Shri Jai Gurudev Seva Samittee, CHHINDWARA V. C.I.T., Jabalpur

ITA 34/JAB/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82722 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-09-2014
• Assessment Year: misc
• Appeal Filed On: 04-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHIR KUMAR
• Assessee Lawyers: ABHISHEK OSWAL
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, S.M.C., JABALPUR BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO.34/JAB/2013 SHRI JAI GURUDEV SEVA SAMITTEE, VS. COMMISSIONER OF INCOME TAX, ACHALDHAM, JABALPUR (M.P.) ACHALDHAM ROAD, BUDHWARI BAJAR, CHHINDWARA (M.P.) (PAN: NOT MENTIONED). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ABHISHEK OSWAL RESPONDENT BY : SHRI SUDHIR KUMAR DATE OF HEARING : 24.09.2014 DATE OF PRONOUNCEMENT : 26.09.2014 ORDER BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS C HALLENGED CORRECTNESS OF ORDER DATED 23.01.2013 PASSED BY THE LD. COMMISSION ER OF INCOME TAX, JABALPUR, DECLINING REGISTRATION UNDER SECTION 12AA OF THE IN COME TAX ACT, 1961. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S:- 1. THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS O F THE CASE IN REJECTING THE APPLICATION FOR REGISTRATION U/S 12A. THE REGISTRATION SHOULD BE ALLOWED. 2. THAT THE LEARNED CIT ERRED IN HOLDING THOUGH SOM E OF THE OBJECTS OF SOCIETY ARE CHARITABLE BUT SOCIETY HAS N OT CARRIED OUT ANY CHARITABLE ACTIVITIES AND ITS ACCOUNTS ARE NOT RELI ABLE, IT MAY PLEASE BE 2 ITA NO.34/JAB/2013 HELD THAT ASSESSEE IS A CHARITABLE INSTITUTE, ENTIT LE FOR EXEMPTION U/S 11. 3. THE ORDER PASSED BY THE CIT UNDER SECTION 12AA I S ILLEGAL AND IS LIABLE TO BE QUASHED. 4. ANY OTHER GROUND THAT MAY ARISE AT THE TIME OF H EARING. 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE APPELLANT IS A SOCIETY AND IT SOUGHT REGISTRATION U NDER SECTION 12AA VIDE APPLICATION DATED 30.07.2012. LEARNED CIT, HOWEVER , REJECTED THE SAID APPLICATION BY OBSERVING AS FOLLOWS :- 2. ON PERUSAL OF THE RECORDS/DOCUMENTS FILED ALONG -WITH APPLICATI0ON, IT IS OBSERVED THAT THE SOCIETY HAS B EEN REGISTERED FOR 9 OBJECTS OUT OF THESE OBJECTS, THE FACT/OBJECTS PLAC ED AT SL. NO.7 TO SL. NO. 9 ARE AS BELOW:- 7. SWASTH EVAM KRISHI KE KSHETRA MEIN KARYA 8. SAMAJIK KARYA 9. BAL KALYAN HETU KARYA KARNA AND THE REMAINING OBJECTS ARE RELATED TO EDUCATION. 3. ON THE PERUSAL OF THE FINAL ACCOUNTS SUBMITTED F OR F.Y. 2008- 09, 2009-10 AND 2010-11, IT IS FOUND THAT THE SOCIE TY HAS CARRIED OUT THE WORK OF DEVELOPMENT OF LAND AND CONSTRUCTION OF BUILDING AT CHHINDWARA AND ALSO ENGAGED IN PUBLICATION OF MAGAZ INE PATRIKA. THE SOCIETY HAS NOT PRODUCED THE MAGAZINE AFTER REQ UISITION. THEREFORE, NATURE OF CONTENTS OF THE MAGAZINE IS NO T KNOWN. SO, IT CANNOT BE ASCERTAINED WHETHER THE EXPENDITURE RELAT ED TO MAGAZINE ALSO FALL UNDER THE PURVIEW OF THE CHARITABLE ACTIV ITIES OR NOT. IN THE BALANCE SHEET FOR F.Y. 2010-11, IT IS SHOWN THAT RS . 17, 75,751/- HAS BEEN EXPENDED ON THE CONSTRUCTION OF BUILDING. 3 ITA NO.34/JAB/2013 4. DURING THE ENQUIRY, IT HAS COME TO NOTICE THAT T HE SOCIETY IS RUNNING A SCHOOL UNDER NAME OF JAI GURUDEV INTERNATIONAL S CHOOL BUT INCOME AND EXPENDITURE ACCOUNT, RECEIPT PAYMENT ACC OUNT AND BALANCE SHEET RELATED TO THIS SCHOOL HAVE NOT BEEN SUBMITTED BY THE SOCIETY. SO, IT COULD NOT BE CONCLUDED THAT THE SOC IETY IS RUNNING THIS SCHOOL. 5. DURING THE ENQUIRY, IT HAS ALSO COME TO NOTICE T HAT THE PLACE, ON WHICH THE SOCIETY HAS EXISTED, HAS BEEN GIVEN ON RE NT TO 'KIDS FOUNDATION SCHOOL'. BUT RENTAL INCOME HAS NOT BEEN SHOWN IN THE INCOME AND EXPENDITURE ACCOUNT BY THE SOCIETY. 6. AS OBSERVED, THE OBJECTS OF THE SOCIETY MENTION ED IN PARA NO. 2, ARE NOT CHARITABLE IN NATURE AND ALSO NOT RELIGIOUS , SO THE SOCIETY CAN DO NON-CHARITABLE ACTIVITIES ALSO. THE SOCIETY HAS ALSO CARRIED OUT PUBLISHING OF MAGAZINE, WHOSE CONTENTS/MATTERS OR P URPOSES ARE NOT KNOWN. THE ACTIVITIES OF SOCIETY I.E. DEVELOPMENT O F LAND, CONSTRUCTION OF BUILDING, RENTING PLACE TO SCHOOL AND PUBLISHING OF MAGAZINE ARE CERTAINLY NOT CHARITABLE. THE SOCIETY HAS NOT SHOWN ANY RENTAL INCOME IN ITS INCOME AND EXPENDITURE ACCOUNT. THE SOCIETY HAS ALSO NOT PRODUCED ITS BOOKS OF ACCOUNTS FOR VERIFICATION. SO SOCIETY'S FINAL ACCOUNTS CANNOT BE RELIED UPON. 7. AFTER CONSIDERING THE ABOVEMENTIONED FACTS, IT IS FOUND THAT THOUGH SOME OF THE OBJECTS OF SOCIETY ARE CHARITABL E BUT SOCIETY HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES AND ITS A CCOUNTS ARE ALSO NOT RELIABLE. IN VIEW OF THE SAME, APPLICATION OF THE S OCIETY IS HEREBY REJECTED. 4. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFOR E ME. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 4 ITA NO.34/JAB/2013 6. I FIND THAT SO FAR AS OBJECTS OF THE APPELLANT A RE CONCERNED, THESE ARE PRIMA FACIE CHARITABLE IN NATURE BUT MERELY BECAUSE THESE OBJECTS ARE NOT PURSUED AS YET, IT CANNOT BE REASON ENOUGH TO DECLINE THE REGISTRATION , AS HELD IN THE CASE OF HARDAYAL CHARITABLE TRUST VS. CIT (355 ITR 534). LD. CIT H AS NOT EXPLAINED WHY DOES HE CONSIDER WORK IN EDUCATION AND AGRICULTURE, SOCIAL AND CHILD WELFARE AS NON- CHARITABLE. HOWEVER, IT APPEARS THAT THE ASSESSEE HAS NOT MADE EFFORTS TO SATISFY THE LD. CIT ON ISSUES RAISED BY HIM SO FAR AS GENUINENE SS OF ACTIVITIES IS CONCERNED, AS SET OUT EARLIER IN THE ORDER, BUT, ACCORDINGLY TO T HE LD. COUNSEL, THE ASSESSEE DID NOT HAVE AN EFFECTIVE OPPORTUNITY TO DO SO EITHER. I, THEREFORE, DEEM IT FIT AND PROPER TO REMIT THE MATTER TO DIRECT THE ASSESSEE TO APPEAR B EFORE THE LD. COMMISSIONER OF INCOME TAX AND DEAL WITH THE HELP OF BOOKS OF ACCOU NTS AND SUCH OTHER EVIDENCES AS MAY BE NECESSARY, HIS OBJECTIONS AND DOUBTS ON G ENUINENESS OF ITS ACTIVITIES. THE MATTER IS ACCORDINGLY RESTORED TO THE FILE OF T HE LD. CIT FOR FRESH ADJUDICATION BY WAY OF A SPEAKING ORDER IN ACCORDANCE WITH LAW A ND AFTER A REASONABLE OPPORTUNITY OF HEARING. I ORDER SO. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 26 TH DAY OF SEPTEMBER, 2014. SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER DATE: 26 TH SEPTEMBER, 2014 PBN/* 5 ITA NO.34/JAB/2013 COPY OF THE ORDER FORWARDED TO :- 1) APPELLANT 2) RESPONDENT 3) CIT (APPEALS) CONCERNED 4) CIT CONCERNED 5) D.R., ITAT, JABALPUR BENCH, JABALPUR 6) GUARD FILE. BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, JABALPUR