M/s Sri. Chidambarashrama Trust, Gubbi V. DIT, Bangalore

ITA 1491/BANG/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57439 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-01-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARCHANA CHOWDHRY CITIIDR
• Assessee Lawyers: V SRINIVASAN
• Keywords: Charitable institution; Opportunity of being heard
• Section: 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO.1491/BANG/2010 ASSESSMENT YEAR : 2009-10 M/S. SRI CHIDAMBARASHRAMA TRUST, SRI CHIDAMBARASHRAMA, GUBBI 572 216. TUMKUR DISTRICT. PAN : AAETS 0067K VS. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, C.A. RESPONDENT BY : SMT. ARCHANA CHOWDHRY, CIT-II(DR) DATE OF HEARING : 23.01.2012 DATE OF PRONOUNCEMENT : 23.01.2012 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 23.11.2010 OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS) [IN SHOR T DIT(E)], BANGALORE. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPE AL: 1. THE ORDER OF THE LEARNED D I T [EXEMPTIONS] PAS SED U/S.293[C] RWS 80G[5][VI] OF THE ACT, CANCELLING THE RENEWAL O F APPROVAL GRANTED U/S.80G[5][VI] UNDER THE ORDER DAT ED 28/09/2007 AND FURTHER ORDER [LETTER DATED 30/08/2010] IN PERPETUITY IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 1491/BANG/2010 PAGE 2 OF 8 2. THE PROVISIONS OF SECTION 293C OF THE ACT, WHIC H IS EFFECTIVE FROM 01/10/2009 CANNOT BE INVOKED IN CANCELLING THE ORIGINAL APPROVAL OR RENEWAL GRANTED BEFORE 01/10/2009. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED DIT [E] HAS ERRED IN INVOKING THE PROVISIONS OF SECTION 293[C] OF THE ACT IN CANCELLING THE RENEWAL OF APPROVAL UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. HE FAILED TO APPRECIATE THE ORIGINAL ORDER OF APPROVAL INITIALLY NOT HAVING BEE N CANCELLED, THE SUBSEQUENT RENEWALS SOUGHT TO BE CANCELLED CANNOT B E CANCELLED AT ALL. 4. THE LEARNED DIT[E] FAILED TO APPRECIATE THAT SR I CHIDAMBARASHRAMA TRUST IS ONLY A MERE CHANGE IN NAME OF THE CHARITABLE INSTITUTION SRI CHIDAMBARASH RAMA FOUNDED UNDER THE WILL AND CODICIL OF LATE SRI CHID AMBAR SWAMIJI, ON THE BASIS OF WHICH THE REGISTRATION U/S .12A OF THE I.T.ACT, 1961 AND APPROVAL U/S.80G WAS ORIGINALLY GRANTED AND RENEWED FROM TIME TO TIME AND IN VIEW OF SUCH GRANT U/S.12A OF THE ACT AND WHEN THE APPROVAL U/S.80G[5][VI] OF THE ACT WAS SOUGHT IN TERMS OF RULE 11 AA IN FORM NO.10-G, IT I S THE SAID REGISTRATION GRANTED U/S.12A WAS CONSIDERED AND APP ROVAL U/S.80G WAS GRANTED TO THE INSTITUTION ORIGINALLY, WHICH CA ME TO BE LATER GOVERNED BY THE TRUST DEED EXECUTED BY THE TRUSTEES OF THE TRUST TO REGULATE THE MANAGEMENT OF THE CHARITABLE INSTITUTI ON WITH THE PRIOR APPROVAL OF THE DEPARTMENT AND NO NEW ENTITY CAME INTO EXISTENCE WARRANTING FRESH REGISTRATION U/S. 12A OF THE ACT OR APPROVAL OR RENEWAL U/S.80G OF THE ACT. 5. THE LEARNED DIT[E] FAILED TO APPRECIATE EVEN TH E AUTHORITIES CONSIDERED THAT THE TRUSTEES OF SRI CHIDAMBARASHRAMA TRUST IS THE VERY SAME ASSESSEE WHOSE EARLIER NAME WAS SRI CHIDAMBARASHRAMA AND NO NEW ENTITY CAME INTO EXISTENCE CONSEQUENT TO THE AC TION OF THE TRUSTEES OF THE VERY CHARITABLE INSTITUTION WITH EA RLIER CHANGED NAME SRI CHIDAMBARASHRAMA EXECUTING THE TRUST DEED SPECIFYING THE RULES & REGULATIONS, WHICH WAS APPRO VED BY THE DEPARTMENT BEFORE THE SAME WAS EXECUTED. THE FINDIN GS OF THE LEARNED DIT[E] IS CONTRARY TO FACTUAL EVIDENCE ON R ECORD AND CONTRARY TO LAW AND REQUIRES TO BE VACATED AND THE CONSEQUENTIAL ORDER ON THE ERRONEOUS APPRECIATION OF THE FACTS RE QUIRES TO BE CANCELLED. 6. THE LEARNED DIT [E] ERRED IN HOLDING THAT THE C HARITABLE INSTITUTION SRI CHIDAMBARASHRAMA TRUST IS QUITE DIFFERENT AND DISTINCT FROM THE ORIGINAL TRUST FOUN DED UNDER THE WILL AND CODICIL OF LATE SWAMIJI, WHICH ALONE WAS R EGISTERED AND ITA NO. 1491/BANG/2010 PAGE 3 OF 8 THE SAID TRUST WITH THE CHANGED NAME IS ALTOGETHER A NEW ENTITY AND THE SAME REQUIRES TO BE REGISTERED AFRESH AND S INCE IS NOT REGISTERED U/S.12A OF THE ACT, SO DESPITE THE FACT THE DEPARTMENT RECOGNIZED THE CHANGE IN THE NAME AND GRANTED THE A PPROVAL U/S.80G[5] ORIGINALLY AND LATER RENEWED IT FROM TIM E TO TIME THE ORDERS REQUIRES TO BE CANCELLED. 7. THE LEARNED DIT [E] FAILED TO APPRECIATE THAT TH E TRUSTEES OF SRI CHIDAMBARASHRAMA TRUST FORMERLY KNOWN AS SRI CHIDAMBARASHRAMA HAVE BEEN FILING THE RETURNS OF INCOME IN THE CHANGED NAME AND HAS BEEN ASSESSED TO TAX IN RESPECT OF THE INCOME FROM THE PROPERTIES HELD IN T RUST FOUNDED UNDER THE WILL AND CODICIL OF LATE SWAMIJI ON THE B ASIS OF WHICH REGISTRATION U/S.12A OF THE ACT AND INITIAL APPROVA L U/S.80G WERE GRANTED AND THE DEPARTMENT RECOGNIZED BY THE ACT OF ASSESSMENTS THAT SRI CHIDAMBARASHRAMA TRUST IS MERE CHANGED NAME OF THE APPELLANT EARLIER KNOWN AS SRI CHIDAMBARASHRAMA, WHICH WAS APPROVED U/S.12A OF THE ACT AND U/S.80G[5] OF THE ACT. 8. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE C OSTS. 3. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE RENEWAL OF THE APPROVAL ALR EADY GRANTED U/S. 80G(5)(VI) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT]. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE DIT( E), BANGALORE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE STATING THEREIN A S TO WHY THE APPROVAL U/S. 80G(5)(VI) OF THE ACT SHOULD NOT BE WITHDRAWN FOR THE REASON THAT NEITHER THE ASSESSEE APPLIED FOR REGISTRATION U/S. 12A OF THE ACT AT ANY TIME NOR THERE WAS ANY REGISTRATION GRANTED BY THE DEPAR TMENT. IN THE SAID NOTICE IT WAS STATED THAT THE ASSESSEE APPLIED FOR RENEWAL OF RECOGNITION U/S. 80G OF THE ACT ON THE PREMISE THAT THE REGIST RATION U/S. 12A OF THE ACT ITA NO. 1491/BANG/2010 PAGE 4 OF 8 GRANTED TO ANOTHER ENTITY BY NAME OF SRI CHIDAMBARA SHRAMA, GUBBI ON 17.07.1974 WILL HOLD GOOD FOR SRI CHIDAMBARASHRAMA TRUST WHICH WAS FORMED ON 29.04.1990. IT WAS FURTHER STATED THAT E ARLIER APPLICATION FOR RENEWAL OF RECOGNITION U/S. 80G OF THE ACT HAD BEEN ALLOWED BY THE DEPARTMENT UNDER THE BELIEF THAT THE ASSESSEE TRUST WAS A REGISTERED TRUST U/S. 12A OF THE ACT, THE APPROVAL FOR RENEWAL WAS G IVEN UPTO 31.3.2010 AND BY VIRTUE OF AMENDMENT MADE TO SECTION 80G(5)(VI) O F THE ACT, RENEWAL OF THE CERTIFICATE WAS MADE VALID FROM 01.04.2010 ONWA RDS VIDE LETTER DATED 30.08.2010. 5. IN RESPONSE TO THE AFORESAID NOTICE, THE ASSESSE E SUBMITTED THAT THE ASSESSEE TRUST WAS ESTABLISHED IN THE FORM OF A TRU ST VIDE TRUST DEED DATED 29.04.1990 AND THE MANAGING COMMITTEE MEMBERS APPOI NTED BY SRI CHIDAMBARA SWAMIJI CONTINUED AS TRUSTEES AND THERE HAD BEEN NO CHANGE IN THE OBJECTIVES. IT WAS FURTHER SUBMITTED THAT T HERE WAS ONLY CHANGE IN THE NAME, THERE WAS NO FRESH TRUST FOUNDED AND THAT ALL THE ASSETS, LIABILITIES, BENEFITS AND ACTIVITIES CARRIED ON TILL THEN BY SRI CHIDAMBARASHRAMA CAME TO BE CARRIED ON AS USUAL, EXCEPT THE CHANGE OF NAM E. IT WAS ALSO SUBMITTED THAT THE RECORDS AND CERTIFICATES ISSUED MAY BE MADE TO READ THE ENTITY NAME AS SRI CHIDAMBARASHRAMA TRUST INSTEAD OF SRI CHIDAMBARASHRAMA. 6. THE LD. DIT(E) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT REGISTRATION U/S. 12A OF THE ACT WAS GRANTED TO SRI CHIDAMBARASHRAMA, GUBBI ON 17.07.1974 AND THAT ALON E WAS A VALID ENTITY AS FAR AS THE ELIGIBILITY FOR APPROVAL U/S. 80G WAS CONCERNED. HE FURTHER OBSERVED THAT THE ASSESSEE TRUST WHICH WAS FORMED V IDE TRUST DEED DATED ITA NO. 1491/BANG/2010 PAGE 5 OF 8 29.04.1990 WAS A SEPARATE ENTITY ALTOGETHER, EVEN T HOUGH IT MAY BE CARRYING ON THE SAME OBJECTIVES. HE ALSO OBSERVED THAT THERE WAS NO REGISTRATION GRANTED U/S. 12A OF THE ACT TO THIS TR UST AND THEREFORE THE APPROVAL U/S. 80G OF THE ACT AND SUBSEQUENT RENEWAL S GIVEN FROM 1990 ONWARDS WAS GIVEN UNDER MISTAKEN BELIEF THAT IT POS SESSED REGISTRATION U/S. 12A OF THE ACT. HE ACCORDINGLY CANCELLED THE APPRO VAL GRANTED U/S.80G(5)(VI) OF THE ACT VIDE ORDER DATED 28.09.20 07. NOW THE ASSESSEE IS IN APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE REGISTRATION U/S. 12A AND THEREAFTER APPROVAL WAS GRANTED U/S. 80G OF THE ACT TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE LD. CI T HAS GRANTED APPROVAL FOR RECOGNITION U/S. 80G OF THE ACT ON 12.3.1990 AND TH EREAFTER, SOME AMENDMENT TOOK PLACE IN THE TRUST, THEREFORE THE TR UST DEED WAS EXECUTED ON 29.04.1990 WHICH WAS APPROVED BY THE OFFICE OF T HE COMMISSIONER OF INCOME-TAX, KARNATAKA-I, BANGALORE VIDE LETTER DATE D 10.06.1997 AND NAME OF CHARITABLE ENTITY CAME TO BE CHANGED AS SRI CHI DAMBARASHRAMA TRUST INSTEAD OF SRI CHIDAMBARASHRAMA WHICH WAS ITS POP ULAR NAME. IT WAS ACCORDINGLY SUBMITTED THAT THE LD. DIT(E) WAS NOT J USTIFIED IN WITHDRAWING THE RECOGNITION ALREADY GRANTED U/S. 80G(5)(VI) OF THE ACT. 8. IN HER RIVAL SUBMISSIONS, THE LD. CIT(DR) STRON GLY SUPPORTED THE ORDER OF THE LD. DIT(E), BANGALORE AND FURTHER SUBM ITTED THAT THE ASSESSEE TRUST WAS NOT HAVING REGISTRATION U/S. 12A WHICH IS A PRIMARY CONDITION TO GET THE APPROVAL U/S. 80G OF THE ACT, THEREFORE THE APP ROVAL ALREADY GRANTED UNDER A WRONG PREMISE WAS RIGHTLY WITHDRAWN BY THE LD. DIT(E), BANGALORE. ITA NO. 1491/BANG/2010 PAGE 6 OF 8 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT EARLIER REGISTRATION U/S. 12A OF THE ACT WAS GRANTED TO THE ENTITY KNOWN AS SRI CHIDAMBARASHRAMA, GUBBI ON 17.07.1974 AND RECOGNITION U/S. 80G OF THE ACT WAS ALSO ALLOWED. IT IS ALSO NOTICED THAT AN AMENDMENT TOOK PLACE IN THE NAME OF THE TRUST, THER EFORE A NEW TRUST DEED WAS WRITTEN ON 29.04.1990, IN THE SAID TRUST DEED ( COPY OF WHICH IS PLACED AT PAGE NOS. 41 TO 50 OF THE ASSESSEES COMPILATION ) SOME AMENDMENTS WERE MADE. THE CLAIM OF THE ASSESSEE IS THAT THE S AID AMENDED TRUST DEED EXECUTED ON 29.04.1990 WAS FURNISHED TO THE DEPARTM ENT AND THEREAFTER RECOGNITION U/S. 80G WAS GRANTED FROM 01.05.91 TO 3 1.03.93 VIDE CERTIFICATE DATED 18.12.1991 (COPY OF WHICH IS PLACED AT PAGE 6 5 OF THE ASSESSEES COMPILATION). IN THE INSTANT CASE, IT IS NOTICED T HAT THE RECOGNITION U/S. 80G OF THE ACT WAS RENEWED VIDE CERTIFICATE DATED 12.05 .2001 ADDRESSED TO THE ASSESSEE TRUST, THE SAID RECOGNITION WAS VALID FROM 01.04.2001 TO 31.03.2004. IN THE SAID CERTIFICATE (COPY OF WHICH IS PLACED AT PAGE 80 OF THE ASSESSEES COMPILATION), IT IS MENTIONED VIDE N OTE NO.(3) THAT IF ANY FURTHER RECOGNITION IS SOUGHT, AN APPLICATION HAS T O BE MADE BEFORE THE EXPIRY OF THE ABOVE PERIOD MENTIONED AND COPY OF OL D 80G AND 12A(A) REGISTRATION CERTIFICATE ARE REQUIRED TO BE FURNISH ED ALONG WITH THE SAID APPLICATION. HOWEVER, IN THE PRESENT CASE, IT IS N OT CLEAR AS TO WHETHER THE REGISTRATION CERTIFICATE, IF ANY, ALREADY GRANTED U /S. 12A(A) OF THE ACT TO THE ASSESSEE TRUST WAS AVAILABLE TO THE DEPARTMENT, WHE N THE RENEWAL OF RECOGNITION U/S. 80G OF THE ACT WAS GRANTED ON 12.0 5.2001. IT IS ALSO NOTICED THAT THE ASSESSEE HAD WRITTEN A LETTER DATE D 11.10.2010 TO THE LD. ITA NO. 1491/BANG/2010 PAGE 7 OF 8 DIT(E), BANGALORE STATING THEREIN AT PARA 2 THAT TH E MANAGING TRUSTEES HAD INFORMED ABOUT SOME AMENDMENT IN THE TRUST DEED DAT ED 29.04.1990 AND THE SAME WAS ALSO APPROVED BY THE OFFICE OF THE CIT , KARNATAKA-I, BANGALORE VIDE LETTER DATED 10.06.1997. A COPY OF T HE SAID LETTER DATED 11.10.2010 IS PLACED AT PAGE NOS. 125 TO 127 OF THE ASSESSEES COMPILATION. IN THE SAID LETTER VIDE PARA 2, IT IS MENTIONED THAT ALL THE ASSETS, LIABILITIES, BENEFITS AND ACTIVITIES CARRIE D ON TILL THEN BY THE MANAGING COMMITTEE UNDER THE NAME AND STYLE OF SRI CHIDAMBAR ASHRAMA CAME TO BE CARRIED ON AS USUAL, EXCEPT THE NAME WAS CHANGED TO SRI CHIDAMBARASHRAMA TRUST AND NO NEW ENTITY CAME TO BE FORMED. IN THE PRESENT CASE, THE FACTS ARE NOT CLEAR AS TO WHETHER ONLY THE NAME OF SRI CHIDAMBARASHRAMA WAS CHANGED TO SRI CHIDAMBARASHRAM A TRUST AND APPROVAL U/S. 80G OF THE ACT WAS GRANTED BY THE DEP ARTMENT AFTER CONSIDERING THAT FACT. WE THEREFORE DEEM IT APPROP RIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE LD. CIT/DIT(E), BANGA LORE, TO BE DECIDED AFRESH AFTER CONSIDERING THE RELEVANT RECORDS AND BY PROVI DING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JANUARY, 2012. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 23 RD JANUARY, 2012. DS/- ITA NO. 1491/BANG/2010 PAGE 8 OF 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.