CHUNILAL HAROVANDAS CHARITABLE TRUST, MUMBAI v. DIT (E), MUMBAI

ITA 47/MUM/2010 | misc
Pronouncement Date: 14-01-2011 | Result: Allowed

Appeal Details

RSA Number 4719914 RSA 2010
Bench Mumbai
Appeal Number ITA 47/MUM/2010
Duration Of Justice 1 year(s) 9 day(s)
Appellant CHUNILAL HAROVANDAS CHARITABLE TRUST, MUMBAI
Respondent DIT (E), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 14-01-2010
Date Of Final Hearing 11-01-2011
Next Hearing Date 11-01-2011
Assessment Year misc
Appeal Filed On 04-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI B. RAMAKO TAIAH (AM) ITA NO.47/MUM/2010 ASSESSMENT YEAR : NOT APPLICABLE CHUNILAL HAROVANDAS CHARITABLE TRUST 8A SANJAY COOP HSG. SOCIETY 2 ND FLOOR VEER SAVARKAR MARG OPP. BENGAL CHEMICALS PRABHADEVI MUMBAI 400 025. ..( APPELLANT ) P.A. NO: (AAATC 2631 F) VS. THE DIRECTOR OF INCOME TAX(EXEMPTION) ROOM NO.616 6TH FLOOR PIRAMAL CHAMBERS PAREL MUMBAI-400 012. ..( RESPONDENT ) APPELLANT BY : DR. K. SHIVARAM RESPONDENT BY : SHRI AJIT KUMAR SINHA O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 1.12.2009 PASSED BY THE DIRECTOR OF INCOME TAX (EXEMPTION) [DIT(E)] MUMBAI. 2. BRIEFLY STATED FACTS OF THE CASE AS OBSERVED BY THE D IT(E) ARE THAT THE APPLICANT TRUST CHUNILAL HARGOVANDAS CHARITAB LE TRUST HAS FILED AN APPLICATION ON 28.1.2009 FOR GRANT OF CERTIF ICATE UNDER SECTION 80G OF THE INCOME TAX ACT 1961. THE TRUST HAS BEEN FO RMED FOR VARIOUS OBJECTS WHICH ARE DETAILED IN THE TRUST DEED DA TED 24.2.1983 AND THE TRUST HAS BEEN ACCORDED APPROVAL UNDER SECTION 12 A VIDE ORDER ITA NO.47/M/10 A.Y:NA 2 DATED 22.9.1983. ON PERUSAL OF THE DETAILS FILED HE NOTICED THAT THE APPLICANT TRUST HAS NOT CARRIED OUT ANY CHARITABLE ACTIV ITIES DURING THE LAST THREE YEARS AND HAS NOT INCURRED ANY EXPENDITURE O N THE SAME. THE SAID FACT WAS EVIDENT FROM THE PROFIT AND LOSS ACCOU NT AND BALANCE SHEET ANNEXED WITH THE APPLICATION UNDER SECTION 80G. IN VIEW OF THE AFORESAID FACT THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF THE CHARITABLE ACTIVITIES CARRIED OUT BY THE TRUST. IN RESP ONSE IT WAS INTERALIA SUBMITTED BY THE ASSESSEE THAT DURING THE YEAR ENDED 31.3.2008 ONE OF THE TRUSTEE OF THE TRUST SHRI VASANT LAL C. SHAH AGED ABOUT 73 YEARS AND WHO LOOKED AFTER THE ACTIVITIES OF THE TRUST WAS NOT KEEPING WELL AND HE EXPRESSED HIS UNWILLINGNESS TO WORK AND TO GIVE AUTHORITY TO SHRI PRADEEP S. SHAH TO TAKE THE CHARGE AND WORK FOR THE TRUST SOMEWHERE IN THE MONTH OF APRIL 2008. SHRI PR ADEEP S. SHAH AFTER TAKING OVER THE CHARGE FILED THE CHARGE REPORT TO THE REGISTERED OFFICE OF THE TRUST. DUE TO ABOVE THE TRUST HAS NOT RE CEIVED ANY DONATIONS AND OTHER SUBSTANTIAL INCOME AND AS A RESULT COU LD NOT ABLE TO SPEND ANY AMOUNT FOR THE CHARITABLE PURPOSE. HOWEVE R THE DIT(E) AFTER CONSIDERING THE ASSESSEES EXPLANATION AND TH E MATERIAL AVAILABLE ON RECORD WHILE OBSERVING THAT IT IS EVIDENT LY CLEAR FROM THE PROFIT & LOSS ACCOUNT FOR THE LAST THREE YEARS THAT NO CHARITABLE ACTIVITIES HAVE BEEN CARRIED OUT AND ACCORDINGLY NO EX PENDITURE ON THE OBJECTS OF THE TRUST HAS BEEN DEBITED; RELIED ON CERTAIN DECISIONS HELD THAT IT IS A CLEAR CUT CASE OF CONTRAVENTION OF THE BENE VOLENT PROVISIONS OF SECTION 80G OF THE ACT AND AS SUCH THE CERTIFICATE U/S.8 0-G COULD NOT SERVE ANY PURPOSE TO THE APPLICANT TRUST AND THE SAM E CANNOT BE GRANTED TO THE TRUST AND ACCORDINGLY HE REJECTED THE A PPELLANTS APPLICATION. 3. BEING AGGRIEVED BY THE ORDER OF THE DIT(E) THE A SSESSEE IS IN APPEAL BEFORE US TAKING THE FOLLOWING GROUNDS OF APP EAL: ITA NO.47/M/10 A.Y:NA 3 1. THE DIRECTOR OF INCOME TAX (EXEMPTION) MUMBAI [THE DIT(E)] ERRED IN REJECTING APPLICATION FOR RE NEWAL OF CERTIFICATE UNDER SECTION 80-G OF THE INCOME TAX AC T 1961. 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT: A) CASES RELIED ON BY HIM WERE NOT APPLICABLE TO THE FACTS OF THE APPELLANT; AND B) ON THE FACTS AND IN LAW THE APPELLANT WERE ENTITLED TO RENEWAL OF CERTIFICATE UNDER SECTION 80 -G. 4. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR T HE ASSESSEE SUBMITS THAT THERE IS NO DISPUTE THAT THE TRUST HAS BEEN GRANTED APPROVAL UNDER SECTION 12A VIDE ORDER DATED 22.9.1983 AND ALSO GRANTED A CERTIFICATE U/S.80-G AND ITS RENEWAL UP TO 31.3.2007. HE FURTHER SUBMITS THAT FOR THE FINANCIAL YEAR ENDED ON 31.3.2006 THE ASSESSEE RECEIVED DONATION OF RS.1 08 000/- AND SPENT RS.1 0 000/- FOR EDUCATIONAL PURPOSES AND RS.7 000/- FOR MEDICAL RELIEF. HE FURTHER SUBMITS THAT FOR THE YEAR ENDED 31.3.2007 THE ASSESSEE R ECEIVED DONATION OF RS.6 000/- AND SPENT RS.10 000/- FOR EDUCAT IONAL PURPOSES AND RS.21 000/- FOR MEDICAL RELIEF. HE FURTHER SUBMITS T HAT FOR THE YEAR ENDED 31.3.2008 THE ASSESSEE EARNED ONLY BANK INTEREST R S.12 496/- AND DUE TO ILLNESS OF TRUSTEE NO AMOUNT WAS SPENT. HE FU RTHER SUBMITS THAT ALL THE CONDITIONS AS MENTIONED U/S.80G ARE COMPLIE D WITH. HE FURTHER SUBMITS THAT ONCE THE REGISTRATION U/S.12A IS GR ANTED THE DIT(E) CANNOT REFUSE TO GRANT CERTIFICATE U/S.80G ON THE GROUND THAT EXEMPTION U/S.11 WOULD NOT BE AVAILABLE. IT IS THE A SSESSING OFFICER WHO MAY LOOK INTO IT AND MAY DENY THE EXEMPTION U/S .11 IF CONDITIONS ARE NOT COMPLIED WITH. EVEN THE REGISTRATION UNDER S EC.12A CANNOT BE REFUSED ON THE GROUND THAT NO ACTIVITY IS CARRIED OUT. THE LD. COUNSEL FOR THE ASSESSEE WHILE DISTINGUISHING THE DECISIONS RELIED ON BY THE DIT(E) RELIED ON FOLLOWING DECISIONS:- ITA NO.47/M/10 A.Y:NA 4 1. SONEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY VS. CIT (2005) 278 ITR 262 (P&H) 2. N.N. DESAI CHARITABLE TRUST VS. CIT (2000) 246 ITR 452 (GUJ.) AND 3. ORPAT CHARITABLE TRUST VS. CIT (2002) 256 ITR 690 (GUJ .). HE THEREFORE SUBMITS THAT THE RENEWAL OF APPROVAL U /S.80G BE GRANTED TO THE ASSESSEE TRUST FROM THE DATE OF APPLICATI ON DATED 23.1.2009. 5. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE DIT(E). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEES APPLICATION FOR GRANT OF APPROVAL U/S.80-G WAS NOT ACCOMPANIED BY A COPY OF THE REGISTRATION GRANTED U/S.12 A NOTES ON ACTIVITIES OF THE INSTITUTION AND COPIES OF ACCOUNTS DURIN G THE LAST THREE YEARS AND THE ASSESSEE HAS FAILED TO FILE ANY OTHER INFOR MATION WHICH WAS REQUIRED BY THE DIT(E). IT IS ALSO NOT THE CASE OF T HE REVENUE THAT THE ASSESSEE HAS NOT SATISFIED ALL THE CONDITIONS AS LAID DO WN IN CLAUSES (I) TO (V) OF THE SUB-SECTION (5) OF SECTION 80-G OF THE ACT. MERELY BECAUSE THE ASSESSEE HAS NOT CARRIED OUT MUCH ACTIVITY DURI NG THE LAST THREE YEARS DOES NOT MEAN THAT THE ASSESSEE IS NOT ENTITLE D TO THE CERTIFICATE U/S.80G OF THE ACT IF OTHER CONDITIONS AS LAI D UNDER CLAUSES (I) TO (V) OF SUB-SECTION (5) OF SECTION 80G READ WITH RULE 11AA OF THE INCOME-TAX RULES 1962 ARE FULFILLED. SINCE THE TRUST HAS BEEN FORMED FOR VARIOUS OBJECTS OF THE PUBLIC UTILITY WHICH ARE FOR THE BENEFIT OF THE ITA NO.47/M/10 A.Y:NA 5 PUBLIC IN GENERAL AND THE SAME HAVE NOT BEEN DOUBTED BY THE DIT(E) AND KEEPING IN VIEW THAT THE TRUST HAS BEEN ACCORDED A PPROVAL U/S.12A WE ARE OF THE VIEW THAT THE DIT(E) WAS NOT JUSTIFIED IN NOT GRANTING APPROVAL U/S.80G OF THE ACT TO THE APPELLANT TRUST. T HIS VIEW ALSO FINDS SUPPORT FROM THE DECISION OF THE TRIBUNAL IN M/S. SHREE NANI SHAKTI DALMIA CHARITABLE TRUST VS. DIT(E) IN ITA NO.816/MUM/ 2010 DATED 4.11.2010 WHEREIN ONE OF US (JM) WAS PARTY WHEREIN ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE IT HAS BEEN OBSERVED AND H ELD VIDE PARA 6 7 AND 8 AS UNDER :- 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABL E ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE. IT IS ALSO NOT IN DISPUTE THAT THE TRUST HAS BEEN ACCORDED APP ROVAL U/S.12A VIDE ORDER DATED 08.12.1997 AND A CERTIFICA TE U/S.80G FOR THE PERIOD 1.4.2003 TO 31.3.1006. THE ASSESSEES APPLICATION FOR GRANT OF A CERTIFICATE U/S.80-G OF THE ACT WAS REFUSED BY THE DIT(E) ON THE GROUND THAT NO CHARITABLE ACTIVITIES HAD BEEN CARRIED OUT AND N O EXPENDITURE ON THE OBJECTS OF THE TRUST HAS BEEN DE BITED BY THE TRUST. ACCORDING TO HIM IT IS A CLEAR CUT CA SE OF CONTRAVENTION OF THE BENEVOLENT PROVISIONS OF SECTI ON 80G OF THE ACT. HOWEVER WE FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEES APPLICATION FOR GRANT OF APPROVAL U/S.80-G WAS NOT ACCOMPANIED BY A COPY OF THE REGISTRATION GRANTED U/S.12A NOTES ON ACTIVITIES O F THE INSTITUTION AND COPIES OF ACCOUNTS DURING THE LAST THREE YEARS AND THE ASSESSEE HAS FAILED TO FILE ANY OTHER INFORMATION WHICH WAS REQUIRED BY THE DIT(E). IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS N OT SATISFIED ALL THE CONDITIONS AS LAID DOWN IN CLAUSE S (I) TO (V) OF THE SUB-SECTION (5) OF SECTION 80-G OF THE A CT. MERELY BECAUSE THE ASSESSEE HAS NOT CARRIED OUT ANY ACTIVITY DURING THE LAST THREE YEARS DOES NOT MEAN THAT THE ASSESSEE IS NOT ENTITLED TO THE CERTIFICATE U/S .80G OF THE ACT IF OTHER CONDITIONS AS LAID UNDER CLAUSES ( I) TO (V) OF SUB-SECTION (5) OF SECTION 80G READ WITH RULE 11 AA OF THE INCOME-TAX RULES 1962 ARE FULFILLED. 7. IN MADANI MUSAFIR KHANA WELFARE SOCIETY V. CIT (2003) 264 ITR 481(PATNA) WHEREIN THE RENEWAL APPR OVAL OF INSTITUTION U/S.80G WAS REJECTED ON THE GROUND T HAT ITA NO.47/M/10 A.Y:NA 6 EXCEPT THE CONSTRUCTION OF A SHOPPING COMPLEX NO O THER CHARITABLE WORK HAS BEEN CARRIED OUT. FURTHER IT W AS FOUND THAT ADVANCE HAS BEEN TAKEN FROM THE DONORS T O WHOM THE SHOP HAS BEEN ALLOTTED BUT THE SAME HAS N OT BEEN SPENT FOR ANY CHARITABLE PURPOSES MENTIONED IN THE MEMORANDUM. IT HAS BEEN HELD THAT THE FINDING ARRI VED AT BY THE COMMISSIONER WAS CORRECT AND NO INTERFER ENCE IS CALLED FOR. IN VISHWA BUDDHA PARISHAD V. CIT (20 03) 264 ITR 357 (PATNA) THE APPLICATION FILED BY THE T RUST FOR RENEWAL OF EXEMPTION U/S. 80-G(5) OF THE ACT HAS BE EN REJECTED AFTER COMING TO A DEFINITE FINDING THAT TH E INSTITUTION HAD MADE VERY LOW EXPENSES OUT OF THE T OTAL DONATION RECEIVED UNDER SECTION 80G(5) THE HONBLE PATNA HIGH COURT WHILE DISMISSING THE WRIT PETITION FILED BY THE INSTITUTION UPHELD THE ORDER PASSED BY THE COMMISSIONER. WHEREAS IN THE CASE BEFORE US IT HAS BEEN OBSERVED BY THE DIT(E) HIMSELF THAT NO CHARITABLE ACTIVITIES HAVE BEEN CARRIED OUT AND NO EXPENDITURE ON THE OBJECTS OF THE TRUST HAS BEEN DEBITED BY THE TR UST THEREFORE IN THE ABSENCE OF ANY MATERIAL TO SHOW T HAT THE ASSESSEE HAS RECEIVED THE AMOUNT AND HAS SPENT FOR ANY OTHER PURPOSES OTHER THAN CHARITABLE PURPOSES BOTH THE DECISIONS RELIED ON BY THE LEARNED DIT(E) ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE CASE. 8. IN THIS VIEW OF THE MATTER AND KEEPING IN VIEW T HE TRUST HAS BEEN ACCORDED APPROVAL U/S.12A AND THE TR UST HAS BEEN FORMED FOR VARIOUS OBJECTS OF THE PUBLIC U TILITY WHICH ARE FOR THE BENEFIT FOR THE PUBLIC IN GENERAL AND KEEPING IN VIEW THE RATIO OF THE DECISION RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE WE ARE OF THE VIE W THAT LEARNED DIT(E) HAS ERRED IN NOT GRANTING THE APPROV AL U/S.80-G OF THE ACT TO THE APPLICANT TRUST. HE IS THEREFORE DIRECTED TO GRANT APPROVAL U/S.80-G OF T HE ACT TO THE TRUST. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. IN THIS VIEW OF THE MATTER WE DIRECT THE DIT(E) TO GR ANT APPROVAL U/S.80G FROM THE DATE OF APPLICATION I.E. 23.1.2009 A S SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE . THE GROUNDS TAKEN BY T HE ASSESSEE ARE THEREFORE ALLOWED TO THE EXTENT AS INDICATED AB OVE. ITA NO.47/M/10 A.Y:NA 7 7. IN THE RESULT ASSESSEE'S APPEAL STANDS ALLOWED AS INDICATE D ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 14.1.2011. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 14.1.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.