Sardar Patel Arogya Trust, Baroda v. The Income tax Officer,Ward-5(2),, Baroda

ITA 588/AHD/2009 | 2000-2001
Pronouncement Date: 25-03-2011 | Result: Allowed

Appeal Details

RSA Number 58820514 RSA 2009
Assessee PAN AAETS8526K
Bench Ahmedabad
Appeal Number ITA 588/AHD/2009
Duration Of Justice 2 year(s) 1 month(s) 2 day(s)
Appellant Sardar Patel Arogya Trust, Baroda
Respondent The Income tax Officer,Ward-5(2),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 27-04-2009
Date Of Final Hearing 10-03-2011
Next Hearing Date 10-03-2011
Assessment Year 2000-2001
Appeal Filed On 23-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : SMC BENCH : AHMEDABAD (BEFORE HONBLE SHR I T.K. SHARMA J.M .) I.T.A. NOS. 587 TO 591/AHD./2009 ASSESSMENT YEARS : 1999-2000 TO 2003-2004 SARDAR PATEL AROGYA TRUST VADODARA -VS- I.T.O. WARD-5(2) VADODARA (PAN : AAETS 8526K) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TUSHAR P. HEMANI A.R. RESPONDENT BY : SHRI VIMALENDU VERMA D .R. O R D E R THESE FIVE APPEALS FILED BY THE ASSESSEE ARE AGAIN ST THE FIVE SEPARATE ORDERS DATED 10.12.2008 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-V BARODA FOR THE ASSESSMENT YEARS 1999-2000 TO 2003-2004. ALL THE AP PEALS WERE HEARD ON THE SAME DATE AND ARGUED BY THE COMMON REPRESENTATIVES. HENCE THEY A RE DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THESE APPEALS COMMON GROUNDS ARE RAISED. THE GROUNDS RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1999-2000 ARE AS UNDER: 1. THE TRUST WAS ALREADY REGISTERED U/S 12A OF TH E INCOME TAX ACT 1961 VIDE REGISTRATION NO. BRD/SYS/110-15-S/96-97 DATED 08 1 1 1996 I.E. THE TRUST WAS REGISTERED SINCE ITS INCEPTION. 2. DUE TO NON AVAILABILITY OF THE ABOVE REGISTRATI ON CERTIFICATE THE TRUST WAS NO OPTION BUT TO APPLY FOR FRESH REGISTRATION WITH A REQUEST TO CONDONE THE DELAY. THE HON. CIT VIDE HIS ORDER DATED 13.09.2005 REJECT THE APPLICATION OF T HE TRUST WITH A REASON THAT THE ASSESSEE HAS NOT CARRIED OUT ANY GENUINE CHARITABLE PR RELI GIOUS ACTIVITIES IN PURSUANCE OF ITS OBJECTS. 3. AT THE TIME OF ASSESSMENT THE TRUSTEE HAS FIND OUT ORIGINAL REGISTRATION CERTIFICATE AND SUBMITTED TO THE INCOME TAX OFFICER. 2 ITA NO. 587 TO 591-AHD-2009 4. DENIAL OF REGISTRATION BY THE HON. CIT DOES NOT MEAN THAT THE ORIGINAL REGISTRATION WAS CANCELLED. BEING A PROCEDURAL LAPSES THE TRUST CAN NOT BE DEEMED TO BE AN UNREGISTERED AND HENCE THE BENEFIT OF SECTION 11 1 2 & 13 OF THE INCOME TAX ACT SHALL BE AVAILABLE TO THE ASSESSEE. 5. THE ASSESSING OFFICER IS NOT CORRECT FOR NOT GR ANTING EXEMPTION U/S 11 OF THE ACT THOUGH THE TRUST WAS REGISTERED U/S 12A OF THE ACT . 6. THE ASSESSEE PRAYS THAT APPLICATION OF INCOME F OR OBJECTS OF THE TRUST WOULD BE ALLOWABLE U/S 11 OF THE ACT WHICH IS DENIED BY THE ASSESSING OFFICER WRONGLY. 7. WITHOUT PREJUDICE TO THE ABOVE THE ASSESSEE IS PRAY THAT EXPENSES INCURRED OF RS. 20 128/- WHICH OTHERWISE ALLOWABLE FROM INCOME AND NOT ALLOWED BY THE ASSESSING OFFICER IS TO BE ALLOWED WHILE COMPUTING THE INCO ME OF THE TRUST EVEN THOUGH EXEMPTION U/S 11 OF THE ACT IS DENIED BY THE OFFICER. 8.THE ENTIRE ADDITION MADE BY ASSESSING OFFICER IS UNWARRANTED AND NOT AS PER PROVISION OF THE ACT WHICH ASSESSEE PRAYS TO DELETE THE ENTI RE ADDITIONS. 9. THE ASSESSEE RELIED ON DECISION GIVEN BY AHMED ABAD BENCH OF ITAT IN THE CASE OF SHREE NAYAKAKA SANSTHAN V/S. ITO WARD 3(2) VADODA RA IN ORDER NO. ITA NO.2364 AHD/2006 A.Y. 2003-04 DATED 31.05.2007. 2.1 IN THE REMAINING FOUR ASSESSMENT YEARS GROUNDS ARE IDENTICAL WITH THAT OF THE AFORESAID GROUNDS OF APPEAL FOR THE ASSESSMENT YEAR 1999-2000 EXCEPT VARIANCE IN AMOUNT IN GROUND NO.7 OF THE APPEALS. THE AMOUNT MENTIONED IN GROUND NO.7 I.E. EXPENSES INCURRED WHICH ACCORDING TO THE ASSESSEE TRUST OTHERWISE ALLOWABLE ARE AS UND ER: ASSESSMENT YEAR AMOUNT (RS.) 2000-01 8 035/- 2001-02 31 701/- 2002-03 15 060/- 2003-04 19 737/- 3. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN ALL THE AFORESAID GROUNDS OF APPEAL ARE THAT THE ASSESSEE TRUST WAS FORMED ON 28 TH MARCH 1996 AND GOT REGISTRATION UNDER BOMBAY PUBL IC TRUST ACT 1950 ON 02.08.1996. CLAUSE 1 OF THE CONS TITUTION OF THE ASSESSEE TRUST READS AS UNDER: THE OBJECT OF THE TRUST IS TO CARRY OUT MEDICAL ACTIVITIES SOCIAL WELFARE ACTIVITIES AND EDUCATIONAL ACTIVITIES FOR THE BEN EFIT OF VILLAGE PEOPLE. 3 ITA NO. 587 TO 591-AHD-2009 3.1 IN THE ASSESSMENTS FRAMED FOR ALL THE ASSESSMEN T YEARS UNDER APPEAL THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF INTRODUCTION/ F RESH ADDITION IN TRUST FUND/ CORPUS AS WELL AS DISALLOWED EXPENSES AND ACCUMULATION OF INCOME AS U NDER: ASSESSMENT ADDITION ON ACCOUNT OF OTHER ADDITIONS (RS.) YEAR DISALLOWANCE OF EXPENSES AND ACCUMULATION OF INCOME (RS.) ________________________ 1999-2000 28 246 1 57 812 (ADDITION ON ACCOUNT OF INTRODUCTION/FRESH ADDITION IN TRUST FUNDS/CORPUS) 2000-2001 21 915 23 500 (ADDITION ON ACCOUNT O F INTRODUCTION/FRESH ADDITION IN TRUST FUNDS/CORPUS) 2001-2002 61 793 26 719 (DISALLOWANCE OF CLAIM FOR EXEMPTION UNDER EXPLANATION TO SECTION 11(1) 2002-2003 23 590 1 00 001 (ADDITION ON ACCOUNT OF INTRODUCTION/FRESH ADDITION IN TRUST FUNDS/CORPUS) 2003-04 19 727 1 42 247 (DISALLOWANCE OF CLAIM FOR EXEMPTION UNDER EXPLANATION TO SECTION 11(1) 4. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) THE ASSESSEE CONTENDED AS UNDER: IT IS SUBMITTED THAT THE CONTENTION OF THE ASSESSIN G OFFICER IS NOT JUSTIFIABLE IN DENYING EXEMPTION UNDER SECTION I1/12 IN VIEW OF THE FOLLO WING: -IT APPEARS THAT THE MAIN CONSIDERATION WHICH INFL UENCED TO THE ASSESSING OFFICER TO HOLD THAT THE ASSESSEE TRUST WAS NOT ELIGIBLE FOR EXEMP TION OF INCOME U/S 11 OF THE IT ACT ON THE BASIS OF NON REGISTRATION U/S 12A(A) R.W.S 12A A FOR THE RELEVANT ASSESSMENT YEARS. -IT IS SUBMITTED THAT SUCH CONSIDERATION DOES NOT JUSTIFY A CONCLUSION THAT THE TRUST WAS NOT ELIGIBLE FOR EXEMPTION OF INCOME U/S 11 OF THE IT ACT IN VIEW OF THE FACT THAT THE TRUST WAS ALREADY REGISTERED U/S 12A(A) OF THE IT ACT 1 961 VIDE REG. NO. BRD/SYS/110-15- 4 ITA NO. 587 TO 591-AHD-2009 S/96-97 DATED 08.11.1996 GRANTED BY THE HON. COMMI SSIONER OF INCOME TAX VADODARA W.E.F. FROM THE INCEPTION OF THE TRUST. IT IS SUBMITTED THAT DUE TO NON AVAILABILITY OF RE GISTRATION CERTIFICATE THE TRUSTEES HAD APPLIED FOR REGISTRATION AGAIN WITH A REQUEST TO C ONDONE THE DELAY. THE HON. C1T VIDE HIS ORDER DATED 13.09.2005 DENIED THE REGISTRATION REJECTING THE APPLICATION OF THE TRUST. IN THIS CASE THE TRUST WAS ALREADY REGISTERED U/S 12A AT THE TIME OF DENIAL OF REGISTRATION. IT IS SUBMITTED THAT DENIAL OF REGISTRATION DOES N OT MEAN THAT THE ORIGINAL REGISTRATION GRANTED WAS CANCELLED. HENCE THE ASSESSING OFFICER'S CONTENTION THAT IN ABSENCE OF REGISTRATION THE EXPENDITURE INCURRED FOR THE OBJECTS OF THE TRUST APPLIED TO C HARITABLE PURPOSES ARE NOT ENTITLED FOR EXEMPTION AVAILABLE U/S 11 & 12 OF THE IT ACT IS N OT JUSTIFIED. EVEN THE ADDITION TO CORPUS OF THE TRUST WHICH IS A CAPITAL RECEIPT IS ALSO AS SESSED AS INCOME IS NOT CORRECT. WITHOUT PREJUDICE TO THE ABOVE IT IS FURTHER SUBM ITTED THAT ONE OF THE MAIN OBJECT AND ACTIVITY OF THE TRUST IS TO PROVIDE MEDICAL HELP B Y ARRANGING MEDICAL CAMPS REGULARLY IN RURAL AREA OF PADRA TALUKA OF BARODA DISTRICT ITS ENTIRE INCOME IS EXEMPTED U/S 10(23C)(IIIAE) OF THE ACT. WITHOUT PREJUDICE TO ABOVE IT IS SUBMITTED THAT T HE TRUST IS REGISTERED BOTH UNDER BOMBAY PUBLIC TRUST ACT (REGISTRATION NO. E/5012/BARODA) ON 03.08.1996 BY THE ASSISTANT CHARITY COMMISSIONER VADODARA AND ALSO UNDER INCO ME-TAX ACT (NO.BRD/SYS/L04-11- S/96-97 BY COMMISSIONER OF INCOME-TAX VADODARA AS CHARITABLE TRUST AND THE ASSESSING OFFICER SHOULD TAKE IN TO CONSIDERATION THESE REGI STRATIONS CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN CASE OF GESTETNER DUPLICA TORS (117 ITR 1). IT IS SUBMITTED THAT IN THE SAID CASE IT WAS HELD THAT WHEN THE PROVID ENT FUND WAS GRANTED RECOGNITION BY THE COMMISSIONER ASSESSING OFFICER COULD NOT HAVE CHA LLENGED ELIGIBILITY FOR SUCH RECOGNITION. IN VIEW OF THE ABOVE IT IS SUBMITTED THAT THE ASS ESSING OFFICER'S CONTENTION IN DENYING EXEMPTION UNDER SECTION 11 OF THE INCOME-TAX ACT T O THE ASSESSEE IS NOT CORRECT. THE ASSESSEE PRAYS THAT EXEMPTION BE ALLOWED TO THEM U NDER SECTION 11/12. IT IS SUBMITTED THAT THE ASSESSING OFFICER IS NOT CORRECT IN TREATING THE CORPUS DONATION AS INCOME WHICH ARE CAPITAL RECEIPTS AND CREDITED TO CORPUS AS PER THE CONSTITUTION OF THE TRUST AND DIRECTIONS OF THE DONORS. 4.1 AFTER CONSIDERING THE AFORESAID SUBMISSIONS IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DISMISSED THE A PPEALS OF THE ASSESSEE FOR THE DETAILED REASONS GIVEN IN PARA 3.2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)S DETAILED REASONS FOR DISMISSING THE APPEALS ARE THE SAME IN RESPECT OF ALL THE ASSESSMENT YEARS. FOR THE 5 ITA NO. 587 TO 591-AHD-2009 SAKE OF CLARITY THE DETAILED REASONS GIVEN IN PARA 3.2 OF THE IMPUGNED ORDER DISMISSING THE APPEAL OF THE ASSESSEE FOR ONLY ONE ASSESSMENT YEAR I.E. 1999-2000 IS REPRODUCED HEREUNDER: 3.2 IT MAY BE NOTED HERE THAT THE CIT BARODA EVEN THOUGH GRANTED EXEMPTION U/S 12A(A) ON 08.11.1996 HAVING MISPLACED THE SAME T HE APPELLANT HAS AGAIN APPROACHED THE CIT FOR GRANT OF EXEMPTION U/S 12A(A) ON 14.0 2.2005. AS STATED ALREADY THE EXEMPTION SOUGHT BY THE APPELLANT WAS DENIED. TO A STRAIGHT QUESTION WHETHER THE APPELLANT HAS SOUGHT MODIFICATION OF THE EXEMPTIO N ORDER DATED 30.08.2005 OR FURTHER CHALLENGED THE SAME THE APPELLANT HAS PROMISED TO COME BACK ON THIS ISSUE AND HAS NOT FURNISHED ANY INFORMATION IN THIS REGARD. IN THE C IRCUMSTANCES IT IS PRESUMED THAT THE APPELLANT NEITHER SOUGHT MODIFICATION OF THE CIT'S ORDER DATED 30-08-2005 NOR CHALLENGED IT FURTHER. IN THE CIRCUMSTANCES IT IS HELD THAT THE AO HAS RIGHTLY DENIED THE EXEMPTION CLAIMED BY THE APPELLANT. 5. AGGRIEVED WITH THE ABOVE THE ASSESSEE IS IN AP PEALS BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING BEFORE THE TRIBUNAL ON B EHALF OF THE ASSESSEE SHRI TUSHAR P. HEMANI APPEARED AND REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THE COUNSEL OF THE ASSESSEE FU RTHER DREW THE ATTENTION OF THE BENCH TO THE PROVISIONS CONTAINED IN SUB-SECTION (3) OF SECTION 12AA WHICH WAS INSERTED BY THE FINANCE ACT 2007 W.E.F. 01.06.2007. HE POINTED OUT THAT THIS SU B-SECTION EMPOWERS THE COMMISSIONER TO CANCEL THE REGISTRATION WHICH HAS ALREADY BEEN GRAN TED. PRIOR TO 01.06.2007 COMMISSIONER OF INCOME TAX WAS HAVING NO POWER TO CANCEL REGISTRATI ON ALREADY GRANTED UNDER SECTION 12A(A) OF THE I.T. ACT 1961. THE COUNSEL OF THE ASSESSEE POI NTED OUT THAT EARLIER THE REGISTRATION WAS GRANTED BY THE CIT BARODA VIDE LETTER NO.BRD/SYS/1 10-15-S/96-97 DATED 8-11-96 SUBMITTED AT PAGE NO.6 OF THE PAPER BOOK AND THE RELEVANT PORTIO N OF WHICH IS REPRODUCED HEREUNDER: OFFICE OF THE COMMISSIONER OF INCOME-TAX NO.BRD/SYS/110-15-S/96-97 AAYAKAR BHAVAN RACE COURSE CIRCLE BARODA-390 007. DATED 8-11-96 TO THE TRUSTEE SHRI SARDAR PATEL AROGYA TRUST VILLAGE KARAKHADI TAL-PADRA DIST- BARODA 6 ITA NO. 587 TO 591-AHD-2009 __________________________AS CONSTITUTED BY THE T RUST DEED/ MEMORANDUM OF ASSOCIATION DATED 28-3-96 HAS FILED THE REGISTRAT ION APPLICATION UNDER SECTION 12(A)(A) OF THE INCOME-TAX ACT 1961 IN THE PRESC RIBED FORM ON 30-10-96 I.E. WITHIN THE STIPULATED TIME/ WAS OUT OF TIME BY DAYS. AS THE TRUST/ INSTITUTION WAS PREVENTED BY SUFFICIENT CAUSE IN FILING THE APPLICATION THE DELAY HAS BEEN CONDONED/SUFFICIENT JUSTIFICATION HAS NOT BEEN G IVEN FOR THE DELAY IN FILING THE APPLICATION AND AS SUCH IT IS REJECTED. REGISTRATION GRATION FROM 28-3-96 2. THE APPLICATION HAS BEEN ENTERED AT NO.BRD/SI B/110-15-8/96-97 IN THE REGISTER OF APPLICATION UNDER SECTION 12(A)(A) MA INTAINED IN MY OFFICE. SD/- (M.K.JOSHI) COMMISSIONER OF INCOME-TAX BARODA NO. BRD/SIB/110-15-S/96-97 BARODA DATED 8-11-96 6.1 THE ABOVE REGISTRATION WAS NEVER CANCELLED TILL DATE. IN THESE CIRCUMSTANCES THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CLEARLY ERRED I N DISMISSING THE APPEALS OF THE ASSESSEE MERELY ON THE GROUND THAT THE REGISTRATION UNDER SE CTION 12A(A) ERRONEOUSLY APPLIED SUBSEQUENTLY ON 24.2.2005 WAS REFUSED. HE SUBMITTED THAT WHEN TH E ASSESSEE FILED THE RETURN OF INCOME FOR ALL THE ASSESSMENT YEARS THIS TRUST WAS DULY REGISTERE D UNDER SECTION 12A(A) AND THEREFORE ON THIS GROUND ALONE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS) CLEARLY ERRED IN DISMISSING THE APPEALS OF THE ASSESSEE. HE ACCORDINGLY CONTENDED T HAT THE IMPUGNED ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE SET ASIDE AN D THE ASSESSING OFFICER BE DIRECTED TO RE- COMPUTE THE INCOME OF THE ASSESSEE FOR ALL THE FIVE ASSESSMENT YEARS KEEPING IN VIEW THAT THE REGISTRATION IS ALREADY GRANTED BY THE CIT BARODA VIDE LETTER NO.BRD/SYS/110-15-S/96-97 DATED 8-11-96. 7. ON THE OTHER HAND SHRI VIMALENDU VERMA D.R. A PPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX(APPEALS). HE POINTED OUT THAT UNLESS THE ASSESSEE SEEKS MODIFICA TION OF CITS ORDER DATED 30.8.2005 THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) IS FAIR AND REASONABLE. 8. HAVING HEARD BOTH THE SIDES I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT PRIOR TO INSERT ION OF CLAUSE 3 OF SECTION 12AA W.E.F. 01.10.2004 7 ITA NO. 587 TO 591-AHD-2009 THE COMMISSIONER OF INCOME TAX WAS HAVING NO POWER TO CANCEL THE REGISTRATION UNDER SECTION 12A(A) ALREADY GRANTED. IT IS PERTINENT TO NOTE THA T IN THIS CASE REGISTRATION WAS ALREADY GRANTED BY THE LD. CIT AS ABOVE ON 8-11-1996 AND IT WAS NEVER CANCELLED BY THE LD. CIT. IN THESE CIRCUMSTANCES I AM OF THE VIEW THAT THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) CLEARLY ERRED IN DISMISSING THE APPEALS OF THE ASSESSEE ON THE REASONING GIVEN BY THE CIT IN THE IMPUGNED ORDERS. THE HON'BLE SUPREME COURT IN THE C ASE OF ADDITIONAL CIT VS- SURAT CITY GYMKHANA [2008] 300 ITR 214 (SC) HELD THAT THE REGI STRATION OF AN INSTITUTION UNDER SECTION 12A OF THE INCOME-TAX ACT 1961 ONCE DONE IS A FAIT ACCOMPLI AND ASSESSING OFFICER CANNOT THEREAFTER FURTHER PROBE INTO THE OBJECT OF INSTITU TION. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF HIRALAL BHAGWATI VS- CIT 246 ITR 188 (GUJ.) HEL D THAT ONCE A REGISTRATION UNDER SECTION 12A(A) OF THE ACT IS GRANTED THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REFUSING THE BENEFIT WHICH COULD OTHERWISE ACCRUE UNDER REGISTRATION ON THE G ROUND THAT IT WAS NOT FOR THE BENEFIT OF PUBLIC AT LARGE. 8.1 IN VIEW OF THE FOREGOING I SET ASIDE THE ORDER S OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND RESTORE THE MATTERS BACK TO THE FI LE OF THE ASSESSING OFFICER TO RE-COMPUTE THE INCOME FOR ALL THE ASSESSMENT YEARS UNDER APPEAL AF RESH KEEPING IN VIEW THE REGISTRATION GRANTED BY THE LD. COMMISSIONER OF INCOME TAX UNDER SECTION 12A(A) ON 08-11-1996 VIDE LETTER NO. BRD/SYS/110-15-S/96-97 AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT FOR STATISTICAL PURPOSES THE APP EALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 25.03.20 11. SD/- (T.K. SHARMA) JUDICIAL MEMBER DATED : 25/03/2011 8 ITA NO. 587 TO 591-AHD-2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED 4) CIT CONCERNED 5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHM EDABAD TALUKDAR/SR.P.S.