Case Law Details
Lord Shiva Educational Welfare Society Vs CIT (Exemption) (ITAT Amritsar)
Conclusion: Since the jurisdiction of PCIT(E) was being limited to verification of two issues, one with regard to the ‘lease hold land’ and the second about the fee concession and on both accounts, CIT (E) had not drawn any adverse inference and, therefore, the order of CIT(E) denying the registration u/s 12AA was bad in law.
Held: An application in Form No.10A was filed by assessee-society in the office of PCIT(Exp) seeking registration u/s 12A. The application revealed that the society was an ongoing entity that had been in operation since 30.01.2013. Earlier an order under section 12AA was passed by the CIT (E) on 30.08.2017 rejecting the application for grant of registration u/s 12AA. Assessee-trust preferred an appeal before Tribunal against the order of the CIT (E). Tribunal had restored back the case of assessee-trust for fresh consideration. Department while rejecting the application had contended that as the character of the school was commercial per se and was hit by the provisions of Section 2(15), giving fee concessions to some of its students would not take aware the commercial character of the school/society. It was held that nothing had been doubted and for the purpose of 12A only two conditions were to be required to be satisfied that one with regard to the activities of the trust and the second with regard to the aims & objects of the society. As regards to the issue of profit motive, it had clearly been held that profit motive should not be predominant and held that the denial of registration was being made following the order of the Hon’ble ITAT on the issue of the franchise fee paid to ‘M/s. Zee Learn Ltd.’ and ignoring the finding was already in favor of the assessee in the earlier order of ITAT in ITA No. 605/Asr/2017 and, therefore, the CIT (E) not following the order of the Hon’ble ITAT was against judicial discipline and rejecting the application for registration u/s 12AA, which issue had already attained finality was bad in law and, thus, PCIT (E) was required to grant registration to assessee u/s 12AA. Therefore, the jurisdiction of PCIT(E) was being limited to verification of two issues, one with regard to the ‘lease hold land’ and the second about the fee concession and on both accounts, and since, the CIT (E) had not drawn any adverse inference and, therefore, the order of CIT(E) denying the registration u/s 12AA was bad in law.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
1. The captioned appeal by the assessee is directed against the order of the CIT(E), Chandigarh dated 23.10.2020 in respect of Assessment Year 2017-18.
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