M/s. Shirror Welfare Trust, Udupi V. The Commissioner Of Income Tax (Exemptions), Bengaluru

ITA 2071/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2763 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-11-2020
• Assessment Year: 2019-2020
• Appeal Filed On: 26-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard; Set aside
• Section: 80G; 12AA; 12; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA P OOJA RI , ACCOUNTANT MEMBER ITA NO. 2071/BANG/2019 ASSESSMENT YEAR : 2019 - 20 SHIROOR WELFARE TRUST, NATIONAL HIGHWAY 66, GREEN VALLEY NATIONAL SCHOOL, SHIRUR 576 228. BYNDOOR TQ. UDUPI DIST. PAN: AAETS 4222L VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI R.E. BALASUBRAMANYAM, CA RESPONDENT BY : SHRI MUZAFFAR HUSSAIN, CI T(DR)(ITAT), BENGALURU. D ATE OF HEARING : 23. 11 .2020 DATE OF PRONOUNCEMENT : 23 . 11 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 26.7.2019 OF THE COMMISSIONER OF INCOME TAX (EXEMPT IONS), BENGALURU [CIT(E) FOR SHORT] REJECTING THE APPLICATION FOR GRANT OF RECOGNITION U/S. 80G OF THE INCOME-TAX ACT, 1961 [THE ACT]. 2. THE ASSESSEE IS A CHARITABLE TRUST ESTABLISHED V IDE DEED DATED 30/03/2001 TO ESTABLISH, RUN AND MANAGE EDUCATIONAL INSTITUTIONS, TO PROMOTE STUDY OF ALL LANGUAGES, CULTURES AND HERITA GES, TO PROPAGATE AND PROMOTE LITERARY AND CULTURAL ACTIVITIES AND TO STR IVE TOWARDS THE OVERALL DEVELOPMENT OF THE SOCIETY. THE ASSESSEE TRUST OBTA INED REGISTRATION UNDER ITA NO.2071/BANG/2019 PAGE 2 OF 4 SECTION 12AA OF THE INCOME TAX ACT ON 02/04/2001 AN D 80G RECOGNITION ON 29/11/2005. SINCE THE 80G RECOGNITION EXPIRED ON 31 /03/2007, THE ASSESSEE TRUST APPLIED FOR REGISTRATION U/S 80G OF THE ACT ON 11/01/2019. THE LD. CIT(E) ISSUED NOTICE REQUIRING SUBMISSION O F DOCUMENTS TO SUBSTANTIATE THE APPLICATION FOR REGISTRATION U/S 8 0G. IN RESPONSE, THE ASSESSEE TRUST SUBMITTED NECESSARY DETAILS AND DOC UMENTS TO SUBSTANTIATE THE CHARITABLE ACTIVITIES CARRIED OUT BY THE TRUST. THE CIT(E), HOWEVER, AFTER CONSIDERING THE DETAILS FILED, REJECTED THE APPLICA TION OF THE ASSESSEE ON THE GROUND THAT IT HAS NOT MADE OUT A CASE FOR SEEKING SUCH RECOGNITION AND HE WAS UNABLE TO SATISFY HIMSELF WITH THE GENUINENESS OF THE OBJECTS AND ACTIVITIES OF THE TRUST. AGGRIEVED BY THE SAME, TH E ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT RECOGNITION U/S. 80G(5) HAS TO BE GRANTED SUBJECT TO CERTAIN CONDITI ONS BEING FULFILLED AS LAID DOWN IN THE SAID SUB-SECTION. RULE 11AA OF THE INC OME-TAX RULES, 1962 [THE RULES] PROVIDES THAT IF THE CONDITIONS MENTION ED IN SECTION 80G(5) ARE NOT SATISFIED, THEN RECOGNITION CAN BE DENIED. IT WAS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THAT IN THE IMPUGNED ORDER , THE LD. CIT(E) HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW AS TO, WHICH OF THE CONDITIONS OF THE PROVISIONS OF SECTION 80G(5) HAVE BEEN TRANSGRESSED BY THE ASSESSEE. THE ONLY OBSERVATION IN THE IMPUGNED ORDER WAS THAT THE TRUST WAS GENERATING SURPLUS AND MAJORITY OF RECEIPTS ARE BY WAY OF FEES COLLECTION. THE LD. COUNSEL SUBMITTED THAT THIS IS NOT A GROUND MENTION ED IN SECTION 80G(5) OF THE ACT FOR WHICH RECOGNITION CAN BE DENIED TO THE ASSESSEE. 4. THE LD. COUNSEL FOR THE ASSESSEE ALSO BROUGHT TO OUR NOTICE THAT THE ASSESSEE ENJOYS THE BENEFIT OF REGISTRATION U/S. 12 AA OF THE ACT AND AS SUCH SATISFIES THE CONDITION THAT IT SHOULD EXIST F OR CHARITABLE PURPOSES. IT WAS THEREFORE SUBMITTED BY HIM THAT THE IMPUGNED OR DER OF CIT(E) SHOULD ITA NO.2071/BANG/2019 PAGE 3 OF 4 BE SET ASIDE AND THE ASSESSEE SHOULD BE GRANTED REC OGNITION U/S. 80G(5) OF THE ACT. 5. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORD ER OF CIT(E) AND SUBMITTED THAT IN ANY EVENT, THE MATTER SHOULD BE R EMANDED TO CIT(E) TO PASS A SPEAKING ORDER SPECIFYING THE GROUNDS ON WHI CH RECOGNITION U/S. 80G IS BEING REFUSED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND ARE OF THE VIEW THAT THE IMPUGNED ORDER OF LD. CIT(E) IS A NON -SPEAKING ORDER. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESS EE, THE GENERATION OF SURPLUS AND THE FACT THAT MAJORITY OF RECEIPTS ARE BY WAY OF FEES COLLECTION CANNOT BE A GROUND TO REFUSE RECOGNITION U/S. 80G O F THE ACT. THE ASSESSEE IS ADMITTEDLY EXISTING FOR A CHARITABLE PU RPOSE OF PROVIDING EDUCATION. AS RIGHTLY CONTENDED BY THE LD. DR, THE IMPUGNED ORDER IS A NON-SPEAKING ORDER AND THEREFORE IT WOULD BE IN THE FITNESS OF THINGS TO SET ASIDE THE ORDER OF CIT(E) AND REMAND BACK TO HIM TH E ISSUE OF GRANT OF RECOGNITION U/S. 80G OF THE ACT TO THE ASSESSEE FOR FRESH CONSIDERATION. THE CIT(E) WILL AFFORD OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE BEFORE DECIDING THE ISSUE. 7. FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSE SSEE IS TREATED AS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF NOVEMBER, 2020. SD/- SD/- ( CH ANDRA POOJARI ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 23 RD NOVEMBER, 2020. / DESAI S MURTHY / ITA NO.2071/BANG/2019 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.