Cheshire Homes Chandigarh, Chandigarh V. CIT I, Chandigarh

ITA 1109/CHANDI/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90184 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-04-2015
• Assessment Year: misc
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 1109/CHD/2012 (UNDER SECTION 12AA OF THE ACT) CHESHIRE HOMES CHANDIGARH VS. THE C.I.T-I, H.NO.341, SECTOR 21A, CHANDIGARH. CHANDIGARH. PAN: AABAC 1667R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET AGGARWAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 26.05.2015 DATE OF PRONOUNCEMENT : 27.05.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX-I, CHANDIGARH DATED 30/31.8.2012, REJECTING THE APPLIC ATION FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX A CT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT IN PRESCRIBED FORM AND SUBMITTED THE DETAILS REGARDING THE ACTIVITIES OF THE ASSESSEE SOCIETY. THE LEARNED COMMISSIONER OF INCOME TAX ON PERUSAL OF THE DETAILS SUBMITTED B Y THE ASSESSEE SOCIETY NOTED THAT : 2 I) NO EVIDENCE REGARDING DISSOLUTION FROM CHESHIRE HOME, MUMBAI HAVE BEEN FILED BY THE ASSESSEE SOCIETY. THE ASSESSEE HAS SUBMITTED BALANCE SHEET AND INCOME & EXPENDITURE ACCOUNT FOR THE PERIOD ENDING 31.3.2010, 31.3.2011 AND 31.3.2012, WHEREAS THE ASSESSEE SOCIETY WAS REGISTERED ON 18.5.2011. II) NO EVIDENCE HAS BEEN SUBMITTED BY THE ASSESSEE SOCIETY REGARDING TRANSFER OF FUNDS FROM ITS PARENT CHESHIRE HOME TO ASSESSEE SOCIETY. III) THE ASSESSEE SOCIETY HAS CLAIMED IN ITS ACTIVI TY REPORT THAT IT IS INVOLVED IN THE ACTIVITIES SUCH A S LOOKING AFTER PHYSICALLY HANDICAPPED AND POOR PERSONS, PROVIDING HOME FOR THEIR EDUCATION, VOCATIONAL GUIDANCE AND SKILLS TO SETTLE THEM IN JOBS. FURTHER THE SOCIETY HAS ALSO CLAIMED TO HAV E ORGANIZED A FEW CAMPS FOR PHYSICALLY HANDICAPPED PERSONS AND ARRANGED OR PROVIDED EQUIPMENTS SUCH AS TRICYCLES, WHEELCHAIRS, ETC. TO PHYSICALLY HANDICAPPED BUT NO EXPENSES HAVE BEEN SHOWN IN THE INCOME & EXPENDITURE ACCOUNT. THEREFORE, NO ACTIVITIES HAVE BEEN CARRIED OUT BY THE ASSESSEE. 3. THE LEARNED COMMISSIONER OF INCOME TAX FURTHER N OTED THAT AT THE STAGE OF GRANT OF REGISTRATION UNDER SE CTION 12AA OF THE ACT, IT IS NOT MERE FORMALITY BUT THE OBJECT S AND GENUINENESS OF THE ACTIVITIES SHALL HAVE TO BE ESTA BLISHED. THE LEARNED COMMISSIONER OF INCOME TAX NOTED THAT T HE 3 ASSESSEE HAS FAILED TO PROVE THAT IT HAS OBJECTS OF CHARITABLE NATURE AND ALSO FAILED TO PROVE ITS GENUINE ACTIVIT IES AND ACCORDINGLY REJECTED THE REGISTRATION APPLICATION. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. IT IS WELL SETTLED THAT AT THE STAGE OF GRANT OF REGIS TRATION OR REFUSAL TO GRANT REGISTRATION, THE LEARNED COMMISSI ONER OF INCOME TAX HAS TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACT IVITIES. SECTION 2(15) OF THE INCOME TAX ACT PROVIDES DEFINI TION OF CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF, PRESERVATION OF MONUMENTS AND ADVAN CEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE A SSESSEE IN THE PAPER BOOK HAS FILED THE REPORT OF THE ACIT, CI RCLE 3(1), CHANDIGARH DATED 30.4./1.5.2012, WHICH WAS FILED TO THE LEARNED COMMISSIONER OF INCOME TAX-I, CHANDIGARH AT THE TIME OF CONSIDERATION OF THE REGISTRATION APPLICATION. THE ASSESSING OFFICER IN HIS REPORT HAS REPRODUCED THE MAIN OBJECTS OF THE ASSESSEE SOCIETY, WHICH PROVIDE FOR PROVIDING RESIDENTIAL ACCOMMODATION ON THE LINE OF A HOME, FO R THE CARE, TREATMENT, NURSING AND GENERAL WELLBEING OF MEN, WO MEN AND CHILDREN OF ALL CLASSES AND COMMUNITIES, WHO ARE CH RONICALLY ILL AND PERMANENTLY DISABLED PHYSICALLY OR PERSONS WITH SPECIAL NEEDS. IT ALSO PROVIDES FOR TAKING CARE O F DESTITUTE ELDERLY AND TO PROVIDE OPPORTUNITIES AND FACILITIES TO PHYSICALLY CHALLENGED FOR GETTING EMPLOYMENT AND TO PROMOTE, CONDUCT AND ENGAGE IN RESEARCH AND EXPERIMENTAL WOR K TO BE OF BENEFIT AND USE OF SUCH PERSONS, ETC. THE ASSES SING OFFICER 4 CONSIDERING THE OBJECTIVES OF THE ASSESSEE SOCIETY AND ITS GENUINE ACTIVITY RECOMMENDED THAT THE ASSESSEE EXIS TS FOR CHARITABLE PURPOSES AS PER SECTION 2(15) OF THE ACT . THE ASSESSING OFFICER ALSO EXPLAINED THE ACTIVITIES OF THE ASSESSEE SOCIETY IN HIS REPORT BY MENTIONING THAT HOUSE NO.3 41, SECTOR 21A, CHANDIGARH HAS BEEN ALLOTTED BY THE DIRECTOR S OCIAL WELFARE, CHANDIGARH ADMINISTRATION TO THE ASSESSEE FOR PHYSICALLY DISABLED PERSONS AND ALSO PROVIDING A KI TCHEN WITH COOK TO SERVE THEM THE MEALS. THE ASSESSEE SOCIET Y ALSO ORGANIZED CAMP FOR DISABLED PERSONS AND HAVE GIVEN TO THE HANDICAPPED PERSONS TRICYCLES, CYCLES AND SEWING MA CHINES. FURTHER PROGRAMMES WERE ALSO HELD FOR PHYSICALLY CH ALLENGED PERSONS AND FOR PROVIDING MEDICAL ATTENTION AND FRE E CHECK UP THROUGH ROTARIAN DOCTOR AND BLOOD DONATION CAMP WAS ALSO MANAGED FROM GOVERNMENT MEDICAL HOSPITAL, PANCHKULA FOR PHYSICALLY PERSONS. THE ASSESSING OFFICER IN VIEW OF THESE FACTS RECOMMENDED TO THE LEARNED COMMISSIONER OF IN COME TAX FOR GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT. FROM THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE SOCIETY IN THE LIGHT OF THE REPORT OF THE ASSESSING OFFICER RECOMMENDING REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE ASSESSEE, IT HAS BECOME CLEAR THAT THE ASSESSEE SOCIETY EXISTS FOR THE PURPOSE OF CHARITABLE ACTIVITY SPECI ALLY FOR THE PURPOSE OF RELIEF OF THE POOR, EDUCATION AND MEDICA L RELIEF FOR PHYSICALLY CHALLENGED AND HANDICAPPED/DISABLED PERS ONS OF ALL SOCIETIES. 5 THUS THE ASSESSEE EXISTS FOR THE CHARITABLE PURPOSE . THE ASSESSEE ALSO FILED CERTIFICATE OF REGISTRATION FRO M DIRECTOR SOCIAL WELFARE, U.T., CHANDIGARH WHERE THE ASSESSEE REGISTERED AS VOLUNTARY ORGANIZATION WORKING IN THE FIELD OF WELFARE OF DISABLED AND GRANT IS ALSO GIVEN BY THE CHANDIGARH ADMINISTRATION FOR THE PURPOSE OF KITCHEN ITEMS, FU RNITURE AND BEDDING, ETC. FOR THE USE OF INMATES OF THE ASSESSE E SOCIETY. THE ASSESSEE IN THE MEMORANDUM OF ASSOCIATION ALSO MENTIONED (PB-14) THAT IN CASE OF DISSOLUTION OF TH E SOCIETY EVERYTHING SHALL NOT BE DISTRIBUTED AMONG THE MEMBERS OF THE SOCIETY BUT SHALL BE GIVEN OR TRANSFERRED TO SOME O THER INSTITUTION HAVING SIMILAR OBJECTS. THUS THE ASSE SSEE HAS BEEN ABLE TO SATISFY THAT THE OBJECTS OF THE ASSESS EE SOCIETY WERE CHARITABLE IN NATURE AND ASSESSEE SOCIETY HAS BEEN CARRYING ON THE GENUINE ACTIVITIES TO ACHIEVE ITS O BJECTIVES. THEREFORE, BOTH THE CONDITIONS OF SECTION 12AA OF T HE ACT ARE SATISFIED IN THE CASE OF THE ASSESSEE. 5. THE LEARNED COMMISSIONER OF INCOME TAX, HOWEVER ON VERY IRRELEVANT REASONS HAS REJECTED THE REGISTR ATION APPLICATION OF THE ASSESSEE BECAUSE NO EVIDENCE REG ARDING DISSOLUTION FROM CHESHIRE HOMES MUMBAI HAS BEEN FIL ED AND THAT NO EVIDENCE HAS BEEN FURNISHED REGARDING T HE TRANSFER OF FUNDS BY THE PARENT SOCIETY. THESE WE RE NOT PROPER AND VALID REASONS TO BE CONSIDERED AT THE ST AGE OF GRANT OF REGISTRATION TO THE ASSESSEE SOCIETY. TH ERE WAS NO ADVERSE MATERIAL AVAILABLE ON RECORD TO REJECT THE APPLICATION FOR REGISTRATION. 6 6. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES IN THE LIGHT OF THE REPORT OF THE ASS ESSING OFFICER RECOMMENDING THE GRANT OF REGISTRATION IN T HE CASE OF THE ASSESSEE, WE ARE SATISFIED THAT THE ASSESSEE HA S BEEN ABLE TO PROVE THE CONDITIONS OF GRANT OF REGISTRATION UN DER SECTION 12AA OF THE ACT. THEREFORE, THE ASSESSEE WOULD BE ENTITLED FOR GRANT OF REGISTRATION ACCORDINGLY. IN VIEW O F THE ABOVE DISCUSSION, WE SET ASIDE THE IMPUGNED ORDER AND DIR ECT THE COMMISSIONER OF INCOME TAX-I, CHANDIGARH TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT WITHIN ONE MONTH FROM THE RECEIPT OF THIS ORDER. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF MAY, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27 TH MAY, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH