SHRI VINAYAK BHARTIYA CHARITABLE GROUP, MUMBAI v. DIT (E), MUMBAI

ITA 7038/MUM/2011 | misc
Pronouncement Date: 11-04-2014 | Result: Allowed

Appeal Details

RSA Number 703819914 RSA 2011
Assessee PAN AATKS0242E
Bench Mumbai
Appeal Number ITA 7038/MUM/2011
Duration Of Justice 2 year(s) 5 month(s) 23 day(s)
Appellant SHRI VINAYAK BHARTIYA CHARITABLE GROUP, MUMBAI
Respondent DIT (E), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 11-04-2014
Date Of Final Hearing 13-03-2014
Next Hearing Date 13-03-2014
Assessment Year misc
Appeal Filed On 18-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI . BEFORE SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDI CIAL MEMBER . / ITA NO. 7038 / MUM./ 2011 ( / ASSESSMENT YEAR : N.A. ) SHRI VINAYAK BHARTIYA CHARITABLE GROUP 105 RIDDHI SIDDHI APARTMENT TILAK ROAD GHATKOPER (E) MUMBAI 400 075 .. / APPELLANT V/S DIRECTO R OF INCOME TAX (EXEMP.) PIRAMAL CHAMBERS PAREL MUMBAI 400 012 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AATKS0242E / ASSESSEE BY : MR. SATISH R. MODI / REVENUE BY : MR. GIRIJA DAYAL / DATE OF HEARING 27 . 0 3 .201 4 / DATE OF ORDER 11.04.2014 / ORDER / PER AMIT SHUKLA J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER DATED 29 TH AUGUST 2011 PASSED BY THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) [DIT(E)] MUMBAI UNDER SHRI VINAYAK BHARTIYA CHARITABLE GROUP 2 SECTION 12AA(1)(B) OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ) REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTION 12A. 2 . FACTS IN BRIEF : THE ASSESSEE WHICH WAS CONSTITUTED ON 28 TH JUNE 2010 BY WAY OF MEMORANDUM OF ASSOCIATION FILED AN APPLICATION IN FORM NO.10A BEFORE THE LEARNED DIT(E) FOR GETTING REGISTRATION UNDER SECTION 12A ON TH E OBJECTS FOR WHICH IT HAS BEEN ESTABLISHED. THESE OBJECTS HAVE BEEN STATED TO BE FOR CHAR ITA BLE PURPOSE S AS DEFINED IN SECTION 2(15). THE OBJECTS HAVE BEEN INCORPORATED IN THE MEMORANDUM OF ASSOCIATION WHICH WAS FILED ALONG WITH THE APPLICATION BEFORE THE LEARNED DIT(E). FROM THE DETAILS FURNISHED ALONG WITH THE APPLICATION THE LEARNED DIT(E) OBSERVED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF ` 15 LAKHS AS LIABILITIES IN T H E NAME OF GOMATIDEVI TRIVEDI. IN RESPONSE TO THE SHOW CAUSE NOTICE IT WAS EXPLAINED THAT SHE IS A TRUSTEE WHO HAS TRANSFERRED HER LAND TO THE TRUST FOR BUILDING OF COLLEGE VIDE TRANSFER DEED EXECUTED ON 19 TH SEPTEMBER 2010. THE TRUST HAS GIVEN THREE CHEQUES OF ` 5 LAKHS EACH WHICH HAS BEEN GIVEN TO THE TRANSFEREE TO BE REALIZED AS AND W HEN THE FUNDS ARE AVAILABLE WITH THE TRUST. H E FURTHER NOTED THAT THE ASSESSEE TRUST HAS ALSO RECEIVED LOANS FROM VARIOUS PERSONS AND THE CREDITWORTHINESS OF THE SAID PERSON COULD NOT BE ESTABLISHED. HE NOTED THE NAMES OF THE NINE PERSON FROM WHOM THE ASSE SSEE HAS RECEIVED THE LOAN OUT OF WHICH HE NOTED THAT FOUR PERSONS WERE AGRICULTURIST WHO WERE NOT ASSESSED TO TAX AND HA VE GIVEN AMOUNT OF ` 50 000 EACH. SIMPLY ON THIS GROUND HE HELD THAT THE ASSESSEE TRUST IS NOT A GENUINE AND ITS ACTIVITIES ARE ALSO NOT GENUINE. 3 . B EFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED DIT(E) HAS FAILED TO EXAMINE THE OBJECTS OF THE TRUST FOR SHRI VINAYAK BHARTIYA CHARITABLE GROUP 3 WHICH IT WAS ESTABLISHED AND ALSO ITS GENUINENESS. HE HAS SIMPLY GONE BY THE FACT THAT IT HAS RECEIVED LOAN A ND SUCH PERSONS DO NOT HAVE CREDITWORTHINESS. ALL THESE ASPECTS CAN ONLY BE EXAMINED AT THE TIME OF THE ASSESSMENT PROCEEDINGS AND NOT AT THE TIME OF GRANTING REGISTRATION. THUS HE SUBMITTED THAT REGISTRATION UNDER SECTION 12A SHOULD BE GRANTED IN ASSESSE ES CASE BASED ON ITS OBJECT ELABORATED IN THE MEMORANDUM OF ASSOCIATION. 4 . THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY RELIED UPON THE ORDER OF THE DIT(E) AND SUBMITTED THAT IT WAS WITHIN THE PURVIEW OF THE DIT(E) TO EXAMINE THE GE NUINENESS OF THE LOAN RECEIVED BY THE ASSESSEE TRUST. HENCE THERE IS NO MISTAKE IN THE ORDER OF THE LEARNED DIT(E). 5 . AFTER CAREFULLY CONSIDERING THE RIVAL SUBMISSIONS AND ALSO THE IMPUGNED ORDER WE FIND THAT NOWHERE THE LEARNED DIT(E) HAS EITHER DISCUSSE D THE OBJECTS OF THE TRUST AND THE PURPOSE FOR WHICH THE TRUST OR THE INSTITUTION HAS BEEN ESTABLISHED. SIMPLY NOTING THE FACT THAT THE TRUST HAS RECEIVED LOAN FROM THE TRUSTEES THAT ITSELF DOES NOT LEAD TO ANY INFERENCE THAT THE ACTIVITIES OF THE TRUST IT SELF IS NOT GENUINE. THERE IS NO BAR THAT THE TRUST CANNOT RECEIVE A LOAN FOR THE PURPOSE OF ITS OBJECTS. IF THE TRUST WAS CONSTRUCTING A COLLEGE BUILDING THEN EITHER THE TRUST CAN RECEIVE THE DONATION TOWARDS CORPUS OR CAN RAISE LOAN. THIS ITSELF CANNOT BE THE GROUND FOR REJECTION OF REGISTRATION UNDER SECTION 12A. PROVISIONS OF SECTION 12AA ARE AMPLY CLEAR WHICH PROVIDES THAT THE COMMISSIONER OF SHRI VINAYAK BHARTIYA CHARITABLE GROUP 4 DIRECTOR OF INCOME CAN CALL SUCH INFORMATION TO SATISFY ABOUT THE GENUINENESS OF THE OBJECTS AND ALSO ABOUT TH E GENUINENESS OF THE ACTIVITIES OF THE TRUST AND THEN ONLY HE CAN EITHER GRANT OR REFUSE THE REGISTRATION. THE LAW MANDATES THAT HE HAS TO EXAMINE THE OBJECTS AND ALSO THE GENUINENESS OF THE ACTIVITIES. THEREFORE IN THIS CASE WE FEEL THAT THE MATTER SHOU LD BE RESTORED TO THE FILE OF THE LEARNED DIT(E) AND ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED DIT(E) AND RESTORE THE ISSUE BACK TO HIS FILE AND DIRECT HIM TO EXAMINE THE ISSUE OF REGISTRATION UNDER SECTION 12A AFRESH AFTER CONSI DERING THE OBJECTS OF THE TRUST AND ALSO THE GENUINENESS OF ITS ACTIVITIES AND AFTER GIVING DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE AND PASS A SPEAKING ORDER IN ACCORDANCE WITH THE LAW. 6 . 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . 11 TH APRIL 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH APRIL 2014 SD / - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI DATED : 11 TH APRIL 2014 SHRI VINAYAK BHARTIYA CHARITABLE GROUP 5 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT MUMBAI CITY CONCERNED ; ( 5 ) / THE DR ITAT MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI