K.P. Singh Charitable Foundation, New Delhi V. CIT(E), New Delhi

ITA 3223/DEL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8470 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R S SINGHVI SHRI SATYJEET GOEL
• Keywords: Charitable institution; Set aside
• Section: 80G; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3223/DEL./2019 ITA NO.3224/DEL./2019 K.P. SINGH CHARITABLE FOUNDATION, VS. CIT (EXEMPTI ON), 4 TH FLOOR, GOPAL DASS BHAWAN, NEW DELHI. BARAKHAMBA ROAD, NEW DELHI 110 001. (PAN : AADTK5393H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, ADVOCATE SHRI SATYJEET GOEL, ADVOCATE REVENUE BY : SHRI J.K. MISHRA, CIT DR DATE OF HEARING : 05.09.2019 DATE OF ORDER : 07.10.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN THE AFORESAID APPEALS, THE SAME ARE BEING DISPOS ED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. APPELLANT, K.P. SINGH CHARITABLE FOUNDATION (HER EINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEALS SOUGHT TO SET ASIDE THE ITA NOS.3223 & 3224/DEL./2019 2 IMPUGNED ORDERS ALL DATED 28.02.2019 PASSED BY THE COMMISSIONER OF INCOME - TAX (EXEMPTION), NEW DELHI ON THE GROUNDS INTER ALIA THAT :- ITA NO.3223/DEL/2019 1 (I) THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) [HEREINAFTER REFERRED TO AS 'CIT(E)'] WAS NOT JUSTIFIED IN REJECTING APPL ICATION FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 W ITHOUT DISPUTING THE FACT THAT OBJECTS OF THE APPELLANT TR UST ARE OF CHARITABLE NATURE IN TERMS OF PROVISION OF SECTION 2(15) OF THE INCOME TAX ACT, 1961. (II) THAT APPELLANT TRUST IS FORMED FOR THE PURPOS E OF PROVIDING EDUCATION, RELIEF TO POOR, MEDICAL RELIEF AND VARIOUS OTHER OBJECTS AS ENSHRINED IN THE TRUST DEED WHICH ARE PURELY OF CHARITABLE NATURE AND IN ACCORDANCE WITH PROVISIONS OF SECTION 2( 15) OF THE INCOME TAX ACT, 1961. (III) THAT THERE BEING NO DISPUTE OR ADVERSE OBSER VATION WITH REGARDS TO OBJECTS AND PURPOSE OF THE APPELLANT TRU ST, THE REJECTION OF APPLICATION U/S 12AA IS ON EXTRANEOUS GROUNDS AND BEYOND THE SCOPE AND POWER AS VESTED BY THE STATUTE . 2(I) THAT THE ACTIVITIES OF THE APPELLANT TRUST AR E IN ACCORDANCE WITH ITS OBJECTS WHICH THE CIT(E) HAS FA ILED TO APPRECIATE. (II) THAT GENUINENESS OF MEDICAL AID BEING NOT IN DISPUTE AND SAME IS SUPPORTED FROM DOCUMENTARY EVIDENCES INCLUD ING MEDICAL CERTIFICATE OF THE CHILD, THE OBSERVATION O F CIT(E) WHILE REJECTING APPLICATION U/S 12AA IS ARBITRARY, IRRELE VANT AND UNCALLED FOR. 3(I) THAT THE BENEFIT OF MEDICAL ASSISTANCE WAS OF CHARITABLE NATURE IN ACCORDANCE WITH OBJECTS OF THE TRUST AND THE CIT(E) WAS NOT JUSTIFIED IN DISPUTING THE SAME. (II) THAT DECISION TO PROVIDE SUCH ASSISTANCE WAS TAKEN BY THE COMMITTEE AFTER CONSIDERING THE GENUINE NEEDS AND T HE CIT(E) HAS NO OVERRIDING POWER TO DISPUTE THE SAME AND IMP OSE UNCALLED FOR CONDITION. 4. THAT ORDER OF CIT(E) IS NOT SUSTAINABLE ON FACT S AND UNDER THE LAW. ITA NOS.3223 & 3224/DEL./2019 3 ITA NO.3224/DEL/2019 1 (I) THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTION) [HEREINAFTER REFERRED TO AS 'CIT(E)') WAS NOT JUSTIFIED IN REJECTING APPL ICATION FOR GRANTING OF EXEMPTION U/S 80G OF THE INCOME TAX ACT , 1961 EVEN THOUGH THE CONDITIONS SPECIFIED U/S 80G(5) OF THE I NCOME TAX ACT, 1961 ARE FULLY SATISFIED. (II) THAT APPELLANT TRUST IS CREATED FOR PURPOSE O F PROVIDING EDUCATION, RELIEF TO POOR, MEDICAL RELIEF AND VARIO US OTHER OBJECTS AS ENSHRINED IN THE TRUST DEED WHICH ARE PURELY OF CHARITABLE NATURE AND IN ACCORDANCE WITH PROVISIONS OF SECTION 2(15) OF THE INCOME TAX ACT, 1961. (III) THAT THERE BEING NO DISPUTE OR ADVERSE OBSER VATION WITH REGARDS TO OBJECTS AND PURPOSE OF THE APPELLANT TRU ST, THE REJECTION OF APPLICATION FOR EXEMPTION U/S 80G IS O N EXTRANEOUS GROUNDS AND BEYOND THE SCOPE AND POWER AS VESTED BY THE STATUTE. 3. THAT ORDER OF CIT(E) REJECTING THE APPLICATION F OR EXEMPTION U/S 80G IS NOT SUSTAINABLE ON FACTS AND U NDER THE LAW. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : APPLICATIONS MOVED BY THE ASSESSEE TRUST IN FORM NO.10A AND 10G SEEKING REGISTRATION UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND EXEMPTION U/S 80G O F THE ACT HAVE BEEN REJECTED BY THE LD. CIT (E) ON THE GROUNDS THAT THE ASSESSEE HAS NOT FILED REQUISITE DETAILS NOR HAS SUBMITTED ANY EVIDENCE TO SHOW THE CHARITABLE ACTIVITIES AND AS SUCH GENUINENESS OF THE ACTIVITIE S HAS NOT BEEN ESTABLISHED. 4. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFO RE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED ITA NOS.3223 & 3224/DEL./2019 4 BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, ASSESSEE TRUST HAS PRODUCED BEFORE THE LD. CIT (E) THE TRUST DEED AND SOME DETAILS REGARDING CHARITABL E ACTIVITIES CARRIED OUT BY THE ASSESSEE. ASSESSEE HAS CONSTITUTED A TR UST VIDE TRUST DEED DATED 27.03.2018 HAVING COMPREHENSIVE OBJECT CLAUS ES WITH MAIN OBJECTS AS UNDER :- (I) THE SPREAD OR PROMOTION OF EDUCATION, KNOWLEDG E OR LEARNING IN ALL ITS BRANCHES INCLUDING ART, CULTURE, MUSIC, DANCE, SPORTS, ANCIENT LEARNING, SOCIAL WELFARE. IN SUCH MANNER AS THE TRU STEES MAY THINK FIT AND FOR THIS PURPOSE TO : (A) ESTABLISH AND/OR ACQUIRE AND MAINTAIN OR SUPPO RT SCHOOLS, COLLEGES, UNIVERSITIES, INSTITUTES, RESEAR CH INSTITUTES, SKILL DEVELOPMENT CENTERS, VOCATIONAL TRAINING CENTERS IN ANY MANNER OR FORM. (B) GRANT ENDOWMENTS, DONATIONS, SCHOLARSHIPS, FELLOWSHIPS, CERTIFICATIONS, PAYMENT IN CASH OR KIN D TO ANY INDIVIDUAL, INSTITUTION, UNINCORPORATED OR INCORPORATED PERSON (WHETHER NOW EXISTING OR HEREINAFTER TO BE ESTABLISHED). (C) ESTABLISH, DEVELOP, FORGE STRATEGIC TIES, RELAT IONSHIPS AND COLLABORATE WITH ANY PERSONS, INSTITUTIONS, BOD IES, SOCIETIES, TRUSTS ETC. (II) AFFORDING OF MEDICAL RELIEF IN SUCH MANNER AS THE TRUSTEES MAY THINK FIT, INCLUDING: (A) ESTABLISHMENT, MAINTENANCE, MANAGEMENT, RUNNING OF HOSPITALS (INCLUDING HOSPITALS FOR ANIMALS, BIRDS, ETC.). DISPENSARIES, NURSING HOMES, HEALTH CENTERS AND OTH ER MEDICAL INSTITUTIONS AND OTHER PUBLIC INSTITUTIONS FOR ADMINISTERING MEDICAL AND OTHER RELIEF AND FOR PROVIDING MEDICAL, PARA-MEDICAL AND OTHER RELATED FACILITIES. (B) ORGANIZING OF MEDICAL CAMPS, SANITATION CAMPAI GN, TRAINING CAMPS, SOCIAL WELFARE PROGRAMMES, PUBLIC HEALTH ACTIVITIES AND HEALTH PROMOTIONAL ACTIVITIES . (C) GRANT OF ENDOWMENTS, DONATIONS, SCHOLARSHIPS, FELLOWSHIPS, CERTIFICATIONS, PAYMENT IN CASH OR KIN D TO ANY INDIVIDUAL, INSTITUTION, UNINCORPORATED OR ITA NOS.3223 & 3224/DEL./2019 5 INCORPORATED PERSON (WHETHER NOW EXISTING OR HEREINAFTER TO BE ESTABLISHED) TO INDIVIDUALS, PERS ONS OR INSTITUTIONS FOR PROVIDING MEDICAL RELIEF, MEDICAL HELP OR UNDERTAKING ANY RESEARCH WORK IN MEDICAL FIELD F OR ACHIEVEMENT OF THE OBJECTS OF THE FOUNDATION. (D) GRANT OF MEDICAL RELIEF AND HELP TO ANY PERSON , INSTITUTION, ENTITY DURING EPIDEMIC, FAMINE, FLOOD, EARTHQUAKE, TSUNAMI, RIOTS, TERRORIST ATTACKS OR AN Y UNFORESEEN NATURAL OR HUMAN MADE CALAMITY OR WAR OR WARLIKE OPERATIONS. (E) ESTABLISHMENT, RUNNING AND MAINTENANCE OF RESE ARCH CENTRES, TRAINING CENTRES, VOCATIONAL TRAINING IN T HE FIELD OF MEDICAL, PARA - MEDICAL, NURSING AND OTHER MEDICAL SUPPORT SYSTEMS AND RESEARCH ACTIVITIES IN ANY WAY WHATSOEVER. (F) ESTABLISH, DEVELOP, FORGE STRATEGIC TIES, RELA TIONSHIPS AND COLLABORATE WITH ANY PERSONS, INSTITUTIONS, BOD IES. SOCIETIES, TRUSTS ETC. (III) RELIEF TO POOR IN SUCH MANNER AS THE TRUSTEE S MAY THINK FIT INCLUDING DISTRIBUTION OF FREE FOOD, FREE CLOTHING, PROVIDING SHELTER, ESTABLISHMENT OF OLD AGE HOMES, ETC.; (IV) HELPING POOR WIDOWS AND UNATTACHED SINGLE WOM EN 7. BARE PERUSAL OF THE AIMS AND OBJECTS OF THE TRUS T DEED CONSTITUTED BY THE ASSESSEE LEADS TO THE CONCLUSION THAT THE CH ARITABLE TRUST HAS BEEN ESTABLISHED TO SPREAD OR PROMOTION OF EDUCATION, KN OWLEDGE OR LEARNING IN ALL ITS BRANCHES INCLUDING ART, CULTURE, MUSIC, DANCE, SPORTS, ANCIENT LEARNING, SOCIAL WELFARE, TO ESTABLISH AND/OR ACQUI RE AND MAINTAIN OR SUPPORT SCHOOLS, COLLEGES, UNIVERSITIES, INSTITUTES , RESEARCH INSTITUTES, SKILL DEVELOPMENT CENTERS, VOCATIONAL TRAINING CENTERS, G RANT ENDOWMENTS, DONATIONS, SCHOLARSHIPS, FELLOWSHIPS, AFFORDING OF MEDICAL RELIEF BY MANAGEMENT, RUNNING OF HOSPITALS, ETC., RELIEF TO T HE POOR, HELPING POOR WIDOWS AND UNATTACHED SINGLE WOMEN, ETC. ITA NOS.3223 & 3224/DEL./2019 6 8. LD. CIT (E) BY LOSING SIGHT OF THE FACTS THAT TH E TRUST HAS BEEN ESTABLISHED ONLY ON 27.03.2018 AND WITHIN A SHORT S PAN OF LESS THAN ONE YEAR, EVIDENCE TO SHOW THE CHARITABLE ACTIVITIES BY THE ASSESSEE TRUST CANNOT BE CALLED FOR. MORE PARTICULARLY, WHEN THE LD. CIT (E) HAS NOT DISPUTED THE CHARITABLE PURPOSE OF THE ASSESSEE TRU ST, WITHIN A SHORT SPAN OF PERIOD, CHARITABLE ACTIVITIES CANNOT BE STARTED. IN THESE CIRCUMSTANCES, LD. CIT (E) WAS ONLY REQUIRED TO FIRSTLY SATISFY HI MSELF IF THE ASSESSEE TRUST HAS BEEN ESTABLISHED FOR CHARITABLE ACTIVITIE S AND HIS APPREHENSION QUA CARRYING OUT THE CHARITABLE ACTIVITIES CAN BE T AKEN CARE OF BY THE AO AT THE TIME OF FRAMING THE ASSESSMENT. 9. HONBLE ALLAHABAD HIGH COURT IN CASE CITED AS CIT (E) VS. YAMUNA EXPRESSWAY INDUSTRIAL DEVELOPMENT AUTHORITY (2017) 395 ITR 18 (ALL.) WHILE DISCUSSING THE SCOPE OF SECTIONS 11 & 12 OF THE ACT HAS HELD THAT IT IS NOT WITHIN THE PURVI EW OF COMMISSIONER TO EXAMINE WHETHER THE ASSESSEE WAS EN TITLED TO EXEMPTION U/S 11 OR 12 SINCE THAT WAS WITHIN THE JU RISDICTION OF AO AND NOT THE COMMISSIONER (E). HONBLE HIGH COURT F URTHER HELD THAT, A BODY OR INSTITUTION WHICH IS FUNCTIONING FOR ADVA NCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY AND WHOSE ACTIVIT IES ARE NOT IN THE NATURE OF TRADE, BUSINESS OR COMMERCE OR SHEER PROF IT MAKING, IS ENTITLED TO CLAIM ITSELF TO BE CONSTITUTED FOR 'CHA RITABLE PURPOSES' AND SEEK REGISTRATION UNDER SECTION 12A(1) OF THE I NCOME-TAX ACT, ITA NOS.3223 & 3224/DEL./2019 7 1961. CHARITABLE PURPOSE PRIMARILY MEANS THAT THE P REDOMINANT OBJECT MUST BE TO PROMOTE WELFARE OF GENERAL PUBLIC . AN ANCILLARY ACTIVITY, IF ANY, TO THAT GENERAL ONE PERFORMED BY THE INSTITUTION WOULD NOT RENDER SUCH INSTITUTION 'NON-CHARITABLE'. 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT THE ASSESSEE TRUST HAVING BEEN CONSTITUTED TO CARRY OUT THE CHARITABLE ACTIVITIES IS ENTITLED FOR REGIS TRATION U/S 12AA OF THE ACT AND CONSEQUENT APPROVAL U/S 80G, BUT THE LD. CI T (E) HAS ERRED IN DECLINING THE REGISTRATION U/S 12AA OF THE ACT AND APPROVAL U/S 80G OF THE ACT ON THE BASIS OF CONJECTURES AND SURMISES TH AT THE ASSESSEE HAS NOT SUPPLIED THE DETAILS OF CHARITABLE ACTIVITIES CARRI ED OUT BY LOSING SIGHT OF THE FACT THAT WITHIN SHORT SPAN OF ONE YEAR, THE DE TAILS OF CHARITABLE ACTIVITIES CANNOT BE STARTED AND AS SUCH, THE QUEST ION OF SUPPLYING THE DETAILS THEREOF DOES NOT ARISE, WHICH IS NOT SUSTAI NABLE IN THE EYES OF LAW. CONSEQUENTLY, APPEALS FILED BY THE ASSESSEE ARE ALL OWED DIRECTING THE LD. CIT (E) TO PROVIDE REGISTRATION U/S 12AA AND ALSO T O GRANT CONSEQUENT APPROVAL U/S 80G OF THE ACT. ORDER PRONOUNCED IN OPEN COURT ON THIS 7 TH DAY OF OCTOBER, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 7 TH DAY OF OCTOBER, 2019 TS ITA NOS.3223 & 3224/DEL./2019 8 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(E), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.