ACIT, Trichy V. People Action for Transformation (PAT) Trust, Trichy

ITA 1438/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7954 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 23-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 12A; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . ! , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. 1438/MDS/2014 $ %$ /ASSESSMENT YEAR : 2010-11 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE I (2), TRICHY. V. M/S.PEOPLE ACTION FOR TRANSFORMATION (PAT) TRUST, NO.65, MELAPUDUR MAIN ROAD, TRICHY 620 001. PAN : AAATP 4968 N ( &' /APPELLANT) ( ()&' /RESPONDENT) &' * + /APPELLANT BY : SHRI N.MADHAVAN, JCIT ()&'*+ /RESPONDENT BY : SHRI S.SRIDHAR, ADVOCATE , *-' /DATE OF HEARING : 06.10.2016 . % *-' /DATE OF PRONOUNCEMENT : 30.11.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF CIT(A), TIRUCHIRAPALLI DATED 29.01.2014 AND PERTAIN S TO ASSESSMENT YEAR 2010-11. 2 I.T.A. NO.1438/MDS/2014 2. SHRI. N.MADHAVAN, THE LEARNED DEPARTMENT REPRESE NTATIVE SUBMITTED THAT THE ASSESSEE IS A CHARITABLE INSTITU TION REGISTERED UNDER SECTION 12A OF THE ACT. MICRO-FINANCING IS NOT ONE OF THE OBJECTS OF THE ASSESSEE TRUST. THE LEARNED DEPARTMENT REPRESENTATI VE SUBMITTED THAT THE ASSESSEE TRUST AMENDED ITS TRUST DEED WITHOUT T HE APPROVAL OF THE DIRECTOR OF INCOME TAX. THEREFORE, THE ASSESSEE SOC IETY HAS TO LOSE ITS EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT. M OREOVER, MICRO- FINANCING IS NOTHING BUT THE BUNNIES OF THE ASSESSE E. THEREFORE, IT WOULD DEFINITELY FALL UNDER PROVISION TO SECTION 2(15) OF THE ACT. HENCE, THE COMMISSIONER HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI S.SRIDHAR, THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT THE OBJECT OF THE SOCIETY I S RELIEF TO THE POOR. IN THE COURSE OF CARRYING OUT THE CHARITABLE ACTIVITY, THE ASSESSEE ADVANCED MONEY TO THE POOR PEOPLE FOR THEIR UPLIFTMENT. THE ASSESSING OFFICER FOUND THAT THE ACTIVITY OF MICRO FINANCE IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. THEREFORE, IT CANNOT BE CONSI DERED TO BE A CHARITABLE ACTIVITY. ON APPEAL BY THE ASSESSEE, THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. ACCORDING TO THE LE ARNED COUNSEL, THE ACTIVITY OF THE ASSESSEE IN ADVANCING MONEY TO POOR PEOPLE WILL FALL UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY. THEREFORE, THE ASSESSEE IS LIABLE FOR 3 I.T.A. NO.1438/MDS/2014 EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT. P LACING RELIANCE OF THE DECISION OF THE TRIBUNAL IN ACIT VS. M/S.NANAYA SURABHI DEVELOPMENT FINANCIAL SERVICES IN ITA 2050/MDS/2014 AND 393/MDS/2015 DATED 24.08.2016, THE LEARNED COUNSEL SUBMITTED THAT ON IDENTICAL CIRCUMSTANCES, THIS TRIBUNAL REMANDED BAC K THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO RE-EXAMINE THE MAT TER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE CLAIMS THAT THE MONEY WAS ADVANCED TO POOR PEOPLE FOR THEIR UPLIFTMENT. THEREFORE, IT WOULD FALL UNDER THE CATE GORY OF GENERAL PUBLIC UTILITY. THE FACT THAT THE TRUST DEED WAS AMENDED WAS NOT BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER OR CIT(A). IT IS AL SO NOT KNOWN WHAT ARE THE CHARITABLE ACTIVITIES CARRIED ON BY THE ASSESSE E. A BARE READING OF THE COPY OF THE TRUST DEED FILED BY THE ASSESSEE SHOWS THAT MICRO FINANCE IS NOT THE OBJECT OF THE TRUST. THEREFORE, IT HAS TO E XAMINE THE ACTUAL CHARITABLE ACTIVITY CARRIED ON BY THE ASSESSEE. IN THE ABSENCE OF ANY MATERIAL BEFORE THIS TRIBUNAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASS ESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER FOR RE- EXAMINATION IN THE LIGHT OF THE MATERIAL THAT MAY B E FILED BY THE ASSESSEE 4 I.T.A. NO.1438/MDS/2014 AND BRING ON RECORD THE ACTUAL ACTIVITIES CARRIED O N BY THE ASSESSEE APART FROM MICRO FINANCE AND THEREAFTER DECIDE THE SAME I N ACCORDANCE WITH LAW AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) ' /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, / /DATED, THE 30 TH NOVEMBER, 2016. SP. * (-01 21%- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 3- ( )/CIT(A) 4. , 3- /CIT, 5. 14 (- /DR 6. 5$ 6 /GF.