Shri Ramsiya Charitable and Educational Trust, Ghaziabad V. CIT (Exemptions), Lucknow

ITA 1578/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2134 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 06-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: R K AGARWAL
• Keywords: Charitable institution
• Section: 80G; 12AA; 12

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH G, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1578/DEL/2018 SHRI RAMSIYA CHARITABLE & EDUCATIONAL TRUST, C/O SH. R.K. AGARWAL, ADVOCATE, BLOCK-77, 1 ST FLOOR, SANJAY PLACE, AGRA. PAN: AARTS 5510N (APPELLANT) VS. CIT(EXEMPTION) LUCKNOW. (RESPONDENT) ASSESSEE BY SH. R.K. AGARWAL, ADVOCATE REVENUE BY SH. S.S. RANA, CIT/DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(E), LUCKNOW DATED 06.02.2018 REGARDING REJECTION OF REG ISTRATION U/S. 80G(5) OF THE IT ACT ON THE FOLLOWING GROUNDS : 1. BECAUSE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW, HER EINAFTER REFERRED TO AS CIT(E), GROSSLY ERRED BOTH IN LAW AND ON FAC TS IN REJECTING APPLICATION OF THE TRUST FILED U/S 80G(5) OF THE I. T. ACT 1961. LD. CIT(E) FAILED TO APPRECIATE THAT THE OBJECTS AND GENUINENE SS OF THE ACTIVITIES WERE ALREADY EXAMINED WHILE GRANTING REGISTRATION U/S 12 A. THE EXAMINATION AFRESH WAS CONTRARY TO PRINCIPLES OF LAW. DATE OF HEARING 27.08.2018 DATE OF PRONOUNCEMENT 04 .09.2018 ITA NO. 1578/DEL/2018 2 2. THE LD. CIT(E), ERRED BOTH IN LAW AND ON FACTS IN REJECTING THE APPLICATION OF THE TRUST U/S 80G(5) FILED IN FORM 10 GI NECESSARY REQUIREMENT FOR GRANT OF APPROVAL, BEING ON RECORD, THE LD. CIT (E) SHOULD HAVE LEGALLY GRANTED THE APPROVAL. 3. BECAUSE, THE REJECTION OF APPROVAL U/S 80G BY LD. CIT(E) IS IN UTTER DISREGARD TO THE AUTHORITATIVE JUDICIAL PRONOUNCEME NT PASSED IN THE CASE OF M/S HARDAYAL CAHRITABLE AND EDUCATIONAL TRUST VS CIT [ 2013] 32 TAXMANN.COM 341 (ALLAHABAD HIGH COURT) AS WELL AS CI T VS PUJYA SHRI JALARAMBAPA AND MATUSHRI VIRBAIMA CHARITABLE TRUST [ ITA NO. 1190 OF 2014 DT. 11.11.2014] (GUJRAT HIGH COURT). 4. BECAUSE THE AUTHORITATIVE JUDICIAL PRONOUNCEMEN T HAVING BROUGHT TO THE NOTICE OF LD. CIT(E) BY WAY OF LETTER DT. 0 5.02.2018, NON CONSIDERATION THEREOF TANTAMOUNT TO CONTEMPT OF COU RT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SOCIETY HAD FILED APPLICATION FOR APPROVAL U/S. 80G(5) ON 06.09.2017 WITH CIT(E), LUCKNOW. THE LD. CIT(E) ISSUED NOTICE FOR EXAMINATION OF THE REC ORDS OF THE SOCIETY, BUT THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS AND VO UCHERS AND INCOME & EXPENDITURE ACCOUNT, RECEIPT & PAYMENT ACCOUNT AND BALANCE SHEET. ON THE BASIS OF DOCUMENTS AVAILABLE WITH THE CIT(E), HE OB SERVED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITY AND THA T THE ASSESSEE SOCIETY HAS NOT PERFORMED ANY ACTIVITY AS PER OBJECTS SET OUT I N THE MEMORANDUM OF SOCIETY. HE ALSO REFERRED TO THE DECISION OF ITAT, LUCKNOW BENCH IN ITA NO. 809/LKW/2014 DATED 26.02.2015, WHEREIN REGISTRATION U/S. 12AA WAS REJECTED BY THE BENCH IN THE SIMILAR CIRCUMSTANCES. ACCORDINGLY, THE CIT(E) REJECTED THE APPLICATION FOR APPROVAL U/S. 80G(5) O F THE ACT. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO. 1578/DEL/2018 3 3. THE LD. AR SUBMITTED THAT THE ASSESSEE SOCIETY H AS GOT REGISTERED U/S. 12AA BY THE CIT(E) LUCKNOW VIDE ORDER DATED 22.08.2 017 PLACED AT PB-28-29 IN PURSUANCE TO THE ORDER OF ITAT IN APPEAL OF THE ASSESSEE BEARING NO. 2127/DEL/2017 DATED 10.07.2017 DIRECTING TO GRANT R EGISTRATION AFTER RELYING ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST VS. CIT(2013) 32 TAXMANN.COM 34 1 (ALL.). IT WAS NEXT SUBMITTED THAT THE LD. CIT(E) HAS FAILED TO CONSIDE R THE DECISION RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F HARDAYAL CHARITABLE & EDUCATIONAL TRUST (SUPRA) RELIED BY THE ASSESSEE BE FORE HIM. THE LD. COUNSEL HAS FURTHER RELIED ON THE FOLLOWING DECISIONS : (I) CIT V. PUJYA SHRI JALARAMBAPA & MATUSHRI VIRBAIMA C HARITABLE TRUST (APPEAL NO. 119 OF 2014 DATED 11.11.2014 (GUJ . HC) (II) SAMAJIK PRAGYA PRASAR SAMITI VS. CIT (ITA NO. 343 O F 2016 DT. 16.01.2018 (ITAT AGRA.) 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE CIT(E) AND SUBMITTED THAT THE ASSESSEE HAD NOT DONE ANY CHARIT ABLE ACTIVITY NOR PRODUCED FINANCIAL STATEMENT NOR BOOKS OF ACCOUNTS NOR ANY V OUCHERS. THEREFORE, NO CHARITABLE ACTIVITY WAS PROVED BY THE ASSESSEE BEFO RE THE LD. CIT(E). BEFORE GRANTING REGISTRATION U/S. 80G(5), THE CIT(E) HAS T O BE SATISFIED THAT THE SOCIETY/TRUST IS ENGAGED IN THE ACTIVITIES WHICH AR E CHARITABLE IN NATURE AS PER THE AIMS AND OBJECTS OF THE SOCIETY. HE ALSO RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN CIT VS. RAMA EDUCATIONAL SO CIETY (2017) 88 TAXMANN.COM 513 (ALL). IN REJOINDER, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THIS DECISION IS NOT APPLICABLE TO THE PRESENT CASE , AS THE ASSESSEE IS IN INITIAL STAGE OF FORMATION OF THE TRUST AND THEREFORE, THER E WAS NO QUESTION OF CARRYING OUT ANY ACTIVITY OR MAINTAINING THE BOOKS OF ACCOUNT WHEREAS IN THE ITA NO. 1578/DEL/2018 4 CASE LAW CITED, THE ACTIVITIES OF THE SOCIETY STOOD STARTED MUCH EARLIER, AS IT WAS GRANTED REGISTRATION U/S. 80G WHICH WAS VALID UPTO 31.03.2004. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN D ISPUTE THAT THE APPELLANT HAD ALREADY BEEN GRANTED REGISTRATION U/S. 12AA BY THE LD. CIT(E) LUCKNOW ON 22.08.2017 IN PURSUANCE TO THE ORDER OF ITAT IN APP EAL OF THE ASSESSEE BEARING NO. 2127/DEL/2017 DATED 10.07.2017 DIRECTIN G TO GRANT REGISTRATION AFTER RELYING ON THE DECISION OF JURISDICTIONAL HIG H COURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST (SUPRA) IN THE SIMILAR CIRCUMSTANCES. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE-TRUST I S IN INITIAL STAGE OF FORMATION OF THE TRUST AND HENCE, IT WAS NOT FEASIBLE FOR THE AS SESSEE EITHER TO CARRY OUT ANY ACTIVITY OR TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE LD. AUTHORITY BELOW. WE ARE, THEREFORE, OF THE OPINION THAT ONCE THE ASSESS EE HAS BEEN GRANTED REGISTRATION WITHOUT GOING INTO THE ACTIVITIES OF T HE ASSESSEE AT THE INITIAL STAGE OF FORMATION OF TRUST, THE LD. CIT(E) WAS NOT JUSTI FIED TO REFUSE APPROVAL TO THE ASSESSEE U/S. 80G(5) OF THE ACT. HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST (SUPRA) HAS HELD THAT WHERE THE TRUST IS AT THE INITIAL STAGE AND NO ACTIVITIES HAV E BEEN CARRIED OUT, ONLY GENUINENESS OF THE OBJECTS OF THE TRUST HAS TO BE T ESTED. ADMITTEDLY, IN THE INSTANT CASE, THE ASSESSEE TRUST HAS ALSO NOT CARRI ED OUT ANY ACTIVITY AND IT WAS THE INITIATION OF THE TRUST. THEREFORE, IN VIEW OF THESE FACTS, THE LD. CIT(E) WAS NOT JUSTIFIED TO REFUSE APPROVAL U/S. 80G ON THIS A CCOUNT. THE DECISION RELIED BY THE LD. DR IS NOT FOUND APPLICABLE TO THE PRESEN T CASE IN VIEW OF THE DISTINGUISHING FEATURES NARRATED BY THE LD. AR ABOV E. ACCORDINGLY, THE APPEAL ITA NO. 1578/DEL/2018 5 OF THE ASSESSEE IS FOUND TO HAVE MERITS AND IS FIT TO BE ALLOWED. THE LD. CIT(E) IS DIRECTED TO GRANT APPROVAL U/S. 80G TO THE ASSESSEE . 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2018. SD/- SD/- (BHAVNESH SAINI) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 4 TH SEPTEMBER, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI