TERAPANTH TRUST, GHATKOPAR, MUMBAI V. DIT (E), MUMBAI

ITA 3646/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75894 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 03-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Keywords: Principle of natural justice
• Section: 80G; 12AA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , , BEFORE SHRI SANJAY ARORA , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMB ER . / ITA NO. 3646 /MUM./ 2012 ( / ASSESSMENT YEAR : 20 09 10 ) TERAPANTH TRUST, GHATKOPAR 2 ND FLOOR, MANU MARKET, M.G. ROAD GHATKOPAR (W), MUMBAI 400 012 .. / APP ELLANT V/S DIRECTOR OF INC OME TAX (EXEMPT.) PIRAMAL CHAMBERS, 6 TH FLOOR PAREL, MUMBAI 400 012 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAATT4142Q / ASSESSEE BY : NONE / REVENUE BY : MR. ASHOK SURI / DATE OF HEARING 0 3 . 03 .201 4 / DATE OF ORDER 14.03.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE AS SESSEE CHALLENGING THE IMPUGNED ORDER DATED 17 TH APRIL 2012 , PASSED BY THE LEARNED DIRECTOR OF INCOME TAX (EXEMP.) , MUMBAI , [DIT(E)] FOR THE ASSESSMENT YEAR 2 0 09 10, IN RELATION TO CANCELLATION OF APPLICATION ORDER UNDER SECTION 80G OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE TERAPANTH TRUST, GHATKOPAR 2 ACT' ) FILED BY THE ASSESSEE FOR RENEWAL / GRANT OF CERTIFICATE UNDER SECTION 80G. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL TO CHALLENGE THE IMPUGNED ORDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED D IT( E ) ERRED IN REJECTING THE APPLICATION UNDER SECTION 80G WITHOUT APPRECIATING THE INFORMATION NFILED WITH REGARD TO THE ENTIRE DONATION RECEIPTS WITH ITS CORPUS DETAILS AND CONFIRMATIONS BY THE APPELLANT DURING THE COURSE OF PROCEEDINGS; THEREFO RE, THE IMPUGNED ORDER SUFFER FROM FAILURE OF NATURAL JUSTICE SANS MERITS AND THE SAME MAY BE VACATED ON THE GROUND OF PERVERSITY. WITHOUT PREJUDICE TO THE ABOVE, ON THE SAME SET OF FACTS AND CIRCUMSTANCES THE REVENUE HAS ALREADY ISSUED UNDER SECTION 80G. DENIAL OF 80G RENEWAL OF FLIMSY GROUND IS NOT JUSTIFIED. 2 . WHEN THE CASE WAS CALLED FOR HEARING NEITHER THE ASSESSEE NOR ANY OF HIS AUTHORIZED REPRESENTATIVES APPEARED BEFORE US TO ASSIST THE BENCH TO DISPOSE OF ITS APPEAL. WE, HOWEVER, PROCEED TO DECIDE THE ASSESSEES APPEAL ON MERIT ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3 . IN THE PRESENT CASE, THE ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT AND ALSO CERTIFICATE UNDER SECTION 80G, HAD BEEN GRANTED. AFTER THE EXPIRY OF THE TIME GRANTED VIDE EARLIER CERTIFICATE, THE ASSESSEE MADE AN APPLICATION UNDER THE PRESCRIBED F ORM NO.10G , ACCOMPANIED WITH VARIOUS DETAILS / DOCUMENTS AS REQUIRED. FROM THE IMPUGNED ORDER, IT IS NOTED THAT A DETAIL QUESTIONNAIRE WAS ISSUED BY THE LEARNED DIT(E), WHICH HAS BEEN REPRODUCED IN THE ORDER. THE SUM AND SUBSTANCE OF THE QUESTIONNAIRE ISSUED WAS THAT, FIRSTLY, THERE ARE CERTAIN DISCREPANCIES BETWEEN THE DONATION RECEIVED AND AS REFLECTED IN THE INCOME & EXPENDITURE ACCOUNT; AND SECONDLY, NO EXPENSES HAVE BEEN INCURRED ON THE OBJECT TERAPANTH TRUST, GHATKOPAR 3 OF THE TRUST BUT HAVE BEEN MAINLY INCURRED ON ACCOUNT OF ADMINISTRATIVE EXPENSES, ETC. IN RESPONSE, THE ASSESSEE HAD GIVEN A BREAK UP OF DONATIONS , WHICH WERE P ARTLY TOWARDS CORPUS FUNDS AND PARTLY TOWARDS GENERAL DONATIONS WHICH HAS BEEN INCORPORATED BY THE LEARNED DIT(E) AT PAGE 3 OF HIS ORDER. REGARDING OTHER OBJECTIONS THAT THE EXPENDITURES HAVE NOT BEEN INCURRED ON THE OBJECT S OF THE TRUST AND THAT MOST OF T HE EXPENSES HAVE BEEN INCURRED ON ACCOUNT OF ADMINISTRATIVE EXPENSES, THE ASSESSEE SUBMITTED THAT IT HAS TAKEN THE PREMISE ON RENT WHICH IS USED FOR THE CHARITABLE ACTIVITIES LIKE BLOOD DONATION CAMP , GYANSALA , SURVADHARM SAMMELAN AND OTHER SIMILAR A CTIVITIES AS GIVEN IN THE OBJECTS. THE DETAILS OF THESE ACTIVITIES HAVE BEEN GIVEN BY THE ASSESSEE VIDE LETTER DATED 29 TH FEBRUARY 2012. LATER ON, THE ASSESSEE AGAIN FURNISHED THE DETAIL SUBMISSIONS ON 26 TH MARCH 2012 AND 28 TH MARCH 2012, THE RELEVANT PORT ION OF WHICH HAVE BEEN INCORPORATED BY THE LEARNED DIT(E). HOWEVER, THE ASSESSEES APPLICATION HAS BEEN REJECTED BY HIM ON THE FOLLOWING GROUNDS: 5. THE SUBMISSION MADE BY THE TRUST IS DULY CONSIDERED. IN THE LIST OF DONORS AS SUBMITTED BY THE TRUST ON 23.12.2011, N O INFORMATION NOF DONATION RECEIVED ON ACCOUNT OF CORPUS OR GENERATION DONATION IS MADE. NO DONATION LETTERS IN RESPECT OF CORPUS DONATION IS SUBMITTED BY THE TRUST TILL DATE. ONLY WHEN THE DISCREPANCY IN IN RESPECT OF DONATION RECEIVED BY TH E TRUST FOR A.Y. 2008 09 AND 2011 12 WAS POINTED OUT, THE TRUST HAS SPOKEN ABOUT THE CORPUS DONATION. HOWEVER, NO EVIDENCES IN RESPECT OF THE SAME IS GIVEN. EVEN THE CONFIRMATIONS IN RESPECT OF DONATION RECEIVED IS EXCESS OF ` 40,000 IS NOT SUBMITTED TO VE RIFY THE GENUINENESS OF THE SAME. THE ONUS IS UPON THE TRUST TO CLARIFY THE DISCREPANCIES IN RESPECT OF DONATIONS RECEIVED AS REFLECTED IN THE INCOME & EXPENDITURE ACCOUNT, WHICH IT FAILED TO DO SO. 6. FURTHER THE TRUST HAS FAILED TO SUBSTANTIATE WITH EVI DENCES ANY EXPENSES BEING INCURRED ON THE OBJECT OF THE TRUST. THE EXPENSES ISSUED ON RENT, ELECTRICITY, WATER ETC. ARE ADMINISTRATIVE IN NATURE, WHICH WILL HAVE TO BE COMPULSORILY ISSUED EVEN IF THERE IS NO ACTIVITY. THE TRUST HAS ALSO FAILED TO TERAPANTH TRUST, GHATKOPAR 4 SUBMIT AN EXPLANATION IN RESPECT OF DISCREPANCIES IN THE PHOTOGRAPHS OF THE BLOOD DONATION CAMP SUBMITTED AS POINT OUT IN THE SHOW CAUSE ISSUED DATE 12.03.2012. 4 . THUS, THE LEARNED DIT(E) HAS REJECTED THE ASSESSEES APPLICATION MAINLY ON TWO COUNTS FIRSTLY, THERE I S NO DONATION LETTER IN RESPECT OF CORPUS DONATION AND THE CONFIRMATION IN RESPECT OF THE DONATION RECEIVED IN EXCESS OF ` 50,000, HAS NOT BEEN SUBMITTED AND LASTLY, THE TRUST HAS FAILED TO SUBSTANTIATE ANY EXPENSES WITH EVIDENCE WHICH HAS BEEN INCURRED ON THE OBJECT S OF THE TRUST. 5 . AFTER CONSIDERING THE RELEVANT FINDINGS OF THE LEARNED DIT(E) , WHICH HAS BEEN INCORPORAT ED IN THE IMPUGNED ORDER ITSELF , AND ALSO THE SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, IT IS SEEN THAT THE LEARNED DIT(E) HAS N OT CULLED OUT IN HIS ORDER AS TO WHICH ARE THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SUB SECTION (V) OF SECTION 80G , HAVE NOT BEEN FULFILLED BY THE ASSESSEE TRUST. IF THE LEARNED DIT(E) IS SATISFIED THAT ONE OR MORE OF THE CONDITIONS LAID DOWN IN T HE SAID CLAUSES HAVE NOT BEEN FULFILLED, HE CAN REJECT THE APPLICATION FOR APPROVAL AFTER RECORDING HIS REASONS. IN THE PRESENT CASE, IT HAS NOT BEEN BROUGHT ON RECORD BY THE REVENUE AS TO WHICH OF THE REQUIREMENT HAS NOT BEEN FULFILLED BY THE ASSESSEE AS PRESCRIBED UNDER RULE 11AA AND WHICH OF THE CONDITIONS MENTIONED IN CLAUSE (I) TO (V) OF SUB SECTION (5) OF SECTION 80G HAS BEEN VIOLATED OR NO T FULFILLED BY THE ASSESSEE . U NLESS THE LEARNED DIT(E) RECORDS THE REASON S OF VIOLATION OF SUCH COND ITIONS, THE LE ARNED DIT(E) CANNOT REJECT THE ASSESSEES APPLICATION. THUS, WE ARE OF THE OPINION THAT THIS ISSUE NEEDS TO BE RESTORED BACK TO THE FILE OF THE LEARNED DIT(E) , TO EXAMINE WHETHER THE ASSESSEE TRUST FULFILLS THE CONDITIONS LAID DOWN IN SECTION 80G OR NOT AN D THEN ONLY AFTER RECORDING THE REASONS, THE LEARNED DIT(E) CAN GRANT APPROVAL OR REJECT THE APPLICATION FOR GRANT OF CERTIFICATE UNDER TERAPANTH TRUST, GHATKOPAR 5 SECTION 80G. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6 . D 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 14 TH MARCH 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH 2014 SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 14 TH MARCH 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITA T, MUMBAI