M/s. Jai Sri Venkateswara Educational Trust, Dharmapuri V. ITO, Krishnagiri

ITA 1607/CHNY/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 8032 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2010
• Assessment Year: misc
• Appeal Filed On: 14-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: G BASKAR
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI U.B.S. BEDI, J.M. AND SHRI K.K. GUPTA, AM .. I.T.A. NO. 1607/MDS/2009 JAI SRI VENKATESWARA EDUCATIONAL TRUST 33/45-S1, MANAVASI NARASIMHAN ROAD GANDHI NAGAR, DHARMAPURI PAN NO. AAGFJ 4499K VS. INCOME-TAX OFFICER WARD 1(2) KRISHNAGIRI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G. BASKAR DEPARTMENT BY : SHRI P.B. SEKARAN O R D E R PER U.B.S. BEDI, J.M: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT, SALEM DATED 12.08.2009 WHEREBY T HE ASSESSEE CHALLENGED THE REFUSAL TO GRANT REGISTRATION U/S 12 AA OF THE INCOME- TAX ACT, 1961 [IN SHORT, THE ACT] BY RAISING THE FO LLOWING GROUNDS: PAGE 2 OF 6 I.T.A. NO. 1607/MDS/2009 1. THE LD. CIT ERRED IN PASSING THE IMPUGNED ORDER IN HASTE WITHOUT GIVING THE APPLICANT SUFFICIENT OPPORTUNITY O F BEING HEARD. 2. THE LD. CIT ERRED IN FACTS AND IN LAW IN REJECTING THE APPLICATION OF REGISTRATION U/S 12AA OF THE INCOME-T AX ACT, 1961 [IN SHORT, THE ACT]. 3. THE LD. CIT WENT WRONG IN HIS INTERPRETATION OF THE PROVISIONS OF SECTION 2(15) OF THE ACT 4. THE LD. CIT OUGHT TO HAVE SEEN THAT THE TERM CHARI TABLE PURPOSES HAD BEEN WELL DEFINED BY THE HON'BLE APEX COURT AND OTHER COURTS AND THERE IS NO FURTHER DISCUSSION REQUIRED ON THE SUBJECT. 5. THE LD. CIT WENT WRONG IN NOT FOLLOWING THE INSTRUCT IONS OF THE CBDT IN CIRCULAR NO. 11 OF 2008 DATED 19.12.2 008 6. THE LD. CIT WENT WRONG IN ITS OBSERVATIONS THAT THE APPELLANT TRUST HAS NOT ESTABLISHED THE GENUINENESS O F THE TRUST AND ALSO THE CHARITABLE ACTIVITY CARRIED O UT BY THE TRUST 7. THE LD. CIT OUGHT TO HAVE EVEN SEEN THAT WHETHER TH E INCOME OF THE TRUST IS DERIVED FROM THIS ACTIVITY OR NOT PAGE 3 OF 6 I.T.A. NO. 1607/MDS/2009 IS TO BE DECIDED EVERY YEAR IN THE ASSESSMENT PROCEEDINGS AND NOT ON SURMISES. 8. THE LD. CIT ERRED IN MAKING OBSERVATIONS WITHOUT APPLYING HIS MIND TO THE NATURE OF THE ACTIVITY IN T HE PROPER VIEWPOINT. DOCUMENTARY EVIDENCE PRODUCED AT THE TIME OF HEARING ABOUT THE ACTIVITIES OF THE TRUST HAS BEEN IGNORED. 9. THE LD. CIT WAS NOT JUSTIFIED IN IGNORING THE ASSURAN CE OF FINANCE MINISTER IN THE PARLIAMENT, WHICH IS BIN DING ON HIM AS HELD BY THE HON'BLE APEX COURT IN R & B FALCON [A] PVT./ LTD VS. CIT [2008] 301 ITR 309 SC AND WAS ALSO NOT JUSTIFIED IN IGNORING THE BOARD CIRCULAR NO. 11 OF 2008 DATED 19 TH DECEMBER 2008 WHEN BOTH THE OBJECTS AND ACTIVITIES WERE CLEARLY CONSISTENT WITH THE EXPLANATION OF LAW IN THE BOARD CIRCULAR, WHICH WAS BINDING ON HIM U/S 119 OF THE ACT. 10. THE LD. CIT ERRED IN NOT CONSIDERING THE TOTALI TY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, BEFORE ARRIVING AT THE UNTENABLE CONCLUSION THAT THE SOURCE OF DONATIONS COULD NOT BE SATISFACTORILY EXPLAINED. PAGE 4 OF 6 I.T.A. NO. 1607/MDS/2009 2. SHORT FACTS APROPOS ARE THAT ASSESSEE TRUST, EVI DENCED BY A TRUST DEED AND SUPPLEMENTARY DEEDS ALLEGEDLY EXECUT ED ON 3.11.2006, 15.7.2009 AND 21.7.2009 FILED ITS APPLIC ATION IN FORM NO. 10A FOR REGISTRATION U/S 13AA ON 11.2.2009. IT IS NOTED THAT THE TRUST CAME INTO EXISTENCE ON 3.11.2006 WHEN MRS. D. POONGODI, W/O SHRI P. RAJAMANICKAM DEDICATED A SUM OF `. 1,001/- AND EXECUTED THE TRUST DEED. CERTAIN DETAILS WERE CALLED FOR FR OM THE ASSESSEE BY THE LD. CIT AND AFTER HEARING THE REPRESENTATIVE OF THE ASSESSEE AND GOING THROUGH THE DETAILS AND DOCUMENTS FURNISHED B Y ASSESSEE, LD. CIT NOTED CERTAIN INFIRMITIES IN EXECUTING SUPPLEME NTARY DEEDS, CHANGE OF OBJECTS WHICH, ACCORDING TO HIM, WERE NOT PERMISSIBLE AND BY HOLDING THAT THE ASSESSEE TRUST IS RUNNING A N EDUCATIONAL INSTITUTION FOR PROFIT AND OTHER ISSUES REGARDING D ONATIONS, HE REFUSED TO GRANT REGISTRATION U/S 12AA OF THE ACT. 3. AGAINST SUCH ORDER OF LD. CIT, ASSESSEE PLEADED THAT NEITHER PROPER OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE N OR THE REPLIES FILED AND EXPLANATIONS GIVEN HAVE BEEN APPROPRIATEL Y CONSIDERED BY THE LD. CIT BEFORE REFUSING TO GRANT REGISTRATION U /S 12AA OF THE ACT. PAGE 5 OF 6 I.T.A. NO. 1607/MDS/2009 SO IT WAS PLEADED THAT IN THE INTEREST OF JUSTICE A ND IN ALL FAIRNESS, THE MATTER BE RESTORED TO THE FILE OF THE LD. CIT F OR REDECIDING THE APPLICATION OF THE ASSESSEE. 3. PER CONTRA, THE LD. D.R. SUPPORTED THE ORDER OF THE LD. CIT AND PRAYED FOR ITS CONFIRMATION AS COGENT REASONS HAVE BEEN GIVEN BY HIM TO REFUSE THE REGISTRATION AS SOUGHT BY THE ASS ESSEE. 4. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE ORDER OF THE LD. CIT WE FIND THAT WHILE CONSIDERING THE APPL ICATION OF THE ASSESSEE, LD. CIT HAS NOT APPROPRIATELY AND JUSTIFI ABLY CONSIDERED ALL POINTS RAISED TO SUPPORT ITS PLEA TO GRANT REGISTRA TION. THEREFORE, IN VIEW OF THE FACTS, CIRCUMSTANCES AND MATERIAL ON RE CORD, AS WELL AS CASE LAW CITED AND MENTIONED IN THE IMPUGNED ORDER, WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE AND TO HAVE FAIR PLAY IN THE MATTER, THE CLAIM OF THE ASSESSEE REQUIRES TO BE LO OKED INTO AFRESH BY THE LD. CIT. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT AND REMIT THE MATTER BACK ON HIS FILE FOR CONSIDERATION AFRESH THE APPLICATION IN VIEW OF THE REPLIES AND EXPLANATIONS FURNISHED BY THE ASSESSEE TO PASS DE NOVO ORDER. WE HOLD AND ORDER ACCORDINGLY. PAGE 6 OF 6 I.T.A. NO. 1607/MDS/2009 NEEDLESS TO ADD, ASSESSEE BE GIVEN SUFFICIENT OPPOR TUNITY TO PRESENT ITS CASE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED FOR STATISTICAL PURPOSES. ORDERED PRONOUNCED IN THE OPEN COURT ON 20.10.201 0. SD/- SD/- (K.K. GUPTA ) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 20 TH OCTOBER, 2010. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE