Vipasana Trust, RAJKOT-GUJARAT V. The Commissioner of Income Tax-IIII, RAJKOT-GUJARAT

ITA 168/RJT/2014

• Counselvise Citation: 16824914 RSA 2014
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-05-2014
• Assessment Year: misc
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L MEENA
• Assessee Lawyers: DR ADHIA
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 168/RJT/2014 VIPASSANA TRUST, C/O. DR. DHIRUBHAI R. SHAH, MALKOSH, NR. BANK OF INDIA, GANDHIGRAM, JUNAGADH PAN : AABTV 5071 B ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX RAJKOT-III, RAJKOT / RESPONDENT / ASSESSEE BY SHRI D R ADHIA, AR / REVENUE BY SHRI M L MEENA, DR / DATE OF HEARING 27.05.2014 !'# / DATE OF PRONOUNCEMENT 29.05.2014 / ORDER THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE OR DER DATED 07.01.2014 OF COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT REJE CTING THE APPLICATION MADE BY THE ASSESSEE-TRUST SEEKING RECOGNITION U/S 80G(5) OF TH E INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST NAMELY VIPASSANA TRUST MADE AN APPLICATION FOR RECOGNITION U/S 80G(5) OF THE IN COME-TAX ACT ON 11.07.2013 IN THE PRESCRIBED FORMAT ALONGWITH AUDITED ACCOUNTS FOR TH E F.Y. 2012-13. A REPORT WAS CALLED FOR BY THE OFFICE OF COMMISSIONER OF INCOME- TAX, RAJKOT-III, RAJKOT IN THIS REGARD AND ON PERUSAL OF THE REPORT OF THE AO, IT W AS NOTICED THAT THE ASSESSEE-TRUST HAS NOT SPENT 85% OF THE EXPENDITURE IN A.Y. 2013-1 4, RELEVANT TO F.Y. 2012-13. THEREFORE, VIDE IMPUGNED ORDER DATED 07.01.2014, TH E LD COMMISSIONER OF INCOME- TAX, RAJKOT-III, RAJKOT REJECTED THE APPLICATION OF THE ASSESSEE-TRUST SEEKING RECOGNITION U/S 80G(5) OF THE ACT FOR THE DETAILED REASON GIVEN IN PARAGRAPH 3 OF THE IMPUGNED ORDER, WHICH READS AS UNDER:- 3. ACCORDINGLY, VIDE THIS LETTER DATED 19.12.2013, THE ASSESSEE TRUST WAS REQUESTED TO FURNISH CERTAIN DETAILS/DOCUMENTS AND THE CASE WAS FIXED ON 06.01.2014. ON THE DATE OF HEARING SHRI RAMNIKBHAI KAVA, THE TRUSTEE OF THE ASSESSEE TRUST ALONGWITH SHRI MULJIBHAI JOSHI, ACCO UNTANT OF THE ASSESSEE TRUST ATTENDED AND FURNISHED THE REQUIRED DETAILS. FROM T HE FIGURES OF INCOME & EXPENDITURE AS REPORTED BY THE AO, IT IS SEEN THAT THE TRUST HAS NOT UTILIZED 85% OF ITS INCOME FOR THE OBJECTS OF THE TRUST. ON PERUSAL OF THE DONATION RECEIPTS, IT IS NOTICED THAT THE ASSESSEE TRUST HAS RECEIVED DONATION FOR OTHER EARMARKED FUNDS (CORPUS FUND) OF RS.24,00,000/- AN D THE SAME HAS BEEN UTILIZED FOR PURCHASE OF LAND, AS SEEN BUT NOWHERE IN THE DONATION RECEIPTS, IT IS MENTIONED THAT SUCH DONATION IS RECEIVED FOR SPECIF IC PURPOSE I.E. CORPUS FUND. IT IS HELD IN THE CASE OF SHRI DIGAMBAR JAIN NAYA MANDIR VS. ADIT 2 168-RJT-2014 - VIPASSANA TRUST 80G(5)-(SMC) (ITAT, CAL) 70 ITD 121; THAT IT IS THE DONOR WHO WI LL DECIDE WHETHER HIS DONATION IS FOR CORPUS FUND OR OTHERWISE AND NOT TH E RECIPIENT TRUST. THE ASSESSEE TRUST HAS NO RIGHT TO TREAT THE DONATION R ECEIVED FOR UTILIZING THE SAME FOR SPECIFIC PURPOSE. AS SUCH, IT HAS FAILED TO PRO VIDE EVIDENCE TO SHOW THAT THE DONORS HAVE DIRECTED TO USE THEIR FUND FOR THE SPEC IFIC PURPOSE. CONSIDERING THE ABOVE FACTS, THE APPLICATION OF TH E ASSESSEE TRUST FOR RECOGNITION U/S 80G(5) OF THE I.T. ACT, 1961 IS HER EBY REJECTED. AGGRIEVED WITH THE ORDER OF LD COMMISSIONER OF INC OME-TAX, RAJKOT-III, RAJKOT, THE ASSESSEE-TRUST IS NOW IN APPEAL BEFORE THIS TRI BUNAL, ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME-TAX HAS ERRED IN LAW AND FACTS IN REJECTING TO GRANT APPROVAL U/S 80G(5) OF THE INCOM E-TAX ACT, 1961. THE TRUST DESERVES APPROVAL U/S 80G(5). 2. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION THAT APPELLANT IS NOT FULFILLING THE CONDITION FOR APPROVAL OF THE PR OVISIONS OF SECTION 11AA OF THE IT ACT. THE TRUST DESERVES APPROVAL U/S. 80G(5). 3. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION THAT APPELLANT HAS VIOLATED THE CONDITIONS LAID DOWN IN SECTION 80G(5) AND IS NOT FULFILLING THE CONDITION FOR APPROVAL OF THE PROVISIONS OF SECTION 11AA OF THE IT ACT. THE TRUST DESERVES APPROVAL U/S 80G(5). 4. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION BASED ON IRRELEVANT ASPECT THAT THE TRUST HAS VIOLATED THE CONDITIONS L AID DOWN IN SECTION 80G(5)(VI) AND HENCE NOT ENTITLE FOR APPROVAL U/S 80G(5). THE TRUST DESERVES APPROVAL U/S 80G(5). 5. THE LD. C.I.T. HAS ERRED IN NOT CONSIDERING THE REAL ASPECT OF THE PROVISIONS OF SECTION 80G(5)(VI) OF THE IT ACT, 196 1. THE TRUST DESERVES APPROVAL U/S 80G(5). 6. THE LD. C.I.T. HAS ERRED IN NOT CONSIDERING THE REAL ASPECT OF THE PROVISIONS THAT TRUST HAS ALREADY BEEN REGISTERED U /S. 12AA OF SECTION 80G(5) OF THE IT ACT, 1961. THE TRUST DESERVES APPROVAL U/ S 80G(5). 7. TAKING INTO CONSIDERING THE LEGAL, FACTUAL AND S TATUTORY ASPECT OF THE OBJECT OF THE TRUST, THE LD. C.I.T. OUGHT TO HAVE G RANTED APPROVAL U/S 80G(5)AS APPLIED FOR. IT IS THEREFORE PRAYED THAT THE ORDER PASSED BY THE LD. C.I.T. REJECTING TO GRANT APPROVAL U/S 80G(5) MAY KINDLY B E CANCELLED AND HE MAY BE DIRECTED TO GRANT APPROVAL U/S 80G(5) TO THE APPELL ANT AS APPLIED FOR. 8. WITHOUT PREJUDICE, THE LD.CIT HAS ERRED IN NOT G RANTING ADEQUATE AND REASONABLE OPPORTUNITY. THE ORDER PASSED BY THE LD. CIT NEEDS CANCELLATION / RESTORATION TO CONSIDER AFRESH THAT THE TRUST DESER VES APPROVAL U/S 80G(5). 9. WITHOUT PREJUDICE, THE ORDER PASSED U/S 80G(5) I S BAD IN LAW DESERVES CANCELLATION. 10. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND A ND/OR SUBSTITUTE ANY OR ALL GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAK ES PLACE. 3. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE-TR UST, SHRI D R ADHIA, AUTHORIZED REPRESENTATIVE, APPEARED AND CONTENDED THAT AT THE TIME OF GRANTING APPROVAL FOR 3 168-RJT-2014 - VIPASSANA TRUST 80G(5)-(SMC) EXEMPTION U/S 80G, ONLY OBJECT OF THE TRUST IS REQU IRED TO BE EXAMINED AND APPLICATION OF FUNDS CAN BE EXAMINED BY ASSESSING O FFICER AT THE TIME FRAMING ASSESSMENT. IN SUPPORT OF THIS, THE AUTHORIZED REP RESENTATIVE FOR THE ASSESSEE-TRUST RELIED UPON THE JUDGMENT OF THE HONBLE PUNJAB & HA RYANA HIGH COURT IN ITS JUDGMENT DELIVERED ON 02.05.2013 IN THE CASE OF CIT V. O.P. JINDAL GLOBAL UNIVERSITY, REPORTED IN (2013) 38 TAXMANN.COM 366 (P&H). THE LD. AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE-TRUST ALSO RELIED UPON THE DECISION OF ITA T, SMC BENCH, RAJKOT IN THE CASE OF SHREE GOVINDBHAI JETHALAL NATHVANI CHARITABLE TR UST IN ITA NO.402/RJT/2013, WHEREIN THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF H ONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF O.P. JINDAL GLOBAL UNIVERSITY (SUPRA). 4. AS AGAINST THE AFORESAID SUBMISSION; SHRI M L ME ENA, DR, APPEARED ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF L D. COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT. HE SUBMITTED THAT SINCE THE AS SESSEE-TRUST FAILED TO APPLY THE APPLICATION OF INCOME TO THE EXTENT OF 85% IN THE F Y 2012-13 RELEVANT TO AY 2013-14, THE VIEW TAKEN BY THE LD COMMISSIONER OF INCOME-TAX , RAJKOT-III, RAJKOT REJECTING THE APPLICATION U/S 80G(5) OF THE INCOME-TAX ACT BE UPH ELD. 5. IN REJOINDER, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT LD. CIT, ON PERUSAL OF THE DONATION RECEIPTS, HAS NOTICED THAT THE ASSESSEE-TRUST RECEIVED DONATION FOR OTHER EARMARKED FUND (CORPUS FUND) OF RS.24,00,000/- AND THE SAME HAS BEEN UTILIZED FOR PURCHASING LAND AS IF EV IDENT FROM THE ORDER PASSED BY HIM; THEREFORE THE MENTIONING IN HIS ORDER THAT NOWHERE OF THE DONATION RECEIPTS IT IS MENTIONED THAT SUCH DONATION IS RECEIVED FOR SPECIF IC PURPOSE I.E. CORPUS FUND IS CONTRARY IN NATURE. TO SUM-UP, THE AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE-TRUST PLEADED THAT THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJ KOT BE DIRECTED TO GRANT THE RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT, 1961 AS SOUGHT BY THE ASSESSEE-TRUST. 6. RIVAL SUBMISSIONS WERE CONSIDERED. THE HONBLE P UNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. O.P. JINDAL GLOBAL UNIV ERSITY (SUPRA) HELD THAT AT THE TIME OF GRANTING APPROVAL FOR EXEMPTION U/S 80G, OBJECT OF THE TRUST IS REQUIRED TO BE 4 168-RJT-2014 - VIPASSANA TRUST 80G(5)-(SMC) EXAMINED AND APPLICATION OF FUNDS CAN BE EXAMINED B Y ASSESSING OFFICER AT THE TIME OF FRAMING ASSESSMENT. THE ONLY REASON GIVEN BY TH E LD. COMMISSIONER OF INCOME- TAX, RAJKOT-III, RAJKOT IN THE IMPUGNED ORDER FOR R EJECTING THE APPLICATION OF THE ASSESSEE-TRUST FOR RECOGNITION U/S 80G(5) IS THAT T HE ASSESSEE-TRUST HAS FAILED IN MAKING EXPENDITURE TO THE EXTENT OF 85% OF ITS INCO ME. KEEPING IN VIEW THE RATIO OF JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. O.P. JINDAL GLOBAL UNIVERSITY (SUPRA), THE RECOGNITION U/S 80G( 5) CANNOT BE REFUSED ON THIS GROUND. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF LD COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT AND DIRECT HIM TO GRANT THE RECO GNITION U/S 80G(5) OF THE INCOME-TAX ACT, 1961 TO THE ASSESSEE-TRUST. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 29.05.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- VIPASSANA TRUST, GANDHIGRAM, JUNAGADH 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX, RAJK OT-III, RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT-I, JUNAGADH 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT