SHRI TIRTH GURU PUSHKAR PUROHIT SANGH, Ajmer v. CIT, Ajmer

ITA 1153/JPR/2011 | 2007-2008
Pronouncement Date: 02-02-2012 | Result: Allowed

Appeal Details

RSA Number 115323114 RSA 2011
Bench Jaipur
Appeal Number ITA 1153/JPR/2011
Duration Of Justice 1 month(s) 2 day(s)
Appellant SHRI TIRTH GURU PUSHKAR PUROHIT SANGH, Ajmer
Respondent CIT, Ajmer
Appeal Type Income Tax Appeal
Pronouncement Date 02-02-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 02-02-2012
Assessment Year 2007-2008
Appeal Filed On 30-12-2011
Judgment Text
1 ITA 1153-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 1153/JP/2011 ASSTT. YEAR : 2007-08. SHRI TIRTH GURU PUSHKAR PUROHIT VS. COMMISSIONER OF INCOME-TAX SANGH TRUST BRAHMA GHAT BARI BASTI AJMER. PUSHKAR AJMER. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SARAL GARG & SHRI SUBHAS H PORWAL RESPONDENT BY : SHRI SUNIL MATHUR DATE OF HEARING : 31.01.2012. DATE OF PRONOUNCEMENT : 02.02.2012. ORDER DATE OF ORDER : 02/02/2012. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY ASSESSEE TRUST AGAINST THE OR DER OF LD. CIT WHO CANCELLED THE REGISTRATION GRANTED UNDER SECTION 12AA WITH EFFECT FROM 01.04.2006. 2. THREE GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE A SSESSEE TRUST. FIRST GROUND IS AGAINST CANCELING THE REGISTRATION OF TRUST WITH EF FECT FROM 01.04.2006 WHEREAS THE POWERS TO WITHDRAW GRANTED W.E.F. 01.10.2010 AND NOT EARLI ER. IN GROUND NO. 2 IT HAS BEEN STATED THAT LD. CIT HAS CONSIDERED VIOLATION OF SECTION 11 (2) OF IT ACT IN VIEW OF NON FILING OF FORM 10B ALONG WITH RETURN WHICH WAS LIABLE TO BE F ILED UNDER SECTION 139(1) WHEREAS ASSESSEE WAS NOT STATUTORILY REQUIRED IN VIEW OF UT ILIZATION/APPLICATION OF FUNDS IN TERMS 2 OF SECTION 11(2). IN GROUND NO. 3 THE ASSESSEE TRU ST HAS OBJECTED IN WITHDRAWING THE EXEMPTION GRANTED UNDER SECTION 80G W.E.F. 28.12.20 11. 3. THE ASSESSEE TRUST WAS GRANTED REGISTRATION UNDE R SECTION 12AA VIDE ORDER DATED 19.5.2005. LD. CIT RECEIVED INTIMATION FROM THE AO WARD 1(1) AJMER THAT TRUST HAS FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2007 -08 ON 14.12.2009 WHICH WAS BELATED ONE AND RETURN FOR ASSESSMENT YEAR 2008-09 WAS ALSO FILED ON 14.12.2009 WHICH WAS FILED AFTER THE END OF THE RELEVANT ASSESSMENT YEAR 31.3. 2009. FURTHER THE SAID RETURNS WERE ALSO NOT SUPPORTED WITH REPORTS IN PRESCRIBED FORM NO. 10B. THUS THE ASSESSEE VIOLATED THE PROVISIONS OF SECTION 12A(1)(B) OF THE ACT AS T HE ASSESSEE HAD ALREADY GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT WITH EFF ECT FROM 01.04.2004. LOOKING TO THE ABOVE REFERENCE MADE BY AO OF THE ASSESSEE TRUST A SHOW CAUSE NOTICE UNDER SECTION 12AA)3) OF THE IT ACT WAS ISSUED TO THE TRUST BY TH E OFFICE OF LD. CIT ON 08.12.2011 TO FURNISH THE VARIOUS DETAILS MENTIONED IN THE ORDER AT PAGE 2. THE TRUST WAS REQUESTED TO FURNISH WHAT TYPE OF CHARITABLE ACTIVITIES HAVE BEE N DONE BY THE TRUST FOR THE FINANCIAL YEAR ENDING ON 31.03.2007 31.03.2008 AND 31.03.2009 AND TILL DATE WITH EVIDENCES. COPIES OF BANK ACCOUNT MAINTAINED BY ASSESSEE FOR THE ABOVE P ERIOD MENTIONED WAS ALSO REQUIRED ALONG WITH ALL BOOKS OF ACCOUNT MAINTAINED BY THE T RUST. IT WAS ALSO INTIMATED TO THE RUST THAT AS PER AUDITED ACCOUNTS FILED WITH THE AO THE TRUST HAS SHOWN SURPLUS OF GROSS RECEIPTS AT 54.75% 30.13% AND 26.58% DURING ASSESS MENT YEARS 2007-08 TO 09-10 RESPECTIVELY. THEREFORE THE TRUST HAS MADE CONTRA VENTION OF SECTION 11(2). THEREAFTER ASSESSEE TRUST FILED REPLY DATED 16.12.2001 AND 20. 12.2001 WHICH ARE REPRODUCED IN THE ORDER OF LD. CIT AT PAGES 2 & 3. AFTER CONSIDERING THE REPLY THE LD. CIT OBSERVED THAT THERE ARE SO MANY DISCREPANCIES AS THE ASSESSEE IS NOT FILING THE RETURNS IN TIME. THE 3 RETURN FOR ASSESSMENT YEARS 2007-08 AND 08-09 WERE FILED BEYOND TIME LIMIT PRESCRIBED UNDER SECTION 139(1). THE LD. CIT ALSO NOTED THAT A S PER INCOME AND EXPENDITURE ACCOUNT TRUST HAS DEBITED EXPENSES OF RS. 1 33 750/- AND RS . 72 750/- UNDER THE HEAD INTEREST FOR A.Y. 2007-08 AND 08-09 BUT IN LEDGER FOR BOTH THE ASSESSMENT YEARS IT HAS BEEN MENTIONED AS INTEREST MOTIVATION (COMMISSION). F ROM THIS FACT THE LD. CIT OBSERVED THAT THE TRUST IS NOT WORKING FOR THE OBJECT OF THE TRUST BUT PAYING COMMISSION TO THE PERSONS AS INTEREST TO MOTIVATION. THE LD. CIT ALSO NOTED THAT THE PAYMENT OF COMMISSION IS MADE TO THE TRUSTEE OF TRUST NAMELY SHRI VIMAL SHYAM SUNDER ETC. MENTIONED IN THE TRUST DEED. THEREFORE THERE IS A VIOLATION UNDER SECTION 13(2) OF THE ACT. LD. CIT FURTHER NOTED THAT ON VERIFICATION OF BOOKS OF ACCO UNT FOR A.Y. 2007-08 THE ASSESSEE HAS SHOWN SUNIL CHHABRA AS CASH CREDITOR FOR RS. 1 00 0 00/- WHEREAS IN THE COPY OF BALANCE SHEET THE TRUST HAS NOT SHOWN SUNIL CHHABRA AS CAS H CREDITOR. IN VIEW OF THESE FACTS THE LD. CIT OBSERVED THAT BOOKS OF ACCOUNT ARE NOT PRO PER. THEREAFTER THE LD. CIT HELD THAT THE TRUST HAS NOT CARRIED OUT CHARITABLE ACTIVITIES AS PER OBJECTS MENTIONED IN THE TRUST DEED HENCE THE REGISTRATION GRANTED TO TRUST ON 18 .05.2005 UNDER SECTION 12AA OF IT ACT WAS CANCELLED WITH EFFECT FROM 01.04.2006. SINC E THE REGISTRATION UNDER SECTION 12AA OF IT ACT WAS CANCELLED THEREFORE EXEMPTION CLAIMED UNDER SECTION 80G OF IT ACT WAS ALSO WITHDRAWN BY LD. CIT WITH EFFECT FROM 28.12.2011. 4. NOW THE TRUST IS IN APPEAL HERE BEFORE THE TRIBU NAL. 5. DETAILED SUBMISSIONS WERE ADVANCED BY LD. A/R. THE CONTENTIONS RAISED BEFORE LD. CIT WERE REITERATED HERE BEFORE THE TRIBUNAL. ATTENTION OF THE BENCH WAS DRAWN ON COPY OF TRUST DEED WHEREIN OBJECTS OF THE TRUST ARE ENUMERATED AND THE OBJECTS OF THE TRUST WAS READ ALSO AND IT WAS SUBMITTED THAT THE T RUST HAS CARRIED OUT ACTIVITIES AS PER THE 4 OBJECTS OF THE TRUST AND NO PROVISION HAS BEEN VIOL ATED WHICH GIVE JURISDICTION TO LD. CIT TO CANCEL THE REGISTRATION AND WITHDRAW THE REGISTR ATION UNDER SECTION 80G. RELIANCE HAS BEEN PLACED ON VARIOUS CASE LAWS. 6. ON THE OTHER HAND THE LD. CIT D/R STRONGLY SUPP ORTED THE ORDER OF LD. CIT. IT WAS SUBMITTED THAT FROM VARIOUS FACTS NOTED BY LD. CIT IT IS CLEARLY ESTABLISHED THAT ASSESSEE TRUST IS NOT DOING CHARITABLE ACTIVITIES IN ACCORDA NCE WITH OBJECTS OF THE TRUST. THE RETURNS WERE FILED LATE. THE NAME OF THE CREDITOR SHOWN IN THE BOOKS OF ACCOUNT BUT NAME OF THE SAME CREDITOR IS NOT APPEARING IN THE BOOKS OF ACCO UNT. THEREFORE LD. CIT WAS JUSTIFIED IN CANCELING THE REGISTRATION. ON LEGAL ISSUE THAT LD. CIT IS EMPOWERED ONLY AFTER 1.10.2010 TO CANCEL THE REGISTRATION AND NOT BEFORE . THE RELEVANT PROVISION OF LAW WAS READ BY LD. CIT D/R. 7. IN REPLY THE LD. COUNSEL OF THE ASSESSEE STATED THAT IT IS FACT THAT NAME OF SUNIL IS NOT APPEARING IN THE BALANCE SHEET BUT THIS IS A TY PING MISTAKE AS NAME OF CREDITOR IS MENTIONED AS SUNIL DHARMAVAT INSTEAD OF SUNIL CHHAB RA. THIS WAS A TYPING MISTAKE AND NO OPPORTUNITY WAS GRANTED BY LD. CIT TO EXPLAIN TH IS ENTRY. REGARDING INTEREST MOTIVATION IT WAS SUBMITTED THAT THIS IS AS PER OB JECTS OF THE TRUST AND ATTENTION OF THE BENCH WAS DRAWN ON TRUST DEED AT PAGE 1 WHERE SUCH OBJECTS ARE GIVEN THAT VARIOUS PERSONS WHO COLLECTS THE DONATION FOR TRUST RETAIN CERTAIN PERCENTAGE OF AMOUNT COLLECTED AND WHERE DIRECTLY DONATION IS RECEIVED THEN SOME P ORTION IS GIVEN TO THE MIDDLE BRAHMINS WHO DID WORK FOR TRUST AND THIS IS AS PER TRUST DEED. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD WE FIND THAT THOUGH THERE ARE CERTAIN DISCREPANCIES I.E. NON FILING OF RETURN IN TIME NOT ENCLOSING FORM NO. 10B 5 ALONG WITH THE RETURN AND NAME OF CREDITOR IS MENTI ONED WRONG AND THERE IS AN ACCOUNT OF INTEREST MOTIVATION. HOWEVER THESE DISCREPANCIES ARE NOT SUCH THAT THE REGISTRATION GRANTED UNDER SECTION 12AA SHOULD BE WITHDRAWN. THE SE DISCREPANCIES CAN BE LOOKED AFTER WHILE COMPLETING THE ASSESSMENT AND IF SOME V IOLATION IS NOTED THEN EXEMPTION UNDER SECTION 10(11) CAN BE DENIED. IF RETURNS ARE NOT BEING FILED THEN THERE ARE OTHER MACHINERY SECTION I.E. SECTION 148 AND ASSESSEE TRU ST CAN BE FORCED TO FILE THE RETURNS. THEREFORE IN OUR CONSIDERED VIEW LD. CIT WAS NOT J USTIFIED IN CANCELING THE REGISTRATION ALREADY GRANTED AND THAT TOO FROM THE BACK DATE. H OW A TRUST CAN IMAGINE THAT REGISTRATION ALREADY GRANTED WILL BE WITHDRAWN AFTER 5 YEARS. I N THE ACT AS PER PROVISIONS OF LAW EVERY TRUST IS LIABLE TO FILE RETURN UNDER SECTION 139. THE TRUST HAS FILED RETURNS THOUGH BELATED AND THESE RETURNS SHOULD BE EXAMINED ON MERIT AND I F THERE IS A VIOLATION THEN OF COURSE EXEMPTION UNDER SECTION 11 CAN BE DENIED. BUT IN O UR CONSIDERED VIEW REGISTRATION ALREADY GRANTED CANNOT BE WITHDRAWN THAT TOO WITH R ETROSPECTIVE EFFECT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE HOLD THAT LD. CIT WAS N OT JUSTIFIED IN CANCELING THE REGISTRATION. ACCORDINGLY WE SET ASIDE THE ORDER O F LD. CIT. THE LD. CIT ALSO WITHDRAWN EXEMPTION GRANTED UNDER SECTION 80G ON THE BASIS CA NCELLATION OF REGISTRATION UNDER SECTION 12AA. SINCE WE HAVE SET ASIDE THE ORDER OF LD. CIT IN CANCELING THE REGISTRATION UNDER SECTION 12AA THEREFORE WITHDRAWAL OF EXEMPT ION UNDER SECTION 80G IS ALSO SET ASIDE. 9. IN THE RESULT APPEAL OF THE ASSESSEE TRUST IS A LLOWED. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 02 .02.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER 6 JAIPUR D/- COPY FORWARDED TO :- SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST AJMER. THE CIT AJMER. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 1153/JP/2011) BY ORDER AR ITAT JAIPUR.