Shri Haritara Spiritual Foundation, Pune V. CIT-I, Pune

ITA 2156/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2763 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-11-2015
• Assessment Year: misc
• Appeal Filed On: 01-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Charitable institution; Additional evidence
• Section: 12A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 2156/PN/2012 $& ' !(' / ASSESSMENT YEAR : 2012-13 SHRI HARITARA SPIRITUAL FOUNDATION, 501, JAI CHAMBERS, GHORPADE PETH, PUNE 411042 PAN : AARCS1339N ....... / APPELLANT )& / V/S. COMMISSIONER OF INCOME TAX I, PUNE / RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI S.K. RASTOGI / DATE OF HEARING : 15-12-2015 / DATE OF PRONOUNCEMENT : 03-02-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX-I, PUNE DATED 28-09-2012 PAS SED U/S. 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE COMMISSIONER OF INCOME TAX VIDE IMPUGNED ORDER HAS REJECTED THE APPLICATION OF THE ASSESSEE FOR GRANT OF RE GISTRATION ON THE GROUND THAT SOME OF THE OBJECTS OF THE ASSESSEE ARE NOT FOR CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. 2 ITA NO. 2156/PN/2012, A.Y. 2012-13 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS A RE: THE ASSESSEE IS A COMPANY INCORPORATED U/S. 25 OF THE COMPA NIES ACT, 1956 ON 14-03-2012. THE ASSESSEE MADE AN APPLICATION D ATED 15-03- 2012 IN THE PRESCRIBED FORM BEFORE THE COMMISSIONER OF INC OME TAX FOR GRANT OF REGISTRATION U/S. 12A OF THE ACT. THE MAIN OBJEC TS OF THE ASSESSEE COMPANY AS PER THE MEMORANDUM OF ASSOCIATION IS TO ESTABLISH, RUN AND ADMINISTER PHILANTHROPIC, EDUCATIONAL, CULTUR AL AND SPIRITUAL ACTIVITIES AND TO PROMOTE, INTRODUCE AND SPREAD A MONG THE PEOPLE OF ALL CLASSES AND MASSES IN GENERAL, THE VEDANTIC, YO GIC, PHILOSOPHICAL, SPIRITUAL IDEAS ETC. THE COMMISSIONER OF INCOME TAX OBSERVED THAT THE MAIN OBJECTS AND MOST OF THE ANCILLARY OBJECTS OF THE ASSESSEE ARE IN THE NATURE OF OBJECTS FOR THE ADVANCE MENT OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. T HE COMMISSIONER OF INCOME TAX FURTHER OBSERVED THAT SOME O F THE OBJECTS MENTIONED IN ANCILLARY OBJECTS HAVE USED THE TERM BUSI NESS. THE COMMISSIONER OF INCOME TAX PARTICULARLY REFERRED TO ANCILLAR Y OBJECTS NO. 32, 35, 41 AND 44. THE COMMISSIONER OF INCOME TAX POIN TED THAT THE ACTIVITIES MENTIONED IN THESE ANCILLARY OBJECTS ARE WITH RESPECT TO ADVANCING MONEY OR GIVING CREDIT TO PERSONS OR CUSTOMER S, TO PROVIDE FOR THE WELFARE OF THE EMPLOYEES OR EX-EMPLOYEES OF THE CO MPANY AND THEIR FAMILIES, AND TO UNDERTAKEN ANY OTHER ACTIVITY WHICH MAY SEEM TO THE COMPANY DESIRABLE, WHETHER GRATUITOUS OR OTHERWISE. SUCH OBJECTS CANNOT BE CONSIDERED AS CHARITABLE. THE COMMISSIONER OF INCOME TAX CALLED FOR THE DETAILS FROM THE ASSESSEE. THE SAME WERE FURNISHED. AFTER EXAMINING THE DETAILS THE COMMISSIONER OF INCOME TAX HELD THAT THE ASSESSEE HAS NOT UNDERTAKEN ANY OF THE MAIN OBJE CTS SO FAR. THE DONATIONS HAVE NOT BEEN UTILIZED FOR THE OBJECTS STATED IN THE MEMORANDUM OF ASSOCIATION. THE COMMISSIONER OF INCOME TA X ACCORDINGLY, REJECTED THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION U/S. 12A OF THE ACT. 3 ITA NO. 2156/PN/2012, A.Y. 2012-13 3. SHRI S.N. PURANIK APPEARING ON BEHALF OF THE ASSESSEE SU BMITTED THAT SOME OF THE ANCILLARY OBJECTS MENTIONED IN THE OBJEC T CLAUSES OF THE ASSESSEE IN THE MEMORANDUM OF ASSOCIATION INDEED CONTAINE D THE WORD BUSINESS. THE ASSESSEE HAS AMENDED THE OBJECT CLAUS ES TO BRING IT IN LINE WITH THE DEFINITION OF CHARITABLE PURPOSE U/S. 2(15) OF TH E ACT. THE LD. AR HAS PLACED ON RECORD A COPY OF MEMORANDUM OF ASSO CIATION WITH AMENDED OBJECTS. THE LD. AR POINTED OUT THAT EVEN IN TH E UNAMENDED OBJECTS IT WAS SPECIFICALLY MENTIONED IN THE MAIN OBJECTS OF THE ASSESSEE COMPANY THAT NO OBJECTS OF THE COMPANY SHALL BE CARRIED OUT WITHOU T PERMISSION OF THE COMPETENT AUTHORITIES WHOMSOEVER A ND NO OBJECTS OF THE COMPANY SHALL BE CARRIED OUT ON COMMERCIAL BASIS . IN SUPPORT OF HIS SUBMISSION THE LD. AR DRAWS OUR ATTENTION TO MEMORANDUM OF ASSOCIATION AT PAGES 1 TO 28 OF THE PAPER BOOK. THE LD . AR HAS ALSO PLACED ON RECORD A COPY OF THE SPECIAL RESOLUTION PASSED IN THE EXTRA ORDINARY GENERAL MEETING HELD ON 19-10-2012 FOR THE AMEN DMENT OF OBJECT CLAUSES. THE LD. AR SUBMITTED THAT CLAUSES 35 AND 44 HAVE BEEN DELETED AND CLAUSES 32 AND 40 HAVE BEEN AMENDED. THE LD. AR FURTHER SUBMITTED THAT THE COMMISSIONER OF INCOME TAX IN IMPUGNED ORDER HAS CATEGORICALLY MENTIONED THAT THE MAIN OBJECTS AS WELL AS MOST OF THE ANCILLARY OBJECTS OF THE ASSESSEE COMPANY ARE IN THE NA TURE OF OBJECTS FOR THE ADVANCING OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF SECTION 2(15) OF THE ACT, STILL THE COMMISSIONER OF INCOME TAX HAS R EJECTED THE APPLICATION OF THE ASSESSEE. EVEN IF SOME OF THE OBJECTS ARE COMMERCIAL IN NATURE, REGISTRATION CANNOT BE DENIED. IN SUPPORT OF H IS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE DECISION IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GUJARAT MARITIME BOARD REP ORTED AS 289 ITR 139 (GUJ.). 4. ON THE OTHER HAND SHRI S.K. RASTOGI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE REGISTRATION U/S. 12 HAS BEEN DENIED TO THE ASSESSEE 4 ITA NO. 2156/PN/2012, A.Y. 2012-13 ON TWO COUNTS : (I) SOME OF THE OBJECTS OF THE ASSESSEE ARE COMMERCIAL IN NATURE, AND (II) THE EXPENDITURE INCURRED BY THE ASSESSE E ON ONE SPIRITUAL DISCOURSE IS HUGE. THE COMMISSIONER OF INCOME TAX HAS POINTED OUT THAT THE ASSESSEE HAS ORGANIZED A SPIRITUAL GET-TOGETHER. THE ASSESSEE INCURRED EXPENDITURE TO THE TUNE OF ` 15,28,289/- ON SINGLE EVENT. THE ASSESSEE IS CARRYING OUT THE ACTIVITIES IN A FLAMBOYANT MANNER, THUS, THE ASSESSEE CANNOT BE SAID TO BE CARRYIN G ANY CHARITABLE ACTIVITY. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED CERTAIN DOCUMENTS AS ADDITIONAL EVIDENCE. THESE DOCU MENTS WERE NOT BEFORE THE COMMISSIONER OF INCOME TAX. THE ASSESSE E HAS FILED AMENDED MEMORANDUM OF ASSOCIATION AND COPY OF SPECIAL RES OLUTION. THE OBJECT CLAUSE HAS BEEN AMENDED AFTER THE PASSING O F IMPUGNED ORDER. IN SUPPORT OF HIS SUBMISSIONS THE LD. DR PLACED RE LIANCE ON THE DECISIONS RENDERED IN THE CASE OF SINHAGAD TECHNICAL EDU CATION SOCIETY VS. COMMISSIONER OF INCOME TAX REPORTED AS 343 ITR 23 (BOM), IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KAMLA TOWN TRUST REPORTED AS 217 ITR 699 (SC) AND IN THE CASE OF BHRIGURAJ CHARITY T RUST VS. COMMISSIONER OF INCOME TAX REPORTED AS 228 ITR 50 (DEL). 5. CONTROVERTING THE SUBMISSIONS MADE ON BEHALF OF THE DEPARTMENT, THE LD. AR SUBMITTED THAT THE DECISIONS ON W HICH THE REVENUE HAS PLACED RELIANCE ARE UNDER THE TRUST ACT, TH EREFORE, THE SAME WOULD NOT BE APPLICABLE IN THE FACTS OF PRESENT CASE. DURING THE PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME TAX THE AS SESSEE HAD PROMISED TO AMEND/DELETE THE OBJECT CLAUSES ON WHICH TH E COMMISSIONER OF INCOME TAX HAS RAISED OBJECTIONS. THE AS SESSEE HAS AMENDED THE OBJECT CLAUSES OF THE MEMORANDUM OF ASSOCIA TION OF THE ASSESSEE COMPANY. THE ADDITIONAL EVIDENCE FILED BY THE ASS ESSEE IS IN SUPPORT THEREOF WHICH INCLUDE; AFFIDAVIT BY DIRECTOR OF THE CO MPANY, CERTIFICATE OF REGISTRATION OF THE SPECIAL RESOLUTION CONFIRMING ALTERATION 5 ITA NO. 2156/PN/2012, A.Y. 2012-13 OF OBJECT CLAUSE, MEMORANDUM OF ASSOCIATION WITH AMENDED OBJECT CLAUSES, COPY OF SPECIAL RESOLUTION PASSED IN THE EXTRA ORD INARY GENERAL MEETING HELD ON 19-10-2012 AND COPY OF MINUTES O F EXTRA ORDINARY GENERAL MEETING HELD ON 19-10-2012. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DOCUMENTS FILED BY THE ASSESSEE IN THE FORM OF PAPER BOOK. THE COMMISSIONER OF INCOME TAX HAS REJECTE D THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION U/S. 1 2A OF THE ACT PRIMARILY ON THE GROUND THAT SOME OF THE OBJECTS OF THE ASSESSEE COMPANY DO NOT FALL WITHIN THE MEANING OF CHARITABLE PURPO SE AS DEFINED IN SECTION 2(15) OF THE ACT. AFTER THE REJECTION OF THE APPLICATION , THE ASSESSEE HAS AMENDED/DELETED THE OBJECT CLAUSES O N WHICH THE COMMISSIONER OF INCOME TAX HAD RAISED OBJECTIONS. THE AS SESSEE HAS FILED A COPY OF MEMORANDUM OF ASSOCIATION OF THE COMPANY WIT H AMENDED OBJECT CLAUSES, COPY OF SPECIAL RESOLUTION PASSED IN THE EXTRA ORDINARY GENERAL MEETING OF THE COMPANY AND CERTAIN OTHE R RELATED RELEVANT DOCUMENTS. SINCE, THESE DOCUMENTS FILED AS ADDITIO NAL EVIDENCE WERE NOT AVAILABLE BEFORE THE COMMISSIONER OF INCO ME TAX, WE FEEL THAT THE FILE NEEDS A REVISIT TO THE COMMISSIONER OF INCOME TAX. 7. ANOTHER OBJECTION WHICH HAS BEEN RAISED BY THE COMM ISSIONER OF INCOME TAX FOR REJECTING THE APPLICATION OF ASSESSEE IS WIT H REGARD TO EXORBITANT EXPENDITURE INCURRED IN ORGANIZING A SPIRITUAL GE T-TOGETHER. THE ASSESSEE HAS EXPLAINED VARIOUS HEADS UNDER WHICH TH E EXPENDITURE HAS BEEN MADE. REGISTRATION U/S. 12A CANNOT BE DENIED M ERELY ON THE GROUND THAT THE ASSESSEE HAS MADE HUGE EXPENDITURE IN ORGANIZING ANY CONGREGATION. WHILE CONSIDERING THE APPLICATION FOR GRANT OF REGISTRAT ION U/S. 12A, THE COMMISSIONER OF INCOME TAX HAS TO CONFINE HIM SELF TO 6 ITA NO. 2156/PN/2012, A.Y. 2012-13 EXAMINE THE GENUINENESS OF ACTIVITIES AND THE OBJECTS OF T HE APPLICANT TRUST/INSTITUTION. ACCORDINGLY, THE LATER OBJECTION RAISED BY THE COMMISSIONER OF INCOME TAX IN REJECTING THE APPLICATION ON THE BASIS OF EXPENDITURE IS NOT SUSTAINABLE. 8. IN THE FACTS OF THE CASE AND THE SUBSEQUENT EVENT S AFTER THE PASSING OF IMPUGNED ORDER, WE DEEM IT APPROPRIATE TO REM IT THE FILE BACK TO THE COMMISSIONER OF INCOME TAX FOR DECIDING THE A PPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION AFRESH IN THE LIGHT OF ADDITIONAL DOCUMENTS PLACED ON RECORD BEFORE THE TRIBUNAL. 9. IN THE RESULT, THE IMPUGNED ORDER IS SET ASIDE AND T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 03 RD DAY OF FEBRUARY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 03 RD FEBRUARY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT-I, PUNE 4. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 5. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE