Rajeswari Ammaiyar Memorial Trust, CHENNAI V. ITO, Coimbatore

ITA 2709/CHNY/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8105 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-01-2016
• Assessment Year: misc
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D N KARR IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution; Principle of natural justice; Reasonable cause
• Section: 80G; 12AA; 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! . ! ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2709/MDS/2014 $ & !'& / ASSESSMENT YEAR : 80G. M/S. RAJESWARI AMMAIYAR MEMORIAL TRUST, 601, GANDHI MAANAGER, PEELAMEDU POST, COIMBATORE 641 004. VS. THE INCOME TAX OFFICER, COMPANY WARD I, COIMBATORE [PAN AABTR 8466L] ( / APPELLANT) ( /RESPONDENT) () * + / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE ,-() * + /RESPONDENT BY : SHRI. D.N. KARR, IRS, CIT. ' ! * . / DATE OF HEARING : 13-01-2016 /0' * . / DATE OF PRONOUNCEMENT : 03-02-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX I, COIMBATO RE IN REJECTING APPROVAL U/SEC. 80G(5) (VI) OF THE ACT VIDE ORDER C .NO.127(262)CIT- I/CBE/2013-14, DATED 12.06.2014. ITA NO.2709/MDS/2014. :- 2 -: 2. THE ONLY SUBSTANTIVE GROUND RAISED BY THE ASSESSEE THAT CIT ERRED IN REJECTING THE APPLICATION FOR GRANT OF RE COGNITION U/S80G OF THE ACT AND WERE TRUST WAS GRANTED REGISTRATION U /S.12AA OF THE ACT. 3. BEFORE WE PROCEED FOR HEARING, THERE IS DELAY OF 73 DAYS IN FILING THE APPEAL. THE LD. AUTHORISED REPRESENTATI VE OF THE ASSESSEE FILED CONDONATION PETITION AND EXPLAINED THE CIRCU MSTANCES FOR DELAY WHICH ARE NOT DELIBERATE BUT DUE TO UNFORESEEN CIR CUMSTANCES. FURTHER, THE LD. DR HAS NO SERIOUS OBJECTION FOR CO NDONATION OF DELAY. AFTER HEARING THE SUBMISSIONS, WE ARE SATISFIED WIT H REASONABLE CAUSE SUBMITTED IN AFFIDAVIT FOR FILING THE APPEAL BELAT EDLY. THEREFORE THE DELAY IS CONDONED AND APPEAL IS ADMITTED. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A TRUST REGISTERED ON 10.07.2007 AT GANAPATHY, COIMBATORE AND THE MAIN OBJECTS OF THE TRUST FALL UNDER CRITERIA OF CHARITA BLE PURPOSE FOR UNDER INCOME TAX ACT. THE TRUST WAS CONSTITUTED AND APPL IED FOR REGISTRATION U/S.12AA OF THE ACT ON 30.08.2011 AND WAS REJECTED . AGAINST THE REJECTION ORDER, THE ASSESSEE FILED AN APPEAL BEFO RE THE TRIBUNAL. THE TRIBUNAL BY ITS ORDER DATED 29.05.2012 IN ITA NO.68 8/MDS/2012, HAS CONSIDERED THE OBJECTS OF THE TRUST AND DEALT THAT THE TRUST WAS CONSTITUTED TO COMPLY WITH THE OBJECTS AS PER TRUS T DEED AND DIRECTED ITA NO.2709/MDS/2014. :- 3 -: THE CIT TO GRANT REGISTRATION U/S.12AA OF THE ACT. ACCORDINGLY, THE TRUST WAS GRANTED 12AA REGISTRATION FROM 01.04.201 1 AS PER THE ORDERS OF CIT-I, COIMBATORE IN C.NO.127(262)12A/CIT -I/CBE/2011-12, DATED 23.07.2012. 5. SUBSEQUENT TO 12AA REGISTRATION THE ASSESSEE E-FIL ED INCOME TAX RETURN WITH TAXABLE INCOME = NIL FOR THE ASSESSMENT YEAR 2014-2015 DECLARING CONTRIBUTIONS AND EXPENDITURE INCURRED IN COMPLIANCE TO SEC.11 OF THE ACT. THE ASSESSEE MAD E AN APPLICATION IN FORM NO.10G ALONGWITH ENCLOSURES WITH THE OFFICE OF CIT-I, COIMBATORE FOR GRANT OF APPROVAL UNDER SEC.80G OF THE ACT. IN THE HEARING PROCEEDINGS ON 21.05.2014 AND 05.06.2014, THE LD. A UTHORISED REPRESENTATIVE AND TRUSTEE OF THE TRUST APPEARED A ND FURNISHED TRUST DEED, 12AA REGISTRATION DETAILS AND SUBMITTED FI NANCIAL STATEMENTS. THE LD.CIT ON VERIFICATION OF THE INFORMATION FOU ND THAT THE ASSESSEE TRUST HAS NOT TAKE UP ANY ACTIVITIES TOWARDS MAIN O BJECTS EVEN AFTER SEVEN YEARS OF INCEPTION. THE LD. CIT ON THE PRESUM PTION THAT ASSESSEE HAS NOT CARRIED OUT ANY SIGNIFICANT ACTIVITIES TOWA RDS THEIR OBJECTIVES AND UNILATERALLY CONCLUDED THAT THE APPLICATION IS PREMATURE AND GENUINESS OF ACTIVITIES ARE NOT SATISFACTORY AND REJECTED THE APPROVAL U/SEC. 80G(5)(VI) OF THE ACT. AGGRIEVED BY THE ORD ER OF THE CIT THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL . ITA NO.2709/MDS/2014. :- 4 -: 6. BEFORE TRIBUNAL, THE LD. AUTHORISED REPRESENTATIVE REITERATED SUBMISSIONS MADE BEFORE THE CIT, COIMBATORE AND SU BMITTED THAT THE COMMISSIONER OF INCOME TAX HAS WRONGLY ERRED IN REJ ECTING THE APPLICATION WITHOUT ANY PROPER REASONS THOUGH ASSES SEE HAS COMPLIED WITH THE CONDITIONS FOR RECOGNITION UNDER 80G OF T HE ACT. THE CIT ON PERUSAL OF THE REGISTERED TRUST DEED FOUND THAT THE OBJECTS OF THE TRUST ARE CHARITABLE BUT ON THE ACTIVITIES OF THE TRUST H E HAS DISSENTED. THE ASSESSEE TRUST FILED RETURN OF INCOME FOR THE ASSES SMENT YEAR 2014- 2015 AND THE ACCOUNTS OF THE TRUST ARE AUDITED BY C HARTERED ACCOUNTANT AND AUDIT REPORT UNDER FROM 10B WAS OBT AINED. THE LD. AUTHORISED REPRESENTATIVE FURNISHED THE FINANCIAL S TATEMENTS, BALANCE SHEET AND RECEIPT AND PAYMENT ACCOUNT OF THE TRUST. FURTHER SUBMITTED THAT THE TRUST WAS GRANTED REGISTRATION U/SEC. 12AA OF THE ACT ON 23.07.2012 BY CIT EFFECTIVE FROM 01.04.201 1 AND PLEADED THAT THE LD.CIT HAS REJECTED THE 80G RECOGNITION W ITHOUT GIVING PROPER REASONS AND JUSTIFICATION AND ALSO NO OPPORTUNITY W AS PROVIDED BEFORE PASSING THE IMPUGNED ORDER IN VIOLATION OF PRINCIPL E OF NATURAL JUSTICE AND PLEADED FOR GRANT OF 80G RECOGNITION. 7. CONTRA THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME TAX AND PLEADED FOR DISMISSAL OF APPEAL. ITA NO.2709/MDS/2014. :- 5 -: 8. WE HEARD THE SUBMISSIONS OF BOTH THE PARTIES AND P ERUSED THE MATERIAL ON RECORD. THE LD. AUTHORISED REPRESE NTATIVE SUBMITTED THAT THE TRUST WAS REGISTERED AND OBTAINED 12AA R EGISTRATION FROM COMMISSIONER OF INCOME TAX VIDE PROCEEDINGS IN C.NO.127(262)12A/CIT-I/CBE/2011-12, DATED 23.07.201 2 BASED ON DIRECTION OF TRIBUNAL IN ITA NO. 688/MDS/2012. TH E TRUST OBJECTS ARE CHARITABLE IN NATURE AND COULD NOT COMMENCED ITS AC TIVITIES IMMEDIATELY AND FILED RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2014- 2015. THE ACCOUNTS ARE AUDITED AND AUDITORS REPORT IN FORM 10B WAS FILED WITH THE INCOME TAX DEPARTMENT. THE LD. AUT HORISED REPRESENTATIVE DREW ATTENTION TO THE AUDITED RECEIP TS & PAYMENTS AND ALSO INCOME AND EXPENDITURE ACCOUNT. WE FOUND THE TRUST HAS RECEIVED DONATIONS AND ALSO INCURRED EXPENDITURE AS PER PROVISIONS OF SEC.11 OF THE ACT AND THERE IS NO DISPUTE OR ANY VI OLATION OF PROVISIONS APPLICABLE FOR CHARITABLE TRUST. THE LD.COMMISSION ER OF INCOME TAX ONLY APPREHENSION THAT THE ASSESSEE TRUST HAS NOT TAKEN UP ANY MAIN OBJECTS OF THE TRUST EVEN AFTER SEVEN YEARS, BUT W E ARE OF THE OPINION THAT OBJECTS OF THE TRUST CAN BE ACHIEVED OVER A PERIOD OF TIME AND THE ASSESSEE HAS PROVED TO THE SATISFACTION OF THE DEPARTMENT THAT THE TRUST ACTIVITIES ARE CHARITABLE IN NATURE WHICH IS NOT DISPUTED AND WAS GRANTED 12AA REGISTRATION IN EARLIER YEARS. CONSIDE RING THE FACTS ON ITA NO.2709/MDS/2014. :- 6 -: RECORD WE SQUASH THE REJECTION ORDER OF COMMISSION ER OF INCOME TAX AND DIRECT TO GRANT RECOGNITION U/S.80G OF THE ACT TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.2709/MDS/2014 IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 3RD DAY OF FE BRUARY, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' # ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 1 / DATED: 03.02.2016 KV 2 * ,$.34 54'. / COPY TO: 1 . () / APPELLANT 3. ' 6. () / CIT(A) 5. 4!9: ,$.$ / DR 2. ,-() / RESPONDENT 4. ' 6. / CIT 6. :;& < / GF