The Dy.Director of Income tax(Exemption), Ahmedabad V. Shri Mahavir Shubh Sandesh Jivdaya Panjarapole Charitable Trust, Ahmedabad

ITA 1482/AHD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0559 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-02-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 25-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIP KR MAJUMDAR
• Assessee Lawyers: PF JAIN
• Keywords: Charitable institution
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCO UNTANT MEMBER DEPUTY DIRECTOR OF INCOME-TAX(EXEMPTION), AHMEDABAD (APPELLANT) VS. SRI MAHAVIR SHUBH SANDESH JIVDAYA PANJRAPOLE CHARITABLE TRUST PA NO.AAACT5287K (RESPONDENT) REVENUE BY : SRI PRADIP KR. MAJUMDAR, SR. D.R. ASSESSEE BY : SRI P.F. JAIN, A.R. DATE OF HEARING : 12-02-2013 DATE OF PRONOUNCEMENT : 28-02-2013 / ORDER PER : D.K TYAGI, JUDICIAL MEMBER:- ALL THESE APPEALS HAVE BEEN FILED BY THE REVENUE AG AINST THE ORDERS OF LD.CIT(A) XXI, DATED 12-01-2010 & 15-03-2011. ITA NOS. 1482/AHD/2011, 1483/AHD/2011 & 824/AHD/20 10 A.Y.:-2005-06, 2006-07 &2007-08 ITA NOS.1482-1483/AHD/2011& 824/AHD/2010 A.Y. 2005- 06,06-07&07-08 DCIT(EXEMPTION) VS. MAHAVIR SHUBH SANDESH JIVDAYA P ANJRAPOLE CHARITABLE TRUST 2 2. IN ALL THESE APPEALS THE REVENUE IS AGGRIEVED BY THE ORDERS OF LD. CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW EXEMPTION U/S 11 OF THE INCOME TAX ACT. SINCE FACTS ARE IDENTICAL, WE ARE DECIDING THESE APPEALS BY TAKING THE FACTS FOR ASSESSMENT YEAR 2005-06. 3. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED THAT THE FOLLOWING EXPENSE S WERE INCURRED BY THE ASSESSEE TOWARDS OBJECT OF THE TRUST:- (I) RS. 12,44,550/- BEING EXPENSES FOR SUNAMI EXPE NSES. (II) RS. 13,33,505/- BEING EXPENSES CLAIMED ON ANIM AL OBJECTS. (III) RS. 3,33,285/- BEING EXPENSES FOR GRASS, WATE R, HAVELI EXPENSES. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D NOT PRODUCED BEFORE HIM ANY DOCUMENTARY EVIDENCE OR BILL IN SUPPORT OF THE SAME IN RESPECT OF TSUNAMI EXPENSES. THE ASSESSEE HAD PRODUCED VOUCHE RS REGARDING THE CLAIM OF THE EXPENSES. ON EXAMINATION THE VOUCHERS IT I S SEEN BY THE ASSESSING OFFICER THAT NO DETAILS OF THE EXPENDITURE WAS MENT IONED. THE VOUCHERS MENTIONED ONLY TSUNAMI EXPENSES. THE NAME AND A DDRESS OF THE PARTIES TO WHOM PAYMENTS HAVE BEEN PAID WAS NOT MENTIONED. SO ME INITIALS WERE GIVEN IN THE VOUCHERS BUT THE NAME AND ADDRESS OF T HE PERSON RECEIVING THE AMOUNT WAS NOT MENTIONED. THE ASSESSEE WAS SPECIFI CALLY ASKED TO PRODUCE BOOKS OF ACCOUNTS AND BILLS AND DOCUMENTARY EVIDENC E IN SUPPORT OF THE CLAIM, THE MANAGING TRUSTEE OF THE TRUST STATED TH AT BOOKS OF ACCOUNTS AND BILLS/EVIDENCES WERE NOT AVAILABLE. SIMILARLY, IN RESPECT OF ANIMAL OBJECT ITA NOS.1482-1483/AHD/2011& 824/AHD/2010 A.Y. 2005- 06,06-07&07-08 DCIT(EXEMPTION) VS. MAHAVIR SHUBH SANDESH JIVDAYA P ANJRAPOLE CHARITABLE TRUST 3 EXPENSES, THE ASSESSEE HAS PRODUCED A COPY OF THE L EDGER ACCOUNTS REGARDING THE EXPENSES. NO BILLS OF THE DOCUMENTARY EVIDENCE NOR ANY VOUCHERS REGARDING THE EXPENSES WERE PRODUCED DURING THE ASS ESSMENT PROCEEDINGS. THE ASSESSEE WAS SPECIFICALLY ASKED TO PRODUCE BOOK S OF ACCOUNTS AND BILLS AND DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM TH E MANAGING TRUSTEES REPLY WAS THAT BOOKS OF ACCOUNT AND BILLS/EVIDENCES ARE NOT AVAILABLE. SIMILAR WAS THE POSITION IN RESPECT OF GRASS WATER EXPENSES. IN VIEW OF THESE FACTS THE ASSESSING OFFICER DISALLOWED THE CLAIM OF EXPENSES AMOUNTING TO RS. 29,11,340/- [12,44,550/-+3,33,285+13,33,285] OUT OF THE CLAIM OF EXPENDITURE TOWARDS THE OBJECT OF THE TRUST. 4. BEFORE THE LD. CIT(A) THE SUBMISSION OF THE ASSE SSEE WAS THAT THE EXPENSES OF THE TRUST WERE WHOLLY INCURRED FOR THE OBJECT OF THE TRUST. IT WAS FURTHER SUBMITTED THAT UNDER THE BANNER OF THE TRUS T, AT THE TIME OF NATURAL CALAMITY(TSUNAMI) IN THE COASTAL AREA WITHIN INDIA TRUST HAS INCURRED AN AMOUNT OF RS. 12,44,550/-. THIS WAS NOTHING BUT FO R PROVIDING FOOD GRAINS, MEDICINES AND CLOTH ITEMS RELATING TO BASIC NEEDS O F THE PERSONS AFFECTED BY THE DISASTER IN THAT AREA. IN RESPECT OF PAYMENT O F RS. 13,33,505/- AND RS. 3,33,285/- IT WAS EXPLAINED THAT THE MAIN OBJECT OF THE TRUST WAS TO TAKE CARE OF ANIMALS COWS ETC IN PARTICULAR TO GET POSSESSIO N OF SUCH ANIMALS FROM SLAUGHTER HOUSE BRINGING THEM TO BANZARA PROVIDE TH EM CATTLE FOOD. THIS TYPE OF EXPENSES WAS INCURRED FROM YEAR TO YEAR AND THE ASSESSEE PRODUCED VOUCHERS FOR SUCH CLAIM. IT WAS CLAIMED THAT DISAL LOWANCE MADE BY THE ASSESSING OFFICER ON THE GROUND OF NON-AVAILABILITY OF BILLS IS NOT CORRECT. IT WAS ALSO SUBMITTED THAT WHEN THE PAYMENT IS MADE TO NEEDY PEOPLE IN THE ITA NOS.1482-1483/AHD/2011& 824/AHD/2010 A.Y. 2005- 06,06-07&07-08 DCIT(EXEMPTION) VS. MAHAVIR SHUBH SANDESH JIVDAYA P ANJRAPOLE CHARITABLE TRUST 4 SMALL PLACES IT IS NOT CORRECT TO EXPECT BILLS FOR SUCH PAYMENT. THE ASSESSEE ALSO PRODUCED CERTAIN PHOTOGRAPHS IN SUPPORT OF THE CLAIM THAT THE MAJOR EXPENSES WERE PAID FOR ANIMAL HEALTH AND TSUNAMI EX PENSES. THE LIST OF PAYEE GIVEN IN ASSESSMENT ORDER ITSELF SUGGEST THAT OBSERVATION ABOUT NON- FURNISHING OF SUCH DETAILS WAS NOT CORRECT. IT WAS FURTHER SUBMITTED THAT SINCE ALL THE EXPENSES HAVE BEEN INCURRED GENUINELY FOR THE PURPOSE OF OBJECTS OF THE TRUST, THE ADDITION MADE WAS NOT JUS TIFIED AND A.O. WAS NOT JUSTIFIED IN DENYING THE EXEMPTION U/S 11 ONLY ON T HE GROUND OF DISALLOWANCE OF SUCH EXPENSES. IT WAS FURTHER SUBMITTED THAT TR UST WAS REGISTERED U/S 12AA AND HAD CARRIED SUCH ACTIVITIES YEAR TO YEAR. 5. AFTER TAKING INTO CONSIDERATION THESE SUBMISSIO NS OF THE ASSESSEE, LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE EXEMPTION U/S 11 AND DELETED THE ADDITIONS BY OBSERVING AS UNDER:- 3. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE ABOVE SUBMISSIONS. I HAVE ALSO PURSUED COPIES OF VOUCHERS , PHOTOGRAPHS ETC PRODUCED BEFORE ME. IT IS NOT IN DISPUTE THAT THE A PPELLANT IS A CHARITABLE TRUST DULY REGISTERED U/S 12AA OF THE L. T. ACT AND IS DOING ITS ACTIVITIES FOR THE CHARITABLE OBJECTS FOR SEVER AL YEARS IN THE PAST. THE A.O. HAS STATED THE BILLS WERE NOT PRODUCED IN CERTAIN CASES OR NAMES AND ADDRESSES OF THE PAYEES WERE NOT GIVEN. A T THE SAME TIME IT IS NOTICED THAT THE APPELLANT HAD PRODUCED VOUCHERS , IN RESPECT OF CERTAIN PAYMENTS, NAMES OF PERSONS FOR PAYMENT FOR ANIMAL OBJECTS, AND TSUNAMI FOR PAYMENT IN RESPECT OF MEDICAL HELP ARE WRITTEN IN THE ASSESSMENT ORDER ITSELF. THUS SUCH OBSERVATIONS FOR DENYING DEDUCTION ARE CONTRADICTORY TO THE FACTS. THE A.O. HAD NOT PO INTED OUT THAT HE HAD CALLED FOR FURTHER DETAILS OR MADE INDEPENDENT ENQUIRY. THE APPELLANT HAS PRODUCED COPIES OF VOUCHERS/BILLS IN RESPECT OF VARIOUS PAYMENTS BEFORE HIM ALSO. CONSIDERING THESE DETAILS AND THE ABOVE FACTS, IN PARTICULAR THE PHOTOGRAPHS IN RESPECT OF VARIOUS ACTIVITIES WHICH ARE PRODUCED, I FIND THAT THE DISALLOWANCE MA DE WAS NOT ITA NOS.1482-1483/AHD/2011& 824/AHD/2010 A.Y. 2005- 06,06-07&07-08 DCIT(EXEMPTION) VS. MAHAVIR SHUBH SANDESH JIVDAYA P ANJRAPOLE CHARITABLE TRUST 5 CORRECT. THE A.O. MADE THE ADDITION ONLY ON THE GRO UND THAT BILLS WERE NOT PRODUCED IN RESPECT OF VARIOUS PAYMENTS. HE HAS TO APPRECIATE THE GROUND REALITY THAT IN RESPECT OF HELPS TO POOR PEO PLE IN SMALL VILLAGES WHICH ARE SITUATED IN INTERIOR PARTS OR ANIMAL HELP IN SUCH AREA, IT IS NOT CORRECT TO EXPECT FOR EACH PAYMENT THERE SHOULD BE BILL OR SUPPORTING VOUCHER FROM SUCH POOR PEOPLE IN FAR INT ERIOR PLACES. THE APPELLANT HAS PRODUCED THEIR ACKNOWLEDGEMENT FOR PA YMENT MADE TO THEM. THE ADDITION FOR DISALLOWANCES OF SUCH PAYMEN T IS, THEREFORE, NOT JUSTIFIED. CONSIDERING ALL THESE ASPECT AND THE FACT THAT THE TRUST IS REGISTERED U/S 12AA, THE DENIAL OF EXPENSES U/S 11 IS ALSO NOT JUSTIFIED. THE ADDITION MADE IS ACCORDINGLY DELETED AND THE A. O. IS ALSO DIRECTED TO ALLOW EXEMPTION U/S 11. 6. AGGRIEVED BY THIS ORDER THE REVENUE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING LD. D.R. RELIED ON THE ORDER OF A.O . WHILE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BE FORE LD. CIT(A) AND ALSO SHOWED US THE PHOTOGRAPHS IN SUPPORT OF HIS CLAIM T HAT MAJOR EXPENSES WERE PAID TOWARDS OBJECTS OF THE TRUST. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT CHARITABLE TRUST IS DULY REGISTERED U/S 12AA OF THE ACT AND IS ENGAGED IN THE ACTIVITIES FO R THE CHARITABLE OBJECTS FOR SEVERAL YEARS IN THE PAST. THE ASSESSING OFFICER W HILE DENYING THE EXEMPTION U/S 11 OF THE ACT HAS NOT DISPUTED THAT ASSESSEE WA S NOT ENGAGED IN THE CHARITABLE ACTIVITIES. HE HAS SIMPLY DOUBTED THE G ENUINENESS OF THE EXPENSES BECAUSE THE ASSESSEE HAS FAILED TO GET BILLS IN RES PECT OF HIS CHARITABLE ACTIVITIES. WHILE DOING SO, THE ASSESSING OFFICER HAS IGNORED THE FACT THAT DURING THE YEAR THE ASSESSEE HAS INCURRED MAJOR EXP ENSES TO HELP THE PEOPLE AFFECTED BY TSUNAMI BY PROVIDING BASIC FACILITIES T O THEM AND ALSO EXPENSES WERE INCURRED FOR HELPING THE ANIMALS FROM SLAUGHTE R HOUSE AND PROVIDE ITA NOS.1482-1483/AHD/2011& 824/AHD/2010 A.Y. 2005- 06,06-07&07-08 DCIT(EXEMPTION) VS. MAHAVIR SHUBH SANDESH JIVDAYA P ANJRAPOLE CHARITABLE TRUST 6 THEM CATTLE FOOD. PHOTOGRAPHS IN RESPECT OF THESE ACTIVITIES SHOWN BY THE ASSESSEES COUNSEL SUPPORT THE CASE OF THE ASSESSEE THAT IT WAS ENGAGED IN THE ACTIVITIES OF HELPING TSUNAMI VICTIMS AND THE ANIMA LS FROM THE SLAUGHTER HOUSES DURING THE YEAR UNDER APPEAL. TO EXPECT THAT BILLS IN RESPECT OF ALL THE EXPENSES WILL BE AVAILABLE WITH THE TRUST IS EXPECT ING TOO MUCH. IN VIEW OF THIS WE ARE NOT INCLINED TO INTERFERE WITH THE ORDE R PASSED BY LD. CIT(A) DIRECTING THE ASSESSING OFFICER TO ALLOW EXEMPTION TO THE ASSESSEE-TRUSTEE U/S 11 OF THE ACT. 7.1 THE REVENUE HAS ALSO CHALLENGED THE ACTION OF T HE LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY ASSESSING OFFICER ON ACCOUNT OF ADMINISTRATIVE EXPENSES I.E ZEROX LEGAL CHARGES BA NK CHARGES ETC. THE ASSESSING OFFICER HAS DISALLOWED A SUM OF RS. 1,80, 440/- ON THIS ACCOUNT ON THE GROUND THAT THESE EXPENSES WERE NOT SUPPORTED B Y BILLS. THE LD. CIT(A) NOTICED THAT THE PAYMENT WAS MAINLY ZEROX AND LEGAL EXPENSES. HE FURTHER OBSERVED THAT ZEROX EXPENSES WERE SUPPORTED BY VOUC HERS. BANK CHARGES COULD BE VERIFIED FROM THE BANK STATEMENT WHICH WAS NOT DONE BY THE A.O. AND THEREFORE LD.CIT(A) DELETED THE DISALLOWANCE MA DE BY THE A.O. ON THIS ACCOUNT. BEFORE US NOTHING WAS ARGUED TO DEVIATE U S FROM THE FINDING OF THE LD. CIT(A), THEREFORE, THE ORDER PASSED BY HIM ON T HIS ISSUE IS ALSO UPHELD. IN THE RESULT REVENUES APPEAL IS DISMISSED. 8. IN ITA NO. 1483/AHD/2011 A.Y. 2006-07 AND ITA NO . 824/AHD/2010 A.Y. 2007-08 THE FACTS ARE SIMILAR AND DISALLOWANCE OF EXPENSES HAS BEEN DONE ON SIMILAR LINE THOUGH THE EXPENSES INCURRED B Y THE ASSESSEE ARE UNDER DIFFERENT HEADS THAN THOSE FOR 2005-06. FOR THE RE ASONS GIVEN BY US FOR ITA NOS.1482-1483/AHD/2011& 824/AHD/2010 A.Y. 2005- 06,06-07&07-08 DCIT(EXEMPTION) VS. MAHAVIR SHUBH SANDESH JIVDAYA P ANJRAPOLE CHARITABLE TRUST 7 UPHOLDING THE ORDER PASSED BY LD. CIT(A) FOR ASSESS MENT YEAR 2005-06 WE UPHOLD THE ORDERS OF CIT(A) FOR THESE ASSESSMENT YE ARS ALSO. 9. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 28/02/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! ,