Shree Goenka Seva Trust, Kolkata V. CIT, (Exemptions), Kolkata, Kolkata

ITA 1423/KOL/2015

• Counselvise Citation: [2016] 128 COUNSELVISE.COM (IT) 9748 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 23-09-2016
• Assessment Year: 2015-2016
• Appeal Filed On: 30-11-2015
• Court: TRIBUNAL
• Keywords: Charitable institution; Question of law
• Section: 80G; 12A; 12AA

Judgement Text

1 ITA NO.1423 & 1424/KOL/2015 SHREE GOENKA SEVA TRUST IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI WASEEM AHMED, AM & SHRI K. NARASIMHA CHARY, JM] I.T.A NOS. 1423 & 1424/KOL/2015 ASSESSMENT YEAR: ----- SHREE GOENKA SEVA TRUST VS. COMMISSIONER OF INCO ME-TAX(EXEMPTION), FOUNDATION (PAN: AAOTS7982H) KOLKATA. (APPELLANT) (RESPONDENT) DATE OF HEARING: 27.09.2016 DATE OF PRONOUNCEMENT: 30.09.2016 FOR THE APPELLANT: SHRI S. SINGHI, FCA FOR THE RESPONDENT: N O N E ORDER PER SHRI K. NARASIMHA CHARY, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(EXEMPTIONS), KOLKATA VIDE MEMO NO. CIT(E)/10E/05/2015-16/2461-63 DATED 09.10. 2015. 2. THESE ARE THE APPEALS BY THE ASSESSEE CHALLENGIN G THE ORDER DATED 09.10.2015 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIO NS), KOLKATA (HEREINAFTER REFERRED TO AS LEARNED CIT). BOTH THE APPEALS ARE HEARD TOGET HER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST CAME INTO EXISTENCE THROUGH A DEED OF TRUST DATED 11.12.2014. THE TRUST FILED AN APPLICATIONS IN FORM 10A AND 10G ON 07.04.2015 BEFORE THE LD. CIT (EXEMPTIONS), KOLKATA SEEKING REGISTRATION UNDER SECTION 12A(1)(AA) AND APPROVAL UNDER SECTION 80G( 5)(VI) OF THE ACT BUT THOSE WERE REJECTED BY THE LD. CIT VIDE ORDER DATED 09.10.2015 HOLDING THAT THE ACTIVITIES OF THE TRUST WERE FOUND TO BE BARE MINIMUM AND NEGLIGIBLE TO JUS TIFY THE CLAIM OF REGISTRATION UNDER SECTION 12AA OF THE ACT. AGGRIEVED BY THE SAID REJE CTION OF REGISTRATION, THE ASSESSEE FILED AN APPEAL IN ITA NO. 1423/KOL/2015 ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (E XEMPTIONS) ERRED IN HOLDING THAT THE APPELLANT TRUST IS GENUINELY NOT ENGAGED IN ANY PUB LIC CHARITABLE ACTIVITY FOR REJECTING THE APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF T HE INCOME TAX ACT, 1961. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX FAIL ED TO APPRECIATE THE FACT THAT THE APPELLANT TRUST WAS ESTABLISHED ON 11TH DECEMBER, 2 014 AND IS ENGAGED IN CHARITABLE ACTIVITIES AND LEGALLY ENTITLED OR CERTIFICATE OF R EGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 3. FOR THAT FROM FACTS AND IN ANY CIRCUMSTANCES OF THE CASE APPELLANT'S APPLICATION FOR GRANT OF CERTIFICATE OF REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 CAN BE DENIED LEGALLY. 2 ITA NO.1423 & 1424/KOL/2015 SHREE GOENKA SEVA TRUST 4. FOR THAT THE ORDER PASSED U/S 12AA OF THE INCOME TAX ACT, 1961 IS ERRONEOUS ON FACTS AND IN LAW AND IS LIABLE TO BE CANCELLED WITH DIRECTION TO GRANT THE APPROVAL. CHALLENGING THE DENIAL OF APPROVAL UNDER SECTION 80 G(5)(VI) AS A CONSEQUENCE OF REJECTION OF THE APPLICATION IN FORM NO. 10A, THE ASSESSEE CA RRIED THE MATTER IN ITA NO. 1424/KOL/2015 ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (E XEMPTIONS) ERRED IN HOLDING THAT THE APPELLANT TRUST IS GENUINELY NOT ENGAGED IN ANY PUB LIC CHARITABLE ACTIVITY FOR REJECTING THE APPLICATION FOR REGISTRATION U/S. 12AA AND APPROVAL U/S 80(G)(5)(VI) OF THE INCOME TAX ACT, 1961. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX FAIL ED TO APPRECIATE THE FACT THAT THE APPELLANT TRUST WAS ESTABLISHED ON 11TH DECEMBER, 2 014 AND IS ENGAGED IN CHARITABLE ACTIVITIES AND LEGALLY ENTITLED FOR CERTIFICATE OF REGISTRATION U/S 12AA AND ALSO APPROVAL U/S 80(G)(5)(VI) OF THE INCOME TAX ACT, 1961. 3. FOR THAT FROM FACTS AND IN ANY CIRCUMSTANCES OF THE CASE APPELLANT'S APPLICATION FOR GRANT OF CERTIFICATE OF REGISTRATION U/S 12AA AND ALSO APPRO VAL U/S 80(G)(5)(VI) OF THE INCOME TAX ACT, 1961 CAN BE DENIED LEGALLY. 4. FOR THAT THE ORDER PASSED U/S 80(G)(5)(VI) OF TH E INCOME TAX ACT, 1961 IS ERRONEOUS ON FACTS AND IN LAW AND IS LIABLE TO BE CANCELLED WITH THE D IRECTION TO GRANT THE APPROVAL. 4. IT IS THE ARGUMENT OF THE LD. A.R. THAT WHILE GR ANTING THE REGISTRATION TO THE ASSESSEE, WHICH IS AT THE COMMENCEMENT STAGE, T HE POWERS OF LD. CIT WITH WHOM THE APPLICATION IS FILED, ARE LIMITED TO THE A SPECT OF EXAMINING THAT WHETHER OR NOT THE OBJECTS OF TRUST ARE CHARITABLE IN NATURE, AND SINCE THE TRUST WAS FORMED ON 11.12.2014AND THE APPLICATION F OR REGISTRATION WAS MADE ON 07.04.2015, THOUGH THE ACTIVITIES COMMENCED TO S OME EXTENT, THERE WERE LESS AS SUCH IS NOT OPEN FOR THE LD. CIT TO GO INTO THE QUANTITATIVE ASPECT OF THE ACTIVITIES OF THE TRUST. 5. CHARITABLE OBJECTS OF THE TRUST ARE NOT DISPUTED BY THE LEARNED CIT. IT IS SUBMITTED THAT SO LONG AS THERE IS NO DISPUTE AS TO THE OBJECTS OF THE TRUST, WHAT IS TO BE SEEN AT THE TIME OF GRANTING REGISTRA TION BY THE LEARNED CIT IS ONLY WHETHER THE OBJECTS OF THE TRUST ARE CHARITABL E AND ACTIVITIES CARRIED OUT ARE GENUINE IN NATURE. IN COMMISSIONER OF INCOME T AX VS SATVARA EDUCATION FOUNDATION TAX APPEAL NO. 907 OF 2013 DATE : 11/11/ 2013 THE HONBLE QUESTION CONSIDERED THE QUESTION WHETHER THE ITAT IS JUSTIFIED IN LAW AS WELL ON FA CTS IN DIRECTING TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961? AND HELD AS FOLLOWS: 3 ITA NO.1423 & 1424/KOL/2015 SHREE GOENKA SEVA TRUST 4. WE HAVE HEARD SHRI PRANAV DESAI, LEARNED COUNSEL APPEARING ON BEHALF OF THE APPELLANT AND PERUSED THE ORDER PASSED BY THE ITAT AS WELL AS THE CIT. AT THE OUTSET, IT IS REQUIRED TO BE NOTED THAT THE REVENUE HAS NOT DOUBTED AND/OR DISPUTED TH E OBJECT AND PURPOSE OF THE ASSESSEE- TRUST/FOUNDATION SO MENTIONED IN THE MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION OF THE FOUNDATION. IT APPEARS THAT THE MAIN OBJECT OF THE FOUNDATION SEEMS TO BE TO PROMOTE, ESTABLISH, DEVELOP, RUN, SUPPORT, MAINTAIN AND ADVA NCE THE CAUSE OF EDUCATION,TO GRANT AID OR OTHER ASSISTANCE TO ALL TYPES OF EDUCATIONAL INSTIT UTIONS INCLUDING SCHOOLS, COLLEGES, UNIVERSITIES, LIBRARIES, READING ROOMS, FORMAL AND NON FORMAL EDUCATIONS, VOCATIONAL TRAINING CENTERS AND OTHER INSTITUTIONS FOR THE BENEFIT OF T HE STUDENTS. IT IS ALSO REQUIRED TO BE NOTED AT THIS STAGE THAT IT WAS THE FIRST YEAR AFTER THE ASS ESSEE-TRUST/FOUNDATION CAME TO BE ESTABLISHED. UNDER THE CIRCUMSTANCES AND CONSIDERING THE OBJECT AND PURPOSE OF THE TRUST NARRATED HEREINABOVE, IT CANNOT BE SAID THAT THE ITAT HAS CO MMITTED ANY ERROR AND/OR ILLEGALITY IN ALLOWING THE APPEAL DIRECTING TO GRANT THE REGISTRA TION UNDER SECTION 12A OF THE INCOME TAX ACT TO THE ASSESSEE TRUST/FOUNDATION. WHILE PASSING THE IMPUGNED ORDER, THE TRIBUNAL IN PARAGRAPH NO. 5 HAS OBSERVED AND HELD AS UNDER; HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE TH ROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT AS PER MEMORAND UM OF ASSOCIATION AND ARTICLES OF ASSOCIATION, THE FOUNDATION IS REGISTERED UNDER SEC TION 25 OF THE COMPANIES ACT UNDER REGISTRATION CERTIFICATE DATED 06/06/2012. THE TOTA L DONATION RECEIVED BY THE ASSESSEE- TRUST IS ONLY RS.7103/-. THE TOTAL AMOUNT GIVEN AS DONATION/SCHOLARSHIP TO GIRL STUDENTS IS ABOUT RS.4000/-. LOOKING TO THE MAGNITUDE OF THE INCOME IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, THE CHARI TABLE ACTIVITIES CARRIED OUT CANNOT BE CALLED AS LOW MAGNITUDE. CONSIDERING THE TOTALIT Y OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE LEARNED CIT R EFUSING REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT. 1961 HAS OBSERVED IRRELEVANT CONSIDERATIONS. WE THEREFORE, DIRECT HIM TO GRANT THE REGISTRATION TO THE FOUNDATION UND ER SECTION 12AA OF THE I.T. ACT, 1961. 5. IN VIEW OF THE ABOVE, WE SEE NO REASON TO INTERF ERE WITH THE IMPUGNED ORDER PASSED BY THE ITAT. NO QUESTION OF LAW, MUCH LESS SUBSTANTIAL QUE STION OF LAW ARISES IN THE PRESENT TAX APPEAL. HENCE, THE PRESENT TAX APPEAL DESERVES TO B E DISMISSED AND IS ACCORDINGLY DISMISSED. 6. IN A DECISION RENDERED BY A COORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF DHARMA SANSTHAPAK SANGH (NIVAS) VS.- CIT ( 2008) 118 TTJ (DEL.) 823, IT IS HELD AS FOLLOWS: 10. THE LAW IS NOW WELL-SETTLED THAT WHILE GRANTING THE REGISTRATION TO THE CHARITABLE INSTITUTION OR TRUST, IF IT IS AT THE COMMENCEMENT STAGE, THE POWERS OF CIT, WITH WHOM THE APPLICATION IS FILED BY SUCH TRUST/INSTITUTION, ARE LIMITED TO THE ASPECT OF EXAMINING THAT WHETHER OR NOT THE OBJECTS OF TRUST ARE CHARITABLE IN NATURE AND THIS WELL ESTABLISHED LAW IS SUPPORTED BY THE DECISIONS RELIED UPON THE LEARNED AUTHORISED REPRESENTATIVE AND REFERRED TO IN THE EARLIER PART OF THE ORDER. IT HAS ALREADY BEEN OBSERVED THAT OBJECTS OF TRUST, WHICH ARE RELIGIOUS, ARE CHARITABLE IN NATURE. THUS, ASSE SSEE ALSO FULFILS SUCH CONDITION. THE CARRYING OF CHARITABLE ACTIVITY AT THE STAGE OF COM MENCEMENT OF INSTITUTION IS NOT RELEVANT TO DECIDE THAT WHETHER SUCH TRUST/ INSTITUTION IS ENTI TLED FOR REGISTRATION. SO LONG THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE, REGISTRATION CA NNOT BE REFUSED, IF THE TRUST IS GENUINE. THEREFORE, WE FIND NO MATERIAL ON RECORD TO JUSTIFY THE ACTION OF THE CIT VIDE WHICH THE ASSESSEE TRUST HAS BEEN REFUSED FOR GRANT OF REGIST RATION. WE DIRECT CIT TO GRANT REGISTRATION TO THE CIT (SIC-ASSESSEE-TRUST). THE APPEAL FILED B Y THE ASSESSEE IS ALLOWED.'[EMPHASIS SUPPLIED] WHILE DECIDING THE APPEAL IN THE ABOVE CA SE, THE TRIBUNAL TOOK INTO CONSIDERATION THE DECISIONS OF TRIBUNAL IN THE CASES OF ACHARYA SEWA NIYAS UTTARANCHAL VS. CIT [(2006) 105 TTJ (DEL) 761] AND MODERN DEFENCE SHIKSHAN SANSTHAN VS. C.I.T . [(2007) 108 TTJ (JD) 732].' 4 ITA NO.1423 & 1424/KOL/2015 SHREE GOENKA SEVA TRUST 7. IN THE DECISIONS RENDERED BY COORDINATE BENCHS I N THE CASE OF VIVEKANANDA WELFARE TRUST VS.- DIT(E) IN ITA NOS. 2095/KOL/2008 AND 27/KOL/2009, ORDER DATED 23.01.2009, M/S GINIA DEVI TODI CHARITABLE TRUST, KOLKATA VS DIRECTOR OF INCOME TAX ITA 738/KOL/2010, DATED 1.6.2011, BANI MITTRA CHARITABLE TRUST, KOLKATA VS. DIRECTOR OF IN COME TAX ITA 1154&1155/KOL/2009, DATED 25.8.2009 THE SAME CONCLU SION WAS REACHED BY FOLLOWING THE EARLIER DECISION OF ITAT, DELHI IN TH E CASE OF DHARMA SANSTHAPAK SANGH (NIVAS) (SUPRA). THE FACTS OF THIS CASE ARE SQUARELY COVERED BY THE DECISIONS CITED ABOVE. RESPECTFULLY FOLLOWIN G THE JUDICIAL REASONING, WE DIRECT THE LD. CIT TO GRANT REGISTRATION TO THE ASSESSEE-TRUST UNDER SECTION 12AA OF THE ACT AND ALSO TO GRANT EXEMPTION CERTIFI ED UNDER SECTION 80G OF THE ACT. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.09.201 6. SD/- SD/- (WASEEM AHMED) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30TH SEPTEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHREE GOENKA SEVA TRUST, 21, CAMAC S TREET, 9 TH FLOOR, KOLKATA-700 071. 2 RESPONDENT CIT(EXEMPTIONS), KOLKATA. 3. THE CIT (A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA /TRUE COPY, BY ORDER, ASSTT. REGISTRAR .