Bhagwat Shikshan Evam Gauraksha Trust, Baroda V. The CIT-I, Baroda

ITA 2801/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73031 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-01-2014
• Assessment Year: misc
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12; 11

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.2801/AHD/2013 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : - ) BHAGWAT SHIKSHAN EVAM GAURAKSHA TRUST, A-3, HARIDHAM DUPLEX NR. HARIAGAR 4 RASTA GOTRI ROAD VADODARA 390 015 / VS. CIT-I, RACE COURSE CIRCLE VADODARA 390 007 ( !./)* !./ PAN/GIR NO. : AABTB 9074 C ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI TEJ SHAH, A.R. ,-(+ / . / RESPONDENT BY : SHRI SUBHASH BAINS, CIT-DR ' 0 / $1 / / / / DATE OF HEARING : 29/01/2014 23' / $1 / DATE OF PRONOUNCEMENT : 07/03/2014 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 30/10/2013. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 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.2801/AHD /2013 BHAGWAT SHIKSHAN EVAM GAURAKSHA TRUST VS. - 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 CASE OF THE AS SESSEE-TRUST HAD FILED AN APPLICATION IN FORM NO.10A DATED 26/04/2013 BEFO RE THE CIT FOR GRANTING REGISTRATION U/S.12A OF THE ACT. THE LD.C IT AFTER GIVING AN OPPORTUNITY OF HEARING REJECTED THE APPLICATION ON THE GROUND THAT THE ASSESSEE HAS NOT APPLIED 85% OF INCOME AND THE ACTI VITIES SAID TO BE CARRIED OUT ARE NOT IN CONSONANCE WITH THE OBJECT O F THE TRUST. THE LD.CIT OBSERVED THAT THE APPLICANT-TRUST HAS CLAIMED EXPEN SES OF RS.2,36,400/- TOWARDS ITS OBJECT UNDER THE HEAD EDUCATION. IT IS OBSERVED THAT THE EXPENSES WERE MADE TOWARDS GRAIN EXPENSES AND MISCE LLANEOUS EXPENSES. THE LD.CIT OBSERVED THAT THE ASSESSEE-TRUST HAD NOT OFFERED 85% OF ITS INCOME. ANOTHER OBSERVATION OF THE LD.CIT WAS THA T THE ASSESSEE-TRUST HAS PURCHASED THE LAND IN THE NAME OF PERSONS SPEC IFIED U/S.13(3) OF THE I.T.ACT. ON THIS BASIS, LD.CIT REJECTED THE APPLIC ATION. 3. THE LD.COUNSEL FOR THE ASSESSEE VEHEMENTLY A RGUED THAT LD.CIT WAS NOT JUSTIFIED IN REJECTING THE APPLICATION. HE SUB MITTED THAT SO FAR AS THE APPLICATION OF INCOME IS CONCERNED, IT IS REQUIRED TO BE SEEN BY THE AO WHEN ASSESSMENT IS MADE AND AT THE TIME OF GRANTING REGISTRATION, LD.CIT HAS TO SEE WHETHER THE OBJECTS ARE CHARITABLE OR NO T. IN SUPPORT OF THE CONTENTION, HE RELIED ON THE DECISION OF HONBLE KA RNATAKA HIGH COURT RENDERED IN THE CASE OF DIRECTOR OF INCOME-TAX VS. GARDEN CITY EDUCATIONAL TRUST REPORTED AT (2010) 191 TAXMAN 238 (KAR.) ITA NO.2801/AHD /2013 BHAGWAT SHIKSHAN EVAM GAURAKSHA TRUST VS. - 3 - 3.1. ON THE CONTRARY, CIT-DR OPPOSED THE SUBMISSION S OF THE LD.COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT THE LD.CIT WAS JUSTIFIED IN REJECTING THE APPLICATION. HE SUBMITTED THAT FIRST LY, THE ASSESSEE HAS NOT APPLIED ITS INCOME AS PER THE PROVISIONS OF THE ACT AND SECONDLY, THE ASSESSEE-TRUST HAS VIOLATED THE PROVISIONS OF SECTI ON 13(3) OF THE ACT BY INVESTING TO THE LAND IN THE NAME OF PERSONS WHO AR E SPECIFIED UNDER SECTION 13(3) OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS CITED BY THE LD. COUNSEL F OR THE ASSESSEE. THERE IS NO DISPUTE SO FAR AS THE POSITION THAT LD.CIT CAN M AKE ENQUIRY TO ASCERTAIN WHETHER THE ACTIVITIES CARRIED OUT BY THE ASSESSEE- TRUST AND ALSO TO VERIFY WHETHER THE PROCEDURAL REQUIREMENT FOR GRANTING THE REGISTRATION HAVE BEEN COMPLIED WITH. IN THE PRESENT CASE, LD.CIT RE JECTED THE APPLICATION ON THE BASIS THAT THE ASSESSEE-TRUST HAS NOT APPLIE D 85% OF ITS INCOME. THE LAW IS WELL SETTLED THAT SO FAR AS THE APPLICAT ION OF MONEY IS CONCERNED, IT SHOULD NOT BE THE BASIS FOR REJECTION OF THE REGISTRATION. ANOTHER GROUND FOR REJECTION OF APPLICATION BY THE LD.CIT IS THAT THE ASSESSEE-TRUST HAS PURCHASED THE LAND IN THE NAME O F THE PERSONS WHO ARE SPECIFIED U/S.13(3) OF THE ACT. HOWEVER, AS PER SE CTION 13(1) OF THE I.T.ACT THE EXCLUSION OF THE TOTAL INCOME U/S. 11 O R 12 OF THE ACT IS BARRED ON THE BASIS OF ONE OF THE CONDITIONS THAT IF ANY P ART OF SUCH INCOME OR ANY PROPERTY OF THE TRUST OR THE INSTITUTION IS DUR ING THE PREVIOUS YEAR USED OR APPLIED, DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF ANY PERSON REFERRED TO IN SUB-SECTION (3) OF SECTION 13 OF THE ACT. LD.CI T HAS NOT GIVEN ANY ITA NO.2801/AHD /2013 BHAGWAT SHIKSHAN EVAM GAURAKSHA TRUST VS. - 4 - CATEGORICALFINDING THAT PROPERTIES SO PURCHASED IN THE NAME OF THE PERSONS WERE DIRECTLY OR INDIRECTLY FOR THEIR BENEFIT. IN THE ABSENCE OF SUCH FINDING, ACTION OF THE LD.CIT WOULD NOT BE NOT JUST IFIED. THEREFORE, THE ORDER OF THE LD.CIT IS HEREBY SET ASIDE AND THE ISS UE IS RESTORED BACK TO HIM FOR DECISIONS AFRESH. NEEDLESS TO SAY THAT LD. CIT WOULD AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE A S PER LAW. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES ONLY. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED BUT FOR STATISTICAL PURPOSES. 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 07/ 03 /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 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