Shree Narandas Jethalal Nathvani Charitable Trust, RAJKOT-GUJARAT V. The Commissioner of Income Tax, Rajkot-1, RAJKOT-GUJARAT

ITA 355/RJT/2013

• Counselvise Citation: 35524914 RSA 2013
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-11-2013
• Assessment Year: misc
• Appeal Filed On: 05-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Assessee Lawyers: DR ADHIA
• Keywords: Charitable institution
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 355/RJT/2013 SHREE NARANDAS JETHALAL NATHAVANI CHARITABLE TRUST, SHRI SITARAM KUTIR, STREET NO.45, PRAHLAD ROAD, DIGVIJAY SINHJI ROAD, RAJKOT ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX-I RAJKOT / RESPONDENT / ASSESSEE BY SHRI D R ADHIA, AR / REVENUE BY DR M L MEENA, DR / DATE OF HEARING 27.11.2013 !'# / DATE OF PRONOUNCEMENT 13.12.2013 / ORDER THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE OR DER DATED 25.07.2013 OF COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT REJECT ING THE APPLICATION OF THE ASSESSEE-TRUST SEEKING APPROVAL U/S 80G(5) OF THE I NCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST MADE AN APPLICATION IN FORM NO.10G FOR GRANT OF APPROVAL U/S 80G(5) OF THE INCO ME-TAX ACT, 1961 ON 29.01.2013. IN ORDER TO VERIFY THE AFORESAID APPLICATION, THE L D. COMMISSIONER OF INCOME-TAX, RAJKOT-I ASKED THE ASSESSEE-TRUST TO FURNISH NECESS ARY EVIDENCES IN SUPPORT OF ITS APPLICATION FOR GRANT OF APPROVAL U/S 80G(5) VIDE L ETTER DATED 05.07.2013. IN REPLY TO THE LETTER OF LD. COMMISSIONER OF INCOME-TAX, SHRI A.D. RUPAREL, CHARTERED ACCOUNTANT FURNISHED A LETTER DATED 15.07.2013 ON B EHALF OF ASSESSEE-TRUST ALONGWITH COPY OF ACCOUNTS FOR THE FY 2011-12 AND 2012-13. ON VERIFYING THE DETAILS AND ACCOUNTS/VOUCHERS SUBMITTED BY THE ASSESSEE-TRUST, THE LD. COMMISSIONER OF INCOME- TAX, RAJKOT-I OBSERVED THAT THE ASSESSEE-TRUST HAS CARRIED OUT ONLY ONE ACTIVITY I.E. DISTRIBUTION OF FOOD GRAINS OF RS.9,465/- ON 15.03. 2010. HOWEVER, THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-I FOUND THE INVO ICE ISSUED BY M/S. SADGURU PROVISION STORES IN RESPECT OF FOOD GRAINS PURCHASE D BY THE ASSESSEE-TRUST NOT GENUINE SINCE THE INVOICE APPEARS TO BE A SIMPLE CO MPUTER PRINT OUT, BEARING NO SERIAL/BILL NUMBER, PHONE NUMBER, ANY REGISTRATION NUMBER WITH SALES TAX DEPARTMENT OR ANY OTHER DEPARTMENT. ANY EVIDENCES/ DETAILS REGARDING BENEFICIARIES TO WHOM SUCH FOOD GRAIN WAS CLAIMED TO HAVE BEEN DI STRIBUTED WERE ALSO NOT 2 355-RJT-2013 - SHREE NARANDAS JETHALAL NATHVANI CHARITABLE TRUST (SMC) PROVIDED BY THE ASSESSEE-TRUST. THEREFORE, THE ASSE SSING OFFICER REJECTED THE APPLICATION OF THE ASSESSEE-TRUST SEEKING RECOGNITI ON U/S 80G(5) OF THE INCOME-TAX ACT, OBSERVING THAT THE ASSESSEE-TRUST HAS FAILED T O COMPLY WITH THE REQUIREMENTS FOR APPROVAL U/S 80G AS LAID DOWN UNDER SECTION 80G(5) AND RULE 11AA OF THE INCOME- TAX RULES, 1962. AGGRIEVED WITH THE ORDER OF LD. COMMISSIONER OF INCOME-TAX, THE ASSESSEE-TRUST IS NOW IN APPEAL BEFORE THIS TRIBUNA L ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME-TAX ERRED IN LAW AND FACTS IN REFUSING TO GRANT APPROVAL U/S 80G(5) OF THE INCOME-TAX ACT, 19 61. THE TRUST DESERVES RECOGNITION U/S 80G(5). 2. THE COMMISSIONER OF INCOME-TAX HAS ERRED IN LAW AND FACTS IN FORMING AN OPINION AGAINST THE APPELLANT REGARDING GENUINENESS OF ITS ACTIVITIES ;WHICH IS ESSENTIAL AS PER RULE 11AA(3) WITHOUT COGENT REA SON. THE TRUST DESERVES RECOGNITION U/S 80 (5). 3. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION THAT APPELLANT IS NOT FULFILLING THE CONDITION FOR APPROVAL OF THE PR OVISIONS OF SECTION 80G(5) OF THE IT ACT. THE TRUST DESERVES RECOGNITION U/S. 80G (5). 4. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION BASED ON IRRELEVANT ASPECT THAT THE TRUST HAS NOT CARRIED OUT ACTIVITIE S WHICH ENTITLE IT'S FOR RECOGNITION U/S. 80G (5) AS PER OBJECT OF THE TRUST . THE TRUST DESERVES RECOGNITION U/S. 80G (5). 5. THE LD. C.I.T. HAS ERRED IN NOT CONSIDERING THE REAL ASPECT OF THE PROVISIONS OF SECTION 80G (5) OF THE IT ACT, 1961. THE TRUST DESERVES RECOGNITION U/S. 80G (5). 6. TAKING INTO CONSIDERING THE LEGAL, FACTUAL AND S TATUTORY ASPECT OF THE OBJECT OF THE TRUST, THE LD. C.I.T. OUGHT TO HAVE G RANTED RECOGNITION U/S 80G (5) AS APPLIED FOR. IT IS THEREFORE PRAYED THAT THE ORDER PASSED BY THE LD. C.I.T. REFUSING TO GRANT RECOGNITION U/S. 8 0G (5) MAY KINDLY BE CANCELLED AND HE MAY BE DIRECTED TO GRANT RECOGNITI ON U/S. 80G (5) TO THE APPELLANT AS APPLIED FOR. 7. WITHOUT PREJUDICE, THE LD. CIT HAS ERRED IN NOT GRANTING ADEQUATE AND REASONABLE OPPORTUNITY. THE ORDER PASSED BY THE LD. CIT NEEDS CANCELLATION/RESTORATION TO CONSIDER A FRESH THAT T HE TRUST DESERVES RECOGNITION U/S. 80G (5) 8. WITHOUT PREJUDICE, THE ORDER PASSED U/S. 80G (5 ) IS BAD IN LAW DESERVES CANCELLATION. 9. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND A ND/OR SUBSTITUTE ANY OR ALL GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAKES P LACE 3. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, ON B EHALF OF THE ASSESSEE-TRUST, SHRI D.R. ADHIA, AR APPEARED AND CONTENDED THAT THE LD. COMMISSIONER OF INCOME-TAX NEITHER CONDUCTED ANY INQUIRY WITH THE SHOPKEEPER N OR PROVIDED ANY OPPORTUNITY TO THE ASSESSEE-TRUST TO ESTABLISH THE GENUINENESS OF THE FOOD GRAIN BILL DATED 15.03.2012. HE ALSO CONTENDED THAT THE FOOD GRAIN WAS DISTRIBUTED TO THE WIDOWS AND 3 355-RJT-2013 - SHREE NARANDAS JETHALAL NATHVANI CHARITABLE TRUST (SMC) DIVORCEES, FOR WHICH THE DETAILS CALLED FOR IS NOT LOGICAL. HE SUBMITTED THAT THE ASSESSEE-TRUST WAS ALSO DISTRIBUTED FRUITS TO THE P OOR CHILDREN OF SLUMPS AREAS AND THE LD. CIT HAS NOT GIVEN REASONABLE OPPORTUNITY TO FUR NISH THE EVIDENCE IN THIS REGARD. HE ALSO SUBMITTED THAT THE ASSESSEE-TRUST CARRIED O UT VARIOUS ACTIVITIES LIKE DISTRIBUTION OF PRIZE TO THE GIRLS FUNCTIONS, PROV IDED EDUCATION TO THE POOR CHILDREN OF SLUMP AREA ETC.., HENCE, THE ASSESSEE-TRUST HAS CAR RIED OUT NECESSARY ACTIVITIES WHICH THE LD. CIT HAS NOT CONSIDERED. THE LD AR OF THE A SSESSEE ACCORDINGLY PLEADED THAT THE IMPUGNED ORDER DATED 25.07.2013 OF LD COMMISSIO NER OF INCOME-TAX, RAJKOT-I U/S 80G(5)(VI) EITHER BE CANCELLED OR THE MATTER BE RES TORED BACK TO THE LD. CIT FOR RE- CONSIDERING THE SAME FOR RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT. 4. ON THE OTHER HAND, DR. M. L MEENA, APPEARED ON B EHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD COMMISSIONER O F INCOME-TAX. HE POINTED OUT THAT THE PURPORTED INVOICE PRODUCED BY THE ASSESSEE -TRUST IS NOT FOUND TO BE GENUINE AS THE SAME DOES NOT HAVE SERIAL/BILL NUMBER, PHONE NUMBER, REGISTRATION NUMBER WITH ANY STATUTORY BODIES ETC.. HE ALSO SUBMITTED T HAT THE TRUST CARRIED OUT ONLY ONE ACTIVITY, HENCE IT IS NOT POSSIBLE TO FORM AN OPINI ON REGARDING GENUINENESS OF ITS ACTIVITIES, WHICH IS ESSENTIAL AS PER RULE 11AA(3) OF THE INCOME-TAX RULES, 1962; THEREFORE, THE VIEW TAKEN BY THE LD. COMMISSIONER O F INCOME-TAX BE UPHELD. 5. HAVING HEARD BOTH SIDES, I HAVE CAREFULLY GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER THE LD. CIT REJECTED THE APPLICATION OF ASSESSEE-TRUST SEEKING APPROVAL U/S 80G(5) OF THE INCOME- TAX ACT MERELY ON DOUBT AND SUSPICION. THE LD. CIT SIMPLY REJECTED THE APPLICATION OF THE ASSESSEE-TRUST ON THE GROUND THAT THE FOOD GRAI N BILL DATED 15.03.2012 PRODUCED BY THE ASSESSEE-TRUST WAS NOT FOUND TO BE GENUINE A ND NON-PRODUCTION OF EVIDENCE REGARDING BENEFICIARIES TO WHOM FOOD GRAIN DISTRIBU TED. ADMITTEDLY, NO INQUIRY IN THIS REGARD WAS CARRIED OUT BY THE LD. CIT IN ORDER TO V ERIFY THE GENUINENESS OF THE VOUCHER SUBMITTED BY THE ASSESSEE-TRUST BEFORE THE LD. CIT. THE LD. CIT HAS ALSO NOT GIVEN REASONABLE OPPORTUNITY TO THE ASSESSEE-TRUST TO FURNISH THE RELEVANT EVIDENCE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE ON HAND, THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. O.P. JIN DAL GLOBAL UNIVERSITY (SUPRA) IS VERY MUCH RELEVANT, WHEREBY THE HONBLE PUNJAB & HA RYANA HIGH COURT HELD THAT AT 4 355-RJT-2013 - SHREE NARANDAS JETHALAL NATHVANI CHARITABLE TRUST (SMC) THE TIME OF GRANTING APPROVAL FOR EXEMPTION U/S 80G , OBJECT OF THE TRUST IS REQUIRED TO BE EXAMINED AND APPLICATION OF FUNDS CAN BE EXAMINE D BY ASSESSING OFFICER AT THE TIME OF FRAMING ASSESSMENT. THE DECISION OF PUNJA B & HARYANA HIGH COURT IN THE CASE OF O.P. JUNDAL GLOBAL UNIVERSITY (SUPRA) HAS B EEN FOLLOWED BY THIS TRIBUNAL IN THE CASE OF SHREE GOVINDBHAI JETHALAL NATHVANI CHAR ITABLE TRUST IN ITA NO.402/RJT/2013 ALSO. KEEPING IN VIEW OF THE RATIO OF JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. O.P. JINDA L GLOBAL UNIVERSITY (SUPRA), I SET ASIDE THE IMPUGNED ORDER OF LD COMMISSIONER OF INCO ME-TAX, RAJKOT-I AND DIRECT HIM TO GRANT THE APPROVAL U/S 80G(5) OF THE INCOME-TAX ACT, 1961 TO THE ASSESSEE-TRUST. 6. IN THE RESULT, APPEAL OF THE ASSESSEE-TRUST IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 13.12.2013 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHREE NARANDAS JETHALAL NATHAVANI CHA RITABLE TRUST, SHRI SITARAM KUTIR, STREET NO.45, PRAHLAD ROAD, RAJ KOT 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX-I, RA JKOT 3. ,0,1 * * 2 / CONCERNED CIT, RAJKOT 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT