M/s. K-Link Foundation, Bhuj V. The Commissioner of Income Tax-I, RAJKOT-GUJARAT

ITA 268/RJT/2013

• Counselvise Citation: 26824914 RSA 2013
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-02-2014
• Assessment Year: misc
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA; DR JAYANT B JHAVERI
• Assessee Lawyers: KALPESH DOSHI
• Section: 12; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 268/RJT/2013 K-LINK FOUNDATION, 1 ST FLOOR, WING-C, KATIRA COMMERCIAL CENTRE, MUNDRA RELOCATION SITE, BHUJ-KUTCH PAN : AAECK 8710 A ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX RAJKOT-I RAJKOT / RESPONDENT / ASSESSEE BY SHRI KALPESH DOSHI, CA / REVENUE BY DR. JAYANT B. JHAVERI, DR & DR M L MEENA, DR / DATE OF HEARING 12.02.2014 !'# / DATE OF PRONOUNCEMENT 26.02.2014 / ORDER THIS APPEAL BY THE ASSESSEE-INSTITUTION IS AGAINST THE ORDER DATED 08.04.2013 OF COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT REJ ECTING THE APPLICATION OF THE ASSESSEE-INSTITUTION FOR REGISTRATION U/S 12A OF T HE INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-INSTI TUTION NAMELY M/S. K-LINK FOUNDATION, BHUJ MADE AN APPLICATION FOR REGISTRATI ON U/S 12A OF THE INCOME-TAX ACT ON 26.10.2012 IN PRESCRIBED FORM NO.10A, ALONGWITH XEROX COPY OF THE MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE F OUNDATION AND REGISTRATION CERTIFICATE UNDER THE COMPANIES ACT DATED 20.06.2012. 3. THE OBJECTS OF THE ASSESSEE-INSTITUTION, AS PER MEMORANDUM OF ASSOCIATION, ARE AS UNDER:- I. TO PROVIDE MULTI SECTORAL INFORMATION, KNOWLEDGE AND INFORMATION FOR DEVELOPMENT, IMPROVE QUALITY OF LIFE AND LIVELIHOOD IN THE SECTORS OF HEALTH, EDUCATION, INFRASTRUCTURE, COMPUTER TRAINING, KNOWL EDGE, NATURAL RESOURCE MANAGEMENT, LEGAL AID, LIVELIHOOD AND GOVERNANCE FO R PROMOTION, SUPPORT, NURTURE, EDUCATION, TRAINING, STRENGTHEN, EMPOWERME NT, ENCOURAGEMENT THE COMMUNITY DEVELOPMENT. II. TO PROVIDE DATABASE FOR SUSTAINABLE DEVELOPMENT INCLUDING SUPPLY AND ASSIST IN THE SUPPLY OF INFORMATION FOR EARLY WARNI NG FOR DISASTERS. III. TO UNDERTAKE ACTIVITIES FOR DISASTER MITIGATIO N, RELIEF AND REHABILITATION. ON PERUSAL OF THE OBJECTS, THE LD. COMMISSIONER OF INCOME-TAX, IN THE IMPUGNED ORDER, HELD THAT CREATION AND SHARING OF INFORMATION IS RESTRICTED AND NOT A 2 268-RJT-2013 - K-LINK FOUNDATION (SMC) GENERAL PUBLIC UTILITY. APART FROM THIS, LD. COMM ISSIONER OF INCOME-TAX, RAJKOT-I, IN THE IMPUGNED ORDER, HELD THAT FROM THE TRIAL BALANC E AS ON 18.02.2013 AND BANK ACCOUNT, IT IS SEEN THAT THE TRUST DID NOT CARRY OU T ANY ACTIVITIES TOWARDS ITS OBJECTS; THEREFORE, THERE IS NO SCOPE TO VERIFY GENUINENESS OF THE ACTIVITIES. HE ACCORDINGLY REJECTED THE ASSESSEE-INSTITUTIONS APPLICATION FOR REGISTRATION U/S 12A OF INCOME-TAX ACT, 1961. AGGRIEVED WITH THE ORDER OF LD. COMMISS IONER OF INCOME-TAX, RAJKOT-I, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL, ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX IS BAD IN LAW AND FACTS. 2. LEARNED COMMISSIONER OF INCOME TAX RAJKOT-1 HAS ERRED IN REJECTING THE APPLICATION FOR GRANT OF APPROVAL OF REGISTRATI ON U/S 12AA OF THE ACT ON THE ALLEGED GROUND THAT THE OBJECT OF THE TRUST ARE NOT CHARITABLE AS PROVIDED IN SEC 2(15) OF THE ACT. 3. LEARNED COMMISSIONER OF INCOME TAX, RAJKOT-1, HA S FURTHER ERRED IN REJECTING THE APPLICATION FOR GRANT OF APPROVAL OF REGISTRATION U/S 12AA OF THE ACT ON THE ALLEGED GROUND THAT APPELLANT TRUST HAS NOT CARRIED OUT ANY ACTIVITY TOWARDS ITS OBJECT, THEREFORE THERE IS NO SCOPE TO VERIFY GENUINENESS OF THE ACTIVITIES. 4. THE APPELLANT CONTEST ALL THE FINDINGS OF FACT A ND LAW GIVEN AGAINST THE APPELLANT. 5. THE APPELLANT THEREFORE PRAYS TO GRANT REGISTRAT ION U/S 12AA OF I.T. ACT TO THE APPELLANT. 4. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E, SHRI KALPESH DOSHI, CA, APPEARED AND FILED A PAPER-BOOK CONTAINING 16 PAGES AS WELL AS COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION. THE LD. COU NSEL OF THE ASSESSEE POINTED OUT THAT AT THE TIME OF GRANTING REGISTRATION U/S 1 2A, ONLY OBJECT OF THE TRUST IS REQUIRED TO BE EXAMINED AS HELD BY THE HONBLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF O.P. JINDAL GLOBAL UNIVERSITY, REPORTED IN (2013) 3 8 TAXMANN.COM 366 (P&H). IN THE IMPUGNED ORDER, THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT REJECTED THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12A SOLELY ON THE GROUND THAT THE TRUST DID NOT CARRY OUT ANY ACTIVITY TOWARDS ITS OB JECTS; THEREFORE IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE ACTIVITIES. THE LD. C OUNSEL OF THE ASSESSEE POINTED OUT THAT NOW THE ASSESSEE-TRUST HAS LAUNCHED TWO PROJEC TS WHICH ARE AS UNDER:- I. BLOOD LINK PROJECT - IN THIS PROJECT, THE ASS ESSEE HAS PROVIDED INFORMATION FOR VARIOUS BLOOD DONORS FOR THE BHUJ C ITY WITH THE HELP OF 3 268-RJT-2013 - K-LINK FOUNDATION (SMC) MOBILE TECHNOLOGY. AS PER THIS PROJECT, JUST BY SE NDING SMS ON A PARTICULAR NUMBER, THE USER WILL GET INFORMATION AB OUT THE VARIOUS DONORS OF THE PARTICULAR BLOOD GROUP WITH THEIR NAME AND CONT ACT NUMBER. THIS FACILITY HAS BEEN UTILIZED BY LARGER NUMBER OF PEOPLE OF BHU J AND THE THIS FACILITY IS PROVIDED FREE OF COST. NONE OF THE PERSON IS CHARGI NG ANY FEE FOR THE USE OF THIS FACILITY. II. SHARP PROJECT UNDER THIS PROJECT, THE ASSES SEE HAS RECOMMENDED FERTILIZERS TO FARMERS BASED ON SOIL AND COP TYPE T O REDUCE THE COST OF FARM PRODUCES, IMPROVE QUALITY OF PRODUCT IN ORDER TO MA XIMIZE THE PRODUCTION. THIS HELPS IN REDUCING ENVIRONMENTAL POLLUTION AND THUS PEOPLE OF KUTCH DISTRICT ARE BENEFITED. THIS PROJECT IS CARRIED OU T WITH THE HELP OF VARIOUS LOCAL GRAM PANCHAYAT AND NO FEE IS CHARGED FOR UTIL IZING THIS FACILITY. TO ENJOY THE BENEFIT OF THIS FACILITY, THERE IS NO REQ UIREMENT TO REGISTER ONESELF, THERE IS NO REQUIREMENT FOR USER ID AND PASSWORD. T HE MEMBERS OF LOCAL GRAM PANCHAYAT CAN USE THIS FACILITY WITH THE HELP OF LOCAL FACILITATION CENTER AND FACILITATION CENTER ALSO GUIDE LOCAL FARMERS FO R THE BENEFIT OF CULTIVATION OF CROP IN THE BEST POSSIBLE MANNER. 4.1 BESIDES THE AFORESAID TWO PROJECTS, THE LD. COU NSEL OF THE ASSESSEE ALSO POINTED OUT THAT THE ASSESSEE HAS ALSO SIMILAR OTHE R PROJECTS IN HANDS WHICH WILL BE APPLIED WITH THE HELP OF GENERAL INFORMATION SYSTEM , MOBILE TECHNOLOGY AND SUCH OTHER PLATFORM AND THUS USE OF TECHNOLOGY IN RURAL AREA WILL HELP IN REDUCING DIFFERENCE BETWEEN RURAL AND URBAN DEVELOPMENT. THE PEOPLE OF RURAL AREA WILL ALSO GET SIMILAR BENEFITS WITH THE HELP OF TECHNOLOGY. THEREFORE, TH E ACTIVITY OF THE ASSESSEE IS COVERED U/S 2(15) AS CHARITABLE ACTIVITY AND THEREF ORE, LD. CIT BE DIRECTED TO GRANT REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961. 5. ON THE OTHER HAND, DR. M.L. MEENA, DR, APPEARED FOR THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF THE LD.CIT. HE PO INTED OUT THAT SINCE THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES, THE CLAIM OF EXEMPTION IS RIGHTLY REJECTED 4 268-RJT-2013 - K-LINK FOUNDATION (SMC) BY THE LD. CIT. IN SUPPORT OF THIS, HE RELIED UPON THE DECISION OF THE ITAT, CHANDIGARH BENCH A IN THE CASE OF SUCHINTA EDUCATIONAL SOCIE TY V. CIT, REPORTED IN [2013] 35 TAXMANN.COM 178 (CHANDIGARH TRIB.) DTD. 24.05.201 3. 6. RIVAL SUBMISSIONS WERE CONSIDERED. ADMITTEDLY, A T THE RELEVANT TIME, THE ASSESSEE-FOUNDATION COULD NOT POINT OUT THE AFORESA ID TWO PROJECTS CARRIED OUT BY THE ASSESSEE AS BOTH THE PROJECTS WERE IN THE PROCESS O F DEVELOPMENT. SINCE NOW BOTH THE AFORESAID PROJECTS ARE IN OPERATION, I AM OF TH E VIEW THAT IT WILL MEET THE END OF JUSTICE IF LD. COMMISSIONER OF INCOME-TAX, RAJKOT-I , RAJKOT RE-CONSIDERS THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12 A AFRESH AND PASS AN APPROPRIATE ORDER IN ACCORDANCE WITH LAW. I HOLD ACCORDINGLY. T HE IMPUGNED ORDER OF LD. COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT IS SET ASIDE WITH THE DIRECTION THAT THE ASSESSEE SHALL FURNISH THE DETAILS OF THE ACTIVITIE S CARRIED OUT BY THEM AND THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT IN TUR N WILL EXAMINE THE SAME AND PASS AN APPROPRIATE ORDER FOR REGISTRATION U/S 12A OF TH E INCOME-TAX ACT AFRESH IN ACCORDANCE WITH LAW. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 26.02.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- K-LINK FOUNDATION, BHUJ-KUTCH 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX, RAJK OT-I, RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT, GANDHIGHAM 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT