M/s Sri Maata Seva Trust, Kovvur V. The CIT, Rajahmundry, Rajahmundry

ITA 186/VIZ/2012

• Counselvise Citation: 18625314 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: N O N E
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

ITA NO.186/VIZAG/2012 SRI MAATA SEVA TRUST, KOVVUR IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 186 /VIZAG/ 2012 ASSESSMENT YEAR : 2011-12 SRI MAATA SEVA TRUST KOVVUR VS. CIT RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAN NO.AAKTS 7491M ASSESSEE BY: N O N E REVENUE BY: SHRI K.V.N. CHARYA, CIT(DR) DATE OF HEARING : 11.07.2014 DATE OF PRONOUNCEMENT : 30.07.2014 ORDER PER BENCH:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT, RAJAHMUNDRY DATED 24.2.2012 REJECTING ASSESSEES AP PLICATION FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT. NONE APPEARED ON B EHALF OF THE ASSESSEE DESPITE ISSUE OF NOTICE. THERE IS NO PETITION FOR ADJOURNMENT EITHER. UNDER THESE CIRCUMSTANCES, WE DISPOSE OF THE CASE EX-PART E ON MERITS QUA THE ASSESSEE. 2. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A TRUST C REATED VIDE REGISTERED TRUST DEED DATED 23.05.2011. CLAIMING ITSELF TO BE A CHARITABLE TRUST, THE ASSESSEE HAD INITIALLY MADE AN APPLICATION IN THE P RESCRIBED MANNER BEFORE THE CIT FOR GRANT OF REGISTRATION U/S 12AAOF THE AC T WHICH WAS REJECTED BY THE COMMISSIONER OF INCOME-TAX VIDE ORDER DATED 24.2.20 12 FOR THE REASON THAT THOUGH THE OBJECTS OF THE TRUST ARE MIXED IN NATURE , NO WORTHWHILE CHARITABLE ACTIVITY WAS CARRIED OUT FROM THE DATE OF CREATION OF TRUST TILL 17.1.2012. THE ASSESSEE CHALLENGED THE SAID ORDER OF REJECTION BEF ORE THE ITAT. ITA NO.186/VIZAG/2012 SRI MAATA SEVA TRUST, KOVVUR 2 3. THE ASSESSEE SUBMITTED BEFORE US THE FOLLOWING G ROUNDS OF APPEAL: A. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPE LLANT, HAVING FULL- FILLED ALL THE LEGAL REQUIREMENTS, IS ENTITLED TO T HE REGISTRATION U/S 12AA OF THE I.T. ACT, 1961. B. THOUGH THE OBJECTS OF THE APPELLANT TRUST ARE BOTH CHARITABLE AS WELL AS RELIGIOUS, THE OBJECTS ARE STIPULATED FOR THE BENEF IT OF THE GENERAL PUBLIC AND HENCE THE APPELLANT TRUST SHOULD HAVE BEEN GRAN TED THE BENEFIT OF REGISTRATION U/S 12AA OF THE I.T. ACT, 1961. C. THE CASES CITED BY THE LEARNED COMMISSIONER OF INCO ME TAX ARE DISTINGUISHABLE ON FACTS AND ARE NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. D. SO LONG AS THE OBJECTS OF THE TRUST ENURE FOR THE B ENEFIT OF THE GENERAL PUBLIC, WHETHER BY WAY OF PUBLIC CHARITABLE ACTIVIT IES OF ACTIVITIES OF PUBLIC RELIGIOUS NATURE OR BOTH, DENIAL OF REGISTRA TION ON THE GROUND THAT THE TRUST HAS NOT YET CARRIED OUT ANY WORTHWHI LE CHARITABLE ACTIVITY BY THE TIME OF THE SEEKING OF THE REGISTRATION U/S 12AA IS NOT JUSTIFIED. 4. FURTHER, THE ASSESSEE SUBMITTED THAT EVEN ASSUMI NG THAT IT HAS MIXED OBJECTS OF BOTH CHARITABLE AND RELIGIOUS IN NATURE AND HAS NOT COMMENCED ANY CHARITABLE ACTIVITY FROM THE DATE OF CREATION OF TR UST, STILL THEN THE ASSESSEE CANNOT BE DENIED REGISTRATION U/S 12AA OF THE ACT S OLELY ON THAT BASIS. IN SUPPORT OF SUCH CONTENTION, ASSESSEE RELIED ON THE FOLLOWING DECISIONS: A) DIT VS. FOUNDATION OF OPHTHALMIC AND OPTOMETRY RESE ARCH FOUNDATION CENTRE (2013) 355 ITR 361 (DEL) B) HARDAYAL CHARITABLE AND EDUCATIONAL TRUST VS. CIT ( 2013) 355 ITR 534 (ALL) C) CIT-I VS. KUTCHI DASA OSWAL MOTO PARIWAR AMBAMA TRU ST (2013) 89 DTR (GUJ) 293 5. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER O F THE CIT. 6. WE HAVE HEARD THE PARTIES AND PERUSED THE IMPUGN ED ORDER OF THE CIT AS WELL AS OTHER MATERIALS ON RECORD. IT IS A FACT THAT THE CIT HAS ACCEPTED THAT THE OBJECTS OF THE TRUST ARE CHARITABLE IN NAT URE. IN THE AFORESAID CIRCUMSTANCES, THE FINDING OF THE CIT THAT THE ASSE SSEE HAS NOT COMMENCED ITS ACTIVITIES HENCE, REGISTRATION CANNOT BE GRANTE D TO HIM IS CONTRARY TO THE FACTS AND MATERIALS ON RECORD AND WITHOUT ANY BASIS . THEREFORE, THE ORDER PASSED BY HIM CANNOT BE SUSTAINED. EVEN OTHERWISE ALSO AS WOULD BE EVIDENT FROM THE ORDER, HE HAS REJECTED THE APPLICATION FOR GRANT OF REGISTRATION SOLELY ON THE GROUND THAT THE ASSESSEE HAS NOT COMMENCED A NY ACTIVITIES. EVEN ASSUMING THAT FACT TO BE CORRECT, THE SAME IS NOT A T ALL A VALID GROUND FOR ITA NO.186/VIZAG/2012 SRI MAATA SEVA TRUST, KOVVUR 3 REFUSING REGISTRATION. LAW IS WELL SETTLED THAT RE GISTRATION CANNOT BE REFUSED TO A TRUST/INSTITUTION ONLY FOR THE REASON OF NON-C OMMENCEMENT OF ITS ACTIVITIES. THE DECISIONS RELIED UPON BY THE ASSES SEE EXPRESS SUCH VIEW. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CI RCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT SINCE THE OBJECTS OF THE SOCIE TY ARE CHARITABLE IN NATURE, IT IS ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, WE DIRECT THE CIT TO GRANT REGISTRATION TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30 TH JULY14 SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS VISAKHAPATNAM, DATED 30 TH JULY, 2014 COPY TO 1 SRI MAATA SEVA TRUST, C/O SANKARA MATHAM, D.NO.5- 10-7, OLD TOWN, KOVVUR-534350, W.G. DIST. 2 CIT, RAJAHMUNDRY 3 THE CIT(A), RAJAHMUNDRY 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM