MAHESHWARI SAMAJ TRUST, Nagpur V. CIT-I, Nagpur

ITA 191/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1725 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Charitable institution; Benefit of exemption
• Section: 80G; 12A

Judgement Text

1 ITA NO. 191/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.191 /NAG/2013 MAHESHWARI SAMAJ TRUST, THE COMMISSIONER OF C/O M/S LOYA BAGRI & CO., V/S. INCOME TAX - I, CHARTERED ACCOUNTANTS, NAGPUR. GANDHIBAG, NAGPUR. APPELL ANT. RESPONDENT. APPELLANT BY : SHRI RAJESH LOYA. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 28 - 07 - 2015 DATE OF PR ONOUNCEMENT : 21 ST AUGUST, 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM AN ORDER OF LEARNED COMMISSIONER OF INCOME TAX - I, NAGPUR DATED 21 - 03 - 2013 PASSED UNDER SECTION 80G OF I.T. ACT. AGAINST THE SAID ORDER, THE APPELLANT HAS RAISED THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX - I U/S 80G OF THE INCOME TAX ACT, 1961 DATED 21 - 03 - 2013 IS BAD IN LAW AND WRONG ON FACTS. 2. THAT THE LEARNED CIT - I ERRED IN LA W AND ON FACTS IN REJECTING REGISTRATION U/S 80G OF THE INCOME TAX ACT HOLDING THAT THE OBJECTS OF THE TRUST ARE NOT CHARITABLE IN NATURE AND THAT THE SAME ARE FOR THE BENEFIT OF A PARTICULAR 2 ITA NO. 191/NAG/2013 SECTION OF THE SOCIETY. ON THE FACTS AND CIRCUMSTANCES OF TH E CASE THE ACTION OF THE LEARNED CIT IS IMPROPER AND UNJUSTIFIED. 2. WHILE REJECTING THE REGISTRATION AS SOUGHT BY THE ASSESSEE UNDER SECTION 80G OF I.T. ACT IT WAS HELD AS UNDER : MAHESHWARI SAMAJ TRUST, NEW RADHAKISAN PLOTS, DISTT. AKOLA HAS MADE A N APPLICATION IN FORM NO. 10 - G ON 16 - 10 - 2012 SEEKING REGISTRATION UNDER SECTION 80G OF THE I.T. ACT, 1961. THE TRUST HAS EARLIER FILED APPLICATION IN FORM NO. 10G ON 27 - 01 - 2011 SEEKING APPROVAL U/S 80G OF THE I.T. ACT, 1961. THE SAME WAS REJECTED ON THE GROUND THAT THE MAIN OBJECT OF THE TRUST AS PER THE BYE - LAWS IS TO CONDUCT VARIOUS ACTIVITIES FOR OVERALL DEVELOPMENT OF /RAJASTHANI SAMAJ WHICH ARE NOT CHARITABLE IN NATURE WITHIN THE MEANING OF SECTION 80G. THEREFORE, THE TRUST WAS ASKED TO AMEND THE BYE - LAWS AND APPLY FOR GRANT OF REGISTRATION AFRESH. SHRI PRAVIN BAHETI, CA AND AUTHORISED REPRESENTATIVE OF THE TRUST ATTENDED ON 12 - 03 - 2013 AND STATED THAT THERE IS NO NEED TO AMEND THE BYE - LAWS AND THE TRUST IS ELIGIBLE FOR GRANT OF APPROVAL U /S 80G. AS THE MATTER HAS ALREADY BEEN DECIDED WHILE DISPOSING OFF TRUSTS EARLIER APPLICATION, I AM OF THE VIEW THAT THE OBJECTS OF THE TRUST ARE NOT CHARITABLE IN NATURE INASMUCH AS THESE ARE FOR THE BENEFIT OF A PARTICULAR SECTION OF THE SOCIETY. MOREOVER, THE TRUST HAS ALSO NOT AMENDED ITS BYE - LAWS. CONSIDERING THE ABOVE FACTS APPLICATION IN FORM NO. 10G FILED BY THE TRUST ON 16 - 10 - 2012 IS HEREBY REJECTED. 3. CHALLENGING THE ABOVE ORDER OF LEARNED COMMISSIONER, LEARNED A.R. MR. RAJESH LOYA HAS PLEADED THAT AS PER THE OBJECTS OF THE TRUST THE SAME WAS NOT FOR A PARTICULAR COMMUNITY OR CASTE BUT IN THE SAID OBJECTS A VERY WIDE TERM I.E. RAJASTHANI SAMAJ WAS MENTIONED. THE TR UST IS NOT FOR THE BENEFIT OF ANY INDIVIDUAL OR A GROUP OF INDIVIDUALS. ALTHOUGH THE NAME OF THE TRUST IS MAHASHWARI SAMAJ TRUST BUT AS PER THE MEMORANDUM OF ASSOCIATION THE OBJECT IS FOR THE BENEFIT OF THE SOCIETY BY CONSTRUCTING HOSTELS, COLLEGES , LIB RARY, HOSPITAL ETC. THEREFORE, THE OBJECT IS NOT FOR THE BENEFIT OF A PARTICULAR CASTE. LEARNED A.R. HAS 3 ITA NO. 191/NAG/2013 ALSO PLACED ON RECORD IN THE COMPILATION, AN APPROVAL GRANTED UNDER SECTION 80G OF THE I.T. ACT WHICH WAS RELEVANT FOR THE PERIOD 01 - 04 - 2003 TO 31 - 03 - 2 008 (DATE NOT LEGIBLE) BEARING F NO.CIT - I/NOT LEGIBLE/NOT LEGIBLE/2003 - 04. LEARNED A.R. HAS PLEADED THAT A RENEWAL OF 80G CERTIFICATE IS REQUIRED, HENCE THE ASSESSEE HAS AGAIN SUBMITTED THE APPLICATION FOR RENEWAL OF FORM NO. 10G WHICH WAS REJECTED BY THE LEARNED COMMISSIONER. IN SUPPORT OF THE LEGALITY OF THE ISSUE HE HAS PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1) AHMEDABAD RANA CASTE ASSOCIATION V/S. CIT (1971) 82 ITR 704 (SC). 2) HIRALAL BHAGWATI V/S. CIT (2000) 246 ITR 188 (GUJ.). 4. LEARNED A.R . HAS PLEADED THAT ONCE A REGISTRATION UNDER SECTION 12A IS GRANTED TO A CHARITABLE INSTITUTION THEN THE BENEFIT OF EXEMPTION UNDER SECTION 80G SHOULD NOT BE DENIED. IN THIS CONNECTION HE HAS INFORMED THAT THE ASSESSEE HAS FILED AN APPLICATION FOR ISSUE OF TRUE COPY OF CERTIFICATE UNDER SECTION 12A OF I.T. ACT BUT THE LEARNED ITO (HQ) FOR CIT - I, NAGPUR HAS INFORMED THAT THE SAME WAS NOT TRACEABLE PRESENTLY. ONE MORE CASE LAW CITED IS SONEPAT HINDU EDUCATIONAL AND CHARITABLE SOCIETY V/S. CIT (2005) 278 ITR 262 (P&H). 5. FROM THE SIDE OF THE REVENUE LEARNED D.R. MR. NARENDRA KANE APPEARED AND PLEADED THAT AS PER THE INSERTION OF CERTAIN NEW CLAUSES IN THE PROVISIONS OF SECTION 80G(5)(III) IT IS PROVIDED THAT THE PROVISIONS APPLIES TO DONATIONS TO ANY INSTITUT ION ESTABLISHED FOR THE CHARITABLE PURPOSE BUT INSTITUTION IS NOT CREATED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. IN THE PRESENT CASE SINCE THE ASSESSEE HAS NOT DEMONSTRATED THAT THE ACTIVITY OF THE TRUST IS FOR GENERAL PUBLIC UTILI TY, THEREFORE, LEARNED COMMISSIONER WAS JUSTIFIED IN REJECTING THE REGISTRATION UNDER SECTION 80G OF I.T. ACT. 4 ITA NO. 191/NAG/2013 6. WE HAVE PERUSED THE MATERIAL PLACED BEFORE US. IN OUR CONSIDERED OPINION THE REASON GIVEN BY THE LEARNED COMMISSIONER FOR REJECTION OF 80G REG ISTRATION WAS NOT IN ACCORDANCE WITH THE LAW PRONOUNCED IN THIS REGARD. IN A CRYPTIC MANNER THE LEARNED COMMISSIONER HAS HELD THAT THE OBJECT OF THE TRUST WAS FOR THE BENEFIT OF RAJASTHANI SAMAJ. BUT ACCORDING TO OUR HUMBLE OPINION THE LEARNED COMMISSION ER WAS REQUIRED TO EXAMINE THAT THE ACTIVITY OF THE TRUST WAS FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR FOR A PARTICULAR CASTE. ONLY AFTER ASCERTAINING CERTAIN FACTS ABOUT THE APPLICATION OF RECEIPTS A CORRECT VIEW CAN BE ADOPTED. IF THE APP LICATION OF RECEIPTS ARE FOR THE BENEFIT FOR GENERAL PUBLIC THEN IT IS NOT JUSTIFIABLE TO HOLD THAT THE TRUST WAS CREATED FOR THE PURPOSE OF A PARTICULAR RELIGIOUS COMMUNITY. IF THE OBJECT OF THE TRUST FOR THE BENEFIT OF A LARGE SECTION OF SOCIETY AND WHER E THE SPECIFIC INDIVIDUALS ARE NOT IDENTIFIED THEN ALSO A BENEFIT OF EXEMPTION CAN BE GRANTED AS HELD IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION V/S. CIT (1971) 82 ITR 704 (SC). THEREFORE, TO APPLY THE LEGAL RATIO LAID DOWN BY THE HONBLE SUPREME COU RT IN THE AFORESAID PRECEDENT, IT IS REQUIRED TO FIRST EXAMINE THE APPLICATION OF INCOME BY THE TRUST, WHETHER USED FOR A PARTICULAR GROUP OF PERSONS OR A PARTICULAR RELIGIOUS COMMUNITY CONTAINING A SMALL SECTION OF SOCIETY. 6.1 ONE MORE PLEA HAS BEEN RAIS ED BEFORE US THAT IN A SITUATION WHEN A REGISTRATION OF A TRUST UNDER SECTION 12A HAS BEEN GRANTED THEN SUCH A TRUST SHOULD ALS O BE GRANTED REGISTRATION UNDER SECTION 80G OF I.T. ACT. THE ASSESSEE HAS PLACED RELIANCE ON A DECISION OF HONBLE GUJARAT HIGH C OURT IN THE CASE OF HIRALAL BHAGWATI V/S. CIT (2000) 246 ITR 188 (GUJ.). TO APPLY THE VERDICT OF THIS DECISION IT IS NECESSARY TO FIRST ASCERTAIN WHETHER A REGISTRATION UNDER SECTION 12A HAS BEEN GRANTED OR NOT. AS FAR AS THIS APPEAL IS CONCERNED NO POSIT IVE EVIDENCE OF 12A REGISTRATION IS PLACED ON RECORD BEFORE US. THE ONLY EVIDENCE IS THAT THE REVENUE 5 ITA NO. 191/NAG/2013 DEPARTMENT HAD NOT FURNISHED THE CERTIFIED COPY OF REGISTRATION UNDER SECTION 12A OF I.T. ACT ON THE GROUND THAT THE SAME WAS NOT AVAILABLE AT THAT POINT OF TIME. THEREFORE, TO ASCERTAIN THE CORRECT POSITION OF REGISTRATION CERTIFICATE UNDER SECTION 12A, WE DEEM IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF LEARNED COMMISSIONER. . 7. ON ACCOUNT OF THE ABOVE REASONS WE HEREBY RESTORE THIS ISSUE TO BE DE CIDED DENOVO BY THE LEARNED COMMISSIONER AFTER A PROPER EXAMINATION OF THE FACTS AND THE LAW APPLICABLE THEREON. IT IS ALSO EXPECTED THAT THE LEARNED COMMISSIONER SHALL PASS A DETAILED ORDER BY GIVING HIS FINDING ON ALL THE ISSUES AS DISCUSSED HEREIN ABOVE . RESULTANTLY THE IMPUGNED ORDER UNDER SECTION 80G IS HEREBY SET ASIDE TO BE DECIDED DENOVO AS PER LAW. GROUNDS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OP EN COURT ON THIS 21 ST DAY OF AUGUST, 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHRAWAT) (ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: AUGUST, 2015. 6 ITA NO. 191/NAG/2013 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR