M/s. Purshottam Public Trust, Baroda V. The CIT-I, Baroda

ITA 2932/AHD/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9667 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-04-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 80G; 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G. D. AGARWAL , VICE PRESIDENT AND SHRI S.S. GODARA JUDICIAL MEMBER ITA NO . 2932 /AHD/201 4 A. Y . 20 14 - 1 5 M/S. PURSHOTTAM PUBLIC TRUST, 14, DHANUSHYA SOCIETY, NEW SAMA ROAD , BARODA. PAN: AACTP 3586G VS COMMISSIONER OF INCOME TAX - I, BARODA. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUBHASH BAINS , CIT - D.R. ASSESSEE(S) BY : SHRI MILIN MEHTA , A.R. / DATE OF HEARING : 07 / 0 4 /201 5 / DATE OF PRONOUNCEMENT: 17 / 04 /201 5 / O R D E R PER: S. S. GODARA , JUDICIAL MEMBER THIS A SSESSEE S A PPEAL IS DIRECTED AGAINST THE ORDER OF CIT - I , BARODA DATE D 15.09.2014 DENYING SECTION 80G(5) REGISTRATION. 2. THE A SSESSEE TRUST ENJOYS SECTION 12A REGISTRATION SINCE 28.02.2014. IT FILE D FOR SECTION 80G APPROVAL ON 18.03.2014. ITS OBJECT S ARE MAINLY IN THE FIELD OF EDUCATION. THE CIT HAS REJECTED ITS 80G APPLI CATION AS UNDER: 4. THE TRUST VIDE ITS LETTER DATED 28.08.204 SUBMITTED THE DETAILS. THE REPLY FURNISHED BY THE TRUST HAS BEEN CONSIDERED. ITA NO. 2932 /AHD /201 4 M/S. PURSHOTTAM PUBLIC TRUST F OR A.Y. 2014 - 1 5 - 2 - I) WHILE GRANTING REGISTRATION U/S. 12A ON 28.02.2014, IT WAS SPECIFICALLY MENTIONED IN THE CERTIFICATE THAT THE T RUST SHOULD DO THE ACTIVITIES AS PER THE OBJECTS, MENTIONED IN THE TRUST DEED. HOWEVER, THE TRUST HAS NOT CONDUCTED ANY ACTIVITIES EXCEPT IT HAD PROVIDED EDUCATIONAL HELP TO 2 STUDENTS IN THE F.Y.2013 - 14, WHICH WERE SHOWN AT THE TIME OF GRANTING REGISTRATI ON U/S. 1 2A. ON PERUSAL OF THE EVIDENCES PRODUCED BY THE TRUST IN SUPPORT OF THE ACTIVITIES, CLAIMED TO BE CARRIED OUT BY IT, IT HAS NOT FURNISHED ANY DOCUMENTS PROVING THAT THE BENIFICIARIES ARE ACTUALLY NEEDY PERSONS . II) ON PERUSAL OF THE INCOME & EXPEN DITURE ACCOUNT FOR THE F.Y.2013 - 14, IT IS SEEN THAT THE TRUST HAS NOT INCURRED 85% OF THE INCOME TOWARDS ITS OBJECTS. IT HAD NOT FILED FORM NO. 10 FOR ACCUMULATION OR SET APART OF THE UNUTILIZED INCOME BEFORE THE CONCERNED A.O. HOWEVER, IT HAD MERELY SUBMI TTED DECLARATION DURING THE CURRENT PROCEEDING IN WHICH THE TRUST HAD DECLARED THAT THE INCOME OF RS.1,23,388/ - WILL BE APPLIED IN THE A.Y. 2015 - 16 IN THE MANNER PROVIDED UNDER THE INCOME TAX ACT, 1961 DTD. 31.07.2014, WHICH IS NOT A CORRECT PROCEDURE FOR ACCUMULATION OF INCOME FOR THE REASON AS UNDER: AS PER RULE - 17 'NOTICE FOR ACCUMULATION O F INCOME BY CHARITABLE OR RELIGIOUS TRUST OR INSTITUTION OR ASSOCIATION REFERRED TO IN CLAUSE(21) AND (23) OF SECTION 10, THE NOTICE TO BE GIVEN TO THE ASSESSING OFFI CE OR THE PRESCRIBED AUTHORITY UNDER SUB SECTION (2) OF SECTION 11 OR UNDER THE SAID PROVISION AS APPLICABLE UNDER CLAUSE (21) OR CLAUSE (23) OF SECTION 10 SHALL BE IN FORM NO. 10 AND SHALL BE DELIVERED BEFORE THE EXPIRY OF THE TIME ALLOWED UNDER SUB - SECTI ON (1) OF SECTION 139, FOR FURNISHING THE RETURN OF INCOME III) IN THE SUBMISSION GIVEN BY THE TRUST, IT IS SEEN THAT THERE IS DONATION INCOME OF RS.1,50,000/ - VIDE LETTER DTD 20.08.2014, THE TRUST WAS ASKED TO PROVIDE THE COPY OF RECEIPTS ISSUED TO THE DONORS. ON PERUSAL OF THE RECEIPTS ISSUED BY THE TRUST, IT IS NOTED THAT THE TRUST HAS GIVEN THE RECEIPTS NO. 002 & 003 TO THE DONORS DTD. 10.06.2014 I.E. IN THE F.Y.2014 - 15, FOR THE AMOUNT OF RS . 25,000/ - AND RS.50,000/ - . HOWEVER, IT HAD RECEIVED DONATION IN THE F.Y.2013 - 14 (VERIFIED FROM THE BANK ACCOUNT). HENCE, IT CAN BE SAID THAT THE ACCOUNTS PRODUCED BY THE TRUST IS NOT RELIABLE. 5. FROM THE ABOVE DISCUSSION, IT IS TO BE HELD, THE ACTIVITIES CARRIED OUT BY THE TRUST ARE NOT GENUINE. DOCUMENTARY PROOF SUBMITTED BY THE TRUST REGARDING CHARITY PROVIDED TO THE STUDENTS DOES NOT PROVE IT WAS GIVEN TO THE NEEDY STUDENTS, THE TRUST HAS NOT FILE FORM NO. 10 FOR ACCUMULATION OF UNUTILIZED INCOME, AND THE RECEIPTS ISSUED TO THE DONORS ARE NOT IN THE SAME F.Y. I N WHICH THE TRUST HAS RECEIVED DONATION . 6. IN VIEW OF THE ABOVE FACTUAL POSITION, IT IS APPARENT THAT THE TRUST HAS FAILED TO ESTABLISH THE GENUINENESS OF ITS ACTIVITIES. THEREFORE, IT IS NOT A FIT CASE FOR GRANTING APPROVAL UNDER SECTION 80G(5)( V I) OF T HE ACT. ' ITA NO. 2932 /AHD /201 4 M/S. PURSHOTTAM PUBLIC TRUST F OR A.Y. 2014 - 1 5 - 3 - THIS LEAVES THE ASSESSEE AGGRIEVED. 3. WE HAVE HEARD BOTH SIDES AND GONE THROUGH THE RELEVANT FINDING S EXTRACTED HEREINABOVE. THE ASSESSEE SUBMITS THE CIT S REASON S RELATE TO G ENUINENESS OF ITS ACTIVITIES AND QUESTION ACCOUNTING OF DONATIONS HER EINABOVE. PER ASSESSEE, THESE ISSUES ARE NOT THE RELEVANT FACTORS IN DECIDING SECTION 80G APPROVAL . CASE LAW OF N.N. DESAI CHARITABLE TRUST VS. CIT , (2002) 123 TAXMAN 866 (GUJ.) IS QUOTED IN SUPPORT. THE REVENUE SUPPORTS THE CIT S ORDER . T HE HON BLE JURISD ICTIONAL HIGH COURT OBSERVE S THAT ASSESSMENT OF A T RUST AND ITS ACTUAL LIA BILITY TO TAX U/S.11, 12 AND 12A A HA VE NO BEARING ON CLAIM OF DONORS FOR WHOSE B ENEFIT SECTION 80G APPROVAL IS ACCORDED. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION OF FACTS. T HEIR LORDSHIPS HAVE DIRECTED THE COMMISSIONER TO PASS A FRESH ORDER AS PER LAW. WE ALSO TAKE CUE THEREFROM AND FOLLOW A SIMILAR PATH. THE CIT S ORDER UNDER CHALLENGE IS SET ASIDE AND MATTER IS RESTORED BACK FOR FRESH ADJUDICATION AS PER LAW. T HE ASSESSEE WILL BE AT LIBERTY TO PLACE ON RECORD ALL ITS EVIDENCE IN SUPPORT OF SECTION 80G REGISTRATION . 4. THE A SSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 17.4.15 SD/ - SD/ - ( G. D. AGARWAL ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED / 0 4 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S ITA NO. 2932 /AHD /201 4 M/S. PURSHOTTAM PUBLIC TRUST F OR A.Y. 2014 - 1 5 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD