Rotary Club Of Poona Downtown Charitable Trust, Pune V. Income-tax Officer, (Exemption), Ward-2, Pune

ITA 1853/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8164 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: RAJENDRA NAHAR
• Keywords: Charitable institution; Benefit of exemption; Set aside
• Section: 80G; 12AA; 2

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.1853/PUN/2018 / ASSESSMENT YEAR : 2013-14 ROTARY CLUB OF POONA DOWNTOWN CHARITABLE TRUST. KHANDELWAL JAIN & ASSOCIATES, ALANKAR CINEMA BUILDING, 1 ST FLOOR, ABOVE UNITED BANK, PUNE-411 001 PAN : AAAJR0413L ....... / APPELLANT ! / V/S. THE INCOME TAX OFFICER (EXEMPTION), WARD-2, PUNE. / RESPONDENT ASSESSEE BY : SHRI RAJENDRA NAHAR REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 09.04.2019 / DATE OF PRONOUNCEMENT : 16.04.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(APPEALS), PUNE-10 DATED 08.10.2018 FOR THE ASSESSME NT YEAR 2013-14 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CA SE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT THE ADDITION OF RS.9,40,110/- MADE BY THE AO REFUSING TO GRANT THE EXEMPTION U/S.11 OF 2 ITA NO. 1853/PUN/2018 A.Y.2013-14 THE ACT IN PURSUANCE OF THE FACT THAT REGISTRATION U/S.12A COULD NOT BE PRODUCED, IS CONTRARY TO THE FACTS AND THE PROVISIO NS OF LAW PREVAILING IN THE CASE OF THE APPELLANT. THE ADDITION MADE BY THE AO BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. THE APPELLANT PRAYS TO BE ALLOWED, TO ADD, AMEND , MODIFY, RECTIFY, DELETE, RAISE ANY GROUNDS OF APPEAL AT THE TIME OF H EARING. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS REFUSAL OF GRANT ING EXEMPTION U/S.11 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS 'THE ACT') BY THE REVENUE AUTHORITIES AND CONSEQUENT ADDITION OF RS.9,40,110/ - IN THE HANDS OF THE ASSESSEE. 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE WA S REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 VIDE REGISTRATION NO. E- 1077( PUNE) DATED 27.10.1986. THE ASSESSING OFFICER DURING ASSESSMENT PROCEE DINGS ASKED THE ASSESSEE TO FURNISH EVIDENCE/ PROOF OF REGISTRATION U/S.12A OF THE ACT WHICH THE ASSESSEE FAILED TO FURNISH. THEREFORE, THE ASSESSING OFFIC ER ASKED THE ASSESSEE VIDE LETTER DATED 17.03.2016 TO EXPLAIN WHY EXEM PTION U/S.11 SHOULD NOT BE DENIED FOR BEING NOT REGISTERED U/S.12A OF THE OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). THE ASSESSEE VIDE LETTER DATED 11.03.2016 CONTENDED THAT THE TRUST WAS EARLIER G RANTED THE REGISTRATION U/S.12A OF THE ACT BUT THE CERTIFICATE WAS NO T TRACEABLE. THE ASSESSEE HOWEVER, HAD SUBMITTED A COPY OF EXEMPTION U/S .80G OF THE ACT ISSUED BY THE DEPARTMENT ON 07.11.2015. IT WAS REQUEST ED BEFORE THE ASSESSING OFFICER TO GRANT EXEMPTION U/S.11 OF THE ACT. THE ASSESSING OFFICER IN ABSENCE OF NON PRODUCTION OF REGISTRATION CERTIFICATE U/S .12A OF THE ACT HAD DENIED THE BENEFIT OF EXEMPTION U/S.11 OF THE ACT ON THE E XCESS OF INCOME OVER EXPENDITURE AND ADDED RS.9,40,110/- IN THE HANDS OF THE ASSESS EE. 3 ITA NO. 1853/PUN/2018 A.Y.2013-14 4. DURING THE FIRST APPELLATE PROCEEDINGS, THE LD. CIT(APPE ALS) UPHELD THE ORDER OF THE ASSESSING OFFICER ONLY ON THE GROUND THAT THE COPY OF REGISTRATION CERTIFICATE U/S.12A OF THE ACT WAS NOT FURNISHED BY THE ASSESSEE BEFO RE HIM. 5. AT THE TIME OF HEARING THE LD. AR OF THE ASSESSEE V EHEMENTLY ARGUED THAT THE TRUST HAD APPLIED FOR GRANTING REGISTRATION U/S.1 2A OF THE ACT ON 12.08.1986 BEFORE THE COMMISSIONER OF INCOME TAX. REGISTRAT ION CERTIFICATE U/S.12A AS WELL AS EXEMPTION U/S.80G OF THE ACT WAS GRANT ED TO THE ASSESSEE TRUST. THE EXEMPTION U/S.80G WAS RENEWED FROM TIME TO TI ME TILL 2007. EVEN THE EXEMPTION U/S.80G FOR GRANTING 100% DEDUCTION DURING GUJARAT EARTHQUAKE WAS ALSO GRANTED WHICH WAS RENEWED TWICE. TH E COPY OF ORIGINAL APPLICATION FOR REGISTRATION AND EXEMPTION U/S.80G OF THE ACT HAS BEEN PLACED ON RECORD. SIMILARLY CERTIFICATE U/S.80G OF THE ACT HAS ALSO B EEN RENEWED FROM TIME TO TIME WHICH IS ALSO EVIDENT FROM RECORD. THERE IS NO DISPUTE FROM REVENUE SIDE WITH REGARD TO THE FACT THAT THE EXEMPTION U/S.80G OF THE ACT HAS CONSTANTLY BEEN RENEWED FOR THE ASSESSEE TRUST. 5.1 THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT TIM E AND AGAIN THEY HAD REQUESTED THE REVENUE AUTHORITY TO FURNISH THE COP Y OF REGISTRATION CERTIFICATE U/S.12A TO THE ASSESSEE SINCE THAT WAS NOT IN THEIR POSSESSION. HOWEVER, TILL DATE THE REVENUE AUTHORITIES HAVE NOT CONCEDED TO THE REQUEST OF THE ASSESSEE. THEREAFTER, THE ASSESSEE HAS FILED AN APPLICA TION THROUGH RTI TO ASCERTAIN WHETHER THE DEPARTMENT HAS THE COPY OF REGIS TRATION CERTIFICATE U/S.12A OF THE ACT. THEREAFTER, ORDER ISSUED U/S.7(1) OF THE RTI ACT, 2005, WAS RECEIVED BY THE ASSESSEE TRUST INTIMATING THAT SUC H INFORMATION IS NOT AVAILABLE WITH THE DEPARTMENT. THE CHARGE I.E. RTI OFFICER OF THE DEPARTMENT WAS CREATED ON 15.11.2014 WHEREAS THE INFORMATION WHICH T HE ASSESSEE TRUST WANTS PERTAINS TO 12.08.1986 I.E. PERIOD MUCH BEFORE THE CR EATION OF THE CHARGE. THEREFORE, THE ASSESSEE TRUST WAS UNABLE TO PR OCURE ANY INFORMATION 4 ITA NO. 1853/PUN/2018 A.Y.2013-14 FROM THE RTI CHARGE OF THE DEPARTMENT. THE LD. AR OF TH E ASSESSEE ALSO INVITED OUR ATTENTION TO THE SUBMISSIONS MADE BEFORE THE LD. CIT(APPEALS) WHEREIN FUNCTIONS OF THE ASSESSEE TRUST HAS BEEN SUBMITT ED BEFORE THE REVENUE AUTHORITIES. IN THAT WRITTEN SUBMISSION, IT IS STATE D THAT LOTS OF PROGRAMMES OF CHARITABLE NATURE ARE CONDUCTED BY THIS A SSESSEE TRUST. THE ASSESSEE TRUST DOES NOT HAVE ITS OWN OFFICE AND THERE IS NO PERMANENT PLACE AS WELL AS A PERMANENT GOVERNING BODY. 5.2 THE LD. AR FURTHER SUBMITTED THAT PARAMETERS OF THE FACTS OF THE ASSESSEE TRUST SHOULD BE CONSIDERED, WHEREIN NO PERMANENT OFFIC E IS THERE BUT AT THE SAME TIME IT IS ALSO CORRECT THAT THE ASSESSEE TRUST HAS RECEIVED REGISTRATION U/S.12A AND EXEMPTION U/S.80G OF THE ACT STA RTING FROM 12.08.1986 ONWARDS. THE BASIC EVIDENCE OF THIS FACT IS THAT THEY HAVE BEEN ABLE TO RENEW EXEMPTION U/S.80G OF THE ACT FROM TIME AND AGAIN. IT IS THE CONTENTION OF THE ASSESSEE THAT IF THE DEPARTMENT IS NOT ABLE TO PROVIDE THE COPY OF REGISTRATION CERTIFICATE THAT DOES NOT JUSTIFY DENIAL OF EXEMPTION U/S.11 OF THE ACT TO A BONA-FIDE ASSESSEE AND IN SUPPORT OF TH IS CONTENTION; THE LD. AR PLACED RELIANCE ON THE DECISION OF THE PUNE BENCH OF TH E TRIBUNAL IN THE CASE OF OSWAL BANDU SAMAJ VS. CIT IN ITA NO.1561/PN/2012 AND IN ITA NOS.203 & 1840/PN/2014. IN THIS CASE, FACTS ARE IDENTICAL AND SIMILAR TO THAT OF THE ASSESSEE. HEREIN ALSO REPEATEDLY EXEMPTION U/S.80G OF THE ACT WAS GRANTED TO THE ASSESSEE. HOWEVER, THE REVENUE AUTHORIT IES DENIED EXEMPTION SINCE REGISTRATION U/S.12A CERTIFICATE WAS NOT AVAILABLE WITH THE ASSESSEE. IN THAT DECISION THE TRIBUNAL HAD RELIED ON THE DECISION IN THE CASE OF SARDAR BHAVAN TRUST VS. INCOME TAX OFFICER IN ITA NO.876 TO 881/ AHD/2010 FOR THE ASSESSMENT YEARS 1999-2000 TO 2004-05 DECIDED ON 10.0 5.2013. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE ONUS IS ON T HE REVENUE TO PROVE THAT THE ASSESSEE TRUST WAS NOT REGISTERED U/S.12A OF THE ACT. THE ASSESSEE 5 ITA NO. 1853/PUN/2018 A.Y.2013-14 CANNOT BE PANELIZED FOR THE FAILURE OF THE DEPARTMENT IN MA INTAINING NECESSARY RECORDS WITH IT. FOLLOWING THIS DECISION, PUNE BENC H OF THE TRIBUNAL OBSERVED THAT THE ASSESSEE HAD FURNISHED SUFFICIENT EVIDEN CES IN SUPPORT OF ITS CLAIM THAT IT HAS BEEN EARLIER ENJOYING THE BENEFIT OF EX EMPTION U/S. 80G OF THE ACT IN THE PAST AND CATEGORIC STATEMENT OF THE ASS ESSEE THAT THE ORIGINAL REGISTRATION CERTIFICATE ISSUED U/S.12A HAS BEEN MISPLACED, T HERE WAS NO OCCASION FOR THE COMMISSIONER OF INCOME TAX TO ASK FOR AN Y FURTHER DOCUMENTS IN SUPPORT OF EARLIER REGISTRATION GRANTED U/S.1 2A OF THE ACT. THE REVENUE HAS NOT BEEN ABLE TO EXPLAIN AS TO HOW THE ASS ESSEE WAS GRANTED APPROVAL/EXTENSION U/S.80G ON REGULAR INTERVALS IN THE ABS ENCE OF REGISTRATION U/S.12A OF THE ACT. 6. PER CONTRA, THE LD. DR HAS RELIED ON THE ORDERS OF T HE SUB-ORDINATE AUTHORITIES. 7. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE TRUST HAS BEEN G ETTING EXEMPTION U/S.80G OF THE ACT ON REGULAR BASIS AS PER ITS APPLICATION FOR RENEWAL FROM 1986 TILL 2007. THE REVENUE AUTHORITIES HAVE ALWAYS RENE WED THE EXEMPTION FOR THE ASSESSEES TRUST U/S.80G OF THE ACT. IT IS ALSO UNDISPUTED THAT THE ASSESSEE TRUST HAS APPLIED FOR REGISTRATION U/S.12A AND E XEMPTION U/S.80G OF THE ACT ON 12.08.1986 ONWARDS. FROM THAT TIME ONWARDS, T HERE HAS BEEN CONSTANT RENEWAL OF EXEMPTION U/S.80G OF THE ACT. THE REV ENUE AUTHORITIES HAVE REFUSED EXEMPTION U/S.11 OF THE ACT TO THE ASSESSE E ON THE GROUND THAT THEY WERE NOT ABLE TO PRODUCE REGISTRATION CERTIFICATE U/ S.12A OF THE ACT. THE ASSESSEE ON ITS OWN HAS MADE CONSTANT EFFORTS TO OBTAIN SUCH COPY OF THE REGISTRATION CERTIFICATE FROM THE DEPARTMENT AND HAVE EVE N APPLIED THROUGH RTI APPLICATION. HOWEVER, THE EFFORTS OF THE ASSESSEE DID N OT MATERIALIZE. BUT IT IS CLEARLY DEMONSTRATED THAT SUCH EFFORTS WERE MADE BY THE ASSE SSEE. ON THE 6 ITA NO. 1853/PUN/2018 A.Y.2013-14 CONTRARY, THE REVENUE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE ASSESSEE TRUST WAS NOT REGISTERED U/S.12A OF THE A CT. THE ACTION OF THE REVENUE GRANTING CONSTANT RENEWAL U/S.80G OF THE ACT FRO M TIME AND AGAIN ITSELF SHOWS THAT THE REVENUE NEVER DOUBTED THE REGISTR ATION U/S.12A OF THE ACT FOR THE ASSESSEE TRUST SINCE ONE OF THE ESSENTIAL CR ITERIA FOR GRANTING RENEWAL OF EXEMPTION U/S. 80G OF THE ACT IS THAT THE TRU ST OR SOCIETY MUST BE REGISTERED U/S.12A OR 12AA OF THE ACT. THE VERY FACT THA T TIME AND GAIN, THE EXEMPTION WAS GRANTED TO THE ASSESSEE TRUST ITSELF SHOW S THAT REVENUE HAS AGREED TO THE FACT THAT TRUST IS REGISTERED U/S.12A OF T HE ACT. JUST BECAUSE DOCUMENTARY EVIDENCES WERE NOT FURNISHED BY THE ASSESS EE CANNOT BE THE GROUND FOR DENYING EXEMPTION U/S.11 OF THE ACT TO THE ASSESSEE. 8. EVEN CO-ORDINATE BENCH OF THE TRIBUNAL, AHMEDABAD IN T HE CASE OF SARDAR BHAVAN TRUST VS. INCOME TAX OFFICER (SUPRA.) HAS CA TEGORICALLY OBSERVED AND HELD THAT THE ONUS IS ON THE REVENUE TO PROVE THAT TH E TRUST WAS NOT REGISTERED U/S.12A OF THE ACT AND THAT THE ASSESSE E CANNOT BE PENALIZED FOR FAILURE ON THE PART OF THE DEPARTMENT IN MAINTAINING NEC ESSARY RECORDS WITH IT. THIS OBSERVATION WAS CONSIDERED BY THE CO ORDINA TE BENCH OF THE TRIBUNAL, PUNE IN THE CASE OF OSWAL BANDHU SAMAJ VS. CIT(SU PRA.) WHEREIN THE PUNE BENCH OF THE TRIBUNAL HAS OBSERVED THAT THE ASSESSEE FURNISHED SUFFICIENT EVIDENCE IN SUPPORT OF ITS CLAIM THAT IT HAS BEEN EARLIER ENJOYING THE BENEFIT U/S.80G AND IT HAD BEEN GETTING RENEWAL FROM TIME A ND AGAIN WHEREAS THE REVENUE HAS NOT BEEN ABLE TO EXPLAIN AS TO HOW THE ASSESSEE WAS GRANTED APPROVAL/EXTENSION U/S.80G IN ABSENCE OF REGISTRATION U/S.12A OF THE ACT. 9. REVERTING TO THE FACTS OF THE PRESENT CASE, THE ASSE SSEE TRUST HAS MADE AMPLE EFFORTS FOR PROCURING INFORMATION FROM THE DEPARTMENT REGARDING DUPLICATE COPY OF REGISTRATION CERTIFICATE. THE DEPARTMENT W AS NOT ABLE TO PROVIDE ANY COPY OF THE REGISTRATION CERTIFICATE. THIS DEMON STRATES THAT THE 7 ITA NO. 1853/PUN/2018 A.Y.2013-14 PROCESS OF MAINTAINING RECORD IN THE DEPARTMENT IS NOT P ROPER AND APPROPRIATE FOR WHICH BONA-FIDE ASSESSEE CANNOT BE PENALIZ ED. FURTHERMORE, REVENUE HAS ACCEPTED THAT THE ASSESSEE TRUST IS REGIS TERED U/S.12A OF THE ACT SINCE ALL THESE YEARS THEY HAVE GRANTED 80G RENEWAL TO THE ASSESSEE TRUST AND THIS FACT IS NOT DISPUTED BY THE DEPARTMENT. IN VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD . CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO GRANT BENEFIT OF EXEMPTION U /S.11 OF THE ACT TO THE ASSESSEE TRUST. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 16 TH DAY OF APRIL, 2019. SD/- SD/- ANIL CHATURVEDI PA RTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 16 TH APRIL, 2019. SB '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS), PUNE-10. 4. THE CIT(EXEMPTION), PUNE. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 8 ITA NO. 1853/PUN/2018 A.Y.2013-14 DATE 1 DRAFT DICTATED ON 0 9 .0 4 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 09 .0 4 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER