M/S. SUKI HOMES TRUST,, HOSUR v. ITO, EXEMPTIONS, , SALEM

ITA 3320/CHNY/2019 | misc
Pronouncement Date: 06-05-2021 | Result: Allowed

Appeal Details

RSA Number 332021714 RSA 2019
Assessee PAN AAOTS6864L
Bench Chennai
Appeal Number ITA 3320/CHNY/2019
Duration Of Justice 1 year(s) 5 month(s) 1 day(s)
Appellant M/S. SUKI HOMES TRUST,, HOSUR
Respondent ITO, EXEMPTIONS, , SALEM
Appeal Type Income Tax Appeal
Pronouncement Date 06-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 06-05-2021
Date Of Final Hearing 01-04-2021
Next Hearing Date 01-04-2021
Last Hearing Date 01-04-2021
First Hearing Date 21-12-2020
Assessment Year misc
Appeal Filed On 05-12-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . BEFORE SHRI DUVVURU RL REDDY JUDICIAL MEMBER AND SHRI S. JAYARAMAN ACCOUNTANT MEMBE R ./ ITA NO.3320/CHNY/2019 M/S. SUKI HOMES TRUST 51 4 TH PHASE KELAMANGALAM ROAD CHAMUNDI NAGAR MATHIRIGI HOSUR- 635 110. VS. THE INCOME TAX OFFICER (EXEMPTIONS) SALEM. [PAN: AAOTS 6864L] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR ADVOCATE /RESPONDENT BY : MRS. R. ANITHA JCIT /DATE OF HEARING : 01.04.2021 / DATE OF PRONOUNCEMENT : 06.05.2021 / O R D E R PER SHRI S. JAYARAMAN ACCOUNTANT MEMBE R : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTION) CHENNAI IN APPLICATION NO. CIT(EXEMPTION) CHENNAI/2019-20/12AA/10902 DATED 30 .09.2019. 2. THE LD. A.R SUBMITTED THAT THERE WAS A DELAY OF 06 DAYS IN FILING THE APPEAL. WHEN THE ORDER OF THE LD. CIT(EXEMPTION S) DATED 30.09.2019 RECEIVED IN THE OFFICE INADVERTENTLY THE DATE OF R ECEIPT WAS NOT NOTED DOWN AND THE TRUSTEE WAS IN BAD HEALTH DURING THE M ONTH OF OCTOBER 2019. DUE TO WHICH THE APPEAL WAS FILED BELATEDLY BY 06 DAYS. SINCE ITA NO.3320/CHNY/2019 :- 2 -: THE DELAY IS NOT WANTON AND THE CIRCUMSTANCES WERE BEYOND THE CONTROL OF THE ASSESSEE HE PLEADED THAT IN THE INTERESTS O F JUSTICE THE DELAY MAY BE CONDONED. 3. WE HAVE HEARD THE RIVAL PARTIES AND CONDONE THE DELAY. 4. M/S. SUKI HOMES TRUST THE ASSESSEE CLAIMED REG ISTRATION U/S. 12AA OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT ) ON 21.03.2019. THE CIT(EXEMPTION) CHENNAI EXAMINED THE CLAIM AND OBSERVED THAT THE ASSESSEE-TRUST IS RUNNING OLD AGE HOME IN THE NAME OF SUKI HOMES TRUST AT HOSUR KRISHNAGIRI THE HOME CONSISTS OF 34 FLATS TWO VILLAS AND CONSISTS OF A SEPARATE DINING HALL BIG KITCHEN ST ORE ETC. WHICH IS FULLY OCCUPIED. THERE ARE 63 MEMBERS STAYING IN THE HOME AND THE TRUST IS TAKING CARE OF THEM FOR THEIR COMFORTABLE STAY TIM ELY FOOD MEDICAL NEEDS VISIT TO TEMPLES AND OUTDOOR VISITS TO DIFFE RENT PLACES ETC. AND THEY ARE RETIRED OFFICERS FROM GOVERNMENT BODY DELHI SE CRETARIAT LIC AND RAILWAYS ETC. THE LD. CIT(EXEMPTIONS) OBSERVED THAT IT IS NOTICED FROM THE COPY OF LEASE AGREEMENT DATED 1/1/2019 THAT THE 35 FLATS WERE CONSTRUCTED BY THE TRUSTEES WITH THE LEASE AMOUNT R ECEIVED FROM SUKI HOME MEMBERS. RS. 85 73 052/- AS ON 31/3/2018 WAS S HOWN AS REFUNDABLE MEMBERS ADVANCE WHICH WAS MAINLY PARKED IN THE FIXED DEPOSIT OF BANK. THUS THE TRUST HAS COLLECTED SUBS TANTIAL AMOUNT FROM ITA NO.3320/CHNY/2019 :- 3 -: THE MEMBERS. FROM THIS IT EMANATES THAT PERSONS WH O CANNOT AFFORD SUCH HUGE AMOUNTS WILL NOT BE GIVEN ANY SERVICES BY THE TRUST AND THE ACTIVITIES OF THE TRUST CANNOT BE TREATED AS CHARIT ABLE IN NATURE. AS PER THE PROVISIONS OF THE SEC. 13(3)(B) OF THE ACT ANY PER SON WHO HAS MADE A SUBSTANTIAL CONTRIBUTION TO THE TRUST IN EXCESS OF FIFTY THOUSAND RUPEES IS CLASSIFIED AS SPECIFIED PERSONS TO WHOM NO INCOME O F THE TRUST CAN BE USED OR APPLIED U/S 13(1)(C) OF THE ACT. IN THIS CA SE THE OCCUPANTS I.E. SUKI HOME MEMBERS THOUGH HAVE CONTRIBUTED SUBSTANT IAL FUNDS FOR THE CONSTRUCTION OF 35 FLATS THE SAME APPEARS TO BE RE FUNDABLE HENCE SUCH CONTRIBUTIONS MAY NOT DIRECTLY FALL UNDER THE PROVI SIONS OF SEC.13(3)(B) OF THE ACT. HOWEVER THESE PERSONS CAN SAID TO BE HAVI NG INDIRECTLY INTEREST IN THE TRUST AND WOULD BE INDIRECTLY CLASSIFIED AS SPECIFIED PERSONS. THUS THE BENEFIT OBTAINED BY THESE PERSONS WOULD FALL U/ S 13(1)(C) OF THE ACT. THEREFORE THE LD. CIT(EXEMPTION) HELD THAT THE ACT IVITIES CANNOT BE TREATED AS CHARITABLE NATURE AND ACCORDINGLY REJECT ED THE ASSESSEES CLAIM AND DENIED THE REGISTRATION U/S. 12AA OF THE ACT. AGGRIEVED THE ASSESSEE FILED THIS APPEAL. 5. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. T HE LD. AR INVITING OUR ATTENTION TO THE CURRENT LIABILITIES I N THE BALANCE SHEET AS ON 31.03.2016 IN THE PAPER BOOK SUBMITTED THAT REFUNDA BLE MEMBERS ADVANCE AS ON 31.03.2016 WAS AT RS.84 35 072/-. IN VITING OUR ATTENTION ITA NO.3320/CHNY/2019 :- 4 -: TO APPLICATION OF FUNDS HE SUBMITTED THAT RS. 80 7 1 878/- IS HELD AS FIXED DEPOSIT. SIMILARLY HE INVITED OUR ATTENTION TO TH E BALANCE SHEET AS ON 31.03.2018 IN THE PAPER BOOK AND SUBMITTED THAT THE REFUNDABLE MEMBERS ADVANCE WAS AT RS. 85 73 052/- WHILE THE F IXED DEPOSIT AS ON 31.03.2018 WAS AT RS. 1 02 76 000/-. THEN HE INVI TED OUR ATTENTION TO THE INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD E NDED 31.03.2016 AND SUBMITTED THAT THE INCOME COMPRISED BANK INTERE ST RECEIVED OF RS. 6 97.504/- AND THE EXCESS INCOME OVER EXPENDITURE WAS JUST AT RS. 54 221/- ONLY. SIMILARLY FOR THE PERIOD ENDED 31. 03.2018 THE BANK INTEREST RECEIVED WAS RS. 5 53 394/- AND THE EXCESS INCOME OVER EXPENDITURE WAS JUST AT RS. 58 317. HE SUBMITTED T HAT THE TRUSTEES HAVE GIVEN THEIR PROPERTIES ON FREE OF COST FOR RUNNING THE CHARITABLE ACTIVITIES AND THE ADVANCE RECEIVED FROM THE OCCUPANTS ARE KEP T IN THE FIXED DEPOSITS AND THE INTEREST RECEIVED FROM THEM IS ALS O USED FOR THE OCCUPANTS WELL BEING. IT IS EVIDENT FROM THE COPIES OF THE EXPENDITURE STATEMENT AND THE BALANCE SHEET THAT THE TRUSTEES H AVE NOT CHARGED ANY MONEY TOWARDS THE USAGE OF THEIR PROPERTY. THE TRUS T IS MANAGED BY SHRI G. ANANTHA NARAYANAN AND MRS. A. RAJESHWARI THEY A RE BUSINESS ENTERPRISERS IN BANGALORE AND HAVE NO ISSUES AND HE NCE THEY DECIDED TO BE HELPFUL TO HUMAN KIND. THEREFORE THEY HAVE OPTE D TO START OLD AGE HOME AT HOSUR AND RENDERING THE UTMOST SERVICES TO HUMAN KIND IN ITA NO.3320/CHNY/2019 :- 5 -: NEEDY DAYS. THE OCCUPANTS ARE RETIRED OFFICERS FRO M GOVERNMENT BODIES DELHI SECRETARIAT LIC RAILWAYS TVS MAHE NDRAS METROLOGICAL DEPARTMENT BABA ATOMIC RESEARCH INSTITUTE ETC. THE TRUST IS TAKING CARE OF ABOUT 63 MEMBERS FROM THE AGE GROUP OF 60 TO 92 YEARS SOME ARE HEALTHY SOME ARE BED RIDDEN HAVING DEMENTIA/PSYCHO/HEART/NEURO/PARKINSONS PROBLEMS. T HE TRUST IS TAKING CARE OF THE ABOVE MEMBERS FOR THEIR COMFORTABLE STA Y TIMELY FOOD MEDICAL ATTENTION EMERGENCY HOSPITAL ADMITTANCE V ISIT TO TEMPLES OUTDOOR VISIT TO DIFFERENT PLACES ETC. UNFORTUNATEL Y THE LD. CIT(EXEMPTIONS) ERRED IN GIVING A FINDING WHICH IS NOT IN ACCORDANCE WITH THE TRUST ACTIVITIES AND THEREFORE PLEADED THAT TH E REGISTRATION BE GRANTED U/S. 12AA OF THE ACT. HE ALSO SUBMITTED THAT GRAN TING OF REGISTRATION U/S. 12AA OF THE ACT DOES NOT PROHIBIT THE A.O OR REVENU E TO EXAMINE THE ASSESSEES ACTIVITIES IN FUTURE AND IN CASE THE ACT IVITIES ARE FOUND TO BE NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT TH E AUTHORITIES ARE EMPOWERED TO ACT APPROPRIATELY IN ACCORDANCE WITH L AW. THEREFORE THE LD. AR SUBMITTED THAT SINCE THE OBJECTS ARE NOT FO UND TO BE CHARITABLE THEREFORE THERE IS NOTHING TO DENY REGISTRATION U/S . 12AA OF THE ACT. THUS THE LD. A.R PLEADED THAT REGISTRATION BE GRANTED U/ S. 12AA OF THE ACT TO THE ASSESSEE. ITA NO.3320/CHNY/2019 :- 6 -: 6. PER CONTRA THE LD. D.R SUPPORTED THE ORDER OF T HE LD. CIT(EXEMPTIONS). 7. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. IT IS CLEAR FROM THE COPIES OF INCOME AND EXPENDITURE ACCOUNT AND THE BALANCE SHEET WHICH WERE AUDITED BY C.A AN D PLACED IN THE RECORD THAT THE TRUST DOES NOT OWN ANY PROPERTY HOU SING THE OCCUPANTS. IT IS SUBMITTED THAT THE TRUST HAS NOT PAID ANY RENT O R LEASE ETC. TO THE TRUSTEES. FURTHER IT WAS SUBMITTED THAT THE TRUSTE ES HAVE GIVEN THEIR OWN PROPERTY FOR A NOBLE CAUSE FREE OF COST. THE REFUN DABLE ADVANCES COLLECTED FROM THE MEMBERS ARE HELD IN THE FIXED DE POSITS AND THE INTEREST RECEIVED ALONG WITH MEMBERS FOOD AND MAINT ENANCE CHARGES COLLECTED FROM THE INMATES ARE INCURRED TOWARDS THE CHARITABLE ACTIVITIES LEAVING ON A MEAGER EXCESS OF INCOME OVER EXPENDITU RE FOR EACH OF THE YEAR. THUS THE FINDINGS RECORDED BY THE LD. CIT(E XEMPTIONS) ARE NOT BORNE FROM THE RECORD AND HENCE HIS ORDER IS NOT S USTAINABLE IN LAW. THEREFORE WE ALLOW THE ASSESSEES APPEAL WITH A DI RECTION TO THE LD. CIT(EXEMPTIONS) TO GRANT REGISTRATION U/S. 12AA OF THE ACT TO THE ASSESSEE. ITA NO.3320/CHNY/2019 :- 7 -: 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE DAY OF 06 TH MAY 2021 IN CHENNAI. SD/ - SD/ - ( . ) (DUVVURU RL REDDY) /JUDICIAL MEMBER ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI /DATED: 06 TH MAY 2021 . EDN SR. P.S /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF