M.P. Gupta Vinod Kumar Foundation, New Delhi v. The Director of Income tax (Exemption),, New Delhi

ITA 1249/DEL/2009 | misc
Pronouncement Date: 07-01-2010 | Result: Dismissed

Appeal Details

RSA Number 124920114 RSA 2009
Bench Delhi
Appeal Number ITA 1249/DEL/2009
Duration Of Justice 9 month(s) 5 day(s)
Appellant M.P. Gupta Vinod Kumar Foundation, New Delhi
Respondent The Director of Income tax (Exemption),, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 07-01-2010
Date Of Final Hearing 07-01-2010
Next Hearing Date 07-01-2010
Assessment Year misc
Appeal Filed On 01-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI C.L. SETHI AND SHRI K.G. BANSAL ITA NO. 1249(DEL)/2009 M.P.GUPTA VINOD KUMAR FOUNDATION DIRECT OR OF INCOME-TAX 303 DHAKA CHAMBER VS. (EXEMPTION) LAXMI NAGAR 2068/31 NAIWALA KAROL BAGH DISTRICT CENTRE NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SHRI G.S. SAHOTA SR. DR ORDER PER K.G. BANSAL ; AM THE APPEAL EMANATES FROM THE ORDER OF THE DIREC TOR OF INCOME-TAX (EXEMPTIONS) DELHI PASSED ON 21.1.2009 UNDER T HE PROVISIONS OF SECTION 12AA(1)(B) OF THE INCOME-TAX ACT 1961. THE ASS ESSEE HAS TAKEN UP FOLLOWING GROUNDS IN THE APPEAL:- A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE IMPUGNED EX-PARTE ORDER PASSED BY THE RESPONDENT IS ILLEGA L ARBITRARY VIOLATIVE OF NATURAL JUSTICE WITHOUT ANY FAI R AND OBJECTIVE APPLICATION OF MIND TO THE FACTS OF THE CASE AND THE LAW APPLICABLE BESIDES BEING CLEARLY WITHOUT JUR ISDICTION AND/OR JUSTIFICATION AND HENCE LIABLE TO BE QUASHED A ND DECLARED NON-EST IN LAW. B) THE RESPONDENT HAS ERRED IN IGNORING THE FACT THAT THE TRUST CAME INTO EXISTENCE ONLY ON 24.6.2008 AND THE REC EIPTS AND PAYMENTS FOR THE PERIOD FROM 24.6.2008 TO 31.10.2008 HA D BEEN DULY GIVEN WITH FULL DETAILS WITH LETTER DATED 11.11.20 08 AND THERE IS NO QUESTION OF THE TRUST HAVING PAST RECORDS AND RETURNS FOR THE ITA1249(DEL)/09 2 LAST THREE YEARS WHICH THE RESPONDENT WANTS T O BE FURNISHED TO VERIFY THE GENUINENESS OF THE TRUST AND THIS AL SO SHOWS TOTAL NON- APPLICATION OF MIND BY HIM AND HENCE THE IMPUGN ED ORDER CANNOT BE SUSTAINED. C) THE APPELLANT HAS POINTED OUT THAT ONLY AFTER REGISTRATION IS GRANTED UNDER SECTION 12A IT WOULD COLLECT FUNDS FROM THE DONORS AND WOULD ALSO SEEK EXEMPTION UNDER SECTION 8 0-G FOR THE PURPOSE BUT THE RESPONDENT HAD TOTALLY IGNORED THE SAM E WHILE PASSING THE IMPUGNED ORDER. D) IT IS SETTLED LAW THAT IN THE FIRST YEAR OR AT THE COMMENCEMENT OF AN ENTITY THERE CANNOT BE ANY PAST RECORD O R DETAILS FOR VERIFICATION AND THE CONDUCT AND ACTIVITIES OF THE ASSESSEE CAN ONLY BE VERIFIED SUBSEQUENTLY IN THE LIGHT OF T HE FUTURE ACTIVITIES/TRANSACTIONS AND EVEN THIS BASIC CO NCEPT HAD NOT BEEN UNDERSTOOD/FOLLOWED BY THE RESPONDENT AND HENCE THE IMPUGNED PERVERSE ORDER IS LIABLE TO BE VACATED. E) THE APPELLANT IS A CHARITABLE TRUST AS CLEAR LY EVIDENT FROM THE TRUST DEED AND VARIOUS RECORDS AND DOCUMENTS DULY FILED BY THE APPELLANT BUT UNFORTUNATELY THE RESPONDENT HA D TOTALLY DISREGARDED THE FACTS AND MATERIALS ON RECORD TO PASS THE IMPUGNED ILLEGAL ORDER RECKLESSLY AND HENCE T HE IMPUGNED ORDER BE QUASHED. 2. ON PERUSAL OF THE ORDER OF THE DIRECTOR OF INC OME-TAX (EXEMPTIONS) IT IS FOUND THAT THE ASSESSEE APPLIED ON 13.8. 2008 IN FORM NO. 10A FOR SEEKING REGISTRATION U/S 12A OF THE INCOME-TAX A CT 1961. THE ASSESSEE WAS REQUESTED TO FURNISH CERTAIN DETAILS MENTI ONED IN THE ORDER. AFTER HEARING THE ASSESSEE THE LEARNED DIRECTOR OF INCOME-TAX (E) REJECTED THE APPLICATION ON THE GROUND THAT THE ASSESSEE HAD NOT COMMENCED ITS ITA1249(DEL)/09 3 CHARITABLE ACTIVITIES. THE RELEVANT PORTION O F HIS ORDER IN PARAGRAPH 4 IS REPRODUCED BELOW:- 4. THE PROVISIONS OF SECTION 12AA STIPULATE THE FOLLOWING CONDITIONS FOR REGISTRATION U/S 12AA OF THE I.T.A CT 1961:- I) THE OBJECTS OF THE TRUST SHOULD BE OF CHARITABLE IN NATURE; II) THE ACTIVITIES OF THE TRUST SHO ULD BE GENUINE. IN ABSENCE OF THE DETAILS THE GENUINENESS OF TH E ACTIVITIES COULD NOT BE ESTABLISHED. THEREFORE ONE OF TH E CONDITIONS FOR GRANTING REGISTRATION U/S 12AA IS ALSO NOT SATISFIED. ACCORDINGLY THE APPLICATION FILED BY THE APPLI CANT FOR GRANT OF REGISTRATION U/S 12AA IS HEREBY REJECTED. R ELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HONBLE H IGH COURT IN THE CASE OF SELF EMPLOYEES SERVICE TRUST VS. CIT 247 ITR 18 (KERALA). IN THIS CASE ALTHOUGH THE NATURE O F THE OBJECTS WAS CHARITABLE AND VOLUNTARY THE TRUST HAD NOT COMMENCED ANY OF ITS ACTIVITIES. THE TRUST COULD NOT PRODUCE ANY EVIDENCE BEFORE THE CIT REGARDING THE GENUINEN ESS OF ITS ACTIVITIES AND THEREFORE THE HONBLE HIGH COU RT DISMISSED THE TRUSTS APPEAL AGAINST CITS ORDER REJECTI NG REGISTRATION U/S 12AA. SINCE IN THIS CASE THE APPLICA NT HAS NOT COMMENCED ITS CHARITABLE ACTIVITIES THE APPLI CATION FOR GRANT OF REGISTRATION IS REJECTED. 2.1 WHILE NO AUTHORIZED PERSON ATTENDED ON BEHA LF OF THE ASSESSEE ON THE DATE OF HEARING BEING 07.01.2010 THE LEA RNED DR DREW OUR ATTENTION TO THE DECISION OF HONBLE KERALA HI GH COURT IN THE CASE OF SELF EMPLOYERS SERVICE SOCIETY VS. CIT (2001) 247 ITR 18 IN WHICH IT WAS MENTIONED THAT THE AUTHORITY AFTER RECE IPT OF THE APPLICATION MAY INTER-ALIA MAKE ENQUIRIES AS HE MAY DEEM FIT IN THIS BEHALF TO SATISFY ITA1249(DEL)/09 4 HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIE S OF THE TRUST OR INSTITUTION AND AFTER SATISFYING HIMSELF ABOUT THE OBJECT S OF THE TRUST ETC. AND GENUINENESS OF ITS ACTIVITIES HE SHALL PASS AN ORDER IN WRITING EITHER REGISTERING THE TRUST OR INSTITUTION; OR REFUS ING TO REGISTER THE TRUST OR THE INSTITUTION. THEREFORE WHILE PASSING ORDER UNDE R THIS SECTION HE HAD TO SATISFY HIMSELF ABOUT CHARITABLE AND RELIGIOUS NATURE OF THE OBJECTS AND GENUINENESS OF THE ACTIVITIES. THE ASSESSEE HA D NOT CARRIED OUT ANY CHARITABLE ACTIVITY IN THE RELEVANT PERIOD. TH E LEARNED SINGLE JUDGE HAD GIVEN OPPORTUNITY TO FILE A FRESH APPLICATION WHEN THE SOCIETY ACTUALLY STARTED CHARITABLE WORK. IT WAS HELD THAT NO BETTER RELIEF COULD BE GRANTED TO THE SOCIETY. THE COURT ALSO DISTINGU ISHED IN THE CONTENTS OF ERSTWHILE SECTION 12A AND THE PRESENT SECTIO N 12AA. THE LATTER MADE IT MANDATORY ON THE PART OF THE AUTHORITY TO SATISFY HIMSELF ABOUT THE AFORESAID TWO CONDITIONS. RELYING ON THIS POS ITION IT WAS ARGUED THAT THE LD. DIRECTOR OF INCOME-TAX (E) RIGHTLY REJEC TED THE APPLICATION OF THE ASSESSEE AS IT HAD NOT CARRIED OUT ANY CHARITA BLE ACTIVITY DURING THE RELEVANT PERIOD. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE A ND RIVAL SUBMISSIONS. ON PERUSAL OF THE ACCOUNTS FILED IN THE PAPER B OOK FOR THE PERIOD 24.6.2008 TO 31.10.2008 IT IS SEEN THAT NO CHARITABLE ACTIVITY WAS ITA1249(DEL)/09 5 CARRIED OUT BY THE ASSESSEE. IT IS NOT KNOWN WHETHER ANY ACTIVITY WAS CARRIED ON OR AFTER 01.11.2008. THE LEARNED DIRE CTOR OF INCOME-TAX (E) HAS NOT FOUND ANYTHING WRONG WITH THE OBJECTS OF THE ASSESSEE FOUNDATION. HIS FINDING THAT NO ACTIVITY HAD BEEN CARRIED OUT IS FACTUALLY CORRECT. THEREFORE WE ARE OF THE V IEW THAT THE DIRECTOR OF INCOME-TAX (E) RIGHTLY REJECTED THE APPLICATI ON OF THE ASSESSEE. HOWEVER IN TERMS OF LIBERTY GRANTED BY THE H ONBLE COURT IN THE CASE OF SELF EMPLOYERS SERVICE SOCIETY (SUPRA) TO T HAT ASSESSEE IT IS ALSO DIRECTED THAT THE ASSESSEE SHALL BE ALLOWED AN OPPORTUNITY TO FILE A FRESH APPLICATION WHEN IT ACTUALLY STARTED DOING CH ARITABLE WORK AND THE DIRECTOR OF INCOME-TAX (E) SHALL CONSIDER SUCH AN APPLICATION ON MERITS WITHOUT BEING INFLUENCED BY THIS ORDER. 4. IN THE RESULT THE APPEAL IS DISMISSED SUBJEC T TO THE LIBERTY GIVEN TO THE ASSESSEE FOUNDATION. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07. 01.2010 SOON AFTER COMPLETION OF THE HEARING. SD/- SD/- (C.L. SETHI) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 7TH JANUARY 2010. ITA1249(DEL)/09 6 SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. M.P.GUPTA VINOD KUMAR FOUNDATION NEW DELHI. 2. DIRECTOR OF INCOME-TAX (EXEMPTIONS) DELHI. 3. CIT 4. CIT(A) NEW DELHI. 5. THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.