ACME FOUNDATION, MUMBAI V. DIT (E), MUMBAI

ITA 2125/MUM/2013

• Counselvise Citation: 212519914 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAGA
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Charitable institution
• Section: 12; 12A

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI P.M. JAGTAP, AM AND SHRI VIVEK VARMA, J M ./ I.T.A. NO. 2125/ MUM/2013 ( / ASSESSMENT YEAR : M/S ACME FOUN DATION, ACME GHAR, 19, K.D. ROAD, VILE PARLE (WEST), MUMBAI -56. / VS. THE DIRECTOR OF INCOME TAX (EXEMPTION), ROOM NO. 616, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. ./ PAN : AAATA 2477 K ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI VIJAY MEHTA R E SPONDENT BY : S MT. S. PADMAGA / DATE OF HEARING : 18-6-2014 / DATE OF PRONOUNCEMENT : 23-7-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI DATED 17 -01-2013 WHEREBY HE REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF APPROVAL U/S 80G(5)(VI) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A TRUST FORM ED AS PER THE TRUST DEED DATED 29-11-1994. IT IS ALSO DULY REGISTERED U/S 12A OF THE ACT ON 10-01-1995. IT FILED AN APPLICATION FOR GRANT OF A PPROVAL U/S 80G(5)(VI) OF THE INCOME TAX ACT, 1961 IN THE PRESCRIBED FORM NO. 10G ON 20-10-2011. WHILE DISPOSING OF THE SAID APPLICATION, THE LD. DIT (EXE MPTION) FOUND THAT THE ITA 2125/M/13 2 FOLLOWING OBJECTS GIVEN IN CLAUSES D & E OF THE TRUST DEED WERE NOT IN THE NATURE OF OBJECT FOR CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT:- CLAUSE D: TO EDUCATE PEOPLE AT LARGE FOR THEIR SEL F DEFENSE AND SELF FITNESS BY UNDERTAKING AND / OR SPONSORING SUITABLE TRAINING PROGRAMMES OF KARATE, KUNG-FU. YOGA, DHYANA, MEDITA TION, VIPASHYANA ETC. AND BY ESTABLISHING AND OR SUPPORTING SUCH TRA INING CERTRES, CLASSES GYMNASIUMS ETC. CLAUSE E: TO ARRANGE TOURS AND EDUCATIONAL VISITS O F VARIOUS PLACES OF INTERESTS IN INDIA FOR ADVANCEMENT AND PROMOTION OF KNOWLEDGE OF PEOPLE AT LARGE IN RESPECT OF INDIAN HERITAGE AND C ULTURE . 3. THE ASSESSEE THEREFORE WAS CALLED UPON BY THE LD . DIT (EXEMPTION) TO OFFER ITS EXPLANATION IN THE MATTER. IN REPLY, A L ETTER DATED 29-10-2012 WAS FILED BY THE ASSESSEE OFFERING ITS EXPLANATION AS U NDER:- AT THE OUTSET, WE WOULD LIKE TO STATE THAT TRUST W AS FORMED ON 29 TH NOVEMBER 1989 AND OBJECTS CLAUSES STATED IN TRUST D EED WERE DECIDED AND DEFINED KEEPING IN MIND TONG TERM OBJECTIVES OF THE TRUST, AS WELL AS LAWS PREVAILING AT THAT POINT OF TIME. IT MAY BE NOTED THAT TRUST HAS NEVER, SINCE FORMA TION, SPENT ANY AMOUNTS TOWARDS OBJECTS AS STATED IN CLAUSES D & E IN TRUST DEED. WITHOUT PREJUDICE TO ABOVE, THESE OBJECTS, AS STATE D IN CLAUSE C AND D CANNOT BE DEEMED TO BE FOR NON CHARITABLE OBJECTS, AS THEY ARE FOR ADVANCEMENT OF GENERAL PUBLIC UTILITY. CLAUSE D DEA LS WITH PHYSICAL FITNESS AND HEALTH RELATED MATTERS. CLAUSE E DEALS WITH SPREADING AWARENESS ABOUT OUR HERITAGE AND ANCIENT CULTURE AN D EFFORTS TO PEOPLE AT LARGE. THESE ARE NOT THE ACTIVITIES, IN NATURE O F TRADE, COMMERCE OR BUSINESS. WITHOUT PREJUDICE TO ABOVE, TRUST IS ALSO WILLING TO DELETE THESE CLAUSES FROM THE TRUST DEED, IF THE PRESENTS AN OBSTACLE IN GETTING RENEWAL OF EXEMPTION CERTIFICATE U/S 8OG. 4. THE LD. DIT (EXEMPTION) DID NOT FIND MERIT IN TH E EXPLANATION OFFERED BY THE ASSESSEE. ACCORDING TO HIM, THE VERY EXISTENCE OF NON-CHARITABLE OBJECTS IN A TRUST DEED CREATING A PUBLIC CHARITABLE TRUST WAS NOT AS PER THE CONDITIONS LAID DOWN IN SECTION 80G(5)(VI) OF THE A CT. HE THEREFORE REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF APPR OVAL U/S 80G(5)(VI) OF THE ITA 2125/M/13 3 ACT. AGGRIEVED BY THE ORDER OF THE LD. DIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. BESIDES REIT ERATING THE ARGUMENTS RAISED ON BEHALF OF THE ASSESSEE BEFORE THE LD. DIT (EXEMPTION) IN SUPPORT OF ITS APPLICATION FOR GRANT OF APPROVAL U/S 80G(5)(VI ) OF THE ACT ON MERIT, THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RAISED AN ALTERNA TIVE CONTENTION THAT THE CERTIFICATE GRANTED TO THE ASSESSEE U/S 12A OF THE ACT TREATING IT AS A CHARITABLE INSTITUTION ESTABLISHED FOR CHARITABLE P URPOSE BEING IN SUBSISTANCE AND THE SAME HAVING NOT BEEN WITHDRAWN, RENEWAL OF EXEMPTION U/S 80G(5)(VI) OF THE ACT CANNOT BE DENIED TO THE ASSES SEE. IN SUPPORT OF THIS CONTENTION, HE HAS RELIED ON THE DECISION OF KOLKAT TA BENCH OF THIS TRIBUNAL IN THE CASE OF BENGAL HOSIERY MANUFACTURERS ASSOCIATI ON VS. DIRECTOR OF INCOME TAX (EXEMPTION) [2012] 018 ITR (TRIB) 0205 WHEREIN RENEWAL OF REGISTRATION U/S 80G(5)(VI) OF THE ACT WAS GRANTED BY THE TRIBUN AL BY HOLDING THAT THE REGISTRATION OF AN INSTITUTION U/S 12A BY ITSELF WA S A SUFFICIENT PROOF OF THE FACT THAT THE TRUST OR THE INSTITUTION CONCERNED WAS CR EATED OR ESTABLISHED FOR CHARITABLE PURPOSE OR A PURPOSE OF GENERAL PUBLIC U TILITY. TO THE SIMILAR EFFECT IS THE OTHER DECISION OF THE DELHI BENCH OF THIS TR IBUNAL IN THE CASE OF MAYO COLLEGE OLD BOYS ASSOCIATION VS. DIT (E) (ITA NO. 2 010/DEL/2010 ORDER DTD. 19-11-2010) WHEREIN IT WAS HELD RELYING ON THE DECI SION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF NN DESAI CHARITABLE TRUST VS. CIT, 246 ITR 452( GUJ.) AND THAT OF HONBLE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF SONEPAT HINDU EDUCATIONAL CHARITABLE TRUST VS. CIT, 278 ITR 262 (P&H) THAT WHEN THE CERTIFICATE GRANTED TO THE ASSESSEE U/S 12 A TREATING IT AS CHARITABLE INSTITUTION WAS SUBSISTING AND THE SAME HAD NOT BEE N SHOWN TO HAVE BEEN WITHDRAWN, RENEWAL OF EXEMPTION U/S 80(G)(5) COULD NOT BE DENIED TO THE ASSESSEE. IN THE PRESENT CASE, THE REGISTRATION WA S GRANTED TO THE ASSESSEE U/S 12A AND THERE BEING NOTHING BROUGHT ON RECORD B Y THE LD. D.R. TO SHOW ITA 2125/M/13 4 THAT THE SAME HAS BEEN WITHDRAWN BY THE DEPARTMENT, WE ARE OF THE VIEW THAT THE EXEMPTION U/S 80G(5)(VI) OF THE ACT CANNOT BE D ENIED. IN THAT VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE LD. DIT( E) REJECTING THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF APPR OVAL U/S 80G(5)(VI) OF THE ACT AND DIRECT THAT THE SAID APPROVAL BE GRANTED TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2014 . ( ) * 23 -7-2014 SD/- SD/- (VIVEK VARMA) (P.M. JAGTAP ) (- JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; * DATED 231712014 [ \ .-../ RK , SR. PS ! '$% &% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE DOT (E), MUMBAI. 4. 7 / ADDL. DIT (E)-II, MUMBAI 5. : --< , < , / DR, ITAT, MUMBAI A BENCH 6. ? / GUARD FILE. / BY ORDER, : - //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI