Dahej Eco Friendly Society, Bharuch V. The CIT-III, Baroda

ITA 1613/AHD/2011

• Counselvise Citation: 161320514 RSA 2011
• Duration Of Justice: 4 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-10-2015
• Assessment Year: misc
• Appeal Filed On: 13-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .. , ( .) , BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO. 1613/AHD/2011 ( / ASSESSMENT YEAR : - ) DAHEJ ECO FRIENDLY SOCIETY RIL SARASWATI TOWNSHIP BLOCK NO.A-1/1, VILL.VADADLA PO DAHEJ 392 130 TAL.VAGRA, DIST.BHARUCH / VS. THE CIT-III RACE COURSE CIRCLE BARODA 390 007 % & ./ ./ PAN/GIR NO. : AABTD 3496 N ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %( + / APPELLANT BY : SHRI S.N. DIVATIA, AR )*%( , + / RESPONDENT BY : SHRI SANJAY AGRAWAL-CIT-DR -. , /& / DATE OF HEARING 19/10/2015 0123 , /& / DATE OF PRONOUNCEMENT 30/11/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX-III, BARODA-7 [CIT IN SHORT] DATED 08/04/2011 . THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1. THE ORDER PASSED U/S 12AA(1)(B)(II) R.W.S. 12A ( A) DATED 08-04-2011 PASSED BY THE CIT - III, BARODA, REJECTING THE APPL ICATION FOR ITA NO.1613/AHD /2011 DAHEJ ECO FRIENDLY SOCIETY VS. CIT - 2 - REGISTRATION UNDER THE INCOME TAX ACT BY THE APPELL ANT TRUST IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL JUSTICE. 2. THE LD. CIT HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN NOT ALLOWING REASONABLE OPPORTUNITY TO THE APPELLANT TRUST BEFOR E REJECTING ITS APPLICATION FOR REGISTRATION UNDER THE ACT. 3. THE LD. CIT HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT TRUST CANNOT BE SAID TO BE A GENUINE CHARITABLE TRUST OR CARRYING ON GENUINE ACTIVITIES IN PURSUANCE OF ITS OBJECTS. 4. THE LD. CIT OUGHT TO HAVE TAKEN INTO CONSIDERAT ION THE AUDITED FINANCIAL STATEMENTS OF LAST TWO YEARS WERE FURNISH ED ALONG WITH THE APPLICATION DTD.18-06-2010 WHICH CLEARLY ESTABLISHE D THAT THE APPELLANT TRUST IS CARRYING ON CHARITABLE ACTIVITIES REGULARL Y. 5. THE LD. CIT OUGHT TO HAVE APPRECIATED THAT IN V IEW OF THE CERTIFICATE OF REGISTRATION UNDER BOMBAY PUBLIC TRUST ACT, THE APPELLANT TRUST WAS A PUBLIC CHARITABLE TRUST. 6. THE LD. CIT OUGHT NOT TO HAVE PASSED A NON-SPEA KING AND REASONED ORDER BY IGNORING THE MATERIAL PRODUCED BEFORE HIM WITH APPLICATION. IT IS, THEREFORE PRAYED THAT THE APPELLANT TRUST OU GHT TO HAVE BEEN REGISTERED U/S 12AA(1)(B)(II) R.W.S. 12A(A) OF THE ACT OR IN ALTERNATIVE THE IMPUGNED ORDER SHOULD BE SET ASIDE FOR PASSING A FRESH ORDER AFTER ALLOWING REASONABLE OPPORTUNITY. 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST THE REJECTION OF APPLICATION MADE U/S.12AA OF THE INCOME TAX ACT,196 1 (HEREINAFTER REFERRED TO AS THE ACT) ON 25/10/2010 FOR REGISTR ATION. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT HAD REJE CTED THE APPLICATION ON THE GROUND THAT THE TRUST HAS NOT CARRIED OUT ANY A CTIVITIES FROM THE DATE ITA NO.1613/AHD /2011 DAHEJ ECO FRIENDLY SOCIETY VS. CIT - 3 - OF INCEPTION. HE SUBMITTED THAT THE ISSUE IS SQUAR ELY COVERED IN FAVOUR OF ASSESSEE BY THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) V S. PANNA LALBHAI FOUNDATION REPORTED AT (2013) 216 TAXMAN 0148 (GUJA RAT). 2.1. ON THE CONTRARY, LD.CIT-DR SHRI SANJAY AGRAWA L OPPOSED THE SUBMISSION OF THE LD.COUNSEL FOR THE ASSESSEE AND S UBMITTED THAT EVEN OTHERWISE ALSO THE APPLICATION FILED BEFORE THE CIT WAS AFTER ONE YEAR FROM THE DATE OF CREATION (I.E.17.7.2008) OF THE TR UST. THEREFORE, IT CLEARLY REVEALS THAT THE APPLICATION WAS BELATEDLY FILED. 2.2. IN REJOINDER, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT HAS NOT REJECTED THE APPLICATION ON THIS GRO UND. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF T HE LD.CIT. WE FIND THAT THE LD.CIT REJECTED THE APPLICATION BY OBSERVI NG AS UNDER:- 5. THE APPLICATION OF THE TRUST HAS BEEN PERUSED AND FOUND NOT SATISFACTORY. AS THERE WERE NO ACTIVITIES CARRIED OUT, THE GENUINENESS OF THE TRUST IS IN DOUBT. THOUGH THE OTHER DETAILS SU BMITTED BY THE TRUST ARE SATISFACTORY, IN THE ABSENCE OF GENUINENESS OF THE TRUST AS IT HAD NOT CARRIED OUT ANY CHARITABLE ACTIVITIES FROM THE DATE OF INCEPTION TO TILL DATE ITS GENUINENESS CANNOT BE RELIED UPON. 3.1. FROM THE ABOVE FINDING OF THE LD.CIT, IT IS EV IDENT THAT THE APPLICATION HAS BEEN REJECTED ON THE GROUND THAT NO ACTIVITY WAS CARRIED ITA NO.1613/AHD /2011 DAHEJ ECO FRIENDLY SOCIETY VS. CIT - 4 - OUT BY THE ASSESSEE-TRUST. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT RENDERED IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) VS. PANNA LALBHAI FOUNDATION(SUPRA), WHEREIN THE HONBLE HIGH COURT H AS HELD AS UNDER:- IN THE INSTANT CASE, THE DIRECTOR OF INCOME-TAX (E XEMPTION) HELD THAT TRUST HAD NOT COMMENCED ITS ACTIVITIES AND DEN IED REGISTRATION. HOWEVER, THERE WAS NOTHING TO INDICAT E ANY MATERIAL TO CONCLUDE THAT THE OBJECTS OF THE TRUST OR THE AC TIVITIES OF THE TRUST WERE NOT GENUINE OR ANY DOUBT AROSE IN RESPEC T OF THE GENUINENESS OF THE ACTIVITIES. THE TRIBUNAL, IN THE INSTANT CASE, THEREFORE, HAS RIGHTLY HELD IN FAVOUR OF THE ASSESS EE BY INTERFERING WITH SUCH AN ORDER. CONSIDERING THE OBJECTS OF THE TRUST, THE TRIBUNAL, WITH COGENT REASONS, DIRECTED THE DIT(E) TO GRANT REGISTRATION U/S. 12AA ON AN APPLICATION PREFERRED UNDER SECTIONS 12A. 3.2. AFTER CONSIDERING THE RIVAL CONTENTIONS AND IN THE LIGHT OF THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, WE HEREBY SET ASIDE THE ORDER OF THE LD.CIT AND RESTORE THE APPLICATION OF THE ASSESSEE-TRUST FOR SEEKING REGISTRATION U/S.12AA OF THE ACT TO THE FIL E OF LD.CIT FOR DECISION AFRESH. MOREOVER, THE LD.CIT HAS NOT DOUBTED ABOUT THE DETAILS SUBMITTED BY THE ASSESSEE. SOLE GROUND FOR REJECTION OF APPL ICATION IS THAT THE ASSESSEE HAS NOT CARRIED OUT ANY ACTIVITY FROM THE DATE OF INCEPTION. THIS REASONING GOES AGAINST THE RATIO LAID DOWN BY THE H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT (EXEMPTION) VS. PANNA LALBHAI FOUNDATION(SUPRA). ITA NO.1613/AHD /2011 DAHEJ ECO FRIENDLY SOCIETY VS. CIT - 5 - 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 30 TH DAY OF NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED / 11 /2015 6/..-, .-../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 789 : / CONCERNED CIT 4. : ( ) / THE CIT(A)-CONCERNED 5. ;< )-89 , / 893 , 7 / DR, ITAT, AHMEDABAD 6. <= >. / GUARD FILE. ! / BY ORDER, *; ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 19.X.2015 (DICTATION-PAD 4- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..29.X.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 30.11.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.11.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER