Commissioner of Income Tax vs Tawi Educational Trust

Mr. N. Paul Vasanthakumar, C.J. - This appeal is filed against the order dated 28.02.2014 passed by the Income Tax Appellate Tribunal

Amritsar Bench in ITA No. 225(Asr)/2012 wherein the respondent preferred an appeal challenging the order of CIT (A) Jammu dated

30.03.2012 relating to the assessment year 2007-08 contending that the Assessing Officer was unjust to the assessee by changing the status from

Trust to AOP and rejecting the registration of the application for registration as a trust since 11.02.2002 under section 12AA of the Income Tax

Act.

The Tribunal found that the assessee had declared gross receipts from tuition fee etc. at Rs. 96,99,210/- and apart from the said receipts, the

assessee had received development fund at Rs. 5,20,500/- and Rs. 44,000/-from the students during the normal course of activity of imparting

education. The assessee, having not obtained any exemption certificate under section 10(23C)(vi) of the Act, cannot claim exemption as it has got

registration under section 12 AA 30.11.2007 w.e.f. 01.04.2007 and the application for registration dated 11.03.2002 was not accepted and it

was the contention of the assessee that the doctrine of consistency was to be followed as the Assessee had been treated as charitable trust and has

been allowed exemption under section 12A of the Act for the assessment years 2002-03 and 2005-06 in the scrutiny assessment. Thus, in the past

as well as in the subsequent year, during the course of scrutiny of assessment, the status of a trust was allowed. The said fact was not appreciated

by the assessing authority and the said submission was accepted by the Tribunal and allowed the appeal holding that for all purposes, the

registration of the assessee trust under section 12AA of the Act shall be deemed to have been granted for the financial year 2001-02 relevant to

assessment year 2002-03.

Learned counsel appearing for the Revenue questioned the said finding by raising the following question of law:

'Whether the ITAT was right in law holding that for all practical purposes, the registration was deemed to have been granted for financial year

2001-02 in spite of no specific order granting registration.?

The said issue was already considered by this Court in a decision made in ITA No. 11/2003 by judgment dated 20.02.2013.

The Delhi High Court in its judgment reported in (2003) 264 ITR 0276, in paragraph 8 has held as under:

In the afore noted factual background, we fail to appreciate as to how, when there is no change in the business of the assessee, relief under

section 80-O of the Act can be denied to them in respect of some of the assessment years when similar relief is granted for previous and

subsequent years. We are of the view that having accepted at least in three assessment years that the assessee's business activity fell within the

ambit of section 80-I of the Act, the Revenue cannot be allowed to now turn around and contend that deduction under the said section is not

available to them in . respect of the present assessment years"".

As against the said judgment, appeal was filed before Hon'ble the Supreme Court which was dismissed on 05.12.2003.

Hon'ble the Supreme Court in its judgment reported in (1992) 193 ITR 0321 has held that in the absence of any material change justifying the

revenue to take a different view of the matter and if there was no change, exemption granted cannot be challenged.

In this case, the assessee having been granted registration under section 12AA of the Income Tax Act for the past and future years, there cannot

be any denial of treating the assessee as exempted category. In such circumstances, no substantial question of law arises for consideration as the

Tribunal while dismissing the appeal has considered all the aspects.

There is no merit in the appeal and the same is dismissed. No costs.