M/s Dasari Gunnapayyasetty Memorial Trust, Visakhapatnam V. THE CIT - 1, Visakhapatnam

ITA 146/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0202 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSAMY
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

ITA NO.146/VIZAG/2013 M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, VISAKH APATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.146/VIZAG/2013 ( / ASSESSMENT YEAR : NA ) M/S. DASARI GUNNA PA YYA SETTY MEMORIAL TRUST PAYAKARAO PETA, VISAKHAPATNAM DIST. VS. CIT - 1 VISAKHAPATNAM [ PAN: AAATD4569P ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI G. GURUSAMY, DR / 3 / DATE OF HEARING : 0 6.11.2015 / 3 / DATE OF PRONOUNCEMENT : 27.11.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT-1, VISAKHAPATNAM. 2. THE ASSESSEE M/S. DASARI GUNNAYYA SETTY MEMORIAL TRUST IS AN UNREGISTERED TRUST AND IT FILED AN APPLICATION IN FORM NO.10A ON 25 TH JULY, ITA NO.146/VIZAG/2013 M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, VISAKH APATNAM 2 2012 SEEKING GRANT OF REGISTRATION U/S 12AA OF THE INCOME-TAX ACT, 1961 ACT (HEREINAFTER CALLED AS THE ACT) WITH THE FOLLOWING OBJECTS: THE OBJECTS FOR WHICH THE TRUST HAS BEEN ESTABLISHE D ARE TO PROVIDE MEDICAL RELIEF, TO PROVIDE EDUCATION, TO CO NSTRUCT KALYANAMANDAPAM IN THE MEMORY OF LATE DASARI GUNNAY YA SETTY, TO UNDERTAKE ANY OTHER OBJECT OF SOCIO-ECONOMIC UPLIFT MENT OF THE PEOPLE AND FURTHERING OF ANY OTHER OBJECTIVES OF GENERAL P UBLIC UTILITY NOT INVOLVING CARRYING ON ANY ACTIVITY FOR PROFIT AND F OR SUCH PURPOSES. A. TO ESTABLISH, PROMOTE, SUPPORT, MAINTAIN, HELP AND RUN MEDICAL OR/AND EDUCATIONAL INSTITUTIONS AND OTHER ESTABLISH MENTS FOR GIVING MEDICAL RELIEF AND EDUCATION TO THE PUBLIC. B. TO PROVIDE EDUCATION, MEDICINES, FOOD, CLOTHING, WA TER, LIGHT AND/OR SHELTER FOR THE POOR AND OR NEEDY PERSONS AN D TO GIVE HELP TO THEM EITHER IN CASH OR IN KIND OR OTHERWISE. C. TO GRANT SCHOLARSHIPS, STIPENDS, FREE STUDENTSHIP, PRIZES, REWARDS AND ALLOWANCES, FINANCIAL AND OTHER ASSISTANCE TO S TUDENTS, LECTURERS, PROFESSORS, TEACHERS ETC., D. TO ORGANISE TRAINING AND EMPLOYMENT FOR WOMEN AND Y OUTH. E. TO ESTABLISH AND MAINTAIN, COMMUNITY HALL, AND/OR D HARMASHALAS FOR THE USE OF THE PUBLIC AND TO GRANT ASSISTANCE F OR THE PURPOSE TO OTHER CHARITABLE INSTITUTIONS. F. TO ESTABLISH AND MAINTAIN HOMES, ORPHANAGES AND OTH ER ESTABLISHMENTS FOR RELIEF OF AND TO GIVE HELP TO TH E POOR AND DESTITUTE, ORPHANS AND WIDOWS AND OTHERWISE PROVIDE FOR THEM. G. TO ESTABLISH, MAINTAIN AND RUN INSTITUTIONS FOR SEN IOR CITIZENS, THEIR CARE, TREATMENT, DAY HOME, ETC., AND TO GRANT ASSIS TANCE IN CASH OR KIND FOR THE PURPOSE. H. TO COLLECT AND RECEIVE DONATIONS, CONTRIBUTIONS, SU BSCRIPTIONS, GRANT-IN-AID, OTHER AID, ASSISTANCE IN CASH OR IN K IND FROM ALL PERSONS AND INSTITUTIONS INTERESTED IN THE OBJECTS OF THE TRUST. I. TO TAKE OF ACCEPT DONATION, LOANS, SUBSIDIES, AIDS, ASSISTANCE (BOTH MONETARY AND IN KIND) FROM WHATEVER SOURCE AVAILABL E. J. TO CARRY AND RUN INSTITUTIONS HAVING OBJECTIVES SIM ILAR TO THE TRUST NOT INVOLVING CARRYING ON ANY ACTIVITY FOR PROFIT. K. TO COMMUNICATE THE MEMORY OF LATE DASARI GUNNAYYA S ETTY, TO ORGANISE MEMORIAL LECTURES, CONSTRUCT OR HELP TO CO NSTRUCT THE BUILDING FOR THE BENEFIT OF GENERAL PUBLIC IN PARTI CULAR FOR THE SENIOR CITIZENS. ITA NO.146/VIZAG/2013 M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, VISAKH APATNAM 3 L. TO ESTABLISH SEATS, GRANTS, MEDALS OR SHIELDS IN TH E NAME OF THE TRUST OR LATE DASARI GUNNAYYA SETTY IN ANY UNIVERSI TY OR INSTITUTION OR ASSOCIATION. M. TO DO ALL ACTS AND ACTIVITIES WHICH ARE CONDUCIVE A ND INCIDENTAL FOR CARRYING OUT OBJECTS AS REFERRED TO HEREINABOVE. 3. THE LD. COMMISSIONER AFTER RECEIVING THE APPLICA TION FROM THE ASSESSEE HAS DIRECTED HIS JURISDICTIONAL ASSESSING OFFICER TO CONDUCT AN ENQUIRY AND FURNISH THE STATUS REPORT. AFTER CONSI DERING THE REPORT OF THE ASSESSING OFFICER, HE HAS COME TO A CONCLUSION THAT THE TRUST IS ONLY ENGAGED IN A COMMERCIAL ACTIVITY OF HIRING KALYANA MANDAPAM WITH A PROFIT MOTTO. FURTHER, THE INCOME AS DERIVED IS UT ILISED ONLY FOR MAINTENANCE OF KALYANA MANDAPAM WITHOUT UNDERTAKING ANY CHARITABLE ACTIVITIES IN THE DOMAIN OF EDUCATION, MEDICAL RELI EF AND OTHER OBJECTS OF GENERAL PUBLIC UTILITY. ACCORDINGLY, HE HAS REJECT ED THE ASSESSEES APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 4. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THAT ASSESSEE HAS NOT COLLECTED EVEN A SINGLE PAISA FROM THE PART IES TO WHOM MARRIAGE HALL WAS GIVEN. THEREFORE, THE ASSESSEE IS NOT IND ULGED IN ANY COMMERCIAL ACTIVITY. HE ALSO FILED THE DETAILS OF THE COPIES OF THE BANK PASS BOOK AND DONATIONS STATEMENT AND SUBMITTED TH AT THE ASSESSING OFFICER, WITHOUT VERIFYING THE SAME REJECTED THE CL AIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE IS ENGAGED IN A COMMER CIAL ACTIVITY. ITA NO.146/VIZAG/2013 M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, VISAKH APATNAM 4 THEREFORE, PRAYED THAT ASSESSEE MAY BE GRANTED REGI STRATION U/S 12AA OF THE ACT. 5. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT EXCEPT RUNNING A KALYANA MANDAPAM, NO CHARITABLE ACTIVITY IS CARRIED OUT BY THE ASSESSEE. THEREFORE, HE SUPPORTED THE ORDER PASSED BY THE CIT . 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS AN UNREGISTERED TRUST FILED AN APPLICATION IN FORM NO. 10, BEFORE THE LD. COMMISSIONER TO GRANT REGISTRATION U/S 12AA OF THE ACT. THE OBJECTS OF THE SOCIETY AS STATED SUPRA ARE NO DOUBT IN THE NAT URE OF CHARITABLE ACTIVITIES. THE MAIN OBJECTS OF THE TRUST ARE MEDI CAL RELIEF, TO PROVIDE EDUCATION, TO CONDUCT KALYANA MANDAPAM IN THE MEMOR Y OF LATE DASARI GUNNAYYA SETTY. FROM THE ABOVE, THE ASSESSEE WANTE D TO RUN A CHARITABLE TRUST TO PROVIDE MEDICAL RELIEF AND PROV IDE EDUCATION. HOWEVER, AS PER THE ORDER PASSED BY THE COMMISSIONE R, THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE KALYANA M ANDAPAM WAS LET OUT TO THE ALL POOR PEOPLE WITHOUT CONSIDERING ANY CASTE OR CREED AND NO AMOUNT HAS BEEN CHARGED BY THE ASSESSEE TRUST. THE REFORE, THERE IS NO COMMERCIAL ACTIVITY INVOLVED BY THE ASSESSEE AND EN TITLED FOR GRANT U/S 12AA OF THE ACT. WE FIND THAT THE OBJECTS OF THE S OCIETY ARE CHARITABLE IN ITA NO.146/VIZAG/2013 M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, VISAKH APATNAM 5 NATURE. ONE OF THE OBJECTIONS RAISED BY THE COMMIS SIONER WAS THAT ASSESSEE WAS ONLY RUNNING THE KALYANA MANDAPAM AND THE FUNDS ARE USED FOR THE PURPOSE OF MAINTENANCE OF KALYANA MAND APAM. THEREFORE THERE IS A COMMERCIAL ACTIVITY INVOLVED AND HENCE T HE ASSESSEE IS NOT ENTITLED FOR GRANT U/S 12AA OF THE ACT. WE FIND THA T THE LD. COMMISSIONER WITHOUT EXAMINING THE DETAILS FILED BY THE ASSESSEE, HE HAS COME TO A CONCLUSION THAT THE ASSESSEE IS RUNNI NG THE TRUST WITH A PROFIT MOTIVE. WE FIND THAT ABOVE FINDING GIVEN BY THE LD. COMMISSIONER IS WITHOUT ANY BASIS. HOWEVER, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER PASSED BY THE COMMISSIONER AND REMIT THE MATTER TO THE COMMISSIONER AND DIRECT HIM TO CONSIDER ALL THE DET AILS FILED BY THE ASSESSEE AND PASS FRESH ORDERS AS PER LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27 TH NOV15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 27.11.2015 VG/SPS ITA NO.146/VIZAG/2013 M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, VISAKH APATNAM 6 / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT M/S. DASARI GUNNAPAYYA SETTY MEMORIAL TRUST, D.NO.6-125, PITTUSALI STREET, PRAKASARAO PET-531 12 6, VISAKHAPATNAM DIST. 2. -., / THE RESPONDENT THE CIT-1, VISAKHAPATNAM 3. -., / THE RESPONDENT THE CIT(E), HYDERABAD 4. ; () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM