Yuva Viaks Manch, Baroda V. The CIT-III, Baroda

ITA 2589/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9290 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Keywords: Opportunity of being heard; Principle of natural justice; Corroborative evidences
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, AM. ITA NO.2589/AHD/2012 ASST. YEAR: YUVA VIKAS MANCH, 27, PANCHVATI SOCIETY, AJWA ROAD, VADODARA. VS. CIT-III, BARODA. APPELLANT RESPONDENT PAN AAATY 2850J APPELLANT BY SHRI SAKAR SHARMA, AR RESPONDENT BY SHRI JAGDISH, CIT,.DR DATE OF HEARING: 3/3/2016 DATE OF PRONOUNCEMENT: 8/03/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE OR DER OF LD. CIT- III, BARODA, PASSED U/S 80G(5) OF THE INCOME-TAX AC T, 1961 (IN SHORT THE ACT) READ WITH RULE 11AA(5) OF THE I.T. RULES, 1962, ON 24/9/2012. THE ONLY GROUND RAISED BY ASSESSEE IN THIS IS AS UN DER :- 1. THE LEARNED CIT ERRED ON FACTS AND IN LAW IN NOT GRANTING APPROVAL U/S 80G(5)(VI) OF THE ACT. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AP PLICANT TRUST WHICH WAS CREATED ON 31.12.2010 AND REGISTERED WITH CHARI TY COMMISSIONER ON 22.07.2011 FILED AN APPLICATION IN FORM 10G FOR APPROVAL OF THE TRUST U/S 80G OF THE ACT. HOWEVER, LD. CIT REJECTED THE ITA NO. 2589/AHD/2012 ASST. YEAR 2 APPLICATION OF ASSESSEE TRUST SEEKING APPROVAL UNDE R SECTION 80G READ WITH RULE 11AA OF IT RULES, 1962 BY OBSERVING AS UNDER :- 1. AN APPLICATION FOR GRANT OF APPROVAL U/S. OG(5 )(VI) OF THE INCOME TAX ACT, 196L WAS SUBMITTED IN FORM NO. 10G BY YUVA VIKAS MA NCH, HEREINAFTER TERMED AS APPLICANT TRU ST ON 28.03.2012. 2. APPLICANT TRUST WAS CREATED ON 31.12.2010 AND WAS R EGISTERED WITH CHARITY COMMISSIONER ON 22.07.2011. AS PER RULE 11AA(2)(II) , APPLICATION IN FORM 10G IS TO BE ACCOMPANIED BY NOTES ON ACTIVITIES OF TRUS T SINCE ITS INCEPTION. THE ACTIVITY REPORT ENCLOSED WITH THE APPLICATION MENTI ONS THAT FROM THE DATE OF REGISTRATION OF THE TRUST U/S.12A I.E. 23.3.2012, T RUST HAS CARRIED OUT EDUCATIONAL ACTIVITIES AS PER OBJECTIVES LISTED IN THE TRUST DE ED AND THE TRUST IS GOING TO DO FURTHER ACTIVITIES FOR SERVICE OF UP-LIFTMENT OF MA N KIND AND OTHER CHARTAIB!E ACTIVITIES. SINCE THE ACTIVITY REPORT WAS NOT INDI CATING SPECIFIC ACTIVITY CARRIED OUT BY THE TRUST SO FAR; THROUGH LETTER DATED 11.06.12, APPLICANT WAS ASKED TO PROVIDE CHARITABLE ACTIVITY REPORT FOR LAST 3 YEARS ALONG W ITH SUPPORTING EVIDENCES. IN LETTER DATED 4.7.12 SUBMITTED IN DAK, THE APPLICANT REFERR ED TO THE ACTIVITY REPORT ENCLOSED W:CH THE APPLICATION, HOWEVER, THROUGH LET TER DATED 5.9.2012, ANOTHER ACTIVITY REPORT WAS FILED BY APPLICANT, IN WHICH IT WAS STATED THAT EDUCATIONAL ACTIVITIES AS PER AUDITED INCOME AND EXPENDITURE AC COUNT AND BALANCE-SHEET FOR A.Y. 2011-12 SUCH AS DISTRIBUTION OF NOTE BOOKS TO NEEDY STUDENTS AS PER OBJECTS OF TRUST DEED WERE CARRIED OUT. A BILL OF MANOJ ENT ERPRISE DATED 4.6.2011 FOR RS. 20,340/- FOR NOTE BOOKS WAS ALSO FILED. SINCE EXACT NATURE OF CHARITABLE ACTIVITIES CARRIED OUT BY APPLICANT TRUST WERE NOT BORNE OUT F ROM THE DOCUMENTS FILED, NOTICE IN TERMS OF RULE 1IAA(5) OF L. T. RULES WAS ISSUED PROVIDING OPPORTUNITY OF HEARING AS WELL AS ASKING THE APPLICANT: TO DEMONST RATE CHARITABLE ACTIVITY CARRIED OUT AS PER ITS OBJECTS ALONG WITH SUPPORTING EVIDEN CES. IN RESPONSE TO THE SAME SHRI BHASKER PATEL, ADVOCATE ATTENDED AND WAS HEARD . HE REFERRED TO THE BILL OF MANOJ ENTERPRISE & CLAIMED DISTRIBUTION OF NOTE BOO KS TO THE NEEDY TO BE CHARITABLE ACTIVITY CARRIED OUT. APART FROM THE DOC UMENTS ALREADY FILED, HE DID NOT FILE ANY FURTHER DOCUMENTS IN SUPPORT OF CHARITABLE ACTIVITY CARRIED OUT. 3. ON A CAREFUL CONSIDERATION OF THE DOCUMENTS ON THE RECORD, I AM NOT SATISFIED ABOUT THE GENUINENESS OF ACTIVITIES OF THE APPLICAN T TRUST. AS PER THE TRUST DEED, ITS OBJECTIVES ARE TO PROMOTE EDUCATIONAL ACTIVITIE S BY ESTABLISHING EDUCATIONAL INSTITUTIONS, PROMOTE EDUCATIONAL ACTIVITIES TO SUP PORT NEEDY STUDENTS IN ACQUIRING HIGHER QUALIFICATIONS BY FEES, BOOKS ETC. THE TRUST ALSO HAS OBJECTIVE TO PROMOTE MEDICAL RELIEF BY ESTABLISHING ULTRA MODERN FACILIT IES. HOWEVER, APPLICANT HAS NOT FILED ANY EVIDENCE IN SUPPORT OF HAVING CARRIED OUT ANY SUCH ACTIVITIES SO FAR OR ITS PLANS FOR ESTABLISHING SUCH INSTITUTIONS ETC. IN NE AR FUTURE. THE ONLY ACTIVITY CLAIMED TO BE CARRIED OUT SO FAR IS DISTRIBUTION OF NOTE BOOKS FREE OF COST, WHICH ALSO IS CLAIMED SOLELY ON THE BASIS OF ONE SINGLE B ILL FOR NOTE BOOKS. NO DETAILS OF BENEFICIARIES OR EVIDENCE OF DISTRIBUTING SUCH NOTE BOOKS ETC. FREE IS FILED. MOREOVER, EDUCATIONAL EXPENSES IN THE INCOME & EXPE NDITURE A/C. FOR YEAR ENDING 31.3.2012 ARE RS. 41,821/-, WHEREAS PROOF FI LED IS TOWARDS EXPENSES OF RS. 20,340/- ONLY. IN THIS SITUATION, I AM NOT SATI SFIED THAT THE APPLICANT TRUST HAS CARRIED OUT ACTIVITIES AS PER TRUST DEED TIL! NOW O R HAS ANY CONCRETE PLANS TO CARRY ITA NO. 2589/AHD/2012 ASST. YEAR 3 OUT THE SAME IN NEAR FUTURE. APPLICATION SEEKING AP PROVAL UNDER SECTION 80 G(5)(VI) R.W. RULE 11AA IS THEREFORE REJECTED. 3. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE US. 4. AT THE OUTSET THE LD. AR SUBMITTED THAT SUFFICIE NT DETAILS WERE ATTACHED ALONG WITH THE APPLICATION IN FORM NO.10G SEEKING APPROVAL UNDER SECTION 80G OF THE ACT INCLUDING ACTIVITY REP ORTS, AUDITED INCOME AND EXPENDITURE ACCOUNTS ETC. LD. AR FURTHER SUBMITTED THAT IT SEEMS THAT LD. CIT-III WAS NOT SATISFIED WITH THE N ECESSARY DETAILS AND WAS SEEKING FOR MORE DOCUMENTARY EVIDENCES TO DEMON STRATE THAT THE CHARITABLE ACTIVITY IS CARRIED ON BY THE ASSESS EE AND THEREFORE, IF ONE MORE OPPORTUNITY IS GIVEN THEN NECESSARY DETAIL S TO THE SATISFACTION OF LD. CIT CAN BE PRODUCED FOR VERIFIC ATION. 5. LD. DR STATED THAT THERE IS NO OBJECTION ON THEI R PART IF THE MATTER IS SET ASIDE TO THE FILE OF LD. CIT FOR FRES H ADJUDICATION. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FROM GOING THROUGH THE OBSERVATIONS OF L D. CIT WE FIND THAT APPLICATION WAS SUBMITTED IN FORM NO.10G ON 28 TH MARCH, 2012 SEEKING APPROVAL U/S 80G(5) OF THE ACT AND CERTAIN REPLIES WERE FORWARDED BY THE ASSESSEE BEFORE LD. CIT ENCLOSING ACTIVITY REPORTS, AUDITED FINANCIAL STATEMENT, SAMPLE OF BILL FOR PUR CHASE OF NOTE BOOKS WHICH WERE USED FOR BEING DISTRIBUTED AMONG THE NEE DY STUDENTS. HOWEVER, LD. CIT WAS NOT SATISFIED WITH THE LIMITED DETAILS FILED BY THE ASSESSEE AND REJECTED THE APPLICATION. ITA NO. 2589/AHD/2012 ASST. YEAR 4 7. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ON THE GROUND OF NATURAL JUSTICE ONE MORE OPPORTUNITY SHOULD BE G IVEN TO THE ASSESSEE TO DEMONSTRATE BEFORE LD. CIT THAT CHARITA BLE ACTIVITIES HAVE BEEN CARRIED OUT REGULARLY BY THE ASSESSEE TRUST AN D ALSO TO FURNISH SUPPORTING EVIDENCES IN THE FORM OF PURCHASE BILLS, DETAILS OF FREE DISTRIBUTION OF NOTE BOOKS, OTHER EDUCATIONAL ACTIV ITIES, DETAILS OF SOCIAL EVENTS, IF ANY, TAKEN UP. WE, THEREFORE, SET ASIDE THE ISSUE TO THE FILE OF LD. CIT FOR FRESH ADJUDICATION AND IT I S NEEDLESS TO MENTION THAT SUFFICIENT OPPORTUNITY OF BEING HEARD TO ASSES SEE WILL BE PROVIDED FOR SUBMITTING VARIOUS DETAILS AS MENTIONED ABOVE I N ORDER TO DEMONSTRATE THE GENUINENESS OF TYPE OF CHARITABLE A CTIVITIES CARRIED ON BY THE ASSESSEE ALONG WITH SUBSTANTIVE EVIDENCES . 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 8/03/2016 MAHATA/- ITA NO. 2589/AHD/2012 ASST. YEAR 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 3/03/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 4/03/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 8/3/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: