Shree Shirdi Saibaba Charitable Trust, Vellore V. DIT, CHENNAI

ITA 1801/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96264 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 07-10-2015
• Assessment Year: misc
• Appeal Filed On: 01-10-2013
• Court: TRIBUNAL
• Department Lawyers: JOE SEBASTIAN
• Assessee Lawyers: T VASUDEVAN
• Keywords: Charitable institution; Condonation of delay
• Section: 12AA; 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . ! '# , $ %& ' [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ] ./ I.T.A.NO.1801/MDS/2013 SHREE SHIRIDI SAIBABA CHARITABLE TRUST NO.14, 4 TH WEST CROSS ROAD GANDHI NAGAR VELLORE 632 006 VS. THE DIRECTOR OF INCOME - TAX(EXEMPTIONS) CHENNAI [PAN A ALTS 8092 H ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE /RESPONDENT BY : SHRI JOE SEBASTIAN, CIT / DATE OF HEARING : 0 7 - 10 - 2015 / DATE OF PRONOUNCEMENT : 16 - 10 - 2015 , / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTIONS), CHENNAI , DATED 28.2.2013, PASSED IN DIT(E) NO.2(374)/12-13 REFUSING REGISTRAT ION U/S 12AA OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). ITA NO. 1801/13 :- 2 -: 2. AT THE OUTSET, IT WAS NOTICED THERE IS A DELAY OF 1 50 DAYS IN FILING THE APPEAL. THE ASSESSEE HAS FILED AN AFFI DAVIT PRAYING FOR CONDONATION OF DELAY AS UNDER: THE PETITIONER SUBMITS THAT ONE OF THE TRUSTEES, MRS.J.AMBUJAM, FELL SERIOUSLY ILL TOWARDS THE END O F MARCH 2013 AND HAD TO BE GIVEN PROLONGED MEDICAL ATTENTION DUE TO HER ADVANCED AGE. SHE WAS ADVISED TO BE ON COMPLETE RES T FOR A FEW MONTHS THEREAFTER. IN ATTENDING TO HER MOTHER, THE MANAGING TRUSTEE, DR. MRS.GEETHA ARUN, LOST TRACK OF THE ORD ER RECEIVED FROM THE DU(E) AND THE NEED FOR FURTHER FOLLOW-UP A CTION. ONLY TOWARDS THE MIDDLE OF SEPTEMBER DID SHE REALIZE THA T THE APPEAL TO THE TRIBUNAL HAS NOT BEEN PREPARED AND FILED. IM MEDIATELY THEREAFTER, THE MANAGING TRUSTEE CONTACTED HER AUDI TOR, WHO IN TURN HANDED OVER THE PAPERS TO THE COUNSEL MR.T.VAS UDEVAN AT CHENNAI. THE ORDERS OF THE LOWER AUTHORITIES WERE S ENT FOR PREPARATION OF THE APPEAL AND WAS EVENTUALLY FILED ON 01.10.13 RESULTING IN A DELAY OF 150 DAYS. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MANAGING TRUSTEE OF THE ASSESSEE HAS TO TAKE CARE OF HER MOTHER, THEREFORE, SHE WAS NOT ABLE TO FILE APPEAL IN TIME. TO THAT EFFECT, A MEDICAL CERTIFICATE DATED 17.12.2013 IS ALSO FILED. ON THE OTHER HAND, THE LD. DR HAS NOT SERIOUSLY OBJECTED TO CONDONING THE DELAY. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH PARTIES A ND THE PETITION FILED BY THE ASSESSEE, WE FIND THAT THERE WAS SUFFICIENT CAUSE IN NOT FILING THE APPEAL IN TIME. WE, THEREFORE, CONDONE THE DELAY OF 150 DAYS AND ADMIT THE APPEAL. ITA NO. 1801/13 :- 3 -: 5. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A CHARITAB LE TRUST AND CREATED BY A TRUST DEED DATED 8.3.2012. IT FILED A N APPLICATION IN FORM NO.10A ON 21.8.2012 SEEKING REGISTRATION U/S 12AA OF THE ACT. THE DIT(E) DENIED THE REGISTRATION U/S 12AA OF THE ACT BY OBSERVING THAT THE ASSESSEE HAS FAILED TO FURNISH THE AUDITED ACC OUNTS AND PROOF OF ACTIVITIES CARRIED ON BY IT. HE FURTHER OBSERVED T HAT THE TRUST HAS DONATED SOME BOOKS AND NOTEBOOKS TO POOR STUDENTS F OR WHICH NO DETAILS WERE FILED. KEEPING IN VIEW THE ABOVE AND ALSO TAKING INTO CONSIDERATION ONE OF THE INCIDENTAL OBJECTS OF THE TRUST, HE CAME TO THE CONCLUSION THAT THE ASSESSEE IS NOT ELIGIBLE FOR R EGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, THE DIT(E) REJECTED THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT. T HEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE-TRUST I S COMMITTED FOR THE CHARITABLE ACTIVITIES AND THE ACT IVITIES OF THE TRUST ARE CHARITABLE IN NATURE. THE DIT(E) HAS TAKEN ONE OF THE ISOLATED INCIDENTAL ACTIVITY AND DENIED REGISTRATION U/S 12 AA OF THE ACT TO THE ASSESSEE. THE LD. COUNSEL PRAYED THAT THE ASSESS EE MAY BE GRANTED REGISTRATION U/S 12AA OF THE ACT. HE FURTHER SUBM ITTED THAT AT INITIAL STAGE OF REGISTRATION, THE SCOPE OF ENQUIRY BY TH E DIT(E) IS VERY LIMITED. HE RELIED ON THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF DIT(E) VS M/S RJBV VASUDEVAN EDUCATI ONAL & CHARITABLE ITA NO. 1801/13 :- 4 -: TRUST IN TAX CASE (APPEAL) NO.729 OF 2013, DATED 22 .7.2014 AND SUBMITTED THAT THE SAME MAY BE FOLLOWED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPOR TED THE ORDER OF THE DIT(E). 8. WE HAVE HEARD BOTH SIDES, PERUSED THE RECORDS AND O RDER OF THE DIT(E). THE ASSESSEE IS A CHARITABLE TRUST C REATED ON 8.3.2012. IT FILED AN APPLICATION IN FORM NO.10A ON 21.8.2012 SEEKING REGISTRATION U/S 12AA OF THE ACT. THE MAIN OBJECT S OF THE TRUST ARE AS UNDER: TO HELP AND ASSIST POOR STUDENTS TO TAKE EDUCATION BY WAY OF CASH OR IN KIND. TO AWARD SCHOLARSHIPS AS WELL AS LOAN SCHOLARSHIPS TO DESERVING STUDENTS. TO DISTRIBUTE PRIZES TO DESERVING AND OUTSTANDING AND MERITORIOUS STUDENTS. TO ESTABLISH, RUN, ASSIST SCHOOLS, EDUCATIONAL INSTITUTIONS, CENTERS OF INFORMATION ON EDUCATION, VOCATIONAL CENTERS, LEARNING AND DEVELOPMENT IN SUC H PLACES AS DEEMED FIT FOR THE PROMOTION OF EDUCATION WITH FOCUS ON INDIAN TRADITIONAL WAY OF LEARNING AN D TO ASSIST STUDENTS BY WAY OF PROVIDING SCHOLARSHIPS , FINANCIAL ASSISTANCE. TO IMPART KNOWLEDGE IN EVERY FACULTY OF EDUCATION TO ESTABLISH, MAINTAIN, MANAGE, RUN, ADMINISTER OLD AGE HOME, HOME FOR DESTITUTE, ORPHANAGE, FEEDING CENTERS, INSTITUTES FOR LEARNING, EDUCATIONAL ITA NO. 1801/13 :- 5 -: INSTITUTIONS, COLLEGES AND CENTERS FOR LEARNING ART S, SCIENCE, ENGINEERING, ANY KNOWLEDGE USEFUL TO MANKIND. TO HELP THE POOR AND DOWN TRODDEN PEOPLE AFFECTED BY NATURAL CALAMITIES, SOCIAL UNREST, RIOT OR WAR A ND TO HELP THE OLD AGED PEOPLE FOR !HEIR LIVING AND FO R THEIR FUNERAL NEEDS. TO DEVELOP IN CHILDREN AND IN YOUTH, THE SENSES OF PATRIOTISM, VALUES, ETHICS AND SKILLS AND IMPART EDUCATION BASED ON INDIAN SYSTEMS, HERITAGE, THOUGHT, CULTURE, TRADITIONS AND LEARNING METHODS AND SKILLS. TO CARRY OUT RESEARCH IN THE FIELD OF EDUCATION, T O CARRYOUT OUT ANY PROGRAM FOR IMPROVING THE PHYSICAL HEALTH CONDITION, TO DEVELOP AND PROMOTE SPORTS AND PHYSICAL FITNESS ACTIVITIES OF POOR CHILDREN AN D PARTICULARLY STUDENTS OF SCHOOLS RUN, MANAGED OR OPERATED BY PANCHAYATS, GOVERNMENT, CORPORATION AND ANY LOCAL AUTHORITY. TO CARRY ON ANY ACTIVITY OF PUBLIC CHARITABLE IN NATURE. 2. FROM THE ABOVE, IT IS VERY CLEAR THAT THE ASSESSEE -TRUST IS CREATED FOR THE PURPOSE OF CHARITABLE ACTIVITIES. THIS FACT IS NOT EVEN DISPUTED BY THE DIT(E). HIS MAIN OBJECTION FOR REF USING REGISTRATION U/S 12AA IS THAT THE ASSESSEE HAS FAILED TO PRODUC ED THE AUDITED ACCOUNTS AND DETAILS ABOUT THE ACTIVITIES. WHEN T HE ASSESSEE IS AT INITIAL STAGE AND CARRYING ON CHARITABLE ACTIVITIES , IT IS NOT NECESSARY FOR THE ASSESSEE TO FILE AUDITED ACCOUNTS BEFORE THE D IT(E). EVEN IT IS NOT NECESSARY THAT THE ASSESSEE HAS TO FILE ALL DETAIL S OF THE ACTIVITIES ITA NO. 1801/13 :- 6 -: CARRIED OUT BY THE ASSESSEE. THE SCOPE OF ENQUIRY BY THE DIT(E) TO GRANT REGISTRATION U/S 12AA IS WHETHER THE OBJECT S OF THE TRUST ARE CHARITABLE IN NATURE OR NOT AND GENUINENESS OF THE TRUST. SO, IF BOTH THE CONDITIONS ARE FULFILLED, THE DIT(E) HAS TO GRA NT REGISTRATION U/S 12AA OF THE ACT. IN THIS CASE, THE OBJECTS OF THE TRUST SHOW THAT THE TRUST IS CREATED ONLY FOR THE PURPOSE OF RUNNING CH ARITIES. SO FAR AS THE GENUINENESS IS CONCERNED, THERE IS NOTHING ON RECOR D TO SHOW THAT THE TRUST IS NOT GENUINE. CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO OBJECTS OF THE TRUST, WE ARE OF T HE OPINION THAT THE ASSESSEE DESERVES TO BE GRANTED REGISTRATION U/S 1 2AA OF THE ACT. THE HON'BLE MADRAS HIGH COURT IN M/S RJBV VASUDEVAN EDUCATIONAL & CHARITABLE TRUST(SUPRA) HAS OBSERVED THAT WHILE GRA TING REGISTRATION U/S 12AA, THE AUTHORITY HAS TO TEST THE NATURE AND THE ACTIVITY OF THE TRUST. SEC. 12AA(1) CONTEMPLATES SATISFACTION OF TH E COMMISSIONER ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF THE ACTIVITIES AND MAKE SUCH ENQUIRY AS MAY BE NECESSARY FOR THE P URPOSE OF GRANT OF REGISTRATION. IN SO CONSIDERING THE APPLICATION , THE COMMISSIONER HAS TO GIVE AN OPPORTUNITY TO THE ASSESSEE AS PROV IDED FOR UNDER PROVISO TO SUB-SECTION (1) OF SEC. 12AA. UNDER SUB -SECTION (3) OF SEC. 12AA, THE COMMISSIONER IS GIVEN POWER TO CANCEL THE REGISTRATION, IF HE SATISFIES THAT THE OBJECTS OF SUCH TRUST ARE NOT GE NUINE OR NOT BEING CARRIED ON IN ACCORDANCE WITH THE OBJECTS OF THE TR UST. WHEN SUCH AN ITA NO. 1801/13 :- 7 -: AUTHORITY IS VESTED WITH THE COMMISSIONER TO CANCEL THE REGISTRATION IN THE EVENT OF THE TRUST NOT BEING CARRIED ON IN ACCO RDANCE WITH THE OBJECTS OF THE TRUST, WE DO NOT FIND ANY GROUND TO SAY THAT MERELY ON THE DATE OF THE APPLICATION, THE ASSESSEE TRUST HA D NOT COMMENCED ITS ACTIVITIES, HENCE, REGISTRATION COULD NOT BE GRANTE D. 3. IN THE PRESENT CASE, THE MAIN OBJECTS OF THE ASSES SEE-TRUST ARE ONLY CHARITABLE OBJECTS. THE ASSESSEE HAS DIS TRIBUTED SOME BOOKS TO THE POOR STUDENTS. SIMPLY BECAUSE THE DETAILS W ERE NOT FILED IN RESPECT OF THE BOOKS DONATED TO THE POOR STUDENTS, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITAB LE ACTIVITIES PARTICULARLY WHEN THE ASSESSEE ASSESSEE IS IN THE BEGINNING STAGE OF CARRYING ON ITS CHARITABLE ACTIVITIES. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES AND BY FOLLOWING THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN M/S RJBV VASUDEVAN EDUCATIONAL & CHAR ITABLE TRUST(SUPRA), WE QUASH THE ORDER PASSED BY THE DIT( E) AND GRANT REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE- TRUST. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ITA NO. 1801/13 :- 8 -: ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, 16 TH OF OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! '# ) ( V. DURGA RAO ) $ / JUDICIAL MEMBER / CHENNAI ! / DATED: 16 TH OCTOBER, 2015 RD !'##$%&#'& / COPY TO: # 1 . / APPELLANT 4. # ( / CIT 2. / RESPONDENT 5. &) *#$$+, / DR 3. # (#-. / CIT(A) 6. * /0#1 / GF