M/s. Kourava Education Society, Haveri V. Commissioner Of Income Tax (Exemptions), Bengaluru

ITA 1821/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7021 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-09-2020
• Assessment Year: 2019-2020
• Appeal Filed On: 22-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Set aside
• Section: 80G; 12AA

Judgement Text

ITA NO.1821/BANG/2019 M/S. KOURAVA EDUCATION SOCIETY, HIREKARUR IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.1821/BANG/2019 ASSESSMENT YEAR: NA M/S. KOURAVA EDUCATION SOCIETY AT HIREKARUR TQ HIREKARUR HAVERI DISTRICT PAN NO : AACAK 6907B VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI SANKETH NAYAK, A.R. RESPONDENT BY : SHRI SUNIL KUMAR SINGH, D.R. DATE OF HEARING : 08.09.2020 DATE OF PRONOUNCEMENT : 09.09.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28.6.2019 PASSED BY LD. CIT(EXEMPTIONS), BENGALURU REJECTING THE APPLICATION FILED BY THE ASSESSEE SEEKING RECOGNITI ON U/S 80G(5)OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT]. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE HAS SUBMITTED APPLICATION SEEKING RECO GNITION U/S 80G OF THE ACT BEFORE LD. CIT(EXEMPTIONS) ON 27.12.2018 . THE LD. CIT(E) CALLED FOR CERTAIN DETAILS AND THE SAME WAS FURNISH ED BY THE ASSESSEE. THE LD. CIT NOTICED THAT THE ASSESSEE TRUST HAS GEN ERATED EXCESS OF INCOME OVER EXPENDITURE IN THE PAST TWO FINANCIAL Y EARS. ACCORDINGLY, ITA NO.1821/BANG/2019 M/S. KOURAVA EDUCATION SOCIETY, HIREKARUR PAGE 2 OF 3 HE TOOK THE VIEW THAT TH ASSESSEE HAS NOT CARRIED O UT CHARITABLE ACTIVITIES AND ACCORDINGLY REJECTED THE APPLICATION OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: THE REPLY SUBMITTED HAS BEEN EXAMINED. AS VERIFI ED FROM THE DOCUMENTS AND FINANCIALS SUBMITTED, THE TRUST WAS G RANTED REGISTRATION U/S 12AA ON 18.9.2018 AS A TRUST WITH SALIENT ACTIVITIES AS EDUCATION, MEDICAL RELIEF, ADVANCEMENT OF ANY OT HER OBJECT OF GENERAL PUBLIC UTILITY. AS PER THE FINANCIALS SUBM ITTED BY THE TRUST IN PAST TWO FINANCIAL YEARS THE SOCIETY HAS EXCESS OF INCOME OVER EXPENDITURE. AT THE STAGE OF RECOGNITION U/S 80G, THE COMMISSIONER IN RECEIPT OF AN APPLICATION FOR RECOGNITION HAS TO SATISFY HIKSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GEN UINENESS OF ITS ACTIVITIES. IN THIS CONNECTION, RELIANCE IS PLACED ON THE FOLLOWING DECISIONS:- A) THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF GA NJAM NAGAPPA AND SON TRUST VS. DIT REPORTED IN 269 ITR 59 HAVE HELD THAT GRANT OF EXEMPTION OR RENEWAL IS NOT AUTOMATIC IN CHARACT ER. B) HONBLE KERALA HIGH COURT IN THE CASE OF SELF EMPLO YERS INSTITUTION VS. CIT REPORTED IN 247 ITR 18 HAS HELD THAT WHERE THER E IS NO MATERIAL BEFORE THE COMMISSIONER TO BE SATISFIED OF THE GENU INENESS OF THE ACTIVITIES OF THE TRUST IS A VALID REASON FOR REJEC TION. IN THE CIRCUMSTANCES, THE APPLICATION FOR GRANT OF RECOGNITION U/S 80G(5)(VI) OF THE I.T. ACT, 1961, IS HEREBY REJECTE D. THE ASSESSEE MAY RE-APPLY AT A LATER DATE AFTER CARRYING OUT CHARITABLE ACTI VITIES. 3. THE PROVISIONS OF SECTION 80G(5) OF THE ACT PRES CRIBES THE CONDITIONS FOR RECOGNIZING A CHARITABLE TRUST U/S 8 0G OF THE ACT. WE NOTICE THAT THE LD. CIT(E) HAS NOT EXAMINED THE COM PLIANCE OF VARIOUS CONDITIONS PRESCRIBED IN SECTION 80G(5) OF THE ACT. INSTEAD THE LD. CIT(E) HAS DRAWN ADVERSE INFERENCE ONLY FOR THE REA SON THAT THE ASSESSEE HAS GENERATED EXCESS OF INCOME OVER EXPEND ITURE IN THE PAST TWO FINANCIAL YEARS, MEANING THEREBY, THE LD. CIT(E ) DID NOT EXAMINE THE ACTIVITIES CARRIED ON BY THE ASSESSEE AND ALSO COMPLIANCE OF ITA NO.1821/BANG/2019 M/S. KOURAVA EDUCATION SOCIETY, HIREKARUR PAGE 3 OF 3 VARIOUS CONDITIONS PRESCRIBED U/S 80G(5) OF THE ACT . THE TWO CASE LAWS REFERRED TO BY LD. CIT(E) HAVE BEEN RENDERED I N THE CONTEXT OF FACTS PREVAILING IN THOSE CASES. HOWEVER, NO SUCH KIND OF DEFICIENCY HAS BEEN POINTED OUT BY LD. CIT IN ORDER TO DRAW SU PPORT OF HIS DECISION. UNDER THESE SET OF FACTS, THE ORDER PASS ED BY LD. CIT(E) CANNOT BE SUSTAINED. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD. CIT(E) AND RESTORE THE SAME TO HIS FILE FOR PRO CESSING THE APPLICATION OF THE ASSESSEE IN ACCORDANCE WITH LAW. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH SEPT, 2020 SD/- (GEORGE GEORGE K. ) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 9 TH SEPT, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.