Radha Rani Sewa Kendra Trust, Mathura V. The C.I.T. -1, Agra

ITA 336/AGR/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0549 (ITAT-AGRA)
• Duration Of Justice: 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-08-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 21-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: R K AGARWAL
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 335 & 336/AGRA/2010 ASSTT. YEAR : 2010-11 RADHA RANI SEWA KENDRA TRUST, VS. THE COMMISSION ER OF B-64, GAURDHAM COLONY, RADHAKUND, INCOME-TAX-I, AGRA GOVERDHAN DISTT. MATHURA. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI R.K. AGARWAL, ADVOCATE. FOR RESPONDENT : SHRI A.K. SHARMA, JR. D.R. ORDER PER BENCH: THE FACTS OF THE CASE ARE THAT THE ASSESSEE-TRUST MOVED AN APPLICATION DATED 23.12.2009 IN FORM NO. 10A FOR GRANT OF REGISTRATION U/S. 12AA OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT). IT ALSO MOVED ANOTHER APPLICATION DATED 23. 12.2009 IN FORM NO. 10G FOR GRANT OF APPROVAL U/S. 80G OF THE ACT. WE PROCEED WITH THE FATE OF AP PLICATION U/S. 12AA IN THE FIRST INSTANCE. 2. ENQUIRY WAS CAUSED TO BE MADE THROUGH THE INSPEC TOR, WHO SUBMITTED HIS REPORT DATED 05.02.2010. IT WAS SUBMITTED THAT HE MET MAHANT SHR I SUBAL DAS JI ON 01.02.2010 AT THE ADDRESS OF THE ASSESSEE. HE INFORMED THAT HE OWNS A PLOT OF LAND ADMEASURING 3200 SQ. FEET, ON WHICH THE OFFICE OF THE ASSESSEE HAS BEEN OPENED. ON THIS LAN D, A BOARD OF THE ASSESSEE-TRUST HAS ALSO BEEN FIXED. THE ASSESSEE-TRUST HAD NOT UNDERTAKEN ANY AC TIVITY TILL THEN, AS IT WAS CONSTITUTED RECENTLY ON 16.12.2009. AFTER REGISTRATION U/S. 12AA AND APP ROVAL U/S. 80G, THE DONATIONS WILL BE RECEIVED, WHICH WILL BE USED FOR THE OBJECTS OF THE TRUST. FURTHER, ENQUIRIES WERE ALSO CAUSED TO BE MADE THROUGH THE JOINT COMMISSIONER OF INCOME -TAX, WHO REPORTED THAT ON THE BASIS OF 2 ITA NO. 335 & 336/AGRA/2010 INSPECTORS REPORT AND OTHER EVIDENCE AND SUBMISSIO NS FURNISHED AND MADE BY THE ASSESSEE, IT CAN BE SAID THAT THE TRUST EXISTS ONLY ON PAPER. HE ALS O RECOMMENDED THAT REGISTRATION MAY NOT BE GRANTED TO THE ASSESSEE. THEREAFTER, THE CIT ISSUED NOTICE DATED 08.03.2010 FOR SUBMITTING THE CASE REGARDING THE REGISTRATION. AFTER PERUSING THE WRITTEN SUBMISSIONS GIVEN BY THE ASSESSEE, IT WAS POINTED OUT TO IT THAT MOST OF THE OBJECTS ARE RELIGIOUS IN NATURE. THE RESULT OF ENQUIRY CONDUCTED BY THE INSPECTOR WAS ALSO INTIMATED THAT NO CHARITABLE ACTIVITY HAS ACTUALLY BEEN CARRIED OUT BY THE ASSESSEE. THE INITIAL CASE OF TH E ASSESSEE WAS THAT THE OBJECTS REGARDING WORSHIP OF RADHA RANI, ESTABLISHMENT OF RADHA RANI TEMPLE AND PROPER ARRANGEMENT OF BHOG ARE INTENDED TO BE FOR THE MENTAL PEACE OF PUBLIC A T LARGE AND IN ANY CASE, THESE OBJECTS CANNOT BE SAID TO BE MEANT FOR SETTING UP PRIVATE RELIGIOUS T RUST. HOWEVER, SUBSEQUENTLY, IT WAS INFORMED THAT THE TRUSTEES HAD DECIDED TO DELETE THE AFORESA ID OBJECTS AND AN AMENDED TRUST DEED, DULY REGISTERED, WAS FILED. THE LEARNED CIT CONSIDERED T HE FACTS AND SUBMISSIONS. IT HAS BEEN MENTIONED BY HER THAT NO CHARITABLE ACTIVITY HAS BE EN CARRIED OUT BY THE ASSESSEE AS IS EVIDENT FROM THE SPOT ENQUIRY MADE BY THE INSPECTOR. ADMITT EDLY, SUCH ACTIVITIES WILL BE CARRIED ON ONLY AFTER THE RECEIPT OF THE REGISTRATION CERTIFICATE A ND THE APPROVAL. RELYING ON THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF SELF EMPLO YERS SERVICE SOCIETY VS. CIT, (2001) 247 ITR 18, IT HAS BEEN HELD THAT THE ASSESSEE IS NOT E NTITLED TO THE REGISTRATION. BY RELYING ON THE SIMILAR ARGUMENTS AND THE FACT THAT THE REGISTRATIO N HAS BEEN REFUSED, THE APPLICATION FOR APPROVAL U/S. 80G HAS ALSO BEEN REJECTED. 3. THE ASSESSEE HAS TAKEN UP SEVEN GROUNDS IN THE A PPEAL. IT IS MENTIONED THAT THE ASSESSEE- TRUST IS A CHARITABLE TRUST AND ITS OBJECTS ARE RELATED TO CHARITY AS PER AMENDED TRUST DEED, 3 ITA NO. 335 & 336/AGRA/2010 THEREFORE, THE CIT ERRED IN HOLDING OTHERWISE. IT I S FURTHER MENTIONED THAT THE AUDITED ACCOUNTS HAVE BEEN WRONGLY DISCARDED, LEADING TO THE FINDING THAT NO CHARITABLE ACTIVITY HAS BEEN DONE. IT IS ALSO MENTIONED THAT VARIOUS SUBMISSIONS MADE HAV E BEEN MISINTERPRETED AND MISUNDERSTOOD BY THE LEARNED CIT. IT IS ALSO MENTIONED THAT THE LD. CIT ERRED IN RELYING ON THE BASELESS REPORT OF THE INSPECTOR AND THE JOINT COMMISSIONER AND NO INDEPEN DENT ENQUIRY HAS BEEN MADE EITHER BY THE JOINT COMMISSIONER OR THE COMMISSIONER. THEREFORE, THE ORDER IS BAD AND ILLEGAL BOTH ON FACTS AND IN LAW. 4. BEFORE US, THE LD. COUNSEL REFERRED TO THE CHRON OLOGY OF EVENTS, PLACED ON PAGE NO. 1 OF THE PAPER BOOK, IN WHICH IT IS MENTIONED THAT THE T RUST WAS CREATED AND REGISTERED ON 16.12.2009. APPLICATION FOR REGISTRATION UNDER THE INCOME-TAX A CT WAS FILED ON 24.12.2009. THE BANK ACCOUNT WAS OPENED ON 29.12.2009. THE INCOME-TAX OFFICER IS SUED A NOTICE ON 11.01.2010 TO WHICH REPLY WAS SUBMITTED ON 03.02.2010. THE INSPECTOR MADE SPO T ENQUIRY AND FILED THE REPORT ON 05.02.2010. THE CIT ISSUED NOTICE ON 08.03.2010, WH ICH WAS REPLIED TO ON 20.04.2010. THE CIT ISSUED ANOTHER NOTICE ON 17.05.2010, WHICH WAS REPL IED TO ON 02.06.2010, ENCLOSING A COPY OF AMENDED TRUST DEED AND THE AUDIT REPORT. THE CIT PA SSED ORDER ON 22.06.2010. THE REGISTRATION HAS BEEN DENIED MAINLY ON THE GROUND THAT NO CHARIT ABLE ACTIVITY HAS BEEN CONDUCTED BY THE ASSESSEE-TRUST. IN THIS CONNECTION, OUR ATTENTION H AS BEEN DRAWN TO THE AUDITED ACCOUNTS FOR THE YEAR ENDED ON 31.03.2010, WHICH SHOW EXCESS OF INCO ME OVER EXPENDITURE AT RS.5,530/-. OUT OF THIS, AN AMOUNT OF RS.5001/- WAS SETTLED BY THE SET TLER OF THE TRUST. THE INCOME AND EXPENDITURE ACCOUNT SHOWS DONATIONS OF RS.37115/- AND A MAJOR E XPENDITURE OF RS.22,424/- AS ANNAKSHETRA EXPENSE. FURTHER, A REFERENCE IS MADE TO THE INCOME AND EXPENDITURE ACCOUNT DRAWN FOR THE 4 ITA NO. 335 & 336/AGRA/2010 PERIOD 16.12.2009 TO 31.01.2010. THIS ACCOUNT SHOWS DONATION OF RS.32,115/- AND MAJOR EXPENSE OF RS.18,083/- TOWARDS ANNAKSHETRA EXPENSE. THE CAS E OF THE LD. COUNSEL IS THAT CHARITABLE ACTIVITY OF FEEDING THE POOR ETC. HAD BEEN STARTED AND, THEREFORE, THE FINDING THAT NO CHARITABLE ACTIVITY HAD STARTED, IS BASED UPON WRONG PREMISE. THESE ACCOUNTS WERE THERE BEFORE THE LD. CIT WHEN SHE PASSED THE ORDER. THUS, THE ORDER SUFFERS FROM AN INFIRMITY ARISING ON ACCOUNT OF IMPROPER APPRECIATION OF FACTS. WHEN HIS ATTENTION WAS DRAWN TOWARDS THE ENQUIRY MADE BY THE INSPECTOR, DURING WHICH HE WAS INFORMED BY THE SETT LER AND THE PRESIDENT OF THE TRUST THAT NO CHARITABLE ACTIVITY HAD STARTED, NO SATISFACTORY EX PLANATION WAS FURNISHED. NONETHELESS, HIS CASE IS THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE LEARNED CIT, SO THAT THE TRUST MAY AVAIL OF ANOTHER OPPORTUNITY TO EXPLAIN THE AFORESAID CONTRA DICTION. AS AGAINST THE AFORESAID, THE LEARNED DR RELIED ON THE ORDER OF THE LEARNED CIT, WHICH HA S BEEN SUMMARIZED BY US WHILE NARRATING THE FACTS OF THE CASE. 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BEFORE US. WE FIND THAT THERE IS A MANIFEST CONTRADICTION BETWEEN THE CONTENTS OF INCOME AND EXPENDITURE ACCOUNT ON ONE SIDE AND THE EXPLANATION GIVEN BY THE PRESIDENT OF THE ASSESSEE-TRUST TO THE INSPECTOR DURING THE COURSE OF SPOT ENQUIRY ON THE OTHER. THIS CONTR ADICTION REQUIRES FURTHER EXAMINATION SO AS TO ARRIVE AT CORRECT POSITION OF FACT. THEREFORE, WE T HINK IT FIT TO RESTORE THE MATTER TO THE FILE OF TH E LEARNED CIT WITH A DIRECTION THAT SHE WILL EXAMINE THE WHOLE OF THE MATTER ONCE MORE AND THEREAFTER DECIDE THE ISSUE OF GRANT OF REGISTRATIO N TO THE ASSESSEE-TRUST AS PER LAW. 5 ITA NO. 335 & 336/AGRA/2010 6. SINCE THE MATTER REGARDING REGISTRATION HAS BEEN RESTORED TO THE FILE OF THE LD. CIT, IT IS IN FITNESS OF SITUATION THAT THE MATTER REGARDING APPR OVAL U/S. 80G SHOULD ALSO BE RESTORED TO HER FILE FOR DE NOVO DECISION AS PER LAW. 7. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 11.08.2011. SD/- SD/- (H.S. SIDHU) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH AUGUST, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY