M/s Haryana Pollution Control Boardc, Panchkula v. CIT, Panchkula

ITA 830/CHANDI/2013 | misc
Pronouncement Date: 28-04-2015 | Result: Allowed

Appeal Details

RSA Number 83021514 RSA 2013
Assessee PAN AAAJH0446F
Bench Chandigarh
Appeal Number ITA 830/CHANDI/2013
Duration Of Justice 1 year(s) 8 month(s) 15 day(s)
Appellant M/s Haryana Pollution Control Boardc, Panchkula
Respondent CIT, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-04-2015
Date Of Final Hearing 16-04-2015
Next Hearing Date 16-04-2015
Assessment Year misc
Appeal Filed On 13-08-2013
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI. BHAVNESH SAINI JUDICIAL MEMBER AND SHRI T.R. SOOD ACCOUNTANT MEMBER ITA NO. 830 /CHD/2013 UNDER SECTION 12 AA M/S HARYANA STATE POLLUTION VS. THE CIT CONTROL BOARD PANCHKULA C-11 SECTOR 6 PANCHKULA PAN NO. AAAJH0446F & ITA NO. 261 TO 266 /CHD/2014 ASSESSMENT YEAR: 2006-07 TO 2011-12 M/S. HARYANA STATE POLLUTION VS. THE DCIT CONTROL BOARD PANCHKULA CIRCLE C-11 SECTOR 6 PANCHKULA PANCHKULA PAN NO. AAAJH0446F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 16/04/2015 DATE OF PRONOUNCEMENT : 28/04/2015 ORDER PER BENCH THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.07.2013 PASSED BY THE CIT PANCHKULA . ITA NO. 830/CHD/2013 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS WHICH IS AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS ERR ED IN LAW AS WELL AS ON FACTS OF THE CASE IN REJECTING THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT 1961. 2 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN TREATING THE ACTIVITIES OF THE ASSESSEE AS THAT OF GENERAL P UBLIC UTILITY WHEREAS THE CASE OF THE ASSESSEE SQUARELY FALLS UNDER THE MAIN SECTION AS ITS ACTIVITIES ARE PRESERVATION OF ENVIRONMENT WHICH IS UNDOUBTE DLY CHARITABLE PURPOSE AS PER DEFINITION U/S 2(15) OF THE ACT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN REJECTING THE REGISTRATION APPLICATION ON THE GROUND THAT BAS IC CONDITION OF GETTING THE ACCOUNTS AUDITED U/S 12(I)(B) IS NOT FULFILLED WHICH IS TO BE SEEN AT THE TIME OF ASSESSMENT AND NOT AT THE TIME OF GRANTING OF REGISTRATION. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN REJECTING THE REGISTRATION APPLICATION ON THE GROUND THAT 85% OF THE INCOME WAS NOT UTILIZED ON ITS OBJECTS THUS AGAIN STEPPING INTO T HE SHOES OF THE ASSESSING OFFICER. 5. THAT THE LEARNED COMMISSIONER OF INCOME IS NOT JUST IFIED IN HOLDING THAT THE ACTIVITIES OF THE BOARD ARE FOR A CESS OR FEE W HICH HAS RESULTED IN ACCUMULATION OF FUNDS OVER THE YEARS AND HAS THUS W RONGLY INVOKED THE PROVISO TO SECTION 2(15) OF THE ACT. 3. THE ASSESSEE HAS FILED AN ADDITIONAL GROUND VIE APPLICATION DATED 3.2.2014 WHICH READS AS UNDER:- THE LD. CIT HAS ERRED ON FACTS AND IN LAW AND IN T REATING THE APPLICATION FOR REGISTRATION U/S 12AA AS TIME-BARRED BY INVOKI NG NON-APPLICABLE SUB- SECTION (1) OF SECTION 12A INSTEAD OF CONSIDERING IT VALID FOR ASSESSMENT YEAR 2013-14 ONWARDS AS PROVIDED UNDER SUB-SECTION (2) OF SECTION 12A OF INCOME-TAX ACT 1961 AS THE APPLICATION HAS BEEN FI LED AFTER 01.06.2007 I.E ON 31.01.2013 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT ADDI TIONAL GROUND IS OF LEGAL NATURE AND THEREFORE SAME IS ADMITTED FOR ADJUDICATION. 5. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE MO VED AN APPLICATION FOR REGISTRATION U/S 12A ON 31.01.2013. THE LD. COMMISSIONER NOTED THE AIM S AND OBJECTS OF THE BOARD GIVEN IN THE MEMORANDUM OF ASSOCIATION AND THEN A REPORT WAS C ALLED FROM THE ASSESSING OFFICER. IN THE REPORT IT WAS POINTED OUT THAT ASSESSEE HAS NOT OBT AINED THE AUDIT REPORT AS PER THE REQUIREMENTS OF THE SECTION 12A AND BOOKS OF ACCOUNT WERE NOT PRODU CED FROM 2006-07 TO 2011-12 AND THERE WAS NO EVIDENCE REGARDING APPLICATION OF 85% OF ITS REC EIPTS FOR CHARITABLE PURPOSES. THE LD. COMMISSIONER FURTHER NOTED THAT ASSESSEE HAS FAILE D TO COMPLY WITH BASIC CONDITION OF THE PROVISION U/S 12A(I)(B) OF GETTING ITS ACCOUNTS AUD ITED. IT WAS FURTHER NOTICED THAT ASSESSEE VIDE LETTER NO. HSPCB/A/CS/2013/450 DATED 18.6.2003 HAS ADMITTED THAT ACCOUNTS WERE AUDITED ONLY 3 UP TO 2003-04 BY COMPTROLLER AND AUDITOR GENERAL OF INDIA. FURTHER ASSESSEE HAS NOT UTILIZED 85% OF ITS RECEIPTS FOR CHARITABLE PURPOSES. IT WAS ALSO OBSERVED THAT INCOME FROM BANKS DEPOSITS AND MISC. RECEIPTS WAS IN THE NATURE OF OTHER SOURC ES AND COULD NOT BE CLAIMED EXEMPT. IN THIS BACKGROUND THE APPLICATION OF ASSESSEE WAS REJECTED . 6. BEFORE US LD. COUNSEL WITH REFERENCE TO THE ADD ITIONAL GROUND FAIRLY ADMITTED THAT AFTER AMENDMENT IN SECTION 12A W.E.F. 1.6.2007 BY FINAN CE ACT 2007 THE ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S 11 & 12 OF THE ACT. EVEN THE PROVIS ION FOR CONDONATION OF DELAY HAS BEEN DELETED BY FINANCE ACT 2007. WITH REFERENCE TO THE NORMAL GROUNDS HE SUBMITTED THAT AT THE TIME OF REGISTRATION THE COMMISSIONER IS ONLY REQUIRED TO EXAMINE THE OBJECTS OF THE BOARD AND NOT THE ACTUAL ACTIVITIES OR OTHER ISSUES LIKE AUDIT OF ACC OUNTS. THE ISSUE LIKE AUDIT OF ACCOUNTS AND GENUINENESS OF ACTIVITIES CAN BE EXAMINED ONLY AT T HE TIME OF GRANT OF EXEMPTION. HE FURTHER SUBMITTED THAT OBJECTS OF THE ASSESSEE ARE CLEARLY COVERED BY DEFINITION OF CHARITABLE PURPOSES GIVEN IN SECTION 2(15) WHICH INCLUDES PRESERVATION OF ENVIRONMENT WHICH WAS ADDED WITH RETROSPECTIVE EFFECT FROM 1.4.2009 BY FINANCE ACT ( NO. 2) OF 2009. HE FURTHER SUBMITTED THAT TRIBUNAL HAS ALREADY HELD IN THE CASE OF HIMACHAL P RADESH ENVIRONMENT POLLUTION AND CONTROL BOARD SV CIT 42 SOT 343 THAT POLLUTION CONTROL BOAR D WAS ENTITLED TO REGISTRATION U/S 12AA. 7. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THER EFORE ORDER OF COMMISSIONER. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT RELEVANT PORTION OF THAT SECTION 12A READS AS UNDER:- 12A [(1)] THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS TH E FOLLOWING CONDITIONS ARE FULFILLED NAMELY:- (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APP LICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE THE 1 ST DAY OF JULY 1973 OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION [WHICHEVER IS LAT ER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA]: [PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATIO N OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIOD AFORESAID THE PROVISIONS OF SECTION 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION - 4 (I) FROM THE DATE OF THE CREATION OF THE TRUST OR T HE ESTABLISHMENT OF THE INSTITUTION IF THE COMMISSIONER IS FOR REASONS TO BE RECORDED IN WRITING SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PER IOD AFORESAID FOR SUFFICIENT REASONS; (II) FROM THE 1 ST DAY OF THE FINANCIAL YEAR N WHICH THE APPLICATION IS MADE IF THE COMMISSIONER IS NOT SO SATISFIED. [PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUS E SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFTER THE 1 ST DAY OF JUNE 2007;] 9. THE SECOND PROVISO WAS INSERTED BY FINANCE ACT 2007 W.E.F. 1.6.2007. THE SECOND PROVISO MAKES IT ABSOLUTELY CLEAR THAT COMMISSIONER WILL HAVE NO POWER TO CONDONE THE DELAY IN CASE APPLICATION ARE FILED AFTER IST JUNE 2006. FURTHER SUB SECTION (2) OF SECTION 12A READS AS UNDER:- [(2)] WHERE AN APPLICATION HAS BEEN MADE ON OR AFTE R THE 1 ST DAY OF JUNE 2007 THE PROVISIONS OF SECTIONS 11 AND 12 SH ALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE.] 10. THE ABOVE PROVISION WAS ALSO INSERTED BY FINANC E ACT 2007 W.E.F. 1.6.2007 AND MAKES IT CLEAR THAT WHERE APPLICATION IS MADE AFTER FIRST DA Y OF JUNE 2007 THEN THE BENEFIT OF SECTIONS 11 & 12 IS AVAILABLE ONLY WITH REFERENCE TO THE ASSESSM ENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE. THIS MEANS THAT THE BENEFIT OF SECTIONS 11 & 12 IS NOT AVAILABLE TO THE EARLIER YEARS FOR WHICH THE APPLIC ATION IS MADE. THEREFORE IN VIEW OF THE ABOVE CLEAR LEGAL POSITION AND ALSO CONCESSION MADE BY LD . COUNSEL FOR THE ASSESSEE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS DISMISSED. 11. AS FAR AS THE OTHER GROUNDS ARE CONCERNED WE F IND THAT IT IS SETTLED LAW THAT AT THE TIME OF REGISTRATION THE CONCERNED AUTHORITY IS REQUIRED TO EXAMINE ONLY THE AIMS AND OBJECTS OF A PARTICULAR INSTITUTION AND IF THE SAME ARE FOUND T O BE OF CHARITABLE NATURE THE REGISTRATION SHOULD BE GRANTED. THE OTHER ISSUE LIKE NON AUDIT OF ACCOU NTS NON APPLICATION OF 85% OF THE FUNDS FOR CHARITABLE PURPOSES ETC. CAN BE EXAMINED ONLY AT TH E TIME OF ASSESSMENT WHEN EXEMPTION IS BEING GRANTED U/S 11 & 12 OF THE ACT. IN THE CASE BEFORE US THE LD. COMMISSIONER HAS NOT RECORDED ANY FINDINGS HOW THE OBJECTS OF THE ASSES SEE ARE NOT CHARITABLE. HE HAS CONSIDERED 5 VARIOUS OTHER ISSUES LIKE NON AUDIT OF ACCOUNTS TH E NON APPLICATION OF 85% OF THE FUNDS FOR CHARITABLE ACTIVITIES ETC. WHICH ARE NOT RELEVANT F OR GRANT OF REGISTRATION THEREFORE IN THE INTERES T OF JUSTICE WE SET ASIDE THE ORDER OF LD. COMMISSIO NER AND REMIT THE MATTER BACK TO THE FILE OF LD. COMMISSIONER FOR REEXAMINATION OF THE ISSUE AND DECIDE THE SAME IN ACCORDANCE WITH LAW. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ITA NOS. 261 TO 266/CHD/2014: 13. IN ALL THESE APPEALS FOLLOWING COMMON GROUNDS H AVE BEEN RAISED. 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN DISMISSING T HE APPEAL OF THE APPELLANT. 2. THAT THE LEARNED CIT(APPEALS) IS NOT JUSTIFIED IN D ISMISSING THE APPEAL OF THE APPELLANT BOARD INSTEAD OF KEEPING IT IN ABEYAN CE TILL THE FINALITY OF REGISTRATION U/S 12AA AND APPROVAL U/S 10(23C)(IV) OF THE INCOME-TAX ACT DESPITE THERE BEING A SPECIFIC GROUND AND SUBM ISSIONS IN THIS RESPECT. 3. THAT THE LEARNED CIT(APPEALS) IS NOT JUSTIFIED IN D ISMISSING THE APPEAL INSTEAD OF GIVING DIRECTIONS TO THE AO TO MODIFY TH E ASSESSMENT ORDER AS AND WHEN THE REGISTRATION U/S 12AA OR APPROVAL U/S 10(23C)(IV) IS OBTAINED BY THE APPELLANT BOARD. 14. AFTER HEARING BOTH THE PARTIES WE FIND THAT DUR ING EXAMINATION OF REGISTRATION PROCEEDINGS U/S 12A IT WAS NOTICED THAT INCOME OF THE ASSESSEE WAS MORE THAN THE TAXABLE LIMIT AND THAT ASSESSEE HAS NOT FILED THE RETURN FOR VARIOUS YEARS THEREFORE A NOTICE U/S 148 WAS ISSUED. IN RESPONSE TO THE NOTICE ASSESSEE FILED DECLARING NI L INCOME FOR ALL THESE YEARS BY CLAIMING EXEMPTION U/S 10(23C)(IV). THE ASSESSEE WAS REQUIRE D TO FURNISH THE APPROVAL FROM THE PRESCRIBED AUTHORITY U/S 10(23C )(IV). IN RESPONS E TO THIS QUERY IT WAS STATED THAT ASSESSEE HAS APPLIED TO CIT PANCHKULA FOR REGISTRATION U/S 12A W.E.F. 2006-07. SINCE THE APPLICATION HAS NOT BEEN DECIDED THEREFORE ASSESSING OFFICER WAS REQU ESTED TO KEEP PROCEEDINGS IN ABEYANCE. THE ASSESSING OFFICER NOTICED THAT EXPLANATION OF THE A SSESSEE WAS CONTRADICTORY BECAUSE ON THE ONE HAND IT WAS CLAIMED THAT ASSESSEE HAS EXEMPT INCOME U/S 10(23C)(IV) BUT LATER ON IT WAS CLAIMED IN RESPONSE TO THE QUERY THAT ASSESSEE HAS APPLIED FOR REGISTRATION U/S 12A WITH CIT PANCHKULA. FURTHER ASSESSEE HAS NOT FILED ANY APPROVAL FROM T HE COMPETENT AUTHORITY U/S 10(23C)(IV). THEREFORE EXEMPTION WAS DENIED AND INCOME WAS ASSE SSED ACCORDINGLY FOR VARIOUS YEARS. 6 15. ON APPEAL INITIALLY VARIOUS ADJOURNMENTS WERE SOUGHT AND THEN IT WAS POINTED OUT THAT ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF R EJECTION FOR REGISTRATION U/S 12A BEFORE THE ITAT CHANDIGARH. IT WAS FURTHER SUBMITTED THAT APP LICATION COULD HAVE BEEN CONSIDERED WITH RETROSPECTIVE EFFECT AND VARIOUS CASE LAWS WERE REL IED ON FOR THIS PURPOSE. IT WAS ALSO CONTENDED THAT MINISTER OF ENVIRONMENT AND FOREST HAVE ASKED FOR EXEMPTION FROM FILING OF RETURN FOR ALL STATE POLLUTION CONTROL BOARDS. THE LD. CIT(A) EXAM INED THESE SUBMISSIONS AND NOTED THAT SINCE ASSESSEE HAS NOT FILED ANY APPROVAL FROM COMP ETENT AUTHORITY IN RESPECT OF EXEMPTION U/S 10(23C)(IV) THEREFORE ACTION OF DENYING EXEMPTION WAS UPHELD. 16. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE WHILE MAKING CONTENTION IN RESPECT OF ADDITIONAL GROUND IN RESPE CT OF APPEAL AGAINST THE GRANT OF REGISTRATION IN ITA NO. 830/CHD/2013. HE FURTHER SUBMITTED THAT A SSESSEE HAS FILED APPLICATION BEFORE THE COMPETENT AUTHORITY U/S 10(23C)(IV) AND AS THE RES ULT IS STILL AWAITED THEREFORE SUITABLE DIRECTION MAY BE ISSUED. 17. ON THE OTHER HAND LD. DR STRONGLY RELIED ON THE ORDER OF COMMISSIONER. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. WE HAVE ALREADY EXTRACTED THE PROVISIONS OF SUB SECTION (2) OF SECTION 12A (RELEV ANT PORTION) WHILE ADJUDICATING ADDITIONAL GROUND IN ITA NO. 830/CHD/2013. SUB SECTION (2) O F SECTION 12A MAKES IT ABSOLUTELY CLEAR THAT EXEMPTION IS NOT AVAILABLE FOR EARLIER YEARS IF APP LICATION IS MADE AFTER IST JUNE 2007. THE EXEMPTION IS AVAILABLE ONLY IN THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE. IN THE CASE BEFORE US APPLICATION IS MADE ON 31.1.2013 I.E IN FINANCIAL YEAR 2012-13 THEREFORE EXEMPTION WOULD BE AVAILABLE IF THE SAME IS GRANTED THROUGH REGISTRATION U/S 12A FROM THE COMPETENT AUTHORITY F ROM ASSESSMENT YEAR 2013-14. THEREFORE EXEMPTION HAS BEEN RIGHTLY DECLINED BY THE LD. CIT FOR ASSESSMENT YEAR 2006-07 TO ASSESSMENT IN 2011-12. THEREFORE IN OUR OPINION LD. CIT(A) H AS CORRECTLY DECIDED THE ISSUE AND ACCORDINGLY THE APPEALS OF THE ASSESSEE DESERVES TO BE DISMISSED. HOWEVER IF THE ASSESSEE IS ABLE 7 TO OBTAIN APPROVAL U/S 10(23C) THEN ASSESSING OFFIC ER SHOULD CONSIDER THE MATTER IN THE LIGHT OF SUCH APPROVAL. 19. IN THE RESULT ITA NOS. 261 TO 266/CHD/2013 STAN D DISMISSED WHEREAS ITA NO. 830/CHD/2013 IS ALLOWED FOR STATISTICAL PURPOSES AN D OTHER APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH APRIL 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR