M/s BWSSB Retired Employees Medical Welfare Association , Bangalore V. Commissioner of Income Tax(Exemptions) , Bangalore

ITA 179/BANG/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0973 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-07-2021
• Assessment Year: 2018-2019
• Appeal Filed On: 31-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT A NO. 179/ BANG / 2019 ASSESSMENT YEAR: 2018 - 19 BWSSB RETIRED EMPLOYEES MEDICAL WELFARE ASSOCIATION, ROOM NO.911, KAVERI BHAVAN, BWSSB, K G ROAD, BANGALORE 560 009. PAN: AAEAB 7561L VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI DEVARATHNA KUM AR, CIT (DR)(ITAT) , B ENGALURU. DATE OF HEARING : 12 . 07 .202 1 DATE OF PRONOUNCEMENT : 12 .07 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26.9.2018 OF THE CIT (EXEMPTIONS) [CIT(E), BANGALOR E REJECTING REGISTRATION U/S. 12AA OF THE INCOME-TAX ACT, 1961 [THE ACT]. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LEARNED ASSESSING AUTHORITY REJECTED THE AP PLICATION FOR REGISTRATION U/S 12AA OF INCOME TAX ACT, 1961. 2. WHILE REJECTING THE APPLICATION FOR REGISTRATION THE LEARNED ASSESSING AUTHORITY STATED THAT 'THE OBJECT AND ACTIVITIES OF THE ASSOCIATION IS FOR THE WELFARE OF ITS RETIRED ITA NO.179/BANG/2019 PAGE 2 OF 5 EMPLOYEES, WHO SUBSCRIBED TO THE ASSOCIATION AND AN Y ASSOCIATION WHEREIN THE BENEFITS DO NOT ENSURE FOR THE GENERAL PUBLIC CANNOT BE CONSIDERED AS A PUBLIC CHARITABLE TRUST'. 3. HOWEVER, THE LEARNED ASSESSING AUTHORITY ERRED I N IGNORING THE VERY FACT THAT THE EMPLOYEES OF THE OR GANISATION POST THEIR RETIREMENT WILL NOT BE IN A POSITION TO BEAR THEIR COST OF MEDICAL EXPENSES SINCE MOST OF THESE RETIRED EMPLOY EES STAY IN THE CITY OF BANGALORE WHERE THE COST OF MEDICAL EXP ENSES IS MUCH HIGHER. THEREFORE, BWSSB RETIRED EMPLOYEE'S ME DICAL WELFARE ASSOCIATION HAS BEEN REGISTERED TO PROVIDE MEDICAL CARE TO ITS RETIRED EMPLOYEES AND THEIR SPOUSES. 4. THE LEARNED ASSESSING AUTHORITY DID NOT CONSIDER THE FACT THAT PROVIDING MEDICAL CARE TO RETIRED BWSSB EMPLOY EES IS A CHARITABLE CAUSE AND FALLS WITHIN THE DEFINITION OF CHARITABLE ACTIVITY AND NEEDS TO BE CONSIDERED. 5. THE APPELLANT SUBMITS THAT IT IS PERTINENT TO PO INT HERE THAT JUST BECAUSE THE ORGANISATION INTENDS TO GIVE MEDIC AL RELIEF TO A PARTICULAR SECTION OF THE SOCIETY IT CANNOT BE SAID THAT IT IS NOT CARRYING OUT CHARITABLE ACTIVITIES. 6. THE APPELLANT SUBMITS IN THE BANGALORE URBAN & R URAL DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES MEMB ERS & EMPLOYEES WELFARE TRUST BANGALORE MILK UNION LTD. V S DEPUTY COMMISSIONER OF INCOME (EXEMPTIONS) CASE, THE HONOU RABLE HIGH COURT OF KARNATAKA HAD DECIDED THE MATTER IN F AVOUR OF THE APPELLANT AS UNDER: 'WHEREAS, THE SETTLOR/EXECUTOR WITH AN INTENTION TO SAFEGUARD THE INTERESTS OF THE MILK PRODUCERS AND T HE EMPLOYEES OF THE MILK PRODUCERS CO-OPERATIVE SOCIETIES OF THE DISTRICT AND TO HELP THE MILK PRODUCERS, HAS COME FORWARD TO CON STITUTE THIS TRUST TO SAFEGUARD THE INTERESTS AND TO PROMOTE THE HEALTH AND EDUCATION OF THE MEMBER MILK PRODUCERS, THEIR FAMILIES/DEPENDENT CHILDREN AND THE EMPLOYEES WORKI NG IN THE MILK PRODUCERS CO-OPERATIVE AND THEIR FAMILIES/DEPE NDENT CHILDREN.' 7. THE APPELLANT ALSO SUBMITS IN THE CASE OF THE TR UST CREATED FOR THE BENEFIT OF RANA CASTE OR COMMUNITY OF CITY OF ITA NO.179/BANG/2019 PAGE 3 OF 5 AHMEDABAD, THE APEX COURT IN AHMEDABAD RANA CASTE ASSOCIATION V. CIT [19711 82 ITR 704 HAS HELD THUS: 'IT IS WELL SETTLED BY NOW, AND THE HIGH COURT ALSO HAS RIGHTLY TAKEN THAT VIEW, THAT AN OBJECT BENEFICIAL TO A SEC TION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY. TO SERVE A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR ALL PERSONS IN A PARTICULAR COU NTRY OR STATE. IT IS SUFFICIENT IF THE INTENTION TO BENEFIT A SECT ION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIED INDIVIDUAL IS PRESEN T.' 8. THE APPELLANT HUMBLY SUBMITS THAT BASED ON ABOVE FACTS AND CIRCUMSTANCES APPEAL MAY BE ALLOWED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE TRUS T E-FILED APPLICATION IN FORM 10A ON 30.10.2018 FOR REGISTRATION U/S. 12A A OF THE ACT. THE ASSESSEE SUBMITTED THE DETAILS CALLED FOR BY THE CI T(E) AND SUBMITTED THAT PROVIDING MEDICAL CAR TO RETIRED BWSSB EMPLOYEES IS A CHARITABLE CAUSE AND FALLS WITHIN THE DEFINITION OF CHARITABLE ACTIV ITY AND SOUGHT REGISTRATION. THE ASSESSEE RELIED ON THE DECISION IN THE CASE OF BANGALORE URBAN & RURAL DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIE S MEMBERS & EMPLOYEES WELFARE TRUST BANGALORE MILK UNION LTD., 79 TAXMANN.COM. 4. THE CIT(E) EXAMINED THE FOLLOWING OBJECTS OF THE ASSESSEE TRUST FILED ALONG WITH THE APPLICATION FOR REGISTRATION:- A. THE OBJECTS OF THE ASSOCIATION IS TO PROVIDE ME DICAL TREATMENT TO THE EMPLOYEES AND THEIR SPOUSE RETIRED /GOING TO RETIRE FROM BWSSB AND INCUR THE MEDICAL EXPENDITURE (MAIN OBJECT). B. THE OTHER OBJECTS ARE DEVELOPING HEALTHY CO-OPER ATIVE PRINCIPLES CORDIALITY AMONG THE MEMBERS, MAKE THE F ACILITIES AVAILABLE TO ALL THE MEMBERS WITHOUT CASTE, CREED A ND GENDER PARTIALITY. C. TO CREATE AWARENESS AMONG THE MEMBERS REGARDING THE DEVELOPMENT IN MEDICAL FIELD. TO ORGANISE SCIENTIFI C AND MEDICAL ITA NO.179/BANG/2019 PAGE 4 OF 5 PROGRAMMES FAMILY WELFARE, INSURANCE AND SMALL SAVI NG AWARENESS PROGRAMMES TO MEMBERS. D. TO CONDUCT SCIENTIFIC MEDICAL SEMINARS TO REMOVE BLIND FAITH SUPERSTITION AMONG THE MEMBERS, E. TO CONDUCT BLOOD DONATION CAMP, ENVIRONMENT PROGRAMMES, EYE DONATION, SPORTS AND CULTURE ETC. R ELATING TO MEMBERS. 5. FROM THE ABOVE OBJECTS CLAUSES, THE CIT(E) WAS OF THE VIEW THAT THE BENEFITS OF THE ASSOCIATION ARE CONFINED TO ITS MEM BERS ONLY AND NOT PUBLIC AT LARGE. THE AIM IS TO PROVIDE MEDICAL RELIEF ONL Y TO THE RETIRED EMPLOYEES AND THEIR SPOUSE AND ONLY LATER ON IT MAY BE EXTEND ED TO THE GENERAL PUBLIC AND THEREFORE THE OBJECTS ARE RESTRICTED TO MEMBERS ONLY. THE DECISIONS RELIED ON BY THE ASSESSEE WERE FOUND DISTINGUISHABL E BY THE CIT(E) AND HE OBSERVED THAT IN THE CASE OF BANGALORE URBAN & RURAL DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES MEMBERS & EMPLOYEES WELFAR E TRUST BANGALORE MILK UNION LTD., 79 TAXMANN.COM AND AHMEDABAD RANA CASTE ASSOCIATION (82 ITR 704) , THERE WERE SEVERAL OBJECTS WHICH WERE OPEN TO THE COMMUNITY AT LARGE INTENDED TO GENERAL PUBLIC WHICH WERE NOT INDIVIDUALLY IDENTIFIABLE. BUT IN THE INSTANT CASE, THE CIT(A) HELD THAT THE MEMBERSHIP OF ASSOCIATION AS WELL AS BENEFITS ARE RESTRICTED TO R ETIRED EMPLOYEES AND THEIR SPOUSE AND THEREFORE REJECTED GRANT OF REGISTRATION U/S. 12AA OF THE ACT. 6. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE U S. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. WE PROCEED TO ADJUDICATE THE CASE AFTER TAKING INTO CONSIDERATION THE MATERI AL ON RECORD AND AFTER HEARING THE LD. DR. 7. FROM THE OBJECTS OF THE CLAUSE WHICH ARE REPRODU CED IN THE EARLIER PARAGRAPH, WE FIND THAT THE ASSESSEE IS NOT EXISTIN G FOR THE BENEFIT OF PUBLIC AT LARGE, INSTEAD IT EXITS ONLY FOR THE BENEFIT OF MEMBERS OF THE ASSOCIATION. BEING SO, THE CIT(E) HAS TAKEN THE CORRECT VIEW ON THE FACTS OF THE CASE TO ITA NO.179/BANG/2019 PAGE 5 OF 5 DENY REGISTRATION U/S. 12AA OF THE ACT. WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER AND THE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JULY, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH JULY, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.