NMDC CSR Foundation , Hyderabad V. Commissioner of Income Tax, (Exemptions), Hyderabad

ITA 1659/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3381 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: misc
• Appeal Filed On: 14-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DIPAK
• Assessee Lawyers: C S SUBRAMANYAM
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1659/HYD/2019 NMDC CSR FOUNDATION, HYDERABAD [PAN: AAGCN0616G] VS COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI C.S.SUBRAMANYAM, AR FOR REVENUE : SHRI R.DIPAK, DR DATE OF HEARING : 21-04-2021 DATE OF PRONOUNCEMENT : 10-06-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL ARISES FROM THE CIT(EXEMPTION S)- HYDERABADS ORDER DATED 30-08-2019 PASSED IN CASE NO.CIT(E)/HYD/16(02)/80G/2018-19 IN PROCEEDINGS U/S.80G(5)(VI) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. BOTH THE LEARNED REPRESENTATIVES AT THE OUTSET TOOK US T O THE CIT(E)S DETAILED DISCUSSION DENYING SECOND 80G REGISTRATION TO THE ASSESSEE READING AS UNDER: 2. A NOTICE DATED 28.06.2019 WAS ISSUED TO THE APP LICANT, TO THE ADDRESS MENTIONED IN FORM 10G, TO APPEAR AND PRODUC E ITS ORIGINAL MEMORANDUM OF ASSOCIATION (MOA)/TRUST DEED FOR VERI FICATION AND TO FURNISH A DETAILED REPLY ON SPECIFIC POINTS ON OR B EFORE 18.07.2019. IN ITA NO. 1659/HYD/2019 :- 2 -: RESPONSE THERETO, THE ASSESSEE, VIDE LETTER DATED 1 8.07.2019 HAS FILED A LETTER ALONG WITH CERTAIN DOCUMENTARY EVIDENCE. O N 30,08.2019, SRI P,K.MAHAPATRA, DY. GENERAL MANAGER (F) OF NMDC LIMI TED APPEARED FOR THE HEARING. 3. NOT A CHARITABLE ACTIVITY: AS SEEN FROM THE INCOME & EXPENDITURE ACCOUNT, IT I S OBSERVED THAT THE ASSESSEE PAID RS.80,00,000/- TO TENVIC SPO RTS EDUCATION PRIVATE LIMITED, BUT THE TENVIC SPORTS EDUCATION PR IVATE LIMITED IS A PROFIT MAKING PRIVATE COMPANY AND ALSO OBSERVED THA T THE ASSESSEE HAS PAID RS. 32,00,0001/- TO K.R.DAV PUBLIC SCHOOL WHICH IS A PRIVATE SCHOOL. IT IS ALSO OBSERVED THAT THE ASSESS EE HAS PAID RS.3,00,000/- TO DEPUTY COMMISSIONER AND DISTRICT M AGISTRATE FOR HIRING THE SERVICES OF HEALTH CONSULTANT. THUS, IT IS OBSERVED THAT ASSESSEE IS MERELY PAYING HUGE AMOUNTS TO PRIVATE ENTITIES. PAYING TO PRIVATE ENTI TIES CANNOT BE A CHARITABLE ACTIVITY. ASSESSEE HAS CLAIMED, BUT IT H AS PAID RS.3,00,00/- TO THE CONSULTANT WHICH WAS HIRED BY D Y.COMMISSIONER AND DISTRICT MAGISTRATE, IT IS NOT CLEAR WHY THE CO NSULTANT WAS HIRED? WHO WAS THE CONSULTANT? WHAT WAS THE CONSULTANT'S C ONTRACT WITH THE DISTRICT MAGISTRATE? PAYING TO SUCH CONSULTANT CANN OT BE A CHARITABLE ACTIVITY. THUS, ASSESSEE HAS NOT DONE ANY ACTIVITY WHICH CAN BE CALLED CHARITABLE ACTIVITY AS DEFINED IN SECTION 2(15) OF THE ACT. SINCE, ACTIVITIES OF THE ASSESSEE ARE NOT CHARITABL E. THE ASSESSEE IS NOT ELIGIBLE FOR REGISTRATION U/S. 80G OF THE ACT. 4. ACTIVITIES IN VIOLATION OF OBJECTS: THE ABOVE DESCRIBED ACTIVITIES ARE NOT AS PER THE O BJECTS OF THE ASSESSEE. THUS, THERE ARE IN THE VIOLATION OF THE O BJECTS OF THE ASSESSSEE. HENCE, THE ASSESSEE IS NOT ELIGIBLE FOR REGISTRATION U/S. 80G OF THE ACT. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED SECTI ON 80G APPROVAL REGISTRATION. IT EMERGES AT THE OUTSET THAT THE CIT (E)S ORDER UNDER CHALLENGE HAS NOT CONSIDERED THE ASSESSEE S OBJECT CLAUSES IN ITS TRUST DEED AS TO WHETHER THE SAME; READ WITH ITS ALLEGED ACTIVITIES CARRIED OUT, SATISFIED THE RIGOR OF SECTION 80G OF THE ACT. ITA NO. 1659/HYD/2019 :- 3 -: FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE TO RESTORE THE INSTANT ISSUE BACK TO THE CIT(E) FOR HIS AFR ESH DETAILED ADJUDICATION AS PER LAW WITHIN THREE EFFECTIV E OPPORTUNITIES OF HEARING. THE ASSESSEE OR HIS LEARNE D AUTHORISED REPRESENTATIVE SHALL APPEAR BEFORE THE CIT(A ) ON OR BEFORE 30-09-2021 WITH ALL THE RELEVANT DOCUMENTS; AT I TS OWN RISK AND RESPONSIBILITY. 4. THIS ASSESSEES APPEAL IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 10-06-2021 TNMM ITA NO. 1659/HYD/2019 :- 4 -: COPY TO : 1.NMDC CSR FOUNDATION, 10-3-311/A, KHANIJ BHAVAN, CASTLE HILLS, MASAB TANK, ASIF NAGAR, HYDERABAD. 2.THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD. 3.THE ADDL.CIT(E)-HYDERABAD. 4.D.R. ITAT, HYDERABAD. 5.GUARD FILE.