Late Janubhai Acharya Smruti Ramroti Annakshetra, AMRELI V. The Commissioner of Income Tax-III, RAJKOT-GUJARAT

ITA 335/RJT/2013

• Counselvise Citation: 33524914 RSA 2013
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-11-2013
• Assessment Year: misc
• Appeal Filed On: 12-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Assessee Lawyers: DM RINDANI
• Keywords: Charitable institution
• Section: 11; 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 335/RJT/2013 LATE JANUBHAI ACHARYA SMRUTI RAMROTI ANNAKSHETRA, NEAR PACHMUKHI HANUMAN MANDIR, SARKARWADA, AMRELI ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX-III RAJKOT / RESPONDENT / ASSESSEE BY SHRI D M RINDANI, CA / REVENUE BY SHRI ANKUR GARG, DR / DATE OF HEARING 11.11.2013 !'# / DATE OF PRONOUNCEMENT 13.11.2013 / ORDER THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE OR DER DATED 13.08.2013 OF COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT REJE CTING THE APPLICATION OF THE ASSESSEE-TRUST FOR RENEWAL OF RECOGNITION U/S 80G(5 ) OF THE INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST WAS CREATED ON 22.08.1989 BY EXECUTING TRUST DEED AND REGISTERED WITH ASSISTANT CHARITY COMMISSIONER, BHAVNAGAR UNDER BPT ACT ON 24.01.1990. THE ASSESSEE-TRUST WAS REGISTERED U/S 12AA OF THE ACT ON 01.06.2004. VIDE ORDER DATED 05.03.2010 IT WAS GRANTED RECOGNITION U/S 80G(5) FROM 01.04.2009 TO 31.03.2012 BY THE COMMISS IONER OF INCOME-TAX, RAJKOT- III, RAJKOT. SUBSEQUENTLY, THE ASSESSEE-TRUST APPLI ED FOR RENEWAL OF RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT, 1961 ON 18.02.2013 IN THE PRESCRIBED FORM ALONGWITH COPY OF AUDIT REPORT FOR THE FINANCIAL YEARS 2009-1 0 TO 2011-12. THE LD COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT, VID E IMPUGNED ORDER DATED 13.08.2013 U/S 18G(5), REFUSED TO RENEW THE RECOGNI TION U/S 80G(5) OF THE INCOME- TAX ACT ON THE GROUND THAT THE ASSESSEE-TRUST HAS N OT FILED COPIES OF FORM NO.10 AS PER SECTION 11(2) OF THE ACT AS REQUIRED BY LETTER DATED 05.08.2013 FIXING DATE OF HEARING ON 12.08.2013. AGGRIEVED WITH THIS ORDER, THE ASSESSEE-TRUST IS IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUNDS:- 1. THE COMMISSIONER OF INCOME TAX-III, RAJKOT ERRE D IN PASSING ORDER U/S 80G(5) WITHOUT GIVING SUFFICIENT OPPORTUNITY OF BEI NG HEARD TO THE APPELLANT. 2 335-RJT-2013 LATE JANUBHAI ACHARYA SMRUTI RAMROTI ANNAKSHETRA (SMC) 2. THE COMMISSIONER OF INCOME TAX-III, RAJKOT ERRED IN PASSING ORDER U/S 80G(5) OF THE INCOME TAX ACT, 1961 REJECTING APPLIC ATION OF THE ASSESSEE TRUST FOR RECOGNITION U/S 80G(5) OF THE INCOME TAX ACT, 1961. 3. THE COMMISSIONER OF INCOME TAX-III, RAJKOT FAILE D TO APPRECIATE THAT AS PER AMENDED SEC. 80G(5)(VI) FROM 1.10.2009, THE REC OGNITION ALREADY GRANTED DID NOT REQUIRE RENEWAL AND ON MERITS TOO, INQUIRY U/S 80G DOES NOT COVER SEC. 11(2). 3. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, ON B EHALF OF THE ASSESSEE-TRUST, SHRI D.M. RINDANI, CA APPEARED AND FILED A PAPER BOOK CO NTAINING FOLLOWING THREE DOCUMENTS:- SR. NO. PARTICULARS PAGE NO. 1. COPY OF LETTER OF THE COMMISSIONER OF INCOME- TAX-III DATED 05.03.2010 1 2. COPY OF LETTER OF THE COMMISSIONER OF INCOME TAX-III, RAJKOT DATED 07.02.2013 2 3. COPY OF LETTER TO THE COMMISSIONER OF INCOME TAX-III DATED 14.08.2013 3 4. COPY OF CIRCULAR NO.7 OF 2010 DATED 27.10.2010 4-5 REFERRING TO THE AFORESAID DOCUMENTS, THE LD COUNSE L OF THE ASSESSEE POINTED OUT THAT THE ASSESSEE-TRUST WAS GRANTED RECOGNITION U/S 80G(5) BY THE LD COMMISSIONER OF INCOME-TAX, RAJKOT-III VIDE ORDER D ATED 05.03.2010. SUBSEQUENTLY, THE ASSESSEE-TRUST APPLIED FOR RENEWAL OF RECOGNITI ON VIDE ITS LETTER DATED 20.12.2012. IN REPLY TO THIS LETTER, THE LD COMMISSIONER OF INC OME-TAX, RAJKOT-III, RAJKOT VIDE LETTER DATED 07.02.2013 INFORMED THAT IN RESPECT OF CERTIF ICATE GRANTED U/S 80G(5) AFTER 01.10.2009, AS PER AMENDMENT MADE IN SECTION 80G(5) OF FINANCE ACT 2009, RENEWAL OF RECOGNITION U/S 80G(5) IS NOT REQUIRED. THEREFORE, RENEWAL APPLICATION MADE ON 20.12.2013 IS FILED. SUBSEQUENTLY, THROUGH INADVERTENTLY, THE ASSESSEE-TRUST ONCE AGAIN FILED AN APPLICATION FOR RENEWAL OF REGI STRATION U/S 80G(5) ON 18.02.2003, WHICH WAS REJECTED BY THE LD COMMISSIONER OF INCOME -TAX, RAJKOT-III VIDE IMPUGNED ORDER DATED 13.08.2013. 4. NARRATING THE ABOVE FACTS, SHRI D. M. RINDANI, T HE LD COUNSEL OF THE ASSESSEE- TRUST POINTED OUT THAT AS PER COPY OF CIRCULAR NO.7 OF 2010 DATED 27.10.2010 (AVAILABLE IN THE PAPER BOOK AT PAGE NO.4-5), THERE WAS NO NECESSITY TO APPLY FOR 3 335-RJT-2013 LATE JANUBHAI ACHARYA SMRUTI RAMROTI ANNAKSHETRA (SMC) RENEWAL OF REGISTRATION IN RESPECT OF ASSESSEE-TRUS T. IN SUPPORT OF THIS, LD COUNSEL OF THE ASSESSEE DREW MY ATTENTION TO THE EXTRACT OF PA RAGRAPH 5 OF THE ABOVE REFERRED CIRCULAR, WHICH IS REPRODUCED HEREIN BELOW:- FURTHER AS PER CLAUSE (VI) OF SUB-SECTION (5) OF S ECTION 80G OF THE INCOME-TAX ACT, 1961, THE INSTITUTIONS OR FUNDS TO WHICH THE D ONATIONS ARE MADE HAVE TO BE APPROVED BY THE COMMISSIONER OF INCOME-TAX IN ACCOR DANCE WITH THE RULES PRESCRIBED IN RULE 11AA OF THE INCOME-TAX RULE, 196 2. THE PROVISO TO THIS CLAUSE PROVIDES THAT ANY APPROVAL GRANTED UNDER THI S CLAUSE SHALL HAVE EFFECT FOR SUCH ASSESSMENT YEAR OR YEARS, NOT EXCEEDING FI VE ASSESSMENT YEARS, AS MAY BE SPECIFIED IN THE APPROVAL. DUE TO THIS LIMITATION IMPOSED ON THE VALIDITY OF S UCH APPROVALS, THE APPROVED INSTITUTIONS OR FUNDS HAVE TO BEAR THE HARDSHIP OF GETTING THEIR APPROVALS RENEWED FROM TIME TO TIME. THIS IS UNDULY BURDENSOM E FOR THE BONA FIDE INSTITUTIONS OR FUNDS AND ALSO LEADS TO WASTAGE OF TIME AND RESOURCES OF THE TAX ADMINISTRATION IN RENEWING SUCH APPROVALS IN A ROUT INE MANNER. THEREFORE, IT IS PROPOSED TO OMIT THE PROVISO TO CL AUSE (VI) OF SUB-SECTION (5) OF SECTION 80G TO PROVIDE THAT THE APPROVAL ONCE GRANT ED SHALL CONTINUE TO BE VALID IN PERPETUITY. FURTHER, THE COMMISSIONER WILL ALSO HAVE THE POWER OF WITHDRAW THE APPROVAL IF THE COMMISSIONER IS SATISF IED THAT THE ACTIVITIES OF SUCH INSTITUTION OR FUND ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE INSTITUTION OR F UND. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST DAY OF OCTOBER, 2009. ACCORDIN GLY, EXISTING APPROVALS EXPIRING ON OR AFTER 1ST OCTOBER, 2009 SHALL BE DEE MED TO HAVE BEEN EXTENDED IN PERPETUITY UNLESS SPECIFICALLY WITHDRAWN. 5. ON THE BASIS OF THE AFORESAID SUBMISSIONS, THE L D COUNSEL OF THE ASSESSEE POINTED OUT THAT THE IMPUGNED ORDER OF LD COMMISSIO NER OF INCOME-TAX, RAJKOT-III REFUSING IN GRANTING RECOGNITION U/S 80G(5) BE QUAS HED AS THERE WAS NO NECESSITY TO APPLY FOR RENEWAL OF RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT, 1961. THE LD COUNSEL OF THE ASSESSEE ALSO POINTED OUT THAT WHEN THE COMMISSIONER OF INCOME-TAX PASSED THE IMPUGNED ORDER, A LETTER DATED 07.02.201 3 ADDRESSED BY THE COMMISSIONER OF INCOME-TAX, RAJKOT-III TO THE ASSES SEE-TRUST WAS ALSO AVAILABLE IN RECORD WHEREIN IT WAS MENTIONED THAT IN RESPECT OF CHARITABLE TRUST WHERE THE REGISTRATION U/S 80G(5) WAS GRANTED ON 01.10.2009 O R THEREAFTER, THERE IS NO NECESSITY TO APPLY FOR RENEWAL OF REGISTRATION. FOR THIS REAS ON, THE ASSESSEE-TRUSTS APPLICATION FOR RENEWAL OF REGISTRATION DATED 20.12.2012 WAS FI LED. THE LD COUNSEL OF THE ASSESSEE ACCORDINGLY PLEADED THAT THE IMPUGNED ORDE R DATED 13.08.2013 OF LD COMMISSIONER OF INCOME-TAX, RAJKOT-III U/S 80G(5) B E QUASHED. 4 335-RJT-2013 LATE JANUBHAI ACHARYA SMRUTI RAMROTI ANNAKSHETRA (SMC) 6. ON THE OTHER HAND, SHRI ANKUR GARG, DR, APPEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD COMMISSIONER O F INCOME-TAX AS THE ASSESSEE HAS NOT FILED COPY OF FORM NO.10 AS PER SECTION 11 (2) OF THE INCOME-TAX ACT, 1961. FURTHER, VARIOUS DETAILS/DOCUMENTS REQUIRED FOR REC OMMENDING THE RENEWAL OF REGISTRATION U/S 80G(5) WERE NOT FURNISHED BEFORE T HE ASSESSING OFFICER. IN REJOINDER, THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT IN CA SE THE ASSESSEE-TRUST HAS NOT FILED FORM NO.10 AS PER SECTION 11(2) OF THE INCOME-TAX A CT, THE ASSESSING OFFICER IS AT LIBERTY TO COMPUTE THE TAXABLE INCOME KEEPING IN VI EW THE RELEVANT PROVISIONS OF THE INCOME-TAX ACT, 1961, BUT THIS CANNOT BE A GROUND T O REFUSE THE RECOGNITION U/S 80G(5) OF THE ACT, PARTICULARLY WHEN THE COMMISSION ER OF INCOME-TAX, RAJKOT-III HAS ISSUED A LETTER DATED 07.02.2013 WHEREIN IT IS POIN TED OUT THAT THERE IS NO REQUIREMENT TO APPLY FOR RENEWAL OF RECOGNITION U/S 80G(5) IN R ESPECT OF TRUST WHERE 80G(5) CERTIFICATE IS ISSUED ON OR AFTER 01.10.2009. 7. HAVING HEARD BOTH SIDES, I HAVE CAREFULLY GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE ASSESSEE-TRUST WAS GRANTED RECOGNITION U/S 80G(5) ON 05.03.2010 WHICH IS VALID IN RESPECT OF DONATION RECEIVED FROM 01.04.2009 TO 31.03.2012. THEREAFTER THE ASSES SEE-TRUST APPLIED FOR RENEWAL OF THE REGISTRATION VIDE LETTER DATED 20.12.20012. IN REPLY TO THIS, THE LD COMMISSIONER OF INCOME-TAX, RAJKOT-III VIDE HIS LETTER DATED 07.02. 2013 INTIMATED THE ASSESSEE-TRUST THAT AS PER AMENDMENT MADE IN THE YEAR 2009 IN SECT ION 80G(5) OF INCOME-TAX ACT IN RESPECT OF TRUST WHERE THE RECOGNITION U/S 80G(5) I S GRANTED ON OR AFTER 01.10.2009, THERE IS NO NEED TO APPLY FOR RENEWAL OF RECOGNITIO N U/S 80G(5) OF THE INCOME-TAX ACT, 1961. IN THIS LETTER THE LD COMMISSIONER OF INCOME- TAX ALSO STATED THAT THE APPLICATION DATED 20.12.2012 OF THE ASSESSEE-TRUST SEEKING RENE WAL OF RECOGNITION U/S 80G(5) OF THE ACT WAS FILED. SUBSEQUENTLY, THROUGH INADVERTEN T, THE ASSESSEE-TRUST VIDE ITS APPLICATION DATED 18.02.2013 APPLIED AFRESH FOR REN EWAL OF RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT, 1961. KEEPING IN VIEW THE EARLI ER REPLY OF LD COMMISSIONER OF INCOME-TAX, RAJKOT-III, WE ARE OF THE VIEW THAT THE RE WAS NO NECESSITY TO APPLY FOR RENEWAL OF RECOGNITION U/S 80G(5) ON 18.02.2013. TH E IMPUGNED ORDER PASSED BY LD 5 335-RJT-2013 LATE JANUBHAI ACHARYA SMRUTI RAMROTI ANNAKSHETRA (SMC) COMMISSIONER OF INCOME-TAX, RAJKOT-III IS NOT IN CO NFORMITY WITH HIS EARLIER LETTER DATED 07.02.2013. THEREFORE, THE IMPUGNED ORDER OF THE LD COMMISSIONER OF INCOME- TAX, RAJKOT-III IS HEREBY QUASHED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE:13.11.2013 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- LATE JANUBHAI ACHARYA SMRUTI RAMROTI ANNAKSHETRA, NEAR PACHMUKHI HANUMAN MANDIR, SARKARWADA, AMRELI 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX-III, RAJKOT 3. ,0,1 * * 2 / CONCERNED JT. CIT, RANGE 1 & 2, JUNAGADH 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT