOR AIR 1969 SC 563 H AS HELD THAT A TANK IS A CHARITABLE INSTITUTION WHEN THERE IS A DEDICATION IN FAVOUR OF THAT TANK. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA SWAMI SATSANG SABHA HAS H ELD THAT DAYAL BAGH SATSANG SABHA OF AGRA IS AN INSTITUTION. A MADARSAH IS AN INSTITU TION AS HELD BY PRIVY COUNCIL IN MASJID SAHID 4 I. T. APPEAL NO. 2305 (DEL) OF 2009. GANJ VS. SHIROMANI GURUDWARA PRABANDHAK COMMITTEE A IR 1940 PC 116. FROM THE ABOVE IT APPEARS THAT THE WORD INSTITUTION IS WIDE ENOUGH TO INCLUDE A SCHOOL WHICH HAS BEEN ESTABLISHED FOR IMPARTING EDUCATION. MERELY BECAUSE THE ASSESS EE-SCHOOL DOES NOT HAVE POWER TO PURCHASE ACQUIRE OR SELL THE PROPERTY DOES NOT MEAN THAT TH E SCHOOL WILL CEASE TO EXIST AS AN INSTITUTION. THE STATUS OF THE ASSESSEE COULD BE AOP IN THE ABSE NCE OF ANY MEMORANDUM OF ASSOCIATION OR TRUST DEED. THEREFORE IN OUR CONSIDERED OPINION THE LD. DIT (EXEMPTION) HAS NOT EXAMINED THE STATUS OF THE ASSESSEE-SCHOOL RIGHT PERSPECTIVE. W E THEREFORE SET ASIDE THE ISSUE TO THE FILE OF TH E LD. DIT (EXEMPTION) WITH THE DIRECTIONS TO EXAMINE THE STATUS OF THE SCHOOL AS AN INSTITUTION AND DECIDE THE ISSUE RELATING TO RESTORING THE GRANT OF REGISTRATION UNDER SECTION 12-A OF THE ACT. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 30 TH APRIL 2010. SD/- SD/- [ R. P. TOLANI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH APRIL 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. 5 I. T. APPEAL NO. 2305 (DEL) OF 2009. 6 I. T. APPEAL NO. 2305 (DEL) OF 2009.