Kathuria Foundation, Nainital V. CIT (Exemption)- , Lucknow

ITA 2064/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1360 (ITAT-DEHRADUN)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 08-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K MATTA CA SHRI SUDHIR MATTA
• Keywords: Charitable institution; Set aside
• Section: 12A; 12AA; 12

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, NEW DELHI (CIRCUIT BENCH AT DEHRADUN ) BEFORE SHRI SUDHANSHU SRIVASTAVA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2064 /DEL/ 2019 (ASSESSMENT YEAR: 2018 - 19 ) KATHURIA FOUNDATION, GOVIND HALL ABOVE CO - OPERATIVE STORE THE MALL, NAINITAL, UTTARAKHAND PAN: AADTK2587K VS. CIT(EXEMPTION), LUCKNOW (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. K. MATTA, CA SHRI SUDHIR MATTA, CA REVENUE BY: SHRI BHOPAL SINGH, JCIT DATE OF HEARING 28/02 / 2020 DATE OF PRONOUNCEMENT 1 3 / 05 / 2020 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS APPEAL IS FILED BY APPELLANT CHARITABLE TRUST AGAINST THE ORDER OF THE LD CIT ( EXEMPTION), LUCKNOW FOR REJECTING THE REGISTRATION TO THE ASSESSEE U/S 12AA ( 1 ) ( V ) ( II) OF THE ACT BY ORDER DATED 09.01.2019. 2 . B RIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS A CHARITABLE TRUST WHO FILED AN APPLICATION FOR REGISTRATION U/S 12A (A) ON 27.08.2018 WITH CIT(EXEMPTION), LUCKNOW. 3 . THE OBJECT OF THE TRUST IS TO P ROVIDE FINANCIAL SUPPORT BY WAY OF SCHOOL FEES TO POOR AND DESERVING STUDENTS. SUCH FEE S WERE PAID DIRECTLY TO THE SCHOOLS BY WAY OF ACCOUNT PAYEE CHEQUES. THEREFORE, THE OBJECT OF THE ASSESSEE WAS EDUCATIONAL ACTIVITIES. THUS CLAIMING IT BE AN ELIGIBLE TRUST TO BE REGISTERED U/S 12 A A OF THE FILED AN APPLICATION IN PRESCRIBED FORM BEFORE THE LD CIT - E. 4 . TO VERIFY THE OBJECT OF THE TRUST AND GENUINENESS OF THE ACTIVITIES THE LD CIT (E) ISSUED NOTICE TO THE TRUST FOR PRODUCTION OF BOOKS OR VOUCHERS IN PAGE | 2 SUPPORT OF ITS CLAIMS. THE LD CIT(E) NOTED THAT APPLICANTS HAS MERELY SUBMITTED COPIES OF THE TRUST DEED AND COULD NOT SHOW ANY OTHER MATERIAL WHICH COULD HAVE THROWN LIGHT UPON THE ACTIVITIES. AS NEITHER THE BOOKS OF ACCOUNT NOR THE VOUCHERS WERE PRODUCE D BEFORE HIM , LD CIT(E) DOUBTED THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND HELD THAT APPLICATION IS DEFICIENT. THEREFORE, HE HELD THAT THE ASSESSEE DOES NOT DESERVE THE REGISTRATION. ACCORDINGLY, HE REJECTED THE APPLICATION IN ABSENCE OF SUFFICIEN T MATERIAL REQUIRED FOR FORMATION OF SATISFACTION ABOUT ELIGIBILITY OF THE TRUST WITH RESPECT TO GENUINENESS OF ITS ACTIVITIES. THEREFORE , ASSESSEE IS IN APPEAL BEFORE US. 5 . THE LD AR SUBMITTED BEFORE US THAT ASSESSEE IS CARRYING ON EDUCATIONAL ACTIVITIES BY REIMBURSEMENT OF THE SCHOOL FEES OF THE POOR STUDENTS. IT WAS FURTHER SUBMITTED THAT AS THE TRUST WAS FORMED IN THE FINANCIAL YEAR END ED ON 31.03.2018 WITH AN INITIAL CORPUS RS. 11000/ - BY THE FOUNDER. FURTHER , SUM OF RS. 25000/ - WAS RECEIVED AS DONATIO N IN TRUST CORPUS. THE MISCELLANEOUS DONATION OF RS. 5900 / - WAS RECEIVED BY THE TRUST. OUT OF THE ABOVE FUND S , ASSESSEE HAS INCURRED THE TOTAL EXPENDITURE ON EDUCATION OF POOR CHILDREN OF APPROXIMATELY RS. 27000/ - AND SMALL AMOUNT WAS SPENT ON ADMINISTRATIVE EXPENSES. THE ASSESSEE SUBMITTED THAT IT HAS ALREADY FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2018 - 19 ON 17.08.2018 WHICH WAS AVAILABLE ON RECORD BEFORE THE LD CIT(E) BEFORE HE PASSED THE ORDER ON 09.01.2019. HE THEREFORE, SUBMITTED T HAT IT IS NOT CORRECT THAT ASSESSEE DID NOT CARRY ON ANY ACTIVITY. HE FURTHER SUBMITTED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE DULY AUDITED BY THE CHARTERED ACCOUNTANT ON 15.05.2018 FOR THE YEAR ENDED ON 31.03.2018 WHICH WAS ALSO AVAILABLE ON RECOR D. HE ALSO REFERRED TO THE STATEMENT OF THE INVESTMENT AS WELL AS UTILIZATION OF THE FUNDS FOR CHARITABLE PURPOSES. HE ALSO REFERRED TO THE NOTICE OF ACTIVITIES FOR FY 2017 - 18. HE SUPPORTED ACTIVITIES OF THE TRUST BY SUBMITTING THE BANK ACCOUNT WITH THE AX IS BANK WHEREIN, THE DONATION S RECEIVED AS WELL AS THE OUTFLOW OR APPLICATIONS OF FUND ARE CLEARLY DEMONSTRATED. IN VIEW OF THIS HE SUBMITTED THAT ALL THESE DETAILS WERE SUBMITTED TO THE LD CIT(E) BUT SAME HAVE NOT BEEN CONSIDERED IN THE PROPER PERSPECTIVE . HE THEREFORE, SUBMITTED THAT THE LD CIT(E) HAS WRONGLY DENIED THE REGISTRATION. PAGE | 3 6 . LD DR SUPPORTED THE ORDER OF THE LD CIT(E) STATING THAT BOOKS OF ACCOUNT AND VOUCHERS AS WELL AS BANK STATEMENT OF THE APPLICANT TRUST WERE NOT PRODUCED BEFORE HIM AND THEREF ORE, THE REGISTRATION HAS RIGHTLY BEEN DENIED. 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LD CIT(E) . UNDOUBTEDLY , THE OBJECT OF THE TRUST IS EDUCATIONAL AND IT PROVIDES SCHOOL FEES TO THE POOR AND DESERVING STUDE NTS. THE AUDITED ACCOUNTS FOR THE YEAR ENDED 31.03.2018 ALSO SUPPORT WITH THE ACTIVITIES OF THE TRUST ARE FOR THE ABOVE OBJECT. THE BANK ACCOUNT SUBMITTED BEFORE US ALSO SHOWS THAT THE DONATION RECEIVED AS WELL AS THE APPLICATION OF THE ABOVE SUM. THE ACTI VITIES OF THE TRUST ARE APPARENTLY IN ACCORDANCE WITH THE OBJECT OF THE TRUST. IN VIEW OF THE ABOVE OVERWHELMING EVIDENCE IT IS APPARENT THAT THE TRUST DESERVES REGISTRATION U/S 12AA(A) OF THE ACT. HOWEVER, THE LD CIT(E) HAS HELD THAT AS NO BOOKS OF ACCOU NT AND VOUCHERS WERE PRODUCED BEFORE HIM THEREFORE, THE APPLICATION OF THE ASSESSEE COULD NOT BE ALLOWED. IN VIEW OF THE ABOVE FACTS AND IN THE INTEREST OF JUSTICE , WE SET ASIDE THE WHOLE ISSUE BACK TO THE FILE OF THE LD CIT(E) WITH A DIRECTION TO THE ASS ESSEE TO ONCE AGAIN SUPPORT ITS CLAIM FOR REGISTRATION U/S 12AA OF THE ACT BY PRODUCING THE BOOKS OF ACCOUNT, VOUCHERS, BANK STATEMENT AND AUDITED ACCOUNT AND FURTHER INFORMATION AS MAY BE NECESSARY FOR VERIFICATION OF GENUINENESS OF THE ACTIVITIES OF THE TRUST. THE LD CIT(E) IS ALSO DIRECTED TO EXAMINE THE SAME AND , IF FOUND IN ORDER, TO GRANT THE REGISTRATION TO THE TRUST AFTER GRANTING PROPER OPPORTUNITY OF HEARING. IN THE RESULT THE ISSUE INVOLVED IN APPEAL COMPRISING OF GROUNDS OF APPEAL IS ALLOW ED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED WITH ABOVE DIRECTION. 9 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 05 / 2020 . - SD/ - - SD/ - ( SUDHANSHU SRIVASTAVA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 05 / 2020 A K KEOT COPY FORWARDED TO PAGE | 4 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI