M/s Madad Charitable Foundation, Amritsar V. Comm Of Income Tax ( Examption), Chandigarh

ITA 225/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6851 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 27-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Charitable institution

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 225/(ASR)/2017 ASSE SSMENT YEAR: MADAD CHARITABLE FOUNDATION 33, D.R. ENCLAVE, AJNALA ROAD, AMRITSAR [PAN: AAETM 4336K] VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SATISH BANSAL (C.A.) RESPONDENT BY: SMT. PARWINDER KAUR, CIT-DR DATE OF HEARING: 26.11.2018 DATE OF PRONOUNCEMENT: 02.01.201 9 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER U/S. 80-G(5)(VI) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH (CIT(E) FOR S HORT) DATED 28.03.2017, ALLOWING APPROVAL TO THE ASSESSEE-APPELLANT THERE-U NDER WITH EFFECT FROM ASSESSMENT YEAR (AY) 2017-18. 2. TAKE THE APPEAL RAISES A SOLE GROUND, READING A S UNDER: 1. THAT THE LD. CIT(EXEMPTIONS), CHANDIGARH HAS GR ANTED THE APPROVAL U/S. 80G(5)(VI) WITH RESPECT TO THE ACTIVITIES, THAT COULD BE CONSTRUED AS CHARITABLE ARE MAINLY ON PROVIDING SCHOLARSHIP, ONLY, AND NOT FOR ALL OTHER ACTIVITIE S OF CHARITABLE & ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IN NATURE, AS SPEC IFIED IN TRUST DEED WITHOUT MENTIONING ANY REASON. ITA NO. 225/ASR/2017 (AY) MADAD CHARITABLE FOUNDATION V. CIT 2 3. OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE A SSESSEE-APPELLANT, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR) , SH. BANSAL, THAT THE ASSESSEES ONLY GRIEVANCE, AS PROJECTED PER ITS GR OUND (SUPRA), IS THE CONDITION (II), AS UNDER, WHICH, INTER ALIA , IS ONE OF THE CONDITIONS SUBJECT TO WHICH THE LD. CIT(E) HAS ALLOWED APPROVAL TO THE APPELLANT-TRUST U/S. 80 -G(5)(VI) OF THE ACT: (II) THE ACTIVITIES THAT COULD BE CONSTRUED AS CHA RITABLE ARE MAINLY ON PROVIDING SCHOLARSHIPS. THE SAID CONDITION, HE ADDED, AS A READING OF THE I MPUGNED ORDER WOULD BEAR OUT, IS WITHOUT MENTION OR REFERENCE TO ANY REASON FOR THE APPROVING AUTHORITY TO, WHILE GRANTING APPROVAL, CONSTRUE ONLY ONE OF THE ACTIVIT IES (OBJECTS) OF THE ASSESSEE AS CHARITABLE. WHY, IF THAT BE SO, IT WOULD NOT BE GRA NTED REGISTRATION U/S.12AA (ON 31. 08.2016); THE TRUST DEED HAVING NOT UNDERGONE ANY C HANGE SINCE, WITH THE APPLICATION U/S. 80-G HAVING BEEN MOVED SOON AFTER ON 27.9.2016. HE WOULD THEN TAKE US THROUGH THE TRUST DEED (PB PAGES 1-26), TO SHOW THAT EACH OF THE FOUR OBJECTS PER THE OBJECT CLAUSE (4), ENUMERATED AT CL AUSES 4.1 THROUGH 4.4, ARE CHARITABLE IN NATURE. THE APPROVAL, HE WOULD CONTIN UE, RATHER THAN BEING MADE WITH REFERENCE TO THE OBJECTS OF THE APPLICANT-TRUST, OU GHT TO BE QUA THE SATISFACTION (OR OTHERWISE) OF THE CONDITIONS LAID DOWN IN LAW, I.E. , AS PER CLAUSES (I) TO (V) OF SECTION 80(G)(5). HE, ACCORDINGLY, PRAYED FOR THE S AID CONDITION (II) TO BE EXPUNGED FROM THE IMPUGNED ORDER. THE LD. DEPARTMENTAL REPRE SENTATIVE (DR) COULD NOT STATE ANY VALID REASON FOR THE INCLUSION OF THE SAI D CONDITION BY THE LD. CIT (E). 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. IT IS, TO BEGIN WITH, NOT POSSIBLE FOR US TO ACCOR D OUR APPROVAL TO THE BROAD STATEMENT MADE BY THE LD. COUNSEL, SH. BANSAL, DURI NG HEARING THAT THE APPROVING AUTHORITY CONSIDER AN APPLICATION FOR APPROVAL U/S. 80-G(5)(VI) WITHOUT REFERENCE TO THE APPLICANTS OBJECTS. THAT THE FUND OR INSTITUTI ON IS ESTABLISHED IN INDIA FOR ITA NO. 225/ASR/2017 (AY) MADAD CHARITABLE FOUNDATION V. CIT 3 CHARITABLE PURPOSES IS THE SINE QUA NON FOR IT BEING RECOGNIZED U/S. 80-G(2)(A)(IV). RATHER, THE HONBLE COURTS HAVE EXPLAINED THAT IT I S PERMISSIBLE FOR THE APPROVING AUTHORITY TO, WHILE CONSTRUING THE PURPOSE OF THE T RUST, GO BEYOND THE OBJECTS OF THE TRUST, I.E., AS SET OUT IN THE MEMORANDUM OF ASSOCI ATION OR THE TRUST DEED. THE PURPOSE BEING TO FIND THE REAL PURPOSE OF THE ESTAB LISHMENT OF THE TRUST, AS AGAINST ITS OSTENSIBLE PURPOSE (REFER: SONEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY V. CIT [2005] 278 ITR 262 (P&H), RELIED UPON BY THE ASSES SEE). THAT SAID, WE FIND NO REASON NOT TO ACCEPT THE ASS ESSEES CASE. THERE IS NOTHING IN THE TRUST DEED, OR THE APPELLANTS ACTIV ITIES, DETAILED IN THE NOTES ON ITS ACTIVITIES FORMING PART OF ITS APPLICATION IN FOR M 10G (AT PB PAGE 44), AS WELL AS IN REPLY (DATED 25/2/2017) TO THE SHOW CAUSE LETTER (AT PB PAGE 47), OR EVEN IN THE FINANCIAL STATEMENTS (PB PGS. 29-33, 34-38), THAT W OULD REMOTELY SUGGEST THAT THE ASSESSEE IS ENGAGED ONLY IN EDUCATIONAL OBJECTS (OB JECT CLAUSE 4.1), GRANTING SCHOLARSHIPS. IN FACT, AS WE OBSERVE, NO SCHOLARSHI PS HAVE BEEN PROVIDED BY THE ASSESSEE-TRUST AS PER THE MATERIAL ON RECORD, NOR C OULD THE LD. DR POINT TO ANY SUCH. IN OTHER WORDS, THERE IS NO BASIS FOR THE SAID COND ITION (II), WHICH WE FIND TO BE MORE IN THE NATURE OF AN OBSERVATION. WE, ACCORDINGLY, DIRECT THE LD. CIT(E) TO ISSUE A R EVISED ORDER U/S. 80- G(5)(VI) EXCLUDING THE SAID CONDITION (II), OR OTHE RWISE ISSUE A RECTIFICATION, WHICH SHALL, IN THAT CASE, FORM AN INTEGRAL PART OF THE P ARENT ORDER. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 02, 2 019 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 02.01.2019 /GP/SR PS. ITA NO. 225/ASR/2017 (AY) MADAD CHARITABLE FOUNDATION V. CIT 4 COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: MADAD CHARITABLE FOUNDATION 33, D.R. ENCLAVE, AJNALA ROAD, AMRITSAR (2) THE RESPONDENT: COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH (3) THE CIT(EXEMPTIONS), CHANDIGARH (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER