Mahesh Pragati Trust, Nashik V. Ito, Nashik

ITA 2420/PUN/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5903 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 06-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Principle of natural justice; Reasonable cause
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2420/PN/2012 MAHESH PRAGATI TRUST C/O KELA HOUSE, PANCHAWATI, NASHIK - 422003 PAN: AATTM4349N APPELLANT VS. CIT-I, NASHIK RESPONDENT APPELLANT BY : SHRI PRAMOD SHINGTE RESPONDENT BY : SHRI S.P . WALIMBE DATE OF HEARING: 02.01.2014 DATE OF ORDER : 09.01.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX-I, [SHORT CIT-I] NASH IK, DATED 30.10.2012 ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX; NASH IK IS NOT JUSTIFIED IN REJECTING THE RENEWAL OF 80G APPLI CATION WITHOUT CONSIDERING THE REASONABLE CAUSE FOR MEAGER ACTIVITIES OF THE TRUST BECAUSE OF CERTAIN LEGAL IN TRICACIES AND TECHNICAL PROBLEMS FOR GETTING EXECUTED THE CON VEYANCE DEED THIS IS AGAINST THE PRINCIPLES OF NATURAL JUST ICE. THE ORDER MAY PLEASE BE CANCELLED AND THE CIT MAY BE DI RECTED TO GRANT RENEWAL FOR 80G CERTIFICATE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT DID NOT VERIFIED THAT TRUST HAS INCURRED EXPENDITURE ON OBJECT OF THE TRUST OF ABOU T RS 38,80,000/- IN EARLIER PERIOD CONSIDERING THE NATUR E OF EXPENSES IT IS CAPITALIZED. THEREFORE THE SOLE REAS ON GIVEN 2 THAT THE ACTIVITIES OF THE TRUST HAS NOT BEEN CARRI ED OUT IN LAST THREE YEARS THIS CANNOT BE SOLE CRITERIA FOR R EFUSAL OR NOT RECOMMENDATION FOR THE RENEWAL UNDER SECTION 80 G I S AGAINST THE NATURAL JUSTICE. THE ORDER MAY PLEASE B E CANCELLED AND THE CIT MAY BE DIRECTED TO GRANT RENE WAL FOR 80G CERTIFICATE THAT APPRECIATE THE FULL COMPLIANCE AS REQUIRED FOR RENEWAL 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT IS NOT JUSTIFIED IN REJECTIN G THE APPLICATION WHEN THE TRUST FULFILS THE CONDITIONS L AID DOWN FOR QUALIFYING FOR DEDUCTION UNDER SECTION 80G. THE CIT MAY BE DIRECTED TO GRANT RENEWAL. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUND OF APPEAL 2. THE CONCERNED CIT FOUND THAT TRUST HAS NOT CARRI ED OUT THE CHARITABLE ACTIVITY AS PER OBJECTS LAID DOWN IN TRU ST DEED DURING THE RELEVANT PERIOD. THEREFORE, THE APPLICATION U/ S. 80G OF I.T. ACT WAS NOT CONSIDERED FOR EXEMPTION. BEFORE US IT WAS SUBMITTED THAT THE ASSESSEE IS A CHARITABLE AND REL IGIOUS TRUST DULY REGISTERED UNDER BPT ACT, VIDE REGISTERED NO.E 628 U/S.12AA OF I.T. ACT, DATED 12.04.1994. IN PURSUAN CE TO THAT, THE ASSESSEE TRUST HAS ALSO BEEN GRANTED CERTIFICAT E U/S.80G FROM TIME TO TIME. THE LAST CERTIFICATE U/S.80G IN 1994 AND THEREAFTER RENEWED FROM TIME TO TIME IN 1995, 1998, 2001 THREE TIMES APPLICABLE UP TO 31.03.2004. ACCORDING TO ASSESSEE , THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES FROM THE EARL IER YEARS WHEN THE APPROVAL AND RECOGNITION U/S.80G WAS GRANT ED AND CERTIFICATE HAS BEEN ISSUED. THE ASSESSEE HAS FILE D AN APPLICATION FOR RENEWAL OF 80G CERTIFICATE BY ITS APPLICATION D ATED 09.04.2012 ALONG WITH ALL NECESSARY INFORMATION. ACCORDING TO CIT, THERE IS NO ACTIVITY OF TRUST DURING THE LAST THREE YEARS. ACCORDING TO LEARNED AUTHORIZED REPRESENTATIVE, THE CLAIM OF ASS ESSEE HAS BEEN REJECTED WITHOUT VERIFYING THE FACT IN THIS RE GARD. MOREOVER, THE REASONABLE CAUSE FOR MEAGER EXPENSES ON ACTIVIT IES BY THE ASSESSEE TRUST HAS NOT BEEN DULY APPRECIATED BY REV ENUE 3 AUTHORITIES. THE STAND OF THE ASSESSEE HAS BEEN TH AT THE TRUST HAS CARRIED OUT ITS ACTIVITIES. THE ASSESSEE HAS E NTERED INTO AN AGREEMENT TO PURCHASE CERTAIN PROPERTY TO CARRY OUT ACTIVITY AS PER OBJECT OF TRUST DEED BUT SAID PROPERTY IS EXPOS ED TO CERTAIN LEGAL INTRICACIES AND TECHNICAL PROBLEMS. SO, SALE DEED OF SAME COULD NOT BE EXECUTED. THE SAME WAS A REASON FOR M EAGER ACTIVITIES AND MEAGER EXPENSES THEREON AT THE RELEV ANT POINT OF TIME. AS STATED ABOVE, THE ASSESSEE HAS ENTERED IN TO AN AGREEMENT OF SALE FOR ACQUISITION OF PLOT. THE TRU ST HAS INCURRED THE EXPENDITURE FOR ACQUISITION OF PLOT / LAND FOR CARRYING ON ACTIVITIES AS PER OBJECT OF TRUST AND SUCH EXPENSES CONSIDERING THE NATURE HAVE BEEN CAPITALIZED AS UNDER: IN 1999-2000 RS.23,00,000/- IN 2000-2001 RS.13,75,000/- IN 2001-2002 RS. 1,90,000/- AS STATED ABOVE, THE SAID PROPERTY WAS EXPOSED TO CERTAIN LEGAL COMPLICATIONS AND TECHNICAL PROBLEMS FOR GETT ING EXECUTED THE CONVEYANCE DEED. SUBSEQUENTLY, PROBLEM WAS SOL VED AND ASSESSEE HAS CONTINUED THE ACTIVITIES. IT IS NOT T HE CASE THAT THE ASSESSEE HAS CLAIMED TO HAVE CHARITABLE ACTIVITY AS PER OBJECT OF TRUST DEED. THE LESSER ACTIVITIES AT THE RELEVANT POINT OF TIME COULD NOT BE SOLE AND VALID GROUND FOR REJECTION OF EXEMPTION U/S.80G. IN VIEW OF ABOVE THE DECISION OF CIT NEED S TO BE RELOOKED IN ITS FACTS AND CIRCUMSTANCES. SO, IN TH E INTEREST OF JUSTICE, WE SET ASIDE THE MATTER TO THE CIT WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. 4 PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 9 TH OF JANUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 9 TH JANUARY 2014 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT-I, NASHIK 4) THE DR, B BENCH, I.T.A.T., PUNE. 5) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE