Shekinah Foundation, Hyderabad V. DIT, Hyderabad

ITA 202/HYD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6434 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-08-2010
• Assessment Year: misc
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Charitable institution; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO.202/HYD/10 M/S. SHEKINA FOUNDATION, HYDERABAD. ( PAN - AACTS 3886 J) V/S. DIRECTOR OF INCOME-TAX (EXEMPTION), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.SIVA KUMAR RESPONDENT BY : SMT. VASUNDHARA SINHA. O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF THE DIRECTOR OF INCOME-TAX (EXEMPTION). 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS REGAR DING THE VALIDITY OF THE ORDER OF THE DIT(EXEMPTION) REJ ECTING THE APPLICATION OF THE ASSESSEE SEEKING RENEWAL OF APPROVAL U NDER S.80G OF THE ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS GRANTED APPROVAL UNDER S.80G OF THE ACT RIG HT FROM 3.5.2001 TO 31.3.2009 BY THE DEPARTMENT. ASSESSEE'S APPL ICATION FOR RENEWAL OF APPROVAL UNDER S.80G FROM 1.4.2009 ONWAR DS WAS REJECTED BY THE DIRECTOR (EXEMPTION) ON THREE GROUNDS. THE FI RST GROUND OF THE DIT(EXEMPTION) TO REJECT THE APPLICATION FOR RENEWAL OF APPROVAL UNDER ITA NO.202/HYD/10 M/S. SHEKINA FOUNDATION, HYDERABAD. . 2 S.80G WAS THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF INCOME OF THE PRESIDENT OF THE ASSESSEE-SOCIETY, WHO WAS STATED TO BE WORKING ON A FULLTIME BASIS FOR THE OBJECTS OF THE SOCIETY AND TH E SECOND REASON FOR REJECTING THE APPLICATION OF THE ASSESSEE WAS THAT T HE ASSESSEE COULD NOT FURNISH FULL ADDRESSES OF THE DONORS AND THERE BY VIOLATED THE PROVISIONS OF S.11 READ WITH S.13 OF THE INCOME-TAX ACT . THE THIRD REASON OF REJECTION OF THE ASSESSEE'S APPLICATION BY THE DIT(EXEMPTION) WAS THAT THE ASSESSEE TRUST WAS NOT REGISTE RED UNDER THE A.P. CHARITABLE AND HINDU RELIGIOUS INSTITUTIONS AN D ENDOWMENTS ACT, 1987. HE SUBMITTED THAT THE OBJECTS OF THE ASSESSEE SOCIETY WERE ADMITTEDLY CHARITABLE IN NATURE AND NONE OF THESE GRO UNDS MENTIONED BY THE DIT(EXEMPTION) FOR REJECTING THE APPLICATION O F THE ASSESSEE ARE SUSTAINABLE. THE LEARNED DEPARTMENTAL REPRESENTATIVE SU BMITTED THAT THE ASSESSEE INSPITE OF THE MANY OPPORTUNITIES ALLOWED HA D NOT COOPERATED WITH THE DEPARTMENT AND COULD NOT FILE NECE SSARY DETAILS BEFORE THE DIT(EXEMPTION). SHE RELIED ON THE ORDER OF THE DIT(EXEMPTION). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND T HAT THERE IS NO DISPUTE THAT THE ASSESSEE SOCIETY'S OBJECTS WERE CHARITABLE IN NATURE. ASSESSEE WAS GRANTED APPROVAL UNDER S.80G FR OM 3.5.2001 AND WAS RENEWED FROM TIME TO TIME TILL 31.3.2009. T HE PRESENT APPLICATION OF THE ASSESSEE FOR RENEWAL OF APPROVAL UNDE R S.80G WAS REJECTED BY THE DIT(EXEMPTION) ON THREE GROUNDS. THE FIRST GROUND FOR REJECTION OF THE APPLICATION OF THE ASSESSEE WAS THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCES FROM WHICH THE PRESIDENT OF THE ASSESSEE-SOCIETY WAS MAKING HIS LIVELIHOOD. WE FIND THAT TH E ASSESSEE TRUST HAS NO OBLIGATION TO EXPLAIN THE SOURCES OF LIVEL IHOOD OF ITS PRESIDENT. THERE COULD NOT BE ANY PRESUMPTION THAT I F THE SOURCES ITA NO.202/HYD/10 M/S. SHEKINA FOUNDATION, HYDERABAD. . 3 FROM WHICH THE PRESIDENT OF THE SOCIETY WAS MAKING HIS L IVELIHOOD COULD NOT BE EXPLAINED FULLY, THE BOOKS OF ACCOUNT MAINTAINE D BY THE ASSESSEE SOCIETY COULD BE HELD AS NOT TRUE AND CORRECT. TH E ASSESSEE SOCIETY IS OBLIGED TO EXPLAIN ONLY AFFAIRS OF THE SOCIET Y AND HENCE, THIS GROUND OF THE DIT(EXEMPTION) TO REJECT THE APPLICATI ON OF THE ASSESSEE UNDER S.80G IS NOT SUSTAINABLE IN LAW. THE SECOND GRO UND ON WHICH THE APPLICATION UNDER S.80G WAS REJECTED WAS THAT THE A SSESSEE COULD NOT FURNISH FULL ADDRESSES OF THE DONORS AND THEREBY VIO LATED THE PROVISIONS OF S.11 READ WITH S.13 OF THE ACT. WE FIND THAT THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE ASSE SSEE SOCIETY IS IN A POSITION TO FURNISH THE NECESSARY DETAILS BE FORE THE DIT (EXEMPTION). IN THESE FACTS, WE HOLD THAT IT WOULD BE IN THE INTERESTS OF JUSTICE TO SET ASIDE THE ISSUE TO THE FILE OF THE DIT( EXEMPTION) WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LA W, AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE OF HEAR ING. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE DEPARTMENT AND SHALL BE AT LIBERTY TO FILE NECESSARY DETAILS ASKED FOR BY THE DEPA RTMENT. WE DIRECT ACCORDINGLY. AS FOR THE THIRD GROUND ON WHICH THE APP LICATION UNDER S.80G WAS REJECTED, VIZ. THE ASSESSEE WAS NOT REGISTERED UN DER THE A.P. CHARITABLE AND HINDU RELIGIONS INSTITUTIONS AND EN DOWMENTS ACT, 1987, WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE WITH THE DECISION OF THE NAGPUR BENCH OF THE TRIBUNAL IN AG RICULTURAL PRODUCE &MARKET COMMITTEE TELHARA & ORS. V/S. CIT (97 TTJ 165 (NAG), WHICH WAS FOLLOWED BY THE HYDERABAD BENCH OF TH E TRIBUNAL IN THE CASE OF M/S. KAMALAKAR MEMORIAL CHARITABLE TRUST V/ S. DIT (EXEMPTION), HYDERABAD, VIDE ORDER DATED 5.3.2010 IN ITA NO.1145/HYD/09. ACCORDINGLY THIS GROUND OF THE DIT(EXEM PTION) FOR REJECTING THE ASSESSEE'S APPLICATION FOR RENEWAL IS NOT VAL ID. WITH THESE OBSERVATIONS, WE SET ASIDE THE ORDER OF THE DIT(EX EMPTION) AND ITA NO.202/HYD/10 M/S. SHEKINA FOUNDATION, HYDERABAD. . 4 RESTORE THE MATTER TO HIS FILE TO DECIDE THE ISSUE AFRE SH IN ACCORDANCE WITH LAW, AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE 5. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 3.9.2010 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 3.9.2010 COPY FORWARDED TO: 1. M/S. SHEKINA FOUNDATION, 4-3-2, OLD NATIONAL HIGHW AY6, HAYATHNAGAR, HYDERABAD 501 505. 2. DIRECTOR OF INCOME TAX (EXEMPTION), HYDERABAD 3. DY. DIRECTOR OF INCOME TAX (EXEMPTION), HYDERABAD 4. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.