Shree Umiya Mataji Sansthan, Kadi V. CIT (Exemption), Ahmedabad

ITA 1917/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3206 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 10-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: U S BHATI
• Keywords: Competent authority; Set aside
• Section: 80G; 12AA

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD ( CONVENED THROUGH VIRTUAL COURT ) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1917/AHD/2018 ( ASSESSMENT YEAR : NA) SHREE UMIYA MATAJI SANSTHAN AT & P.O. RAJPUR, TA. KADI, DIST. MEHSANA (NG) / VS. COMMISSIONER OF INCOME- TAX (EXEMPTIONS) AHMEDABAD ./ ./ PAN/GIR NO. : AAETS2892L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI U. S. BHATI, A.R. / RESPONDENT BY : SHRI O. P. SHARMA, CIT.DR DATE OF HEARING 15/02/2021 !'# / DATE OF PRONOUNCEMENT 16/06/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER DATED 19.06.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), AHMEDABAD (CIT(E) IN SHORT), UNDER S. 80G(5) OF THE INCOME TAX ACT WH EREBY THE REGISTRATION SOUGHT UNDER S.80G(5) OF THE INCOME TA X ACT, 1961 (THE ACT) FOR REGISTRATION OF TRUST WAS DECLINED. ITA NO. 1917/AHD/18 [SHREE UMIYA MATAJI SANSTHAN VS. CIT(E)] - 2 - 2. THE GROUND OF APPEAL RAISED BY ASSESSEE READ H EREUNDER: 1.0 THE LEARNED COMMISSIONER OF INCOME-TAX (EXEMPT IONS) ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION IN FORM NO.1OG FOR APPROVAL U/S 80G(5) OF THE INCOME TAX AC T, 1961. 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (EXEMPTI ONS) ERRED IN LAW AND ON FACTS IN CONCLUDING THAT THE APPELLAN T TRUST HAD INCURRED MORE THAN 5% OF ITS TOTAL INCOME IN RE SPECT OF RELIGIOUS PURPOSES FROM THE F.YR.2014-15 TO 2017-18 AND THEREFORE TRUST IS NOT ELIGIBLE FOR APPROVAL U/S 80 G(5) OF THE INCOME TAX ACT, 1961. 3.0 THE LD. COMMISSIONER OF INCOME-TAX (EXEMPTIONS ) ERRED IN LAW AND ON FACTS IN ARRIVING AT THE CONCLUSION THAT IN ABSENCE OF COMPLETE FORM NO. 10G, HE WAS UNABLE TO SATISFY ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE APPE LLANT TRUST AND WHETHER THE SAME WERE IN CONSONANCE WITH ITS OB JECT DESPITE THE FACT THAT HE HAD HIMSELF PASSED ORDER U /S 12AA IN THE CASE OF THE APPELLANT TRUST ON 12 TH JUNE, 2018. 4.0 THE LD. COMMISSIONER OF INCOME-TAX (EXEMPTION ) ERRED IN LAW AND ON FACTS IN NOT PROVIDING PROPER OPPORTUNIT Y TO THE APPELLANT TRUST BEFORE DISPOSAL OF THE APPLICATION. 3. BRIEFLY STATED, THE ASSESSEE TRUST APPLIED FOR R EGISTRATION UNDER S.12AA OF THE ACT, WHICH WAS RECEIVED VIDE ORDER DA TED 12.06.2018 FROM THE CIT(E), AHMEDABAD. AS A SEQUEL THERETO, T HE ASSESSEE APPLIED FOR APPROVAL UNDER S.80G(5) OF THE ACT IN P RESCRIBED FORM NO. 10G BEFORE THE CIT(E), AHMEDABAD FOR THE PURPOS ES OF AVAILING EXEMPTION UNDER S.80G OF THE ACT. IN THE COURSE OF THE PROCEEDINGS BEFORE THE CIT(E), IT WAS NOTICED BY HIM THAT ACTIV ITY OF THE ASSESSEE ARE RELIGIOUS IN NATURE AND THE EXPENDITUR E INCURRED IN RELIGIOUS ACTIVITIES HAVE EXCEEDED THE THRESHOLD LI MIT OF 5% OF THE TOTAL RECEIPTS SET OUT IN 80G(5B) OF THE ACT FOR F. Y. 2014-15, 2015- 16 & 2016-17. THE CIT(E) ALSO INTER ALIA OBSERVED THAT THE ASSESSEE HAS FAILED TO ADDUCE DOCUMENTARY EVIDENCES TO SATISFY HIM ABOUT THE GENUINENESS OF ITS ACTIVITIES AS ALSO WHE THER THESE ACTIVITIES ARE IN CONSONANCE WITH ITS STATED OBJECT S. CONSEQUENTLY, ITA NO. 1917/AHD/18 [SHREE UMIYA MATAJI SANSTHAN VS. CIT(E)] - 3 - THE CIT(E) CAME TO THE CONCLUSION THAT THE TRUST DO ES NOT MEET THE REQUIREMENTS OF LAW FOR APPROVAL UNDER THE PROVISIO NS OF SECTION 80G(5) OF THE ACT. CONSEQUENTLY, THE CIT(E) DENIED THE APPROVAL UNDER S.80G(5) OF THE ACT SOUGHT BY THE APPLICANT T RUST. 4. AGGRIEVED, THE ASSESSEE TRUST PREFERRED APPEAL B EFORE THE TRIBUNAL. 5. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED COUNSEL FOR THE ASSESSEE, MR. BHATI, SUBMITTED THAT THE WHO LE ACTION OF THE CIT(E) IS PERFUNCTORY AND WITHOUT DUE APPLICATION O F MIND. INVITING OUR ATTENTION TO THE IMPUGNED ORDER OF REJECTION IN CHALLENGE, THE LEARNED COUNSEL REFERRED PARA NO.3 OF ITS ORDER WHE REBY AN AVERMENT WAS MADE THAT THE MAIN OBJECT TO THE TRUST IS RELIG IOUS IN NATURE CLAIMED TO BE STATED BY THE ASSESSEE. THE LEARNED COUNSEL THEREAFTER ADVERTED TO A CORRIGENDUM TO ORDER UNDER S.80G(5) O F THE ACT DATED 10.09.2018 WHEREIN THE CIT(E) HIMSELF HAS DELETED P ARA NO.3 OF THE MAIN ORDER ON THE GROUNDS OF INADVERTENT MISTAKE. THE LEARNED COUNSEL POINTED OUT THAT WHEN THE MAIN ORDER AND TH E CORRIGENDUM THERETO READ IN TANDEM, IT WILL BE APPARENT THAT A FUNDAMENTAL MISTAKE WAS COMMITTED IN THE MAIN ORDER AND THE WHO LE ADJUDICATION PROCESS WAS PROCEEDED ON THE PREMISE THAT THE TRUST IS RELIGIOUS IN NATURE WHICH MISTAKE HAS A DIRECT BEARING ON THE CO NCLUSION DRAWN ADVERSE TO THE ASSESSEE. WHILE THE FUNDAMENTAL MIS TAKE IN PARA NO.3 WAS CURED BY ITS OMISSION BY WAY OF CORRIGENDUM, TH E ERRONEOUS CONCLUSION HOWEVER CONTINUED. THE LEARNED COUNSEL THEREAFTER REFERRED TO A TABULATED STATEMENT REPRODUCED AT PAG E NO.3 OF THE IMPUGNED ORDER UNDER S.80G(5) OF THE ACT AND POINTE D OUT THAT THE NATURE OF EXPENSES INCURRED BY WAY OF MANDIR RASODA EXPENSES (RS.7.26 LAKHS), MANDIR NIBHAV EXPENSES (RS.4.65 LA KHS), KAYAMI POONAM EXPENSES (RS.0.84 LAKHS), PAGPADA SANGH EXPE NSE ITA NO. 1917/AHD/18 [SHREE UMIYA MATAJI SANSTHAN VS. CIT(E)] - 4 - (RS.11,000/-) & STATIONARY EXPENSES (RS.39,991/-) O UT OF TOTAL EXPENSES INCURRED AMOUNTING TO RS.13.37 LAKHS HAS N OT BEEN CONTROVERTED BY THE CIT(E). IT WAS THEREAFTER SUBM ITTED THAT THESE EXPENSES HAVE BEEN HELD TO BE EXPENSES NOT AKIN TO RELIGIOUS EXPENSES IN SEVERAL JUDICIAL PRECEDENTS. THE LEARN ED COUNSEL REFERRED TO THE DECISION OF SHIV MANDIR DEVSTTAN PANCH COMMITTEE SANSTAN VS. CIT-1, NAGPUR [ITA NO.223/NAGPUR/2009 D ATED 11.10.2012] FOR THE PROPOSITION THAT FREE FOOD EXPENSES (RASOD A EXPENSES), BUILDING MAINTENANCE EXPENSES ETC. DO NO T FALL WITHIN THE AMBIT OF RELIGIOUS ACTIVITIES. THE LEARNED COU NSEL THUS SUBMITTED THAT WHEN THE PROPOSITION LAID DOWN IN TH E DECISION OF THE CO-ORDINATE BENCH IS APPLIED TO THE FACTS OF THE CA SE, THE EXPENSES INCURRED FOR RELIGIOUS ACTIVITIES WOULD BE LESS THA N 5% OF INCOME AND CONSEQUENTLY THE REQUEST FOR APPROVAL UNDER S.8 0G OF THE ACT CANNOT BE DENIED IN THE FACTS OF THE CASE. THE LEA RNED COUNSEL FINALLY SUBMITTED THAT REGISTRATION UNDER S.12AA OF THE ACT GRANTED BY THE CIT(E) HAS NOT BEEN DISTURBED AND IS CONTINU ING TO BE EFFECTIVE TILL DATE. THUS, THE WHOLE PURPOSE OF RE GISTRATION WOULD BE RENDERED INFRUCTUOUS SANS THE APPROVAL UNDER S.80G OF THE ACT. THE LEARNED COUNSEL ACCORDINGLY URGED FOR A DIRECTION T O THE CIT(E) TO REVISIT THE FACTUAL POSITION AND GRANT APPROVAL UND ER S.80G OF THE ACT AS SOUGHT. 6. THE LEARNED DR FOR THE REVENUE, ON THE OTHER HAN D, RELIED UPON THE ORDER PASSED UNDER S.80G(5) OF THE ACT SOU GHT TO BE ASSAILED BY THE ASSESSEE. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND MATERIAL PLACED AND ADVERTED TO IN TERMS OF RULE 18 (5) INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. AS POINTED OUT O N BEHALF OF THE ASSESSEE, PARA 3 OF THE ORDER OF THE CIT(E) SEEKS T O PROCEED ON ITA NO. 1917/AHD/18 [SHREE UMIYA MATAJI SANSTHAN VS. CIT(E)] - 5 - PREMISE THAT ASSESSEE TRUST IS RELIGIOUS IN NATURE IN EXCLUSION TO OTHER ACTIVITIES. HOWEVER, THE CIT(E) HIMSELF HAS DISLODGED THIS ASSUMPTION IN THE CORRIGENDUM ISSUED THEREAFTER. T HUS, THE VERY PREMISE THAT THE ASSESSEE IS RELIGIOUS IN NATURE IN PITH AND SUBSTANCE IS SHAKEN TO ITS ROOTS. THE FINDINGS OF THE CIT(E) APPEARS TO HAVE PROCEEDED ON THIS VERY PREMISE. THUS, THE WHOLE CO NCLUSION DERIVED ON A SHAKY GROUND IS DAMP SQUIB IN THE ABSENCE OF A NY DEFINITE FACT IN THIS REGARD. CONSEQUENTLY, THE SECOND PLEA RAIS ED ON BEHALF OF THE ASSESSEE THAT CERTAIN EXPENDITURE TABULATED IN PAGE 3 OF THE CIT(E)S ORDER FALL OUTSIDE THE AMBIT OF RELIGIOUS ACTIVITY IS NOT BEING EXAMINED AT THIS STAGE. NO SUCH PLEA HAS BEE N DEALT WITH BY CIT(E). IF THE PLEA RAISED ON BEHALF OF THE ASSESS EE HAVING REGARD TO THE NATURE OF EXPENSES IS FOUND TO BE TRUE, THE THR ESHOLD LIMIT OF INCURRED EXPENDITURE NOT EXCEEDING 5% OF ITS TOTAL INCOME AS STIPULATED UNDER S.80G(5B) OF THE ACT WILL NOT BE B REACHED AND THEREFORE THE ADVERSE INFERENCE DRAWN AGAINST THE A SSESSEE TRUST WOULD NOT BE SUSTAINABLE IN LAW. 8. THUS, IN TOTALITY, IT IS CONSIDERED EXPEDIENT WI TH THE ORDER OF THE CIT(E) DATED 19.06.2018 IS SET ASIDE AND THE E NTIRE MATTER IS RESTORED BACK TO THE FILE OF THE CIT(E) / COMPETENT AUTHORITY FOR DE NOVO CONSIDERATION IN THE LIGHT OF FACTS AVAILABLE ON R ECORD AS WELL AS FRESH FACTS THAT MAY COME TO THE LIGHT OR POINTE D OUT TO HIM BY THE ASSESSEE TRUST. NEEDLESS TO SAY, IT SHALL BE O PEN TO THE ASSESSEE TRUST TO PLACE ALL ARGUMENTS AND EVIDENCES IN CORRO BORATION, AS MAY BE DEEMED NECESSARY, IN SUPPORT OF ITS APPLICATION FOR APPROVAL 80G OF THE ACT PENDING BEFORE THE COMPETENT AUTHORITY. PERTINENT HERE TO OBSERVE THAT THE FAIR OPPORTUNITY SHALL BE GRANT ED TO THE ASSESSEE TRUST BEFORE COMING TO THE CONCLUSION AS DIRECTED. THE COMPETENT AUTHORITY SHALL MAKE EVERY POSSIBLE ENDEAVOR TO DIS POSE OF THE APPLICATION FOR APPROVAL UNDER S.80G OF THE ACT IN QUESTION WITHIN 3 ITA NO. 1917/AHD/18 [SHREE UMIYA MATAJI SANSTHAN VS. CIT(E)] - 6 - MONTHS FROM THE DATE OF SERVICE OF THIS ORDER. THE ASSESSEE TRUST SHALL EXTEND FULL CO-OPERATION IN SPEEDY DISPOSAL O F THE MATTER WITHOUT ANY DEMUR. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (RAJPAL YADAV) (PRADIP KUMA R KEDIA) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 16/06/2021 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED ON 16/06/2021