Shree Kapaya Aathkoti Moti Paksh Sthanakvashi Sangh,, RAJKOT-GUJARAT v. The Commissioner of Income Tax-I,, RAJKOT-GUJARAT

ITA 462/RJT/2013 | misc
Pronouncement Date: 11-04-2014 | Result: Allowed

Appeal Details

RSA Number 46224914 RSA 2013
Assessee PAN AALTS6540G
Bench Rajkot
Appeal Number ITA 462/RJT/2013
Duration Of Justice 4 month(s) 12 day(s)
Appellant Shree Kapaya Aathkoti Moti Paksh Sthanakvashi Sangh,, RAJKOT-GUJARAT
Respondent The Commissioner of Income Tax-I,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 11-04-2014
Date Of Final Hearing 09-04-2014
Next Hearing Date 09-04-2014
Assessment Year misc
Appeal Filed On 29-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBULAL SMC BENCH RAJKOT BEFORE SHRI T. K. SHARMA JM ITA NO.462/RJT/2013 SHREE KAPAYA AATHKOTI MOTI PAKSH STHANAKVASHI SANGH C/O. RAMJI LALJI MAMANIA KAPAYA TAL. MUNDRA KUTCH PAN : AALTS 6540 G ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX RAJKOT-I RAJKOT / RESPONDENT / ASSESSEE BY SHRI VIMAL DESAI CA / REVENUE BY DR M L MEENA D.R. / DATE OF HEARING 09.04.2014 !'# / DATE OF PRONOUNCEMENT 11.04.2014 / ORDER THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE OR DER DATED 27.09.2013 OF COMMISSIONER OF INCOME-TAX RAJKOT-I RAJKOT REJECT ING THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12A OF THE INCO ME-TAX ACT 1961. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE-TRUST MADE AN APPLICATION FOR REGISTRATION U/S 12A OF THE INCOME-TAX ACT ON 13.03 .2013 IN FORM NO.10A ACCOMPANIED WITH XEROX COPY OF THE REGISTRATION CER TIFICATE DATED 19.06.1964. IN RESPONSE TO THE SHOW-CAUSE NOTICE ISSUED BY THE LD. CIT IN ORDER TO VERIFY THE APPLICATION OF THE TRUST AND GENUINENESS OF IT ACTI VITIES SHRI ATUL DESAI CA & AR OF THE ASSESSEE-TRUST SUBMITTED A LETTER DATED 23.09.2 013 ALONGWITH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS FOR VERIFICATION. ON VERIFICAT ION OF THE AFORESAID DOCUMENTS THE LD. CIT OBSERVED THAT THE ASSESSEE-TRUST UTILIZED I TS INCOME IN MAKING PAYMENTS TO ANOTHER TRUSTS AND HE ACCORDINGLY REJECTED THE APPL ICATION OF ASSESSEE-TRUST FOR REGISTRATION U/S 12A OF THE INCOME-TAX ACT FOR THE DETAILED REASON GIVEN IN PARAGRAPH NOS. 4 TO 6 OF THE IMPUGNED ORDER WHICH READ AS UN DER:- 4. ON GOING THROUGH THE BOOKS OF ACCOUNTS IT IS N OTICED THAT DURING THE FY 2012-13 THE GROSS RECEIPTS OF THE TRUST WERE OF RS .86 892/- AND IT CLAIMED THAT EXPENDITURE TOWARDS ITS OBJECTS WERE RS.15 500/-. O N VERIFICATION IT IS SEEN THAT THE ABOVE ENTIRE PAYMENT WAS DONATION TO OTHER TRUSTS VIZ. PAYMENT OF RS.11 000/- TO SHRI KUTCH AUTHORITY MOTI PRAKESH ST HANAKWASI JAIN SANGH 2 462-RJT-2013 SHREE KAPAYA AATHKOTI MOTI PAKSH STHANAKVASHI SANGH (SMC) MUMBAI PAYMENT OF RS.2 000/- TO SHRI AATHKOTI MOTI PAKSH STANAKWASI JAIN SANGH BHUJPUR AND PAYMENT OF RS.2 500/- TO SHRI MI RAROAD VARDHMAN STHANAK JAIN SANGH SHRI SHANTINAGAR STHANAKWASI JAI N UPASHRAY MIRA ROAD THANE. THUS THE ONLY ACTIVITY OF THE TRUST WAS GIVI NG DONATIONS TO ANOTHER TRUSTS DURING THE YEAR UNDER CONSIDERATION. GIVING A DONATION TO ANOTHER TRUST OUT OF THE TRUST FUND CANNOT BE TERMED AS AN ACTIVI TY TOWARDS ITS OBJECTS. 5. THE ABOVE INFERENCE IS SUPPORTED BY EXPLANATION APPENDED BELOW SECTION 11(2) OF THE ACT WHEREIN IT IS PROVIDED TH AT ANY AMOUNT PAID TO ANY TRUST INSTITUTIONS FUND EDUCATIONAL INSTITUTION OR HOSPITAL ETC. SHALL NOT BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE PUR POSE. WHEN THE LEGISLATURE CLEARLY PROVIDES THAT IN CERTAIN CIRCUMSTANCES PAY MENTS TO OTHER ORGANIZATION SHALL NOT BE APPLICATION OF INCOME FOR CHARITABLE P URPOSE THE ONLY ACTIVITY OF GIVING DONATION TO ANOTHER TRUST CANNOT BE CONSIDER ED A GENUINE ACTIVITY TOWARDS ITS OBJECTS. 6. AS PER THE PROVISIONS OF SECTION 12AA OF THE I.T . ACT 1961 THE COMMISSIONER SHALL SATISFY HIMSELF WITH REGARD TO: I) OBJECTS OF THE TRUST/INSTITUTION AND II) GENUINENESS OF ITS ACTIVITIES IN VIEW OF THE ABOVE FACTS IT IS CLEAR THAT ACTIVI TIES OF THE TRUST WERE NOT FOUND TO BE GENUINE. THUS THE TRUST IS NOT FULFILLING TH E CONDITIONS LAID DOWN FOR REGISTRATION U/S 12AA OF THE I.T. ACT 1961 AND RUL E 17A OF THE I.T. RULES 1962. I THEREFORE REJECT THE ASSESSEES APPLICATIO N FOR REGISTRATION U/S 12A OF THE IT ACT. AGGRIEVED WITH THE ORDER OF LD COMMISSIONER OF INC OME-TAX RAJKOT-I THE ASSESSEE-TRUST IS NOW IN APPEAL BEFORE THIS TRIBUNA L ON THE FOLLOWING GROUNDS:- 1. THE ORDER U/S 12AA(1)(B)(II) IS BAD IN LAW. 2. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN REJECTING THE APPLICATION FOR REGISTRATION OF THE APPELLANT TRUST U/S 12A 3. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THE CHARITABLE OBJECTS OF THE TRUST AND IN HOLDING THAT THE ACTIVITIES OF THE TRUST WERE NOT GENUINE. 3. BEFORE THE TRIBUNAL ON BEHALF OF THE ASSESSEE-T RUST SHRI VIMAL DESAI CA APPEARED AND FILED A PAPER-BOOK CONTAINING 66 PAGES WHICH INTER-ALIA INCLUDED THE FOLLOWING DOCUMENTS:- SR. NO. PARTICULARS PAGE NOS. I. WRITTEN SUBMISSIONS A-F 2. COPY OF ACKNOWLEDGMENT OF RETURN FOR A.Y 2013-14 DA TED 02-09-2013 AND COMPUTATION 1-2 OF INCOME 3. COPY OF ACKNOWLEDGMENT OF RETURN FOR A. Y 2012-13 A ND COMPUTATION OF INCOME 3-4 4. COPY OF AUDITORS REPORT FOR THE YEAR ENDING ON 31-0 3-2012 AND 31-03- 2011 5-15 5. COPY OF APPLICATION FOR REGISTRATION DATED 13-03 -2013 16-17 6. COPY OF FORM LOA DATED 13-03-2013 18 3 462-RJT-2013 SHREE KAPAYA AATHKOTI MOTI PAKSH STHANAKVASHI SANGH (SMC) 7. COPY OF LIST OF NAMES ADDRESSES OF TRUSTEES ALONG WITH PHONE NUMBERS PHOTOGRAPHS AND 19-21 COPY OF PAN CARD 8. COPY OF PASSBOOK 22-25 9. COPY OF REGISTRATION OF TRUST BY DEPUTY CHARITY COMMISSIONER 26 10. COPY OF REGISTER OF TRUST 27-32 11. COPY OFL.T.O.'S LETTER DATED 10-05-2013 33 12. COPY OF FURTHER SUBMISSIONS MADE TO ITO DATED 02-09 -2013 BY ASSESSEE 34-35 13. COPY OF SHOW-CAUSE NOTICE DATED 10-09-2013 FROM COM MISSIONER OF INCOME- TAX RAJKOT - 36 I RAJKOT 14. COPY OF ASSESSEE REPLY AGAINST THE SHOW-CAUSE N OTICE DATED 23-9- 2013 37-38 15. COPY OF DECISION OF HON'BLE HIGH COURT IN CASE OF KUTCHI DASA OSWAL MOTO PARIW 39-43 AMBAMA TRUST [2013] 29 TAXMANN.CORN 228 16. COPY OF DECISION OF KARNATAKA HIGH COURT IN CAS E OF KARUNYA RURAL HEALTH- 44-47 VS. DIRECTOR OF INCOME - TAX(EXEMPTIONS)[20 121 24 TAXM ANN.COM 344 17. COPY OF DECISION OF COCHIN TRIBUNAL IN CASE OF MAHA TMA GANDHI CHARITABLE SOCIETY V. 48-52 COMMISSIONER OF INCOME TAX(20 13) 33 TAXMANN.COM 14 18. COPY OF DECISION OF ALLAHABAD HIGH COURT IN CASE OF HARDAYAL CHARITABLE & EDUCATION 53-60 TRUST 32 TAXMANN.COM 341 19. COPY OF DECISION OF CHENNAI TRIBUNAL IN CASE OF A.V .S. EDUCATIONAL TRUST V. INCOME TAX 61-66 OFFICER [2013] 30 TAXMANN.COM 168 THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT THE M AIN ACTIVITY OF THE TRUST IS TO PROVIDE ACCOMMODATION AND OTHER ASSISTANCE TO RE LIGIOUS PERFORMANCES UNDER JAINISMS FOR SADHUJS AND SAINTS AND TO MANAGE RELIG IOUS PLACES FOR RELIGIOUS ACTIVITIES BY JAIN SADHUS & SAINTS. HE ALSO SUBMIT TED THAT THE TRUST IS CREATED ON 19.06.1964 AND AS PER ENTRY NO.5 THE OBJECTS AND A CTIVITY OF THE TRUST ARE FOR RELIGIOUS PURPOSE. HE ALSO SUBMITTED THAT THE TRUST HAS DONAT ED THE FUND TO THOSE REGISTERED TRUST WHO ARE HAVING THE SAME OBJECTS / ACTIVITIES WITH THE ASSESSEE-TRUST. HE ALSO CONTENDED THAT THE LD. CIT HAS REJECTED THE APPLICA TION OF THE ASSESSEE-TRUST ON THE BASIS THAT THE TRUST IS ONLY GIVING DONATIONS TO OT HER TRUSTS AND THE SAME CANNOT BE CONSIDERED AS CHARITABLE ACTIVITY. IN THIS REGARD THE LD. COUNSEL OF THE ASSESSEE RELIED UPON THE DECISION OF JURISDICTIONAL HIGH COURT IN T HE CASE OF KUTCHI DASA OSWAL MOTO PARIWAR AMBAMA TRUST [2013] 29 TAXMANN.COM 228 WH EREIN IT IS OBSERVED BY THE HONBLE HIGH COURT THAT ABSENCE OF ANY ACTIVITY OF A TRUST AT THE TIME OF REGISTRATION IS NOT A GROUND TO QUESTION GENUINENESS OF OBJECTIVES AND ACTIVITIES; REGISTRATION FOR TRUST CANNOT BE DINED ON THE SOLE GROUND OF NON-COM MENCEMENT OF ACTIVITY AND SUCH ABSENCE OF ACTIVITY DOES NOT EMPOWER COMMISSIONER T O INFER ABSENCE OF GENUINENESS. A COPY OF THE SAID JUDGMENT IS PLACED ON RECORD AT PAGE NO.39-43 OF THE PAPER-BOOK. HE FURTHER POINTED OUT THAT WHAT A DONOR TRUST WHICH ITSELF IS A CHARITABLE AND RELIGIOUS TRUST DONATES ITS INCOME TO ANOTHER TRUST THE DONOR TRUST CAN 4 462-RJT-2013 SHREE KAPAYA AATHKOTI MOTI PAKSH STHANAKVASHI SANGH (SMC) BE SAID TO HAVE APPLIED ITS INCOME FOR THE RELIGIOU S AND CHARITABLE PURPOSES. IN THIS REGARD THE LD. COUNSEL OF THE ASSESSEE RELIED UPON THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF KARUNYA RURAL HEALTH-CARE SOCI ETY V. DIRECTOR OF INCOME- TAX (EXEMPTIONS) [2012] 24 TAXMANN.COM 344 WHEREIN IT WAS HELD THAT ONCE EVIDENCE PRODUCED DISCLOSED THAT FUNDS OF TRUST ARE APPLIED FOR CARRYING ON CHARITABLE ACTIVITIES PURPOSE OF ESTABLISHING TRUST IS FULLY SATISFIED AND IT DOES NOT MATTER THAT ASSESSEE IS CARRYING ON CHARITABLE ACTIVITY THROUGH ANOTHER TRUST. COPY OF THE SAID DECISION IS ALSO PLACED ON RECORD AT PAGE NO.44-47 OF THE PAPER-BOOK. HE THEREFORE SUBMITTED THAT THE IMPUGNED ORDER OF LD. COMMISSION ER OF INCOME-TAX BE SET ASIDE AND HE MAY BE DIRECTED TO PASS A FRESH ORDER U/S 12 AA OF THE INCOME-TAX ACT 1961. 4. AS AGAINST THE SUBMISSION OF LD. COUNSEL OF THE ASSESSEE DR. M.L. MEENA DR APPEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPOR TED THE ORDER OF LD. CIT. HE ALSO POINTED OUT THAT THE ASSESSEE-TRUST WAS MAINLY MAKING DONATIONS TO OTHER TRUSTS WHOSE ACTIVITIES AND OBJECTS ARE NOT CLEARLY KNOWN; THEREFORE THE VIEW TAKEN BY THE LD. CIT IN REJECTING THE ASSESSEE-TRUSTS APPLICATI ON FOR REGISTRATION U/S 12A OF THE INCOME-TAX ACT BE UPHELD. 5. I HAVE HEARD BOTH SIDES AND CAREFULLY GONE THROU GH THE IMPUGNED ORDER OF LD COMMISSIONER OF INCOME-TAX RAJKOT-I THE DECISIONS CITED AND THE DOCUMENTS AVAILABLE ON RECORDS INCLUDING PAPER-BOOK FILED BY THE ASSESSEE-TRUST. THE MAIN CONTENTION OF LD. CIT FOR REJECTING THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12A IS THAT THE ASSESSEE-TRUST HAS ONLY MADE DO NATIONS TO SOME OTHER TRUSTS. THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF KARUNYA RURAL HEALTH-CARE SOCIETY V. DIRECTOR OF INCOME-TAX (EXEMPTIONS) [20 12] 24 TAXMANN.COM 344 AS RELIED UPON BY THE ASSESSEE-TRUST IS VERY MUCH REL EVANT IN THIS BEHALF; WHEREIN IT HAS BEEN HELD BY THE HONBLE HIGH COURT THAT ONCE EVID ENCE PRODUCED DISCLOSED THAT FUNDS OF TRUST ARE APPLIED FOR CARRYING ON CHARITAB LE ACTIVITIES PURPOSE OF ESTABLISHING TRUST IS FULLY SATISFIED AND IT DOES NOT MATTER THA T ASSESSEE IS CARRYING ON CHARITABLE ACTIVITY THROUGH ANOTHER TRUST. THEREFORE IN VIEW OF THE FOREGOING I SET ASIDE THE 5 462-RJT-2013 SHREE KAPAYA AATHKOTI MOTI PAKSH STHANAKVASHI SANGH (SMC) IMPUGNED ORDER DATED 27.09.2013 PASSED BY THE LD CO MMISSIONER OF INCOME-TAX RAJKOT-I U/S 12AA(1)(B)(II) AND DIRECT HIM TO GRANT REGISTRATION TO THE ASSESSEE-TRUST UNDER SECTION 12A OF THE ACT. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) / ORDER DATE: 11.04.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHREE KAPAYA AATHKOTI MOTI PAKSH STHA NAKVASHI SANGH C/O. RAMJI LALJI MAMANIA KAPAYA TAL. MUNDRA KUTCH 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX RAJK OT-I RAJKOT 3. 0 1 * * 2 / CONCERNED CIT GANDHIDHAM 4 . 345 1 * 1# !$ / DR ITAT RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY ITAT RAJKOT