Sh. Hari Amrit Charitable Trust, Mathura v. C.I.T.-1, Agra

ITA 327/AGR/2013 | misc
Pronouncement Date: 29-10-2013 | Result: Allowed

Appeal Details

RSA Number 32720314 RSA 2013
Assessee PAN AAEAS7587D
Bench Agra
Appeal Number ITA 327/AGR/2013
Duration Of Justice 29 day(s)
Appellant Sh. Hari Amrit Charitable Trust, Mathura
Respondent C.I.T.-1, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 29-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 29-10-2013
Date Of Final Hearing 29-10-2013
Next Hearing Date 29-10-2013
Assessment Year misc
Appeal Filed On 30-09-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE : SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI PRAMOD KUMAR ACCOUNTANT MEMBER ITA NO. 326/AGRA/2013 SHRI RATI RAM SHIKSHA SAMITI VS. THE COMMISSIONE R OF VILLAGE AND POST KAMAR INCOME-TAX-I AGRA. MATHURA DISTRICT (U.P.) (PAN: AAEAS 7587 D). ITA NO. 327/AGRA/2013 SHRI HARI AMRIT CHARITABLE TRUST VS. THE COMMISSI ONER OF B-20 INDRAPURI CHANDRAPURI COLONY INCOME-TAX-I AGRA. MATHURA DISTRICT (U.P.) (PAN: AAKTS 2356 R). (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI M.M. AGARWAL C.A. RESPONDENT BY : SHRI ANIRUDH KUMAR CIT/DR DATE OF HEARING : 29.10.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.10.2013 ORDER PER BHAVNESH SAINI J.M.: BOTH THE APPEALS BY THE DIFFERENT ASSESSEES ARE DI RECTED AGAINST DIFFERENT ORDERS OF LD. CIT-I AGRA DATED 27.08.2013 AND 26.0 8.2013 REJECTING APPLICATIONS FOR REGISTRATION U/S. 12AA OF THE IT ACT. THE ISSUE IS SAME IN BOTH THE APPEALS THEREFORE FOR THE PURPOSE OF DISPOSAL OF APPEALS THE APPEAL IN ITA NO. 326/AGRA/2013 IS DECIDED AS IS ARGUED BY BOTH THE P ARTIES. ITA NOS. 326 & 327/AGRA/2013 2 ITA NO. 326/AGRA/2013 (SHRI RATI RAM SHIKSHA SAMIT I) : 2. THE ASSESSEE SOCIETY MOVED APPLICATION FOR REGIS TRATION U/S. 12AA OF THE IT ACT. THE ASSESSEE WAS REQUIRED TO PRODUCE RELEVANT DETAILS BEFORE THE LD. CIT TO PROVE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE SOCIETY. HOWEVER NO COMPLIANCE WAS MADE. THEREAFTER THE MATTER WAS ADJ OURNED TO SOME OTHER DATE AND ASSESSEE WAS TO FILE COMPLETE LIST OF DONORS AND BI LLS OF PURCHASE. THE ASSESSEE WAS ALSO DIRECTED TO PRODUCE ALL THE DONORS. THE INSPEC TOR REPORTED IN HIS REPORT THAT HE HAS GONE TO THE DONORS AND SUBMITTED THE ENQUIRY RE PORT IN WHICH EITHER SOME OF THE DONORS DENIED GIVING ANY DONATIONS TO THE ASSES SEE OR WERE NOT TRACEABLE BECAUSE OF DEATH OR SHIFTED FROM RESIDENCE. SOME OF THE DONORS ACCEPTED GIVING GIFT TO THE ASSESSEE. IT WAS THEREFORE FOUND THAT MOST OF THE DONORS FROM WHOM ENQUIRIES WERE MADE BY THE AO THROUGH INSPECTOR HA VE DENIED TO HAVE GIVEN ANY DONATIONS TO THE INSTITUTION. THE ASSESSEE FAILED T O PRODUCE EVEN A SINGLE DONOR BEFORE THE LD. CIT. THE LD. CIT THEREFORE FOUND T HAT THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE SOCIETY. THE APPLICATION FOR REGISTRATION WAS ACCORDINGLY REJECTED. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE OF DONATION IS NOT RELEVANT TO THE MATTER IN ISSUE AT THE STAGE OF REG ISTRATION AND RELIED UPON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST VS. CIT REPORTED IN 214 TAXMAN 655 AS WELL AS THE ORDER OF ITA NOS. 326 & 327/AGRA/2013 3 ITAT AGRA BENCH IN THE CASE OF BABU RAM EDUCATION SOCIETY VS. CIT ALIGARH IN ITA NOS. 78 & 79/AGRA/2013 DATED 26.07.2013 COPY O F WHICH IS FILED AT PAGE 154 OF THE PAPER BOOK. ON THE OTHER HAND THE LD. DR RE LIED UPON THE IMPUGNED ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOU ND THAT THE ISSUE IS ALREADY DECIDED BY ITAT AGRA BENCH IN THE CASE OF BABU RAM EDUCATION SOCIETY (SUPRA) (ALSO REPORTED IN 26 ITR (TRIB. AGRA) 351 IN WHICH IN PARA 4 TO 7 IT IS HELD AS UNDER : 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL AVAILABLE ON RECORD. SECTION 12AA OF THE I T ACT PROVIDES AS UNDER : PROCEDURE FOR REGISTRATION. 12AA. (1) THE COMMISSIONER ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12A SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM TH E TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY A LSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL IF HE IS NOT SO SATISFIED PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : ITA NOS. 326 & 327/AGRA/2013 4 PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSE D UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY O F BEING HEARD. (1A) ALL APPLICATIONS PENDING BEFORE THE CHIEF COM MISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SE CTION (1) BEFORE THE 1ST DAY OF JUNE 1999 SHALL STAND TRANSFERRED ON T HAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEI VED UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12 A. (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGIS TRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT 1996 (33 OF 1996) AND SUBSEQUENTLY THE COMM ISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION AR E NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION AS THE CASE MAY BE HE SHALL PASS AN O RDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTIT UTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSE D UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD. 5. THE INGREDIENTS OF ABOVE SECTION CLEARLY MAKES O UT THAT BEFORE GRANT OF REGISTRATION U/S. 12AA THE LD. CIT HAS TO SATISFY HIMSELF ABOUT THE OBJECTS AND GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE TRUST OR INSTITUTION. OTHER CONDITIONS ARE NOT RELEVANT A T THE STAGE OF GRANT OF REGISTRATION. THE RECOGNITION U/S. 80G(5) IS CONSEQ UENTIAL TO THE GRANT OF REGISTRATION. HONBLE JURISDICTIONAL ALLAHABAD H IGH COURT IN THE CASE OF HARDAYAL CHARITABLE AND EDUCATIONAL TRUST V S. CIT-II AGRA (SUPRA) HELD AS UNDER : THE PREPONDERANCE OF THE JUDICIAL OPINION OF ALL TH E HIGH COURT INCLUDING THIS COURT IS THAT AT THE TIME OF R EGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT WHICH IS NECESS ARY FOR CLAIMING EXEMPTION UNDER SECTION 11 & 12 OF THE ACT THE COM MISSIONER OF INCOME TAX IS NOT REQUIRED TO LOOK INTO THE ACTIVIT IES WHERE SUCH ITA NOS. 326 & 327/AGRA/2013 5 ACTIVITIES HAVE NOT OR ARE IN THE PROCESS OF ITS IN ITIATION. WHERE A TRUST SET UP TO ACHIEVE ITS OBJECTS OF ESTABLISHING EDUCA TIONAL INSTITUTION IS IN THE PROCESS OF ESTABLISHING SUCH INSTITUTIONS A ND RECEIVES DONATIONS THE REGISTRATION UNDER SECTION 12AA CANN OT BE REFUSED ON THE GROUND THAT THE TRUST HAS NOT YET COMMENCED THE CHARITABLE OR RELIGIOUS ACTIVITY. ANY ENQUIRY OF THE NATURE WOULD AMOUNT TO PUTTING THE CART BEFORE THE HORSE. AT THIS STAGE ONLY THE G ENUINENESS OF THE OBJECTS HAS TO BE TASTED AND NOT THE ACTIVITIES WH ICH HAVE NOT COMMENCED. THE ENQUIRY OF THE COMMISSIONER OF INCOM E TAX AT SUCH PRELIMINARY STAGE SHOULD BE RESTRICTED TO GENUINENE SS OF THE OBJECTS AND NOT THE ACTIVITIES UNLESS SUCH ACTIVITIES HAVE COMMENCED. THE TRUST OR SOCIETY CANNOT CLAIM EXEMPTION UNLESS IT IS REGISTERED UNDER SECTION 12AA OF THE ACT AND THUS AT THAT SUCH INITI AL STAGE THE TEST OF THE GENUINENESS OF THE ACTIVITY CANNOT BE A GROUND ON WHICH THE REGISTRATION MAY BE REFUSED. IT IS NOT DENIED THAT FOR SUBSEQUENT YEAR THE APPE LLANT HAS BEEN GRANTED EXEMPTION UNDER SECTION 12AA AND HAS ALSO B EEN APPROVED UNDER SECTION 80G OF THE ACT SUBJECT TO CERTAIN CO NDITIONS. IF THE COMMISSIONER OF INCOME TAX WAS SATISFIED WITH THE G ENUINENESS OF THE OBJECTS OF THE TRUST FOR THE SUBSEQUENT ASSESSMENT YEAR THE REFUSAL OF THE REGISTRATION FOR THE PREVIOUS ASSESSMENT YEAR 2 011-12 WAS NOT JUSTIFIED. THE QUESTION OF EXEMPTION OF THE APPLICATION OF IN COME RECEIVED BY WAY OF DONATION IS A SEPARATE ISSUE AND WHICH M AY BE REQUIRED TO BE CONSIDERED WHEN THE RETURN IS FILED BY THE TRUS T AND IS EXAMINED BY THE INCOME TAX OFFICER. THE QUESTION AS TO WHETH ER THE DONATIONS BY THE SOCIETIES WAS THE EXPENDITURE OF THE TRUST F OR CHARITABLE AND RELIGIOUS PURPOSES WILL BE EXAMINED AT THE TIME OF EXAMINING THE RETURN. IN THE RESULT THE INCOME TAX APPEAL IS ALLOWED. AL L THE THREE SUBSTANTIAL QUESTIONS OF LAW FORMULATED AS ABOVE AR E DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE WIT H A CLARIFICATION THAT THE REGISTRATION UNDER SECTION 12AA AND APPROV AL UNDER SECTION 80G WOULD NOT BY ITSELF ENTITLE THE TRUST FOR EXEMP TION OF THE INCOME OF ITS DONORS OR OF THE TRUST FOR THE ASSESSMENT YE AR 2011-12. FOR CLAIMING SUCH EXEMPTION THE RETURNS OF THE DONOR AN D THE TRUST WILL BE EXAMINED FOR ORDERS TO BE MADE IN ACCORDANCE WITH LAW. ITA NOS. 326 & 327/AGRA/2013 6 6. CONSIDERING THE ABOVE PROVISIONS IN THE LIGHT OF DECISION OF HONBLE ALLAHABAD HIGH COURT IT IS CLEAR THAT MOST OF THE OBJECTIONS RAISED BY THE LD. CIT IN THE IMPUGNED ORDER ARE NOT RELEVANT FOR THE PURPOSE OF GRANT OF REGISTRATION U/S. 12AA OF THE I T ACT AND APPROVAL OF EXEMPTION U/S. 80G(5) OF THE IT ACT. HONBLE ALL AHABAD HIGH COURT IN THIS CASE HELD THAT FOR GRANT OF REGISTRAT ION U/S. 12AA THE COMMISSIONER OF INCOME TAX IS NOT REQUIRED TO LOOK INTO THE ACTIVITIES WHERE SUCH ACTIVITIES HAVE NOT OR IN THE PROCESS OF ITS INITIATION. THE OBJECTS OF THE INSTITUTION SHALL HAVE TO BE SEEN. T HE ISSUE OF RECEIPT OF DONATIONS IS NOT RELEVANT. THE REGISTRATION COULD N OT HAVE BEEN REFUSED ON THE GROUND THAT THE TRUST HAS NOT YET COMMENCED THE CHARITABLE OR RELIGIOUS ACTIVITIES. THE ASSESSEE HAS FILED COPY O F THE AIMS AND OBJECTS OF THE SOCIETY WHICH SHOWS THAT THE ASSESS EE EXISTS FOR EDUCATIONAL AND CHARITABLE PURPOSE ONLY WHICH IS ALSO SUPPORTED BY THE REPORT OF DCIT (JUDICIAL) DATED 11.01.2013 (PB- 90) IN WHICH IT WAS REPORTED THAT NATURE OF THE OBJECTS IN BY-LAWS/ MOS WAS FOUND TO BE EDUCATIONAL. INCOME OF THE ASSESSEE WAS FOUND TO HAVE APPLIED WHOLLY FOR CHARITABLE ACTIVITIES. THE ASSESSEE SOCI ETY WAS FOUND TO EXIST AND REGISTERED UNDER THE SOCIETIES ACT. LIST OF THE DONORS HAVE BEEN PROVIDED. DCIT(JUDL.) THEREFORE RECOMMENDED GRANT OF REGISTRATION U/S. 12AA AND APPROVAL OF EXEMPTION U/ S. 80G OF THE IT ACT. THE ASSESSEE PURCHASED LAND FOR THE PURPOSE OF CONSTRUCTION OF THE BUILDING DETAILS ARE MENTIONED IN THE AUDITED BALANCE SHEET. PHOTOGRAPH SHOWS THAT THE SOCIETY IS AT THE STAGE O F CONSTRUCTION OF THE EDUCATIONAL BUILDING. LIST OF THE DONORS ARE FILED IN THE PAPER BOOK AND LARGE NUMBER OF DONORS HAVE CONFIRMED GIVING OF DONATIONS TO THE ASSESSEE FOR THE PURPOSE OF SOCIETY WHICH IS SUPPOR TED BY THEIR IDENTITY PROOFS. THE ASSESSEE ALSO APPLIED FOR GRANT OF RECO GNITION FOR EDUCATIONAL PURPOSE WITH DR. BHIM RAO AMBEDKAR UNIV ERSITY AGRA AND WITH THE OFFICE OF HIGHER EDUCATION OFFICER AG RA ALIGARH REGION AGRA. THESE EVIDENCES ON RECORD CLEARLY PROVE THAT THE OBJECTS OF THE ASSESSEE WERE CHARITABLE & EDUCATIONAL IN NATURE AN D ARE GENUINE. THE ASSESSEE IS AT THE STAGE OF SETTING UP THE EDUCATIO NAL INSTITUTION THEREFORE THE ASSESSEE SOCIETY WAS SET UP TO ACHIE VE ITS OBJECTS OF ESTABLISHING EDUCATIONAL INSTITUTION IS IN THE PROC ESS OF ESTABLISHING SUCH INSTITUTION AND RECEIVED DONATIONS. AT THIS ST AGE AS PER JUDGMENT OF HONBLE ALLAHABAD HIGH COURT THE GENUINENESS OF THE OBJECTS HAVE TO BE TESTED AND NOT THE ACTIVITIES WHICH HAVE NOT COMMENCED. THE REASONS GIVEN BY THE LD. CIT IN THE IMPUGNED ORDER FOR REJECTION OF APPLICATIONS ARE THUS NOT RELEVANT AT THIS STAGE WH ICH MAY BE A SEPARATE ITA NOS. 326 & 327/AGRA/2013 7 ISSUE AND ARISE WHENEVER THE RETURN OF INCOME WOULD BE FILED BY THE ASSESSEE AND WOULD BE EXAMINED AT ASSESSMENT STAGE. CONSIDERING THE FACTS AND CIRCUMSTANCES AND OVER ALL EVIDENCES PRO DUCED ON RECORD IN THE LIGHT OF PROVISIONS OF SECTION 12AA OF THE IT A CT WE ARE OF THE VIEW THAT THE ASSESSEE SOCIETY IS ENTITLED FOR REGI STRATION U/S. 12AA OF THE IT ACT AND APPROVAL U/S. 80G(5) OF THE IT ACT. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE LD. CIT AND DIRECT HIM TO G RANT REGISTRATION TO THE ASSESSEE U/S. 12AA OF THE IT ACT AND APPROVAL U /S. 80G(5)(VI) OF THE IT ACT IN ACCORDANCE WITH LAW. 7. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 5. IT MAY ALSO BE NOTED HERE THAT IN THE ABOVE DECI SION THE TRIBUNAL HAS ALSO TAKEN INTO CONSIDERATION THE DECISION OF HONBLE AL LAHABAD HIGH COURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST (SUPRA). THE ISSUE OF DONATION IS NOT RELEVANT AT THE STAGE OF GRANT OF REGISTRATION U/S. 12AA OF THE IT ACT. FINDING OF THE LD. CIT IS THEREFORE NOT IN ACCORDANCE WITH LAW A ND IS LIABLE TO BE SET ASIDE. BY FOLLOWING THE ABOVE DECISIONS WE SET ASIDE THE IMP UGNED ORDER AND RESTORE THE MATTER IN ISSUE TO THE FILE OF LD. CIT WITH DIRECTI ON TO RE-DECIDE THE APPLICATION FOR REGISTRATION U/S. 12AA IN ACCORDANCE WITH LAW AND T HE LD. CIT IS DIRECTED TO PASS REASONED ORDER SATISFYING HIMSELF ABOUT THE AIMS AN D OBJECTS OF THE ASSESSEE SOCIETY ALONGWITH ITS GENUINENESS. THE LD. CIT SHALL GIVE R EASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 326 & 327/AGRA/2013 8 ITA NO. 327/AGRA/2013 (SHRI HARI AMRIT CHARITABLE TRUST) : 6. BOTH THE PARTIES STATED THAT THE ISSUE IS SAME A S IS CONSIDERED ABOVE IN THE CASE OF SHRI RATI RAM SHIKSHA SAMITI (SUPRA) IN ITA NO. 326/AGRA/2013. BY FOLLOWING THE DECISION IN THIS CASE WE SET ASIDE T HE ORDER OF THE LD. CIT AND RESTORE THE MATTER IN ISSUE TO HIS FILE WITH THE DIRECTION TO RE-DECIDE THE APPLICATION U/S. 12AA IN ACCORDANCE WITH LAW AS IS DIRECTED IN THE C ASE OF SHRI RATI RAM SHIKSHA SAMITI (SUPRA). IN THE RESULT THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED BY ORDER 4. CIT CONCERNED 5. DR ITAT AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY