Dr. Parammitra Shashtri Education Charitable Trust, Baroda V. The CIT-I, Baroda

ITA 2495/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72981 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-01-2014
• Assessment Year: misc
• Appeal Filed On: 23-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Reasonable cause
• Section: 12A

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.2495/AHD/2013 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : - ) DR.PARAMMITRA SHASHTRI EDUCATION CHARITABLE TRUST 402, AVANI RESIDENCY B/H. YASH COMPELX, GERI COMPOUND ROAD GOTRI ROAD VADODARA 390 015 / VS. THE CIT-I BARODA ( !./)* !./ PAN/GIR NO. : AABTD 6312 R ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI TEJ SHAH, A.R. ,-(+ / . / RESPONDENT BY : SHRI SUBHASH BAINS, CIT-D.R. ' 0 / $1 / / / / DATE OF HEARING : 29/01/2014 23' / $1 / DATE OF PRONOUNCEMENT : 21/02/2014 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX-I, BARODA (CIT FOR SHORT) DATED 12/07/2013 PASSED U/S.12AA(1)(B)(II) R.W.S. 12A(A) OF THE I.T. ACT, 1961. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- THE APPELLANT BEGS TO PREFER THIS APPEAL ON THE FO LLOWING AMONGST OTHER GROUNDS WHICH MAY BE URGED BEFORE OR DURING THE TIM E OF HEARING OF THE APPEAL: ITA NO.2495/AHD /2013 DR. PARAMMITRA SHASHTRI VS. CIT - 2 - 1. THAT THE LD.CIT ERRED IN REFUSING TO GRANT REGISTRA TION U/S.12AA OF THE ACT. 2. ANY OTHER GROUND. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FILED AN APPLICATION IN THE PRESCRIBED FORM NO.10A FOR REGISTRATION U/S.12A(A) OF THE INCOME-TAX ACT (HEREINAFTER REFERRED TO AS THE ACT). IN ORD ER TO PROCESS THE APPLICATION FOR REGISTRATION, A QUESTIONNAIRE DATED 05/02/2013 WAS ISSUED BY THE LD.CIT. IN PURSUANCE TO THAT, THE ASSESSE E FILED A LETTER DATED 13/02/2013. THE LD.CIT RECORDED THAT THE ASSESSEE- TRUST IS REGISTERED WITH THE CHARITY COMMISSIONER ON 29/09/2011. HE H AS RECORDED THE MAIN OBJECTS OF THE TRUST IN PARA-3 OF HIS ORDER. I N ORDER TO VERIFY THE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE TR UST, A LETTER DATED 26/04/2013 WAS ISSUED TO THE TRUST CALLING UPON TO SUBMIT REPORT ON CHARITABLE ACTIVITIES CARRIED OUT FROM THE DATE OF INCEPTION OF THE TRUST WITH DOCUMENTARY EVIDENCES IN SUPPORT OF ITS CLAIM. THE LD.CIT FURTHER RECORDED THAT IN RESPONSE TO LETTER DATED 26/04/20 13, THE ASSESSEE FILED A REPLY VIDE LETTER DATED 06/05/2013. HOWEVER, AFTE R CONSIDERING THE REPLY OF THE ASSESSEE, THE LD.CIT WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE-TRUST AND REJECTED THE APPLICATION. 3. NOW, THE ASSESSEE IS IN FURTHER APPEAL AGAINST T HE REJECTION OF THE APPLICATION. IT IS NOTEWORTHY THAT THE APPEAL FILE D BY THE ASSESSEE IS BARRED BY DELAY OF 37 DAYS. THE APPLICATION FOR C ONDONATION OF DELAY HAS BEEN FILED. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HERE WAS A REASONABLE CAUSE FOR DELAY IN FILING THE PRESENT AP PEAL. HE HAS DRAWN OUR ITA NO.2495/AHD /2013 DR. PARAMMITRA SHASHTRI VS. CIT - 3 - ATTENTION TOWARDS THE AFFIDAVIT FILED BY ONE SHRI R AMANATH PANDEY, TRUSTEE OF THE APPELLANT-TRUST. 4.1. ON THE CONTRARY, LD.CIT-DR SUBMITTED THAT THE RE IS NO REASONABLE CAUSE FOR CONDONING THE DELAY. 5. AFTER HEARING THE RIVAL CONTENTIONS AND CONSIDER ING THE AFFIDAVIT FILED BY THE TRUSTEE OF THE ASSESSEE-TRUST, WE ARE OF THE VIEW THAT THE ASSESSEE-TRUST HAD A REASONABLE CAUSE FOR NOT FILIN G THE APPEAL WITHIN THE PRESCRIBED TIME. THEREFORE, THE DELAY OF 37 DAYS I S HEREBY CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 6. THE LD.COUNSEL FOR THE ASSESSEE SHRI TEJ SHAH VE HEMENTLY ARGUED THAT THE LD.CIT FAILED TO APPRECIATE THE FACTS OF T HE CASE IN RIGHT PERSPECTIVE. HE SUBMITTED THAT AT THE TIME OF REGI STRATION, THE LD.CIT HAS TO SEE WHETHER OBJECTS OF THE ASSESSEE-TRUST ARE CH ARITABLE IN NATURE OR NOT. HE PLACED RELIANCE ON THE DECISION OF HON BLE COORDINATE BENCH (ITAT C BENCH AHMEDABAD) RENDERED IN THE CASE OF AJIT EDUCATION TRUST VS. CIT REPORTED AT (2010) 42 SOT 415 (AHD.) DATED 24/09/2010. 6.1. ON THE CONTRARY, LD.CIT-DR SHRI SUBHASH BAINS SUBMITTED THAT THE CASE-LAW AS RELIED UPON BY THE ASSESSEE IS NOT APPL ICABLE ON THE PRESENT CASE. HE SUBMITTED THAT AT THE TIME OF REGISTRATIO N, THE LD.CIT HAS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVI TIES OF THE TRUST AND HE IS EMPOWERED TO MAKE ENQUIRY IN THIS RESPECT. HE SUBMITTED THAT THE ITA NO.2495/AHD /2013 DR. PARAMMITRA SHASHTRI VS. CIT - 4 - ASSESSEE-TRUST COULD NOT SATISFY THE CIT IN RESPECT OF GENUINENESS OF ACTIVITY AND NATURE OF SUCH ACTIVITY BEING CHARITAB LE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE SO FAR AS THE PROPOSITION IS CONCERNED, THAT BEFORE GRANTING REGISTRATION, THE L D.CIT HAS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, HE IS EMPOWERED TO MAKE ENQUIRY IN THIS RESPECT. WE FI ND THAT THE LD.CIT HAS NOT DOUBTED ABOUT THE OBJECTS OF THE TRUST BEING NO T CHARITABLE IN NATURE, BUT HE WAS OF THE VIEW THAT OUT OF TWO ACTIVITIES C ARRIED OUT BY THE ASSESSEE-TRUST, FIRST IS - ORGANIZING A CONFERENCE AND THE SECOND IS - GIVING SCHOLARSHIP AMOUNTING TO RS.5,000/- AND RS.6,500/- TO THE STUDENTS AT PANCHMAHAL AND KHEDA DISTRICT. IN RESPECT OF THE F IRST ACTIVITY, THE LD.CIT OPINED THAT ORGANIZING A CONFERENCE DOES NOT FIT INTO ANY OF ITS OBJECTIVES, I.E. EDUCATIONAL, HEALTH, CHARITABLE AC TIVITIES, DEVELOPMENT OF GOOD CULTURE, FARMERS AND RURAL INDIA. IN RESPECT OF THE SECOND ACTIVITY, LD.CIT WAS OF THE VIEW THAT THE SCHOLARSHIP GIVEN B Y THE ASSESSEE WAS IN CASH, THE GENUINENESS OF THE DONATION GIVEN IS NOT VERIFIABLE. THEREFORE, IT IS NOT A FIT CASE FOR GRANTING REGISTRATION UNDER S ECTION 12A OF THE ACT, AT THIS STAGE. SO FAR AS THE PROPOSITION THAT BEFORE GRANTING REGISTRATION TO ANY TRUST U/S.12A OF THE ACT IS CONCERNED, THE CIT HAS POWER TO MAKE ENQUIRIES. BUT IN THE PRESENT CASE, THE LD.CIT HAS NOT MADE ENQUIRY WHETHER THE ASSESSEE HAD GENUINELY CARRIED OUT THE SECOND ACTIVITY AND HE SIMPLY DOUBTED THAT THE TRUST IS BASED AT BARODA AN D DONATION IS GIVEN AT PANCHMAHAL AND KHEDA DISTRICT. ONE OF THE OBJECTS OF THE ASSESSEE-TRUST IS SCHOLARSHIP. AS PER THIS OBJECT, THE ASSESSEE I S REQUIRED TO HELP NEED ITA NO.2495/AHD /2013 DR. PARAMMITRA SHASHTRI VS. CIT - 5 - BASED AND INTELLIGENT AND MERITORIOUS STUDENTS. TH E LD.CIT OUGHT TO HAVE VERIFIED FROM THE CHILDREN WHO HAD BEEN GRANTED SCH OLARSHIP BY THE ASSESSEE-TRUST. THE LD.CIT FAILED TO APPRECIATE THE FACT THAT THE SCHOLARSHIP WAS GIVEN BY THE ASSESSEE-TRUST TO THE NEEDY CHILDREN AT PANCHMAHAL AND KHEDA DISTRICT OF RURAL AREA. THERE FORE, IN OUR CONSIDERED VIEW, THE LD.CIT SHOULD NOT HAVE CASUALL Y REJECTED THE APPLICATION OF THE ASSESSEE-TRUST. THEREFORE, THE ORDER OF THE LD.CIT IS HEREBY SET ASIDE AND HE IS DIRECTED TO RECONSIDER T HE ASSESSEES APPLICATION AFTER MAKING DUE VERIFICATION OF ACTIVI TIES OF THE TRUST. THUS, THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 21/ 02 /2014 71.., .../ T.C. NAIR, SR. PS 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ ': / CONCERNED CIT-I, BARODA 4. ':() / THE CIT(A)-CONCERNED 5. 8 #; ,$ , , / DR, ITAT, AHMEDABAD 6. ;<& =0 / GUARD FILE. 4' 4' 4' 4' / BY ORDER, -8$ ,$ //TRUE COPY// > >> >/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD