Smt Bimla Devi Gopal Prasad Press Wala, Mathura V. The C.I.T.-1, Agra

ITA 289/AGR/2012

• Counselvise Citation: 28920314 RSA 2012
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-11-2012
• Assessment Year: misc
• Appeal Filed On: 26-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M M AGARWAL
• Keywords: Charitable institution; Opportunity of being heard
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.288 & 289/AGR/2012 SMT. BIMLA DEVI GOPAL PRASAD PRESS VS. COMMISSION ER OF INCOME TAX-1, WALE CHARITABLE TRUST, AGRA. RAGHAV KUNJ, 215/21, DIBLE NAGAR, KRISHNA NAGAR, MATHURA. (PAN: AALTS 1641 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.M. AGARWAL, C.A. RESPONDENT BY : SHRI WASEEM ARSHAD, SR. D. R. DATE OF HEARING : 19.11.2012 DATE OF PRONOUNCEMENT OF ORDER : 23.11.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST TWO DIFFERENT ORDERS, BOTH DATED 21.06.2012, PASSED BY THE LD. CIT-I, AGRA. O NE APPEAL IS IN RESPECT OF REJECTION OF APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) AND THE OTHER APPEAL IS IN RESPECT OF REJECTION OF APPLICATION FOR GRANT OF APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT. ITA NOS.288 & 289/AGR/2012 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST MOVED APPLICATION DATED 20.12.2011 IN FORM NO.10G FOR GRANT OF APPROVAL UND ER SECTION 80G OF THE ACT. SIMILARLY, APPLICATION DATED 20.12.2011 IN FORM NO. 10A FOR GRANT OF REGISTRATION UNDER SECTION 12AA WAS FIELD BEFORE THE CIT ON 26.1 2.2012. THE CIT REJECTED BOTH THE APPLICATIONS OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE TRUST HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITY. THE CIT NOTED THAT HE WAS UNABLE TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE TRUST. BOTH THE ORDERS OF THE CIT HAVE BEEN CHALLENGED BY THE ASSES SEE ON THE GROUND THAT THE CIT NEVER PROVIDED ANY OPPORTUNITY OF HEARING TO THE AS SESSEE. THE CIT WRONGLY HELD THAT NO CHARITABLE ACTIVITIES WERE CARRIED OUT. TH E CIT DID NOT CONDUCT HEARING AND PROCEEDING OF THE MATTER HIMSELF AT ANY POINT OF TI ME. THE ORDERS PASSED BY THE CIT ARE WHOLLY ILLEGAL AND BAD IN LAW. 3. THE LD. AUTHORISED REPRESENTATIVE RELIED UPON TH E ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF SHIKSHA SANKALP SOCIETY IN ITA NO.418/AGR/2010, ORDER DATED 18.05.2012, WHEREIN ON IDENTICAL SET OF FACTS THE I.T.A.T. DIRECTED THE CIT TO ALLOW GRANT OF RENEWAL OF APPROVAL UNDER SECTION 80 G(5)(VI) OF THE ACT AND ALSO DIRECTED TO ALLOW REGISTRATION UNDER SECTION 12AA O F THE ACT. THE LD. AUTHORISED REPRESENTATIVE HAS ALSO DREW OUR ATTENTION TO PAGE NOS.31 TO 35 OF ASSESSEES PAPER BOOK WHERE APPLICATION FOR INFORMATION SOUGHT UNDER R.T.I. ACT AND REPLY GIVEN BY THE DEPARTMENT HAS BEEN PLACED. THE RELEVANT REPLY FILED IN RESPONSE TO R.T.I. ITA NOS.288 & 289/AGR/2012 3 INFORMATION VIDE LETTER DATED 18 TH SEPTEMBER, 2012 OF CENTRAL PUBLIC INFORMATION OFFICER, O/O. ACIT (HQ./ADMN.), AGRA IS REPRODUCED AS UNDER :- (PAGE NO.32 OF ASSESSEES PAPER BOOK) (IV) AS REGARDS THE QUERY AS TO WHETHER THE CIT-1, AGRA WAS PRESENT IN PERSON IN HIS OFFICE ON THE DATE OF HEARING, IT IS TO BE MENTIONED THAT THE CHARGE OF THE CIT-1, AGRA DURING THE PERIOD WAS BEING HELD AS ADDITIONAL CHARGE BY SHRI B.P.S. BISHT IN ADDITION TO HIS REGULAR CHARGE OF THE CIT-1, KANPUR. FROM THE ORDER SHEET OF THE FILE IT IS NOT CLEAR AS TO WHETHER THE FILE WAS PUT UP TO HIM AT A GRA OR WAS TAKEN TO KANPUR FOR HIS APPROVAL 3.1 THE LEARNED DEPARTMENTAL REPRESENTATIVE RE LIED UPON THE ORDER OF THE CIT. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSE E FILED NECESSARY APPLICATIONS FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT AND FOR APPROVAL UNDER SECTION 80G(5) OF THE ACT ON 26.12.2012. THE CIT PASSED TH E ORDERS DATED 21.06.2012. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE THE ORDERS PASSED BY THE CIT IS IN ACCORDANCE WITH LAW. TO EXAMINE THIS ISSU E WE WOULD LIKE TO REFER THE RELEVANT SECTION 12AA OF THE ACT WHICH IS REPRODUCE D AS UNDER:- 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM TH E TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTI ON AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEH ALF; AND ITA NOS.288 & 289/AGR/2012 4 (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING TH E TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORD ER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSE D UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNI TY OF BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF CO MMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999, SHALL STAND TRANS FERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PROCEED W ITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS R ECEIVED UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF S ECTION 12A.] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) [OR HAS OBTAINE D REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996)]] AND SUBSEQ UENTLY THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SU CH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACC ORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MA Y BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUC H TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSE D UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD.] 5 FOR PROPER APPRECIATING THE ISSUE WE WOULD A LSO LIKE TO REFER SOME ADMITTED FACTS NOTICED FROM THE RECORD WHICH ARE AS UNDER:- ITA NOS.288 & 289/AGR/2012 5 5.1 FROM THE ORDER SHEET DATED 19.06.2012 IT APPEAR S THAT THE IMPUGNED ORDER HAS BEEN PUT UP BY I.T.O. H.Q. BEFORE THE CIT. THE RELEVANT ABSTRACT OF THE ORDER SHEET IS REPRODUCED AS BELOW: - (PAGE NO.35 OF PAPE R BOOK) 16.09.2012 SIR, AS DIRECTED, DFA OF ORDERS U/S 12AA & 80G IS PUT UP FOR APPROVAL PL. SD/- ITO(T) CIT-1 ON PERUSAL OF DETAILS FILED ON RECORD AND WRITTEN S UBMISSIONS MADE SUBSEQUENTLY IT IS SEEN THAT NO CHARITABLE ACT IVITIES AS SUCH HAVE BEEN CARRIED OUT BY A, FROM WHICH SATISFACTION RE GARDING ITS OBJECTS AND GENUINENESS OF ACTIVITIES CAN BE FOUND. THUS, THIS APPLICATION HAS BEEN REJECTED. ORDER U/S. 12AA PASSED ACCORDINGLY. SD/- 21.6.12 5.2 THE RELEVANT QUESTION AND REPLY GIVE BY TH E REVENUE UNDER THE RTI ACT TO THE ASSESSEE FROM PAGE NOS.31 & 32 OF THE ASSESSEE S PAPER BOOK ARE REPRODUCED AS UNDER :- (IV) WHETHER LEARNED COMMISSIONER OF INCOME TAX-1, AGRA WERE PRESENT IN PERSON IN HIS OFFICE AT AYAKAR BHAWAN, S ANJAY PLACE, AGRA ON ANY OF DATE OF WHICH THE CASE IS SHOWN TO BE HEA RD AS PER ORDER SHEET ENTRIES OR OTHERWISE ANY PERSONAL HEARING WAS GRANTED BY HIM IN THE MATTER. (IV) AS REGARDS THE QUERY AS TO WHETHER THE CIT-1, AGRA WAS PRESENT IN PERSON IN HIS OFFICE ON THE DATE OF HEARING, IT IS TO BE MENTIONED THAT THE CHARGE OF THE CIT-1, AGRA DURING THE PERIOD WAS BEING HELD AS ADDITIONAL CHARGE BY SHRI B.P.S. BISHT IN ADDITION TO HIS REGULAR CHARGE OF THE CIT-1, KANPUR. FROM THE ORDER SHEET OF THE FILE IT IS NOT CLEAR AS TO WHETHER THE FILE WAS PUT UP TO HIM AT A GRA OR WAS TAKEN TO KANPUR FOR HIS APPROVAL ITA NOS.288 & 289/AGR/2012 6 5.3 THE ASSESSEE HAS FURNISHED A COPY OF TRUST DEED . ACCORDING TO THAT, THE OBJECTS OF THE TRUST ARE AS UNDER:- (PAGE NO.6 OF P APER BOOK) 4. OBJECTS A. EDUCATIONAL TO RUN, MAINTAIN OR ASSIST ANY EDU CATIONAL OR VOCATIONAL TRAINING OR TO GRANT INDIVIDUAL SCHOLARS HIPS FOR POOR, DESERVING AND NEEDY STUDENTS FOR ELEMENTARY AND HIG HER EDUCATION. B. MEDICAL TO RUN, MAINTAIN OR ASSIST ANY MEDICAL INSTITUTION, NURSING HOME OR CLINICS OR TO GRANT ASSISTANCE TO N EEDY AND INDIGENT PERSONS FOR MEETING THE COST OF MEDICAL TREATMENT. C. RELIEF OF THE POOR TO GIVE FINANCIAL OR OTHER ASSISTANCE IN KIND BY WAY OF DISTRIBUTION OF BOOKS, NOTEBOOKS, CLOTHS, UNIFORMS, OR MEALS ETC. FOR THE POOR, WIDOWS, DISABLED, INDIGENT AND T O THE PERSONS SUFFERING FROM PHYSICAL CHALLENGES AND NATURAL CALA MITIES. D. ENVIRONMENTAL PRESERVATION TO PROMOTE PRESERVA TION OF NATURAL RESOURCES, PRESERVATION OF MONUMENTS OF HIS TORICAL IMPORTANCE, PRESERVATION OF ENVIRONMENT AND PROMOTE ALTERNATE SOURCES OF ENERGY. E. OTHER OBJECTS OF GENERAL PUBLIC UTILITY - (I) TO ACQUIRE PROPERTY FOR THE SOLE USE FOR PUBLIC GOOD BY MAKING IT AVAILABLE FOR PUBLIC PURPOSES AS FOR EXAMPLE AROUSI NG, LIBRARY, HOSPITAL, CLINIC, CRCHE AND/OR AS A COMMUNITY HALL TO BE AVAILABLE FOR PUBLIC USE AS TRAINING CLASSES, SEMINARS, DISCOURSE S AND OTHER PUBLIC FUNCTIONS FOR BENEFIT OF THE COMMUNITY IN GENERAL. (II) TO UNDERTAKE ANY OTHER ACTIVITY INCIDENTAL TO THE ABOVE ACTIVITIES BUT WHICH ARE NOT INCONSISTENT WITH THE ABOVE OBJEC TS. 5.4 THE WINDING UP CLAUSE OF THE TRUST IS REPRODUCE D AS UNDER: (PAGE NO.9 OF PAPER BOOK) IN THE EVENT OF DISSOLUTION OR WINDING UP OF THE T RUST THE ASSETS REMAINING AS ON THE DATE OF DISSOLUTION SHAL L UNDER NO ITA NOS.288 & 289/AGR/2012 7 CIRCUMSTANCES BE DISTRIBUTED AMONGST THE TRUSTEES B UT THE SAME SHALL BE TRANSFERRED TO SOME OTHER SIMILAR TRUST/ ORGANIZ ATION WHOSE OBJECTS ARE SIMILAR TO THOSE OF THIS TRUST SUBJECT TO STATUTORY PERMISSIONS, IF ANY, UNDER ANY LAW FOR THE TIME BEI NG IN FORCE. 6. SECTION 12AA LAID DOWN PROCEDURE TO BE FOL LOWED BY THE CIT FOR GRANTING REGISTRATION OF A TRUST. IN THE SAID SECTION 12AA THE POWER AND DUTY PROVIDED TO THE CIT AND NOT HIS SUBORDINATE OR ITO HQ (TECH.). ON C ONSIDERATION OF RELEVANT PROVISIONS OF THE ACT AND FACTS OF THE CASE INCLUDI NG NOTED ABOVE WE FIND THAT THE CIT DID NOT ACT ACCORDING TO LAW AND PROVISIONS OF SECTION 12AA & 80G OF THE ACT. HE DID NOT APPLY HIS MIND BEFORE REJECTING AS SESSEES APPLICATIONS. ON QUERY OF THE ASSESSEE UNDER RTI ACT, IT WAS REPLIED THA T AS PER ORDER SHEET ENTRY IT IS NOT CLEAR WHETHER THE FILE WAS PUT UP AT AGRA OR WAS TA KEN TO KANPUR FOR HIS APPROVAL. THUS, IT IS CLEAR THAT DRAFT ORDERS PUT UP BY SUBOR DINATE HAS BEEN APPROVED BY THE CIT. SUCH ORDERS CANNOT BE SAID TO BE ORDER UNDER SECTION 12AA OF THE ACT. WHEN THE ORDER UNDER SECTION 12AA IS NOT PASSED BEFORE E XPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEI VED TO THE CIT, THE TRUST IS DEEMED GRANT OF REGISTRATION AS HELD BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SOCIETY FOR THE PROMOTION OF EDUCATION ADVE NTURE SPORT & CONSERVATION OF ENVIRONMENT VS. CIT, 171 TAXMAN 113 (ALL).FURTHER, ON IDENTICAL SET OF FACTS, THE I.T.A.T., AGRA BENCH IN THE CASE OF SHIKSHA SANKALP SOCIETY VS. CIT IN ITA NO.418/AGR/2010, ORDER DATED 18.05.2012 HAS HELD AS UNDER :- (PARAGRAPH NOS.6 & 7) ITA NOS.288 & 289/AGR/2012 8 6. CONSIDERING THE ABOVE DISCUSSION, THE IMPUGNED ORDER DATED 27.07.2010 CANNOT BE SUSTAINED IN LAW AND ACCORDING LY, WE HOLD (I). THAT THE CIT, ALIGARH HAS NOT CONDUCTED ANY EN QUIRY INTO THE MATTER IN ORDER TO SATISFY HIMSELF ABOUT THE GENUIN ENESS OF THE ACTIVITIES OF THE ASSESSEE INSTITUTION OR FUND; (II). THAT THE IMPUGNED ORDER IS PASSED BY THE LD. CIT WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND IN M OST MECHANICAL MANNER, MERELY RELYING UPON THE ORDER SH EET DATED 08.07.2010 RECORDED BY ITO (TECH.); (III). THAT THE IMPUGNED ORDER IS PASSED BEYOND THE PERIOD OF 6 MONTHS FROM THE DATE OF FILING OF APPLICATION AND, THEREFORE, PROVISIONS OF RULE 11AA(6) OF THE IT RULES HAVE BEE N VIOLATED. NOTHING COULD BE ATTRIBUTED TO THE ASSESSEE FOR TAK ING TIME IN NOT COMPLYING WITH THE DIRECTIONS OF THE LD. CIT BE CAUSE THE LD. CIT NEVER ISSUED ANY DIRECTION AS PER ABOVE FINDING S. THEREFORE, THE ASSESSEE IS ENTITLED FOR GRANT OF RE NEWAL OF APPROVAL U/S. 80G(5) OF THE IT ACT; (IV). THAT THE REASONS GIVEN BY ITO (TECH.) FOR REF USAL TO RENEW THE APPROVAL U/S. 80G(5)(VI) ARE NOT VALID IN THE EYES OF LAW AND SINCE THE ASSESSEE ENJOYED REGISTRATION U/S. 12AA O F THE IT ACT CONTINUOUSLY AND ALSO COMPLIED WITH THE PROVISIONS OF SECTION 80G(5), THEREFORE, RENEWAL OF APPROVAL SHOULD NOT H AVE BEEN REJECTED. 7. IN VIEW OF THE ABOVE DISCUSSION AND FINDINGS, WE SET ASIDE THE ORDER OF THE LD. CIT, ALIGARH DATED 27.07.2010 AND DIRECT HIM TO GRANT RENEWAL OF APPROVAL U/S. 80G(5)(VI) OF THE IT ACT. 7. SINCE THE ORDER PASSED BY THE CIT IS NOT IN ACCO RDANCE WITH LAW AND ACCORDINGLY THE ORDER WAS NOT PASSED BEFORE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH APPLICATION IS RECEIVED, UNDER T HE CIRCUMSTANCES, THE ASSESSEE IS ITA NOS.288 & 289/AGR/2012 9 ENTITLED TO REGISTRATION UNDER SECTION 12AA AND APP ROVAL UNDER SECTION 80G OF THE ACT. 8. IN THE LIGHT OF ABOVE DISCUSSIONS, FOLLOWING THE ABOVE ORDER OF I.T.A.T., AGRA BENCH AND FAILURE ON THE PART OF CIT TO EXAMIN E THE ISSUE IN THE LIGHT OF PROVISIONS OF SECTION 12AA & 80G OF THE ACT, WE HAV E NO OPTION EXCEPT TO SET ASIDE THE ORDERS OF CIT DATED 21.06.2012 FOR REFUSA L OF REGISTRATION UNDER SECTION 12AA OF THE ACT AND REFUSAL OF APPROVAL UNDER SECTI ON 80G OF THE ACT. WE DIRECT THE CIT TO GRANT REGISTRATION UNDER SECTION 12AA AN D RENEWAL OF APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT WITH EFFECT FROM THE DATE FROM WHICH THE ASSESSEE REQUESTED FOR GRANT OF REGISTRATION UNDER SECTION 1 2AA AND FOR APPROVAL UNDER SECTION 80G OF THE ACT. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY