Life Shines Educational and Charitable Trust, CHENNAI V. ACIT, Trichy

ITA 2818/CHNY/2014

• Counselvise Citation: 281821714 RSA 2014
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-02-2015
• Assessment Year: misc
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMOD NANGIA
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! . . ' , # $ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NOS.2818 & 2819/MDS/2014 M/S LIFE SHINES EDUCATIONAL AND CHARITABLE TRUST, 4/15, 1 ST FLOOR, SRINIVASA NAGAR NORTH EXTENSION, T.V. KOIL, TRICHY 620 005. PAN : AABTL 0241 M V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I(2), TIRUCHIRAPALLI. (&'/ APPELLANT) ()*&'/ RESPONDENT) &' + , / APPELLANT BY : SHRI A.S. SRIRAMAN, ADVOCATE )*&' + , / RESPONDENT BY : SHRI PRAMOD NANGIA, CIT - ! + . / DATE OF HEARING : 26.02.2015 /0 + . / DATE OF PRONOUNCEMENT : 05.03.2015 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER: THESE ASSESSEES APPEALS ARISE FROM TWO SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX-I, TIRUCHIRAPALLI , BOTH DATED 26.09.2014 IN C. NO.6162E(95/83)/CIT-I/TRY/2013-14 DENYING - - I.T.A. NOS.2818 & 2819/MDS/2014 2 REGISTRATION UNDER SECTION 80G AND 12AA OF THE INCO ME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE ASSESSEE-TRUST WAS CREATED BY A TRUST DEED REGISTERED ON 23 RD AUGUST, 2012. THE SAME WAS FOLLOWED BY A SUPPLEMENTARY DEED DATED 19.09.2014. THE ASSESSEE APPLIED FOR REGISTRATIONS UNDER SECTION 12AA AND SECTION 80 G OF THE ACT ON 24 TH MARCH, 2014. THE CIT HAS REJECTED ITS FORMER PETI TION AS UNDER:- 1. THE TRUST HEREIN KNOWN AS 'LIFE SHINES EDUCATIONAL AND CHARITABLE TRUST', 4115, SRINIVASA NAGAR, NORTH EXTENSION, T.V. KOVIL, TRICH Y- 620 005 WAS CREATED BY A DEED REGISTERED ON 23/08/2012. THIS DEED WAS FURTHER AMENDED VIDE SUPPLEMENTARY DEED DATED 19/09/2014. THE MAIN OBJECTS AS PER THE DEED ARE TO ESTABLISH, MAINTAIN, RUN DEVELOP, SPONSOR, SCHOOLS, PLAY SCHOOLS, COLLEGES, RESEARCH INSTITUTIONS, UNIVERSIT IES, POLYTECHNICS, PROFESSIONAL ENGINEERING INSTITUTIONS , TECHNICAL, VOCATIONAL, ART, CRAFT, SCIENCE SCHOOLS AND COLLEGES AND GENERALLY ALL KINDS OF EDUCATIONAL INSTITUTION INCLUDING TEACHERS TRAINING INSTITUTES, B.ED., COLLEGES AND CATERING COLLEGES / INSTITUTES; TO PRO MOTE TO EDUCATE, TO PUBLISH BASIC MEDICAL AWARENESS AMONG THE GENERAL PUBLIC PRIMARILY IN THE RURAL ARE AS; TO CONSTRUCT, START, RUN, MAINTAIN, TAKEOVER AND DEVELOP HOSPITAL, POLYCLINIC, HEALTH CLINIC, NURSIN G HOMES: TO ESTABLISH, MAINTAIN, MANAGE, RUN, DEVELOP, SPONSOR TAKE OVER SCHOOLS, COLLEGES, RESEARCH INSTITU TIONS IN THE FIELD OF MEDICAL SCIENCES ESPECIALLY NURSING, PHARMACY, LAB TECHNOLOGY AND ALL - - I.T.A. NOS.2818 & 2819/MDS/2014 3 PARAMEDICAL COURSES; TO RELIEVE THE POOR, IN INDIGE NT PERSONS, IRRESPECTIVE OF CASTE, CREED, RELIGION OR NATIONALITY AND MAKE THEM TO PROVIDE FOR THEIR BARE NECESSITIES OF LIFE; TO CONSTRUCT, START, RUN MAINT AIN AND TAKE OVER AND DEVELOP HOMES, FEEDING HOUSES FOR THE AGED ORPHANS, DESTITUTE, WOMEN, WORKING WOMEN, CRECHES; TO PROVIDE ASSISTANCE IN CASH OR IN KIND T O POOR AND DESERVING STUDENTS TO PROSECUTE STUDIES; T O OPEN AND RUN SCHOOLS FOR THE BLIND, DEAF, DUMB, MENTALLY RETARDED AND OTHER PHYSICALLY DISABLED PERSONS ETC., 2. THE TRUST HAS FURNISHED AN APPLICATION ON 24/03/2014 IN FORM L0A UNDER SECTION 12A(L)(AA) OF THE INCOME TAX ACT, 1961 SEEKING REGISTRATION U/S 12AA OF THE ACT. 3. THE APPLICANT TRUST WAS SENT A DETAILED QUESTIONNAIRE VIDE THIS OFFICE LETTER DARED 12/06/2 014 CALLING FOR DETAILS/ CLARIFICATIONS! EVIDENCES INTE R ALIA TO PROVE THE CHARITABLE NATURE OF THE STATED OBJECTS O F THE TRUST AS WELL AS GENUINENESS OF THE ACTIVITIES CARR IED OUT BY THE APPLICANT. THE TRUST WAS ASKED TO PROVE WITH THE HELP OF BOOKS OF ACCOUNTS, DOCUMENTS, PAPERS AND OTHER NECESSARY EVIDENCE THAT IT DID CAR RY OUT THE ACTIVITIES STATED IN THE OBJECT CLAUSE OF T HE TRUST'S DEED AND THAT THESE ACTIVITIES WERE CHARITA BLE IN NATURE AS PER DEFINITION U/S. 2(15) OF THE INCOME TAX ACT, 1961. THE REPLY FILED BY THE TRUST ALONG W ITH THE DETAILED REPORTS OBTAINED FROM THE LOWER AUTHORITIES WERE PERUSED. 4. THE CASE WAS POSTED FOR HEARING ON 19/09/2014 IN RESPONSE TO WHICH SHRI. S. KALAIMANI, AUTHORISED REPRESENTATIVE OF THE TRUST ALONGWITH SHRI. M.K. GE RALD SELVAN, MANAGING TRUSTEE OF THE TRUST APPEARED AND THE CASE WAS HEARD. 5. ENQUIRIES MADE BY THE ASSESSING OFFICER AND TH E PERUSAL OF THE DETAILS FURNISHED BY THE TRUST REVEA LED - - I.T.A. NOS.2818 & 2819/MDS/2014 4 THAT THE TRUST IS ONLY RUNNING A PRE-SCHOOL IN THE NAME OF 'BEST KIDZ' FOR PRE-KG, LJ(G AND UKG CLASSES BY COLLECTING FEES FOR IMPARTING EDUCATION TO CHILDREN . PERUSAL OF THE INCOME AND EXPENDITURE ACCOUNT FURNISHED BY THE TRUST REVEALED THAT THE TRUST HAS COLLECTED FEES OF RS.91, 000 AND RS.3,86,500 FOR TH E YEAR 2012-13 AND 2013-14 RESPECTIVELY. THE ACCOUNTS DO NOT SHOW INCURRING OF ANY EXPENDITURE TOWARDS 'CHARITY'. THOUGH THE TRUST WAS CREATED TOWARDS ACHIEVING CHARITABLE OBJECTIVES AS NARRATED ABOVE, NONE OF THE CHARITABLE ACTIVITIES WERE CARRIED OUT BY THE TRUST OTHER THAN RUNNING THE KIDS SCHOOL . NO DOCUMENTARY EVIDENCE IN PROOF OF HAVING CARRYING OU T ANY CHARITABLE ACTIVITY WERE FURNISHED BY THE TRUST . 6. THOUGH THE OBJECTS FOR WHICH THE TRUST WAS CRE ATED ARE OF CHARITABLE IN NATURE, THE TRUST DID NOT CARR Y OUT ANY REASONABLE CHARITABLE ACTIVITY EVER SINCE ITS C REATION IN 2012 AND THE TRUST HAS NO MATERIAL TO PROVE THAT THE CHARITABLE ACTIVITIES ARE CARRIED OUT. THEREFORE, T HE TRUST DOES NOT SATISFY THE CONDITIONS FOR GRANT OF REGIST RATION U/S 12AA OF THE INCOME TAX ACT, 1961. 7. I AM THEREFORE UNABLE TO GRANT REGISTRATION TO THE TRUST SINCE THE APPLICANT HAS NOT COMPLIED THE REQUIREMENTS OF SECTION 12AA OF THE INCOME TAX ACT, 1961. IT'S APPLICATION. FOR REGISTRATION, THEREFORE , IS HEREBY REJECTED. 3. IN VIEW THEREOF, THE ASSESSEES LATTER PLEA OF S ECTION 80G REGISTRATION ALSO STANDS DECLINED. THEREFORE, THE ASSESSEE HAS PREFERRED THESE TWO APPEALS. 4. A PERUSAL OF THE FILES REVEALS THAT I.T.A. NO. 2818/MDS/2014 CHALLENGES THE CITS ORDER DENYING 80 G - - I.T.A. NOS.2818 & 2819/MDS/2014 5 REGISTRATION AND I.T.A. NO. 2819/MDS/2014 PERTAINS TO SECTION 12AA ISSUE. IT HAS COME ON RECORD THAT THE ASSESSE ES MAIN OBJECTS ARE COVERED BY THE CHARITABLE PURPOSES EDU CATION U/S 2(15) OF THE ACT. THE CIT HOLDS THAT THE ASSESSING OFFICER HAS MADE CERTAIN QUERIES AND THE ASSESSEE IS FOUND RUNN ING A PRE- SCHOOL TINY TOTS, CLASSES BY COLLECTING FEES AND IM PARTING EDUCATION. THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF DIT V. SEERVI SAMAJ TAMBARAM TRUST (2014) 362 ITR 1 99 HOLDS THAT INITIATION OF CHARITABLE ACTIVITY DOES NOT FOR M SUBJECT OF SECTION 12AA REGISTRATION ISSUE. THE REVENUE FAILS TO BRING ANY DISTINCTION ON FACTS. THEREFORE WE HOLD THAT THE A SSESSEES OBJECTS ARE COVERED BY THE CHARITABLE PURPOSES EDU CATION. IT IS HELD ENTITLED FOR SECTION 12AA REGISTRATION. REST OF THE ISSUES OF CARRYING ON OF CHARITABLE ACTIVITIES, APPLICATION O F INCOME ETC ARE LEFT TO BE CONSIDERED IN APPROPRIATE PROCEEDINGS. THE ASSESSEES APPEAL I.T.A. NO. 2819/MDS/2014 SEEKING SECTION 12AA REGISTRATION SUCCEEDS. I.T.A. NO. 2818/MDS/20 14 CHALLENGING THE CITS ORDER REFUSING SECTION 80G RE GISTRATION IS REMITTED BACK FOR DECISION AFRESH, AS PER LAW. IT IS ALLOWED FOR STATISTICAL PURPOSES. - - I.T.A. NOS.2818 & 2819/MDS/2014 6 5. I.T.A. NO. 2819/MDS/2014 IS ALLOWED AND I.T.A. N O. 2818/MDS/2014 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 5 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (S.S. GODARA) ( . ) ( . . ') / ACCOUNTANT MEMBER # /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 5 TH MARCH, 2015. KRI. 3 + )#.45 650. /COPY TO: 1. &' /APPELLANT 2. )*&' /RESPONDENT 3. - 7. /CIT-I, TIRUCHIRAPALLI 4. 5!8' )#.# /DR 5. '9: ; /GF.