S.V.Security & Welfare Association, New Delhi V. CIT(E), New Delhi

ITA 3675/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0053 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2018-2019
• Appeal Filed On: 25-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. Amit Shukla, Judicial Member Dr. B. R. R. Kumar, Accountant Member (Through Video Conferencing) ITA No. 3675/Del/2019 : Asstt. Year : 2018-19 ITA No. 4211/Del/2019 : Asstt. Year : 2018-19 S. V. Security & Welfare Association (Regd.), 11/372, 1 st Floor, Sunder Vihar, Paschim Vihar, New Delhi-110087 Vs CIT(Exemptions), New Delhi (APPELLANT) (RESPONDENT) PAN No. AAWAS1368L Assessee by : Ms. Rano Jain LLM Adv. Revenue by : Sh. H. K. Choudhary, CIT DR Date of Hearing: 20.10.2021 Date of Pronouncement: 18.01.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: These appeals are against the orders passed by the ld. CIT-(Exemptions) against non-registration u/s 12AA and u/s 80(5)(vi) of the Income Tax Act, 1961. 2. The ld. CIT-(Exemptions) rejected registration u/s 12AA of the Income Tax Act, 1961 of the assessee after perusal of the aims and objects of the society which revealed that the society is primarily a group of members who intend to undertake activities for security for the residents of the colony and its members. The ld. CIT-(Exemptions) held that though it also proposes to carry out some other activities of benefit which can ITA Nos. 3675 & 4211/Del/2019 S. V. Security & Welfare Association 2 be deemed to be for the general public utility but the predominant object of the society is for the benefit of its members. 3. The ld. CIT-(Exemptions) has also held that the memorandum clearly indicates the aims and objects of this association as well as activity undertaken by the applicant are confined to the members of this association and is not for the general public. It was also be mentioned that all the security agencies/institutions objects are to address the security problem of the members, but it does not constitute charity as it is providing the same for a price/value to be paid by the members as subscription fees. Therefore, it was held that there exists a relationship that of service provider and recipient of service. As regards facilities to be provided to the members, the same is also given for a value and the relationship between the organization and the members can at the most be said to be covered by the ‘Principle of Mutuality’. Therefore, the objects of the society cannot be termed as ‘Charitable’ by any stretch of imagination irrespective of the ultimate beneficiaries being general public or the members of the applicant society. 4. The ld. CIT-(Exemptions) has also held that when the objects of the assessee society are for providing the security to its concerned members, the same would not form activities for charitable purpose for the purpose of grant of registration u/s 12A of the Act. The security association is a mutual concern of the members who formed the society and the whole idea of this mutual society is that the particular members comprising should ITA Nos. 3675 & 4211/Del/2019 S. V. Security & Welfare Association 3 be benefited out of their own contribution, therefore, it cannot be said to be for the purpose of charity. 5. Referring to Lord Russel of Killowen, the ld. CIT- (Exemptions) held that instances have been stretched in favour of charities almost to bursting point. But the Courts have firmly drawn the line in at least one direction. The universal rule is that the law recognizes no purpose as charitable unless it is of a public character. That is to say, a purpose must, in order to be charitable, be directed to the benefit of the community or a section of the community and not to the benefit of particular private individuals. There is no such thing as private charitable trust. The mere fact that the number of beneficiaries is considerable cannot raise a private benefaction into the class of charitable gift. 6. The Ld. CIT(E) held that a trust for the benefit of the members of a club or an association for the employees of a company factory or institution is not charitable. It is not a trust for the benefit of the public but merely for the benefit of a fluctuating body of private individuals. A gift for establishing a recreation ground for the employees of a company is not for a charitable purpose, but a gift for a public recreation ground is. 7. Aggrieved with the order of the ld. CIT-(Exemptions), the assessee filed appeal before us. The ld. AR argued that the ld. CIT-(Exemptions) has not perused the other objectives of the trust and the work undertaken by the assessee such as, ITA Nos. 3675 & 4211/Del/2019 S. V. Security & Welfare Association 4 a) Organizing of Painting Competition for children for Independence Day b) Magic show and cultural evening on the occasion of Diwali c) Fancy dress competition and sports meet for children on Christmas. d) Blanket distribution to the poor sleeping on the road sides during winters. e) Distribution of raincoats to workers like vegetable seller, milkman etc. in monsoon season. f) Conducted a Candle Lighting Ceremony in the memory of CRPF personnel killed on 14 th February in Pulwama to encourage people for donating generously for the families of killed Jawans. g) SVSWA had approached the Delhi Government for adoption of 3 parks in Sunder Vihar as the LIG Government Servants H/B society which is deemed as RWA by Delhi Government provides funds to them for maintenance of parks were not maintaining the parks. h) Besides the above activities, SVSWA had voluntarily engaged personnel for the security of the people especially senior citizen, ladies and children, SVSWA had also approached civic authorities for betterment of society infrastructure and played a pivotal role in getting LED lights installed and around Sundar Vihar 8. The ld. CIT DR supported the order of the ld. CIT- (Exemptions) and argued that due indulgence of occasional charitable works like public distribution of blankets cannot give rise to any charitable activity to be granted registration u/s 12AA. ITA Nos. 3675 & 4211/Del/2019 S. V. Security & Welfare Association 5 Heard the arguments of both the parties and perused the material available on record. 9. The only issue awaiting before us is whether the other works undertaken by the trust or in the nature of the charitable activities or not and this matter has not been considered by ld. CIT-(Exemptions). In order to look into the primary facts, we find it is a robust case to remand the matter to the file of the ld. CIT-(Exemptions) to examine the matter afresh and take a decision in accordance with the provisions of the Income Tax Act. 10. Both the matters of the registration u/s 12AA as well as granting exemption u/s 80G stands set aside to the file of the ld. CIT-(Exemptions). 11. The appeals of the assessee are allowed for statistical purpose. Order Pronounced in the Open Court on 18/01/2022. Sd/- Sd/- (Amit Shukla) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 18/01/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR