Deepayan, Bangalore v. ITO, Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO. 96/BANG/2010 ASSESSMENT YEAR : N.A. DEEPAYAN D - 1 CASA LAVELLE - 1 HOTEL RAMA LANE LAVELLE ROAD CROSS BANGALORE 560 001. : APPELLANT VS. THE DIRECTOR OF INCOME TAX (EXEMPTIONS) BANGALORE. : RESPONDENT APPELLA NT BY : SHRI V. SRINIVASAN C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL.CIT(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL AGGRIEVED BY THE ORDER OF THE DIT(EXEMPTIONS) BANGALORE NO. DIT(E)BLR/80G(R)/727/AAATD4885E/ ITO(E) - I/VOL 2009 - 10 DATED 20.11.2009 REJECTING RENEWAL OF RECOGNITION U/S. 80G(5)(VI) OF THE ACT. 2. THE APPELLANT SOCIETY WAS REGISTERED U/S. 12A OF THE ACT WITH EFFECT FROM 1.4.1996 AND WAS GRANTED RECOGNITION U/S. 80G OF THE ACT FOR A PERIOD FROM 24.8.2006 TO 31.3.2009. ON 31.3.2009 THE APPELLANT FILED AN ITA NO. 96 /BANG/ 10 PAGE 2 OF 4 APPLICATION FOR RENE WAL OF RECOGNITION U/S. 80G IN FORM NO.10G. THE MAIN OBJECTS OF THE SOCIETY ARE TO PROMOTE SOCIAL CULTURAL EDUCATIONAL AND CHARITABLE ACTIVITIES F URTHER TO HOLD MEETINGS ARRANGE CONFERENCES AND LECTURES AND TO CONDUCT PROGRAMME S FOR MEMBERS AS APPAREN T FROM THE MEMORANDUM OF ASSOCIATION AND RULES AND REGULATIONS FILED BY THE ASSESSEE. 3. LD. DIT(E) RAISED DOUBTS AS REGARDS THE APPLICABILITY OF SECTION 80G(5)(II) OF THE ACT IN THE CASE OF THE ASSE SSEE SINCE ITS OBJECTS WAS ONLY FOR CONDUCT OF RECREATIONAL ACTIVITIES. THE APPELLANT CAME OUT STATING THAT THEY HAVE AMENDED THE OB JECTS OF THE TRUST DEED AND NOW THE SOCIETY S ACTIVITIES CONSISTS ONLY FOR PROVIDING PUBLIC BENEFIT ESPECIALLY TO THE POOR AND ALSO FOR AWARDING SCHOLARSH IP TO STUDENTS IN THE . THE L D. DIT(E) OPINED THAT THERE IS AN AMBIGUITY IN THE STATEMENT OF THE APPELLANT AS TO WHETHER THE AMEN DMENT IS BROUGHT ABOUT IN THE MO A OF THE SOCIETY OR THE TRUST DEED THEY REFERRED TO AND WHETHER THE DEED WAS EITHER REGISTERED BY THE REGISTRAR OF SOCIETIES OR THE SUB - REGISTRAR. LD. DIT(E) ALSO CAME TO A FINDING THAT THE APPELLANT WAS ORGANIZING DEEPAVALI GET TOGETHER HOLI GET TOGETHER MOVIE SHOW MUSICAL NITE AND CULTURAL PROGRAMMES ETC. WHICH WERE NOT IN THE NATURE OF CHARITABLE PURPOSE. IN THE LIGHT OF THE ABOVE FACTS LD. DIT(E) REJECTED THE APPLICATION OF THE APPELLANT FOR RENEWING RECOGNITION U/S. 80G(5)(VI) OF THE ACT. 4. LD. AR STOUTLY ARGUED THAT THE APPELLANT IS A SOCIETY AND DURING THE YEAR ITS ACTIVITIES WERE PURELY IN CHARITABLE NATURE AND DI D NOT CONDUCT ANY ACTIVITIES WHICH CANNOT BE CONSIDERED TO BE NON - CHA RITABLE. THE MO A OF THE SOCIETY HAS BEEN ACCORDINGLY AMENDED LEGALLY. HE ALSO FURNISHED A ITA NO. 96 /BANG/ 10 PAGE 3 OF 4 PAPER BOOK CONTAINING 1 TO 67 PAGES WHICH INCLUDES THE INCOME & EXPENDITURE ACCOUNT AND BALANCE SHEET FOR THE YEAR ENDED 31.3.2006. 5. LD. DR VEHEMENTLY ARGUED IN SUPPORT OF THE REVENUE STATING THAT THE APPELLANT S ACTIVITIES ARE NOT CHARITABLE IN NAT URE AND ONLY CONSISTS OF DIWALI - HOLI GET TOGETHERS CONDUCTING MOVIE DRAMA SHOWS AND ORGANIZING MU SICAL AND DANDIYA NIGHTS. IT WAS PRAYED THAT THE ORDER OF THE LD. DIT( E) MAY BE UPHELD. 6. LD. AR REQUESTED BEFORE THE BENCH THAT THE CASE MAY BE REMITTED BACK TO THE LD. DIT(E) FOR FRESH CONSIDERATION SINCE HE WILL BE IN A POSITION TO EXPLAIN THE ACTIVITIES CONDUCTED BY THE ASSESSEE THREADBARE AND ESTABLISH THAT THE SOCIETY EXISTED ONLY FOR GENERAL PUBLIC UTILITY. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE AMENDED M O A OF THE SOCIETY WAS NOT PLACED BEFORE US FOR OUR CONSIDE RATION. IT ALSO APPEARS THAT THE SAME WAS NOT BEFORE THE LD. DIT(E). FROM THE INCOME & EXPENDITURE ACCOUNT SUBMITTED BY THE ASSESSEE IT IS EVIDENT THAT THE ASSESSEE HAD INCURRED EXPENDITURE FOR DIWALI GET TOGETHER HOLI GET TOGETHER ORGANIZING MOVIE SH OWS AND CONDUCTING MUSICAL NITE. WHEN QUESTIONED ON THE NATURE OF THESE EXPENDITURE TO THE LD. AR HE CAME OUT BOLDLY STATING THAT HE WILL BE ABLE TO ESTABLISH ALL SUCH SUM WAS SPENT FOR CHARITABLE PURPOSE. MERE LY BY THE MENTION OF THESE TERMS IN THE INC OME & EXPENDITURE ACCOUNT WILL NOT ESTABLISH THE RE AL NATURE OF THESE EXPENSES. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE WE DO NOT FIND ANY HARM IN PROVIDING THE APPELLANT WITH ONE MORE OPPORTUNI TY BEFORE THE LD. DIT(E) TO ESTABLISH HIS BONAFIDE CLAIM. THEREFORE WE REMIT BACK THE CASE TO THE FILES OF LD. DIT(E) FOR DE NOVO CONSIDERATION ITA NO. 96 /BANG/ 10 PAGE 4 OF 4 WITH AN ADVICE TO THE ASSESSEE TO COOPERATE PROMPTLY WITH THE REVENUE AND CONCLUDE THE PROCEEDING SPEEDILY WITHOUT SEEKING UNNECESSARY A DJOURNMENTS . 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF FEBRUARY 2011 . SD/ - SD/ - ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 11 TH FEBRUARY 2011. DS/ - COPY TO: BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE. 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE