Green Mumbay Lions Education Trust, Navsari V. The CIT, Valsad

ITA 1727/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6932 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2011
• Assessment Year: misc
• Appeal Filed On: 26-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MODI
• Keywords: Opportunity of being heard; Set aside
• Section: 80G; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON' BLE SHRI N.S.SAINI, A.M . ) I.T.A. NO. 1727/AHD./20009 GREEN MUMBAY LIONS EDUCATION TRUST -VS- THE C.I.T., VALSAD (PAN: AAATG 8361G) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. S. MODI, A.R. RESPONDENT BY : SHRI K. MADHUSUDAN, SR.D. R O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 23.03.2009 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX, VALSAD REJECTIN G THE APPLICATION OF THE ASSESSEE TRUST UNDER SECTION 80G OF THE I.T. ACT, 1961. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEA L IS AS UNDER: (1) THE LEARNED CIT, VALSADS ORDER IS CONTRADICTO RY TO LAW AND FACTS OF THE CASE & HENCE, LIABLE TO BE QUASHED. (2) THE LEARNED CIT, VALSAD HAS ERRED IN DENYING R ENEWAL EXEMPTION / APPROVAL U/S. 80G(5) OF THE ACT WITHOUT CONSIDERING ON MERITS TH E DOCUMENTS EVIDENCES/EXPLANATIONS FURNISHED BEFORE HIM TO SA TISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE APPLICANT TRUST AND HENCE, HIS ACTION IN REFUSING TO GRANT RENEWAL EXEMPTION/APPROVAL I S ARBITRARY, BAD IN LAW AND NOT JUSTIFIED. 3. AT THE TIME OF HEARING BEFORE US, SHRI M.S. MODI APPEARED ON BEHALF OF THE ASSESSEE AND DREW OUR ATTENTION TO LAST PARA OF THE IMPUGNED ORDER, WHICH READS AS UNDER: 5. IN RESPONSE TO THIS LETTER, A WRITTEN SUBMISSI ON WAS FILED BY THE ASSESSEE ON 19.3.2009. ON VERIFICATION OF THE SUBMISSION, IT I S SEEN THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS OF SECTION 11 OF THE I. T. ACT, 1961 BY NOT EXPENDING 85% OF ITS INCOME ON THE OBJECTS OF THE TRUST. THEREFORE, THE APPLICATION FILED FOR CERTIFICATE U/S 80G IS HEREBY REJECTED . 2 ITA NO. 1727-AHD-2009 3.1 THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THA T FROM THE ABOVE, IT IS CLEAR THAT LD. CIT REJECTED THE APPLICATION FILED FOR CERTIFICATE UNDE R SECTION 80G SOLELY ON THE GROUND THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS O F SECTION 11 OF THE I.T. ACT, 1961 BY NOT EXPENDING 85% OF ITS INCOME ON THE OBJECT OF THE TR UST. HE POINTED OUT THAT THIS IS CONTRARY TO THE FACT THAT THE ASSESSEE HAS SPENT MORE THAN 85% OF ITS INCOME WHICH IS EVIDENT FROM AUDITED INCOME & EXPENDITURE A/C., BALANCE-SHEET AN D STATEMENT OF COMPUTATION OF INCOME FOR THE YEAR ENDING 31.3.2006, 31.3.2007 AND 31.03. 2008 FURNISHED ALONG WITH THE APPLICATION IN FORM NO.10G. THE SUMMARY OF THE APPL ICATION OF THE INCOME IS AS UNDER: ASSTT. YEAR GROSS TOTAL INCOME (IN RS.) APPLICATION OF INCOME (IN RS.) TOTAL APPLICATION OF INCOME IN RS.) PERCENTAGE TO GROSS TOTAL INCOME IN I &E A/C IN B/S 2006-07 71,55,680/- 73,64,050/- 5,42,428/- 79,06,478/- 110.50% 2007-08 80,78,155/- 87,19,582/- 15,15,124/- 1,02,34,706/- 126.70% 2008-09 1,19,22,081/- 1,04,74,847/- 7,27,195/- 1,12,02,042/- 93.96% 3.2 ON THE BASIS OF ABOVE, THE LD. COUNSEL SUBMITTE D THAT THE LD. CIT BE DIRECTED TO GRANT 80G CERTIFICATE FROM THE DATE OF APPLICATION. 4. ON THE OTHER HAND, SHRI K. MADHUSUDAN, SR. D.R., APPEARING ON BEHALF OF THE REVENUE, SUBMITTED THAT AFORESAID FACTS AND FIGURES NEED VERIFICATION AT THE END OF THE ASSESSING OFFICER. 5. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT WAS REQUIRED TO PAS S A SPEAKING ORDER. IN THE IMPUGNED ORDER, THE CIT HAS NOT GIVEN FACTS AND FIGURES. ON THE CON TRARY, THE ASSESSEE IS POINTING OUT THAT HE HAS SPENT MORE THAN 85% OF ITS INCOME. WE, THEREFOR E, SET ASIDE THE ORDER OF THE CIT AND DIRECT HIM TO VERIFY THE AFORESAID FACTS AND FIGURE S AND IN CASE, THE ASSESSEE HAS SPENT MORE THAN 85% OF ITS INCOME, HE WILL GRANT THE CERTIFICA TION UNDER SECTION 80G FROM THE DATE OF APPLICATION AS PROVIDED IN THE ACT. NEEDLESS TO ADD , BEFORE PASSING A FRESH ORDER, THE CIT WILL 3 ITA NO. 1727-AHD-2009 ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE TRUST. RESULTANTLY, FOR STATISTICAL PURPOSE, THE APPEAL OF THE ASSESSEE IS TREATED AS A LLOWED. 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 06.04 .2011. SD/- SD/- (N.S.SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06/04/2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, 4) CIT CONCERNED, 5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, I TAT, AHMEDABAD TALUKDAR/SR.P.S.