Sri Laxmi Ganesh Chandi Seva Trust, Karimnagar, Hyderabad V. CIT(Exemptions), Hyd, Hyderabad

ITA 1062/HYD/2015

• Counselvise Citation: 106222514 RSA 2015
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 13-08-2015
• Court: TRIBUNAL
• Department Lawyers: KONDA RAMESH
• Assessee Lawyers: B SATYANARAYANA MURTY
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1062/HYD/2015 SRI LAXMI GANESH CHANDI SEVA TRUST, KARIMNAGAR [PAN: AAJTS7763B] VS THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI B. SATYANARAYANA MURTY , AR FOR REVENUE : SHRI KONDA RAMESH , DR DATE OF HEARING : 28 - 1 0 - 201 5 DATE OF PRONOUNCEMENT : 20 - 1 1 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD DATED 30-06-2015 REJECTING THE APPLICATION IN FORM 10A FO R REGISTRATION U/S. 12AA OF THE INCOME TAX ACT [ACT]. ASSESSEE IS CONTESTING VARIOUS ISSUES SUBMITTED THAT CIT(EXEMPTIONS) IS NO T JUSTIFIED IN REJECTING THE REGISTRATION U/S. 12AA OF THE ACT. 2. BRIEFLY STATED, ASSESSEE-TRUST WAS CREATED VIDE TRUST DEED EXECUTED ON 22-06-2010. IT HAS FILED AN APPLICATIO N IN FORM 10A I.T.A. NO. 1062/HYD/2015 SRI LAXMI GANESH CHANDI SEVA TRUST :- 2 -: ON 17-12-2014 SEEKING REGISTRATION U/S. 12AA OF THE ACT. IT WAS SUBMITTED DURING THE PROCEEDINGS THAT ASSESSEE DID NOT CARRY ON ANY ACTIVITIES AND HAS OPENED THE BANK ACCOUNT JUST BEFORE APPLYING FOR REGISTRATION AND ONLY ACTIVITY UNDERTA KEN WAS GIVING A DONATION OF RS. 15,000/- TO SRI SEETHARAMA SEVA SAD AN WHICH WAS AUTHORIZED BY THE OBJECTS OF THE TRUST. IT WAS FUR THER SUBMITTED THAT MAIN OBJECT IS TO START A VANAPRASTHA ASHRAM F OR AGED AND NEEDY WHICH FALLS UNDER THE CATEGORY OF RELIEF OF THE POOR. VIDE LETTER DT. 23-03-2015, ASSESSEE FURNISHED VARIOUS D ETAILS INCLUDING THE COPIES OF THE BANK ACCOUNTS, DETAILS OF DONATIO NS RECEIVED AND DETAILS OF DONATIONS PAID, SEEKING REGISTRATION U/S . 12AA. HOWEVER, LD. CIT(EXEMPTIONS) REFUSED REGISTRATION STATING AS UNDER: 2. THOUGH THE APPELLANT TRUST WAS CREATED ON 22-06-2010, IT HAS NOT UNDERTAKEN ANY ACTIVITY SO F AR. IN MY VIEW, IN ABSENCE OF COMMENCEMENT OF ANY ACTIVITY, W HEN THE TRUST HAS BEEN CREATED MORE THAN FOUR YEARS AGO, IT MAY NOT BE ELIGIBLE FOR REGISTRATION U/S. 12AA OF THE ACT. FU RTHER, FROM THE ENCLOSURE TO THAT APPLICATION IN F.NO. 10A, IT IS N OTICED THAT THE APPLICANT HAS NOT FILED ITS COPIES OF ACCOUNTS FOR THE INCOME TAX RULES, 1962. FURTHER, THE APPLICANT HAS NOT FURNIS HED COPIES OF ITS ACCOUNTS INCLUDING THE BALANCE SHEET PERTAINING TO THE THREE PRECEDING ACCOUNT YEARS EVEN DURING THE PROCEEDINGS . UNDER THESE CIRCUMSTANCES, IN MY CONSIDERED VIEW, THE APP LICANT TRUST IS NOT ELIGIBLE FOR REGISTRATION U/S. 12AA OF THE ACT. 3. LD. COUNSEL REFERRING THE PAPER BOOK FILED IN TH IS REGARD SUBMITTED THAT ASSESSEE HAS NOT STARTED ANY ACTIVIT Y AND ONLY THE BANK ACCOUNT WAS OPENED RECENTLY, THEREFORE, SUBMIS SION OF ACCOUNTS FOR EARLIER YEARS DOES NOT ARISE. MOREOVE R, IT WAS SUBMITTED THAT LD. CIT(EXEMPTIONS) WAS NOT EMPOWERE D TO REJECT THE REGISTRATION ON THE REASON THAT ASSESSEE HAS NO T COMMENCED ANY ACTIVITY EVEN THOUGH IT WAS CREATED MORE THAN F OUR YEARS AGO. I.T.A. NO. 1062/HYD/2015 SRI LAXMI GANESH CHANDI SEVA TRUST :- 3 -: LD. COUNSEL RELIED ON THE DECISION OF THE HON'BLE D ELHI HIGH COURT IN THE CASE OF FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE, IN ITA NO. 1687/2010 DT.16-08-201 2 IN SUPPORT OF THE CONTENTIONS. LD. DR, HOWEVER, SUPPORTED THE ORDERS OF THE LD. CIT(EXEMPTIONS). 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE ISSUE. WE ARE OF THE OPINION THAT LD. CIT(EXEMPTIO NS) TRAVELLED BEYOND HIS JURISDICTION IN REFUSING TO REGISTER THE APPELLANT-TRUST. AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE , IN ITA NO. 1687/2010 (SUPRA), CIT(E) IS NOT REQUIRED TO EXAMINE WHETHER ASSESSEE HAS STARTED THE ACTIVITIES OR NOT? THE HO N'BLE HIGH COURT HAS CONSIDERED THAT IF THE REVENUES CONTENTIONS ARE CORRECT, THEN NECESSARILY, A CONDITION WOULD HAVE TO BE READ INTO THE PROVISION THAT THE COMMISSIONER SHOULD BE SATISFIED THAT THE TRUST IS IN FACT ENGAGED IN CHARITABLE ACTIVITIES WHICH WOULD IN TUR N INJECT CONSIDERABLE DEAL OF SUBJECTIVITY . IT IS QUITE POSSIBLE THAT IF SUCH FLEXIBILITY IS INTRODUCED, IT WOULD BE SUSCEPTIBLE TO VARIED INTERPRETATION BY THE DIFFERENT AUTHORITIES IN THAT SOME WOULD BE SATISFIED WITH ACTIVITY OF FEW MONTHS, WHILE OTHERS MAY WISH TO EXAMINE THE ACTIVITIES OF THE ORGANIZATION FOR LONG ER TIME . HONBLE DELHI HIGH COURT WAS FOLLOWING THE DECISION OF HON' BLE KARNATAKA HIGH COURT IN THE CASE OF DIT VS. MEENAKSHI AMMA EN DOWMENT TRUST [50 DTR (KAR) 243]. IT IS TO BE STATED THAT THE OBJECTS OF THE TRUST HAVE TO BE TAKEN INTO CONSIDERATION BY THE AU THORITIES AND THE OBJECTS OF THE TRUST TO BE READ FROM THE TRUST DEED ITSELF. IN THE SUBSEQUENT RETURNS FILED BY THE TRUST, IF THE R EVENUE COMES ACROSS THAT FACTUALLY TRUST HAS NOT CONDUCTED ANY C HARITABLE ACTIVITIES, IT IS ALWAYS OPEN TO THE AUTHORITIES CO NCERNED TO I.T.A. NO. 1062/HYD/2015 SRI LAXMI GANESH CHANDI SEVA TRUST :- 4 -: WITHDRAW THE REGISTRATION ALREADY GRANTED OR CANCEL THE SAID REGISTRATION U/S. 12AA(3) OF THE ACT. THEREFORE, W HEN ASSESSEE SUBMITTED THAT IT HAS NOT COMMENCED ANY CHARITABLE ACTIVITY IN THE IMPUGNED YEARS, CIT(EXEMPTIONS) CANNOT REJECT ON TH E REASON THAT ASSESSEE HAS NOT COMMENCED ANY ACTIVITY. HE SHOULD HAVE CONFINED HIMSELF TO THE OBJECTS OF THE TRUST AND EX AMINED WHETHER THEY ARE CHARITABLE IN NATURE OR NOT AS PER THE PRO VISIONS OF THE ACT AND THE PRINCIPLES LAID DOWN ON THIS ISSUE. SINCE L D. CIT(EXEMPTIONS) HAS NOT EXAMINED THE OBJECTS OF THE TRUST AT ALL, IN THE INTEREST OF JUSTICE, WE CANCEL THE ORDER OF CIT(EXEMPTIONS) DT. 30-06-2015 AND RESTORE THE ISSUE OF REGISTRATION TO THE FILE OF CIT(EXEMPTIONS) TO EXAMINE IT AFRESH AND CONSIDER G RANTING THE REGISTRATION U/S. 12AA OF THE ACT. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBE R HYDERABAD, DATED 20 TH NOVEMBER, 2015 TNMM I.T.A. NO. 1062/HYD/2015 SRI LAXMI GANESH CHANDI SEVA TRUST :- 5 -: COPY TO : 1. SRI LAXMI GANESH CHANDI SEVA TRUST, H.NO. 1-4-18 /1, BRAHMANWADI, KARIMNAGAR. C/O. VENUGOPAL & CHENOY, CHARTERED ACCOUNTANTS, 4-1-889/16/2, TILAK ROAD, HYDERABAD. 2. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD. 3 . IT O ( EXEMPTIONS ) , HYDERABAD. 4. D.R. ITAT, HYDERABAD. 5. GUARD FILE.