Nanda Gokula, Shimoga V. Commissioner of Income tax, Davangere

ITA 1229/BANG/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1500 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-10-2015
• Assessment Year: misc
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I P S BINDRA HEARD ON PRONOUN
• Keywords: Gift
• Section: 12A

Judgement Text

ITA.1229/BANG/2014 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER I.T.A NO.1229/BANG/2014 (ASSESSMENT YEAR : NA) NANDA GOKULA, UPPALLI, M. L. HALLI POST, SAGARA TALUK, SHIMOGA DISTRICT .. APPELLANT PAN : AABTN5243R V. COMMISSIONER OF INCOME-TAX, DAVANGERE .. RESPONDENT ASSESSEE BY : SHRI. G VENKATESH, ADVOCATE REVENUE BY : SHRI. I. P. S. BINDRA, CIT-DR HEARD ON : 12.10.2015 PRONOUNCED ON : 20.10.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY ASSESSEE IT IS AGGRIEVED TH AT CIT, DAVANGERE DENIED REGISTRATION SOUGHT BY IT U/S.12AA OF THE IN COME-TAX ACT, 1961 (THE ACT IN SHORT). 02. FACTS APROPOS ARE THAT ASSESSEE A TRUST REGISTE RED ON 13.06.2008 HAD FILED AN APPLICATION FOR REGISTRATION U/S.12AA OF T HE ACT ON 07.01.2014. ITA.1229/BANG/2014 PAGE - 2 CIT REQUIRED THE ASSESSEE TO FURNISH ITS FINANCIAL STATEMENTS FOR THE YEARS ENDING 31.03.2009, 31.03.2010, 31.03.2011, 31.03.20 12 AND 31.03.2013 AND ALSO A NOTE ON ITS ACTIVITIES. AFTER VERIFYING THE TRUST DEED, CIT REACHED AN OPINION THAT TRUST HAD CERTAIN OBJECT CL AUSES WHICH WERE PURELY NOT CHARITABLE IN NATURE. HE THEREFORE HELD THAT T HERE WAS LIKELIHOOD OF MISUSE OF THE OBJECTS OF THE ASSESSEE. FURTHER ACC ORDING TO HIM, BENEFICIARIES WERE NOT WELL DEFINED. HE REJECTED T HE APPLICATION FILED BY THE ASSESSEE. 03. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE OR DER OF CIT SUBMITTED THAT THE TRUST DEED OF THE ASSESSEE CLEARLY REFLECT ED ITS OBJECTS AS MAINTENANCE OF GOSHALA, VETERINARY HOSPITALS AND TH E LIKE. THESE COULD NOT BE CONSIDERED AS NON-CHARITABLE. AS PER THE LD. AR , CIT WENT BY THE SUPPLEMENTARY OBJECTS WHICH WERE ONLY A MEANS OF AC HIEVING THE MAIN OBJECTS. ACCORDING TO HIM THE REGISTRATION WAS UNF AIRLY DENIED. RELIANCE WAS PLACED ON THE DECISION OF ITAT, CHENNAI BENCH I N SNEKALAYA FOR ANIMALS V. ITO [(2012) 52 SOT 352] AND THAT OF ITAT , MUMBAI BENCH IN THE CASE OF SHREE NASHIK PANCHVATI PANJARPOLE V. DI T (EX) [(2014) 148 ITD 343]. 04. PER CONTRA, LD. DR SUPPORTED THE ORDER OF CIT. ITA.1229/BANG/2014 PAGE - 3 05. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. OBJECT CLAUSE OF THE ASSESSEE, AS IT APPEARS IN ITS TRUST DEED DT.13.06.2008, IS REPRODUCED HEREUNDER : 1. TO ESTABLISH MAINTAIN AND RUN GOSADANAS, GOSHALAS, FREE . VETERINARY HOSPITALS, SAVE AND PROTECT THE LIVES OF AGED COWS, OXEN, CATTLE AND OTHER DOMESTIC ANIMALS ON MERCY BASIS IN THE LARGER INTEREST OF ANIMAL KIN D 2. TO CONDUCT, ENCOURAGE RESEARCH ACTIVITIES IN ANIMAL HUSBANDRY AND ANIMAL PRODUCTS . 3.TO UNDERTAKE, CARRYON, ENCOURAGE PRODUCTION AND MARKETING OF COW BASED PRODUCTS 4. TO UNDERTAKE ANY OTHER ACTIVITY INCIDENTAL TO THE A BOVE AIMS. 5. TO OPEN, ESTABLISH, RUN, MAINTAIN, TAKE OVER, LET O N LEASE, SELL OR OTHERWISE TRANSFER BRANCHES AT ANY P LACE OR PLACES IRRESPECTIVE OF GEOGRAPHICAL BOUNDARIES. 6. TO COLLABORATE AND JOIN HANDS WITH SIMILAR INSTITUT IONS FOR THE PURPOSES AND OBJECTS OF THE TRUST 7. TO CO-OPERATE WITH NATIONAL AND INTERNATIONAL ORGANISATIONS HAVING SIMILAR AIMS AND OBJECTS. 06. TRUST DEED ALSO CARRIES IN IT AN ENABLING CLAUS E NO.3 FOR ATTAINING THE OBJECTS MENTIONED ABOVE. THIS IS REPR ODUCED HEREUNDER : ITA.1229/BANG/2014 PAGE - 4 FOR THE IMPLEMENTATION OF THE ABOVE OBJECTS, THE FO LLOWING ACTIVITIES SHALL BE UNDERTAKEN: A) TO COLLECT FUNDS BY WAY OF SUBSCRIPTIONS, CONTRIBUTIONS, FEES, CHARITIES, DONATIONS, GRANTS, SUBSIDIES, LOANS, DEPOSITS ETC., FROM TRUSTEES, THE GENERAL PUBLIC, GOVERNMENT - STATE/CENTRAL, OTHER GOVT./NON -GOVT. ORGANISATIONS AND BODIES CORPORATE INCLUDING FOREIG N AGENCIES AND ORGANISATIONS. B) TO SELL, LEASE, LICENSE, MORTGAGE, EXCHANGE, GIFT, ALIENATE, DISPOSE OFF, DEVELOP, IMPROVE OR TURN INTO ACCOUNT ANY OF THE PROPERTIES OR ASSETS OF THE TRUST AS MAY BE THO UGHT FIT FOR, WITH A VIEW TO PROMOTE THE OBJECTS OF THE TRUST. C) TO TAKE SUCH OTHER OBJECTS NOT INCONSISTENT WITH TH E SPIRIT OF THE TRUST AND THE OBJECTS THAT THE TRUSTE ES MA Y ADD TO THE ABOVE MENTIONED OBJECTS, HAVING REGARD T O THE PARTICULAR NEEDS OF THE TIME AND NOT INCONSISTENT WITH THE PROVISIONS OF INCOME TAX ACT, 1961. D) TO ACQUIRE AND HOLD, CONSTRUCT, SELL, MORTGAGE, DIS POSE OF, TURN TO ACCOUNT OR OTHERWISE TO DEAL WITH ALL OR AN Y OF THE PROPERTIES OF THE TRUST, BY WAY OF PURCHASE, HI RE ETC. 07. READING OF THE MAIN OBJECT CLEARLY SHOW THAT TH ERE WAS NOTHING WHICH COULD BE TERMED AS NON-CHARITABLE. IF WE TAK E EACH OF THE OBJECTS MENTIONED IN THE MAIN OBJECTS THESE WERE FOR GENERA L PUBLIC UTILITY. CIT CONSIDERED THE ENABLING CLAUSE THREE, INTENDED FOR ACHIEVING THE MAIN OBJECT ALSO AS A PART OF THE OBJECTS OF THE ASSESSE E WHICH IN OUR OPINION WAS INCORRECT. COORDINATE BENCH OF CHENNAI HAS IN THE CASE OF SNEKALAYA FOR ANIMALS (SUPRA) HELD THAT A TRUST FORMED FOR THE PU RPOSE OF TAKING CARE OF ITA.1229/BANG/2014 PAGE - 5 SICK ANIMALS WILL BE ELIGIBLE FOR REGISTRATION U/S. 12A OF THE ACT. SIMILAR VIEW WAS TAKEN BY THE MUMBAI BENCH IN THE CASE OF S HREE NASHIK PANCHVATI PANJARPOLE (SUPRA). CIT HAS NOT GIVEN AN Y ADVERSE FINDING ON THE ACCOUNTS SUBMITTED BY THE ASSESSEE FOR VARIOUS YEAR S. THERE IS NO GRIEVANCE BY THE REVENUE THAT THE SAID ACCOUNTS REFLECTED A D IFFERENT LINE OF ACTIVITY OTHER THAN WHAT WAS MENTIONED IN THE OBJECTS CLAUSE OF THE ASSESSEES TRUST. FURTHER THE CLASS OF BENEFICIARIES WHO WILL BE BENE FITTED CAN BE CLEARLY DISCERNED FROM THE TRUST DEED AND THEY ARE THE GENE RAL PUBLIC. IN SUCH A SCENARIO WE ARE OF THE OPINION THAT REGISTRATION SO UGHT BY THE ASSESSEE TRUST WAS UNJUSTLY DENIED. WE DIRECT THE CIT TO GRANT RE GISTRATION TO THE ASSESSEE. 08. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20TH DAY OF O CTOBER, 2015. SD/- SD/- (VIJAYPAL RAO) (ABRAH AM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR