Gautam Budh Jan Kalyan Seva Sansthan , Azamgarh V. Commissioner of Income Tax (Exemption), Lucknow

ITA 290/LKW/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1615 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 14-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K BAR
• Assessee Lawyers: ANAAM SOM RATNA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12; 11; 80G; 12A; 12AA

Judgement Text

I.T.A. NO.290/LKW/2019 ASSESSMENT YEAR:N.A. 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.290/LKW/2019 ASSESSMENT YEAR: N.A. GAUTAM BUDH JAN KALYAN SEVA SANSTHAN, T.C. 46 V, U.P. STATE CONSTRUCTION & INFRASTRUCTURE DEVELOPMENT CORPORATION, VIBHUTI KHAND, GOMTI NAGAR, LUCKNOW. PAN:AABAG0811F VS. CIT (EXEMPTIONS), LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT (EXEMPTIONS), LUCKNOW DATED 22/02/2019. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT ASSE SSEE WAS HAVING REGISTRATION U/S 12AA OF THE ACT, HOWEVER, ITS APPL ICATION FOR GRANT OF APPROVAL U/S 80G HAS BEEN REJECTED BY LEARNED CIT ( EXEMPTIONS) BY HOLDING THAT MERE SUBMISSION OF DOCUMENTS IS NOT THE SOLE C RITERIA FOR APPROVAL U/S 80G(5) OF THE I.T. ACT AND THE APPROVAL U/S 80G(5) IS NOT A MECHANICAL PROCESS WHEREIN THE ACCORDING OF REGISTRATION U/S 1 2AA/10(23C) OF THE ACT APPELLANT BY SHRI ANAAM SOM RATNA, ADVOCATE RESPONDENT BY S HRI A. K. BAR, CIT (D.R.) DATE OF HEARING 04 / 09 /201 9 DATE OF PRONOUNCEMENT 06/09/2019 I.T.A. NO.290/LKW/2019 ASSESSMENT YEAR:N.A. 2 AND FILING OF DOCUMENTS AT ONE END WOULD RESULT IN THE ISSUANCE OF APPROVAL U/S 80G(5) AT THE OTHER END. LEARNED A. R. ARGUED THAT ONCE THE REGISTRATION U/S 12A WAS GRANTED TO THE ASSESSEE, T HE ACTION OF LEARNED CIT (EXEMPTIONS) IN REJECTING THE APPLICATION U/S 80G W AS NOT JUSTIFIED AS VARIOUS BENCHES OF THE TRIBUNAL HAVE HELD THAT ONCE THE REGISTRATION U/S 12A IS AVAILABLE TO THE ASSESSEE, THE ASSESSEE CANNOT B E DENIED THE BENEFIT OF SECTION 80G OF THE ACT. 3. LEARNED D. R., ON THE OTHER HAND, SUPPORTED THE ORDER OF LEARNED CIT (EXEMPTIONS). 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE WAS REQUIRE D TO FILE CERTAIN CLARIFICATIONS AGAINST HIS APPLICATION FILED U/S 80 G AND THE DATE OF COMPLIANCE WAS FIXED FOR 30/01/2019. ON 30/01/2019 LEARNED CO UNSEL FOR THE ASSESSEE FILED A REPLY ALONG WITH THE ANNEXURES, A COPY OF W HICH IS PLACED AT PAGES 6 OF THE PAPER BOOK. THE SUBMISSIONS/EXPLANATIONS FI LED BY THE ASSESSEE ON 30/01/2019 INCLUDED VARIOUS DOCUMENTS WHICH THE ASS ESSEE WAS REQUIRED TO FILE. THE LEARNED CIT (EXEMPTIONS) PASSED THE ORDER REJECTING THE APPLICATION OF THE ASSESSEE BY HOLDING THAT THE APPROVAL U/S 80 G(5) IS NOT A MECHANICAL PROCESS WHEREIN THE ACCORDING OF REGISTRATION U/S 1 2AA OF THE ACT AND FILING OF DOCUMENTS AT ONE END WOULD RESULT IN THE ISSUANC E OF APPROVAL U/S 80G(5) OF THE ACT. THE LEARNED CIT (EXEMPTIONS) HE LD THAT THE APPLICATION AND THE SUPPORTING DOCUMENTS SHOULD DULY PASS THE T EST AS MANDATED BY LAW FOR ACCORDING THE RECOGNITION U/S 80G(5) OF THE ACT. HE FURTHER HELD THAT APPLICANT HAD FAILED TO PROVIDE ANY COGENT PROOF TH AT COULD VERIFY THAT THE APPLICANT IS ACTUALLY CARRYING OUT ACTIVITIES IN PU RSUANCE OF THE OBJECTS SET FORTH IN THE MEMORANDUM OF THE TRUST. HOWEVER, FRO M THE VARIOUS JUDGMENTS OF VARIOUS BENCHES OF THE TRIBUNAL, WE FI ND THAT FOR GETTING I.T.A. NO.290/LKW/2019 ASSESSMENT YEAR:N.A. 3 APPROVAL U/S 80G OF THE ACT, THE LEARNED CIT (EXEMP TIONS) IS REQUIRED TO SEE AS TO WHETHER CONDITIONS LAID DOWN UNDER CLAUSE (I) TO (V) OF SECTION 80G(5) ARE FULFILLED OR NOT. FOR THE SAKE OF CONVENIENCE, THE CONDITIONS AS LAID DOWN IN SECTION 80G(5) ARE REPRODUCED BELOW: (5) THIS SECTION APPLIES TO DONATIONS TO ANY INSTI TUTION OR FUND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB -SECTION (2), ONLY IF IT IS ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE AND IF IT FULFILS THE FOLLOWING CONDITIONS, NAMELY:-- (I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCOM E, SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOM E UNDER THE PROVISIONS OF SECTIONS 11 AND 12 OR CLAUSE (23AA) O R CLAUSE (23C) OF SECTION 10: PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCOME, BEING PROFITS AND GAINS OF BUSINESS, THE CONDITION THAT SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOM E UNDER THE PROVISIONS OF SECTION 11 SHALL NOT APPLY IN RELATIO N TO SUCH INCOME, IF,--(A) THE INSTITUTION OR FUND MAINTAINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS;(B) THE DONATIONS MADE TO THE INSTITUTION OR FUND ARE NOT USED BY IT, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS; AND(C) THE INSTITUTION O R FUND ISSUES TO A PERSON MAKING THE DONATION A CERTIFICATE TO THE E FFECT THAT IT MAINTAINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF S UCH BUSINESS AND THAT THE DONATIONS RECEIVED BY IT WILL NOT BE U SED, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS; (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED DOES NOT, OR THE RULES GOVERNING THE INSTITUTION OR FUND DO NOT, CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATI ON AT ANY TIME OF THE WHOLE OR ANY PART OF THE INCOME OR ASSETS OF TH E INSTITUTION OR FUND FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOS E; (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO B E FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACCO UNTS OF ITS RECEIPTS AND EXPENDITURE; (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED A S A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRA TION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT AC T IN FORCE IN ANY PART OF INDIA OR UNDER SECTION 25 OF THE COMPANIES A CT, 1956 (1 OF I.T.A. NO.290/LKW/2019 ASSESSMENT YEAR:N.A. 4 1956), OR IS A UNIVERSITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUCATIONAL INSTITUTION RECOGNISED BY THE GOVERNMEN T OR BY A UNIVERSITY ESTABLISHED BY LAW, OR AFFILIATED TO ANY UNIVERSITY ESTABLISHED BY LAW, OR IS AN INSTITUTION FINANCED W HOLLY OR IN PART BY THE GOVERNMENT OR A LOCAL AUTHORITY; WE FIND THAT LEARNED CIT (EXEMPTIONS) HAS NOT MADE ANY OBSERVATION REGARDING VIOLATION OF ANY CONDITION LAID DOWN UNDE R CLAUSE (I) TO (V) OF SECTION 80G(5) OF THE ACT. THEREFORE, WE DEEM IT AP PROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF LEARNED CIT (EXEMPTIONS) WHO SHOULD CONSIDER THE APPLICATION OF THE ASSESSEE U/S 80G AFRESH KEEPING IN VIEW THE DECISION OF VARIOUS BENCHES OF THE TRIBUNAL AND ALSO KEEPING IN VIEW THE SPIRIT OF CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SECTI ON 80G OF THE ACT. NEEDLESS TO SAY, THE ASSESSEE WILL BE AFFORDED REASONABLE AN D SUFFICIENT OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 06/09/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:06/09/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR