ARYA SANSTHA, BARAN V. CIT, Kota

ITA 1001/JPR/2010

• Counselvise Citation: 100123114 RSA 2010
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 03-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Charitable institution
• Section: 12AA; 68; 28; 11

Judgement Text

1 ITA 1001-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 1001/JP/2010 M/S. ARYA SANSTHA, VS. THE COMMISSIONER OF INCOM E-TAX, BARAN. KOTA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SIDHARTH RANKA RESPONDENT BY : SHRI SUNIL MATHUR ORDER DATE OF ORDER : 24/06/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT WHO REJECTED THE APPLICATION FOR EXEMPTION UNDER SECTION 80G(5) OF T HE IT ACT. 2. THE ASSESSEE IS A SANSTHA ESTABLISHED ON 26.7.20 06 BY VIRTUE OF REGISTRATION GRANTED BY THE SUB-REGISTRAR. THE REGISTRATION UND ER SECTION 12AA HAS ALSO BEEN GRANTED BY THE LD. CIT VIDE ORDER DATED 26.10.2009. THEREA FTER THE ASSESSEE FILED APPLICATION IN FORM NO. 10G ON 15.12.2009 SEEKING GRANT OF APPROVA L OF EXEMPTION UNDER SECTION 80G(5). A REPORT ON THE APPLICATION OF THE ASSESSE E WAS RECEIVED FROM THE ITO WHO SENT THE REPORT THAT ON THE RECEIPTS ISSUED IN LIEU OF GIFT THE NAME OF THE PERSON IS MENTIONED WITHOUT PROPER ADDRESS. IT WAS FURTHER REPORTED THA T IN THE RECEIPT FULL ADDRESS IS NOT MENTIONED. HOWEVER, IN THE LIST OF DONORS COMPLETE NAME AND ADDRESSES ARE MENTIONED. ACCORDINGLY, IT WAS FOUND BY THE AO THAT THE MONEY WAS NOT USED FOR THE PURPOSES IT WAS RECEIVED AS GIFT. AN OPPORTUNITY WAS GIVEN TO THE ASSESSEE TRUST. DETAILED REPLY WAS FILED. 2 AFTER CONSIDERING THE AOS REPORT AND REPLY OF THE ASSESSEE, THE LD. CIT WAS NOT SATISFIED ABOUT THE GENUINENESS OF THE ACTIVITY OF SANSTHAN. ACCORDINGLY, HE REJECTED THE APPLICATION UNDER THE PROVISIONS OF RULE 11AA(5) OF I.T. RULES. 3. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE TR IBUNAL. 4. THE LD. COUNSEL OF THE ASSESSEE FILED WRITTEN SU BMISSIONS AND IT WAS FURTHER SUBMITTED THAT ALL THE CONDITIONS FOR HOLDING THE G ENUINENESS OF THE TRUST ARE SATISFIED FORE GRANTING EXEMPTION UNDER SECTION 80G(5). THE LD. C IT HAS NOT INDICATED HOW THE CONDITIONS PRESCRIBED UNDER THE LAW WERE NOT SATISF IED. THE SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB SECTION (2) WAS READ ALSO. IT WAS FURTHER SUBMITTED THAT ASSESSEE IS COVERED ;UNDER SECTION 11 AS REGISTRATION UNDER SECTION 12AA HAS A LREADY BEEN GRANTED TO THE ASSESSEE. ALL THE REQUIREMENTS ARE SATISFIED, THEREFORE, THE LD. CIT WAS JUSTIFIED IN DENYING EXEMPTION UNDER SECTION 80G(5). RELIANCE WAS PLACE D ON THE CASE LAWS MENTIONED IN THE WRITTEN NOTE. 5. ON THE OTHER HAND, LD. CIT D/R PLACED RELIANCE O N THE ORDER OF LD. CIT. 6. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND THAT THE TRUST DESERVES TO SUCCEED IN ITS APPEAL. T HE REGISTRATION UNDER SECTION 12AA HAS BEEN GRANTED BEFORE MOVING APPLICATION IN FORM N. 1 0. ALL THE CONDITIONS FOR GRANTING EXEMPTION ARE SATISFIED. THE ASSESSEES INCOME IS ASSESSABLE IN VIEW OF PROVISIONS OF SECTION 11 OF THE ACT. IF BY ANY REASON DONATION R ECEIVED BY ASSESSEE FOUND NOT USED FOR THE PURPOSE FOR WHICH THE TRUST HAS BEEN GRANTED R EGISTRATION UNDER SECTION 12AA THEN IN THAT CASE THE REGISTRATION UNDER SECTION 12AA CAN B E CANCELLED OR EXEMPTION UNDER SECTION 11 CAN BE DENIED AND THE AMOUNT OF DONATION CAN BE TREATED AS LOAN AND IN VIEW OF PROVISIONS OF SECTION 68 THEY CAN BE CONSIDERED WHI LE COMPLETING THE ASSESSMENT IN VIEW 3 OF PROVISIONS OF SECTIONS 28 TO 43. HOWEVER, IN OUR CONSIDERED VIEW, THE REGISTRATION UNDER SECTION 80G(5) CANNOT BE DENIED MERELY ON THE REPORT OF THE AO THAT COMPLETE ADDRESS IS NOT MENTIONED ON THE RECEIPT. WHEN LIST IS PREPARED, ALL THE NAMES OF THE DONORS INCLUDING THEIR COMPLETE ADDRESSES WERE FURN ISHED THEN WHAT ELSE LEFT TO BE ASCERTAINED. IT IS NOT NECESSARY THAT COMPLETE ADDR ESS SHOULD BE MENTIONED ON THE RECEIPT WHEN ASSESSEE HAS FULL RECORD I.E. NAME AND ADDRESS ES OF THE PARTIES AND THEY HAVE BEEN FURNISHED BY LD. AO FROM WHOM THE REPORT WAS SOUGHT BY LD. CIT. VARIOUS CASE LAWS RELIED UPON BY LD. A/R GOES IN FAVOUR OF THE ASSESS EE. THESE CASES ARE IN CASE OF DERA BABA JODH SACHIAR VS. UNION OF INDIA, 328 ITR 178 W HEREIN IT IS HELD THAT TO GRANT OR REFUSE EXEMPTION UNDER SECTION 80G, MAIN CRITERION WHICH REQUIRES CONSIDERATION IS AS TO WHETHER INCOME DERIVED IS BEING USED FOR CHARITABLE PURPOSES, AS PER OBJECT OF TRUST/SOCIETY OR NOT. 7. IN CASE OF KALYANAM KAROTI VS. CIT, 123 ITD 317, THE LUCKNOW BENCH OF THE TRIBUNAL HAS HELD THAT WHILE GRANTING RECOGNITION U NDER SECTION 80G(5) OR CONTINUATION THEREOF COMMISSIONER HAS ONLY TO SEE WHETHER SOCIET Y FULFILS CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SECTION 80G(5) AND NOT WHETH ER CERTAIN RECEIPTS, I.E., VOLUNTARY DONATIONS, ARE PROPERLY EXPLAINED OR NOT. 8. THE HONBLE GUJARAT HIGH COURT IN CASE OF N.N. D ESAI CHARITABLE TRUST VS. CIT, 246 ITR 452 HAS HELD THAT SCOPE OF ENQUIRY IS CONFI NED TO FIND OUT WHETHER INSTITUTION SATISFIES THE PRESCRIBED CONDITIONS. ACTUAL ASSESS MENT OF INSTITUTION WOULD NOT AFFECT THE CLAIM FOR SPECIAL DEDUCTION UNDER SECTION 80G. 9. SIMILAR VIEW HAS BEEN EXPRESSED BY PUNE BENCH OF THE TRIBUNAL IN CASE OF SHIKSHAN PRASARAK MANDALI VS. CIT, 28 SOT 50. 4 10. ALL THESE DECISIONS ARE IN FAVOUR OF THE ASSESS EE AS ALL THE CONDITIONS PRESCRIBED UNDER CLAUSES (I) TO (V) OF SUB-SECTION 5 ARE SATIS FIED. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE DIRECT THE AO TO ALLOW THE REGIST RATION UNDER SECTION 80G(5). 11. IN THE RESULT, APPEAL OF THE ASSESSEE TRUST IS ALLOWED. 12. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 24 .6.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- M/S. ARYA SANSTHA, BARAN. THE CIT, KOTA. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 1001/JP/2010.) BY ORDER, AR ITAT JAIPUR.