SINGHI FOUNDATION, MUMBAI v. DIT (E), MUMBAI

ITA 4164/MUM/2011 | 2001-2002
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 416419914 RSA 2011
Bench Mumbai
Appeal Number ITA 4164/MUM/2011
Duration Of Justice 10 month(s) 10 day(s)
Appellant SINGHI FOUNDATION, MUMBAI
Respondent DIT (E), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 30-03-2012
Assessment Year 2001-2002
Appeal Filed On 20-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHIRI P. M. JAGTAP ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ITA NO. : 4164/MUM/2011 ASSESSMENT YEAR : 2011-12 SINGH I FOUNDATION ASHOKRAJ BUILDING B-WIND 1 ST FLOOR S.V. ROAD GOREGAON (W) MUMBAI-400 062 PAN NO: VS. DCIT (EXEMPTION) 6 TH FLOOR PIRAMAL CHAMBERS PAREL MUMBAI-400 012 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.N. VASANI RESPONDENT BY : SHRI A.K. NAYAK DATE OF HEARING : 2 1 .03.2012 DATE OF PRONOUNCEMENT : 30 . 03.2012 ORDER PER AMIT SHUKLA (J.M.) : THE PRESENT APPEAL IS ARISING OUT OF ORDER DATED 1 6.03.2011 PASSED BY DIRECTOR OF INCOME-TAX (EXEMPTION) MUMBAI REJEC TING THE APPELLANTS CLAIM FOR REGISTRATION U/S.12AA OF THE INCOME TAX A CT 1962. 2. THE APPELLANT TRUST HAS BEEN CONSTITUTED VIDE TR UST DEED DATED 28.11.2008 FOR CARRYING OUT CHARITABLE ACTIVITIES A S PER THE OBJECTS GIVEN IN CLAUSE (6)(A) (B) AND (C) OF THE SAID DEED WHIC H READS AS UNDER :- ITA NO : 4164/MUM/2011 SINGHI FOUNDATION 2 (6)(A) THE TRUSTEES SHALL UTILIZE THE NET INCOME O F THE TRUST FUND FIRSTLY TO MEET WITH THE EXPENSES OF TH E MANAGEMENT OF THE TRUST SECONDLY TO PAY OR APPLY T HE WHOLE OR ANY PART OF BALANCE THEREOF FOR ANY ONE OR MORE OF THE FOLLOWING OBJECTS. I. FOR MEDICAL RELIEF OF NEEDY PEOPLE. II. FOR EDUCATIONAL PURPOSE EITHER BY GIVING SCHOLARSHIPS FEES BOOKS ETC TO NEEDY STUDENTS OR FOR ESTABLISHING EDUCATIONAL INSTITUTIONS HOSTELS ETC. III. FOR GIVING HELP TO NEEDY AND DESTITUTE PEOPLE WITH A VIEW TO ALLEVIATING AND FOR ESTABLISHING SUCH PEOPLE IN LIFE. IV. TO HELP DISSEMINATION OF KNOWLEDGE OF GENERAL USE AND TO HELP AND FOSTER MOVEMENTS AND ACTIVITIES WHICH WOULD CONTRIBUTE TO HUMAN HAPPINESS. V. FOR ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY. B) FOR THE PURPOSES OF AFFORDING MEDICAL RELIEF TH E TRUSTEES MAY AT THEIR ABSOLUTE DISCRETION GIVE DONATION TO S UCH INSTITUTIONS AS MAY BE ENGAGED OR WANTING TO BE ENG AGED IN SEARCH AND DIAGNOSIS OR TREATMENT OF DISEASES AS TH E TRUSTEES MAY THINK FIT. C) IN CARRYING OUT THE OBJECTS OF THE TRUST MENTION ED ABOVE THE TRUSTEES SHALL DO SO WITHOUT ANY DISCRETION OF CASTE CREED OR RELIGION. THE TRUSTEES HOWEVER SHALL HAVE THE R EQUISITE DISCRETION TO CHOOSE THE PERSONS OR PERSON TO WHOM SUCH HELP IS TO BE GIVEN. 2.1 ACCORDINGLY IT APPLIED FOR GRANTING OF REGISTRA TION U/S.12A BEFORE THE DIT(EXEMPTION) IN PRESCRIBED FORM NO.10A ON 03. 09.2010. THE SAID REGISTRATION WAS SOUGHT FROM 01.04.2010. 3. DURING THE COURSE OF THE PROCEEDINGS U/S.12AA T HE DIT(EXEMPTION) NOTED THAT THE APPELLANT TRUST HAD F ILED A PROVISIONAL BALANCE SHEET WHEREIN CORPUS DONATION RECEIVED AND DEPOSIT WITH HDFC DID NOT APPEAR IN THE STATEMENT OF ACCOUNT. ACCORD INGLY HE ISSUED A SHOW CAUSE LETTER FOR AN EXPLANATION AS TO WHY THE SAID AMOUNT HAS NOT BEEN SHOWN IN THE STATEMENT OF ACCOUNT. IN COMPLIA NCE THEREOF A REVISED ITA NO : 4164/MUM/2011 SINGHI FOUNDATION 3 BALANCE SHEET WAS FILED DULY SIGNED BY THE TRUST WHEREIN THE SAID DONATION AND CORRESPONDING DEPOSIT WITH HDFC BANK W AS TAKEN INTO ACCOUNT. IT WAS SUBMITTED THAT THE SAID OMISSION WA S DUE TO PRINTING ERROR AND THE REVISED BALANCE SHEET SHOULD BE TAKEN INTO COGNIZANCE. 4. THE LEARNED DIT(EXEMPTION) REJECTED THE APPELLA NTS APPLICATION FOR REGISTRATION AFTER OBSERVING AND HOLDING AS UND ER :- 4. I HAVE GONE THROUGH THE DETAILS RECORDS AND TH E SUBMISSIONS OF THE TRUST. AS PER THE PROVISIONS OF SECTION 12AA(1)(B) A TRUST IS TO BE REGISTERED IF THE COMM ISSIONER IS SATISFIED ABOUT THE OBJECTS OF THE TRUST AND THE GE NUINENESS OF ITS ACTIVITIES. IN THE CASE UNDER CONSIDERATION AN D FROM THE DOCUMENTS FILED ON RECORD INCLUDING THE ACCOUNTS ST ATEMENT THE ISSUE WHICH ARISES FOR CONSIDERATION IS WHETHER THE ACTIVITIES/GENUINENESS OF THE TRUST CAN BE HELD TO BE VERIFIED FOR BEING ELIGIBLE TO GRANT REGISTRATION U/S.12A OF THE IT ACT. AS ALREADY STATED ABOVE ON BEING CALLED FOR THE T RUSTEE HAS SUBMITTED A PROVISIONAL ACCOUNTS WHEREIN THE CORPUS DONATION RECEIVED BY THE TRUST AND THE DEPOSIT MADE WITH THE HDFC BANK HAS NOT BEEN REFLECTED AND ACCOUNTED FOR IN THE SAID STATEMENT. THE RECEIPT ALSO CORROBORATED BY T HE FACT THAT THE TRUST WAS ASKED TO FURNISH THE COPIES OF THE BA NK STATEMENT WHEREIN THE SAID CREDIT DEPOSIT OF THE C ORPUS DONATION AND THE DEBIT WITHDRAWAL OF THE DEPOSIT MA DE WITH HDFC BANK WAS REFLECTED. HOWEVER NEITHER THE ENTR IES WERE ACCOUNTED IN THE PROVISIONAL BALANCE SHEET FILED ON RECORD. ADMITTEDLY WHEN THE SAID DISCREPANCIES WAS POINTED OUT THE TRUSTEE PROMPTLY FILED A REVISED STATEMENT OF AFFAI RS ON RECORD RECTIFYING THE SAID MISTAKE AND CLAIMED THAT THE SA ID DOCUMENT WAS ERRONEOUSLY PRINTED. THOUGH THE REVI SED BALANCE SHEET REFLECTS THE CORPUS DONATION AS WELL AS THE DEPOSIT WITH HDFC BANK THE SAME CANNOT BE ACCEPTED FOR THE REASON THAT THE PROVISIONAL STATEMENTS ARE DULY ATT ESTED AND VERIFIED BY THE FOUNDER TRUSTEE AND IT IS EXPECTED THAT THE TRUE AND CORRECT AFFAIRS OF THE TRUST ACTIVITIES ARE FIL ED ON RECORD BEFORE THE DEPARTMENT. ONCE A DISCREPANCY IS DETE CTED AND POINTED OUT THEN THE ONUS SHIFTS ON THE TRUST TO P ROVE OTHERWISE. IN THE INSTANT CASE THE TRUST HAS FILE D 2 SEPARATE STATEMENT OF ACCOUNTS BOTH BEING VERIFIED AND ATTE STED BY THE TRUSTEE BUT IT STILL PRESENTS A TOTALLY DIFFERENT PICTURE OF THE STATE OF AFFAIRS OF THE TRUST. IT MAY BE PERTINENT TO NOTE THAT ITA NO : 4164/MUM/2011 SINGHI FOUNDATION 4 THE TRUST WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT S TO ASCERTAIN THE CORRECTNESS AND IN COMPLIANCE THEREOF THE TRUST HAS FILED A COPY OF THE LEDGER AND BANK STATEMENT O NLY ON RECORD WHICH IT CLAIMS TO BE THE BOOKS OF ACCOUNTS . IT IS ALSO A MATTER OF RECORD THAT THE TRUST HAD RECEIVED THE CO RPUSE DONATION ON 12/11/10 THE DEPOSIT WITH HDFC BANK WA S MADE ON 24/12/10 AND THE STATEMENT OF AFFAIRS CAME TO BE FILED ONLY ON 17/01/10 BUT STILL THE SAID CORPUS DO NATION AND DEPOSIT WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOU NTS. THE TRUST OR ITS TRUSTEE HAVE NOT GIVEN ANY BONAFIDE RE ASONS OR SUFFICIENT CAUSE AS TO HOW THE SAID ENTRIES WERE NO T ACCOUNTED FOR IN THE BOOKS WHEN THE ENTIRE BOOKS ARE MAINTA INED ON COMPUTER. MOREOVER THE TRUST/TRUSTEE HAVE NOT DISC HARGED THE ONUS OF PROVING THE SAME AND THE SAID DISCREPANCY H AS BEEN CLAIMED TO BE A ERRONEOUS PRINT OUT WHICH CANNOT B E ACCEPTED EVEN BY PREPONDERANCE OF ALL PROBABILITIES. THE ST ATEMENTS FILED ON RECORD EARLIER AND THE REVISED STATEMENT F ILED NOW DO FORM PART OF THE BOOKS OF ACCOUNTS OF THE TRUST AND IT IS EXPECTED TO REFLECT THE TRUE AND CORRECT AFFAIRS OF THE ACTIVITIES CARRIED OUT BY THE TRUST. IN THE INSTANT CASE THE SAME HAS NOT BEEN VERIFIABLE AND THEREFORE I AM OF THE OPINION T HAT THE CONDITION PRECEDENT TO GRANT THE REGISTRATION IS NO T SATISFIED. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY THE REGISTRATION CANNOT BE GRANTED TO THE APPLICANT TRUST. THE APPLICATION DATED 03.09.2010 THEREFORE STANDS REJECTED. 5. THE LEARNED AR APPEARING ON BEHALF OF THE APPELL ANT TRUST SUBMITTED THAT THE LEARNED DIT(EXEMPTION) HAS NOT G IVEN ANY ADVERSE COMMENT EITHER ON THE OBJECTS OF THE SOCIETY OR ON THE GENUINENESS OF ITS ACTIVITIES. HE HAS MERELY GONE BY AN OMISSION OF A FIGURE WHICH WAS DULY RECTIFIED AND FILED BEFORE HIM AT THE TIME OF THE PROCEEDINGS. HE DREW OUR ATTENTION TO THE REVISED BALANCE SHEET FIL ED VIDE LETTER DATED 07.03.2011 WHEREIN THE AMOUNT OF `. 1 00 000/- RECEIVED TOWARDS DONATION AND CORRESPONDING ENTRY OF DEPOSIT WITH HD FC BANK ON THE ASSET SIDE WAS INCORPORATED. A COPY OF FINAL BALAN CE SHEET AS ON 31.03.2011 HAS ALSO BEEN FILED WHEREIN THE SAID AM OUNT HAS BEEN TAKEN INTO CONSIDERATION IN THE BALANCE SHEET. HE ALSO B ROUGHT TO OUR NOTICE THAT ON SECOND APPLICATION FILED BY THE APPELLANT T RUST REGISTRATION ITA NO : 4164/MUM/2011 SINGHI FOUNDATION 5 U/S.12AA HAS BEEN GRANTED BY THE DIT(EXEMPTION) W.E .F 01.04.2011 VIDE ORDER DATED 05.01.2012 ON THE SAME OBJECTS OF THE T RUST. THE A.R. THUS PLEADED THAT THERE IS NO REASON AS TO WHY THE REGIS TRATION SHOULD NOT BE GRANTED W.E.F. 01.04.2010. 6. ON THE CONTRARY THE LEARNED SR. DR SUBMITTED TH AT THE DIT(EXEMPTION) WAS JUSTIFIED IN NOT GRANTING THE RE GISTRATION AS THE BOOKS OF ACCOUNTS WAS FOUND NOT RELIABLE AND STRONG LY RELIED UPON THE FINDINGS GIVEN IN PARA 4 OF THE IMPUGNED ORDER AS HAVE BEEN REPRODUCED BY US ABOVE. 7. WE HAVE HEARD THE CONTENTIONS OF THE RIVAL PARTI ES AND ALSO GONE THROUGH THE FINDINGS GIVEN BY THE DIT(EXEMPTION) REFUSING GRANT FOR REGISTRATION U/S.12AA. THE LEGAL PROVISION FOR GRA NTING REGISTRATION U/S.12AA IS THAT THE COMMISSIONER OR DIRECTOR OF I NCOME TAX ON RECEIPT OF AN APPLICATION U/S.12A IS REQUIRED TO CALL FOR S UCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION TO SATISF Y HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND TO M AKE SUCH ENQUIRIES AS HE MAY DEEMED FIT IN THIS REGARD AND AFTER BEING SA TISFIED ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACT IVITIES HE CAN GRANT REGISTRATION U/S.12AA TO THE SAID TRUST OR INSTITUT ION. HERE IN THIS CASE THE DIT(EXEMPTION) HAS FAILED TO LOOK INTO THE OBJE CTS OF THE TRUST AND ALSO THE GENUINENESS OF ITS ACTIVITIES. THE APPLIC ATION HAS BEEN REJECTED MERELY ON THE GROUND THAT THE ENTRY OF DONATION HAS NOT BEEN INCORPORATED IN THE PROVISIONAL BALANCE SHEET FILED EARLIER WHICH HAS BEEN REVISED ONLY WHEN THE APPELLANT TRUST WAS CONF RONTED WITH. SUCH AN ERROR OF ACCOUNTING ENTRY IN THE BALANCE SHEET C ANNOT BE A FATAL FOR THE PURPOSE OF GRANTING REGISTRATION U/S.12AA AS THE L EGAL REQUIREMENT IS TO LOOK INTO THE OBJECTS AND THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. SUCH AN ERROR IS REQUIRED TO BE LOOK INTO BY THE AS SESSING OFFICER DURING ITA NO : 4164/MUM/2011 SINGHI FOUNDATION 6 THE COURSE OF THE ASSESSMENT PROCEEDINGS WHEN THE R EGISTRATION HAS BEEN GRANTED. IT IS VERY SIGNIFICANT THAT IN THE SUBSEQ UENT APPLICATION THE DIT(EXEMPTION) HIMSELF HAS GRANTED REGISTRATION W. E.F. 01.04.2011 ON THE SAME OBJECTS AND THE ACTIVITIES OF THE TRUST. ONCE IT HAS BEEN FOUND THAT THE OBJECTS AND THE ACTIVITIES OF THE APPELL ANT TRUST ARE GENUINE AND REGISTRATION HAS BEEN GRANTED IT CANNOT BE HEL D THAT THE SAID VERY OBJECT AND THE ACTIVITIES ARE NOT GENUINE W.E.F. 01 .04.2010. ONCE THE ERROR AND THE POSTING OF FIGURE IN THE BALANCE SHEE T HAVE BEEN RECTIFIED AND IN THE FINAL BALANCE SHEET AS ON 31.03.2011 NO ADVERSE INFERENCE SHOULD DRAWN IN GRANTING OF REGISTRATION U/S.12AA. THUS ON THESE FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT THE APP ELLANT TRUST IS ENTITLED FOR REGISTRATION U/S.12AA W.E.F. 01.04.201 0 AND THE DIT(EXEMPTION) IS DIRECTED TO ISSUE THE CONSEQUENTI AL CERTIFICATE GRANTING REGISTRATION U/S.12AA TO THE APPELLANT TRUST W.E.F. 01.04.2010. 8. IN THE RESULT THE APPEAL FILED BY THE APPELLANT IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH 2012. S D/ - S D/ - ( P. M. JAGTAP ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DT: 30.3.2012 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. 4. CIT (A) 5. THE DR B - BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI ROSHANI