Ministry of Living Water, Lucknow V. Commissioner of Income Tax-II, Lucknow

ITA 14/LKW/2014

• Counselvise Citation: 1423714 RSA 2014
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-10-2014
• Assessment Year: misc
• Appeal Filed On: 07-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIVEK MISHRA
• Section: 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.14 & 15/LKW/2014 ASSESSMENT YEARS :N.A. C.I.T. - II, LUCKNOW. VS. MINISTRY OF LIVING WATER, 594/KHA/68, IBRAHIMPUR, NILMATHA BAZAR, LUCKNOW. PAN:AACTM7540B (RESPONDENT) (APPELLANT) SHRI DHARMENDRA KUMAR, C. A. APPELLANT BY SHRI VIVEK MISHRA, CIT, D. R. RESPONDENT BY 15/10/2014 DATE OF HEARING 10 /12/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LEARNED CIT - II, LUCKNOW BOTH DATED 26/11/2013 U/S 12AA AND SECTION 80G(5) OF THE INCOME TAX ACT. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE IN I.T.A. NO.14/LKW/2014 ARE AS UNDER: 1. THAT LEARNED CIT ERRED IN FACTS AND LEGAL ASPECTS O F THE CASE IN REJECTING THE RECOGNITION UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961. 2 2. THAT LD. CIT REJECTED THE APPLICATION OF APPELLANT - TRUST FOR NOT CARRYING OUT ANY CHARITABLE ACTIVITY, WHICH IS AGAINST THE FACTS AND INCORRECT. APPELLANT - TRU ST IS ACTUALLY CARRYING OUT THE CHARITABLE ACTIVITIES, AS MENTIONED IN BYE - LAWS OF APPELLANT - TRUST. 3. THAT THE OBJECTS OF APPELLANT ARE CHARITABLE IN NATURE AND APPELLANT IS ENGAGED IN CHARITABLE ACTIVITIES. 3. THE GROUNDS RAISED BY THE ASSESSEE IN I.T .A. NO.1 5 /LKW/2014 ARE AS UNDER: 1. THAT LEARNED CIT ERRED IN FACTS AND LEGAL ASPECTS OF THE CASE IN REJECTING THE REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 2. THAT LD.CIT REJECTED THE APPLICATION OF APPELLANT - TRUST FOR NOT CARRYING OUT ANY CHARITABLE ACTIVITY, WHICH IS AGAINST THE FACTS AND INCORRECT. APPELLANT - TRUST IS ACTUALLY CARRYING OUT THE CHARITABLE ACTIVITIES, AS MENTIONED IN BYE - LAWS OF APPELLANT - TRUST. 3. THAT THE OBJECTS OF APPELLANT ARE CHARITABLE IN NATURE AND' APPELLANT IS ENGAGED IN CHARITABLE ACTIVITIES. 4. THAT SECTION 13 OF INCOME TAX ACT, 1961 DOES NOT APPLY IN CASE OF APPELLANT - TRUST. THE ALLEGATION OF LD.CIT FOR ALLEGED APPLICABILITY OF SECTION 13 OF INCOME TAX ACT, 1961 IN: CASE OF APPELLANT - TRUST IS AG AINST THE FACTS AND INCORRECT. 4. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT NOTES ON THE ACTIVITIES OF THE ASSESSEE ARE AVAILABLE ON PAGE NO. 22 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD FROM 04 /01/2011 TO 31/03/2011 IS AVAILABLE ON PAGE NO. 34 OF THE PAPER BOOK AND SIMILARLY , THE INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD FROM 04/01/2011 TO 31/03/2012 IS AVAILABLE ON PAGE NO. 44 OF THE PAPER 3 BOOK. THEREAFTER HE SUBMITTED THAT INCOME AND EXPE NDITURE ACCOUNT FOR THE YEAR ENDING ON 31/03/2013 IS AVAILABLE ON PAGE NO. 54 OF THE PAPER BOOK. HE SUBMITTED THAT FROM THESE INCOME AND EXPENDITURE ACCOUNTS, IT CAN BE SEEN THAT VARIOUS ACTIVITIES WERE UNDERTAKEN BY THE ASSESSEE FOR EDUCATION AND VARIOUS EXPENSES WERE INCURRED ON THIS ACCOUNT AS APPEARING IN TH ESE INCOME AND EXPENDITURE ACCOUNT S AND THEREFORE, CIT WAS NOT JUSTIFIED IN SAYING THAT THE ASSESSEE TRUST IS NOT INCURRING FUNDS FOR ACHIEVING ITS DECLARED OBJECTIVES. 5. AS AGAINST THIS, LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE ORDER PASSED BY LEARNED CIT U/S 12AA, HE HAS NOTED THAT AS PER THE ASSESSEES TRUST MEMORANDUM, THERE ARE MORE THAN 200 OBJECTIVES UN DER 47 MAJOR HEADS AND HE HAS REPRODUCED TOP 10 OBJECTIVES OF THE ASSESSEE AS PER BYE - LAWS OF THE ASSESSEE SOCIETY. THEREAFTER, HE HAS GIVEN A FINDING THAT AS PER PROFIT & LOSS ACCOUNT OF THE ASSESSEE FOR FINANCIAL YEAR 2010 - 11 TO 2012 - 13, THE ASSESSEE TR UST IS NOT INCURRING FUNDS FOR ACHIEVING ITS DECLARED OBJECTIVES. SIMILARLY, IN THE ORDER PASSED BY HIM U/S 80G(5) , H E HAS GIVEN A FINDING THAT ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, IT IS ESTABLISHED BEYOND DOUBT THAT THE ASSESSEE TRUST IS NOT C ARRYING OUT ANY CHARITABLE ACTIVITIES AT PRESENT. IN THE LIGHT OF THESE FINDINGS OF LEARNED CIT, WE NOTICE NOTES OF ACTIVITIES AVAILABLE ON PAGE NO. 22 OF THE PAPER BOOK. IN THE SAME, IT IS POINTED OUT BY THE ASSESSEE THAT ONE OF THE OBJECT S OF THE ASSES SEE WAS TO SERVE HOMELESS / ISOLATED / ABANDONED PERSONS , TO EDUCATE SOCIETY IN UNDERSTANDING COMMUNITY WELFARE, COMMUNITY HEALTH DEVELOPMENT ETC. AS PER THE ASSESSEE, THE SECOND OBJECTIVE IS TO PROVIDE EDUCATION HELP TO POOR CHILDREN AND TO PROVIDE CARE 4 AND SUPPORT FOR HOMELESS AND ABANDONED WOMEN AND CAMP FOR HEALTH CARE OF OLD AGED PERSONS. THE TRUST DEED OF THE ASSESSEE IS AVAILABLE ON PAGE NO. 4 TO 20 OF THE PAPER BOOK AND IN THE SAME , WE FIND THAT ALTHOUGH THERE ARE VARIOUS CLAUSES OF OBJECTS BUT THE BASIC AND UNDERLINING OBJECT IS TO PROVIDE EDUCATIONAL HELP TO THE POOR, HEALTH RELATED HELP TO THE POOR AND TO SERVE HOMELESS/ABANDONED PERSONS. NOW WE EXAMINE THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE IS INCURRING EXPENDITURE FOR FULFILLING THESE OBJECTS. IN THE INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31/03/2011, WE FIND THAT THE ASSESSEE HA S INCURR ED AN AMOUNT OF RS.21,157/ - ON ACCOUNT OF CARE & SUPPORT EXPENSES FOR HOMELESS AND ABANDONED WOMEN AND SIMILARLY AN AMOUNT OF RS.16,065/ - WAS INCURRED IN RESPECT OF CAMP FOR HEALTH CARE OF OLD AGE PERSONS. IN THIS YEAR, THE ACTIVITIES WERE CARRIED OUT FOR A PERIOD OF LESS THAN THREE MONTHS BECAUSE THE ASSESSEE TRUST WAS CONSTITUTED ON 04/01/2011. IN THE NEXT YEAR I.E. THE YEAR ENDING ON 31/03/2012, AN AMOUNT OF RS.15,378/ - WAS INCURRED ON ACCOUNT OF EDUCATION HELP TO POOR CHILDREN, AN AMOUNT OF RS.1,01,702/ - WAS INCURRED ON ACCOUNT OF CARE & SUPPORT E XPENSES FOR HOMELESS AND ABANDONED WOMEN AND AN AMOUNT OF RS.31,040/ - WAS INCURRED ON ACCOUNT OF CAMP FOR HEALTH CARE OF OLD AGE PERSONS . IN TH E NEXT YEAR I.E. IN THE YEAR ENDING ON 31/03/2013, THE ASSESSEE HAS INCURRED AN AMOUNT OF RS.20,252/ - ON ACCOUNT OF EDUCATION HELP TO POOR CHILDREN, RS.1,08,509/ - ON ACCOUNT OF CARE AND SUPPORT EXPENSES FOR HOMELESS AND ABANDONED WOMEN AND AN AMOUNT OF RS.33,062/ - WAS INCURRED ON ACCOUNT OF CAMP FOR HEALTH CARE OF OLD AGE PERSONS. HENCE, IT IS SEEN THAT NOT ONLY TH E OBJECTIVE ARE CHARITABLE BUT THOSE OBJECTIVES WERE UNDERTAKEN ALSO BY INCURRING EXPENSES IN RESPECT OF THOSE OBJECTIVES. IT IS IMMATERIAL THAT THE ASSESSEE WAS HAVING MORE THAN 50 OBJECTIVES AND WAS INCURRING EXPENSES FOR ONLY 2 TO 3 OBJECTIVES ONLY. E VEN IN THAT SITUATION, THE ASSESSEES CLAIM 5 FOR REGISTRATION U/S 12AA AND U/S 80G(5) CANNOT BE REJECTED. CONSIDERING ALL THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE DESERVES REGISTRATION U/S 12AA AND 80G(5) ALSO. WE DIRECT THE CIT ACCORDINGLY. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE STAND ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10 / 12/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1 . THE APPELLANT 2 . THE RESPONDENT. 3 . CONCERNED CIT 4 . THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR