Madhusan Rathi Charity Trust, v. CIT, III, Pune,

ITA 309/PUN/2009 | misc
Pronouncement Date: 08-12-2010 | Result: Allowed

Appeal Details

RSA Number 30924514 RSA 2009
Assessee PAN AAATS4777N
Bench Pune
Appeal Number ITA 309/PUN/2009
Duration Of Justice 1 year(s) 9 month(s) 2 day(s)
Appellant Madhusan Rathi Charity Trust,
Respondent CIT, III, Pune,
Appeal Type Income Tax Appeal
Pronouncement Date 08-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 08-12-2010
Date Of Final Hearing 06-12-2010
Next Hearing Date 06-12-2010
Assessment Year misc
Appeal Filed On 06-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 309/PN/09 MADHUSUDHAN RATHI CHARITY TRUST RATHI CHAMBERS 7 DECCAN COLLEGE ROAD YERAWADA PUNE 411 004 PAN NO. AAATS4777N .... APPELLANT VS. CIT-III PUNE . RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY : SHRI A.S. SINGH ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT-III PUNE DATED 03-02-2009. THE GROUNDS READS AS UNDER:- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT-III PUNE WAS NOT JUSTIFIED IN REJECTING THE AP PLICATION OF APPROVAL FILED IN F. NO. 10-G THEREBY REJECTING THE APPROVAL U/S. 80-G OF THE ACT. THE LD. CIT-III BE DIRECTED TO GRANT APPROVAL FOR REVIVAL OF 80-G REGISTRATION IN ACCORDANCE WITH THE PROVISIONS OF T HE LAW. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE APPELLANT- TRUST HAVING SUBMITTED ALL BASIC DOCUMEN TS AND INFORMATION AS CALLED FOR MORE THAN TWO OCCASIONS AND WITHOUT C ONSIDERING THEM AND WITHOUT GRANTING PROPER OPPORTUNITY IN SPITE OF REPETITIVE FOLLOW UP BY THE APPELLANT-TRUST THE REJECTION ORDE R HAS BEEN PASSED BREACHING THE FUNDAMENTAL RULES OF NATURAL JUSTICE. THE SAME BE QUASHED. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT-III WAS NOT JUSTIFIED THE APPLICATION FOR GRANT OF RENEWAL OF APPROVAL SUBMITTED. THE CERTIFICATE U/S. 80-G WAS A LREADY GRANTED DT. 05-04-2004 TO THE APPELLANT-TRUST. NOTHING IS POINT ED OUT THEREAFTER ANYTHING THE CONDITIONS LAID DOWN IN S. 80-G OF THE ACT. THE APPROPRIATE DIRECTIONS BE ISSUED FOR GRANT OF APPRO VAL FOR RENEWAL OF 80-G CERTIFICATE. ITA NOS. 309/PN/09 PAGE 2 OF 4 2. AT THE VERY OUT SET LD COUNSEL FOR THE ASSESSEE M ENTIONED THAT THE CIT DID NOT GRANT PROPER OPPORTUNITY BEFORE THE REQUEST FOR GRANT OF APPROVAL U/S 80G WAS DENIED. FURTHER IT WAS BROUGHT TO OUR NOTICE THE ORDER O F THE TRIBUNAL OF THE DELHI BENCH IN THE CASE OF GIAN EDUCATIONAL SOCIETY VS. C IT (2010) 6 ITR (TRIB) 350 (DELHI) AND STATED THAT THE REGISTRATION U/S 80G OF T HE ACT CANNOT BE REJECTED WHILE REGISTRATION U/S. 12A IS NOT DISTURBED. RELYING ON THE CHANDIGARH BENCH DECISION IN THE CASE OF HIMACHAL PRADESH ENVIRONMENT PROTECTION AN D POLLUTION CONTROL BOARD VS. CIT (2009) 125 TTJ (CHD) 98 TO SUPPORT HIS ARGUM ENTS REGARDING DOMINANT PURPOSE VS. ANCILLARY ACTIVITIES. ON THE OTHER HAND LD DR FOR THE REVENUE RELIED ON THE ORDER OF THE CIT. 3. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE ORDER OF THE CIT AND OTHER AVAILABLE RECORDS BEFORE US. LATEST D ECISION OF ITAT B BENCH PUNE IN THE CASE OF PROMOTERS AND BUILDERS ASSOCIATI ON OF PUNE BEARING ITA NO. 39/PN/2009 A.Y 2008-09 ORDER DATED 30-11-2010 WAS ALS O PERUSED. WE HAVE ALSO GONE THROUGH THE RELEVANT PROVISIONS IN THIS REGARD WHI CH ARE AS FOLLOWS:- SEC 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR EDUCATION MEDICAL RELIEF [PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS FORE STS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ART ISTIC OR HISTORIC INTEREST ] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES THE CARRYING ON AC TIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION IRRESPECTIVE OF THE NATURE OF USE OR APP LICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITY: . .. FURTHER THE PROVISION OF SECTION 80G(5)(I) IS AS UNDER . 80G(5)(I). THIS SECTION APPLIES TO DONATIONS TO ANY INSTITUTION OR F UND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB-SECTION (2) ONLY IF IT IS ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE AND IF IT FULFILS THE FOLLOWING CONDITIONS NAMELY:- [(I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCOME SU CH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTIONS 11 AND 12 [OR CLAUSE (23AA)] [OR CLAUSE (23C)] OF SECTION 10 : [ PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCOME B EING PROFITS AND GAINS OF BUSINESS THE CONDITION THAT SUCH INCOME WOULD N OT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 11 SHALL N OT APPLY IN RELATION TO SUCH INCOME IF- 4. FURTHER WE HAVE ALSO PERUSED THE DELHI BENCH DECIS ION IN THE CASE OF GAIN EDUCATIONAL SOCIETY(SUPRA) THE HELD PORTION READS AS UND ER:- HELD ALLOWING THE APPEAL THAT THE ASSESSEE PROVIDED FR EE PROFESSIONAL TRAINING OF SEWING WEAVING AND MUSIC TO THE POOR WIDOWS AND HELPLES S UNEDUCATED FEMALES TO MAKE THEM SELF-DEPENDENT AGAINST NOMINAL PAYMENTS. THE ACTIVITIES WERE CARRIED ON ITA NOS. 309/PN/09 PAGE 3 OF 4 WITH THE HELP OF DONATIONS RECEIVED FROM MEMBERS AND FR OM PERSONS CONTRIBUTING FOR CHARITY. MOREOVER THE RECOGNITION GRANTED TO THE ASSESSEE UNDER SECTI ON 12A WAS IN FORCE AND HAD NOT BEEN WITHDRAWN . THE GRANT OF RENEWAL OF 80G CERTIFICATE HAD WRONGLY BEEN REFUSED TO THE ASSESSEE A S ACCORDING TO THE FATS OF THE CASE THE ACTIVITY OF THE ASSESSEE WAS VERY MUCH CHARIT ABLE IN NATURE AS IT WAS CONSTITUTED TO PROVIDE EDUCATION TO THE NEEDY PERSONS AND FEMALES TO ENABLE THEM TO BECOME SELF-DEPENDENT. NO SPECIFIC INSTANCE HAD BEEN BROUGHT ON RECORD BY THE COMMISSIONER TO SHOW THAT WHAT WAS STATED BY THE ASSE SSEE WAS NOT CORRECT. THERE WAS NO JUSTIFICATION FOR NON-GRANT OF RENEWAL OF CE RTIFICATE UNDER SECTION 80G AND THE COMMISSIONER WAS DIRECTED TO GRANT RENE WAL OF CERTIFICATE UNDER SECTION 80G OF THE ACT TO THE ASSESSEE. 4. FROM THE PROVISIONS IT IS EVIDENT THAT THE PROVISI ONS TO SEC. 80G(5) ARE NOT INDEPENDENT AND THEY HAVE TO BE INTERPRETED IN CONJUN CTION WITH THE OTHER PROVISIONS OF THE ACT SUCH AS SEC. 11 AND 12 OF THE INCOME TAX ACT. THE INCOME WHICH IS OTHER WISE INELIGIBLE FOR INCLUSION IN THE TOTAL INCOME FOR THE PURPOSE OF SEC. 11 AND 12 OF THE INCOME TAX ACT CANNOT BE ELIG IBLE FOR INCLUSION IN THE TOTAL INCOME UNDER THE SAID PROVISIONS. THEREFORE THE APPLICA BILITY OF THE DECISION IN THE CASE OF GIAN EDUCATIONAL SOCIETY (SUPRA) CANNOT BE RU LED OUT. IN OTHER WORDS THE INCOME CHARGEABLE TO TAX IN VIEW OF THE VIOLATION O F THE PROVISIONS OF SECTION 80G CANNOT BE ALLOWED AS EXEMPTION ONE UNDER THE PROVISI ONS OF SECTIONS 11 AND 12 OF THE ACT. NONE OF THE PARTIES PRESENT BEFORE US TO ESTA BLISH WHETHER THERE IS DISTURBANCE TO REGISTRATION GRANTED U/S 12A OF THE IN COME TAX ACT. IN THESE CIRCUMSTANCES BOTH THE PARTIES HAVE AGREED TO GO BACK TO THE FILES OF THE CIT PUNE FOR DECIDING THE ISSUE AFRESH AFTER EXAMINATION OF THE ISSUE AFRESH. WE FIND MERIT IN THE REQUEST OF THE PARTIES ACCORDINGLY THE GROUNDS RAIS ED IN THE APPEAL ARE SET ASIDE TO THE FILES OF THE CIT WITH THE DIRECTION TO DECID E THE ISSUE DE NOVO AFTER CONSIDERING THE DECISION MENTIONED ABOVE AND ALSO AN Y OTHER LAW IN FORCE. IT GOES WITHOUT SAYING THAT CIT SHOULD HONOUR THE PRINCIPLE O F NATURAL JUSTICE AND ACCORD ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY GROUNDS ARE SET ASIDE. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . ORDERS PRONOUNCED IN THE OPEN COURT ON 08 TH DECEMBER 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 08 TH DECEMBER 2010 R ITA NOS. 309/PN/09 PAGE 4 OF 4 COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT-III PUNE 4. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE