Uttranchal Tennis Association, Dehradun V. CIT, Dehradun

ITA 2062/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97061 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 29-07-2015
• Assessment Year: misc
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDREKAR
• Assessee Lawyers: S K MATTA
• Keywords: Charitable institution; Question of law
• Section: 80G; 12AA; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMB ER ITA NO: 2062/DEL/2013 AY : -- UTTRANCHAL TENNIS ASSOCIATION VS. C IT 42/24, CIRCULAR ROAD, DEHRADUN DEHRADUN (PAN AAAAU1321M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MATTA, CA RESPONDENT BY :SHRI J.P. CHANDREKAR, SR. DR DATE OF HEARING :29.7.2015 DATE OF PRONOUNCEMENT :14. 8.2015 O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIR ECTED AGAINST THE ORDER OF LD. CIT , DEHRADUN U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT D ATED 26.2.2013 WHEREIN THE LD. CIT(A) HAS REJECTED THE APPLICATION FILED BY THE AS SESSEE FOR REGISTRATION U/S 12A(A) OF THE INCOME TAX ACT, 1961. 2. THE REGISTRATION WAS REJECTED ON THE FOLLOWI NG GROUNDS :- I) THE OBJECTS OF THE ASSESSEE SOCIETY ARE MULTIP LE. SOME OBJECTS WHEN UNDERTAKEN, CAN BE COMMERCIAL VENTURES. II) THE OBJECTS ARE CHARITABLE AND SOME ARE NOT, THE TRUSTEES IN THEIR, DISCRETION CAN APPLY THE INCOME OR PROPERTY TO THOS E OBJECTS WHICH ARE NOT CHARITABLE. THE OBJECT OF SPORTS PROMOTION GETS BLURRED. III) THERE IS NO EVIDENCE THAT THE SOCIETY HAS B EEN PROMOTED THE SPORT OF TENNIS. THE EVIDENCE PRODUCED DISCLOSES INSIGNIFIC ANT CHARITABLE ACTIVITY. ITA NO.2062DEL/2013 UTTRANCHAL TEN NIS ASSOCIATION VS. CIT 2 IV) NO EVIDENCE OF ANY SUBSTANTIAL ACTIVITY TO SHOW THE GENERAL PUBLIC ARE BENEFITED, IS PRODUCED. V) SPOT INSPECTION SUGGESTS THAT THE ACTIVITIES HAV E NOT BEEN TAKEN UP AFTER 2003 DUE TO PERSONAL COMPULSIONS. VI) SUBSCRIPTION/CONTRIBUTION AND TOURNAMENT EXPENS ES ARE INCURRED EXPENSES AGAINST THE SAME AND HENCE IS COVERED BY T HE FOURTH LIMB OF CLAUSE 15 OF SECTION 2 OF INCOME TAX ACT 1961. 3. WE HAVE HEARD SHRI S.K. MATTA, LD. COUNSEL FOR THE ASSESSEE AND SHRI J.P. CHANDREKAR LD. SENIOR DR ON BEHALF OF THE REVENUE. THE OBJECTS OF THE TRUST ARE AS FOLLOWS : 1. TO PROSPER THE RELATIONS OF ALL THE TENNIS UNITS, PLAYERS AND IN GENERAL OF THE SOCIETY IN THE STATE. 2. TO UNDERSTAND THE PROBLEMS OF PLAYERS OF TENNIS AND TO ERADICATE THE SAME WITH THE PHYSICAL, ECONOMIC AND MORAL SUPPORT IN THE STATE. 3. TO GET SUPPORT OF THE ALL WALKS OF LIFE IN THE SOCI ETY FOR THE IMPLEMENTATION OF THE NEW SCHEMES FOR THE BENEFIT OF TENNIS PLAYER S OF ALL AGE GROUPS 4. TO IDENTIFY THE TALENT IN SPORTS IN THE STATE AND T O HELP THROUGH THE MEDIUM OF THIS ASSOCIATION IN THE FIELD OF GAMES, E DUCATION AND GENUINE NEEDS OF THE PLAYERS THROUGH GOVT. SPORTS DEPARTMEN TS 5. TO SATISFY THE FEELING THAT TENNIS IS THE GAME OF GENERAL PUBLIC 6. TO HELP AND COOPERATE IN FORMULATION OF SCHEMES IN THE STATE WITH RESPECT TO CULTURAL, PHYSICAL, SOCIAL, MORAL, EDUCATIONAL AND SPORTS ACTIVITIES WITH THE HELP OF ADMINISTRATION AND SPORTS MINISTRY 7. TO GET SUPPORT OF GENERAL PUBLIC IN HOLDING COMPETI TIVE EVENTS OF TENNIS WITH THE HELP OF LOCAL PUBLIC IN GENERAL 8. TO HUNT THE LOCAL TALENT IN TENNIS AND TO HELP AND SUPPORT THEM FOR THEIR OVERALL DEVELOPMENT 9. TO SUPPORT THE STATE PLAYERS OF TENNIS IN THE EVENT OF SOCIAL OR OTHER DISASTER 10. TO HELP ALL TENNIS PLAYERS OF THE STATE IRRESPECTI VE OF POLITICAL AND COMMERCIAL CONSIDERATIONS AND TO REMOVE ALL THE PRO BLEMS OF TENNIS PLAYERS IN THE STATE. 11. TO PROVIDE TENNIS FACILITIES IN ALL THE DISTRICTS O F THE STATE, TO CONDUCT TENNIS COMPETITIONS AND TENNIS COACHING CAMPS TO PROVIDE F REE MEDICAL FACILITIES, RESEARCH CENTRES, TRAINING CENTRES, GAMES AND SPORT S, YOGA CENTRES, ITA NO.2062DEL/2013 UTTRANCHAL TEN NIS ASSOCIATION VS. CIT 3 LIBRARIES, FREE HOSTEL FACILITIES ETC. TO THE PLAYE RS OF TENNIS AND TO RUN AND MANAGE THESE FACILITIES. 12. TO PROPAGATE AND POPULARISE THE GAME OF TENNIS THRO UGH SPORTS DEPARTMENTS AND TO MOTIVATE STATE TENNIS UNITS. TO ORGANISE TENNIS EVENTS ON THE OCCASIONS OF DAYS OF NATIONAL INTEREST IN TH E STATE. TO PROPAGATE THE GAME OF TENNIS IN RURAL AREAS AND TO PROMOTE THIS G AME THROUGH SOCIAL AND MUTUAL BENEFITS OF RURAL AREAS 13. TO CREATE AWARENESS ABOUT TENNIS IN GENERAL PUBLIC, SPORTSMAN SPIRITS BY FOLLOWING THE LOCAL INDIAN CULTURE AND PROTECT ITS VALUES. TO CREATE THE FEELING OF SELF CONFIDENCE DISCIPLINE AND UNITY THR OUGH THE GAME OF TENNIS. 4. IN OUR CONSIDERED OPINION THE GROUNDS ON WHI CH THE REGISTRATION OF THE TRUST REJECTED BY THE LD. CIT CANNOT BE UPHELD FOR THE FO LLOWING REASONS. 5. A PLAIN READING OF THE OBJECTS DEMONSTRATE THAT THESE ARE CHARITABLE IN NATURE. WHILE GRANTING REGISTRATION, THE OBJECTS OF THE TRU ST HAVE TO BE EXAMINED AND IF THEY ARE CHARITABLE IN NATURE, REGISTRATION HAS TO BE GR ANTED. THERE IS NO DISPUTE THAT THE OBJECTS ARE CHARITABLE IN NATURE. THERE IS NO EVIDE NCE THAT THE ACTIVITIES ARE NOT GENUINE UNDER THE CIRCUMSTANCES WE HOLD THAT THE CL AIM OF THE ASSESSEE IS TO BE ALLOWED . 6. A CHARITABLE TRUST FOR PURPOSES OF STARTING AN EDUCATIONAL INSTITUTION HAD ACQUIRED LANDS FOR ABOUT RS. 17 CRORES, BUT HAD NOT OBTAINED THE NECESSARY AFFILIATION FROM THE GOVERNMENT. SINCE THERE WAS NO OTHER INFRA STRUCTURE WITH THE ASSESSEE HAVING INCURRED ONLY RS. 1,500, THE COMMISSIONER FE LT THAT THE AMOUNTS SPENT HAVING BEEN MEAGRE, THE QUESTION OF REGISTRATION AT THIS S TAGE CANNOT ARISE. SINCE REGISTRATION HAS TO BE CONSIDERED IN THE LIGHT OF G ENUINENESS AND THE OBJECTS AND THESE WERE NOT IN QUESTION, THE TRIBUNAL DIRECTED R EGISTRATION. THE HIGH COURT FOUND THAT THE FINDING OF THE TRIBUNAL DOES NOT GIVE RISE TO ANY QUESTION OF LAW IN A GROUP ITA NO.2062DEL/2013 UTTRANCHAL TEN NIS ASSOCIATION VS. CIT 4 OF TWO CASES IN CIT VS. SURYA EDUCATIONAL AND CHARI TABLE TRUST (2013) 355 ITR 280 (P & H). IT WAS POINTED OUT THAT THE COMMISSIONER W AS NOT JUSTIFIED IN HIS EXPECTATION THAT THERE SHOULD BE ACTIVITY AT THE TI ME OF APPLICATION. SECTION 12AA(3) WHICH EMPOWERS CANCELLATION MAKES IT CLEAR THAT REG ISTRATION CAN BE CANCELLED ONLY WHERE THE ACTIVITIES ARE NOT CARRIED OUT IN CONFORM ITY WITH THE OBJECTS. THE SAME REASONING SHOULD APPLY FOR GRANT OF REGISTRATION AS WELL. 6.1 IN YET ANOTHER CASE OF DIRECTOR OF INCOME T AX VS. FOUNDATION OF OPTHALMIC AND OPTOMETRY RESEARCH EDUCATION CENTRE (2013) 355 ITR 361 (DELHI) ON THE SAME SUBJECT, IT WAS HELD BY THE HIGH COURT THAT MERELY BECAUSE THE ACTIVITY OF RUNNING AN EDUCATIONAL INSTITUTION HAD NOT COMMENCED DURING TH E YEAR, REGISTRATION COULD NOT BE DENIED, WHERE GENUINENESS WAS NOT AT ISSUE. 6.2 IN YET ANOTHER CASE, WHERE REGISTRATION W AS DENIED FOR THE SAME REASON THAT NO CHARITABLE ACTIVITY HAS YET COMMENCED, THE HIGH COURT FOUND THAT IT COULD NOT BE THE REASON FOR DENIAL, IN HARDAYAL CHARITABLE AND E DUCATIONAL TRUST V. CIT (2013) 355 ITR 534 (ALL). IN THE SAME CASE, THERE WAS ALSO ANOTHER REASON THAT FAMILY LOGO WAS UTILISED FOR THE TRUST INDICATING THAT THE TRUS T WAS INTENDED TO PROMOTE FAMILY BUSINESS. THE TRIBUNAL FELT THAT THE ARGUMENTS OF T HE COMMISSIONER HAD NOT BEEN REFUTED AND ADVISED THAT A FRESH APPLICATION MAY BE FILED AFTER ACTIVITIES ARE COMMENCED. THE HIGH COURT DID NOT CONSIDER IT NECES SARY TO AWAIT COMMENCEMENT AND THAT GENUINENESS ALONE COULD BE CONSIDERED AS I S EVIDENT BY THE PREPONDERANCE OF THIS VIEW IN THE PRECEDENTS. APPROVAL UNDER SECT ION 80G WAS ALSO DIRECTED POINTING OUT THAT NEITHER REGISTRATION NOR APPROVAL UNDER SECTION 80G BY THEMSELVES MERITED EXEMPTION, WHICH CAN BE GONE INTO BY THE A SSESSING OFFICER. ITA NO.2062DEL/2013 UTTRANCHAL TEN NIS ASSOCIATION VS. CIT 5 7. THE APPREHENSION OF THE LD. CIT THAT, WHEN CERTAIN OBJECTIVES ARE UNDERTAKEN, THEY MIGHT BECOME A COMMERCIAL VENTURE, IS NOT SUPP ORTED BY THE FACTS ON RECORD. SUCH APPREHENSION CANNOT BE THE BASIS OF REJECTION OF THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. IF AT ALL THERE IS A VIOLATION , THEN THE AO HAS THE POWERS AND JURISDICTION TO DISALLOW THE CLAIM OF THE ASSESSEE U/S 11 OF THE ACT. 8. WHEN THE ASSESSEE HAS PRODUCED CERTAIN EVIDENC E REGARDING FREE COACHING CAMPS DISTRIBUTION OF KITS ETC. REGISTRATION CAN NO T BE DENIED ON THE GROUND THAT THE ACTIVITY IS INSIGNIFICANT. 9. COLLECTION OF ENTRY FEE AND SUBSCRIPTION /CO NTRIBUTION AND UTILISING THE SAME FOR INCURRING EXPENDITURE ON TOURNAMENTS ETC. CANNOT BE A REASON FOR COMING TO CONCLUSION THAT THE ACTIVITY OF THE ASSESSEE IS ON COMMERCIAL LINES. THUS REJECTION OF REGISTRATION ON THIS GROUND IS BAD IN LAW. 10. THE FINDING THAT THE ASSESSEE SOCIETY HAS N O ACTIVITY AFTER 2003 IS CONTRARY TO THE FACTS ON RECORD, AS EVIDENCED BY THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 ST MARCH, 2013. 11. IN VIEW OF THE ABOVE DISCUSSION WE DIRECT THE LD. CIT(A) TO GRANT REGISTRATION TO THE ASSESSEE U/S 12A/12AA OF THE ACT. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST, 2015. SD/- SD/- (G.C. GUPTA) (J. S UDHAKAR REDDY) VICE PRESIDENT ACCOUNTANT MEMBER DATED: THE 14 .8. 2015 ITA NO.2062DEL/2013 UTTRANCHAL TEN NIS ASSOCIATION VS. CIT 6 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 4.8.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 6.8.20 15 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER