Manav Sewa Gram Udyog Sangh, New Delhi v. CIT, Rohtak

ITA 3535/DEL/2011 | misc
Pronouncement Date: 25-11-2011 | Result: Allowed

Appeal Details

RSA Number 353520114 RSA 2011
Assessee PAN AAATM9613P
Bench Delhi
Appeal Number ITA 3535/DEL/2011
Duration Of Justice 4 month(s) 12 day(s)
Appellant Manav Sewa Gram Udyog Sangh, New Delhi
Respondent CIT, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 25-11-2011
Date Of Final Hearing 19-10-2011
Next Hearing Date 19-10-2011
Assessment Year misc
Appeal Filed On 13-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE G.D. AGRAWAL HON'BLE VICE-PRESIDENT AND SHR I RAJPAL YADAV: HONBLE JUDICIAL MEMBER ITA NO.3535/DEL/2011 ASSESSMENT YEAR: - - MANAV SEWA GRAM UDYOG SANGH VS. COMMISSIONER OF IN COME-TAX C/O KAPIL GOEL ADV. A-1/25 SECTOR NEW DELHI. 15 ROHINI NEW DELHI-110085 (PAN: AAATM9613P) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI KAP IL GOEL ADV. ASSESSEE BY: SHRI RS NEG I SR.DR DATE OF HEARING : 19.10.2011 DATE OF PRONOUNCEMENT : 25.11.2011 ORDER PER RAJPAL YADAV:JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED COMMISSIONER OF INCOME-TAX ROHTAK DATED 26.05.2011 PASSED UNDER SECTION 12AA(1)(B)(II) OF THE INCOME-TAX ACT 1961. THE GRI EVANCE OF THE ASSESSEE IS THAT LEARNED COMMISSIONER HAS ERRED IN REFUSING THE REGISTRATION TO THE ASSESSEE UNDER SEC. 12A OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E MANAV SEWA GRAM UDYOG SANGH WAS ESTABLISHED IN 1994 AND IT WAS REGI STERED UNDER THE SOCIETIES REGISTRATION ACT 1860. IN CLAUSE (2) OF ITS MEMORANDUM THE ASSESSEE SOCIETY HAS ASSIGNED A LARGE NUMBER OF AIM S AND OBJECTS FOR 2 UPLIFTMENT OF POOR AND NEEDY WOMEN PROMOTION OF EDUCATION WELFARE OF THE AGED ETC. IT HAS FILED AN APPLICATION UNDER SEC . 12A(1)(2A) OF THE ACT IN FORM NO.10A WITH THE CIT HISSAR ON 10.11.2010. SIN CE THE JURISDICTION OVER THE ASSESSEE LIES WITH CIT ROHTAK ITS APPLICATION WAS TRANSFERRED BY THE CIT HISSAR TO CIT ROHTAK. LEARNED COMMISSIONER CON DUCTED AN INQUIRY UNDER CLAUSE (A) OF SEC. 12AA AND THEREAFTER REJECT ED THE APPLICATION OF THE ASSESSEE. THE OPERATIVE PART OF THE ORDER PASSED BY THE LEARNED COMMISSIONER READS AS UNDER: 3. AS PER RULE 17A(A) OF THE INCOME-TAX RULES 196 2 THE APPLICANT WAS REQUIRED TO SUBMIT THE ORIGINAL INSTR UMENT OF ITS ESTABLISHMENT TOGETHER WITH A COPY THEREOF; BUT THE APPLICANT SUBMITTED ONLY A PHOTOCOPY OF THE INSTRUMENT. THE A PPLICANT DID NOT TURN UP TO PRODUCE THE ORIGINAL COPY OF THE INSTRUM ENT OF ITS ESTABLISHMENT. THE APPLICATION WAS THEREFORE INCO MPLETE AND NOT COMPETENT FOR THE CONSIDERATION OF REGISTRATION U/S . 12AA OF THE INCOME-TAX ACT. 4. A REPORT WAS CALLED FOR FROM THE ASSESSING OFFI CER AS WELL AS JOINT CIT ROHTAK AS TO WHETHER THE APPLICANT FULFIL LED THE CONDITIONS FOR THE ELIGIBILITY FOR REGISTRATION U/S.12AA OF TH E INCOME-TAX ACT. AS PER JOINT CIT ROHTAK REPORTED THAT VIDE POINT (I) OF THE LETTER OF ASSESSING OFFICER DATED 19.05.2011 THE ASSESSING O FFICER HAD CALLED FOR FOLLOWING DETAILS:- 3 CERTIFIED COPY OF MEMORANDUM OF ASSOCIATION/TRUST DEED ALONGWITH AIMS AND OBJECTS OF THE TRUST/SOCIETY NA ME AND ADDRESS OF THE MEMBERS/TRUSTEES OF THE SOCIETY/TRUS T THEIR OCCUPATION AND SOURCES OF INCOME AND THEIR PAN. HOWEVER IN REGARD TO ABOVE NO DETAILS OF THE SOUR CES OF INCOME AND PAN OF MEMBERS AND TRUSTEES ARE MENTIONED. FURTHER JOINT COMMISSIONER OF INCOME-TAX ROHTAK HA S ALSO REPORTED THAT VIDE POINT (VII) AND (VIII) OF THE L ETTER OF THE ASSESSING OFFICER DATED 19.05.2011 THE ASSESSING OFFICER HAD ALSO CALLED FOR FOLLOWING DETAILS- DETAILS OF PAYMENTS MADE BY THE SOCIETY/TRUST TO A NY MEMBER OF THE SOCIETY/TRUST OR THEIR FAMILY MEMBERS ON ANY ACCOUNT OF SALARY WAGES HONORARIUM COMMISSION CONTRACT PAY MENTS ETC. AS WELL AS DETAILS OF RECEIPTS OF (I) DONATION IN KIND (II) DONATION TOWARDS CORPUS AND (III) GENERAL DONATION ALONGWITH NAMES AND ADDRESS OF THE DONORS AND CONFIRMATION FR OM THOSE WHO MADE DONATION OF RS.5000 OR MORE FOR THE LAST T HREE YEARS AND ALSO DURING THE CURRENT YEAR. THE JOINT COMMISSIONER OF INCOME-TAX ROHTAK VIDE H ER REPORT DATED 35.05.2011 DID NOT RECOMMEND THE REGISTRATION OF THE SOCIETY U/S. 12AA BY CLEARLY STATING IN PARA 4.2 OF THE R EPORT THAT: 4 IN THIS REGARD RELIANCE HAS BEEN PLACED ON PHOTOG RAPHS AND NEWSPAPER CLIPPINGS. THE PHOTOGRAPHS GENERALLY EXHI BIT A GROUP OF PEOPLE SEATED TOGETHER OVER SHACKS OR IN A FEW INSTANCES WALKING WITH THE PORTERS/BANNERS. ALSO TH E NEWS PAPER CLIPPINGS ARE MOSTLY UNDATED AND IN FEW CASES ARE A S OLD AS RELATING TO THE YEAR 2005 THE DETAILS OF WORK DONE AT THE GROUND LEVEL WHEREIN MATERIAL DIFFERENCE HAS BEEN MADE T O THE LIVES OF PEOPLE AND IN THE ENVIRONMENTAL PRESERVATION INCLUD ING WATERSHED DEVELOPMENT ETC. IS NOT BROUGHT ON RECORD . KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTAN CES IT IS CLEAR THAT THE APPLICANT FAILED TO SUBSTANTITE HIS CLAIM THAT SOCIETYS AIMS/OBJECTS AND TERMS OF MEMORANDUM ARE OF THE CHA RITABLE NATURE AND ALSO COULD NOT PRODUCE ANY CONCRETE EVIDENCE TO PROVE THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY IN SPI TE OF REPEATED OPPORTUNITIES ACCORDED. CONSEQUENTLY THE REQUEST O F THE APPLICANT SOCIETY FOR REGISTRATION U/S. 12AA OF THE INCOME-TA X ACT CANNOT BE ACCEDED TO AND THE APPLICATION IN FORM 10A IS THER EFORE REJECTED ACCORDINGLY U/S. 12AA(1)(B)(II) OF THE INCOME-TAX A CT 1961. 3. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER OF LEARNED COMMISSIONER SUBMITTED THAT LEARNED COMMISS IONER FAILED TO APPRECIATE THE CONTROVERSY IN A TRUE PROSPECTIVE. H E POINTED OUT THAT IN PARAGRAPH 3 OF THE IMPUGNED ORDER LEARNED COMMISSI ONER HAS OBSERVED 5 THAT APPLICATION SUBMITTED BY THE ASSESSEE IS INCOM PLETE AND NOT COMPETENT FOR THE CONSIDERATION OF REGISTRATION UNDER SEC. 12 AA OF THE ACT. THE OBJECTIONS RAISED BY THE LEARNED COMMISSIONER IS TH AT ASSESSEE FAILED TO SUBMIT THE ORIGINAL INSTRUMENT OF ITS ESTABLISHMENT . HE SUBMITTED THAT THE ASSESSEE HAS FILED TRUE PHOTOCOPY OF THE ORIGINAL M EMORANDUM WHICH WAS DULY ATTESTED BY THE NOTARY AS WELL AS BY THE PRESI DENT OF THE SOCIETY. THE OBSERVATIONS OF THE LEARNED COMMISSIONER ARE INCORR ECT. IN ORDER TO VERIFY THIS ASPECT THE ITAT HAS CALLED FOR THE ORIGINAL R ECORD AND FOUND THAT CERTIFIED COPY OF THE MEMORANDUM OF THE SOCIETY IS AVAILABLE ON THE RECORD. THUS AFTER TAKING INTO CONSIDERATION THIS ASPECT WE DO NOT FIND ANY MERIT IN THIS OBJECTION OF THE LEARNED COMMISSIONER. HE FAIL ED TO APPRECIATE THE FACT THAT A TRUE PHOTOSTAT COPY DULY CERTIFIED OF THE IN STRUMENT OF ESTABLISHMENT IS SUFFICIENT TO COMPLY WITH THE CONDITIONS OF RULE 17 A(A) OF THE INCOME-TAX RULES. IF THERE IS ANY DOUBT TO THE AUTHORITIES ABO UT THE AUTHENTICITY OF SUCH DOCUMENT THEN THEY COULD INSIST FOR PRODUCTION OF T HE ORIGINAL DEED AND A COMPARISON CAN BE MADE. BUT IT IS NOT ADVISEABLE TO REJECT THE APPLICATION OF AN APPLICANT ON FLIMSY GROUNDS. THE QUASI-JUDICIAL AUTHORITIES ARE BEING RESPECTED NOT ON ACCOUNT OF THEIR POWERS TO LEGALIZ E THE INJUSTICE ON TECHNICAL GROUNDS BUT FOR THEIR CAPABILITIES OF REMOVING INJU STICE AND IS EXPECTED TO DO SO. 6 4. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT A DETAILED SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE UNDER THE SIGNATURE OF SHRI NARESH KUMAR SHARMA ITO(HQ.) IN THE OFFICE OF CIT ROHTAK ON 11.5.2011. IN THIS SHOW-CAUSE NOTICE LEARNED ITO HAD ASKED FO R DETAILS ON 26 POINTS. THE ASSESSEE HAS SUBMITTED ITS REPLY TO THE LETTER. LEARNED COMMISSIONER HAS OBSERVED IN THE IMPUGNED ORDER THAT CERTIFIED COPY OF MEMORANDUM OF ASSOCIATION/TRUST DEED ALONG WITH AIMS AND OBJECTS NAMES AND ADDRESSES OF THE MEMBERS AND TRUSTEES ETC. WERE CALLED FOR BUT T HE ASSESSEE FAILED TO GIVE THE SOURCE OF INCOME AND PAN OF MEMBERS AND TRUSTEE S AS MENTIONED. HE POINTED OUT THAT ASSESSEE FAILED TO UNDERSTAND FOR WHAT PURPOSE THE PAN OF THE MEMBERS AND TRUSTEES WERE REQUIRED. IT IS AN AP PLICATION FOR GRANT OF REGISTRATION UNDER SEC. 12AA. IT IS NOT AN ASSESSME NT PROCEEDINGS. THE ASSESSEE HAS FILED CERTIFIED COPY OF MEMORANDUM. IT HAS ALSO GIVEN THE DETAILS OF ITS MEMBERS AND THE MANAGEMENT. IT HAS G IVEN THEIR ADDRESSES ALSO. LEARNED COMMISSIONER HAS NOWHERE EXPRESSED HOW THES E DETAILS WOULD BE INSTRUMENTAL IN REJECTING OR ACCEPTING THE APPLICAT ION OF THE ASSESSEE. LEARNED COMMISSIONER FURTHER MADE A REFERENCE TO TH E REPORT OF THE JOINT COMMISSIONER AND OBSERVED THAT IN THIS REPORT ASSE SSEE HAS JUST PRODUCED PHOTOGRAPH EXHIBITING A GROUP OF PEOPLE SAT TOGETHE R OVER SHACKS OR IN A FEW 7 INSTANCE WALKING WITH BANNERS. THE ASSESSEE FAILED TO GIVE ANY CONCRETE EVIDENCE EXHIBITING ANY CHANGE HAS BEEN EFFECTED BY ITS ACTIVITY AT THE GRASS ROOT LEVEL IN THE LIVES OF THE PEOPLE. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS PAGE NO. 60 WHERE A CERT IFICATE ISSUED BY THE ADDITIONAL DEPUTY COMMISSIONER-CUM-CHIEF EXECUTIVE OFFICER OF DISTRICT RURAL DEV. AGENCY ROHTAK. THE ASSESSEE HAD CARRIED OUT A SURVEY UNDER TOTAL SANITATION CAMPAIGN SCHEME OF THE STATE GOVER NMENT FOR BPL AND APL FAMILIES IN THE DISTT. ROHTAK. THE SURVEY CONDU CTED BY THE ASSESSEE WAS FOUND TO BE SATISFACTORY AND A CERTIFICATE TO T HIS EFFECT WAS ISSUED. COPY OF THE CERTIFICATE HAS BEEN MADE AVAILABLE ON THIS PAGE. SIMILARLY HE REFERRED PAGE 61 WHERE CERTIFICATE ISSUED BY THE DISTRICT ED UCATION OFFICER DEMONSTRATING SATISFACTION ON THE SURVEY CONDUCTED BY THE ASSESSEE UNDER SARVE SIKHSHA ABHIYAN IS AVAILABLE. HE MADE REFEREN CES TO THE VARIOUS NEWSPAPERS CUTTINGS PLACED ON THE PAPER BOOK AND SU BMITTED THAT AT THIS STAGE LEARNED COMMISSIONER HAS TO SEE WHETHER PRIMA FACIE ACTIVITIES MENTIONED IN THE AIMS AND OBJECTS ARE OF CHARITABLE NATURE OR NOT. THEIR ACTUAL IMPLEMENTATION WOULD BE A FUTURE COURSE OF A CTION. IT IS NOT THE REQUIREMENT OF THE LAW THAT FIRST THE ASSESSEE CARR IED OUT THE ACTIVITIES IN FULL SWING AND ONLY THEREAFTER THE REGISTRATION WOULD BE GRANTED. FOR BUTTRESSING HIS CONTENTIONS HE RELIED UPON THE ORDER OF THE IT AT IN THE CASE OF GEMS 8 EDUCATION SOCIETY PASSED IN ITA NO. 5308/DEL/2010 W HEREIN THE ITAT AFTER PUTTING RELIANCE UPON THE DECISION OF HON'BLE KARNA TAKA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX VS. GARDEN CITY EDUC ATIONAL TRUST REPORTED IN 191 TAXMAN 238 HAS OBSERVED THAT REGISTRATION UN DER SEC. 12A IS ONE OF THE PROCEDURAL ASPECT FOR CLAIMING BENEFIT UNDER SE C. 11 AND 12 OF THE INCOME-TAX ACT 1961. THE ISSUES WHETHER THE ASSESS EE WOULD EARN INCOME IT WILL APPLY ITS INCOME FOR THE PURPOSE OF ITS ACT IVITIES OR NOT ARE RELEVANT WHILE ASSESSING THE INCOME OF THE ASSESSEE. FOR GRA NTING REGISTRATION UNDER SEC. 12A LEARNED COMMISSIONER IS REQUIRED TO LOOK INTO PRIMA FACIE ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE. THE ACTIVITIES INCORPORATED IN THE AIMS AND OBJECTS SHOULD BE IN ACCORDANCE WIT H LAW. THEY SHOULD NOT FOR THE PURPOSE OF CARRYING OUT ANY ILLEGAL ACTIVIT Y ETC. MEANING THEREBY THAT REGISTRATION UNDER SEC. 12A MAY NOT BE GIVEN TO AN ASSESSEE FOR CERTAIN ACTIVITIES WHICH ARE NOT IN CONSONANCE WITH THE EXP RESSION CHARITABLE PURPOSES PROVIDED IN SEC. 2(15) BUT IN THE GARB OF CHARITABLE OBJECTS THE ASSESSEE IS TRYING TO INCLUDE SUCH OTHER ACTIVITIES WHICH ARE BASICALLY NOT FOR CHARITABLE PURPOSES. HE PRAYED THAT APPEAL OF THE A SSESSEE BE ALLOWED AND LEARNED COMMISSIONER BE DIRECTED TO ISSUE REGISTRAT ION UNDER SEC. 12A OF THE ACT. 9 5. ON THE OTHER HAND LEARNED DR RELIED UPON THE OR DER OF THE LEARNED COMMISSIONER AND SUBMITTED THAT JOINT COMMISSIONER OF INCOME-TAX DID NOT RECOMMEND THE CASE OF THE ASSESSEE FOR GRANT OF REG ISTRATION. HE FURTHER SUBMITTED THAT THE ASSESSEE FAILED TO SUPPLY REQUIS ITE DETAILS WHICH CAN SUGGEST THAT ITS ACTIVITIES WERE OF CHARITABLE IN N ATURE. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WITH REGARD TO THE FIRST OBJECTIO N RAISED BY THE LEARNED COMMISSIONER FOR NON-MAINTAINABILITY OF ASSESSEES APPLICATION FOR GRANT OF REGISTRATION ARE CONCERNED WE HAVE ALREADY ADJUDIC ATED THIS ISSUE IN THE FOREGOING PARAGRAPHS. IN PARAGRAPH NO.4 LEARNED CO MMISSIONER HAS MADE REFERENCE TO THE REPORT OF JOINT CIT. IN THIS REPOR T THE FIRST REFERENCE MADE BY THE LEARNED COMMISSIONER WITH REGARD TO THE OBJE CTION OF THE LEARNED JOINT CIT FOR NON-GRANT OF THE REGISTRATION IS THAT ASSESSEE FAILED TO GIVE SOURCE OF INCOME AND PAN OF MEMBERS. IN OUR OPINION ONCE THE ASSESSEE HAS SUBMITTED CERTIFIED COPY OF MEMORANDUM LIST OF ITS MEMBERS AND THEIR ADDRESSES IT IS NOT INCUMBENT UPON IT TO GIVE THE SOURCE OF THE INCOME OR PAN OF ITS MEMBERS. THE MEMBERS MIGHT NOT BE HAVING PAN. LEARNED COMMISSIONER OR THE JOINT CIT HAS NOT ASSIGNED ANY REASON EXHIBITING THE PURPOSE FOR WHICH THESE DETAILS ARE ESSENTIAL AND I N ABSENCE OF SUCH DETAILS 10 THE INQUIRY REQUIRED TO BE CONDUCTED UNDER SEC. 12A A(A)(B) OF THE ACT CANNOT BE CONDUCTED. THE RELEVANCY OF SUCH DETAILS HAS NOT BEEN HIGHLIGHTED. SIMILARLY THE OTHER OBJECTIONS REFERRED IN THE REP ORT ARE SUPERFICIAL OR IRRELEVANT. LEARNED REVENUE AUTHORITIES HAVE TOTALL Y FAILED TO LOOK INTO THE AIMS AND OBJECTS OF THE ASSESSEE MENTIONED IN THE M EMORANDUM OF ASSOCIATION. THEY HAVE ALSO TOTALLY OVERLOOKED THE VARIOUS CERTIFICATES ISSUED BY THE AUTHORITIES OF THE HARYANA STATE DEMO NSTRATING THE ROLE PLAYED BY THE ASSESSEE FOR SOCIAL UPLIFTMENT NAMELY COND UCTING A SURVEY UNDER TOTAL SANITATION CAMPAIGN SCHEME MEANT FOR BPL AND APL FAMILIES AND SARVE SIKHSHA ABHIYAN ETC. HON'BLE KARNATAKA HIGH C OURT IN THE CASE OF GARDEN CITY EDUCATIONAL TRUST (SUPRA) HAS EXAMINED THE PURPOSE OF INQUIRY REQUIRED TO BE CONDUCTED WHILE GRANTING REGISTRATIO N UNDER SEC. 12A AND OBSERVED THAT LEARNED AUTHORITIES HAVE TO LOOK THE OBJECTS OF THE SOCIETY AND ASCERTAINED WHETHER SUCH OBJECTS ARE PRIMA FACIE CH ARITABLE IN NATURE. THEY HAVE TO VERIFY THE ACTIVITIES OF THE ASSESSEE WHETH ER THEY ARE PRIMA FACIE GENUINE OR NOT. ALL OTHER ASPECTS ABOUT EARNING OF INCOME AND ITS TAXABILITY HAS TO BE LOOKED INTO AT THE TIME OF ASSESSMENT PRO CEEDINGS. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE DETAILED QUESTIONNAIRE ISSUED FROM THE OFFICE OF THE LEARNED COMMISSIONER ON 11.5.2011 AND ITS REPLY GIVEN BY THE ASSESSEE. THE COPIES OF BOTH THE LETTERS 11 ARE AVAILABLE ON PAGE NOS. 1 TO 4 OF THE PAPER BOOK . THE ASSESSEE HAS SUBMITTED INCOME AND EXPENDITURE ACCOUNT FOR THE LA ST THREE YEARS BOOKS OF ACCOUNT AND VOUCHERS ETC. REGISTRATION CERTIFICATE ISSUED UNDER SOCIETIES REGISTRATION ACT ETC. IT HAS SUBMITTED LIST OF OFFI CE BEARERS OF GOVERNING BODY. IT HAS SPECIFICALLY POINTED OUT THAT NO PAYME NT IN SHAPE OF ANY REMUNERATION HAS BEEN MADE TO ANY MEMBERS OF THE SO CIETY. WE HAVE LOOKED INTO ALL THESE ASPECTS. TAKING INTO CONSIDERATION A LL THESE EVIDENCE WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE LEARNED C OMMISSIONER TO GRANT REGISTRATION TO THE ASSESSEE UNDER SEC. 12A OF THE ACT. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 25.11.2011 . SD/- SD/- ( G.D. AGRAWAL ) ( RAJPAL YADAV ) VICE- PRESIDENT JUDICIAL MEMBER DATED: 25/11/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR