Jhalana Widlife Research Foundation , Pune V. Commissioner of Income-tax, (Exemption), Pune

ITA 1686/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7238 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-02-2020
• Assessment Year: misc
• Appeal Filed On: 05-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION, A/5/6, SWALP GHARKUL SHREE HOUSING SOCIETY, GANESHMALA, PUNE 411 030 PAN : AAECJ1973E VS. CIT(EXEMPTION), PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(EXEMPTION), PUNE ON 31-08-2019 DENYIN G RECOGNITION U/S.80G(5) OF THE INCOME-TAX ACT, 1961 (HEREIN AFTER ALSO CALLED THE ACT). 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS A COMPA NY INCORPORATED ON 10-03-2018 U/S 8 OF THE COMPANIES ACT, 19 56. REGISTRATION U/S.12AA OF THE ACT WAS GRANTED ON 15-02-2019. THE ASSESSEE BY SHRI C.H. NANIWADEKAR REVENUE BY MS. KESANG Y. SHERPA DATE OF HEARING 04-09-2020 DATE OF PRONOUNCEMENT 04-09-2020 ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 2 ASSESSEE E-FILED APPLICATION IN FORM NO.10G FOR GRANT OF RECOGNITION U/S.80G OF THE ACT ON 20-02-2019. THE LD. CIT (EXEMPTION) REQUIRED THE ASSESSEE TO FURNISH/UPLOAD CERTAIN INFORMATION/CLARIFICATIONS FOR THE PURPOSE OF VERIFYING THE GENUINENESS OF ITS ACTIVITIES CARRIED OUT AND UTILIZATION/APPLICATION OF PROCEEDS TOWARDS THE AVOWED CHARITABLE OBJECTS OF THE C OMPANY. THE ASSESSEE FURNISHED CERTAIN INFORMATION. THE LD. CIT( E) FOUND THAT THE ASSESSEE DID NOT SUBMIT ANY PROOF IN RESPECT OF ACTIV ITIES CARRIED OUT. FROM THE PROFIT AND LOSS ACCOUNT FOR THE YEAR E NDING 31-03-2018, THE LD. CIT(E) FOUND THAT THE ASSESSEE INCU RRED NIL EXPENDITURE ON OBJECTS OF THE COMPANY. NO FINANCIAL STATEME NTS FOR THE F.Y. 2018-19 WERE FURNISHED. WHEN CONFRONTED, IT WA S SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE FOUNDER OF THE COMPANY WAS MAKING SOME RESEARCH IN JHALANA LEOPARD SANCTUARY, JAIPUR ON CO-EXISTENCE OF LEOPARDS AND HUMANS . CERTAIN PHOTOGRAPHS WERE SUBMITTED BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION. THE LD. CIT(E) DID NOT GRANT REGISTRATION ON THE GR OUND THAT THE ASSESSEE FAILED TO LEAD ANY EVIDENCE ABOUT HAVING IN CURRED ANY EXPENDITURE IN THE FINANCIAL STATEMENTS IN RESPECT OF THE AB OVE ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 3 STATED ACTIVITIES. AGGRIEVED THEREBY, THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. SECTION 80G(5) PROV IDES FOR REGISTRATION UNDER THE SECTION. THIS SUB-SECTION IN THE OP ENING PART PROVIDES THAT: THIS SECTION APPLIES TO DONATIONS TO ANY INSTITUTION OR FUND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB-SECTION (2), ONLY IF IT IS ESTABLISHED IN INDIA FOR A CHAR ITABLE PURPOSE AND IT FULFILS THE FOLLOWING CONDITIONS. CLAUSE (I) OF SUB- SECTION (5) STATES THAT `WHERE THE INSTITUTION OR FUND DERIVES ANY INCOME, SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 11 AND 12.... THIS DECIPHERS THAT IN ORDER TO BE ELIGIBLE FOR REGISTRATION U/S 80G, IT IS SINE QUA NON THAT THE ASSESSEE MUST BE FIRST REGISTERED, INTER ALIA, U/S 12AA OF THE ACT AS A PRE-CONDITION SO AS TO AVAIL EXEMP TION U/S 11 ETC. OF THE ACT. CLAUSE (VI) OF SECTION 80G(5) PROVID ES THAT : IN RELATION TO DONATIONS MADE AFTER THE 31 ST DAY OF MARCH, 1992, THE INSTITUTION OR FUND IS FOR THE TIME BEING APPROVED BY THE COMMISSIONER IN ACCORDANCE WITH THE RULES MADE IN THIS BEHALF . THUS, IT IS ESSENTIAL THAT THE FUND OR INSTITUTION MUST BE FIRST ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 4 REGISTERED U/S 12AA ETC. OF THE ACT AND THEN, IN ADDITION, SH OULD HAVE BEEN REGISTERED IN TERMS OF SECTION 80G(5)(VI) OF THE ACT SO AS TO CONFER BENEFIT OF DEDUCTION U/S 80G TO THE PERSONS MAKING DONATIONS. THE RELEVANT RULE REFERRED TO IN SUB-SECTION (VI) OF SECTION 80G(5) IS RULE 11AA OF THE INCOME-TAX RULES, 1962. THIS RULE, IN TURN, EMBODIES `REQUIREMENTS FOR APPROVAL OF AN INSTITUTION OF FUND UNDER SECTION 80G. SUB-RULE (2)(I) OF RULE 11AA STATES THAT THE APPLICATION SHALL BE ACCOMPANIED, INTER ALIA, BY A COPY OF REGISTRATION GRANTED U/S 12A ETC. SUB-RULE (3) OF RULE 11AA S TATES THAT : THE COMMISSIONER MAY CALL FOR SUCH FURTHER DOCUMENTS OR INFORMATION FROM THE INSTITUTION OR FUND OR CAUSE SUCH ENQUIR IES TO BE MADE AS HE MAY DEEM NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF SUCH INSTITUTION OR FUND . ON A HARMONIOUS READING OF SECTION 80G(5) AND RULE 11AA , IT BECOMES CRYSTAL CLEAR THAT FOR SEEKING AN APPROVAL FOR THE PURPOSES OF U/S.80G, THE INSTITUTION OR FUND MUST BE REGISTERED U/S 12A A OF THE ACT AND THEN ON FILING THE REQUISITE APPLICATION FOR REGIS TRATION U/S 80G, THE COMMISSIONER SHOULD SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF SUCH INSTITUTION OR FUND. THE CONTENTION OF THE LD. AR THAT SINCE THE ASSESSEE WAS REGISTE RED BY ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 5 THE CIT U/S 12AA OF THE ACT, HE COULD NOT HAVE EMBARKED UPON FURTHER EXAMINATION OF ACTIVITIES CARRIED OUT FOR GRANTING REGISTRATION U/S 80G OF THE ACT, IS ERGO, MERITLESS. IT IS QUITE C LEAR THAT FOR REGISTRATION U/S 80G, THE ASSESSEE HAS TO BE FIRST N ECESSARILY REGISTERED U/S 12A OF THE ACT FOR SATISFYING THE MANDATE OF SECTION 80G(5)(I) OF THE ACT. IT IS ONLY THEN THAT THE PROCEEDINGS F OR REGISTRATION U/S 80G START. IF THE CONTENTION OF THE LD. AR THAT GRANTING OF REGISTRATION U/S 12AA BINDS THE CIT FROM MAKING FURTHER EXAMINATION FOR REGISTRATION U/S 80G IS TAKEN TO LOGICAL CONCLUSION, IT WOULD MEAN THAT ON GRANT OF REGISTRATION U/S 12AA ETC., THE REGISTRATION U/S 80G(5) SHOULD AUTOMATICALLY FOLLOW, WHICH IN OUR CONSIDERED OPINION IS CONTRARY TO THE DIRECTIVE OF THE PROVISIONS. IT IS QUITE CLEAR THAT ONLY AFTER THE INSTITUTION OR FU ND HAS BEEN REGISTERED U/S 12AA ETC. THAT, ON AN APPLICATION M ADE BY IT, THE EXERCISE OF EXAMINATION OF THE SATISFACTION OF CONDITIONS OF SECTION 80G READ WITH RULE 11AA GETS TRIGGERED. 4. ADVERTING TO THE FACTS OF THE INSTANT CASE, IT IS NOTICED THAT TH E ASSESSEE WAS INCORPORATED ON 10-03-2008. FROM THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR THE YEAR ENDING 31-03-2 018, THE LD. CIT(E) FOUND THAT NO ACTIVITIES WERE CARRIED OUT. WE GAVE ALSO ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 6 GONE THROUGH SUCH P&L ACCOUNT AND FIND THAT THERE IS NIL EXPENDITURE ON ITS EXPENDITURE SIDE. THE ASSESSEE, IN FACT, FILED APPLICATION FOR RECOGNITION U/S.80G ON 20-02-2019 AND THE IMPUGNED ORDER CAME TO BE PASSED ON 31-08-2019. IT IS THE CASE OF THE ASSESSEE THAT WHEN THE LD. CIT(E) REJECTED THE ASSESSE ES APPLICATION U/S.80G, THE ACCOUNTS FOR THE YEAR ENDING 31-03- 2019 WERE UNDER PREPARATION, WHICH COULD NOT BE FILED AND SUCH ACCOUNTS ACTUALLY GOT FINALIZED A LITTLE LATER. THE LD. AR MADE A STATEMENT A T THE BAR THAT FOR THE YEAR ENDING 31-03-2019, THE ASSESSEE RECEIVED A SUM OF RS.3.53 LAKH AS DONATION AND INCURRED EXPENDITUR E OF RS.4.04 LAKH ON THE ACTIVITIES OF THE TRUST. SINCE SUCH PROFIT AN D LOSS ACCOUNT SHOWING EXPENDITURE ON ACTIVITIES OF THE ASSESSE E WAS NOT AVAILABLE BEFORE THE LD. CIT(E), WITHOUT COMMENTING ON TH E MERITS OF THE MATTER, WE SET-ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF LD. CIT(E) FOR DECIDING THE CASE AFRES H AFTER CONSIDERING THE RELEVANT EVIDENCE INCLUDING PROFIT AND LOSS A CCOUNT FOR THE YEAR ENDING 31-03-2019. NEEDLESS TO SAY, THE ASS ESSEE WILL BE ALLOWED SUFFICIENT HEARING OPPORTUNITY BEFORE REACHING ANY DECISION. ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 7 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH SEPTEMBER, 2020. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 04 TH SEPTEMBER, 2020 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(E), PUNE 4. 5. THE JCIT (E), RANGE, PUNE , , / DR A, ITAT, PUNE 6. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1686/PUN/2019 JHALANA WILDLIFE RESEARCH FOUNDATION 8 DATE 1. DRAFT DICTATED ON 04-09-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 04-09-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *