URINE THERAPY FEDERATION, MUMBAI v. DIT(E), MUMBAI

ITA 872/MUM/2010 | misc
Pronouncement Date: 12-01-2011 | Result: Allowed

Appeal Details

RSA Number 87219914 RSA 2010
Assessee PAN AAATU0113C
Bench Mumbai
Appeal Number ITA 872/MUM/2010
Duration Of Justice 11 month(s) 7 day(s)
Appellant URINE THERAPY FEDERATION, MUMBAI
Respondent DIT(E), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 12-01-2011
Date Of Final Hearing 08-11-2010
Next Hearing Date 08-11-2010
Assessment Year misc
Appeal Filed On 04-02-2010
Judgment Text
1 ITA 872/MUM/10 URINE THERAPY FEDERATION. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F BEFORE SHRI R.V. EASWAR PRESIDENT AND SHRI P.M. JA GTAP A.M. ITA NO. 872/MUM/2010 ASSESSMENT YEAR URINE THERAPY FEDERATION C/O POOJA MATERNITY & NURSING HOME KAJUPADA 103 SANTOSHI MATA SOC. BHATWADI GHATKOPAR (W) MUMBAI 400 084. PAN AAATU0113C VS. DIRECTOR OF INCOME TAX (EXEMPTION) ROOM NO. 616 PIRAMAL CHAMBERS PAREL MUMBAI. 12 APPELLANT RESPONDENT APPELLANT BY SHRI K. SHIVRAM SHRI PARAS SAVLA RESPONDENT BY SHRI SUMEET KUMAR ORDER PER P.M. JAGTAP A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF DIT (EXEMPTION) DTD. 4.12.09 WHEREBY HE REFUSED TO GRANT THE APPROVAL SO UGHT BY THE ASSESSEE U/S 80G. 2. THE ASSESSEE IN THE PRESENT CASE IS A TRUST WHICH IS DULY APPROVED U/S 12-A. IT MOVED AN APPLICATION ON 1.4.09 FOR GRANT OF CERTIFI CATE U/S 80G OF THE INCOME TAX ACT 1961. FROM THE PERUSAL OF THE DETAILS FILED BY THE ASSESSEE ALONG WITH THE SAID APPLICATION IT WAS NOTICED BY THE DIT (EXEMPTION) THAT THE ASSESSEE TRUST HAD NOT CARRIED OUT ANY CHARITABLE ACTIVITIES DURING THE LAST THREE PRECEDING YEARS IN AS MUCH AS THERE WAS NO EXPENDITURE INCURRED BY IT ON ANY CHARITABLE ACT IVITIES. HE THEREFORE REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF CHARITABLE ACTIV ITIES IF ANY CARRIED OUT BY IT AND ALSO TO 2 ITA 872/MUM/10 URINE THERAPY FEDERATION. SHOW CAUSE AS TO WHY ITS APPLICATION U/S 80G SHOULD NOT BE REJECTED ON THE GROUND THAT NO CHARITABLE ACTIVITIES WERE BEING CARRIED OUT. IN R EPLY A LETTER DATED 1.12.2009 WAS FILED ON BEHALF OF THE ASSESSEE MAKING THE FOLLOWING SUBMISS IONS: YOUR HONORS QUESTION REGARDING NO ACTIVITIES CARRI ED OUT DURING LAST THREE YEARS WE HEREBY CLARIFIED THAT (A) IN FINANCIAL YEAR 2008-09 THE TRUST HAS SPENT A SU M OF ` 31678/- FOR THE OBJECT OF THE TRUST AND SAME CAN BE VERIFIED FROM A UDITED INCOME AND EXPENDITURE ACCOUNT OF FY 2008-09. THE COPY OF ACC OUNTS IS ATTACHED HEREWITH. (B) IN FY 2007-08 THE TRUST HAS SPENT A SUM OF ` 10841/- FOR THE OBJECT OF THE TRUST BUT DUE TO MISTAKE OF ACCOUNTANT IT IS SHOWN UNDER HEAD MEETING AND CONFERENCE EXP. THE COPY OF ACCOUNTS IS ALREADY FIL ED. (C) IN FY 2006-07 THE TRUST HAS SPENT SUM OF ` 12532/- FROM EARMARKED FUND FOR THE OBJECT OF THE TRUST AND SAME CAN BE VERIFIE D FROM AUDITED BALANCE SHEET WHERE SUCH FUND IS SHOWN UNDER SCHEDULE A ACC OUNT FOR FY 2006-07 3. THE DIT (EXEMPTION) DID NOT FIND MERIT IN THE AB OVE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE IN SUPPORT OF ITS APPLICATION FOR A PPROVAL U/S 80G FOR THE FOLLOWING REASONS GIVEN IN PARA 4 OF HIS IMPUGNED ORDER: THE MATTER HAS BEEN PERUSED AND I HAVE GONE THROUGH THE RECORDS AND THE SUBMISSIONS OF THE ASSESSEE. THE TRUST HAS BEEN FO RMED VIDE TRUST DEED DATED 12.05.2004 AND THE TRUST HAS BEEN ACCORDED APPROVAL VIDE ORDER DATED 15.10.2004. ADMITTEDLY THE APPLICANT TRUST HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES DURING THE LAST 3 YEARS PERIOD. THE SAME IS EVIDENT AND CORRO BORATED FROM THE RETURN OF INCOME AND MORE PARTICULARLY THE PROFIT AND LOSS ACCOUNT W HEREIN NO EXPENDITURE FOR THE ACCOUNT OF OBJECT OF THE TRUST HAS BEEN INCURRED/DE BITED BY THE APPLICANT TRUST DURING THE LAST 3 YEARS PERIOD. THE TRUST HAS BEEN FORMED FOR THE VARIOUS OBJECTS OF PUBLIC UTILITY WHICH ARE FOR THE BENEFITS OF THE PUBLIC IN GENERAL. THE PROVISIONS OF SECTION 80G WERE INTRODUCED WITH THE INTENTION OF PROVIDING FINANCIAL AND OTHER HELP TO THE NEEDY AND POOR PUBLIC IN GENERAL. THE INTENTION BE HIND ENACTING SUCH A BENEFICIAL PROVISO WAS TO GRANT INCENTIVES TO THE TRUST WHO AR E ENGAGED IN CARRYING OUT CHARITABLE ACTIVITIES FOR THE BENEFIT OF PUBLIC IN GENERAL. IN THE INSTANT CASE NO SUCH ACTIVITIES OF PUBLIC UTILITY HAVE BEEN CARRIED OUT AND AS SUCH THE INTENTION OF GRANTING THE APPROVAL U/S 80G IS DEFEATED. THE APPLICANT TRU ST IN ITS REPLY HAS STATED THAT IT HAS EXPENDED VARIOUS AMOUNT IN ALL THE LAST 3 YEARS BU T ON PERUSAL OF THE DULY AUDITED P&L ACCOUNT IT IS NOTICED THAT NO SUCH EXPENDITURE AS CLAIMED BY THE AUTHORISED REPRESENTATIVE IN HIS REPLY FILED NOW AND DISCUSSED ABOVE HAS BEEN DEBITED AT ALL BY THE APPLICANT TRUST. IN THE PRESENT CASE IT IS CR YSTAL CLEAR FROM THE PROFIT AND LOSS ACCOUNT FOR LAST 3 YEARS ANNEXED WITH THE APPLICATI ON THAT THE APPLICANT TRUST HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES NOR HAS ANY A MOUNT BEEN DEBITED UNDER THE HEAD EXPENSES ON OBJECTS OF TRUST. THE AFORESAID IS A C LEAR CUT CASE OF CONTRAVENTION OF THE BENEVOLENT PROVISIONS OF SECTION 80G OF THE I.T. AC T AND AS SUCH THE CERTIFICATE U/S 80G WOULD NOT SERVE ANY PURPOSE TO THE APPLICANT TR UST AND THEREFORE THE SAME CANNOT BE GRANTED TO THE APPLICANT TRUST. 3 ITA 872/MUM/10 URINE THERAPY FEDERATION. 4. FOR THE REASONS GIVEN ABOVE AND RELYING ON THE D ECISIONS OF HONBLE PATNA HIGH COURT IN THE CASE OF MADANI MUSAFIR KHANA WELFARE S OCIETY VS. CIT 264 ITR 481AND IN THE CASE OF VISHWA BUDHA PARISHAD VS. CIT 264 ITR 3 57 THE DIT (EXEMPTION) REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR APPROVAL/ CERTIFICATE U/S 80G. AGGRIEVED BY THE ORDER OF THE DIT (EXEMPTION) THE ASSESSEE HAS PREF ERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IN SUPPORT OF THE ASESSEES CAS E THAT CHARITABLE ACTIVITIES WERE CARRIED OUT BY IT IN ALL THE THREE RELEVANT YEARS I.E FINAN CIAL YEAR 2006-07 2007-08 & 2008-09 THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED COPIES O F ANNUAL ACCOUNTS OF THE ASSESSEE FOR THE SAID YEARS TO SHOW THE EXPENDITURE INCURRED ON SUCH CHARITABLE ACTIVITIES. AS POINTED OUT BY HIM THE BALANCE SHEET OF THE ASSESSEE AS ON 31. 3.07 ALONG WITH SCHEDULE VIII THERETO CLEARLY SHOWS THAT EXPENSES OF ` 12 532/- WERE INCURRED BY THE ASSESSEE ON CHARITABLE ACTIVITY IN THE FORM OF CONDUCTING AWARE NESS CAMP DURING THE FINANCIAL YEAR 1996-97 OUT OF SHIVAMBU SHIBIR PROJECT FUND. THE SA ID FUNDS TO THE EXTENT OF ` 67 827/- WERE AVAILABLE WITH THE ASSESSEE AS ON 1.4.2006 AND AFTER REDUCING THE SAME BY ` 12 532/- ON ACCOUNT OF EXPENSES INCURRED DURING FINANCIAL YE AR 2006-07 THE BALANCE AMOUNT OF ` 55 295/-WAS SHOWN IN THE BALANCE SHEET AS ON 31.3.2 007. SINCE THE SAID EXPENSES WERE INCURRED OUT OF EARMARKED FUND WHICH WAS DULY REFLE CTED IN THE BALANCE SHEET THE SAME HAD NO REFLECTION IN THE INCOME AND EXPENDITURE ACC OUNT FOR THE FINANCIAL YEAR 2006-07. IT APPEARS THAT THE DIT (EXEMPTION) HOWEVER COULD NO T APPRECIATE THIS ACCOUNTING PRESENTATION OF THE RELEVANT TRANSACTIONS AND PROCE EDED TO DRAW WRONG INFERENCE THAT THERE WAS NO EXPENSES INCURRED BY THE ASSESSEE ON I TS CHARITABLE OBJECTS AND THERE WERE THUS NO CHARITABLE ACTIVITY CARRIED OUT BY IT IN FI NANCIAL YEAR 2006-07. A SIMILAR WRONG INFERENCE WAS ALSO DRAWN BY THE DIT (EXEMPTION) IN SO FAR AS FINANCIAL YEAR 2007-08 IS CONCERNED WHEREIN EXPENSES INCURRED BY THE ASSESSEE ON CHARITABLE ACTIVITIES IN THE FORM OF MEETING OF SHIVAMBU SHIBIR PROJECT FUND AMOUNTIN G TO ` 7879/- AND CONFERENCE 4 ITA 872/MUM/10 URINE THERAPY FEDERATION. AMOUNTING TO ` 2962/- WERE DEBITED IN THE P&L ACCOUNT INADVERTENT LY UNDER THE HEAD ESTABLISHMENT EXPENSES INSTEAD OF REFLECTING THE SAME AS EXPENSES INCURRED ON THE OBJECTS OF THE TRUST. IN FINANCIAL YEAR 2008-09 A LSO THE ASSESSEE HAD INCURRED EXPENSES ON CHARITABLE OBJECTS IN THE FORM OF CONTRIBUTION P AID FOR 5 TH NATIONAL CONFERENCE ON SHIVAMBU AMOUNTING TO ` 25 000/- AND OTHER EXPENSES INCIDENTAL TO THE SAID CONFERENCE AMOUNTING TO ` 6678/- AND ALTHOUGH THE SAID AMOUNT WAS DULY REFLE CTED IN THE INCOME AND EXPENDITURE OF THE ASSESSEE FOR FINANCIAL YEAR 2008 -09 UNDER THE HEAD EXPENDITURE ON OTHER CHARITABLE OBJECTS IT APPEARS THAT THE DIT ( EXEMPTION) HAS COMPLETELY OVERLOOKED THE SAME. THE DOCUMENTARY EVIDENCE FILED BY THE AS SESSEE BEFORE THE DIT (EXEMPTION) IN SUPPORT OF ITS APPLICATION FOR GRANT OF CERTIFIC ATE U/S 80G THUS WAS SUFFICIENT TO ESTABLISH THAT CHARITABLE ACTIVITIES WERE CARRIED OUT BY THE ASSESSEE IN THE RELEVANT THREE YEARS I.E. FINANCIAL YEAR 2006-07 2007-08 & 2008-09 AND THE D IT (EXEMPTION) IN OUR OPINION WAS NOT JUSTIFIED IN REJECTING THE SAID APPLICATION FILED BY THE ASSESSEE ON THE GROUND THAT THERE WAS NO CHARITABLE ACTIVITY CARRIED OUT BY THE ASSESSEE IN THESE THREE YEARS. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE DIT (EXEMPTION) AND DIRECT HIM TO GRANT THE CERTIFICATE APPLIED FOR BY THE ASSESSEE U/S80G. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS A LLOWED ORDER PRONOUNCED ON 12 TH JANUARY 2011. SD/- SD/- (R.V. EASWAR) (P.M. JAGTAP) PRESIDENT A CCOUNTANT MEMBER MUMBAI DATED 12 TH JANUARY 2011. RK 5 ITA 872/MUM/10 URINE THERAPY FEDERATION. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE DIT (EXEMPTION) - MUMBAI 4. THE A.O. DDIT/ADIT/ITO RANGE 1/11 MUMBAI 5. THE DR BENCH F 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 6 ITA 872/MUM/10 URINE THERAPY FEDERATION. DATE INITIALS 1 DRAFT DICTATED ON 5.1.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 6.1.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER