Asakiranam St. Theresa's Charitable Society, Eluru V. THE CIT., RAJAHUMUNDRY., Rajahmundry

ITA 17/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0242 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 23-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S N MURTHY
• Assessee Lawyers: K CHENNUBOTLU
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.17/VIZAG/2013 ( / ASSESSMENT YEAR : 2013-14 ) ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY ELURU VS. CIT RAJAHMUNDRY [ PAN: AACAA 0708N ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI K. CHENNUBOTLU, AR -., / / RESPONDENT BY : SHRI T.S.N. MURTHY, CIT(DR) / 3 / DATE OF HEARING : 21.10.2015 / 3 / DATE OF PRONOUNCEMENT : 29.10.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT(A), RAJAHMUNDRY DATED 24.12.2012 FOR THE ASSESS MENT YEAR 2013-14. ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 2 2. THE ASSESSEE ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY REGISTERED UNDER THE SOCIETYS REGISTRATION ACT, 19 35 OF 2001 DATED 20.6.2008. THE ASSESSEE SOCIETY HAS MADE AN APPLIC ATION IN FORM NO.10A DATED 19.5.2012 FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT) WITH THE FOLLOWI NG OBJECTS:- 1. TO CARRY ON EDUCATIONAL, MEDICAL AND CHARITABLE WOR KS AND FOR THE PURPOSE TO ESTABLISH, TAKE OVER, ENDOW MAINTAIN, ADMINISTER, CARRY ON, CONDUCT, DEVELOP, EQUIP IMPRO VE, EXTEND, ALTER AND CLOSE DOWN SCHOOLS COLLEGES INSTI TUTIONS, FOR THE DIFFUSION OF USEFUL KNOWLEDGE, HOSTELS, BOARDIN G, HOUSES, CHAPELS, WORK, GUILDE, AND NEEDLE WORK CLAS SES, POOR HOUSES, ORPHANAGES, PENITENTIARIES, HOME FOR THE AG ED, RESCUE HOMES, REFUGES FOR POOR, DISTRESSED AND DEST ITUTE WOMEN AND CHILDREN, FOUNDLING HOMES, SOUP KITCHENS, NURSERIES, LIBRARIES, READING ROOMS, RETREAT HOUSES , CONFRATERNITIES, SODALITIES AND OTHER EDUCATIONAL , SCIENTIFIC, TECHNICAL AND CHARITABLE INSTITUTIONS, WORKS, AMENI TIES AND ACTIVITIES OF ALL KINDS OF ANY PART OF INDIA WITH A VIEW NOT TO MAKE PROFIT AND SOLELY FOR THE UPLIFTMENT OF MANKIND ON HUMANIT ARIAN GROUNDS. 2. TO EDUCATE, TRAIN AND INSTRUCT ADULTS AND CHILDREN IRRESPECTIVE OF RELIGION, RACE, COMMUNITY, CASTE, LANGUAGE OR SOCIA L STATUS BY TAKING OVER, ESTABLISHING, ENDOWING, CONDUCTING, MAINTAINI NG, ADMINISTERING AND CARRY ON SCHOOLS, COLLEGES AND INSTITUTIONS FOR THEIR EDUCATION, INSTRUCTION AND TRAINING IN ALL SUBJECTS RELIGIOUS AND SECULAR, LIBERAL AND TECHNICAL AND TO DEVELOP, EQUIP, IMPROVE, ALTER AND CLOSE DOWN SUCH SCHOOLS, COLLEGES AND INSTITUTIONS WITH A VIEW NOT TO MAKE PROFIT. 3. TO ESTABLISH, TAKE OVER, ENDOW, MAINTAIN, ADMINISTE R, CANYON, CONDUCT, DEVELOP EQUIP, IMPROVE, EXTEND ALTER AND C LOSE DOWN HOSPITALS, DISPENSARIES, NURSING HOMES AND WARDS, NURSING SCHO OLS AND INSTITUTES, FACILITIES FOR NURSING IN PRIVATE HOMS, REHABILITATION CENTERS, AMBULANCE WORK, MEDICAL COLLEGES AND TRAIN ING CLASSES, RESEARCH INSTITUTES, CONVALESCENT HOMES, C LINICS FOR OUTDOOR AND INDOOR RELIEF, LABORATORIES, CRCHES AN D OTHER CHARITABLE INSTITUTIONS, WORKS, AMENITIES AND ACTIVITIES OF AL L KINDS IN ANY PART OF INDIA IRRESPECTIVE OF RELIGION, RACE, COMMUNITY, CASTE OR SOCIAL STATUS, WITH A VIEW NOT TO MAKE PROFIT. ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 3 4. TO PROVIDE, ORGANIZE, MAINTAIN, IMPROVE, ALTER AND CONDUCT PREMISES, FACILITIES, EQUIPMENT AND MEANS FOR THE P ROPAGATION AND ADVANCEMENT OF THE EDUCATIONAL, SCIENTIFIC, TEC HNICAL, RELIGIOUS AND CHARITABLE IDEALS OF THE SAID CONGREG ATION INCLUDING THE HOLDING OF CLASSES CONFERENCES, CONGRESSES, LECTURE S, DEMONSTRATIONS, MEETINGS, EXHIBITIONS, SEMINARS, RETREATS, COURSES AND COMPETITIONS AND THE GIVING OF PRIZES, AWARDS SCHOL ARSHIPS, FREE-SHIPS, DIPLOMAS AND CERTIFICATES IN RESPECT TH EREOF WITH A VIEW NOT TO MAKE PROFIT. 5. TO PUBLISH, ISSUE AND EXHIBIT ANY JOURNALS, PERIODI CALS, BOOKS, PAPERS, PAMPHLETS, ADVERTISEMENTS, REPORTS, LECTURES AND OTHER READING MATTER FOR THE DIFFUSION OF USEFUL KN OWLEDGE AND FOR THE PROMOTION, BENEFIT AND ADVANCEMENT OF THE EDUCA TIONAL, SCIENTIFIC, TECHNICAL, RELIGIOUS AND CHARITABLE IDE ALS, INSTITUTIONS, WORKS AND ACTIVITIES OF THE SOCIETY, BUT WITH A VIE W NOT TO MAKE PROFIT. 3. THE LD. COMMISSIONER AFTER RECEIVING THE APPLICA TION FROM THE ASSESSEE CALLED THE DETAILS AND ACCORDINGLY, THE LD . REPRESENTATIVE FOR THE ASSESSEE APPEARED BEFORE THE LD. COMMISSIONER S UBMITTED BOOKS OF ACCOUNTS AND OTHER DETAILS. 4. THE LD. COMMISSIONER AFTER CONSIDERING THE DETAI LS FILED BY THE ASSESSEES REPRESENTATIVE, HE HAS OBSERVED THAT THE ASSESSEE SOCIETY HAS TAKEN UNSECURED LOAN OF RS.2,70,000/- DURING THE YE AR 2008-09 BUT NO EVIDENCE IN SUPPORT OF RECEIPT OF LOAN AND REPAYMEN T OF LOAN WAS PRODUCED. FROM THE CASH BOOK AND LEDGER, IT IS SEE N THAT THE AMOUNTS WERE INTRODUCED IN CASH ONLY. NO DETAILS OF THE CR EDITORS IN RESPECT OF UNSECURED LOANS WERE FURNISHED. NO BALANCE SHEET A ND INCOME AND EXPENDITURE STATEMENT FOR THE FINANCIAL YEAR 2008-0 9 WERE FILED. HE FURTHER OBSERVED THAT THE ASSESSEE TRUST IS RECEIVI NG FUNDS FROM STATE ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 4 GOVERNMENT FOR THE ACTIVITIES UNDER THE SARVA SHIKS HA ABHIYAN (RAJIV VIDHYA MISSION) NATIONAL CHILD LABOUR PROJECT. THE SE FUNDS HAVE BEEN UTILIZED FOR THE ACTIVITIES OF THE TRUST. APART FR OM THE GRANTS MENTIONED, THE TRUST IS COLLECTING DONATIONS FROM OTHERS. DUR ING CURRENT FINANCIAL YEAR, THE TRUST HAS COLLECTED FEE FROM THE STUDENTS FOR THEIR STAY IN THE PREMISES. THE LD. COMMISSIONER FURTHER OBSERVED TH AT DURING THE FINANCIAL YEAR 2009-10, THE ASSESSEE SOCIETY INCURR ED AN EXPENDITURE OF RS.1,15,000/- NOT PRODUCED ANY EVIDENCE AND SUBMITT ED THAT THIS AMOUNT IS SPENT TOWARDS THE FOOD EXPENSES AND DROP OUT STUDENTS REMUNERATION AND FOR THE TEACHERS UNDER THE SCHEME OF RAJIV VIDHYA MISSION. SIMILARLY, RS.2,10,180/- WAS CLAIMED AS R ECEIPT FROM SOCIAL SERVICE CENTRE AND THE NATURE OF RECEIPT AND UTILIS ATION WAS NOT ESTABLISHED. THE ASSESSING OFFICER HAS FURTHER OBS ERVED THAT THE ASSESSEE HAS FAILED TO MAINTAIN VOUCHERS/BILLS IN R ESPECT OF CERTAIN EXPENDITURE AND ALSO PRODUCED SELF-MADE VOUCHERS AN D CAME TO A CONCLUSION THAT THE ACTIVITIES OF THE TRUST ARE NOT GENUINE. 5. ON BEING AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEES TRUST ESTABLISHED ONLY FOR THE PURPOSE OF THE CHARITABLE ACTIVITIES IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY. THE ASSESSEE SOCI ETY IS ALSO RECOGNISED ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 5 BY THE GOVERNMENT OF ANDHRA PRADESH AND RECEIVING F UNDS FOR VARIOUS PROJECTS AND SUBMITTED THAT REGISTRATION MAY BE GRA NTED. ON THE OTHER HAND, THE LD. DR HAS STRONGLY SUPPORTED THE ORDER P ASSED BY THE LD. COMMISSIONER. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORDS , GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE IS A CHARITABLE SOCIETY, APPLIED FOR REGISTRATION U/S 12A OF THE ACT ON 19.5 .12. ALL THE OBJECTIVES OF THE ASSESSEES CHARITABLE SOCIETY ARE COMMITTED FOR EDUCATION AND OTHER CHARITABLE PURPOSES. THE LD. COMMISSIONER CA LLED THE DETAILS FROM THE ASSESSEE AND HE DOUBTED THE GENUINENESS OF THE SOCIETY ON THE GROUND THAT SOME OF THE DETAILS IN RESPECT OF UNSEC URED LOANS RELATING TO A.Y. 2008-09 WERE NOT PRODUCED AND SOME OF THE EXPE NDITURE INCURRED FOR THE RESIDENTIAL BRIDGE CAMP WAS DOUBTED AND SOM E RECEIPTS RECEIVED FROM SOCIAL SERVICE CENTRE AND EXPENDITURE INCURRED NO BILLS/VOUCHERS MAINTAINED BY THE ASSESSEE. WE FIND THAT THE ABOVE OBSERVATIONS MADE BY THE LD. COMMISSIONER ARE WITHOUT ANY BASIS. THE COMMISSIONER HIMSELF HAS OBSERVED THAT THE ASSESSEE TRUST WAS RE CEIVING FUNDS FROM THE STATE GOVERNMENT FOR THE ACTIVITIES UNDER THE S ARVA SHIKSHA ABHIYAN, RAJEEV VIDHYA MISSION & NATIONAL CHILD LA BOUR PROJECT. THESE FUNDS HAVE BEEN UTILISED FOR THE ACTIVITIES OF THE TRUST. HE FURTHER ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 6 OBSERVED THAT THE TRUST IS COLLECTING DONATIONS FRO M OTHERS. NO DETAILS WERE MENTIONED. THE TRUST HAS COLLECTED FEE FROM T HE STUDENTS FOR THEIR STAY IN THE PREMISES. WHAT IS THE FEE COLLECTED IS ALSO NOT MENTIONED. AFTER CAREFUL CONSIDERATION OF THE ORDER OF THE COM MISSIONER, WE FIND THAT THE OBSERVATIONS MADE BY THE COMMISSIONER ARE NOT BASED ON ANY MATERIAL AND THE ORDER OF THE COMMISSIONER DESERVES TO BE QUASHED. FURTHER, WE FIND THAT THE ASSESSEE SOCIETY IS COMMI TTED FOR CHARITABLE ACTIVITIES, MAINLY EDUCATION TO THE POOR AND PARTIC ULARLY TO ENCOURAGE THE DROP OUT STUDENTS. WHEN THE OBJECTS OF THE ASSESSE E TRUST ARE IN CHARITABLE NATURE, IT IS NOT OPEN FOR THE COMMISSIO NER TO GO TO THE EARLIER ASSESSMENT YEARS AND OBSERVED THAT SOME DETAILS ARE NOT FILED. IT IS THE DUTY OF THE COMMISSIONER TO SEE THAT WHETHER THE OB JECTS OF THE ASSESSEE TRUST ARE CHARITABLE OR NOT AND THE ACTIVI TIES ARE CARRIED BY THE ASSESSEE TRUST IN ACCORDANCE WITH THE OBJECTS OR NO T. ONCE THESE TWO CONDITIONS ARE PROVED, THE COMMISSIONER HAS TO ACCO RD REGISTRATION U/S 12AA OF THE ACT. IN SO FAR AS GENUINENESS IS CONCE RNED, THE COMMISSIONER HAS TO EXAMINE THE ACTIVITIES OF THE T RUST RELATING TO ITS OBJECTS. ONCE THE OBJECTS ARE CHARITABLE IN NATURE AND THE ASSESSEE IS CARRYING ITS ACTIVITIES IN CONFORMITY WITH THE OBJE CTS OF THE TRUST, GENUINENESS CANNOT BE DOUBTED UNLESS THERE IS A CON CRETE EVIDENCE TO COME TO A CONCLUSION THAT THE ACTIVITIES OF THE TRU ST ARE NOT GENUINE. IN ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 7 THIS CONTEXT, THE HONBLE KARNATAKA HIGH COURT HAS CONSIDERED THE ISSUE AND OBSERVED THAT FOR THE PURPOSE OF REGISTRATION U /S 12A OF THE ACT WHAT THE AUTHORITIES IS TO SATISFY IS THE GENUINENE SS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND HOW THE INCOME DERIVED FROM THE TRUST PROPERTY IS OFFERED TO CHARITABLE OR RELIGIOUS PURP OSE AND NOT THE NATURE OF THE ACTIVITY BY WHICH THE INCOME IS DERIVED BY T HE TRUST. THERE ARE SUFFICIENT SAFEGUARDS UNDER THE ACT FOR CANCELLATIO N OF THE REGISTRATION IF THE PROVISIONS ARE MISUSED. IN THE CASE OF CIT VS. A.M.M. ARUNACHALA EDUCATIONAL SOCIETY 243 ITR 229, THE HONBLE MADRAS HIGH COURT HAS OBSERVED THAT THE SOCIETY FRAMED FOR SOLE PURPOSE O F RUNNING AND MANAGING SCHOOL IS AN EDUCATIONAL INSTITUTION IS EN TITLED FOR EXEMPTION U/S 10(22) OF THE ACT. 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE AND ALSO FOLLOWING THE JUDICIAL PRECEDENTS, WE FIND THA T THE ASSESSEE TRUST IS ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. ACC ORDINGLY, WE QUASH THE ORDER PASSED BY THE COMMISSIONER AND DIRECT HIM TO ACCORD REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE AND ORDER ACCOR DINGLY. ITA NO.17/VIZAG/2013 ASAKIRANAM ST. THERESAS CHARITABLE SOCIETY, ELURU 8 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 TH OCT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 29 TH OCT15 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT ASAKIRANAM ST. THERASAS CHARITABLE SOCIETY, D.NO.1 1- 84, GAVARAVARAM, ELURU, W.G. DIST. 534003, A.P. 2. -., / THE RESPONDENT THE CIT, RAJAHMUNDRY 3. ; () / THE CIT(A), RAJAHMUNDRY 4. -, , / // / DR, ITAT, VISAKHAPATNAM 5 . . . . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM