The DCITNavsari Circle, Navsari V. Dharampur Uthan Vahini, Dist.Navsari

ITA 2811/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9141 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-12-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 07-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U B MISHRA
• Keywords: Charitable institution
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING : 16.12.2010 DRAFTED ON: 16.12.2010 ITA NO.2811/AHD/2008 ASSESSMENT YEAR : 2005-06 DY.COMMISSIONER OF INCOME TAX NAVSARI CIRCLE NAVSARI VS. DHARAMPUR UTHAN VAHINI (DHRUVA) VRINDAVAN CAMPUS VANSDA, DI.NAVSARI PAN/GIR NO. : AATD 4290 P ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI U.B. MISHRA, SR. D.R. RESPONDENT BY: SHRI KAMLESH BHATT, A.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-VALSAD DATED 17/04/2008 PASSED FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE AGGREGATE ADDITIONS OF RS.11,41,582/- MADE BY THE AO ON ACCOUNT OF DIFFERENT OF INTEREST RECEIVED BY THE TRUST FROM THE BENEFICIARIES AND PAID TO THE NABARD, AS T HE TRUST IS NOT PROVIDING FREE SERVICES OR COST TO COST SERVICE TO THE BENEFICIARIES. BESIDES, THE SURPLUS ON SALE OF MATERIALS VIZ. FERT ILIZERS, EQUIPMENT ETC. THOUGHT THE SAID BUSINESS ACTIVITIES WERE OUT OF PR EVIEW OF OBJECT OF THE TRUST. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE BY TH E AO. ITA NO.2811/AHD /2008 DY.CIT VS. DHARAMPUR UTHAN VAHINI ASST.YEAR - 2005-06 - 2 - 2. AT THE OUTSET, IT HAS BEEN INFORMED THAT ON IDE NTICAL FACTS AND CIRCUMSTANCES IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 AN APPEAL OF THE REVENUE HAS ALREADY BEEN DISMISSED BY THE ITAT B BENCH AHMEDABAD BEARING ITA NO.600/AHD/2008 (FOR AS SESSMENT YEAR 2004-05) VIDE ORDER DATED 04/06/2010. IN THAT APPE AL, THE GROUNDS OF THE REVENUE WERE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE AGGREGATE ADDITIO NS OF RS.3570570/- MADE BY THE AO ON ACCOUNT OF DIFFERENT OF INTEREST RECEIVED BY THE TRUST FROM THE BENEFICIARIES AND PAID TO THE NABARD, AS T HE TRUST IS NOT PROVIDING FREE SERVICES OR COST TO COST SERVICES TO THE BENEFICIARIES. BESIDES, THE SURPLUS ON SALE OF MATERIALS VIZ, FERT ILIZERS, EQUIPMENT ETC. THOUGH THE SAID BUSINESS ACTIVITIES WERE OUT OF PR EVIEW OF OBJECT OF THE TRUST. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE BY TH E A. O. 2.1. ON THE BASIS OF ABOVE REPRODUCTION OF THE GROU NDS, IT IS APPARENT THAT THE ISSUE WAS IDENTICAL BEFORE THE RESPECTED C O-ORDINATE BENCH WHICH WAS DEALT WITH AS FOLLOWS:- 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE WITH THE ORDER OF THE LEA RNED CIT(A). IT IS UNDISPUTED FACT THAT THE ASSESSEE IS A PUBLIC CHARI TABLE TRUST REGISTERED UNDER THE PROVISIONS OF SECTION 12A OF THE IT ACT C ARRYING OUT VARIOUS OBJECTS INCLUSIVE OF OBJECT OF RURAL DEVELOPMENT. T HE ASSESSEE CLAIMED THAT SINCE THE OBJECTS OF THE ASSESSEE TRUST BEING RURAL DEVELOPMENT, THE SAME FALLS WITHIN THE PURVIEW OF SECTION 2(15) OF THE IT ACT WHICH DEFINES MEANING OF ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY WHICH PARTAKES THE CHARACTER OF CHARITABLE TRUST. THE ASSESSEE ITA NO.2811/AHD /2008 DY.CIT VS. DHARAMPUR UTHAN VAHINI ASST.YEAR - 2005-06 - 3 - FILED TABLE OF INCOME AND APPLICATION OF INCOME BEF ORE THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WHICH PROVED THAT THE ASSESSEE MET WITH THE CONDITIONS STIPULATED IN SECTION 11 OF THE IT ACT. BENEFICIARIES OF THE ASSESSEE TRUST ARE FARMER S OF TRIBAL AREA AND THE ACTIVITIES OF THE ASSESSEE TRUST ARE CARRIED OU T FOR ATTAINMENT OF THE OBJECTIVES OF THE TRUST. NOTHING IS POINTED OUT IF THERE WAS DIVERSION OF ANY INCOME TO ANY PERSON PROHIBITED UNDER THE LAW. THE ASSESSEE FILED FINANCIAL STATEMENT BEFORE THE LEARNED CIT(A) TO SH OW THAT THE TRUST HAS PROVIDED FERTILIZERS TO THE POOR FARMERS EVEN AT FR EE OF COST. THE LEARNED CIT(A) ON CONSIDERATION OF THE MATERIALS BE FORE HIM AND THE DECISIONS CITED BEFORE HIM WAS SATISFIED WITH THE O BJECTS OF THE ASSESSEE TRUST AND ITS ACTIVITIES WHICH ARE FALLING WITHIN THE PURVIEW OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY AS DEFINED U/S 2(15) OF THE IT ACT. WE MAY ALSO NOTE HERE THAT DEF INITION OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY WAS EXPANDED BY ADDING THE PROVISO TO SECTION 2(15) OF THE IT AC T WITH EFFECT FROM 01- 04-2009 WHICH IS NOT APPLICABLE TO THE ASSESSMENT Y EAR UNDER APPEAL. THE LEARNED CIT(A) ON CONSIDERATION OF THE MATERIAL ON RECORD SPECIFICALLY HELD THAT THE ASSESSEE HAS COMPLIED WI TH THE PROVISIONS OF SECTION 11 OF THE IT ACT, THEREFORE, THE ASSESSEE C ANNOT BE DENIED THE BENEFIT U/S 11 OF THE IT ACT. HONBLE DELHI HIGH CO URT IN THE CASE OF BHARAT KALYAN PRATISTHAN VS DIRECTOR OF INCOME-TAX (EXEMPTION) 299 ITR 406 HELD HELD, ALLOWING THE APPEAL, THAT THE T RUST DEED REQUIRED THE TRUST TO UTILIZE ITS FUNDS FOR CHARITABLE PURPO SES WHICH WERE MEDICAL RELIEF, EDUCATION AND RELIEF TO THE POOR. IN THE AP PLICATION FOR ACCUMULATION THE ASSESSEE HAD SPECIFIED THESE THREE OBJECTS. IT WAS NOT REQUIRED FOR THE ASSESSEE TO BE MORE SPECIFIC W ITH REGARD TO THE UTILISATION OF THE FUNDS. THE ASSESSEE WAS ENTITLED TO ACCUMULATE THE INCOME FOR THE OBJECTS OF THE TRUST. INCIDENTAL INC OME OR ACCUMULATION OF INCOME FOR THE OBJECTS OF TRUST CANNOT DENY BENE FIT OF SECTION 11 OF THE IT ACT TO ASSESSEE. THE LEARNED DR HAS NOT PROD UCED ANY ITA NO.2811/AHD /2008 DY.CIT VS. DHARAMPUR UTHAN VAHINI ASST.YEAR - 2005-06 - 4 - EVIDENCE OR MATERIAL BEFORE US TO CONTRADICT THE FI NDINGS OF THE LEARNED CIT(A). IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD, WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. WE ACCOR DINGLY, CONFIRM THE FINDINGS OF THE LEARNED CIT(A) AND DISMISS THE APPE AL OF THE REVENUE. 3. ONCE A CO-ORDINATE BENCH HAS TAKEN A VIEW IN FA VOUR OF THE ASSESSEE BY REJECTING REVENUES APPEAL IN THE PAST, THEREFORE, WE HAVE NO REASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE VIE W ALREADY TAKEN IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05. CONSEQUENTLY, FOR THIS YEAR AS WELL REVENUES GROUNDS ARE HEREBY DISM ISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 23/ 12 /2010. SD/- SD/- ( N.S. SAINI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 23 / 12 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CI T(APPEALS)-VALSAD 5. THE DR, AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO.2811/AHD /2008 DY.CIT VS. DHARAMPUR UTHAN VAHINI ASST.YEAR - 2005-06 - 5 - 1. DATE OF DICTATION..20.12.2010 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.12.2010 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S23/12/10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23/12/10 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER .. 9. DATE OF DESPATCH OF THE ORDER