Life Spring Foundation, Secunderabad V. Director of Income Tax(Exemption), Hyderabad

ITA 1353/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66549 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 04-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIDISHA KALRA
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Charitable institution
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMB ER ITA NO.1353/HYD/2012 M/S. LIFE SPRING FOUNDATION, CHLKALGUDA, HYDERABAD ( PAN - AAAAL 4302 P) V/S. DIRECTOR OF INCOME - TAX (EXEMPTION), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI LAXMI NIWAS SHARMA DEPARTMENT BY : S MT. VIDISHA KALRA DR DATE OF HEARING 5 . 12 .2012 DATE OF PRONOUNCEM ENT 12.12.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION), HYDERABAD DATED 25.6.2012, REJECTING THE APPLICATION OF THE ASSESSEE FOR APPROVAL UNDER S.80G(5) OF THE ACT. 2. ASSESSEE, A SOCIETY REGISTERED WITH REGISTRAR OF SOCIETIES HYDERABAD ON 19.11.2010 AND REGISTERED UNDER S.12AA OF THE ACT VIDE ORDER DATED 18.11.2011 WITH EFFECT FROM 1.4.2011, FILED A N APPLICATION FOR APPROVAL UNDER S.80G OF THE ACT, ON 29.12.2011. THE DIRECTOR OF INCOME- TAX(EXEMPTION) VIDE LETTER DATED 27.3.2012 SOUGHT C ERTAIN ADDITIONAL INFORMATION AND DOCUMENTS FROM THE ASSESSEE. IN RE SPONSE, THE ASSESSEE FURNISHED THE RELEVANT ADDITIONAL INFORMATION/PAPER S, INCLUDING THE AUDITED ACCOUNTS FOR THE FINANCIAL YEAR 2010-2011 AND PROVI SIONAL ACCOUNTS FOR THE FINANCIAL YEAR 2011-12. THE ASSESSEE ALSO FURNISHED COPIES OF BANK ITA NO.1353/HYD/2012 M/S. LIFE SPRING FOUNDATION, SECUDNERABAD. 2 STATEMENTS FOR THE ABOVE SOCIETY PERTAINING TO THE ACCOUNTS IN STATE BANK OF INDIA, PADMARAO NAGAR, SECUNDERABAD. 3. FROM THE INCOME AND EXPENDITURE ACCOUNT FOR TH E YEAR ENDED 31.3.2012, THE DIRECTOR OF INCOME-TAX(EXEMPTION) N OTICED THAT UNDER INCOME, A SUM OF RS.67,326 WAS SHOWN AS BIRTH SPON SORSHIP RECEIPTS. UNDER SUCH ENTRY, IT WAS FURTHER MENTIONED CURRENT YEAR RS.19,000 AND EARLIER RS.48,326. THE DIRECTOR OF INCOME-TAX(EX EMPTION) WONDERED HOW THE SUM OF RS.67,326 WAS SHOWN AS INCOME OF THE SOC IETY FOR THE YEAR ENDED 31.3.2012, WHEN A SUM OF RS.19,000 ONLY WAS SHOWN A S PERTAINING TO THE CURRENT YEAR. HE NOTED THAT THE NATURE OF SUCH EAR LIER AMOUNT OF RS.48,326 ALSO HAS NOT BEEN EXPLAINED/CLARIFIED. HE FURTHER NOTED THAT AS PER ONE OF THE BANK ACCOUNT STATEMENT, THERE WERE CREDIT ENTRIES O F RS.4,000 AND RS.15,000 MADE ON 23.4.2011 AND 2.10.2011 RESPECTIVELY. AS P ER THE SAID ACCOUNT, ACCORDING TO HIM, THERE WERE TOTAL RECEIPTS, WHICH MAY BE INCOME AT RS.19,000 DURING FINANCIAL YEAR 2011-12. AS PER ON E OTHER BANK STATEMENT IN RESPECT OF ANOTHER ACCOUNT OF THE ASSESSEE FILED BE FORE THE DIRECTOR, IT WAS NOTED, THERE WAS A DEPOSIT OF RS.5,000 MADE IN CASH ON 1.6.2011. THE SAID DEPOSIT WAS NOTED TO HAVE BEEN MADE FROM SELF CASH DEPOSIT. CONSIDERING THE FACT THAT THE INCOME AND EXPENDITURE ACCOUNT ST ATEMENT FOR THE YEAR HAS REVEALED AN INCOME OF RS.19,000 ONLY AND THERE WER E ONLY THREE DEPOSITS TOTALLING TO RS.24,000 MADE IN THESE TWO BANK ACCOU NTS, THE DIRECTOR OF INCOME-TAX(EXEMPTION) WONDERED HOW THE ASSESSEE-SOC IETY HAS SHOWN AN AMOUNT OF RS.67,320 AS INCOME FOR THE FINANCIAL YEA R 2011-012. FURTHER, FROM THIS THE DIRECTOR OF INCOME-TAX(EXEMPTION) NOT ED THAT IT APPEARS THAT THE ASSESSEE HAS NOT ACCOUNTED FOR ITS ENTIRE INCOM E RECEIVED DURING THE FINANCIAL YEAR 2011-12 IN ITS BANK ACCOUNTS. FURTH ER, CONSIDERING THE FACT THAT WHEN THE INCOME AND EXPENDITURE ACCOUNT HAS CL EARLY MENTIONED RS.19,000 AS INCOME DURING THE CURRENT YEAR, BY SHO WING AN INCREASED AMOUNT OF RS.67,326 AS INCOME FROM BIRTH DAY RECEIP TS, THE ASSESSEE ITA NO.1353/HYD/2012 M/S. LIFE SPRING FOUNDATION, SECUDNERABAD. 3 RENDERED ITS ACCOUNTS NOT RELIABLE. IN THE LIGHT O F THE ABOVE DISCREPANCIES IN THE ACCOUNTS OF THE ASSESSEE, THE DIRECTOR OF INCOM E-TAX(EXEMPTION) THUS CONCLUDED THAT THE ASSESSEE HAS NOT CORRECTLY MAINT AINED ITS ACCOUNTS PERTAINING TO INCOME DURING THE FINANCIAL YEAR 2011 -12, AND THEREFORE, HELD THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITION S TIPULATED IN CLAUSE (IV) TO S.80G(5) OF THE ACT AND CONSEQUENTLY, THE ASSESSEE IS NOT ELIGIBLE FOR APPROVAL UNDER S.80G(5)(VI) OF THE ACT. FOR THIS REASON, AND ALSO OBSERVING THAT THE ASSESSEE SOCIETY IS NOT REGISTERED UNDER T HE ANDHRA PRADESH CHARITABLE & HINDUS RELIGIOUS INSTITUTIONS & ENDOWM ENTS ACT, 1987, HELD THAT THE ASSESSEE CANNOT BE GRANTED APPROVAL UNDER S.80G (5) OF THE ACT, AND CONSEQUENTLY REJECTED THE APPLICATION OF THE ASSESS EE IN THAT BEHALF. 4. AGGRIEVED BY THE ORDER OF THE DIRECTOR OF INCOM E-TAX(EXEMPTION), ASSESSEE PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE A SSESSEE SERIOUSLY DISPUTING THE FINDINGS OF THE DIRECTOR (EXEMPTION) SUBMITTED THAT THE ASSESSEE HAS NOT ONLY MAINTAINED ALL THE BOOKS OF A CCOUNT AS REQUIRED UNDER THE STATUTE BUT ALSO GOT ITS ACCOUNTS ARE AUDITED A S REQUIRED UNDER LAW. IT WAS FURTHER SUBMITTED THAT ALL THE BOOKS OF ACCOUNT AND OTHER NECESSARY DOCUMENTS, THOUGH WERE SUBMITTED BEFORE THE DIRECTO R(EXEMPTION), WITHOUT PROPERLY VERIFYING THEM, HE HAS COME TO A CONCLUSIO N THAT THE ASSESSEE HAS NOT MAINTAINED ITS ACCOUNTS PROPERLY. IT WAS FURTH ER CONTENDED BY THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE THAT THERE BEING NO REQUIREMENT UNDER THE STATUTE TO HAVE REGISTRATION UNDER ANDHRA PRADESH CHARITABLE & HINDUS RELIGIOUS INSTITUTIONS & ENDOWM ENTS ACT, 1987 FOR AVAILING THE BENEFIT OF APPROVAL UNDER S.80G OF THE ACT, THE REASON GIVEN BY THE DIRECTOR(EXEMPTION) IN THAT BEHALF IS NEITHER N OR VALID. IN SUPPORT OF THESE CONTENTIONS, LEARNED AUTHORISED REPRESENTATI VE FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE HYDERABAD BE NCH OF THE TRIBUNAL IN THE ITA NO.1353/HYD/2012 M/S. LIFE SPRING FOUNDATION, SECUDNERABAD. 4 CASE OF P.R. CHELLARAM CHARITABLE TRUST, SECUNDERAB AD V/S. DIRECTOR OF INCOME-TAX(EXEMPTION), HYDERABAD (ITA NO.565/HYD/20 12 DATED 10.8.2012). 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE CONTRARY, SUPPORTED THE ORDER OF THE DIRECTOR (EXEMPTION). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. AS CAN BE GATHERED FROM THE I MPUGNED ORDER OF THE DIRECTOR(EXEMPTION), HE HAS REFUSED TO GRANT APPROV AL UNDER S.80G(5) BY OBSERVING THAT THE ASSESSEE HAS NOT MAINTAINED ITS ACCOUNTS PROPERLY. HOWEVER, IT IS THE CONTENTION OF THE ASSESSEE THAT NOT ONLY THE ACCOUNTS WERE MAINTAINED PROPERLY, BUT THE SAME WERE ALSO SUBJECT ED TO STATUTORY AUDIT. IT IS NOT CLEAR FROM THE ORDER OF THE DIRECTOR (EXEMPT ION) AS TO WHETHER THE SO CALLED DEFECT OR DEFICIENCIES FOUND BY HIM WERE POI NTED OUT TO THE ASSESSEE FOR CLARIFICATION, AND SUFFICIENT OPPORTUNITY WAS G IVEN TO THE ASSESSEE FOR CLARIFYING THE SAME. THE FURTHER CONCLUSION OF TH E DIRECTOR THAT SINCE THE ASSESSEE IS NOT REGISTERED UNDER THE ANDHRA PRADESH CHARITABLE & HINDUS RELIGIOUS INSTITUTIONS & ENDOWMENTS ACT, 1987, IT I S NOT ELIGIBLE FOR APPROVAL UNDER S.80G, APPEARS TO BE FAR-FETCHED, SINCE THERE IS NO SUCH PRE-CONDITION PUT UNDER THE STATUTE. THAT APART, EVEN IN THE AB SENCE OF SUCH REGISTRATION, AS IT APPEARS, THE DEPARTMENT HAS GRANTED REGISTRAT ION UNDER S.12AA OF THE ACT TO THE ASSESSEE. IN THIS VIEW OF THE MATTER, WE DEEM IT JUST AND PROPER TO SET ASIDE THE IMPUGNED ORDER OF THE DIRECTOR(EXE MPTION), AND TO REMIT THE MATTER BACK TO HIS FILE FOR CONSIDERATION OF THE IS SUE AFRESH, KEEPING IN VIEW OUR OBSERVATIONS HEREINABOVE, IN ACCORDANCE WITH L AW, AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ITA NO.1353/HYD/2012 M/S. LIFE SPRING FOUNDATION, SECUDNERABAD. 5 ORDER PRONOUNCED IN THE COURT ON 12.12.2012 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- 12 DECEMBER, 2012 COPY FORWARDED TO: 1. M/S. LIFE SPRING FOUNDATION, CHLKALGUDA, H.NO.11-4-523, NEAR GANDHI STATUE, CHILAKALGUDA BUS STOP, CHILKALGUDA, SECUNDERABAD 500 025 2 . 3. 4. DIRECTOR OF INCOME - TAX(EXEMPTION) , HYDERABAD DY. DIRECTOR OF INCOME-TAX(EXEMPTION) HYDERABAD DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S.