Cardio Vascular Solution Society, New Delhi v. DIT (Exemptions), Delhi

ITA 5307/DEL/2012 | misc
Pronouncement Date: 21-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 530720114 RSA 2012
Assessee PAN AABAC0222G
Bench Delhi
Appeal Number ITA 5307/DEL/2012
Duration Of Justice 2 year(s) 1 month(s) 4 day(s)
Appellant Cardio Vascular Solution Society, New Delhi
Respondent DIT (Exemptions), Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 21-11-2014
Date Of Final Hearing 12-11-2014
Next Hearing Date 12-11-2014
Assessment Year misc
Appeal Filed On 17-10-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B: NEW DELHI BEFORE SHRI J.S. REDDY ACCOUNTANT MEMEBR AND SHRI GEORGE GEORGE K JUDICIAL MEMBER ITA NOS.5307/DEL/2012 ASSESSMENT YEAR 2012-13 M/S. CARDIO VASCULAR SOLUTION SOCIETY VS. DIT (EXEMPTIONS) FLAT NO. 353 GF POCKET K AAYAKAR BHAWAN SARITA VIHAR 3 RD FLOOR LAXMI NAGAR NEW DELHI. DELHI 110 092 (PAN AABAC0222G) (APPELLANT) ( RESPONDENT) ITA NO. 2223/DEL/20 13 ASSESSMENT YEAR 201 2-13 M/S. CARDIO VASCULAR SOLUTION SOCIETY VS . ITO (EXEMPTIONS) FLAT NO. 353 GF POCKET K AAYAKAR BHAWAN SARITA VIHAR 3 RD FLOOR LAXMI NAGAR NEW DELHI. DELHI 110 092 (PAN AABAC0222G) APPELLANT BY : S HRI R.M. MEHTA ADVOCATE RESPONDENT BY : SHRI VIVEK WADEKAR CIT DR ORDER PER GEORGE GEORGE K JUDICIAL MEMBER THESE ARE APPEALS OF THE ASSESEES SOCIETY AGAINST THE ORDER OF DIT(E) DATED 22.8.2012. 2. IN ITA NO. 5307/12 THE ASSESSEE SOCIETY HAS R AISED FOLLOWING EFFECTIVE GROUNDS :- I) THE DIRECTOR OF INCOME TAX (EXEMPTION) DELHI HAS E RRED IN LAW AND ON FACTS OF THE CASE BY REJECTING THE REGISTRATION U/S 12A OF THE IT ACT. ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 2 II) THE DIRECTOR OF INCOME TAX (EXEMPTION) DELHI HAS E RRED IN LAW AND ON FACTS OF THE CASE BY REJECTING APPLICATION IN FORM NO. 10 G SEEKING EXEMPTION U/S 80G. 3. IN ITA NO. 2223/13 THE SOLITARY EFFECTIV E GROUNDS RAISED IS IDENTICAL TO THE GROUND NO. (II) IN ITA NO. 5307/12 (SUPRA). 4. THERE IS A DELAY IN FILING ITA NO. 2223/1 3 BY 106 DAYS. THE ASSESSEE SOCIETY HAS FILED A LETTER STATING THE REASONS FOR THE DELAY IN FILING THE APPEAL. IT WAS SUBMITTED THAT FOR REGISTRATION U/S 12A AND EXE MPTION U/S 80G A CONSOLIDATED APPEAL ( ITA NO. 5307/12) WAS FILED WI THIN THE TIME LIMIT PRESCRIBED. LATER THE ASSESSEE WAS ADVISED TO FILE SEPARATE AP PEALS FOR REJECTION OF REGISTRATION U/S 12A AND EXEMPTION U/S 80G AND ACCO RDINGLY APPEALS RELATING TO GROUND OF EXEMPTION U/S 80G WAS FILED BELATEDLY BY 106 DAYS. ON PERUSAL OF THE REASONS FOR THE DELAY IN CONDONATION PETITION WE A RE CONVINCED THAT THE DELAY IN FILING APPEAL NO. 2223/13 WAS REASONABLE HENCE T HE DELAY IN FILING THE APPEAL IS CONDONED AND WE DISPOSE OFF THE SAME ON MERITS. 5. BRIEF FACTS OF THE CASE ARE AS FOLLOWS : THE ASSESSEE SOCIETY HAD FILED TWO APPLICATIONS FO R REGISTRATION U/S 12A AND EXEMPTION U/S 80G OF THE ACT ON 10.2.2012. THE DIT( E) REJECTED THE SAID APPLICATION VIDE HIS ORDER DATED 22.8.2012. THE OB SERVATION OF THE DIT(E) IN REJECTING THE APPLICATIONS OF THE SOCIETY READS AS FOLLOWS :- 3. ON PERUSAL OF THE FINANCIAL STATEMENT IT IS F OUND THAT THE SOCIETY IS IN RECEIPT OF RS. 33 75 000/- OUT OF THESE MOST OF THE EXPENSES ARE RELATED ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 3 TO ADMINISTRATIVE NATURE. THE SOCIETY HAS GIVEN RS. 7 000/- TO OTHER SOCIETY. THE SOCIETY HAS NOT DONE ANY CHARITABLE AC TIVITY SO FAR. MERE PASSING OF DONATION TO OTHER SOCIETY IS NOT A CHARI TABLE ACTIVITY. THE SOCIETY IS IN RECEIPT OF RS. 32 00 000/- FROM INDIA MEDTRONIC PVT. LTD. TO CONDUCTED SEMINARS/SUMMIT AS PER THE NORMS AND REQU IREMENT OF THE COMPANY. TDS WERE DEDUCTED FROM THE PAYMENT MADE TO THE APPLICANTS. IT SHOWS THAT IT IS A PROFESSIONAL RECEIPT. IT IS V ERY CLEAR THAT THE SOCIETY WORK ON THE BASIS OF PAYMENT TO SPREAD ITS EXPERTIS E TO THE PERSON IN THE SAME FIELD ARRANGED BY THE SPONSORS OF THE SEMINAR/ SUMMIT. THIS IS NOT A CHARITABLE ACTIVITY IN ANY MANNER. IN VIEW OF ABOVE FACTS IT IS HELD THAT T HE SOCIETY DOES NOT FULFIL THE CONDITIONS LAID DOWN FOR GRANT OF REGISTRATION U/S 12A OF THE INCOME TAX ACT. ACCORDINGLY THE APPLICATION FILED BY THE APPL ICANT FOR GRANT OF REGISTRATION U/S 12A IS HEREBY REJECTED. 4. SINCE THE APPLICANT IS NOT REGISTERED U/S 1 2A OF THE ACT THEREFORE APPLICATION IN FORM NO. 10G SEEKING EXEMPTIONS U/S 80G OF THE ACT IS ALSO HEREBY REJECTED. 6. THE ASSESSEE SOCIETY BEING AGGRIEVED IS IN APPEAL BEFORE US. THE ASSESSEE HAS FILED TWO PAPER BOOKS ONE ENCLOSING THE CERTIFI CATE OF REGISTRATION AND THE MEMORANDUM OF RULES AND REGULATIONS OF THE ASSESSEE S SOCIETY. THE OTHER PAPER BOOK CONTAINS THE COPY OF THE AUDIT BALANCE SHEET THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31 ST MARCH 2012 ETC. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OBJECTS OF THE ASSESSEE SOCIETY ARE CHARITABLE IN NATURE AND DONATIONS RECEIVED ARE FOR ACTIVITIES WH ICH ARE CHARITABLE AND ARE IN CONSONANCE WITH THE OBJECTS OF THE ASSESSEES SOCIE TY. FURTHER IT WAS SUBMITTED THAT WHEN THE APPLICATION FOR REGISTRATION U/S 12A IS TO BE CONSIDERED BY DIT(E) HE HAS TO EXAMINE WHETHER THE SAID APPLICATION IS M ADE IN ACCORDANCE WITH THE REQUIREMENT OF SECTION 12A READ WITH RULE 17A AND W HETHER FORM NO. 10A HAS ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 4 BEEN PROPERLY FILLED UP. IT WAS SUBMITTED THAT DIT( E) HAS TO EXAMINE THE OBJECTS OF THE TRUST WHETHER IT IS CHARITABLE OR NOT AT THE STAGE OF EXEMPTION OF REGISTRATION U/S 12A AND IT IS AT THE ASSESSMENT ST AGE THE APPLICATION OF INCOME IS TO BE EXAMINED. FOR THE AFORESAID PROPOSITION THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING JUDGMENTS NAMELY :- 1. FIFTH GENERATION EDUCATION SOCIETY VS. CIT REPORTED IN 185 ITR 634 (ALL) 2. SANNJEEVAMMA HANUMANTHA GOWDA CHARITABLE TRUST V. DIT(E) (2006) 285 ITR 327 (KARN) 3. CIT VS. GUJARAT MARITIME BOARD (2007) 2 89 ITR 139 (GUJ.) 7. THE LD. DR RELIED ON THE ORDER OF THE DIT(E) . 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD . SECTION 12A OF THE ACT MANDATES THE DIT (EXEMPTION) FOR CALLING FOR SUCH DOCUMENT/INFORMATION FROM THE APPLICANT SOCIETY AS HE THINKS NECESSARY AND ALSO MAKE SUCH INQUIRY AS HE MAY DEEM FIT. ON BEING SATI SFIED ABOUT THE OBJECT OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF THE ACT IVITIES OF THE ASSESSEE TRUST OR INSTITUTION HE SHALL GRANT THE REGISTRATION. IN CAS E HE IS NOT SATISFIED HE MAY REFUSE TO GRANT REGISTRATION AFTER GIVING REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE SOCIETY. HOWEVER ORDER GRANTING OR REF USING REGISTRATION SHALL BE PASSED WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION IS MADE U/S 12A OF THE ACT. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF FIFTH GENERATION EDUCATION SOCIETY VS. CIT (SUPRA) HAS HE LD THAT AT THE STAGE OF GRANTING REGISTRATION DIT (E) IS NOT TO EXAMINE T HE APPLICATION OF INCOME. IT WAS ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 5 STATED BY THE HONBLE COURT THAT ALL THAT HE MAY EX AMINE IS WHETHER THE APPLICATION IS MADE IN ACCORDANCE WITH REQUIREMENT OF SECTION 12A READ WITH RULE 17A AND WHETHER FORM NO. 10A HAS BEEN PROPERLY FILLED UP. HE MAY ALSO EXAMINE WHETHER THE OBJECT OF THE TRUST ARE CHARIT ABLE OR NOT. AT THIS STAGE IT IS NOT PROPER TO EXAMINE THE APPLICATION OF INCOME. 9. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HO NBLE KARNATAKA HIGH COURT IN THE CASE OF SANJEEVAMMA HANUMAN THE GOWDA CHARITABL E TRUST VS. DIT (EXEMPTION) (SUPRA) WHEREIN IT WAS HELD DIT (E) IS TO VERIFY THE OBJECTS OF THE TRUST AND NOT THE ACTIVITIES. IF THE ACTIVITIES ARE NOT CHARITABLE IT WAS HELD BY THE HONBLE HIGH COURT IT S A MATTER OF ASSESSMENT AND NOT A MATTER OF REGISTRATION. THE SAME VIEW HAS BEEN TAKEN IN THE JUDGMENT OF TH E HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT MARITIME BOARD (2007) 289 ITR 139 (GUJ.) IT WAS AFFIRMED BY THE HONBLE SUPREME COURT BY THE JUDGMENT REPORTED IN 295 ITR 561 (SC)). 10. THE RECENT JUDGMENT OF THE HONBLE JURISDIC TIAOLAL HIGH COURT IN THE CASE OF DIT VS. FOUNDATION OF OPHTHALMIC & OPTOMETRY RE SEARCH EDUCATION CENTRE (JUDGMENT DATED 16.8.2012 IN ITA NO. 1687/10) WAS C ONSIDERING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW. WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS RIGH T IN HOLDING THAT WHILE EXAMINING THE APPLICATION UNDER SECTION 12AA (1)(B) READ WITH SECTION 12A OF THE INCOME TAX ACT 1961 THE CONCER NED COMMISSIONER / DIRECTOR IS NOT REQUIRED TO EXAMINE THE QUESTION WH ETHER THE TRUST HAS ACTUALLY COMMENCED AND HAS IN FACT CARRIED ON CHA RITABLE ACTIVITIES? ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 6 11. IN DECIDING THE ABOVE QUESTION OF LAW THE H ONBLE HIGH COURT HELD AS FOLLOWS :- 10. FACIALLY THE ABOVE PROVISION WOULD SUGGEST THAT THERE NO RESTRICTIONS OF THE KIND WHICH THE REVENUE IS READI NG INTO IN THIS CASE. IN OTHER WORDS THE STATUTE DOES NOT PROHIBIT OR ENJOI N THE COMMISSIONER FROM REGISTERING TRUST SOLELY BASED ON IT OBJECTS WITHOUT ANY ACTIVITY IN THE CASE OF A NEWLY REGISTERED TRUST. THE STATUTE D OES NOT PRESCRIBE A WAITING PERIOD FOR A TRUST TO QUALIFY ITSELF FOR R EGISTRATION. 11. IF THE REVENUES CONTENTIONS ARE CORRECT THEN NECESSARILY A CONDITION WOULD HAVE TO BE READ IN TO THE PROVISION THAT THE COMMISSIONER SHOULD BE SATISFIED THAT THE TRUST IS IN FACT ENGAG ED IN CHARITABLE ACTIVITIES WHICH WOULD IN TURN INJECT CONSIDERABLE DEAL OF SUB JECTIVITY. IT IS QUITE POSSIBLE THAT IF SUCH FLEXIBILITY IS INTRODUCED IT WOULD BE SUSCEPTIBLE TO VARIED INTERPRETATION BY THE DIFFERENT AUTHORITIES IN THAT SOME WOULD BE SATISFIED WITH ACTIVITY OF FEW MONTHS WHILE OTHERS MAY WISH TO EXAMINE THE ACTIVITIES OF THE ORGANIZATION FOR LONGER TIME. IN THIS VIEW OF THE MATTER THIS COURT IS PERSUADED TO FOLLOW THE INTER PRETATION GIVEN TO SECTION -12AA BY THE KARNATAKA HIGH COURT IN DIRECT OR OF INCOME TAX (EXEMPTIONS) V. MEENAKSHI AMMA ENDOWMENT TRUST (SUP RA). 12. FOR THE ABOVE REASONS THE COURT ANSWERS THE QUESTION OF LAW IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL IS ACCORDINGLY DISMISSED. 12. LD. DIT (E) HELD OUT THE TOTAL RECEIPTS S UBSTANTIAL AMOUNT WAS EXPENDED FOR ADMINISTRATIVE PURPOSES. THIS OBSERVATION OF TH E DIT(E) IS FACTUALLY INCORRECT. ON PERUSAL OF THE BALANCE SHEET FOR THE YEAR ENDING 31 ST MARCH 2012 IT IS EVIDENT THAT SUBSTANTIAL RECEIPT OF RS. 20.61 LAKHS WAS LYI NG IN BANK ACCOUNT AND ONLY THE MINUSCULE PORTION OF THE RECEIPT WAS INCURRED AS AD MINISTRATIVE EXPENSES. THE ASSESSEE SOCIETY HAD RECEIVED RS. 30 LACS FROM INDI A MEDTRONIC PVT. LTD. AND BOSTON SCIENTIFIC INDIA PVT. LTD. FOR MEDICAL EDUCA TION PROGRAMME. IT ALSO ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 7 RECEIVED RS. 3 75 000/- FROM BOSTON SCIENTIFIC INDI A PVT. LTD. AS DONATION TOWARDS NEWER ADVANCE INTERVENTION CARDIOLOGY. DIT (E) HAS WRONGLY MENTIONED THAT IT IS PROFESSIONAL RECEIPT. THE ASSESSEE SOCI ETY HAS CONDUCTED THE FOLLOWING ACTIVITIES /WORKSHOP/SEMINARS A) ON THE 24 TH AND ON 25 TH OF JUNE 2011 A SYMPOSIUM WAS ORGANIZED IN MASSOURI WHICH WAS ATTENDED BY 82 DOCTORS FROM UTTR A KHAND U.P. RAJASTHAN AND HARYANA & DELHI. THE SPEAKER SPOKES ON ALL ASPECTS OF PREVENTIVE AN ADVANCE CARDIOLOGY. THE DOCTORS ALSO EXAMINED THE HEART OF DIFFERENT PEOPLE FREE OF COST. B) ON 11 TH OF NOVEMBER 2011 A CAMP IN COLLABORATION WITH ROTA RY CLUB DEOBAN U.P. WAS ORGANIZED WHERE 22 PATIENTS WERE SC REENED EXAMINED & TREATED FREE OF COST. DR. RAJNEESH KAPOOR PRESIDENT OF THE SOCIETY DELIVERED AN AWARENESS TALK. C) ON 22 ND JANUARY 2012 IT HAS ORGANIZED A HEALTH CAMP AT AL LAHABAD WHERE ABOUT 500 POOR PATIENTS WERE EXAMINED BP REA DINGS WERE TAKEN AND CONSULTATION WAS GIVEN BY DR. KAPOOR D) ON 29 TH JANUARY 2012 THE SOCIETY HAS DONATED RS. 7000/- TO MATRI KALYAN MANCH TO DISTRIBUTE BLANKETS AND MEDICINES T O POOR PATIENTS. 13. THE ASSESSEE SOCIETY HAS ALSO ENCLOSED PAPE R CUTTING AND PHOTOGRAPHS IN SUPPORT OF SAID ACTIVITIES. FROM INCOME & EXPENDITU RE ACCOUNT IT IS CLEAR THAT THE ASSESSEE SOCIETY HAS SPENT A SAME 7 36 069/- ON THE ABOVE CHARITABLE ACTIVITIES. THEREFORE DIT(E) IS NOT CORRECT IN HIS CONCLUSIONS AND REJECTING THE ASSESSEE SOCIETIES APPLICATION IN FORM NO. 10A. HENCE WE DI RECT THAT ASSESSEE SOCIETY BE GRANTED REGISTRATION U/S 12A OF THE ACT. ITA NO. 5307/DEL/12 AND ITA NO. 2223/DEL/13 8 14. SINCE REGISTRATION U/S 12A IS GRANTED THE DIT(E) SHALL EXAMINE WHETHER THE ASSESEE HAS SATISFIED THE NECESSARY CONDITIONS U/S 80G FOR GRANT OF EXEMPTION IN THE SAID SECTION. IT IS ORDERED ACCORD INGLY. 15. IN THE RESULT APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER 2014. SD/- SD/- (J.S. REDDY) ( GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 21 ST NOVEMBER 2014 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR ITAT