Nature Care Foundation, Pune V. Commissioner of Income-tax - V, Pune

ITA 1123/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9937 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-09-2012
• Assessment Year: misc
• Appeal Filed On: 07-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Charitable institution; Principle of natural justice
• Section: 12A; 12AA; 10B

Judgement Text

N THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS. 1123 & 1124/PN/2011 (ASSTT. YEA R : - ) NATURE CARE FOUNDATION, APPELLANT SAHAJIVAN HOUSING SOCIETY, G BLOCK, TELECO ROAD, PLOT NO. RM/04, CHINCHWAD, PUNE 411019 PAN : AABTN3360M V. COMMISSIONER OF INCOME TAX V, PUNE RES PONDENT APPELLANT BY : SHRI SUNIL PATHAK RESPONDENT BY : SHRI MUK ESH VERMA, CIT DATE OF HEARING : 25/9/20 12 DATE OF PRONOUNCEMENT : 25- 9-12 O R D E R PER R.S. PADVEKAR, JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE, BOTH AGAINST THE ORDERS OF THE LD CIT-V, PUNE REFUSING TO GRANT THE APPROVAL U/S. 80 G OF THE ACT AS WELL AS DISMISSING THE APPLICATION FOR R EGISTRATION U/S. 12A OF THE ACT. 2. WE FIRST TAKE THE ASSESSEES APPEAL BEING ITA NO . 1124/PN/2011 IN WHICH THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD CIT(A) V, PUNE, REFUSING TO GRANT REGISTRATION U/S. 12AA OF THE AC T. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS : 1] THE LEARNED CIT ERRED IN NOT GRANTING REGISTRAT ION TO THE APPELLANT CHARITABLE TRUST U/S 12AA. 2] THE LEARNED CIT FAILED TO APPRECIATE THAT A. THE OBJECTS AND ACTIVITIES OF THE APPELLANT TRUS T WERE CHARITABLE AND HENCE, IT WAS ENTITLED TO REGISTRATI ON U/S 12AA. B. THE TRAINING PROGRAM FOR THE UNEMPLOYED PERSONS AND THE WOMEN FOR EMU FARMING WAS IN PURSUANCE OF THE OBJECTS OF THE TRUST AND THE INTENTION WAS TO PROVI DE NEW SOURCES OF EARNING FOR THE VILLAGERS/FARMERS. 2 ITA NOS. 1123 & 1124/PN/2011 NATURE CARE FOUNDATION, A.Y. - C. THE TRUST FULFILLS ALL THE CONDITIONS FOR REGIST RATION U/S 12AA AND HENCE, IT WAS INCORRECT TO REFUSE THE REGISTRATION ON SOME IRRELEVANT/INCORRECT POINTS. 3] THE APPELLANT PRAYS FOR GRANT OF REGISTRATION U /S 12AA. 3. BRIEFLY STATED, FACTS ARE AS UNDER. THE ASSESS EE IS A TRUST AND FILED APPLICATION IN FORM NO. 10A DATED 02.12.2010 FOR T HE REGISTRATION U/S. 12A OF THE I.T. ACT. THE LD CIT CALLED FOR THE FO LLOWING DOCUMENTS AND INFORMATION : I) AUDITED STATEMENTS OF ACCOUNTS FOR Y.E. 31/03/10 , ALONGWITH AUDIT REPORT IN FORM 10B FOR THE YEAR ENDING 31/03/ 2010. II) PLEASE STATE WHETHER THE TRUST CARRIES ON ANY A CTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEES OR ANY OTHER CONSIDERATION. III) IF 85% OF INCOME OF THE TRUST FOR THE YEAR END ING 31.3.10 HAS NOT BEEN SPENT FOR ITS OBJECTS., THE INCOME OF THE TRUST FOR AY IS LIABLE TO TAX. REPORT WHETHER RETURN OF INCOME HAS BEEN FILED OR NOT. IV) PLEASE QUOTE THE DATE OF FILING OF FORM NO. 10 WITH THE A.O. AND PRODUCE COPY OF THE SAME TO THIS OFFICE, IF ANY . V) LIST OF DONORS ABOVE RS. 500/-, NAME, ADDRESS, A MOUNT AND DATE AND RECEIPT NUMBER, FOR THE LAST THREE YEARS. VI) WHETHER DONATION IN FOREIGN EXCHANGE RECEIVED? IF YES, PRODUCE FC3 AND COPY OF REGISTRATION GRANTED BY GOV T. OF INDIA, MINISTRY OF HOME AFFAIRS. VII) PLEASE QUOTE/PRODUCE PAN OF THE TRUST AND TRUS TEES ALONGWITH PRESENT ADDRESS OF THE TRUSTEES VIII) PRODUCE PROOF FOR THE ACTIVITIES OF THE TRUST AND GENUINENESS OF THE TRUST AND NOTE ON ACTIVITIES FOR LAST THREE YEARS. IX) PRODUCE DETAILS OF THE BANK ACCOUNT X) PRODUCE COPY OF THE RETURN FILED ALONGWITH STATE MENT OF ACCOUNT FOR THE LAST YEAR. THE ASSESSEE TRUST HAS BEEN REGISTERED ON 23.4.2010 AND TILL THE DATE OF FILING THE APPLICATION TO LD CIT, NO ACTIVITY WAS U NDERTAKEN NOR ANY DONATION WAS RECEIVED. THE ASSESSEE ALSO STATED BE FORE THE LD CIT THAT 3 ITA NOS. 1123 & 1124/PN/2011 NATURE CARE FOUNDATION, A.Y. - NO RETURN OF INCOME HAS BEEN FILED IN THE CAPACITY AS A TRUST. THE ASSESSEE STATED THAT EMU FARMING ENTREPRENEUR DEVE LOPMENT TRAINING HAS BEEN CONDUCTED FOR MAHILA BACHAT GAT AND FOR U NEMPLOYED PERSONS AT LATUR. THE LD CIT EXAMINED THE BANK A/C. AND IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED RS. 5000/- ON 9.5.2011 AND THERE WAS NO OTHER TRANSACTION EXCEPT THE SAID DEPOSIT. THE LD CIT(A ) HELD THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE TO PROMOTE TH E BUSINESS INTEREST OF SOME CONCERNS WHICH WANT EMU FARMING TO TAKE ROOT S IN INDIA. THE LD CIT DECLINED TO GRANT THE REGISTRATION TO THE ASSES SEE U/S. 12AA(1)(B)(II) OF THE I.T. ACT. NOW, THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORD. THE LD COUNSEL SUBMITS THAT EMU FARMING IS A NEW CONCEPT AND THE ASSESSEE HAS UNDERTAKEN THE TRAINING PROGRAM I N THE VILLAGES IN LATUR AND BASIC OBJECT OF THE ASSESSEE TRUST IS TO PROMOT E EMU FARMING IN THE RURAL AREA FOR GENERATING THE EMPLOYMENT. HE SUBMI TS THAT THE LD CIT HAS EXCEEDED HIS JURISDICTION WHILE CONSIDERING THE APPLICATION FOR REGISTRATION U/S 12A AS HE HAS TO CONSIDER THE GENU INENESS OF THE ACTIVITIES AS WELL AS OBJECTS OF THE ASSESSEE. HE SUBMITS THAT THE ASSESSEE TRUST IS AT INFANCY STAGE AND NO EXPENDITU RE WAS INVOLVED NOR THERE IS ANY PROFIT MOTIVE. HE PLEADED FOR GRANTIN G THE REGISTRATION. WE HAVE ALSO HEARD THE LD. D.R. 5. FOR GETTING THE BENEFITS OF SEC. 11, ONE OF THE CONDITIONS IS THAT THE ASSESSEE SHOULD HAVE BEEN GRANTED REGISTRATION U/S. 12AA OF THE ACT. IT IS NECESSARY TO EXAMINE THE RELEVANT PROVISION OF SEC.12AA OF THE ACT WHICH READS AS UNDER : 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHA LL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRU ST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NEC ESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE T RUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUS T OR INSTITUTION; 4 ITA NOS. 1123 & 1124/PN/2011 NATURE CARE FOUNDATION, A.Y. - (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT 6. AS PER THE LANGUAGE USED, IN CLAUSE (B) OF SEC. 12AA(1) OF THE ACT, THE LD CIT HAS TO SATISFY HIMSELF ABOUT OBJECT OF T HE TRUST AND GENUINENESS OF THE ACTIVITY AT THE TIME OF GRANTING THE REGISTRATION TO THE TRUST. IN THE PRESENT CASE, THE LD CIT(A) HAS NOT EXPRESSED ANYTHING ON THE ACTIVITIES OF THE TRUST, BUT ONLY HAS EXPRESSED THAT THE OBJECT OF THE ASSESSEE TRUST IS TO DO THE EMU FARMING ACTIVITY F OR THE BENEFIT OF SOME BUSINESS CONCERNS. IN FACT, THE LD CIT SHOULD HAVE EXAMINED THE OBJECTS OF THE TRUST AS PER THE TRUST DEED AND THEN HE SHO ULD HAVE FORMED HIS OPINION AND VIEW. THE VIEW EXPRESSED BY THE LD CIT IS ONLY ON THE SURMISES AND PRESUMPTIONS AS THERE IS NO MATERIAL BEFORE HIM TO FORM SAID OPINION. THE APPLICATION OF THE INCOME CAN B E CONSIDERED BY THE A.O WHEN ASSESSMENT OF THE ASSESSEE WILL BE COMPLETED A ND THIS IS NOT A STAGE WHERE THE LD CIT SHOULD ALSO ENTER INTO TH E SAID AREA FOR VERIFYING WHETHER THE INCOME IS PROPERLY APPLIED OR NOT. WE CONSIDER IT FIT TO SET ASIDE THE MATTER TO THE FILE OF THE CIT V, PUNE FOR FRESH CONSIDERATION IN THE LIGHT OF OUR ABOVE OBSERVATION S. NEEDLESS TO SAY THE CIT-V, PUNE IS DIRECTED TO GIVE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE AS PER THE PRINCIPLES OF NATURAL JUSTICE. ACCORDING LY, ALL GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. NOW WE TAKE THE ASSESSEES APPEAL BEING ITA NO. 1123/PN/2011 IN WHICH THE ASSESSEE HAS RAISED THE GRIEVANCE AGAINS T REFUSAL OF THE LD. CIT TO GRANT THE RECOGNITION U/S. 80G(5) OF THE AC T. THE ORDER OF THE LD CIT-V, PUNE IS VERBATIM WITH THAT OF REFUSING TO GR ANT REGISTRATION U/S. 12AA. 8. WE HAVE MADE OUR OBSERVATIONS WHILE SETTING ASID E THE MATTER OF REGISTRATION U/S. 12AA TO THE FILE OF THE LD CIT- V , PUNE. AS THE REASONS GIVEN BY LD. CIT ARE IDENTICAL AS THAT IN THE CAS E OF REGISTRATION U/S. 12AA, AND MOREOVER THE DECISION IN THE CASE OF GRAN T OF REGISTRATION U/S. 12AA OF THE LD CIT IS DECISIVE FOR GETTING THE RECO GNITION U/S. 80G(5) OF THE ACT, WE SET ASIDE THIS MATTER ALSO TO THE FILE OF THE LD CIT TO DECIDE THE ISSUE OF GRANT OF RECOGNITION U/S. 80G(5) OF TH E ACT TO THE ASSESSEE AFRESH AFTER DECIDING THE ASSESSEES APPLICATION FO R GRANT OF REGISTRATION U/S. 12AA OF THE ACT. WE, ACCORDINGLY, IN THIS CA SE ALSO SET ASIDE THE ORDER OF THE CIT-V, PUNE AND RESTORE THE MATTER BAC K TO HIS FILE. NEEDLESS 5 ITA NOS. 1123 & 1124/PN/2011 NATURE CARE FOUNDATION, A.Y. - TO SAY THAT THE ASSESSEE SHOULD BE GIVEN OPPORTUNIT Y OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL JUSTICE. IN RESULT, A SSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 9. TO SUM UP THE RESULT, BOTH THESE APPEALS OF ASSE SSEE ARE ALLOWED FOR THE STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER 2012 IMMEDIATELY AFTER CONCLUSION OF HEARING. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 25TH SEPTEMBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE ACIT CPC, BANGALORE 4. THE D.R. A BENCH, PUNE 5. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE