SHRI KRUPA NIDHI TRUST, MUMBAI V. DIT(E), MUMBAI

ITA 2968/MUM/2013

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6483 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 17-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL E BENC H MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 2968/MUM/2013 FOR (ASSESSMENT YEAR 2009-10) SHRI KRUPA NIDHI TRUST, 602, MERU TOWERS, A WING, 549, JAME JAMSHED ROAD, MATUNGA (CR), MUMBAI-400019. PAN: AALTS6811N VS. DIT(E), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SH. R. MANJUNATHA SWAMY (CIT-DR) DATE OF HEARING : 10.01.2019 DATE OF PRONOUNCEMEN T : 13.02.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) [FOR SHORT LD. DIT(E)], MUMB AI DATED 21.02.2013 PASSED UNDER SECTION 12AA OF THE ACT. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 DIRECTOR OF INCOME TAX (EXEMPTION) HAS ERRED IN L AW AS WELL AS ON FACTS IN REJECTING REGISTRATION U/S 12AA OF THE ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 2 DIRECTOR OF INCOME TAX (EXEMPTION) HAS ERRED IN O BSERVING THAT ACTIVITIES OF THE TRUST DO NOT QUALIFY IN THE NATURE OF CHARITY WITHI N THE MEANING OF SECTION 2(15) OF THE ACT WHICH IS UNFOUNDED, WITHOUT ANY BASIS AN D AS SUCH THE ORDER IS ARBITRARY AND UNJUSTIFIED. 3 THAT THE REGISTRATION HAS BEEN REFUSED ONLY ON TH E BASIS OF SUSPICION, CONJECTURES AND SURMISES WHICH IS NOT PERMITTED UNDER THE LAW A ND AS SUCH THE ORDER REFUSING REGISTRATION IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. ' ITA NO. 2968 MUM 2013-SHRI KRUPA NIDHI TRUST 2 4. THAT THE REGISTRATION HAS BEEN REFUSED ONLY ON T HE BASIS OF ASSUMPTION THE TRUST HAS CHARITABLE AND NON CHARITABLE ACTIVITIES WITHOU T CONSIDERING THAT TRUST IS PRIMARILY A EDUCATIONAL TRUST AND OTHER ACTIVITIES ARE ANCILLARY OR INCIDENTAL TO PRIMARILY OBJECT OF EDUCATION. FURTHER AMENDMENT TO CLAUSE 2(15) IN THE YEAR 2009 &2010 IS NOT APPLICABLE TO TRUST ENGAGED IN PROVISI ON OF RELIEF FOR POOR, EDUCATION AND HEALTH. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A PUBL IC CHARITABLE TRUST REGISTERED UNDER THE BOMBAY TRUST ACT VIDE REGISTRATION DATED 15.06.2012. THE ASSESSEE- TRUST FILED APPLICATION BEFORE LD DIT(E) FOR REGIST RATION UNDER SECTION 12A ON 23.08.2012. THE LD. DIT(E) FOR MAKING NECESSARY EN QUIRY ISSUED NOTICE DATED 21.11.2012 TO THE ASSESSEE FOR FURNISHING CERTAIN NECESSARY DETAILS. THE ASSESSEE COMPLIED THE SAID SHOW CAUSE NOTICE BY FIL ING REPLY AND THE NECESSARY DETAILS. AFTER PERUSAL OF NECESSARY RECORD AND THE BYLAWS OF THE ASSESSEE-TRUST, THE LD. DIT(E) TOOK HIS VIEW THAT THERE IS NO BINDI NG LEGAL OBLIGATION ON THE TRUST TO APPLY INCOME/FUND SOLELY AND EXCLUSIVELY F OR CHARITABLE PURPOSE. THE OBJECTS OF THE ASSESSEE ALSO CONTAINED CERTAIN CLAU SE SHOWING NON- CHARITABLE/COMMERCIAL ACTIVITIES. THEREFORE, FURTHE R A SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. THE ASSESSEE FILED IS SUBMI SSION DATED 04.02.2013 CONTENDING THEREIN THAT ALL OBJECTS OF THE ASSESSEE IN THE OBJECTS CLAUSE ARE FOR CHARITABLE PURPOSE ONLY. IT WAS FURTHER SUBMITTED T HAT IF ANY COMMERCIAL ACTIVITIES ARE CARRIED OUT THE INCOME TAX PROVIDED THE MECHANISM TO SUPERVISE AND VERIFY ON YEARLY BASIS OF FURNISHING RETURN OF INCOME. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY LD. DIT(E). THE LD. DI T(E) CONCLUDED THAT ONCE THE REGISTRATION IS GRANTED UNDER SECTION 12A OR 12 AA, THE ASSESSING OFFICER ITA NO. 2968 MUM 2013-SHRI KRUPA NIDHI TRUST 3 CANNOT MAKE FURTHER PROBE INTO THE OBJECT OF THE TR UST. FOR ACTIVITIES OF THE ASSESSEE, THE LD. DIT(E) CONCLUDED THAT THERE IS NO CLAUSE IN THE TRUST-DEED TO SEGREGATE THE OBJECT IN PREDOMINANT OR INCIDENTAL A CTIVITIES. THEREFORE, THE LD. DIT(E) WAS NOT SATISFIED ABOUT THE CHARITABLE OBJEC T AND GENUINENESS OF ITS EMPLOYEES. THEREFORE, THE APPLICATION OF ASSESSEE W AS REJECTED. AGGRIEVED BY THE ORDER OF LD. DIT(E), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE THE SER VICE OF NOTICE OF HEARING FOR MORE THAN FIVE OCCASIONS. PERUSAL OF RECORD REV EALS THAT ASSESSEE IS NOT APPEARED THROUGHOUT THE PENDENCY OF APPEAL SINCE 20 13. PERUSAL OF RECORD REVEALS THAT AUTHORITY LETTER OF SHRI VAIBHAV N. BA NJAN IS ON RECORD. HOWEVER, THERE IS NO OCCASION OF SHRI VAIBHAV N. BANJAN. THE REFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABL E ON RECORD. 4. WE HAVE HEARD THE SUBMISSION OF LD. DR FOR THE REVE NUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DR FOR THE RE VENUE SUPPORTED THE ORDER OF DIT(E). THE LD. DR SUBMITS THAT THE ASSESSEE FAILED TO PROVE THE CHARITABLE OBJECT AND GENUINENESS OF THE ACTIVITIES. THE LD. D IT(E) AFTER EXAMINING THE VARIOUS CLAUSE AND THE RECORDS FURNISHED BEFORE HIM AND CAME TO THE CONCLUSION THAT THE ASSESSEE IS NOT ENTITLED FOR RE GISTRATION UNDER SECTION 12AA OF THE ACT. 5. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. PERUSAL OF IMPUGNED O RDER REVEALS THAT THE ITA NO. 2968 MUM 2013-SHRI KRUPA NIDHI TRUST 4 ASSESSEE WAS ASKED TO SATISFY ABOUT THE OBJECT OF T HE TRUST AND GENUINENESS OF ITS ACTIVITIES. THE ASSESSEE FURNISHED CERTAIN DETA ILS ALONG WITH THE COPY OF TRUST-DEED DATED 16.04.2012 REGISTERED WITH CHARITY COMMISSIONER, MUMBAI. AFTER PERUSING THE TRUST-DEED, THE LD. DIT(E) WAS O F THE VIEW THAT THERE IS NO LEGAL OBLIGATION FOR APPLICATION OF FUND SOLELY AND EXCLUSIVELY FOR CHARITABLE PURPOSE AND THERE IS MORE THAN ONE OBJECT FOR NON-C HARITABLE OF COMMERCIAL IN NATURE. THUS, THE LD. DIT(E) WAS NOT SATISFIED WITH THE OBJECT OF THE TRUST. SO FAR AS THE ACTIVITIES ARE CONCERNED, THE LD. DIT(E) CONCLUDED THAT THE ASSESSEE CONTENDED THAT ACTIVITIES CAN BE EXAMINED AT THE TI ME OF SCRUTINIZING THE RETURN OF THE ASSESSEE. THUS, THE LD. DIT(E) CONCLUDED THA T ASSESSEE FAILED TO COMPLY WITH THE MANDATORY CONDITION PRESCRIBED UNDER SECTI ON 12AA AND REJECTED THE APPLICATION OF THE ASSESSEE. BEFORE US, NEITHER THE REPRESENTATIVE OF ASSESSEE HAS COME FORWARD TO PROVE THE GENUINENESS OF ACTIVI TIES NOR PLACED ANY DOCUMENT TO SUBSTANTIATE THEIR CONTENTION. THEREFOR E, WE DO NOT FIND ANY MERITS IN THE GROUNDS OF APPEAL RAISED BY ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/02/2019. SD/ SD/- SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATE: 13.02.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT (A) ITA NO. 2968 MUM 2013-SHRI KRUPA NIDHI TRUST 5 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI