Scottish Educational Society, V. CIT,

ITA 2079/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8521 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-07-2009
• Assessment Year: 2008-2009
• Appeal Filed On: 27-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K RAO
• Keywords: Set aside
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT, SHRI R.P. GARG AND HONBLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.2079 & 2146/DEL./2008 (ASSESSMENT YEAR : 2008-09) SCOTTISH EDUCATIONAL SOCIETY, VS. CIT, FARIDABAD. REGD. OFFICE : F-BLOCK, PALAM VIHAR, GURGAON. (PAN/GIR NO.AAGTS7726K) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMOL SINHA, ADV. REVENUE BY : SHRI B.K. RAO, SR.DR ORDER PER R.P. GARG, SR.VP THIS ARE TWO APPEALS BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX, REJECTING THE REGISTRATION TO THE SOC IETY U/S 12A AND NOT GRANTING EXEMPTION U/S 80G(5)(VI) OF THE ACT, 1961. 2. THE SOCIETY TRUST WAS REGISTERED ON 8.6.2007 IN THE NAME AND STYLE OF SCOTTISH EDUCATIONAL SOCIETY WITH DISTRICT REGISTRAR OF FIRM S & SOCIETIES, GURGAON, HARYANA HAVING ITS REGISTERED OFFICE AT F-BLOCK PALAM VIHAR , GURGAON, HARYANA AND ADMINISTRATIVE OFFICE AT A-13, PRASHANT VIHAR, DELH I TO IMPART EDUCATION. THE AIMS AND OBJECTS OF THE SOCIETY GIVEN IN THE MEMORANDUM OF ASSOCIATION ARE AS UNDER: (A) TO PROVIDE BETTER AND QUALITY EDUCATION FOR T HE CHILDREN. (B) TO IMPART EDUCATION THROUGH HINDI AS WELL AS EN GLISH AND OTHER INTERNATIONAL MEDIUMS AND WAYS ON MODERN LINES. (C) TO ESTABLISH, RUN AND MANAGE, EDUCATIONAL INSTI TUTIONS. ITA NOS.2079 & 2146/DEL./2008 (A.Y. : 2008-09) 2 (D) TO PROMOTE CULTURAL EDUCATION, SUCH AS MUSIC, D ANCE, DRAMA, PAINTING AMONGST THE STUDENTS. (E) TO ARRANGE EDUCATIONAL TOURS AND SEMINARS. (F) TO PROMOTE NATIONAL CONSCIOUSNESS AMONG THE STU DENTS/CHILDREN. (G) AND GENERALLY TO DO ALL SUCH OTHER ACTS, DEEDS AND THINGS, WHICH MAY BE HELPFUL, LAWFUL FOR PROMOTION OF AIMS AND OBJECTS O F THE SOCIETY. (H) ALL INCOME AND PROPERTY OF THE SOCIETY SHALL BE APPLIED SOLELY TOWARDS THE PROMOTION OF AIMS AND OBJECTS OF THE SOCIETY AS SET FORTH IN THE MEMORANDUM OF ASSOCIATION AND NO PORTION THEREOF SH ALL BE PAID OR TRANSFERRED DIRECTLY OR INDIRECTLY TO THE MEMBERS O F THE SOCIETY. (I) SOCIETY SHALL NOT RELATE TO ANY POLITICAL PARTY R ITS ACTIVITIES. (J) NO MEMBERS OF THE SOCIETY SHALL BE APPOINTED TO ANY SALARIED OFFICE OF THE SOCIETY OR ANY OFFICE OF THE SOCIETY PAID BY FEES, THAT NO REMUNERATION SHALL BE GIVEN BY THE SOCIETY TO ANY MEMBER EXCEPT REPAYM ENT OF OUT OF POCKET EXPENSES AND INTEREST ON MONEY LENT OR RENT FROM TH E PREMISES TO THE SOCIETY. (K) THE SOCIETY BY ITS CURRICULUM REQUIRED TO APPLY ITS PROFITS, IF ANY, OR OTHER INCOME IN PROMOTION OF ITS OBJECT. (L) IF UPON THE WINDING UP OR DISSOLUTION OF THE SO CIETY THERE REMAINS AFTER SATISFACTION OF ALL DEBTS AND LIABILITIE4S ANY PROP ERTY WHATSOEVER, THE SAME SHALL NOT BE PAID TO OR DISTRIBUTED AMONGST THE MEM BERS OF THE SOCIETY BUT SHALL BE GIVEN OR TRANSFERRED TO SOME OTHER INSTITU TIONS HAVING OBJECTS SIMILAR TO THE OBJECTS OF THE SOCIETY TO BE DETERMI NED BY THE MEMBERS OF THE SOCIETY AT OR BEFORE THE TIME OF DISSOLUTION. IT APPLIED FOR REGISTRATION U/S 12A AS WELL AS FOR GRANTING THE DEDUCTION U/S 80G OF THE ACT. THE CIT REQUIRED THE ASSESSEE TO FURNISH CERT AIN DETAILS AND ON GOING THROUGH THAT THE CIT DENIED THE REGISTRATION ON THE GROUND THAT THE OBJECTS OF THE SOCIETY ARE NON CHARITABLE AS DEFINED IN SECTION 2(15) OF THE ACT. QUOTING PROVISIONS OF SECTION 12A, HE OBSERVED THAT FOLLOWING TWO CONDITIONS WERE TO BE S ATISFIED: (I) THE OBJECT OF THE SOCIETY SHOULD BE OF CHARITAB LE IN NATURE; AND (II) THE ACTIVITY OF THE SOCIETY SHOULD BE GENUINE. ITA NOS.2079 & 2146/DEL./2008 (A.Y. : 2008-09) 3 THE CIT, THEREFORE, HELD THAT IN ABSENCE OF CONCRET E EVIDENCE, THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY TRUST COULD NOT BE ESTABL ISHED AND, THEREFORE, ONE OF THE CONDITIONS FOR GRANTING REGISTRATION U/S 12AA IS NOT SATISFIED . HE ACCORDINGLY REJECTED THE REGISTRATION U/S 12A AS WELL AS GRANTING EXEMPTION U/S 80G OF THE ACT. 3. WE HAVE GONE THROUGH THE MATERIAL ON RECORD AND SUBMISSION ADVANCED BY BOTH THE SIDES. ON A BARE PERUSAL OF THE OBJECTS STATED IN THE MEMORANDUM OF SOCIETY OF THE TRUST DEED, IT WOULD BE EVIDENT THAT THE OBJECTS OF THE TRUST ARE CHARITABLE AND WE DO NOT FIND ANY CLAUSE THEREIN WHICH COULD BE SAID TO BE N ON-CHARITABLE. EVEN THE CIT HAS NOT POINTED OUT THAT ANY CLAUSE WAS NON-CHARITABLE AT T HE TIME OF GRANTING REGISTRATION OF THE TRUST. WHAT THE CIT HAS TO SEE IS THAT ITS OBJECTS ARE CHARITABLE AND IF HE FINDS THAT THE OBJECTS ARE CHARITABLE HE SHOULD GRANT REGISTRATION TO THE TRUST. AT THIS TIME, IT IS NOT REQUIRED TO EXAMINE THAT THE ACTIVITIES WERE CARRIE D OUT IN A MANNER WHICH COULD BE SAID TO BE NON-CHARITABLE. WHEN THE OBJECTS ARE CHARITA BLE, IT HAS TO BE TREATED AS A GENUINE TRUST UNLESS THERE IS SOME MATERIAL ON RECORD TO HO LD IT OTHERWISE. THE CIT HAS PUT THE ONUS ON THE ASSESSEE TO SAY THAT IT HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT ACTUAL CHARITABLE ACTIVITIES HAVE BEEN CARRIED OUT OR AS TO THE GENUINENESS OF THE ACTIVITIES. THE APPROACH OF THE CIT, IN OUR OPINION, IS NOT IN ACCORDANCE WITH LAW AND AS HELD ABOVE, ON A PERUSAL OF THE OBJECTS OF THE TRUST, WE FIND T HAT ALL THE OBJECT IN THE CLAUSES ARE CHARITABLE AND THERE IS NOTHING IN THE TRUST WHICH COULD CAST A DOUBT ABOUT ITS GENUINITY. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT AND D IRECT HIM TO GRANT REGISTRATION AS WELL AS EXEMPTION U/S 80G OF THE ACT. 4. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 5. ORDER PRONOUNCED IN OPEN COURT ON 10.07.2009. (RAJPAL YADAV) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JULY 10, 2009. *SKB* ITA NOS.2079 & 2146/DEL./2008 (A.Y. : 2008-09) 4 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT, FARIDABAD. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT