VIJAY VARGIYA VANI CHARITABLE TRUST, Jaipur V. ACIT, Jaipur

ITA 1012/JPR/2011

• Counselvise Citation: 101223114 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-11-2012
• Assessment Year: misc
• Appeal Filed On: 18-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Keywords: Charitable institution; Principle of natural justice
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH : JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.1012/JP/2011 (A.Y. 2010-11) VIJAY VARGIYA VANI CHARITABLE TRUST, VS. ACIT-II, 2, BHAVANI SINGH ROAD, JAIPUR-II, JAIPUR. JAIPUR. PAN NO. AABTV 2516 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHISH SHARMA. DEPARTMENT BY : SHRI A.K. KHANDELWAL- D.R. DATE OF HEARING : 15/01/2014. DATE OF PRONOUNCEMENT : 21/01/2014. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 27/09/2011 OF LD. CIT, JAIPUR-II, JAIPUR. THE FOLL OWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. THAT THE APPLICATION HAS BEEN REJECTED FOR NONE FOR THE FAULTS OF ASSESSEE APPLICANT. THE APPLICATION HAS BEEN DECI DED AND REJECTED EX-PARTY FOR NON-APPEARANCE OF THE COUNSEL AND THER EFORE IS IN ABNEGATION OF PRINCIPLES OF NATURAL JUSTICE. 2 2. THAT THE COMMISSIONER OF INCOME-TAX HAS FAILED T O APPRECIATE THAT THE FACT OF YEAR UNDER CONSIDERATION WAS FIRST YEAR OF TRUST AS IT COME INTO EXISTENCE ON 22/04/2010 3. THAT THE COMMISSIONER OF INCOME-TAX HAS FAILED T O APPRECIATE THAT ENTIRE DETAIL CALLED FOR BY AUTHORITIES BELOW HAS B EEN SUBMITTED WHEREIN NO DEFECTS HAVE BEEN BROUGHT TO THE KNOWLED GE OF THE APPLICANT. 4. THAT THE RATIO APPLIED BY THE LEARNED COMMISSION ER IS NOT APPLICABLE AS THE SOCIETY IN RATIO WAS RECEIVING FR OM AND LENDING MONEY TO ITS MEMBERS WHEREAS IN THE CASE OF TRUST I N QUESTION HAS BEEN CREATED FOR PHILANTHROPIC FOR PURPOSE AND NOT FOR THE PURPOSE OF PROFIT. 5. THAT THE ORDER OF REJECTION OF APPLICATION UNDER SECTION 12AA IS ILLEGAL AND RUNS COUNTER TO THE FACTS OF THE CASE A ND THEREFORE DESERVES TO THE ANNULLED/ SET ASIDE AND QUASHED. 6. THAT, THE COMMISSIONER WHILE REJECTED THE APPLIC ATION HAS FAILED TO APPRECIATE THE FACT OF BENEFICIARIES CLAUSE IN TRUS T DEED AS UNDER:- ALL THE MANKIND WITHOUT ANY DISCRIMINATION ON THE BASIS OF RELIGION, CASTE, COLOUR, CREED OR SEX SHALL BE BENE FICIARIES OF THIS TRUST. THE TRUST SHALL EXIST SOLELY FOR PHILANTHROP IC PURPOSE AND NOT FOR PURPOSE OF PROFIT. THE ALLEGATION OF TRUST BEING CREATED FOR THE BENE FIT OF PARTICULAR SECTION/CAST OF A SOCIETY ONLY SURMISE AND CONJECTU RE WITHOUT BRINING ANY EVIDENCE OR RECORD. THE ORDER OF REJEC TION THEREFORE DESERVES TO BE TURNED DOWN. 7. THAT THE APPLICANT APPELLANT CRAVES LEAVE OF T HIS TRIBUNAL TO ADD TO AMEND, ALTER AND / OR SUBTRACT ALL OR ANY OF THE GROUNDS OF APPEAL. 2 THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE REJECTION OF APPLICATION UNDER SECTION 12AA OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS ACT, IN SHORT). 3 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE F ILED AN APPLICATION IN FORM-10A FOR SEEKING REGISTRATION UN DER SECTION 12AA OF THE ACT. LD. CIT OBSERVED THAT THE ASSESSEE-TRUST W AS CREATED ON 22/04/2010 HAVING VARIOUS OBJECTS SUCH AS TO RUN ME DICAL AND EDUCATIONAL INSTITUTIONS, PROVIDE EDUCATION, MEDICI NE, FOOD, CLOTHING ETC. LD. CIT OBSERVED THAT THE OBJECTS IN CLAUSE NO. 7(D) & (F) WERE NOT RELATED TO CHARITY AT ALL. THESE CLAUSES WERE AS UNDER:- (D) TO PURCHASE ACQUIRE APPLY FOR LAND, BUILDING, P REMISES OR CONSTRUCT THE BUILDING. (F) TO PUBLISH NEWSPAPER, JOURNAL, MAGAZINE EITHER DAILY FORTNIGHTLY OR MONTHLY BASIS. LD. CIT WAS OF THE VIEW THAT FROM THE PLAIN READIN G OF ANY OF THE ABOVE SAID OBJECTS, IT COULD NOT BE SAID THAT ANY P URPOSE OF CHARITY WAS SERVED BY THOSE TWO OBJECTS. HE, THEREFORE, REJECT ED THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. NO W, THE ASSESSEE IS IN APPEAL. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MA IN OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE, THEREFORE, I T WAS ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. HE FUR THER SUBMITTED THAT THE LD. CIT REJECTED THE APPLICATION BY OBSERVING T HAT THE TRUST HAD BEEN CREATED ON 22/04/2010, BUT IT HAD NOT BEEN CAR RIED OUT ANY 4 CHARITABLE ACTIVITY. IT WAS CONTENDED THAT THE LD. CIT BEFORE COMING TO THE SAID CONCLUSION, HAD NOT APPRECIATED THE FAC TS IN RIGHT PERSPECTIVE AND ALSO DID NOT AFFORD ANY OPPORTUNITY . IT WAS FURTHER CONTENDED THAT THE LD. CIT DID NOT DOUBT THAT THE MAIN OBJECTS OF THE ASSESSEE WERE CHARITABLE IN NATURE, THEREFORE, REJE CTION OF APPLICATION WAS NOT JUSTIFIED. RELIANCE WAS PLACED IN THE CASE OF JASODA DEVI CHARITABLE TRUST VS. CIT [2011] 15 TAXMAN.COM 295 ( JP) . 5. IN HIS RIVAL SUBMISSIONS, LD. D.R. SUPPORTED THE I MPUGNED ORDER PASSED BY THE LD. CIT(A). 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE MAIN OBJECTS O F THE ASSESSEE WERE TO RUN MEDICAL AND EDUCATIONAL INSTITUTIONS, PROVID E EDUCATION, MEDICINE, FOOD, CLOTHING ETC. THOSE OBJECTS ARE CH ARITABLE IN NATURE AND THE LD. CIT(A) DID NOT DOUBT THOSE OBJECTS, HE SIMPLY DOUBTED THE ANCILLARY OBJECTS WHICH WERE RELATING TO THE PURCHA SE, ACQUIRE THE LAND AND BUILDING. THE SAID OBJECTS ARE CORRELATED WITH THE MAIN OBJECTS AND IT IS DIFFICULT TO CARRYON WITH THE MAIN ACTIVI TIES WITHOUT CONSTRUCTING/ PURCHASING BUILDING. THEREFORE, LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION MOVED BY THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. ON A S IMILAR ISSUE, THE 5 COORDINATE BENCH I.E. ITAT, JAIPUR BENCH B IN THE CASE OF JASODA DEVI CHARITABLE TRUST VS. CIT (SUPRA) HAS HELD AS UNDER:- THE COMMISSIONER WAS NOT JUSTIFIED IN REJECTING TH E APPLICATION FOR REGISTRATION ON THE BASIS THAT THE ASSESSEE HAD NOT CARRIED OUT ANY CHARITABLE ACTIVITIES WITHOUT APPRECIATING THAT IT WAS CREATED ON 06/05/2009 ONLY. BESIDES, THE COMMISSIONER BEFORE COMING TO SAID CONCLUSION DID NOT AFFORD AN OPPORTUNITY TO THE ASS ESSEE TO MEET HIS OBJECTION REGARDING THE ACTIVITIES OF THE TRUST. T HE CONTENTION OF THE ASSESSEE REMAINED THAT DURING THE RELEVANT PERI OD, IT HAD SPONSORED A SUM OF RS. 18,000/- TOWARDS COMPUTER HA RDWARE EDUCATION COURSE TO C BELONGING TO AN ECONOMICALL Y WEAKER SCHEDULED TRIBE. NO DOUBT HAD BEEN EXPRESSED ON TH E CHARITABLE NATURE OF THE ACTIVITIES OF THE ASSESSEE-TRUST. TH US, WHILE SETTING ASIDE THE ORDER IMPUGNED, THE COMMISSIONER WAS TO B E DIRECTED TO GRANT REGISTRATION UNDER SECTION 12AA AS SOUGHT FOR BY THE ASSESSEE. 7 . THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE ABOVE SAID CASE. SO, BY RESPECTFULLY FOLLOWING THE AFORE SAID REFERRED TO ORDER, THE IMPUGNED ORDER IS SET ASIDE AND THE LD. CIT(A) IS DIRECTED TO GRANT THE REGISTRATION TO THE ASSESSEE-TRUST AS SOU GHT FOR. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 21 ST JANUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST JANUARY, 2014. VR/- 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R BY ORDER ASSISTANT REGISTRAR, ITAT, JAIPUR.