Vinay Memorial Educational Trust, Etawah V. C.I.T.-II, Agra

ITA 355/AGR/2013

• Counselvise Citation: 35520314 RSA 2013
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-02-2014
• Assessment Year: misc
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARSHAD
• Assessee Lawyers: ASHISH BANSAL
• Section: 12; 11; 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMB ER ITA NO. 355/AGRA/2013 VINAY MOMORIAL EDUCATIONAL TRUST, VS. COMMISSIONE R OF 578,FRIENDS COLONY, ETAWAH. INCOME-TAX-II, AGRA . (PAN: AABTV 5991 L). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH BANSAL, ADVOCATE RESPONDENT BY` : SHRI WASEEM ARSHAD, SR. DR DATE OF HEARING : 27.02.2014 DATE OF PRONOUNCEMENT : 28.02.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT-II, AGRA DATED 18.09.2013, REJECTING THE APPLICATION U/S. 12 AA OF THE IT ACT. 2. THE ASSESSEE TRUST MOVED FOR GRANT OF REGISTRATI ON U/S. 12AA OF THE IT ACT. THE LD. CIT NOTED THAT THE ASSESSEE TRUST IS YET TO BEGIN ITS ACTIVITIES. ONLY LAND HAS BEEN PURCHASED ON WHICH SCHOOL BUILDING IS UNDER CO NSTRUCTION. THE LD. CIT, THEREFORE, HELD THAT SINCE CHARITABLE ACTIVITIES HA VE NOT YET STARTED, THEREFORE, HE WAS UNABLE TO SATISFY HIMSELF REGARDING THE GENUINENESS OF CHARITABLE ACTIVITIES UNDERTAKEN BY THE TRUST. THE APPLICATION WAS ACCORD INGLY REJECTED. ITA NO. 355/AGRA/2013 2 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE ISSUE IS NOW COVERED BY THE ORDER OF HONBLE ALLAHABAD HIGH CURT IN THE CASE OF HARDAYAL CHARITABLE & EDUCATIONAL TRUST VS. CIT REPORTED IN 355 ITR 534, IN WHICH IT WAS HELD AS UNDER : THE PREPONDERANCE OF THE JUDICIAL OPINION OF ALL TH E HIGH COURT INCLUDING THIS COURT IS THAT AT THE TIME OF R EGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, WHICH IS NECESS ARY FOR CLAIMING EXEMPTION UNDER SECTION 11 & 12 OF THE ACT, THE COM MISSIONER OF INCOME TAX IS NOT REQUIRED TO LOOK INTO THE ACTIVIT IES, WHERE SUCH ACTIVITIES HAVE NOT OR ARE IN THE PROCESS OF ITS IN ITIATION. WHERE A TRUST, SET UP TO ACHIEVE ITS OBJECTS OF ESTABLISHING EDUCA TIONAL INSTITUTION, IS IN THE PROCESS OF ESTABLISHING SUCH INSTITUTIONS, A ND RECEIVES DONATIONS, THE REGISTRATION UNDER SECTION 12AA CANN OT BE REFUSED, ON THE GROUND THAT THE TRUST HAS NOT YET COMMENCED THE CHARITABLE OR RELIGIOUS ACTIVITY. ANY ENQUIRY OF THE NATURE WOULD AMOUNT TO PUTTING THE CART BEFORE THE HORSE. AT THIS STAGE ONLY THE G ENUINENESS OF THE OBJECTS HAS TO BE TASTED AND NOT THE ACTIVITIES, WH ICH HAVE NOT COMMENCED. THE ENQUIRY OF THE COMMISSIONER OF INCOM E TAX AT SUCH PRELIMINARY STAGE SHOULD BE RESTRICTED TO GENUINENE SS OF THE OBJECTS AND NOT THE ACTIVITIES UNLESS SUCH ACTIVITIES HAVE COMMENCED. THE TRUST OR SOCIETY CANNOT CLAIM EXEMPTION, UNLESS IT IS REGISTERED UNDER SECTION 12AA OF THE ACT AND THUS AT THAT SUCH INITI AL STAGE THE TEST OF THE GENUINENESS OF THE ACTIVITY CANNOT BE A GROUND ON WHICH THE REGISTRATION MAY BE REFUSED. IT IS NOT DENIED THAT FOR SUBSEQUENT YEAR THE APPE LLANT HAS BEEN GRANTED EXEMPTION UNDER SECTION 12AA AND HAS ALSO B EEN APPROVED UNDER SECTION 80G OF THE ACT, SUBJECT TO CERTAIN CO NDITIONS. IF THE COMMISSIONER OF INCOME TAX WAS SATISFIED WITH THE G ENUINENESS OF THE OBJECTS OF THE TRUST FOR THE SUBSEQUENT ASSESSMENT YEAR, THE REFUSAL OF THE REGISTRATION FOR THE PREVIOUS ASSESSMENT YEAR 2 011-12 WAS NOT JUSTIFIED. THE QUESTION OF EXEMPTION OF THE APPLICATION OF IN COME RECEIVED BY WAY OF DONATION, IS A SEPARATE ISSUE AND WHICH M AY BE REQUIRED TO BE CONSIDERED, WHEN THE RETURN IS FILED BY THE TRUS T AND IS EXAMINED BY THE INCOME TAX OFFICER. THE QUESTION AS TO WHETH ER THE DONATIONS ITA NO. 355/AGRA/2013 3 BY THE SOCIETIES WAS THE EXPENDITURE OF THE TRUST F OR CHARITABLE AND RELIGIOUS PURPOSES WILL BE EXAMINED AT THE TIME OF EXAMINING THE RETURN. 3.1 HE HAS FURTHER SUBMITTED THAT THE ASSESSEE SOLE LY EXISTS FOR EDUCATIONAL PURPOSES WHICH HAVE NOT BEEN DISPUTED. THEREFORE, T HE ASSESSEE IS ENTITLED FOR REGISTRATION. THE LD. DR ACCEPTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE JUDGMENT OF HONBLE ALLAHABAD HIGH COU RT. 4. ON CONSIDERATION OF THE MATERIAL ON RECORD IN TH E LIGHT OF DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF HARDAYAL CHARIT ABLE & EDUCATIONAL TRUST (SUPRA), WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE LD. CIT TO GRANT REGISTRATION TO THE ASSESSEE U/S. 12AA OF THE IT ACT IN ACCORDAN CE WITH LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY