Guru Smriti Kala Kendra, Bangalore v. DIT(Exemptions), Bangalore

ITA 766/BANG/2009 | misc
Pronouncement Date: 10-02-2010 | Result: Allowed

Appeal Details

RSA Number 76621114 RSA 2009
Bench Bangalore
Appeal Number ITA 766/BANG/2009
Duration Of Justice 6 month(s) 11 day(s)
Appellant Guru Smriti Kala Kendra, Bangalore
Respondent DIT(Exemptions), Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 10-02-2010
Date Of Final Hearing 02-02-2010
Next Hearing Date 02-02-2010
Assessment Year misc
Appeal Filed On 29-07-2009
Judgment Text
ITA.766 & 777/B/09 PAGE - 1 IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' BEFORE SHRI. K. P. T. THANGAL VICE PRESIDENT AND SHRI. A. MOHAN ALANKAMONY ACCOUNTANT MEMBER I.T.A.NOS.766 & 767/BANG/2009 (ASSESSMENT YEAR : NA) M/S. GURU SMRITI KALA KENDRA NO.2835 15TH CROSS 5TH MAIN ROAD BSK II STAGE BANGALORE 560 070 .. APPELLANT V. DIRECTOR OF INCOME TAX (EXEMPTIONS) BANGALORE .. RESPONDENT APPELLANT BY : SHRI. MANOJ D. PUKHALE RESPONDENT BY : SHRI. JASON P. BOAZ O R D E R PER K. P. T. THANGAL VICE PRESIDENT : THESE ARE APPEALS BY THE ASSESSEE AGAINST THE ORDE R OF THE DIT(EXEMPTIONS) REJECTING THE REGISTRATION U/S.12A AND RECOGNITION U/S.80G IN THE TWO APPEALS RESPECTIVELY. ITA.766/BANG/2009 : 2. THE ASSESSEE IS A CHARITABLE TRUST FOR IMPARTING EDUCATION WITHOUT ANY PROFIT MOTIVE AND THEREFORE THE ASSES SEE IS ENTITLED TO REGISTRATION U/S.12A. THE ASSESSEE IS ATTACKING TH E FINDING OF THE DIT(EXEMPTIONS) THAT THE ASSESSEE IS INTENDED TO CA RRY ON COMMERCIAL ITA.766 & 777/B/09 PAGE - 2 ACTIVITY. THE DIT(EXEMPTIONS) FAILED TO CONSIDER T HAT PURLISHING AND SELLING OF BOOKS MAGAZINES RESEARCH ARTICLES BUL LETINS ETC. WERE IN THE COURSE OF CARRYING ON CHARITABLE ACTIVITIES AND THAT TOO WITHOUT ANY PROFIT NOTICE AND THEREFORE NO COMMERCIAL ACTIVIT IES WERE CARRIED OUT TO INVOKE PROVISO TO SECTION 2(15). THE DIT (EXEMP TIONS) ALSO FAILED TO CONSIDER THAT THE TRUST STARTED FUNCTIONING ONLY NOW AND HENCE THE ACTIVITIES COULD NOT BE COMMENCED IN FULL SWING AND ON THE BASIS OF THE FEES RECEIVED FROM THE STUDENTS IT COULD NOT B E HELD THAT THE TRUST WAS NOT CARRYING ON CHARITABLE ACTIVITY. 3. THE ASSESSEE MADE AN APPLICATION FOR GRANT OF RE COGNITION U/S.80G ON 5.11.08 AND THE TRUST WAS REGISTERED ON 9.11.2006. DIT (EXEMPTIONS CALLED FOR THE DETAILS SO AS TO SPECIFY THE OBJECTS OF THE TRUST AND GENUINENESS OF THE ACTIVITIES FOR GIVING REGISTRATION. 4. ON VERIFICATION THE DIT (EXEMPTION) FOUND THAT THE OBJECT CLAUSE (E) WHICH DEALS WITH PUBLISHING AND SELLING BOOKS AND MAGAZINES RESEARCH ARTICLES BULLETINS AND RECORDE D AUDIO/VIDEO CASSETS VCDS ETC. ARE ALL COMMERCIAL NATURE. SHE FURTHER FOUND NO ACTIVITY HAS BEEN COMMENCED SO FAR IN FURTHERANCE O F THE OBJECTS AND THEREFORE SHE HELD IF THE REGISTRATION IS ALLOWED AND THE APPLICANT UNDERTAKES COMMERCIAL ACTIVITIES AS PER THE OBJECTS OF THE TRUST THEN IT ITA.766 & 777/B/09 PAGE - 3 WILL BE DIFFICULT TO REVOKE THE REGISTRATION EVEN I F THE ASSESSEE IS DOING COMMERCIAL ACTIVITY. HENCE SHE REFUSED THE REGISTR ATION. WHILE PROCESSING THE APPLICATION FOR REGISTRATION THE DIT (EXEMPTION) FURTHER FOUND THAT THOUGH THE TRUST WAS FORMED EARLIER IT HAD NOT STARTED ANY ACTIVITY SO FAR. THE ASSESSEE REITERATED THE ABOVE FACTS VIDE ITS LETTER DT.14.5.2009. SUBSEQUENTLY IN THE SAME LETTER THE ASSESSEE HOWEVER STATED THAT THE TRUST HAD STARTED ITS ACTIVITIES IN CLUDING TRAINING OF THE STUDENTS FOR DANCE MUSIC ETC. THE TRAINING IMPAR TED TO STUDENTS DOES NOT LEAD TO GRANT OF CERTIFICATE BY THE KENDRA NOT THE KENDRA IS AFFILIATED TO ANY UNIVERSITY. HENCE SHE HELD THAT THE ACTIVITIES OF THE TRUST CANNOT BE HELD AS 'EDUCATION' AND DOES NOT FA LL WITHIN THE PURVIEW OF SECTION 2(15) OF THE ACT. WITH THE ABOV E OBSERVATION THE ASSESSEE'S APPLICATION WAS REJECTED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH E MAIN OBJECT OF THE ASSESSEE IS ENUMERATED UNDER THE HEAD 'EDUCA TION AND RESEARCH ACTIVITIES.' I.E. TO RUN SCHOOLS COLLEGES IN THE FIELD OF INDIAN MUSIC PERFORMING ARTS TO GIVE PRACTICAL KNOWLEDGE TO STU DENTS FOR EXAMINATIONS AND COMPETITIONS ETC. AND ALSO TO E STABLISH MAINTAIN RUN THE SCHOOLS AND INSTITUTES IN THE FIELD OF MANU FACTURING TECHNIQUES OF MUSICAL INSTRUMENTS ETC. TO MAINTAIN RESEARCH C ENTERS AND TO ENCOURAGE RESEARCH ACTIVITIES IN THE FIELD OF EDUCA TION AS WELL AS FINE ITA.766 & 777/B/09 PAGE - 4 ARTS PERFORMING ARTS ETC. THE SCHOLARSHIPS ARE T O BE PROVIDED TO DESERVING STUDENTS CONDUCT FESTIVALS ETC. THESE ARE DEFINITELY CHARITABLE ACTIVITIES. ONE OF THE REASON GIVEN BY THE LEARNED DIT(EXEMPTIONS) IS THAT THE ASSESSEE IS NOT SO FAR COMMENCED ITS ACTIVITIES AND WHEN IT IS SO IT REGISTRATION IS GI VEN IT WILL BE DIFFICULT TO REVOKE THE SAME. WE ARE UNABLE TO ACCEPT THE AB OVE PROPOSITION. IN THE CASE OF ECUMENICAL CHRISTIAN CENTRE V. COMMI SSIONER OF INCOME-TAX (1983) 139 ITR 226 THE HON'BLE JURISDI CTIONAL HIGH COURT HELD THE OBJECT OF ASSESSEE IS EDUCATION AND DIFFUSION OF KNOWLEDGE PUBLICATION OF BOOKS PROMOTION OF RESEA RCH ARE ALL CHARITABLE ACTIVITIES. MERELY BECAUSE THE OBJECT C LAUSE IS WIDELY WORDED IT WILL NOT DEFEAT MEAN THAT THE PURPOSE IS NOT EDUCATIONAL. HENCE THE HON'BLE HIGH COURT HELD THE ASSESSEE WAS ENTITLED TO RECOGNITION U/S.80G. FOLLOWING THE ABOVE DECISION WE ARE OF THE VIEW THAT THE DIT (EXEMPTION) WAS NOT JUSTIFIED IN DENYING THE REGISTRATION U/S.12A MERELY ON THE GROUND THAT THE ASSESSEE HAS SO FAR NOT STARTED ANY ACTIVITIES. WITH THE ABOVE OBSERVA TION WE REMAND THE MATTER BACK TO THE FILE OF THE DIT (EXEMPTION) TO C ONSIDER THE ISSUE AFRESH. ITA.766 & 777/B/09 PAGE - 5 ITA.767/BANG/2009 : 6. THIS APPEAL IS AGAINST THE ORDER OF THE DIT (EXE MPTIONS) IN DECLINING TO GRANT RECOGNITION U/S.80G OF THE ACT. THE FACTS ARE IDENTICAL TO ITA NO.766/BANG/2009 DEALT WITH BY US IN THE SUPERCEDING PARAGRAPHS. SINCE WE HAVE REMANDED THE MATTER RELATING TO DENYING REGISTRATION U/S.12AA(1)(B)(II) THEREIN TO THE DIT (EXEMPTIONS) THE ISSUE IN THE PRESENT APPEAL RELAT ING TO GRANTING RECOGNITION U/S.80G IS ALSO REMANDED BACK FOR FRESH DECISION. 7. IN THE RESULT BOTH THE APPEALS BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES AND WE DIRECT THE DIT (EX) TO PASS APPROPRIATE ORDERS KEEPING IN VIEW OUR OBSERVATIONS AS ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 10TH FEBRUARY 2010. SD/- SD/- (A. MOHAN ALANKAMONY) (K. P. T. THANGAL) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE DATED : 10TH FEBRUARY 2010 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF ITAT NEW DELHI 7. GF ITAT BANGALORE