Raja Bahadur Venkat Rama Reddy Society, Hyderabad V. DIT (Exemptions), Hyderabad

ITA 1005/HYD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2540 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NAESAMMA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Charitable institution
• Section: 80G; 12A; 11

Judgement Text

ITA NO 1005 OF 2013 RAJA BAHADUR VENKAT RAMA REDDY NIZAMABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1005/HYD/2013 (ASSESSMENT YEAR: 2009-10) M/S. RAJA BAHADUR VENKAT RAMA REDDY SOCIETY NIZAMABAD PAN: AAATR 2096 R VS DIRECTOR OF INCOME TAX (EXEMPTIONS) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SMT. S. NAESAMMA, CIT(DR) O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10AGAINS T THE ORDER OF THE LEARNED DIT (E), HYDERABAD, DATED 15.03.2013 REFUSING TO GRANT REGISTRATION U/S 80G(5) OF THE AC T. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY RUNNING A SCHOOL AND AN OLD AGE HOME. IT WAS GRANTE D REGISTRATION U/S 12A OF THE ACT. SUBSEQUENTLY, THE ASSESSEE FILE D AN APPLICATION IN FORM NO.10G ON 15.04.2009 SEEKING APP ROVAL U/S 80G(5) OF THE I.T. ACT. THE SAME WAS REJECTED BY TH E DIT (E) ON THE GROUND THAT THE ASSESSEE IS COLLECTING FEE UNDER DI FFERENT HEADS FROM THE STUDENTS INCLUDING UNDER THE HEAD BUILDIN G FUND DURING THE YEAR 2009-10 AND POINTED OUT THAT THE AS SESSEE HAS VIOLATED THE G.O DATED 6.8.2009 OF THE GOVT. OF AND HRA PRADESH DATE OF HEARING : 22.09.2017 DATE OF PRONOUNCEMENT : 29.09.2017 ITA NO 1005 OF 2013 RAJA BAHADUR VENKAT RAMA REDDY NIZAMABAD. PAGE 2 OF 4 UNDER THE A.P. EDUCATIONAL INSTITUTION (REGULATION OF ADMISSION AND PROHIBITION OF CAPITATION FEE) ACT, 1983 AND ALS O THAT THE ASSESSEE IS RUNNING AN OLD AGE HOME ON COMMERCIAL L INES AND THEREFORE, THE ACTIVITIES OF THE ASSESSEES INSTITU TIONS ARE NOT CHARITABLE IN NATURE. IT WAS THUS HELD THAT THE ASS ESSEE IS NOT ENTITLED TO THE BENEFIT OF SECTION 80G OF THE ACT. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE ITAT AND THE ITAT AFTER REFERRING TO THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF N.N. DESAI CHARITABLE TRU ST VS. CIT (246 ITR 452), HELD THAT ONCE THE CONDITIONS LAID DOWN I N RULE 11AA AS ALSO IN SUB-CLAUSES (I) TO (V) OF SECTION 80G ARE C OMPLIED WITH, THE TRUST IS ELIGIBLE FOR REGISTRATION U/S 80G OF THE A CT. THUS, THE ITAT VIDE ITS ORDER DATED 31.08.2012 IN ITA NO.1154/HYD/ 2009, HAS REMITTED THE SAID MATTER TO THE FILE OF THE DIT (E) FOR GRANTING EXEMPTION U/S 80G OF THE ACT. 4. THE DIT (E) IN THE CONSEQUENTIAL PROCEEDINGS, REAFFIRMED HIS EARLIER ORDER DENYING REGISTRATION U /S 80G OF THE ACT AND THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE SATISFIED ALL THE CONDITIONS MENTIONED IN SECTION 80G OF THE ACT AND SINCE THE REGISTRATION GRANTED U/S 1 2A OF THE ACT IS STILL IN FORCE, THE ASSESSEE CANNOT BE DENIED REGIS TRATION U/S 80G OF THE ACT. IN SUPPORT OF HIS CONTENTION, THE LEARN ED COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE UPON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF AG ARWAL SAMAJ SAHAYATA TRUST, HYDERABAD IN ITA NO.888/HYD/2015 DA TED 10.02.2017 WHEREIN IT HAS BEEN HELD THAT ONCE REGIS TRATION U/S ITA NO 1005 OF 2013 RAJA BAHADUR VENKAT RAMA REDDY NIZAMABAD. PAGE 3 OF 4 12A OF THE ACT IS GRANTED BY THE PRESCRIBED AUTHORI TY, THE DIT (E) IS NOT JUSTIFIED IN DENYING APPROVAL U/S 80G OF THE ACT. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THOUGH THE REGISTRATION U/S 12A IS A PRE-CONDITION FOR GRANT O F APPROVAL U/S 80G, THAT ALONE CANNOT BE THE BASIS FOR GRANTING AP PROVAL U/S 80G OF THE ACT AND THE DIT (E) HAS TO BE SATISFIED THAT THE ASSESSEE FULFILLS THE CONDITIONS PRESCRIBED U/S 80G (5) OF THE ACT. HE SUBMITTED THAT IN THE CASE BEFORE US, THE ASSESS EE HAS CLEARLY COLLECTED BUILDING FUND AND THEREFORE, IS NOT ELI GIBLE FOR EXEMPTION U/S 11 OF THE ACT AND HENCE APPROVAL U/S 80G HAS RIGHTLY BEEN REJECTED. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS RUNNING A S CHOOL AND HAS BEEN GRANTED REGISTRATION U/S 12A OF THE ACT. WHILE GRANTING REGISTRATION U/S 12A OF THE ACT, THE DIT (E) WAS SA TISFIED THAT THE ASSESSEES OBJECTIVES ARE CHARITABLE IN NATURE. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF HIRALAL BHAGWATI VS. COMM ISSIONER OF INCOME-TAX, REPORTED IN 246 ITR 188 (GUJ.), HAS HEL D THAT THE PROCEDURE PRESCRIBED FOR REGISTRATION U/S 12A OF TH E ACT IS NOT A MERE/EMPTY FORMALITY AS IT REQUIRES THAT NOT ONLY A N APPLICATION SHOULD BE FILED IN THE PRESCRIBED FORM STATING ABOU T THE DETAILS OF THE ORIGIN OF THE TRUST BUT ALSO THE NAMES AND ADDR ESSES OF THE TRUST AND/OR MANAGERS SHOULD BE FURNISHED AND THE D IT (E) HAS TO EXAMINE THE OBJECTS OF CREATING THE TRUST AS WEL L AS EMPIRICAL STUDY OF THE PAST OF THE APPLICANT AND HAS TO EXAMI NE THAT IT IS REALLY A CHARITABLE TRUST OR INSTITUTION ELIGIBLE F OR REGISTRATION. IT WAS HELD THAT ONCE REGISTRATION U/S 12A OF THE ACT HAS BEEN ITA NO 1005 OF 2013 RAJA BAHADUR VENKAT RAMA REDDY NIZAMABAD. PAGE 4 OF 4 GRANTED, THEN THE DEPARTMENT WAS NOT JUSTIFIED IN R EFUSING THE APPROVAL U/S 80G(5) OF THE ACT. 8. FURTHER, IN THE CASE OF N.M. DESAI CHARITABLE TRU ST VS. CIT (CITED SUPRA), THE HON'BLE GUJARAT HIGH COURT H AS HELD THAT WHILE CONSIDERING THE APPLICATION FOR REGISTRATION U/S 80G OF THE ACT, THE AUTHORITY GRANTING APPROVAL CANNOT ACT AS AN ASSESSING AUTHORITY ONCE CONDITIONS SPECIFIED ARE SATISFIED A ND THE INQUIRY SHOULD BE CONFINED TO FIND OUT IF THE INSTITUTION S ATISFIED THE PRESCRIBED CONDITIONS. AS IT IS NOT DISPUTED THAT T HE ASSESSEE HAS BEEN GRANTED REGISTRATION U/S 12A OF THE ACT AND SU CH REGISTRATION HAS NOT BEEN WITHDRAWN, WE ARE OF THE OPINION THAT THE ASSESSEE SHOULD HAVE BEEN GRANTED REGISTRATION U/S 80G OF TH E ACT. WE THEREFORE, DIRECT THE DIT (E) TO GRANT APPROVAL TO THE ASSESSEE U/S 80G, IF THE ASSESSEE CONTINUES TO ENJOY REGISTRATIO N U/S 12A OF THE ACT. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 29 TH SEPTEMBER, 2017. VINODAN/SPS COPY TO: 1 SHRI K.VASANTKUMAR, A.V.RAGHU RAM, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD-01 2 DIRECTOR OF INCOME TAX (EXEMPTIONS) 3 RD FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500001 3 ADIT (E)-HYDERABAD 4 THE DR, ITAT HYDERABAD 5 GUARD FILE BY ORDER