Treedom Foundation , Bangalore V. The Income Tax Officer (Exemptions) Ward-2 , Bangalore

ITA 2646/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6084 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-03-2019
• Assessment Year: 2018-2019
• Appeal Filed On: 24-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARASIMHA RAJU JDIT
• Keywords: Charitable institution
• Section: 80G; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 2646/BANG/2018 ASSESSMENT YEAR : N.A. TREEDOM FOUNDATION, NO.3, MSR WEST PARK, CHURCH STREET, BENGALURU 560 001. PAN: AADTT 2141G VS. THE INCOME TAX OFFICER (EXEMPTIONS), WARD-2, BENGALURU. APP ELL ANT RESPONDENT APPELLANT BY : S MT. SUMAN L UNKAR, CA R E SPONDENT BY : SHRI M. NARASIMHA RAJU, JDIT DATE OF HEARING : 14 . 03.2019 DATE OF PRONOUNCEMENT : 15 .0 3 .201 9 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 28.8.2018 OF CIT(EXEMPTIONS), BANGALORE REFUSING AP PROVAL U/S.80G(5)(VI) OF THE INCOME TAX ACT, 1961 [THE ACT]. 2. THE ASSESSEE IS A TRUST WHICH CAME INTO EXISTENC E PURSUANT TO A REGISTERED DEED OF TRUST DATED 8.1.2018. THE MAIN OBJECTS FOR WHICH THE TRUST WAS CREATED WAS FOR THE RELIEF TO THE POOR, E NVIRONMENTAL ACTIVITIES AND OTHER GENERAL PUBLIC UTILITY. THE ASSESSEE MADE APPLICATIONS ON ITA NO.2646/BANG/2018 PAGE 2 OF 4 8.2.2018 FOR GRANT OF REGISTRATION U/S.12A OF THE A CT IN FORM NO.10A AND FOR GRANT OF APPROVAL U/S.80G OF THE ACT IN FORM NO. 10 G. 3. AS FAR AS APPLICATION FOR GRANT OF REGISTRATION U/S.12A OF THE ACT IS CONCERNED, THE SAME WAS ALLOWED BY THE CIT(E) VIDE HIS ORDER DATED 29.8.2018. HOWEVER, ON 28.8.2018 HE PASSED THE IMP UGNED ORDER REJECTING THE APPLICATION OF THE ASSESSEE FOR GRANT OF APPROVAL U/S.80G OF THE ACT. THE REASON GIVEN IN THE IMPUGNED ORDER IS THAT THE ASSESSEE HAS NOT CARRIED OUT ANY NOTICEABLE ACTIVITIES. 4. AGGRIEVED BY THE AFORESAID ORDER, THE ASSESSEE H AS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD T HE RIVAL SUBMISSIONS. THE LIMITED OBJECTION RAISED BY THE LD. CIT(E) IS T HAT THE ASSESSEE HAS NOT STARTED SIGNIFICANT ACTIVITY AND ACCORDINGLY THE AP PLICATION IS NOT FIT FOR GRANT OF APPROVAL UNDER SECTION 80G OF THE ACT. IN OTHER WORDS, THE LD. CIT(E) HAS ACCEPTED THE FACT THAT THE ASSESSEE HAS STARTED CER TAIN ACTIVITIES AS PER ITS OBJECTS. THE OBJECTS HAVE BEEN DULY VERIFIED AND AP PROVED AS CHARITABLE OBJECTIVES WHILE GRANTING APPROVAL UNDER SEC.12AA O F THE ACT. IN OUR VIEW, WHAT IS OF RELEVANCE FOR THE PURPOSES OF GRANT OF A PPROVAL UNDER SEC.80G IS, WHETHER THE OBJECTIVES ARE CHARITABLE OR NOT; THE ACTIVITIES, SO STARTED, HOWSOEVER INSIGNIFICANT IT MAY BE, ARE GENUINE ACTI VITIES OR NOT; AND WHETHER THE SAME ARE IN CONSONANCE WITH AND IN FURT HERANCE OF THE OBJECTIVES OF THE ASSESSEE SOCIETY. 5. ACCORDING TO SECTION 80G AS WELL AS RULE 11AA, W HAT IS REQUIRED TO BE SEEN IS, WHETHER THE INSTITUTION/FUND HAS BEEN E STABLISHED IN INDIA FOR A CHARITABLE PURPOSE OR NOT. SECONDLY, IT LAYS DOWN C ERTAIN ADDITIONAL CONDITIONS UNDER CLAUSE (I) TO CLAUSE (V) WHICH ARE REQUIRED TO BE FULFILLED. RULE 11AA PROVIDES THAT WHERE THE CIT IS SATISFIED THAT THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SUB-SEC.5 ARE FULFILL ED, THE CIT IS REQUIRED TO ITA NO.2646/BANG/2018 PAGE 3 OF 4 RECORD HIS SATISFACTION BEFORE GRANT OF APPROVAL UN DER SEC.80G(VI). WHERE HOWEVER, THE CIT IS SATISFIED THAT ONE OR MORE OF T HE CONDITIONS ARE NOT FULFILLED, HE IS EMPOWERED TO REJECT THE APPLICATIO N FOR APPROVAL AFTER RECORDING THE REASONS FOR SUCH REJECTION. IN THE IN STANT CASE, THE ASSESSEE HAS BEEN DULY REGISTERED UNDER SEC.12AA WHICH SHOWS THAT LD. CIT HAS ALREADY VERIFIED ITS OBJECTIVES AND ITS ESTABLISHME NT FOR CHARITABLE PURPOSES. REGARDING FULFILMENT OF ADDITIONAL CONDITIONS SPECI FIED IN CLAUSE (I) TO CLAUSE (V) OF SEC.80G(5), WE FIND THAT THERE IS NO RECORDI NG OF SATISFACTION REGARDING NON-FULFILMENT OF ANY OF THE CONDITIONS S O SPECIFIED AND THE LD. CIT(E) HAS SUMMARILY REJECTED THE ASSESSEE'S APPLIC ATION. THE DECISION OF THE ITAT JAIPUR IN THE CASE OF ANAND INCUBATION CENTRE VS. CIT(E), JAIPUR (2017) 86 TAXMANN.COM 250 (JAIPUR) SUPPORTS THE PLEA OF THE ASSESSEE IN THIS REGARD. 6. SINCE THE ONLY REASON FOR NOT ACCORDING APPROVAL U/S.80G OF THE ACT WAS THAT THE ASSESSEE DID NOT CARRY ON ANY CHARITAB LE ACTIVITY AND SINCE THAT REASON HAS BEEN HELD TO BE NOT RELEVANT FOR GR ANT OF APPROVAL, AS A CONSEQUENCE, THE APPROVAL U/S.80G OF THE ACT SHOULD BE ALLOWED. WE HOLD AND DIRECT ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF MARCH, 2019. SD/- SD/- ( G. MANJUNATHA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEM BER JUDICIAL MEMBER BANGALORE, DATED, THE 15 TH MARCH, 2019. / D ESAI S MURTHY / ITA NO.2646/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APP ELL ANT 2. RESPONDENT 3. CIT 4. C IT(A ) 5. DR, ITAT, BANGALORE. 6. GUAR D FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.