B.G.Samuel Social Welfare Trust, CHENNAI V. ITO, Tuticorin

ITA 1455/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7098 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 28-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: A S SRIRAMAN
• Section: 80G; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! , ' # BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A.NO.1455/MDS./2014 B.G.SAMUEL SOCIAL WELFARE TRUST, 6/155,CHURCH STREET, SERVALKRANMANDAM, TUTICORIN 628 103. VS. THE INCOME TAX OFFICER, WARD 1(1), TUTICORIN. PAN AABTB 4784 B ( !$ / APPELLANT ) ( %&!$ / RESPONDENT ) / APPELLANT BY : SHRI A.S.SRIRAMAN,ADVOCATE / RESPONDENT BY : SHRI GURU BHASHYAM JCIT D.R. / DATE OF HEARING : 04 .08.2014 /DATE OF PRONOUNCEMENT : 08.08.2014 ' / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX-I, MADURAI DATED 04.01 .2013 IN THE CASE NO.464/37/2012-13/CIT-1, PASSED U/S 80G OF THE INCOME-TAX ITA NO1455./MDS/14 2 ACT, 1961 WHEREIN THE LD. CIT HAD DENIED RECOGNITI ON UNDER SECTION 80G OF THE ACT. 2. THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LD. CIT HAS RAISED NINE GROUNDS BEFORE US IN ITS APPEAL; HOWEVER, THE CRUX OF THE ISSUE IS THAT, THE LD.CIT HAD ERRED BY DENYING TO GRANT RECO GNITION UNDER SECTION 80G OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE TRUST FILED AN APPLICATION ON 30.7.12 BEFORE THE COMMISSIONER OF I NCOME TAX MADURAI FOR GRANT OF REGISTRATION U/S. 12AA OF THE ACT AND FOR RECOGNITION U/S. 80G OF THE ACT. AFTER PERUSING THE OBJECTS OF THE TRUST, THE LD. COMMISSIONER OF INCOME TAX GRANTED R EGISTRATION U/S. 12AA OF THE ACT, HOWEVER DENIED RECOGNITION UNDER S ECTION 80G OF THE ACT BY HOLDING IT TO BE PREMATURE, SINCE THE AS SESSEE TRUST HAD NOT FULFILLED ALL THE CONDITIONS LAID DOWN U/S. 80G (5) OF THE ACT. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOM E TAX-I THE ASSESSEE TRUST IS IN APPEAL BEFORE US. ITA NO1455./MDS/14 3 4. LD. A.R. SUBMITTED BEFORE US THAT THE LD. CIT ( A) HAD DENIED RECOGNITION TO THE TRUST U/S. 80G OF THE ACT BECAUS E THE ASSESSEE TRUST HAD NOT PERFORMED ANY ACTIVITIES IN THE NATUR E OF CHARITY STIPULATED IN THE TRUST DEED DURING THE RELEVANT AS SESSMENT YEAR. THE LD. A.R. FURTHER SUBMITTED THAT THE ASSESSEE WILL B E ABLE TO CONDUCT CHARITABLE ACTIVITIES ONLY AFTER RECEIVING DONATION S AND FOR THAT REASONS HAD SOUGHT RECOGNITION U/S. 80G OF THE ACT. IT WAS THEREFORE PLEADED THAT THE LD. CIT (A) MAY BE DIRECTED TO GRA NT RECOGNITION U/S. 80G OF THE ACT TO THE ASSESSEE TRUST. 5. LD. D.R ARGUED IN SUPPORT OF THE ORDER OF THE L D. COMMISSIONER OF INCOME TAX AND FURTHER POINTED OUT THAT THE ASSE SSEE TRUST HAD NOT INDULGED IN ANY CHARITABLE ACTIVITY DURING THE RELE VANT ASSESSMENT YEAR. THE LD. D.R FURTHER STATED THAT THE LD. COMMI SSIONER OF INCOME TAX HAD JUDICIOUSLY GRANTED REGISTRATION U/S. 12AA OF THE ACT AND HELD THAT THE ISSUE WITH RESPECT TO RECOGNITION U/S. 80G OF THE ACT WAS PREMATURE, HOWEVER HE HAD ALSO MENTIONED IN HIS ORD ER THAT THE ASSESSEE TRUST WAS AT LIBERTY TO APPLY FOR RECOGNIT ION U/S. 80G OF THE ITA NO1455./MDS/14 4 ACT AFTER CARRYING OUT THE ACTIVITIES IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT IN TH E ARGUMENT SUBMITTED BY THE LD. A.R. ONLY AFTER RECEIVING FIN ANCE BY WAY OF DONATIONS, THE ASSESSEE TRUST WILL BE IN A POSITION TO CARRY OUT THE OBJECTS LAID DOWN IN THE TRUST DEED. IN SUCH CIRCU MSTANCES, GRANTING RECOGNITION U/S. 80G OF THE ACT WOULD BE A PREREQUI SITE BEFORE COMMENCEMENT OF THE ACTIVITIES OF THE TRUST. THERE FORE, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE COMMISSIONER OF INCOM E TAX HAD JUDICIOUSLY GRANTED RECOGNITION U/S. 12AA OF THE AC T TO THE ASSESSEE TRUST, HE OUGHT TO HAVE ALSO GRANT RECOGNITION U/S. 80G OF THE ACT. THE STATUTE ALSO PROVIDES FOR CANCELLATION OF THE REGIS TRATION U/S. 12AA(3) OF THE ACT IF THE COMMISSIONER IS SATISFIED THAT TH E ACTIVITIES OF THE TRUST ARE NOT GENUINE OR NOT BEING CARRIED OUT IN A CCORDANCE WITH THE OBJECTS OF THE TRUST WHICH WILL CONSEQUENTLY ERASE THE BENEFIT OF SEC.80G OF THE ACT TO THE ASSESSEE TRUST IN CASE OF VIOLATION OF THE TRUST DEED. THEREFORE, WE ARE OF THE CONSIDERED VI EW THAT THE LD. ITA NO1455./MDS/14 5 COMMISSIONER OF INCOME TAX OUGHT TO HAVE GRANTED RE COGNITION U/S. 80G OF THE ACT TO THE ASSESSEE TRUST AND ACCORDINGL Y WE HEREBY DIRECT HIM TO DO SO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON 8 TH AUGUST, 2014. SD/ SD/- ( VIKAS AWASTHY ) ( A.MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 8 TH AUGUST, 2014. K S SUNDARAM. !'#$# /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. %&' /CIT(A) 4. % /CIT 5. #( )!!*+ /DR 6. ) ,-. /GF ITA NO1455./MDS/14 6 DR.O.K.NARAYANAN , SHRI A.MOHAN ALANKAMONY SHRI V. DURGA RAO SHRI CHALLA NAGENDRA PRASAD SHRI VIKAS AWASTHY SHRI S.S.GODARA