Hon'ble Bachchoo Lal,J.
Heard Sri Shambhu Chopra, the learned counsel for the appellant and Sri Rahul Agarwal, the learned counsel for the assessee.
The assessee is running an educational institution contending that its activities were charitable in nature and, accordingly, applied for registration under Section 12-AA of the Income Tax Act. (hereinafter referred to as the Act) The memorandum of association also indicated that apart from educational activities the assessee had other charitable objects, but at the time of filing of the application, the only activity, which the assessee was carrying, was the educational activity. The Commissioner of Income Tax, after considering the matter, passed an order rejecting the application of the assessee for registration under Section 12-AA of the Act. The Commissioner of Income Tax noted that the assessee had a total strength of 2000 students and was running an educational institution in its own land and that the surplus over the expenses was being utilized for expansion of the school, which was not a charitable activity. The Commissioner of Income Tax also observed that (2) education per se was not a charitable activity and that the assessee was running the institution on purely commercial lines and, accordingly, rejected the application. The assessee, being aggrieved, filed an appeal before the Tribunal, who after considering the matter, has set aside the order of the Commissioner of Income Tax and further directed the Commissioner to grant registration under Section 12-AA of the Act.
The department, being aggrieved by the order of the Tribunal, has filed the present appeal under Section 260(A) of the Income Tax Act.
Having heard the learned counsel for the parties, the Court finds from a perusal of the order of the Tribunal that pursuant to the inquiry made under Section 12-AA of the Act, a draft order of the Additional Commissioner of Income Tax was placed before the Commissioner, which recommended that registration should be granted to the assessee. This draft order was passed on the basis of the inquiry and appreciation of evidence to show that the assessee was carrying out charitable activities. The Tribunal found that inspite of this recommendation an ex parte order was passed without giving an opportunity of hearing to the assessee and without considering the material evidence. The Tribunal further found that there was ample material on the record to suggest that the assessee was carrying out charitable educational activities such as granting scholarships and providing free education to the poorer section (3) of the society. The Tribunal further found that on the date when the impugned order was passed, the Commissioner was not present in the office and, therefore, could not have passed the order on that date.
On these glaring findings, the Tribunal has set aside the order of the Commissioner.
In view of the aforesaid, we are of the opinion that the findings given by the Tribunal are based on appreciation of evidence and, being findings of fact, no substantial question of law arises for consideration.
The appeal fails and is dismissed.
Order Date :- 22.5.2014 Bhaskar (Bachchoo Lal, J.) (Tarun Agarwala)