Vigyan Foundation, Lucknow V. Commissioner of Income Tax (Exemption), Lucknow

ITA 206/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1091 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 30-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S MINHAS
• Assessee Lawyers: R K VERMA
• Keywords: Charitable institution
• Section: 80G; 12A; 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 206/LKW/2017 ASSESSMENT YEAR: N.A. VIGYAN FOUNDATION 16/626, INDIRA NAGAR LUCKNOW V. CIT (EXEMPTION) LUCKNOW T AN /PAN : AAATV4615L (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI R. K. VERMA, ADVOCATE RESPONDENT BY: SHRI J.S. MINHAS, CIT (D.R.) DATE OF HEARING: 15 0 3 201 8 DATE OF PRONOUNCEMENT: 20 0 3 201 8 O R D E R PER P ARTHA SARA THI CHAUDHURY, J.M : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW DATED 17/1/2017 PASSED UNDER SECTION 80G(5)(VI) OF THE ACT. 2 . THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST REJECTION OF APPLICATION FOR EXEMPTION UNDER SECTION 80G OF THE ACT. FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), WE FIND THAT HE HAS DENIED EXEMPTION BASICALLY ON CERTAIN FACTORS. FIRSTLY IT IS STATED THAT ASSESSEE HAS FAILED TO PRODUCE THE BOOKS OF ACCOUNT AND VOUCHERS WHICH COULD HAVE SUBSTANTIATED THE GENUINE UTILIZATION OF THE HEFTY GRANTS RECEIVED BY THE ASSESSEE FROM VARIOUS FOREIGN INSTITUTIONS. SECONDLY IT WAS OBSERVED BY THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) THAT WHENEVER GRANT WAS RECEIVED, MAJORITY PORTION WAS ITA NO.206/LKW/2017 PAGE 2 OF 4 USED FOR ADMINISTRATIVE EXPENSES AND MEAGER PORTION WAS ON L Y USED FOR ACTUAL ACTIVITIES AND THEREFORE IT WAS DIFFICULT TO CONCLUDE WHETHER SOCIETY IS SOLELY FOR CHARITABLE PURPOSE. THIRDLY, THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) HAS REFERRED TO SECTION 13(1)(C) READ WITH SUB - SECTION (3). SECTION 13(1)(C) PROVIDES THAT WHERE A PART OF INCOME OF CHARITABLE AND RELIGIOUS TRUST OR INSTITUTIONS ENSURES OR IS USED OR APPLIED DIRECTLY OR INDIRECTLY FOR THE BENEFI T OF THOSE PERSONS SPECIFIED IN SECTION 13(3), THAT A TRUST OR INSTITUTION FORFEITS THE EXEMPTIONS UNDER SECTION 11 EVEN IF ONLY A SMALL PORTION OF MONEY IS UTILIZED OR USED OR APPLIED FOR BENEFIT OF A PERSON MENTIONED IN SECTION 13(3). THE LD. COMMISSION ER OF INCOME - TAX (EXEMPTIONS) THEREAFTER RECORDS THAT THE AFOREMENTIONED VIOLATION HAS BEEN CLEARLY MENTIONED IN THE AUDIT REPORT UNDER SECTION 10B WHEREIN IT HAS BEEN ACCEPTED BY THE AUDITORS OF THE ASSESSEE THAT A PAYMENT WAS MADE BY THE ASSESSEE TO ANY SUCH PERSON (PERSON REFERRED TO IN SECTION 13(3)) DURING THE PREVIOUS YEAR BY WAY OF SALARY, ALLOWANCE OR OTHERWISE WHICH LEAVES NO ROOM FOR ANY DILEMMA REGARDING THE ALLEGED VIOLATION OF NORMS LAID DOWN UNDER SECTION 13(1)(C) OF THE ACT ON THE PART OF THE ASSESSEE. THEREFORE, ON THESE THREE GROUNDS, THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) HAS REFUSED TO GRANT EXEMPTION UNDER SECTION 80G OF THE ACT TO THE ASSESSEE - APPLICANT. 3 . AT THE TIME OF HEARING BEFORE US, THE LD. A.R. OF THE ASSESSEE PLACED BEFO RE US VOLUMINOUS PAPER BOOK AND SHOWED US RELEVANT PORTION WHEREBY ALL THE BOOKS OF ACCOUNT AND VOUCHERS WERE PRODUCED AND SUBMITTED BEFORE THE DEPARTMENT FOR EXAMINATION. THE LD. A.R. OF THE ASSESSEE ALSO DENIED OTHER TWO CHARGES LEVELED AGAINST THE ASSE SSEE BY THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS). 4 . THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS). ITA NO.206/LKW/2017 PAGE 3 OF 4 5 . WE HAVE PERUSED THE CASE RECORDS, ANALYSED THE FACTS AND CIRCUMSTANCES AND WE FIN D THAT ON ONE HAND ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) STATES THAT DOCUMENTARY EVIDENCES WERE NOT PRODUCED WHEREAS BEFORE US IN THE PAPER BOOK THE LD. A.R. OF THE ASSESSEE DEMONSTRATES THAT THESE DOCUMENTS WERE PLACED BEFORE THE DEPART MENT. FURTHERMORE, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT ON THE BASIS OF REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12A , EXEMPTION OUGHT TO HAVE BEEN GRANTED TO THE ASSESSEE SOCIETY. HOWEVER, THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) HAS POINTED OUT CERTAIN LEGAL DISCREPANCIES BY WAY OF SECTION 13(1)(C) READ WITH SECTION 13(3) AND ALSO HAS POINTED OUT THAT OUT OF GRANTS RECEIVED , ONLY A SMALL AMOUNT IS SPENT FOR ACTUAL ACTIVITY OF THE SOCIETY AND REST ARE USED AS ADMINISTRATIVE EXPENSE S. THUS, THE ISSUE NEEDS DETAILED INVESTIGATION AND THEREFORE IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) AND RESTORE THE MATTER BACK TO HIS FILE TO INVESTIGATE THE ISSUE AFRESH AND PASS AN ORDER AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 / 0 3 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT M EMBER JUDICIAL MEMBER DATED: 20 TH MARCH , 201 8 JJ: 1503 ITA NO.206/LKW/2017 PAGE 4 OF 4 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR