Raghuraji Devi Foundation Trust, v. CIT, Faizabad

ITA 613/LKW/2010 | misc
Pronouncement Date: 12-01-2011 | Result: Allowed

Appeal Details

RSA Number 61323714 RSA 2010
Assessee PAN AABTR5936G
Bench Lucknow
Appeal Number ITA 613/LKW/2010
Duration Of Justice 3 month(s) 15 day(s)
Appellant Raghuraji Devi Foundation Trust,
Respondent CIT, Faizabad
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 12-01-2011
Date Of Final Hearing 11-01-2011
Next Hearing Date 11-01-2011
Assessment Year misc
Appeal Filed On 27-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH 'A' LUCKNOW BEFORE SHRI H. L. KARWA HON'BLE VICE PRESIDENT AND SHRI N. K. SAINI ACCOUNTANT MEMBER I.T.A. NO.613 & 593/LUC/10 ASSESSMENT YEAR: N.A. RAGHURAJI DEVI FOUNDATION TRUST VS. C.I.T. VILL MOHASINPUR FAIZABAD. TEHSIL AKBARPUR AMBEDKAR NAGAR. PAN:AABTR5936G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT SHUKLA ADVOCATE RESPONDENT BY: SHRI ANADI VERMA D. R. O R D E R PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 26/08/2010 OF CIT FA IZABAD. SINCE THE APPEALS WERE HEARD TOGETHER SO THESE ARE BEING DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE WILL DEAL WITH I.T.A. NO.613/LUC/10. IN THIS APPEAL THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE REJECTION OF THE 2 APPLICATION OF THE ASSESSEE SEEKING REGISTRATION U/S 12A OF THE I.T. ACT 1961. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE AS SESSEE MOVED AN APPLICATION U/S 12A OF THE ACT FOR REGISTRATION UNDER THAT SECTION. THE LEARNED CIT ASKED THE ASSESSEE TO SUBMIT THE DOCUMENTS IN ORDER TO VERIFY THE GENUINENESS OF THE ACTIVITIES RECEIPT OF D ONATION AND CONTRIBUTION THE LIST OF DONORS/CONTRIBUTORS WITH VER IFIABLE DETAILS OF THE PERSONS WHO MADE SUCH PAYMENTS LIKE NAME COMPLETE ADD RESS DATE OF RECEIPT OF DONATION/CONTRIBUTION AND THE AMOUNT SO DONATED/CONTRIBUTED TOWARDS CHARITABLE PURPOSES ETC. THE LEARNED CIT POINTED OUT THAT ON VERIFICATION OF THE VOUCHERS FUR NISHED BY THE ASSESSEE IT WAS SEEN THAT MOST OF THE EXPENSES WERE NOT DU LY SUPPORTED BY THE CASH MEMO/BILLS ETC. AND WERE MERELY SELF-MADE VOUCHERS SUPPORTING THE EXPENSES. HE ALSO POINTED OUT T HAT AS PROOF OF ITS CHARITABLE ACTIVITIES THE ASSESSEE HAD PRODUCED SA LE DEED FOR A PLOT OF LAND DEEDS GIFTING LAND TO SOCIETY AN AGREE MENT WITH A BUILDER FOR CONSTRUCTION OF BUILDING PURPORTEDLY FOR A SCHOOL THE ESTABLISHMENT OF WHICH ACCORDING TO THE SOCIETY WAS CONTEMPLATING . ACCORDING TO THE LEARNED CIT THE MERE OWNERSHIP OF LAND AND ENTE RING INTO A CONTRACT FOR CONSTRUCTION OF BUILDING PURPORTEDLY F OR A SCHOOL BY 3 THEMSELVES DID NOT AMOUNT TO ACTIVITIES AS WOULD FULFI LL THE CONJUNCTIVE TEST OF OBJECTS BEING CHARITABLE AND GENUINENESS OF CHA RITABLE ACTIVITIES MANDATED BY THE LAW. THE LEARNED CIT OBSERVED THAT T HE GENUINENESS OF CHARITABLE ACTIVITIES COULD ONLY BE GATHERED FROM THE EVIDENCE PRODUCED BY THE ASSESSEE AND IN THE INSTANT CASE IT WAS N OT POSSIBLE TO ARRIVE AT A SATISFACTION THAT THE ASSESSEE WAS GENUINELY ENGAGED IN CHARITABLE ACTIVITIES. ACCORDINGLY THE APPLICATION MOVED BY THE ASSESSEE WAS REJECTED. NOW THE ASSESSEE IS IN APPEAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE OBJECTS OF THE ASSESSEE WERE CHARITABLE IN NATURE AND THE MAIN OBJECT WAS TO ESTABLISH EDUCATIONAL INSTITUTION TO PROVIDE THE EDUCA TION TO THE NEEDY PERSONS SO ACTIVITIES OF THE ASSESSEE CONNECTED WITH IMPA RTING EDUCATION WERE CHARITABLE IN NATURE. IT WAS STATED T HAT TO START THE EDUCATIONAL INSTITUTE THE LAND WAS REQUIRED WHICH WAS DONATED BY SHRI RAJIV AGARWAL AND THIS FACT WAS REFLECTED IN THE STAT EMENT OF AFFAIRS FILED BEFORE THE CIT. OUR ATTENTION WAS DRAWN TOWA RDS PAGE NO. 73 OF THE ASSESSEES COMPILATION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE EXPENSES INCURRED WERE NOMI NAL SO THOSE WERE ON THE SELF-MADE VOUCHERS. OUR ATTENTION WAS DR AWN TOWARDS PAGE NO. 74 OF THE ASSESSEES COMPILATION WHICH IS THE CO PY OF INCOME 4 AND EXPENDITURE ACCOUNT. IT WAS SUBMITTED THAT THE L EARNED CIT WITHOUT CONSIDERING THE OBJECT OF THE ASSESSEE WAS NOT J USTIFIED IN REJECTING THE APPLICATION MOVED BY THE ASSESSEE FOR REG ISTRATION U/S 12AA OF THE ACT. 5. IN HIS RIVAL SUBMISSIONS THE LEARNED D. R. STRONGLY SUP PORTED THE ORDER OF LEARNED CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL LY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN T HE PRESENT CASE MAIN OBJECTION OF THE CIT WHILE REJECTING THE APPL ICATION U/S 12AA WAS THAT THE EXPENSES INCURRED BY THE ASSESSEE WERE NOT DULY SUPPORTED BY CASH MEMOS. IT IS NOTICED THAT THE ASSESSEE HAD INCUR RED THE FOLLOWING EXPENSES: 1. CONVEYANCE EXPENSES 935.00 2. POSTAGE STAMP & TELEPHONE EXPENSES 123.00 3. BOARD MEETING EXPENSES 1 642.00 4. REGISTRATION & RENEWAL EXPENSES 2 860.00 5. MISC. EXPENSES 2 200.00 6. TAKSHILA PRIMARY ACADEMY 5 000.00 7. AUDIT FEES 2 500.00 6.1 FROM THE ABOVE EXPENSES IT IS NOTICED THAT THE ASSESSE E INCURRED THE EXPENSES OF `14 760/-. THOSE EXPENSES WERE MAINLY O N ACCOUNT OF AUDIT FEES REGISTRATION AND RENEWAL EXPENSES AND PAYME NT TO TAKSHILA 5 PRIMARY ACADEMY. THE ASSESSEE INCURRED A SUM OF `935/- ON CONVEYANCE AND `123/- ON ACCOUNT OF POSTAGE STAMP AN D TELEPHONE EXPENSES. FOR THOSE EXPENSES IT IS NOT POSSIBLE TO GET T HE CASH MEMO AND BILLS ETC. SINCE THE EXPENSES WERE PETTY THEREFORE THE GROUND ON THE BASIS OF WHICH THIS APPLICATION HAS BEEN REJECTED WAS NOT SUFFICIENT. THE ANOTHER OBSERVATION OF THE LEARNED C IT WHILE REJECTING THE APPLICATION OF THE ASSESSEE WAS THAT IT WAS NOT POSSIB LE TO ARRIVE AT A SATISFACTION THAT APPLICANT WAS GENUINELY ENGAGED IN THE CHARITABLE ACTIVITIES. HOWEVER HE HAD NOT DISCUSSED W HAT WERE THE MAIN OBJECTS OF THE ASSESSEE AND HOW THOSE WERE NOT CHARI TABLE IN NATURE. WE THEREFORE CONSIDERING THE ENTIRE FACTS OF THE PRESENT CASE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF LEARNED CIT TO BE ADJUDICATED AFRESH AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. NOW WE WILL DEAL WITH I.T.A. NO.593/LUC/10. IN THIS APPEAL THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE REJECTION OF APPLICATION MOVED BY THE ASSESSEE FOR GRANT OF APPROVAL U/S 80G OF T HE I.T. ACT 1961. IT IS NOTICED THAT THE LEARNED CIT REJECTED T HE SAID APPLICATION FOR THE REASON THAT THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT HAS BEEN REJECTED. SINCE THE ISSUE RELATING TO THE REGIST RATION U/S 12AA OF 6 THE ACT HAS BEEN SET ASIDE TO THE FILE OF THE LEARNED CIT IN THE FORMER PART OF THIS ORDER WHILE DECIDING THE ASSESSEES APPEAL I N I.T.A. NO.613/LUC/10 THEREFORE THE ISSUE RELATING TO GRANT OF APPROVAL U/S 80G IS ALSO SET ASIDE TO THE FILE OF LEARNED CIT TO BE ADJUDICATED AFRESH AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 8. IN THE RESULT THE APPEALS ARE ALLOWED FOR STATISTIC AL PURPOSES. (THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12/0 1/2011) SD/. ( H. L. KARWA ) VICE PRESIDENT SD/. (N. K. SAINI) ACCOUNTANT MEMBER DATED: 12/01/2011 *SINGH COPY FORWARDED TO THE: - 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR