Rythu Welfare Society,PER, Hyderabad V. THE CIT , Vijayawada

ITA 184/VIZ/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6781 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 01-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K DEVARATHNA KUMAR
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 1 8 3 & 184 / VIZ /201 4 RYTHU WELFARE SOCIETY, D.NO. 1 - 5, ELURU CANAL LEFT, PRASADAMPADU, VIJAYAWADA. V . CIT, VIJAYAWADA. PAN NO. AACTR 1199 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI K. DEVA RATHNA KUMAR CIT DR DATE OF HEARING : 2 9 / 0 6 /201 7 . DATE OF PRONOUNCEMENT : 18 / 0 8 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , DATED 26 /0 2 /201 4 . ITA NO. 183/VIZ/2014 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A REGISTERED SOCIETY FILED AN APPLICATION IN FORM NO. 10 - A FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT'). AS THE FACTS AVAILABLE ON RECORD , THE ASSESSEE - SOCIETY IS EXISTED TO CONSTRUCT A BRIDGE ON ELURU CANAL AT KM 10.32 OF VILLAGE PRASADAMPADU . T HE ONLY PURPOSE OF WHICH , ASSESSEE - SOCIETY IS EXISTED FOR CONSTRUCTION OF BRIDGE. THE VERY SAME WORK HAD ALREADY BE EN TAKEN 2 ITA NO. 183 /VIZ/2014 ( RYTHU WELFARE SOCIETY P E R ) FROM THE GOVERNMENT OF ANDHRA PRADESH , IRRIGATION DEPARTMENT VIDE ORDER DATED 17/04/2008 BY M/S. PROGRESSIVE CONSTRUCTION LTD. THERE IS A DISPUTE BETWEEN GOVERNMENT OF ANDHRA PRADESH AND M/S. PROGRESSIVE CONSTRUCTION LTD. , T HEREFORE, THE ASSESSEE - SOCIETY HAS TAKEN CONSTRUCTION WORK FROM M/S. PROGRESSIVE CONSTRUCTION LTD. AND THEN AWARDED SUCH CONTRACT TO M/S. A.V.N. CONSTRUCTIONS FOR THE VALUE OF 1,36,90,899/ - EXCLUDING MATERIAL COST. THE BALANCE EXPENDITURE WAS BORNE BY THE VARIOUS PEOPLE OF PRASADAMPADU VILLAGE , WHO ARE THE MEMBERS OF THE ASSESSEE - SOCIETY. FROM THE ABOVE, IT IS NOT CLEAR WHAT ARE THE TERMS AND CONDITIONS BETWEEN GOVERNMENT OF ANDHRA PRADESH AND M/S. PROGRESSIVE CONSTRUCTION LTD. AND WHAT ARE THE TERMS AND CONDITIONS BETWEEN M/S. PROGRESSIVE CONSTRUCTION LTD. AND THE ASSESSEE SOCI ETY AND , WHAT IS THE TOTAL COST OF THE BRIDGE AGREED BY THE M/S.PROGRESSIVE CONSTRUCTION LTD. WITH THE GOVERNMENT OF ANDHRA PRADESH. THE ASSESSEE - SOCIETY SIMPLY SAYS THAT IT HAS UNDERTAKEN THE CONSTR UCTION WORK FROM M/S. PROGRESSIVE CONSTRUCTION LTD. AND GIVEN IT TO THE VARIOUS CONSTRUCTIONS COMPANIES AND THE BALANCE AMOUNT OF EXPENDITURE WAS BORNE BY THE SOCIETY - MEMBERS. THE LD. COMMISSIONER SAID THAT ONCE THERE IS ALREADY AGREEMENT WITH GOVERNMENT OF ANDHRA PRADESH TO UNDERTAKE THE WORK OF BRIDGE, THERE IS NO NECESSITY FOR THE ASSESSEE - SOCIETY TO INTERFERE WITH THAT , WHICH IS AGAINST THE PUBLIC POLICY AND REJECTED THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. 3 ITA NO. 183 /VIZ/2014 ( RYTHU WELFARE SOCIETY P E R ) 3 . AFTER CAREFUL CO NSIDERATION OF THE ORDER PASSED BY THE LD.COMMISSIONER AND ALSO CONSIDERING THE ARGUMENTS OF THE L EARNED COUNSEL FOR THE ASSESSEE, IT IS NOT CLEAR THAT WHAT ARE CHARIT ABLE ACTIVITIES ARE BEING PERFORMED BY THE ASSESSEE - SOCIETY . IT IS ALSO NOT CLEAR THAT ONCE THE GOVERNMENT HAS AWARDED THE CONTRACT TO M/S.PROGRESSIVE CONSTRUCTION LTD., WHAT IS NECESSARY FOR THE ASSESSEE - SOCIETY TO INTERFERE WITH AND TAKING CONSTRUCTION WORK FROM M/S.PROGRESSIVE CONSTRUCTION LTD. AND GIVEN IT SUB - CONTRACT TO M/S.A.V.N. CONSTRUCTIONS. THE ASSESSEE FAILED TO ESTABLISH THAT IT IS EXISTED FOR CHARITABLE PURPOSES. WE ARE UNABLE TO UNDERSTAND THAT AS TO WHY ASSESSEE - SOCIETY IS REQUIRED TO CHARITY REGISTRATION UNDER SECTION 12AA OF THE ACT WHEN THE ASSESSEE HAS TAKEN THE CONTRACT WORK FROM M/S. PROGRESSIVE CONSTRUCTION LTD. AND SUB - CONTRACTED TO M/S. A.V.N. CONSTRUCTIONS , THE REMAINING EXPENDITURE BORNE BY THE MEMBERS OF THE SOCIETY, SO THERE IS NO PROFIT TO THE ASSESSEE - SOCIETY AND THEREFORE FOR WHA T PURPOSE THE ASSESSEE - SOCIETY IS ASKING REGISTRATION UNDER SECTION 12AA. THE ASSESSEE ALSO FAILED TO FILE RELEVANT DETAILS TO SATISFY THAT THE ACTIVITIES CARRIED ON BY THE ASSESSEE - SOCIETY ARE CHAR I T A BLE IN NATURE. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT THE ASSESSEE IS NOT ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. WE ALSO FIND THAT LD. COMMISSIONER RIGHTLY HELD THAT THE ASSESSEE SOCIETY IS NOT ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. I N VIEW OF THE ABOVE, OUR INTERFERENCE IS NOT REQUIRED IN THE 4 ITA NO. 183 /VIZ/2014 ( RYTHU WELFARE SOCIETY P E R ) ORDER PASSED BY THE LD. COMMISSIONER . THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. ITA NO. 18 4 /VIZ/2014 4. SO FAR AS THIS APPEAL IS CONCERNED, IT IS A CONSEQUENTIAL TO THE REGISTRATION UNDER SECTION 12AA OF THE ACT. AS W E HAVE ALREADY DECIDED THAT THE ASSESSEE IS NOT ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, THIS APPEAL HAS BECOME INFRUCTUOUS AND IS ACCORDINGLY DISMISSED. 5 . IN THE RESULT , BOTH THE APPEAL S FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 1 8 T H DAY OF AUGUST , 201 7 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 8 T H AUGUST , 201 7 . VR/ - COPY TO: 1. THE ASSESSEE - RYTHU WELFARE SOCIETY, D.NO. 1 - 5, ELURU CANAL LEFT, PRASADAMPADU, VIJAYAWADA. 2. THE REVENUE - CIT, VIJAYAWADA. 3. THE D.R . , VISAKHAPATNAM . 4. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.