Sant Dalip Singh Ji Memorial Charitable Society, Distt.Bathinda V. The Commissioner of Income-tax, Bathinda

ITA 37/ASR/2014

• Counselvise Citation: 3720914 RSA 2014
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2014
• Assessment Year: misc
• Appeal Filed On: 23-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA KUMAR SINGH
• Assessee Lawyers: P N ARORA
• Keywords: Charitable institution; Capital expenditure
• Section: 143(3); 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO.37(ASR)/2014 SANT DALIP SINGH JI MEMORIAL VS. COMMISSIONER OF I NCOME TAX, CHARITABLE SOCIETY, BATHINDA. DERA BHAI MASTAN SINGH JI, PATTI KALAN, VPO MEHRAJ, TEHSIL RAMPURA PHUL, DIST. BATHINDA. (PAN: AAFAS 3056 E) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P.N. ARORA, ADVOCATE RESPONDENT BY: SHRI VIRENDRA KUMAR SINGH, D.R. DATE OF HEARING: 26.11.2014 DATE OF PRONOUNCEMENT: 27.11.2014 ORDER PER B.P. JAIN, ACCOUNTANT MEMBER : THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, BATHINDA DATED 24.12.2013. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. COMMISSIONER OF INCOME TAX, BATHIN DA HAS ERRED IN LAW AND ON FACTS, IN REJECTING THE ASSESEES APP LICATION FOR GRANT OF APPROVAL U/S 80G(5)(VI) OF THE INCOME TAX ACT 1961 BY TREATING THE SAME AS PREMATURE. 2. THAT THE ORDER IS BAD IN LAW AND ON FACTS. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUND OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. ITA NO.37(ASR)/2014 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEES SOCIETY IS REGISTERED WITH ADDITIONAL REGISTRAR OF SOCIETIES, BATHINDA (P UNJAB) ON 13.09.2010. THE ASSESSEE SOCIETY WAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 BY THE LD. CIT, BATHINDA VIDE ORDER DATED 22.02.2012. THE ASSESSEE APPLIED FOR GRANT OF APPROVAL UNDER SE CTION 80G(5)(VI) OF THE ACT DATED 09.07.2013 IN THE PRESCRIBED FORM 10G. T HE ASSESSEE PLACED ON RECORD INCOME AND EXPENDITURE ACCOUNT FOR THE A.Y. 2011-12 TO 2013-14 WHICH FOR THE SAKE OF CONVENIENCE ARE REPRODUCED HE REIN BELOW:- INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31 .03.2011 EXPENDITURE AMOUNT (RS) INCOME AMOUNT(RS) TO ELECTRICITY EXPENSES 10,200 DONATION 2,19,458 TO LANGAR EXPENSES 25,712 RECEIPT OF TAKE 5 27,545 TO MISC. EXPENSES 6,680 TO PETROL AND DIESEL 8,345 TO REGISTERED CHARGES 5,500 TO SALARY TO STAFF 1,13,000 TO EXCESS OF INCOME OVER EXPENDITURE 77,566 2,47,003 2,47,003 INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31 .03.2012 EXPENDITURE AMOUNT (RS) INCOME AMOUNT(RS) TO ELECTRICITY EXPENSES 10,400 DONATION 1,09,500 TO LANGAR EXPENSES 29,700 CONTRIBUTION 35,000 TO MISC. EXPENSES 7,050 IDP RECEIPTS 930 TO PETROL AND DIESEL 9,350 OPERATION RECEIPTS 1,78,500 TO SALARY TO STAFF 1,32,000 OPD RECEIPTS 23,045 TO HONORARIUM 18,000 INTEREST ACCOUNT 200 TO MEDICINE EXPENSES 1,11,741 TO EXCESS OF INCOME OVER EXPENDITURE 28,934 2,47,003 3,47,175 3,47,175 ITA NO.37(ASR)/2014 3 INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31 .03.2013 EXPENDITURE AMOUNT (RS) INCOME AMOUNT(RS) TO ELECTRICITY EXPENSES 11,440 DONATION 82,450 TO LANGAR EXPENSES 31,150 CONTRIBUTION 35,000 TO MISC. EXPENSES 7,710 IDP RECEIPTS 11,130 TO PETROL AND DIESEL 9,470 OPERATION RECEIPTS 1,83,000 TO SALARY TO STAFF 1,45,200 OPD RECEIPTS 14,435 TO HONORARIUM 18,000 INTEREST ACCOUNT 540 TO MEDICINE EXPENSES 73,395 TO EXCESS OF INCOME OVER EXPENDITURE 30,190 3,26,555 3,26,555 4. THE LD CIT, BATHINDA, ON PERUSAL OF THE SAID INC OME AND EXPENDITURE ACCOUNT, REJECTED THE APPLICATION OF THE SOCIETY FO R GRANT OF APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT AND NECESSARY FINDING OF THE LD. CIT ARE REPRODUCED HEREIN BELOW :- 4. FROM THE PERUSAL OF THE ABOVE, IT HAS BEEN NOTI CED THAT DURING THE ASSESSMENT YEAR 2011-12, THERE WERE NO WORTHWHI LE CHARITABLE ACTIVITIES EXCEPT LANGAR EXPENSES AND SALARY TO STA FF AT RS.25,712/- AND RS.1,13,000/- RESPECTIVELY. DURING THE ASSESSM ENT YEAR 2011-12, IN ADDITION TO THE LANGAR AND SALARY EXPENSES DEBIT ED AT RS.29,700/- AND RS.1,32,000/- RESPECTIVELY, MEDICINES EXPENSES HAVE BEEN DEBITED AT RS.1,11,741/-. SIMILARLY IN THE ASSESSMENT YEAR 2013-14, IN ADDITION TO LANGAR AND SALARY EXPENSES DEBITED AT R S.31,150/- AND RS.1,45,200/- RESPECTIVELY, MEDICINES EXPENSES HAVE BEEN DEBITED AT RS.73,395/- 5. PERUSAL OF THE ABOVE DETAILS OF MAIN EXPENSES DE BITED BY THE APPLICANT REVEALS THAT NO WORTHWHILE CHARITABLE ACT IVITIES HAVE BEEN DONE BY THE APPLICANT DURING ALL THE THREE ASSESSME NT YEARS 2011-12 TO 2013-14 6. IN VIEW OF THESE FACTS, A THE APPLICATION OF THE SOCIETY FOR GRANT OF EXEMPTION U/S 80G(5)(VI) OF THE INCOME TAX ACT, 1961 IS PREMATURE. THEREFORE, THE APPLICATION FILED BY THE APPLICANT S OCIETY SANT DALIP SINGH JI MEMORIAL CHARITABLE SOCIETY, DERA BHAI MAS TAN SINGH JI, ITA NO.37(ASR)/2014 4 PATTI KALAN, VPO-MEHRAJ, TEHSIAL RAMPURA PHUL (PUNJ AB) ON 09.07.2013 FOR GRANT OF APPROVAL U/S 80G(5)(VI) OF THE INCOME TAX ACT, 1961 IS HEREBY REJECTED. 5. THE LD. COUNSEL FOR THE ASSESSEE SHRI P.N. ARORA , ADVOCATE ARGUED WITH REFERENCE TO A.Y. 2011-12 AND INVITED OUR ATTENTION TO PAGE NOS.26 AND 27 WHICH IS ORDER UNDER SECTION 143(3) OF THE ACT WHERE THE A.O . WARD-I(3), BATHINDA IN THE CASE OF THE ASSESSEE HELD THAT THE ASSESSEE TRUST IS RUNNING A SMALL CHARITABLE EYE HOSPITAL AT VILLAGE & POST OFFICE MEHRAJ. THE ASSE SSEES RECEIPTS ARE MAINLY FROM DONATIONS FROM PUBLIC AND ACCORDINGLY CONSIDERING T HE REGISTRATION UNDER SECTION 12AA OF THE ACT DATED 22.02.2012, RETUNED INCOME OF THE ASSESSEE WAS ACCEPTED. THE ORDER IS DATED 23.08.2013. LD. COUNSEL FOR THE ASSESSEE SHRI P.N. ARORA, ADVOCATE FURTHER INVITED OUR ATTENTION TO THE OFFIC E NOTE OF THE ITO DATED 23.08.2013 WHICH IS REPRODUCED FOR THE SAKE OF CONV ENIENCE AS UNDER :- OFFICE NOTE : 1. ON VERIFICATION, IT HAS BEEN NOTICED THAT THE AS SESSEE TRUST HAS BEEN CARRYING OUT THE ACTIVITIES COVERED U/S 2(15) OF TH E ACT. IT HAS ALSO BEEN NOTICED THAT THE INCOME HAS MAINLY BEEN EARNED BY THE ASSESSEE FROM DONATIONS ETC. AND WHOLE OF THE INCOME HAS BEE N IN REVENUE AND CAPITAL EXPENDITURE. IN VIEW OF THE NATURE OF THE EXPENDITURE INCURRED, IT TANTAMOUNT TO APPLICATION OF INCOME FOR CHARIT ABLE PURPOSES WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. HE NCE, NO ACTION IS CALLED FOR. FURTHER, DETAILS OF THE DONORS WERE OB TAINED AND EXAMINED W.R.T. THE DOCUMENTARY EVIDENCE. THE SLIPS OF DONA TIONS RECEIVED WERE CALLED FOR AND EXAMINED BY TEST CHECK. NOTHING ADV ERSE CAME TO THE NOTICE OF THE UNDERSIGNED. 2. DOCUMENTARY EVIDENCE IN RESPECT OF THE CAPITAL E XPENDITURE INCURRED HAS BEEN OBTAINED AND EXAMINED. NO DISCREPANCY WAS NOTICED. ITA NO.37(ASR)/2014 5 3. COPY OF BYE-LAWS/AIMS & OBJECTIVES AND LIST OF D ONORS HAVE BEEN OBTAINED AND PLACED ON RECORDS AFTER VERIFICATION. NOTHING ADVERSE WAS NOTICED. 4. COPY OF REGISTRATION U/S 12A(A) OF THE I.T. ACT, 1961 HAS BEEN OBTAINED WHICH IS PLACED ON RECORDS. 6. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUED THAT NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE SPECIFICALLY THAT ANY EXPENSES INCURRED WHICH IS NOT FOR CHARITABLE PURPOSE. RATHER, ALL THE EXPENS ES AND THE RECEIPTS ARE FOR CHARITABLE PURPOSES AND, THEREFORE, PRAYED TO CANCE L THE ORDER OF LD. CIT AND TO DIRECT THE LD. CIT TO GRANT APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT. 7. THE LD. DEPARTMENTAL REPRESENTATIVE SHRI VIRENDR A KUMAR SINGH, ON THE OTHER HAND, RELIED UPON THE ORDER OF LD. CIT, BATHI NDA AND ARGUED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES AND, THEREFORE, PRAYED TO CONFIRM THE ORDER OF LD. CIT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. ON PERUSAL OF THE ACCOUNTS PLACED ON RECORD, THE LD. C IT HAS NOT BROUGHT ON RECORD ANY SPECIFIC EXPENDITURE OR INCOME WHICH IS NOT OF CHAR ITABLE PURPOSE. NOTHING HAS BEEN BROUGHT ON RECORD THAT EXCESS INCOME OVER EXPE NDITURE HAS BEEN USED FOR ANY OTHER PURPOSE THAN CHARITABLE IN NATURE. AS POINTE D OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE A.O. IN SCRUTINY ASSESSMENT UNDER SEC TION 143(3) VIDE ORDER DATED 23.08.2013 FOR A.Y. 2011-12 HAS EXAMINED THE ACTIVI TIES OF THE ASSESSEE TRUST ITA NO.37(ASR)/2014 6 WHICH IS RUNNING A SMALL CHARITABLE EYE HOSPITAL WH ICH IS BEING RUN MAINLY FROM THE DONATION OF PUBLIC AND THE ACTIVITIES AS CHARIT ABLE HAS BEEN ACCEPTED FOR THE A.Y. 2011-12. AS REGARDS THE OFFICE NOTE OF THE A. O. CLEARLY ESTABLISHES THAT TRUST HAS BEEN CARRYING OUT THE ACTIVITIES COVERED UNDER SECTION 2(15) OF THE ACT AND THE RECEIPTS HAVE BEEN APPLIED WITHIN THE MEANING OF SE CTION 2(15) OF THE ACT AND THE A.O. HAS NOT NOTICED ANY DISCREPANCIES WHILE MAKING SCRUTINY OF THE ACCOUNT FOR THE A.Y. 2011-12. AS REGARDS THE A.Y. 2012-13 AND 2013-14 THE EXPENDITURE INCURRED ARE UNDER SIMILAR HEAD AS IN ASSESSMENT YE AR 2011-12 AND IN ADDITION THE ASSESSEE HAS INCURRED MEDICINE EXPENSES AND RECEIVE D THE HOSPITAL RECEIPTS WHICH HAVE BEEN USED FOR CHARITABLE PURPOSES IN THE ABSEN CE OF ANYTHING OTHERWISE ON RECORD. THEREFORE, IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS BEEN CARRYING OUT THE CHARITA BLE ACTIVITIES AND THE LD. CIT IS NOT JUSTIFIED IN REJECTING THE APPLICATION OF THE A SSESSEE FOR GRANT OF APPROVAL UNDER SECTION 80G(5)(VI) AND ACCORDINGLY THE LD. CIT IS D IRECTED TO GRANT APPROVAL UNDER SECTION 80G(5)(VI) TO THE ASSESSEE SOCIETY. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.11.2014. SD/- SD/- (A.D. JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH NOVEMBER, 2014 PBN/* ITA NO.37(ASR)/2014 7 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SANT DALIP SINGH JI MEMORIAL CHARIT ABLE SOCIETY, DERA BHAI MASTAN SINGH JI, PATTI KALAN, VPO MEHRAJ, TEHSIL RA MPURA PHUL, BATHINDA. 2. COMMISSIONER OF INCOME TAX, BATHINDA. 3. THE CIT(A), 4. THE CIT, 5. THE D.R., I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.