RAMADEVI EDUCATION TRUST, THANE V. CIT, THANE

ITA 1940/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71941 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-02-2013
• Assessment Year: misc
• Appeal Filed On: 09-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S ATISH CHANDAK
• Keywords: Charitable institution; Opportunity of being heard
• Section: 80G; 12AA

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO.1939/M/2011 ./I.T.A. NO.1940/M/2011 SMT. RAMADEVI EDUCATINAL TRUST, 103, GANARAJ TOWERS, OPP. SHIV SENA SHAKHA, M R. RAJDEEP SOC., NAUPADA, THANE (W) 400 602. / VS. CIT - II, 9 TH FLOOR, VARDAAN BUILDING, MIDC, WAGLE IND. ESTATE, THANE - 400 604. ./ PAN : AAITS 7108 K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SATISH CHANDAK / RESPONDENT BY : SHRI SANJEEV JAIN, DR / DATE OF HEARING : 19.12.2013 / DATE OF PRONOUNCEMENT : 19.12.2013 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. THESE TWO APPEALS ARE FILED BY THE ASSESSEE ON 9.3.2011 A GAINST THE ORDERS OF THE CIT - II, THANE PASSED U/S 12AA(3) AND 80G OF THE ACT . SINCE, THE ISSUES INVOLVED IN THESE TWO APPEALS ARE CONNECTED , THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED IN THIS COMPOSITE ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN T HE SUCCEEDING PARAGRAPHS. 2. AT THE OUTSET, SHRI SATISH CHANDAK, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO ITA NO. 1939/M/ 2011 AND MENTIONED THAT THE APPEAL IS FILED AGAINST THE ORDER OF THE CIT - II, THANE WHO REJECTED THE APPLICATION FOR REGISTRATION OF THE TRUST U/S 12AA OF THE ACT. THE CIT ORDER WAS PASSED AFTER EXPIRE OF PERIOD OF 6 MONTHS. REFERRING TO GROUND NO.2 OF THIS APPEAL, LD COUNSEL MENTI ONED THAT THE CIT - II, THANE REJECTED THE REGISTRATION FOR THE REASONS NON - SUSTAINABLE IN LAW. FURTHER, LD COUNSEL REFERRED TO THE SECOND APPEAL ITA NO.1940/M/2011 AND MENTIONED THAT THE 2 APPEAL FILED AGAINST THE ORDER OF THE CIT - II, THANE, WHO REJECTED THE APPLICATION FOR APPROVAL OF THE TRUST U/S 80G OF THE ACT . AGAIN, THIS ORDER WAS PASSED PASSING AFTER EXPIRY OF 6 MONTHS PERIOD. IN EFFECT, THESE APPEAL S ARE CONNECTED WITH EACH OTHER. 3. BEFORE US , LD COUNSEL BROUGHT OUR ATTENTION TO THE FACTS AND MENTIONED THAT THE ASSESSEE IS A CHARITABLE TRUST DULY APPROVED BY THE CHARITY COMMISSIONER AND RELIED ON THE COPY OF THE TRUST DEED FOR THIS PURPOSE AS WELL AS THE CERTIFICATE OF THE CHARITY COMMISSIONER . BRINGING OUR ATTENTION TO THE IMPUGNED ORDERS OF THE CIT - II, THANE PASSED U/S 12AA & 80G OF THE ACT , LD COUNSEL MENTIONED THAT ESSENTIALLY THE ASSESSEE WAS INCORPORATED FOR THE CHARITABLE PURPOSE OF EDUCATION FOR PUBLIC PURPOSES AND THE SAME IS REGIST ERED IN THANE FOR ADMINISTRATIVE CONVENIENCE. THE TRUST IS INTENDED FOR DOING THE SAID CHARITABLE WORK IN VARI OUS STATES OF INDIA. T O START , THE ASSESSEE PURCHASED A LAND AND STARTED THE WORK IN UTTAR PRADESH (UP) IN THE NAME OF S.R. DEGREE COLLEGE. IN ADDITION, THE PRELIMINARY WORK RELATING TO SEEKING PERMISSIONS OF THE GOVERNMENT ALSO BEG A N IN RAJASTHAN. CIT REJECTED THE REGISTRATION U/S 12AA AS WELL AS THE APPROVALS U/S 80G OF THE ACT MERELY SUSPECTING THE BONA FIDES OF THE A SSESSEE. HE DID NOT APP RECIATE THE FACT THAT THE LAW DOES NOT PREVENT ASSESSEE TO HAVE REGISTER ED OFFICE IN THANE AND INITIATE THE CHARITY WORK AT UP / JAIPUR. IT IS NOT THE REQUIREMENT OF THE LAW THAT THE TRUST MUST START THE CHARITY WORKS AT THE PLACES WHERE THE TRUST IS REGI STERED. FURTHER , HE FAIRLY MENTIONED THAT THERE ARE CERTAIN NON - COMPLIANCES IN THE MATTERS OF FURNISHING OF SOME DOCUMENTS AS SPECIFIED IN PARA 3 OF THE ORDER OF THE CIT - II, THANE U/S 12AA AS WELL AS FURNISHING OF THE BOOKS OF ACCOUNTS WHICH WERE KEPT AT THE CUSTODY OF THE CHARTERED ACCOUNTANT AT THE RELEVANT POINT OF TIME. FURTHER ALSO , HE MENTIONED THAT THE TRUST IS BONA FIDE AND THE OBJECTS ARE BONA FIDE AND ALSO THE APPLICATION OF THE FUNDS FOR OBJECTS OF THE TRUST. UNDER THESE CIRCUMSTANCES, THE DEN IAL OF REGISTRATION U/S 12AA AND APPROVALS U/S 80G OF THE ACT ARE UNSUSTAINABLE IN LAW. FURTHER, HE PROMISED TO FURNISH THE BOOKS OF ACCOUNTS AS WELL AS THE R EQUISITE DOCUMENTS BEFORE THE CIT , IF THE MATTER IS REMANDED TO THE FILES OF THE AO. 4. ON THE OTH ER HAND, LD DR RELIED HEAVILY ON THE ORDERS OF THE CIT - II, THANE. HE UNDERLINED THE FACT THAT THE ASSSESSEE COMMITTED DEFAULT IN FURNISHING THE REQUISITE DETAILS AS DISCUSSED IN PARA 3 OF THE ORDER U/S 12AA(3) OF THE ACT . BRINGING OUR ATTENTION TO THE CO NTENTS OF PARA 5 AS WELL AS PARA 7 OF THE ORDER OF THE CIT, LD DR HIGHLIGHTED FACT THAT NON - FURNISHING / NON - PRODUCTION OF THE CONCERNED 3 DOCUMENTS OR BOOKS OF ACCOUNTS TO THE REVENUE. LD DR RELIED ON THE IMPUGNED ORDERS AND STATED THAT T HE FACT OF REGISTE RING THE TRUST IN THANE AND EXECUTING THE OBJECTS IN UP / JAIPUR IS NOT COMPREHENDABLE AS PER THE LD DR. FURTHER, RELYING ON THE JUDGMENT OF THE CASE OF COMMISSIONER OF INCOME - TAX - I, SALEM V. SHEELA CHRISTIAN CHARITABLE TRUST [2013] 32 TAXMANN.COM 242 (MADRAS) , LD DR MENTIONED THAT THE SPECIAL BENCH DECISION IN THE CASE OF BHAGWAD SDWARUP SHRI DEVRAHA BABA MEMORIAL SHRI HARI PARMARTH DHAM TRUST VS. CIT [2008] 111 ITD 175 STANDS REVERSED AND THEREFORE, GROUND NO.1 IN BOTH THE APPEALS, IN ANY WAY, TO BE D ISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES ON THE GROUNDS RAISED IN BOTH THE APPALS AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT PAPERS FILED BEFORE US. IT IS AN ADMITTED FACT THAT THERE IS A FAILURE ON PART OF THE ASSESSEE I N NOT ONLY PRODUCING THE BOOKS OF ACCOUNTS BEFORE THE CIT BUT ALSO IN NOT FURNISHING CERTAIN PAPERS AS DEMANDED BY THE CIT - II, THANE. THESE FAILURES ARE NOT APPRECIATED. IT IS THE DUTY OF THE ASSESSEE TO PRODUCE AND FURNISH THE BOOKS OF ACCOUNTS AND THE DETAILS WITHOUT ANY DELAY. IT IS THE DUTY OF THE ASSESEE, WHO DESIRES TO CLAIM EXEMPTIONS; TO DISCHARGE ONUS BEFORE THE GOVERNMENT AUTHORITIES. BOOKS OF ACCOUNT ARE EXPECTED TO BE IN PREMISES OF THE ASSESSEE CERTAINLY NOT WITH THE CA BUT FOR THE AUDIT REASONS, IF ANY. BOOKS OF ACCOUNTS OF THE ASSESSEE ARE THE IMPORTANT SOURCE OF INFORMATION TO KNOW THE APPLICATION OF FUNDS FOR THE OBJECTS OF THE TRUST, THE ASSESSEE. REQUEST FOR REGISTRATION CAN BE REJECTED IF THERE IS A PROBLEM WITH THE OBJECTS OR ACTIVITY OF THE TRUST. ASSESSEE NEED TO DEMONSTRATE BEFORE THE CIT THAT THE OBJECTS ARE HONORABLE AND CHARITABLE IN NATURE AND FUNDS ARE APPLIED ONLY FOR THE ACTIVITIES CONCERNING THE SAID OBJECTS AND IN ACCORDANCE WITH LAW . WE ORDER ACCOR DINGLY. FURTHER, WE ARE OF THE OPINION THAT THE LAW DOES NOT SPECIFY THAT TRUST SHOULD HAVE REGISTERED OFFICE AT THE PLACE OF ACTIVITIES OF THE TRUST. IN OUR OPINION, TRUST MAY HAVE ITS REGISTERED OFFICE AT ONE STATE IN INDIA AND THE TRUSTS ACTIVITIES CAN BE IN OTHER STATES I.E., UP OR JAIP UR. REVENUE MUST NOT RAISE SUCH OBJECTION S SO LONG AS THE TRUST IS INCORPORATED DULY UNDER LAWS EXISTING IN STATE OF MAHARASHTRA AND THE CHARITY COMMISSIONER GRANTED APPROVAL AS PER THE DUE PROCESS OF LAW FOR PUBLIC PURPOSES IN INDIA. REGARDING THE APPLICABILITY OF THE CITED JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF SHEELA CHRISTIAN CHARITABLE TRUST (SUPRA) , CIT MAY TAKE NOTICE OF IT AND REJECT THE OBJECTIONS OF THE ASSESSEE BY PASSING A SPEAKING ORD ER. PRIMA FACIE, WE FIND THAT THE SAID JUDGMENT IS 4 RELEVANT FOR THE PROPOSITION PERIOD OF SIX MONTHS PROVIDED IN SECTION 12AA(2) FOR DISPOSAL OF APPLICATION SEEKING REGISTRATION IS ONLY DIRECTORY AND, THEREFORE, NOT PASSING AN ORDER WITHIN SAID PERIOD WOULD NOT AUTOMATICALLY RESULT IN GRANTING REGISTRATION TO TRUST . AS DISCUSSED IN THE OPEN COURT, BOTH THE APPEALS RAISED BY THE ASSESSEE SHOULD BE RESTORED TO THE FILES OF THE CIT - II, THANE FOR ADJUDICATING THE MATTER AFRESH WITH A DIRECTION TO PASS A S PEAKING ORDER AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED IN BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPO SES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2013. S D / - S D / - (SANJAY GARG) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 19 .12 .2013 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI