BHANSALI TRUST, MUMBAI V. ITO (E) 1(1), MUMBAI

ITA 3031/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4466 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P SINGH
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Charitable institution; Principle of natural justice; Cancellation of registration
• Section: 143(3); 142(1); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI JOGINDER SINGH, JM & SHRI RAJESH KUMAR, AM ITA NO.3031/MUM/2014 ASSESSMENT YEAR : 2010-11 BHANSALI TRUST, EE-7010 BHARAT DIAMOND BOURSE BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI- 400 050 PAN AAATB1718N VS. THE ITO (EXEMP.)1(1), MUMBAI (APPELLANT) RESPONDENT) ASSESSEE BY : DR K SHIVARAM REVENUE BY : SHRI N P SINGH DATE OF HEARING : 28.10.2015 DATE OF PRONOUNCEMENT : 06.01.2016 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE IMPUGNED ORDER DATED 14.03.2014, PASSED BY THE CIT(A)- I, MU MBAI, FOR THE ASSESSMENT YEAR 2010-11.THE ASSESSEE FILED REVISED REVISED GROUNDS OF APPEAL VIDE LETTER DATED 14.10.2015 AS THE ORIGINAL ARGUMENTS WERE LENGTHY A ND ARGUMENTATIVE. THE REVISED GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- I. DENIAL OF EXEMPTION U/S.11 1. THE LEARNED CIT(A) ERRED IN DENYING THE EXEMPTION U /S 11 AND ASSESSING INCOME AT RS.12,86,05,122/- AS AGAINST THE NIL INCO ME SHOWN BY THE APPELLANT. ITA NO.3031/MUM/2014 BHANSALI TRUST 2 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE AP PELLANT TRUST HAS NOT MADE ANY CHANGES IN THE OBJECTS OF THE TRUST DURING THE RELEVANT YEAR, HOWEVER, AMENDMENT WHICH WERE MADE IN THE YEAR 1975 AND 1979 WERE MAINLY ENLARGING THE SCOPE OF THE CHARITABLE OBJECT S WITH THE PERMISSION OF THE CHARITY COMMISSIONER, HENCE, DENIAL OF EXEMP TION WAS NOT JUSTIFIED. THEREFORE EXEMPTION UNDER SECTION 11 MAY BE GRANTED. II. ENHANCEMENT OF INCOME 3. THE LEARNED CIT(A) ERRED IN ENHANCING THE INCOME OF THE TRUST FROM RS.98,19,681/- TO RS.12,86,05,122/- ON THE GROUND T HAT ASSESSEE HAS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR CLAIM U/S35AC, AND THE TRUST HAS NOT SPENT 85% OF TOTAL INCOME, WITHOUT IS SUING THE SPECIFIC NOTICE OR PROVIDING ANY OPPORTUNITY TO THE ASSESSEE FOR ENHANCEMENT OFN THE SAID ISSUES, HENCE, ORDER CIT(A) FOR ENHANC ING THE TAXABLE INCOME AT RS.12,86,05,122/- MAY BE QUASHED. 4. WITHOUT PREJUDICE TO ABOVE, THE ASSESSE HAS MAIN TAINED SEPARATE ACCOUNTS AS PER SECTION 35AC AND HAS SPENT 90.18% O F 4RECEIPTS WHICH ARE PART OF ACCOUNTS PRODUCE BEFORE AO AND CI T(A), HENCE THE ENHANCEMENT IS BAD IN LAW AND THE SAME MAY BE QUASH ED. 2. THE ISSUE RAISED IN GROUND NOS. 1 & 2 IS AGAINST THE CONFIRMATION OF THE ACTION OF THE AO DENYING EXEMPTION U/S.11 OF THE AC T. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CHARITABLE TRUST REGISTERED U/S 12A WITH THE D.I.T.(E), MUMBAI, VIDE REGISTRATION ITA NO.3031/MUM/2014 BHANSALI TRUST 3 NO.BMY/TR/B(A)/2/73-74 DATED 27.11.1973 AND WITH CH ARITY COMMISSIONER, MUMBAI, VIDE REGN. NO.E-3995. THE ASSESSEE FILED IT S RETURN OF INCOME ON 15.10.2010 DECLARING INCOME AT NIL. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) AND 142(1) WERE ISS UED AND DULY SERVED ON THE ASSESSEE. THE ASSESSEE CLAIMED EXEMPTION U/S. 11 O F THE ACT, WHICH WAS DENIED BY THE AO ON THE GROUND THAT THE TRUST DEED OF THE ASS ESSEE WAS AMENDED TWICE VIDE ORDER OF THE CHARITY COMMISSIONER DATED 28.03.1975 AND AGAIN ON 19.07.1979 RESPECTIVELY U/S. 50A OF BPT ACT 1950. THE AO HELD THAT SINCE THE ORIGINAL TRUST DEED ON THE BASIS OF WHICH EXEMPTION U/S. 12A WAS G RANTED STANDS ALTERED, THE EXEMPTION/REGISTRATION GRANTED U/S. 12A CEASES TO E XIST AS THE AMENDED TRUST DEED WAS NOT FILED BEFORE THE COMMISSIONER AND NO REVISE D REGISTRATION WAS OBTAINED BY THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(A), WHO NOT ONLY DISMISSED THE APPEAL OF THE AS SESSEE BUT ALSO ENHANCED THE ASSESSMENT FROM RS.98,19,681/- TO RS.12,86,05,122/- ON THE GROUND THAT THE ASSESSEE HAD NOT MAINTAINED SEPARATE BOOKS OF ACCO UNTS FOR ITS CLAIM U/S. 35AC OF THE ACT AND THE TRUST HAD NOT SPENT 85% OF ITS INCO ME. 5. THE LEARNED AR SUBMITTED BEFORE US THAT THE ASSE SSMENT OF THE ASSESSEE WAS MADE IN THE EARLIER YEARS ALSO VIZ. A.YS 2004-05, 2 007-08 AND 2008-09 AND EXEMPTION U/S. 11/12 OF THE ACT WERE ALLOWED AND TH E RETURNED INCOME OF THE TRUST WAS ACCEPTED WITHOUT RAISING ANY SAID OBJECTIONS AS TO REVISED REGISTRATION U/S. 12A. FURTHER, THE LEARNED AR BROUGHT TO OUR NOTICE THAT SIMILAR ISSUE WAS RAISED BY THE REVENUE IN A.Y. 2009-10, WHICH WAS DECIDED IN FAVOU R OF THE ASSESSEE BY THE CIT(A) ITA NO.3031/MUM/2014 BHANSALI TRUST 4 AND THE REVENUE PREFERRED APPEAL BEFORE THE ITAT, W HICH WAS DECIDED VIDE ORDER DATED 21.08.2015 IN FAVOUR OF THE ASSESSEE. THE LE ARNED COUNSEL SUBMITTED THAT THE CASE OF THE ASSESSEE IS THUS, COVERED IN ITS FA VOUR BY THE SAID ORDER OF THE TRIBUNAL. 6. PER CONTRA, THE LEARNED DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW ON THIS ISSUE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND FIND THAT THE TRIBUNAL IN ITA NO. 5948/MUM/2012 FOR A.Y. 2009-10 DECIDED SAME ISSUE IN FAVOUR OF THE ASSESSEE ITS OWN CASE BY THE COORDINATE BENCH IN AY 2009-10 AND THUS THE ISSUE FOR THE YEAR UNDER APPEAL IS CO VERED IN FAVOUR OF THE ASSESSEE. THE RELEVANT PARAS OF THE SAID ORDER ARE REPRODUCED AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ON. IN THE PRESENT CASE, AS THE AFORESAID DISCUSSION SHOWS, THE ONLY PLEA RA ISED BY THE ASSESSING OFFICER TO DENY THE EXEMPTION UNDER SECTION 11/12 O F THE ACT IS TO THE EFFECT THAT THERE HAS BEEN AN ADDITION IN THE OBJECT CLAUS E OF THE ASSESSEE TRUST, SUBSEQUENT TO THE GRANT OF REGISTRATION UNDER SECTI ON 12A OF THE ACT, WHICH HAS NOT BEEN INTIMATED TO DIT(E). THUS, AS PER THE ASSESSING OFFICER, IT HAS TO BE PRESUMED THAT THE REGISTRATION ORIGINALLY GRA NTED UNDER SECTION 12A OF THE ACT DOES NOT SURVIVE, WHICH WOULD LEAD TO THE D ENIAL OF THE BENEFITS OF SECTION 11/12 OF THE ACT. 7.1 FACTUALLY SPEAKING, T HE RESPONDENT ASSESSEE IS A TRUST SET UP ON THE BASIS OF TRUST DEED DATED 19/ 3/1969 AND IT HAS UNDERGONE AMENDMENTS VIDE ORDERS OF THE CHARITY COM MISSIONER DATED 20/3/1975 AND19/7/1979 UNDER SECTION 50A OF THE BOM BAY PUBLIC TRUST ACT, 1952, WHICH IS SUBSEQUENT TO THE REGISTRATION OF TH E TRUST UNDER SECTION 12A OF THE ACT AS A CHARITABLE INSTITUTION DATED 27/1 1/1973. 7.2 THERE IS NO DENYING THE FACT THAT SO FAR AS THE OBJECTS CONTAIN ED IN THE ORIGINAL TRUST DEED DATED 19/3/1969 ARE CONCERNED, THEY ARE CHARIT ABLE IN NATURE BECAUSE NOT ONLY ASSESSEE WAS GRANTED REGISTRATION UNDER SE CTION 12A OF THE ACT ON 27/11/1973 BUT IT HAS ALSO BEEN ALLOWED EXEMPTION U NDER SECTION 11/12 OF THE ACT. THE MOOT QUESTION IS AS TO WHETHER ASSESS EE CAN BE SAID TO BE A CHARITABLE INSTITUTION EVEN AFTER THE AMENDMENT TO THE TRUST DEED DATED 20/3/1975 AND 19/7/1979. THE AFORESAID POINT IS REL EVANT BECAUSE IN THE IMPUGNED ORDER OF ASSESSMENT THERE IS NO FINDING BY THE ASSESSING OFFICER THAT THE ACTIVITIES ADDED IN 1975 AND 1979 DO NOT F ALL WITHIN THE PURVIEW OF ITA NO.3031/MUM/2014 BHANSALI TRUST 5 CHARITABLE PURPOSE. IN FACT THE ONLY BASIS FOR THE ASSESSING OFFICER TO HAVE DENIED THE EXEMPTION UNDER SECTION 11/12 OF THE ACT IS THE FAILURE OF THE ASSESSEE TO INTIMATE THE AMENDMENTS OF 1975 AND 197 9 AND REREGISTER WITH THE DIT(EXEMPTION) FOR THE PURPOSES OF SECTION 12A OF THE ACT. THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12A OF THE ACT CAN BE CANCELLED ONLY AS PER THE STATUTORY REQUIREMENTS, W HICH PRESCRIBE THAT EITHER THE ACTIVITIES BEING CARRIED OUT ARE NOT GENUINE OR THAT THEY ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS, MEANING THEREBY THAT THE AMENDED OBJECTS BEING PURSUED ARE NON CHARITABLE. 7.3 IN FACT THE DECISION IN THE CASE OF BOARD OF C ONTROL FOR CRICKET IN INDIA. VS. ITO (SUPRA) RELIED UPON BY THE LD. DEPARTMENTAL REPRESENTATIVE BEFORE US IS A CASE WHERE THE AMENDMENTS IN THE MEMORANDUM OF ASSOCIATION WERE FOUND TO BE SUBSTANTIAL AND MATERIAL CHANGES AND, THEREFORE, THE TRIBUNAL OPINED THAT SUCH ACTIVITIES WERE REQUIRED TO BE EXA MINED BY THE INCOME TAX AUTHORITIES SO AS TO ENABLE THE ASSESSEE TO CONTINU E AVAILING THE BENEFITS OF SECTION 11/12 OF THE ACT. NOTABLY, IN THIS CONTEXT, THE IMPUGNED ORDER OF THE ASSESSING OFFICER DOES NOT CONTAIN ANY ADVERSE FIND ING AS TO WHETHER THE ADDITIONS IN THE OBJECTS HAVE RENDERED THE ACTIVITI ES OF THE ASSESSEE AS NON- CHARITABLE. 7.4 IN OUR CONSIDERED OPINION, A MERE NON-INTIMATIO N OF THE AMENDMENTS IN THE TRUST DEED TO THE DEPARTMENT CANNOT IPSO-FACTO LEAD TO CANCELLATION OF REGISTRATION BECAUSE THE STATUTORY REQUIREMENT OF C ANCELLATION OF REGISTRATION CONTAINED IN SECTION 12AA(3) OF THE ACT PRESCRIBE T HAT THE CANCELLATION OF REGISTRATION CANNOT BE EFFECTUATED UNLESS A CASE IS MADE OUT THAT THE NEW OBJECTS DO NOT FIT-IN WITH THE EXISTING OBJECTS (I. E. NEW OBJECTS ARE NON- CHARITABLE IN NATURE) OR THAT THE ACTIVITIES ARE I N-GENUINE. A PERTINENT QUESTION IS AS TO WHETHER, ON FACTS, CAN SUCH A FIN DING BE REACHED IN THE PRESENT CASE. FOR THIS PURPOSE, WE HAVE PERUSED THE AMENDMENTS TO THE TRUST DEED MADE IN 1975 AND 1979, WHICH HAVE BEEN T ABULATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND A COM PARATIVE CHART HAS ALSO BEEN PLACED IN THE PAPER BOOK FILED BEFORE US AT PA GES 52 TO 53. A PERUSAL OF THE SAME SHOWS THAT IN THE ORIGINAL TRUST DEED THE OBJECTS OF THE ASSESSEE ARE IN THE SPHERE OF EDUCATION PURPOSE, MEDICAL PUR POSE AND RELIEF OF POVERTY, ETC. IN THE CONTEXT OF THE OBJECTS OF MEDI CAL PURPOSE AND RELIEF TO POVERTY, THE ACTIVITIES ENUMERATED INTER-ALIA, INCL UDED:- AID AND RELIEF IN KINDS SUCH AS GIVING CLOTHES, GRAINS AND FREE DISTR IBUTION OF MEDICINES OR PROVIDING FREE MEDICAL AID. SUBSEQUENTLY, IN THE 1 975 AMENDMENT, THE ACTIVITIES OF AID OR RELIEF IN KIND HAS BEEN SUPPLE MENTED BY ENABLING PROVIDING OF LOAN AND RELIEF IN CASH ALSO. 7.5 FURTHER, THE MEDICAL PURPOSE AND OTHER OBJECTS MEANT FOR THE BENEFIT OF GENERAL PUBLIC IN INDIA WAS CONTAINED IN THE ORIGIN AL DEED IN THE CONTEXT OF GIVING DONATIONS TO HOSPITALS AND CHARITABLE DISPEN SARIES, ETC. THIS ASPECT WAS EXTENDED IN THE AMENDMENT OF 1975 TO INCLUDE RU NNING AND MANAGING OF HOSPITALS, PANJARAPOLES, ETC., NOTABLY, IN THE O RIGINAL TRUST DEED ALSO, ITA NO.3031/MUM/2014 BHANSALI TRUST 6 OBJECTS OF THE ASSESSEE INCLUDED THE SPHERE OF SCHO OLS, COLLEGES, EDUCATIONAL INSTITUTIONS, ETC. 7.6 THIRDLY, IN THE ORIGINAL TRUST DEED THE ASSESSE E ENVISAGED HELP BY WAY GRANTS AND CONTRIBUTIONS TO INSTITUTIONS CARRYING O N THE WORK OF PUBLIC CHARITABLE PURPOSE IN INDIA. IN THE AMENDMENT MADE IN 1975 SUCH ACTIVITIES WAS SUPPLEMENTED BY INCORPORATING THE ACTIVITY OF G IVING LOANS ALONGWITH THE ACTIVITY OF GIVING GRANTS AND CONTRIBUTIONS TO INST ITUTIONS CARRYING ON WORK FOR PUBLIC CHARITABLE PURPOSES IN INDIA. 7.7 LASTLY, IN THE ORIGINAL TRUST DEED ASSESSEE WAS HAVING ACTIVITY OF PROVIDING GRANTS AND CONTRIBUTIONS TO INSTITUTIONS ESTABLISHED FOR CARRYING ON AN OBJECT OF GENERAL PUBLIC UTILITY NOT INVOLVING A N ACTIVITY FOR PROFIT. IN THE AMENDMENT MADE IN 1979, IT WAS INCORPORATED THAT AS SESSEE WOULD ALSO PROMOTE RURAL DEVELOPMENT, INCLUDING THE PROGRAMME OF PROMOTING SOCIO AND ECONOMIC WELFARE AND UP-LIFT IN RURAL AREAS. 7.8 IN THE BACKGROUND OF THE ABOVE ANALYSIS OF THE CHANGES IN THE OBJECT CLAUSE, IN OUR VIEW, THERE IS NO CHANGE IN THE TONE AND TENOR OF THE OBJECTS PURSUED BY THE ASSESSEE IN A REAL SENSE. IN FACT, O UR AFORESAID ANALYSIS OF THE CHANGES IN THE TRUST DEED, DO NOT REFLECT THAT THE OBJECTS OF THE ASSESSEE TRUST HAS UNDERGONE CHANGES BUT THE AMENDM ENTS ARE MERELY ENABLING CLAUSES WHICH PROVIDE ONLY MEANS OR POW ER TO ACHIEVE OBJECTS IN THE TRUST DEED. IN OUR CONSIDERED OPINION, HAVING R EGARD TO THE AFORESAID FACT SITUATION, IT WOULD BE INAPPROPRIATE TO CONSTR UE THE AMENDMENTS OF 1957 AND 1979 AS INSERTIONS OF ANY NEW OBJECTS OF T HE ASSESSEE TRUST, RATHER THE AMENDMENTS ONLY SEEK TO PROVIDE ENABLING POWERS TO THE TRUST TO ACCOMPLISH ITS ORIGINAL OBJECTS WHICH ARE IN THE F IELDS OF EDUCATIONAL PURPOSE, MEDICAL PURPOSE, RELIEF OF POVERTY AND OBJ ECTS OF GENERAL PUBLIC UTILITY NOT INVOLVING CARRYING ON ANY ACTIVITY FOR PROFIT. IN FACT, HONBLE BOMBAY HIGH COURT IN THE CASE OF DECCAN GYMKHANA VS . CIT, 262 ITR 459 (BOM) AS WELL AS THE JUDGMENT OF HONBLE SUPREME CO URT IN THE CASE OF PHD CHAMBER OF COMMERCE & INDUSTRY VS. DIT,130 ITR 186 (SC) HAS LAID DOWN THAT A DISTINCTION HAS TO BE MADE BETWEEN THE PURP OSE OF A TRUST AND THE POWERS CONFERRED UPON THE TRUSTEES AS BEING INCID ENTAL TO ACCOMPLISH THE PURPOSE OF THE TRUST. IN OUR CONSIDERED OPINION, TH E AMENDMENTS IN 1975 &1979, WHICH HAVE BEEN NOTICED ABOVE ONLY SEEK TO E NABLE THE TRUSTEES TO CARRY OUT ACTIVITIES FOR ACCOMPLISHING THE PURPOSE OF THE TRUST WHICH WE HAVE FOUND EARLIER TO BE FOR A CHARITABLE PURPOSE AS P ER ORIGINAL TRUST DEED. THEREFORE, FACTUALLY SPEAKING, EVEN IF ONE HAS TO C ONSIDER THE AMENDMENTS OF 1975 & 1979 MADE IN THE TRUST DEED, IN OUR VIEW IT DOES NOT SIGNIFY THAT THE REGISTRATION GRANTED TO THE ASSESSEE ON 27/11/1 973 UNDER SECTION 12A OF THE ACT IS RENDERED NUGATORY. 7.9 AT THE TIME OF HE ARING, THE LD. DEPARTMENTAL REPRESENTATIVE HAD RELIED UPON THE JUD GMENT OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE BOARD OF CONTROL FOR CRICKET IN INDIA. (SUPRA) AS ALSO THE JUDGMENT OF HONBLE ALLAHABAD H IGH COURT IN THE CASE OF ALLAHABAD AGRICULTURAL INSTITUTE & ANOTHER (SUPRA). IN THIS CONTEXT, IT HAS TO BE OBSERVED THAT SO FAR AS THE DECISION OF THE MUMB AI TRIBUNAL IN THE CASE OF ITA NO.3031/MUM/2014 BHANSALI TRUST 7 BOARD OF CONTROL FOR CRICKET IN INDIA (SUPRA) IS CO NCERNED, THE SAME HAS BEEN RENDERED IN THE CONTEXT OF THE FACT SITUATION THEREIN. IN THE CASE OF BOARD OF CONTROL FOR CRICKET IN INDIA (SUPRA), THE TRIBUNAL FOUND THE AMENDMENTS TO THE MEMORANDUM OF ASSOCIATION AS BEIN G SUBSTANTIVE, WHICH INCLUDED AMENDMENT OF RULES AND REGULATIONS PROVIDI NG FOR PROMOTION OF COMMERCIAL INTERESTS TOWARDS ADMINISTRATION OF IPL CHAMPIONSHIP LEAGUE, ETC. QUITE CLEARLY IN THE PRESENT CASE, THERE IS NO SUCH FACT SITUATION AND FOR THAT MATTER, THERE IS NO CHARGE AGAINST THE ASSESSE E THAT THE AMENDMENTS OF 1975 AND 1979 HAVE RESULTED IN CARRYING ON OF ANY C OMMERCIAL ACTIVITY BY THE ASSESSEE. RATHER, IN THE PRESENT CASE, IN THE A SSESSMENT FINALIZED U/S. 143(3) OF THE ACT ON 7/11/2006 FOR ASSESSMENT YEAR 2004-05, THE ASSESSING OFFICER ALLOWED EXEMPTION TO THE ASSESSEE UNDER SEC TION 11/12 OF THE ACT. WHILE DOING SO, THE ASSESSING OFFICER HAS SPECIFICA LLY NOTED THAT THE ACTIVITIES OF THE ASSESSEE ARE IN THE FIELD OF EDUCATION AND H EALTH AND RUNNING OF ANGADWADIES IN 600 VILLAGES AND FIVE HIGH SCHOOLS W ITH HOSTEL FACILITIES IN BACKWARD AREAS. IT WAS ALSO SPECIFICALLY NOTED THAT THE TRUST WAS RUNNING 190 BEDDED GENERAL HOSPITAL AT DISSA, WHERE POOR PE OPLE WERE BEING TREATED. SIMILARLY, IN THE ASSESSMENT ORDER FOR ASS ESSMENT YEAR 2007-08 PASSED UNDER SECTION 143(3) OF THE ACT DATED 11/12/ 2009, THE ASSESSING OFFICER HAS NOTICED THE ACTIVITIES OF THE ASSESSEE IN THE FIELD OF EDUCATION, INCOME GENERATION FOR ANGADWADIES, DE- ADDICTION AN D OTHER SOCIAL AND ECONOMIC FIELDS. THE ASSESSING OFFICER HAS ALSO NOT ICED THAT ASSESSEE HAS CARRIED OUT VARIOUS PROJECTS DURING NATURAL CALAMIT IES, APART FROM THE ACTIVITIES OF RUNNING ANGADWADIES IN VILLAGES, HIGH SCHOOLS IN BACKWARD AREAS AND THE PROVIDING OF MEDICAL FACILITIES TO THE POOR PEOPLE. THEREFORE, THE FACT SITUATION IN THE PRESENT CASE, WHICH THE AO HAS ALS O ACCEPTED IN THE SCRUTINY ASSESSMENT IN PAST, DOES NOT REFLECT ANY CHARGE THA T THE ACTIVITIES OF THE ASSESSEE AS CONSEQUENCE OF THE AMENDMENT IN THE TRU ST DEED OF 1975 AND 1979 HAVE BEEN OF NONCHARITABLE NATURE. THUS, THE D ECISION IN THE CASE OF BOARD OF CONTROL FOR CRICKET IN INDIA STANDS ON A D IFFERENT FOOTING AND, IS OF NO HELP TO THE REVENUE IN THE PRESENT CASE. 8. IN SO FAR AS THE RELIANCE PLACED BY THE LD. DEPA RTMENTAL REPRESENTATIVE IN THE CASE OF ALLAHABAD AGRICULTURAL INSTITUTE (SUPRA ) IS CONCERNED, IT WAS POINTED OUT BY THE LD. REPRESENTATIVE FOR THE ASSES SEE THAT THE SAME WAS DISTINGUISHABLE AS THE FACTS THEREIN WERE ON A DIFF ERENT FOOTING. IT WAS POINTED OUT THAT IN THE CASE BEFORE THE HONBLE ALL AHABAD HIGH COURT, THERE WERE SEVERAL CHANGES MADE IN THE OBJECTS OF THE TRU ST WHICH IS NOT THE SITUATION IN THE PRESENT CASE. IN OUR CONSIDERED OP INION, THE DECISION OF THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF ALLA HABAD AGRICULTURAL INSTITUTE & ANOTHER (SUPRA), HAS BEEN RENDERED IN T HE SPECIFIC FACTS AND CIRCUMSTANCES PREVAILING THEREIN. THE HONBLE HIGH COURT THEREIN HAD NOTED WHOLESALE CHANGES IN THE OBJECTS OF THE ASSESSEE AN D FURTHER THE HONBLE HIGH COURT OBSERVED THAT THE ASSESSEE COULD NOT SHO W THAT THE REVISED OBJECTS WERE CHARITABLE IN NATURE. IT WAS UNDER THE AFORESAID SITUATION, THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT HAS TO BE UNDERSTOOD. IN THE PRESENT CASE, FACT-SITUATION WHICH WE HAVE ANALYZED ABOVE, STANDS ON AN ENTIRELY DIFFERENT FOOTING. THEREFORE, THE JUDGEMEN T OF ALLAHABAD HIGH COURT ITA NO.3031/MUM/2014 BHANSALI TRUST 8 IN THE CASE ALLAHABAD AGRICULTURAL INSTITUTE (SUPRA ), DOES NOT HELP THE CASE OF THE REVENUE IN THE PRESENT CASE. 8.1. IN VIEW OF OUR AFORESAID DISCUSSION, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE AND WE HEREBY AFFIRM THE DECISION OF TH E CIT(A) DIRECTING THE ASSESSING OFFICER TO ALLOW THE EXEMPTION TO THE ASS ESSEE UNDER SECTION 11/12 OF THE ACT. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, ALLOW GROUND NOS. 1 & 2 RAISED BY THE ASS ESSEE. THE AO IS DIRECTED ACCORDINGLY. 8. THE ISSUE RAISED IN GROUND NOS. 3 & 4 RELATES TO ENHANCEMENT OF INCOME BY THE CIT(A) WITHOUT ISSUING SPECIFIC NOTICE OR PROVI DING ANY OPPORTUNITY TO THE ASSESSEE FOR ENHANCEMENT OF ITS INCOME TO RS.12,86, 05,122/- FROM RS. 98,19,681/-. 9. THE BRIEF FACTS OF THE CASE ARE THAT THE CIT(A) DURING THE COURSE OF APPEAL PROCEEDINGS NOTICED THAT THE ASSESSEE CARRIED NEW A CTIVITIES U/S 35AC OF THE ACT AND THE ASKED THE AO TO SEND A REMAND REPORT VIDE LETTE R DATED 27.11.2013 WHICH WAS FILED 24.02.2014. THE LD AO IN THE REMAND REPORT S UBMITTED THE DETAILS OF DONATIONS ABOVE RS. 1,00,000/- TO INSTITUTIONS WHICH WERE NOT REGISTERED U/S 12A. THE REPORT ALSO CONTAINED DETAILS AS TO RECEIPTS OF RS. 2,51,7 5,000/- U/S 35AC OF THE ACT WHICH WERE NOT INCLUDED IN THE INCOME AND EXPENDITURE ACC OUNT OF THE ASSESSEE AND NO SEPARATE ACCOUNTS IN RESPECT ELIGIBLE PROJECTS AND SCHEMES AND ENHANCED THE INCOME OF THE ASSESSEE TRUST TO RS. 12,86,05,122/- FROM THE INCOME ASSESSED BY AO RS. 98,19,681/- BY GIVING VARIOUS REASONS WHICH WE RE DISCUSSED FROM PARA 5.6 TO 5.27 OF THE APPEAL ORDER. THE SAID DISALLOWANCE OF RS.12,86,05,122/- WAS WORKED OUT IN THE LIGHT OF THE FACT THAT REGISTRATION OF T HE TRUST U/S 12A OF THE ACT CEASED TO EXIST. 10. THE LEARNED AR SUBMITTED BEFORE US THAT THE CIT (A) HAS ENHANCED THE ASSESSMENT OF THE ASSESSEE FROM RS.98,19,681/- TO R S.12,86,05,122/- WITHOUT GIVING ANY REASONABLE OPPORTUNITY OR ANY NOTICE TO THAT EFFECT THEREBY DENYING NATURAL JUSTICE TO THE ASSESSEE. THE LEARNED COUNS EL DREW OUR ATTENTION TO LETTER DATED 13.05.2014 ADDRESSED TO THE CIT(A) CONTAINED AT PAGE 107 OF THE PAPER- ITA NO.3031/MUM/2014 BHANSALI TRUST 9 BOOK. IN PARA 2 OF THE SAID LETTER IT HAS BEEN CLE ARLY STATED THAT THE ASSESSEE HAS MAINTAINED SEPARATE BOOKS OF ACCOUNT IN RESPECT OF THE ACTIVITIES CARRIED OUT U/S. 35AC. IT HAS ALSO MAINTAINED SEPARATE BALANCE SHEE T, PROFIT & LOSS ACCOUNT WHICH WERE PRODUCED BEFORE THE CIT(A). THE LEARNED COUNS EL FURTHER CONTENDED THAT THE ISSUE INVOLVED IN THE GROUNDS BE RESTORED TO THE FI LE OF THE AO TO VERIFY THE SAID FACTS AND BE DIRECTED TO ALLOW THE RELIEF TO THE AS SESSEE. THE LD COUNSEL ALSO SUBMITTED THAT THE MAIN ISSUE ON THE BASIS OF WHICH THE DISALLOWANCE WAS WORKED OUT ON THE BASIS OF WRONG BELIEF OF THE CIT(A) THAT REGISTRATION OF THE TRUST U/S12A CEASED TO EXIST WITH THE ALTERATION OF OBJECT OF TH E TRUST BY OVERLOOKING THE FACT THAT THE OBJECTS OF THE TRUST AS ORIGINALLY CONTAINED IN THE TRUST DEED WERE RETAINED AND IT IS ONLY SOME ADDITIONAL CHARITABLE OBJECTS WERE INC LUDED IN THE TRUST DEED. THE LD. COUNSEL FURTHER SUBMITTED THAT NOW THE ISSUE WAS PR OVISION OF SECTION 12A STAND DECIDED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE B Y THE DECISION OF THE TRIBUNAL IN AY 2009-10. 11. THE LEARNED DR, ON THE OTHER HAND, OBJECTED TO THE ARGUMENTS OF THE AR AND RELIED UPON THE ORDER OF THE CIT(A) ON THE ISSUE. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND AT PAGES 107 & 108 OF THE PAPER -BOOK THE LETTER DT 13.05.2014, ADDRESSED TO THE CIT(A), CLEARLY STATING THAT THE A SSESSEE MAINTAINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF ACTIVITIES CARRIED OUT U/S . 35AC AND SEPARATE ANNUAL ACCOUNTS COMPRISING INCOME AND EXPENDITURE ACCOUNTS AND BALANCE SHEET, WHICH WERE FILED BEFORE THE CIT(A). THE RELEVANT PARAGR APHS ARE REPRODUCED AS UNDER: 2. ON PAGE NO.17 AT PARA NO.5.20 YOUR HONOUR HAS MENTIONED THAT NO SEPARATE ACCOUNT HAS BEEN MAINTAINED FOR THE ACT IVITIES CARRIED OUT U/S. 35AC. THIS IS ALSO NOT FACTUALLY CORRECT. THE ASS ESSEE HAS MAINTAINED A SEPARATE ACCOUNT FOR 35AC AND SEPARATE INCOME AND E XPENDITURE ACCOUNT AND BALANCE SHEET HAS BEEN PREPARED AND THE SAME HA S BEEN FILED WITH YOUR HONOUR IN THE APPEAL PROCEEDINGS. HOWEVER, WE ATTA CH HEREWITH THE SEPARATE ACCOUNT FOR 35AC, INCOME AND EXPENDITURE A CCOUNT AND BALANCE SHEET. SO, KINDLY RECTIFY THIS MISTAKE. 3. ON PAGE NO.17 AT PARA 5.22 YOUR HONOUR HAS MENT IONED THAT EXPENDITURE INCURRED AT RADHANPUR GENERAL ACCOUNT, DEESA GENERAL ACCOUNT AND BIHAR EYE CAMP TOTALLING RS.6,58,60,574/- IS FO R 35AC PROJECT. THIS IS ITA NO.3031/MUM/2014 BHANSALI TRUST 10 FACTUALLY NOT CORRECT. THERE ARE THE EXPENDITURES INCURRED AT VARIOUS CENTRES OF THE TRUST WHICH ARE NOT UNDER 35AC. KINDLY RECTIFY ABOVE MISTAKES WHICH ARE APPARENT FR OM RECORD AND KINDLY AMEND YOUR ORDER AND OBLIGE. 12.1. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION T HAT THE FINDING OF FACTS AS RECORDED BY THE CIT(A) IS FACTUALLY INCORRECT AND N EEDS TO BE RE-EXAMINED. WE, THEREFORE, IN THE INTEREST OF JUSTICE, RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE O F SEPARATE BOOKS AND ALLOW DEDUCTION U/S. 35AC AS CLAIMED BY THE ASSESSEE. THU S, THE ISSUE IS ALLOWED FOR STATISTICAL PURPOSE. 14. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 6 TH JANUARY, 2016. SD/- SD/- (JOGINDER SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 6 TH JANUARY, 2016. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI