Guru Nanak Public School Committee, Ludhiana v. ACIT, CC-II, Ludhiana

ITA 946/CHANDI/2019 | 2008-2009
Pronouncement Date: 28-02-2020 | Result: Allowed

Appeal Details

RSA Number 94621514 RSA 2019
Assessee PAN AAAAG4584E
Bench Chandigarh
Appeal Number ITA 946/CHANDI/2019
Duration Of Justice 8 month(s) 7 day(s)
Appellant Guru Nanak Public School Committee, Ludhiana
Respondent ACIT, CC-II, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2020
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-02-2020
Last Hearing Date 25-02-2020
First Hearing Date 25-02-2020
Assessment Year 2008-2009
Appeal Filed On 21-06-2019
Judgment Text
A IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH ! ' # $ %! BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA ACCOUNTANT MEMBER ./ ITA NO. 946/CHD/2019 / ASSESSMENT YEAR : 2008-09 GURU NANAK PUBLIC SCHOOL COMMITTEE SARABHA NAGAR LUDHIANA. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-II LUDHIANA. ./ PAN NO: AAAAG 4584 E / APPELLANT / RESPONDENT / ASSESSEE BY: SHRI P.K. GOEL (FCA) SHRI SUNIL ARORA & SHRI S.K. MUKHI (ADVS) ! / REVENUE BY: SHRI ARVIND SUDARSHAN (JCIT-DR) #$ / DATE OF HEARING : 25/02/2020 %&'($ / DATE OF PRONOUNCEMENT: 28/02/2020 / ORDER PER: ANNAPURNA GUPTA ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-5 LUDHIANA [HEREINAFTER REFERRED TO AS THE CIT(A)] DA TED 29/04/2019 CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE A .Y. 2008-09. 2. THE FACTS OF THE PRESENT CASE ARE THAT THE ASSES SEE COMMITTEE WAS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 1860 WITH THE REGISTRAR OF FIRMS AND SOCIETY PUNJAB CHANDIGARH WITH THE OBJECT OF MANAGING AND RUNNING GURU NANAK PUBLIC SCHOOLS A ND OTHER EDUCATIONAL INSTITUTIONS TO BE ESTABLISHED FROM TIM E TO TIME. THE ITA 946/CHD/2019 GURU NANAK PUBLIC SCHOOL COMMITTEE VS ACIT 2 ASSESSEE COMMITTEE HAD BEEN GRANTED REGISTRATION U/ S 12A OF THE ACT VIDE ORDER OF THE LD. CIT-III LUDHIANA DATED 2 8/09/2007 AND HAD BEEN CLAIMING EXEMPTION/DEDUCTION U/S 11/12 OF THE ACT SINCE THEN. HOWEVER THE REGISTRATION WAS CANCELED U/S 12 AA(3) OF THE ACT VIDE ORDER OF THE LD.CIT-III LUDHIANA DATED 30/03/ 2013 WITH RETROSPECTIVE EFFECT FROM 28/09/2007 SINCE WHEN TH E REGISTRATION WAS GRANTED. 3. FOR THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE H AD FILED RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMIN G EXEMPTION U/S 11/12 OF THE ACT. ON THE CANCELLATION OF THE REGIST RATION THE CASE OF THE ASSESSEE FOR THE IMPUGNED YEAR WAS REOPENED U/S 147 OF THE ACT AND THEREAFTER ASSESSMENT WAS COMPLETED BY TREA TING CORPUS CONTRIBUTION AND THE EXCESS OF RECEIPT OVER EXPENDI TURE AS INCOME OF THE ASSESSEES SOCIETY. THUS THE INCOME WAS COM PUTED AT RS.66 20 860/- AS AGAINST NIL INCOME RETURNED BY TH E ASSESSEE FOR THE IMPUGNED YEAR. THE APPEAL OF THE ASSESSEE WAS D ISMISSED BY THE LD CIT(A) AND THEREAFTER SHOW CAUSE NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT WAS ISSUED FOR LEVYING PENALTY. DUE REPLY WAS FILED BY THE ASSESSEE CLAIMING THAT THE M ERE REJECTION OF ITS CLAIM OF EXEMPTION U/S 11 OF THE ACT WOULD NOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE PL EA OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER (A.O.) AND ACCORDINGLY PENALTY @ 100% OF THE TAX SOUGHT T O BE EVADED WAS LEVIED BY THE A.O. AMOUNTING TO RS. 19 35 258/- . THE SAME WAS UPHELD BY THE LD. CIT(A). ITA 946/CHD/2019 GURU NANAK PUBLIC SCHOOL COMMITTEE VS ACIT 3 4. AGAINST THE ORDER OF THE LD. CIT(A) THE ASSESSE E HAS COME UP IN APPEAL BEFORE US RAISING SEVERAL GROUNDS. AT THE OUTSET THE LD COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ITAT HAD RESTORED BACK ITS REGISTRATION U/S 12A OF THE ACT VIDE ITS O RDER PASSED IN APPEAL FILED TO IT IN ITA NO. 619/CHD/2013 AND HAD ALSO DELETED THE ADDITIONS IN ITS QUANTUM APPEAL FILED IN ITA NO. 91 0/CHD/2016 VIDE A CONSOLIDATED ORDER PASSED ON 20/12/2019. COPY OF THE SAID ORDER WAS PLACED BEFORE US AT PAPER BOOK PAGE NO. 22 TO 3 5. OUR ATTENTION WAS DRAWN TO THE RELEVANT FINDING OF THE ITAT QUASHING ORDER OF THE LD. CIT CANCELLING REGISTRATION GRANTE D TO THE ASSESSEE U/S 12AA OF THE ACT AT PARA 13 TO 15 OF THE ORDER WHICH ARE REPRODUCED AS UNDER: 13. AFTER ANALYZING THE DETAILS IN BRIEF OF THE PRESENT CASE WE FIND THAT LD. CIT HAD CANCELLED THE REGISTRATION OF THE APPELLANT BY TAKING INTO CONSIDERATION THE SET OF FACTS PERTAINING TO THE YEAR 1971 AND THE CIRCUMSTANCES BEFORE GRANT OF REGISTRATION WHICH WAS GRANTED ON 28.09.2007. AT THIS STAGE WE ARE OF THE VIEW THAT LD. CIT CAN SUBSEQUENTLY CANCEL THE REGISTRATION ONLY UNDER ABOVE TWO CONTINGENCIES AS MENTIONED IN DETAIL ABOVE HOWEVER FOR THE SAKE OF REPETITION I.E. (I) THE ACTIVITIES OF THE TRUST ARE NOT GENUINE OR (II) THE ACTIVITIES OF THE TRUST BEING NOT CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. 14. IT IS ADMITTED FACT THAT LD. DR COULD NOT POINT OUT BEFORE US ANY CHANGE IN CIRCUMSTANCES AFTER THE GRANT OF REGISTRATION BY THE CIT IN ITA 946/CHD/2019 GURU NANAK PUBLIC SCHOOL COMMITTEE VS ACIT 4 THE YEAR 2007 . IT HAS FURTHER NOT BEEN POINTED OUT THAT WHAT ARE THE MATERIAL CHANGES IN THE CIRCUMSTANCES WHICH LED THE CIT TO CANCEL THE REGISTRATION WHICH WAS EARLIER GRANTED TO THE APPELLANT. IN OUR CONSIDERED VIEW THE CIT CANNOT CANCEL THE REGISTRATION ALREADY GRANTED ON THE BASIS OF CIRCUMSTANCES PERTAINING TO THE YEAR 1971 OR PRIOR TO GRANT OF INITIAL REGISTRATION AS HE DO NOT ENJOY THE POWER OF REVIEW AND IN CASE THE CIT IS ALLOWED TO CANCEL THE REGISTRATION ON THE BASIS OF CIRCUMSTANCES WHICH WERE IN EXISTENCE BEFORE THE GRANT OF PERMISSION INITIALLY GRANTED TO THE APPELLANT THEN THE SAID ORDER WOULD AMOUNT TO REVIEW OF THE DECISION OF THE EARLIER CIT WHICH ADMITTEDLY NOT THE POSITION OF LAW. SINCE THE CIT CAN EXERCISE THE JURISDICTION TO CANCEL THE REGISTRATION ONLY IN THE TWO CIRCUMSTANCES WHICH ARE MENTIONED IN SECTION 12AA(3) OF THE ACT AND IN THE PRESENT CASE IT HAS NOT BEEN POINTED OUT BY THE CIT THAT ANY OF THOSE CONDITIONS ARE PRESENT IN THE CASE OF THE APPELLANT THUS IN NO CIRCUMSTANCES THE REGISTRATION OF THE APPELLANT COULD HAVE BEEN CANCELLED ON THE BASIS OF CIRCUMSTANCES PRIOR TO 28.09.2007 THE DATE ON WHICH THE INITIAL REGISTRATION WAS GRANTED. 15. APART FROM ABOVE WE HAVE ALSO NOTICED THAT CIT IN HIS ORDER HAS MENTIONED THAT CCIT LUDHIANA HAD REFUSED TO ALLOW APPLICATION U/S 10(23C) TO THE APPELLANT. IT WAS STATED AT BAR BY LD. AR THAT THE SAID ORDER OF CCIT LUDHIANA REGARDING REFUSAL TO ALLOW APPLICATION U/S 10(23C) OF THE INCOME TAX ACT HAS ALREADY BEEN CHALLENGED BY ITA 946/CHD/2019 GURU NANAK PUBLIC SCHOOL COMMITTEE VS ACIT 5 THEM BEFORE HON'BLE HIGH COURT AND THE HON'BLE HIGH COURT HAS ALREADY ADMITTED THE SAID PETITION FOR ADJUDICATION. THUS IN OUR VIEW THE CIT COULD NOT CANCEL THE REGISTRATION OF THE APPELLANT WHICH WAS ALREADY GRANTED ON 28.09.2007 BY HOLDING THAT CCIT LUDHIANA HAD REFUSED TO ALLOW APPLICATION OF THE ASSESSEE U/S 10(23C) OF THE ACT. THEREFORE IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AS DETAILED ABOVE WE QUASH THE ORDER OF CIT DATED 30.03.2013 REGARDING CANCELLATION OF REGISTRATION GRANTED TO THE APPELLANT U/S 12AA. THE LD. COUNSEL FOR THE ASSESSEE THEREFORE CONTEN DED THAT THERE WAS NO CASE FOR LEVY OF PENALTY SINCE THE ADDITIONS MADE DID NOT SURVIVE. 5. THE LD. DR ON THE OTHER HAND FAIRLY CONCEDED T O THE ABOVE FACT. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E GONE THROUGH THE ORDER PASSED BY THE COORDINATE BENCH. W E SEE NO REASON TO UPHOLD THE LEVY OF PENALTY IN THE PRESENT CASE U/S 271(1)(C) OF THE ACT SINCE THE BASIS FOR LEVY OF P ENALTY BEING CANCELLATION OF REGISTRATION GRANTED TO THE ASSESSE E U/S 12A OF THE ACT AND AS A CONSEQUENCE TREATING ITS SURPLUS AND C ORPUS DONATION AS NOT EXEMPT BUT TAXABLE UNDER THE ACT HAS BEEN Q UASHED BY THE ITAT. IN EFFECT THE REGISTRATION GRANTED TO THE ASS ESSEE U/S 12A STANDS RESTORED BY THE ORDER OF THE ITAT. THE ADDIT IONS MADE TO THE INCOME OF THE ASSESSEE AS A CONSEQUENCE OF CANCELLA TION OF ITA 946/CHD/2019 GURU NANAK PUBLIC SCHOOL COMMITTEE VS ACIT 6 REGISTRATION NO LONGER SURVIVE AND THERE REMAINS N O BASIS FOR THE LEVY OF PENALTY IN THE PRESENT CASE. THE PENALTY SO LEVIED U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 19 35 258/- I S THEREFORE DIRECTED TO BE DELETED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY 2020. SD/- SD/- ' # $ %! (SANJAY GARG) (ANNAPURNA GUPTA) / JUDICIAL MEMBER &' / ACCOUNTANT MEMBER )& / DATED: 28/02/2020 *RANJAN &* + - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. /0 1 $ 1 23405 / DR ITAT CHANDIGARH 6. 046# / GUARD FILE &* ' / BY ORDER / ASSISTANT REGISTRAR