Baba Samtai Nath Charitable Trust, V. CIT,

ITA 372/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7001 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-03-2009
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Reasonable cause; Condonation of delay
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TA X AP PELLA TE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE H ON'BLE SENIOR VICE P RESIDENT, SHRI R.P. GARG AN D HON'BLE JUDICIA L MEMBER, SHRI RAJPAL YADAV ITA NO.372/DEL./2008 BABA SAMT AI NATH CHARITABLE TR UST, VS. CIT, ROHTAK. VPO NANWAN, NEAR SATNALI, TEHSIL & DISTT. MAHENDERGARH. (APP EL LANT ) (RES PONDENT ) ASSE SSE E BY : S HRI NAVIN GUPTA, ADVOCATE REV ENUE B Y : MS. P RATI MA KAUSHIK, SENIOR DR O R D E R GARG, SENIOR VP : T HIS APPE AL F ILED B Y T HE ASSESSEE IS A GA INST THE ORDER OF COMMISSIONER OF INCOME-TA X IN RE JE CTING TH E APP LI CAT ION OF ASSESSEE FOR R EGISTR ATION UNDER SEC TION 12A OF TH E IN COME-TAX ACT . 2. ASSE SSEE IS A TRUST CREATED FOR THE GENERAL PUBLIC UTIL ITY WITH THE OBJECTS OF THE T RUST BEING THE WELFARE OF COWSHED (GAUSHALAS), TO PROVIDE SCHOLARSHIP AND HIGHER EDUCATION TO THE POOR, BACKWARD AND ST CHILDREN, TO P ROVIDE ARTIFICIAL LIMB S TO HANDICAPS, TO HOLD BLOOD DONATION CA MP S, TO PROVIDE DONATION OF E YES, TO OPEN AND RUN SCHOOL AND COLLEGES UNDER THE EDUCATION INSTITUTIONS, TO OPEN AND M AINTAIN OLD-AGE HOME AND HO MES FOR WIDOWS, TO OPEN HOSPITALS, NURSING HOME S, ETC. FILED AN APPLICATION FOR THE REGISTRATION UNDER SECTION 12A OF THE ACT IN FO R M NO.10A ON 31.5.2007 ALONG WITH BALANCE SHEET FOR THE Y EAR ENDED 31.3.2005 WITH A REQUEST FOR CONDONATION OF 2 ITA NO.372/DEL./2008 DELAY AND TO G RANT REGISTRATION WITH EFFECT FRO M 11.3.2005, T HE DATE ON WHICH THE TRUST WAS CREATED. 3. THE CO M MI SS IONER OF I NCO ME- TAX, AFTER OBTAINING A REPO RT FROM THE ASSE SSING OFFICER, R EJECTED THE APPLICATION AS WELL AS DECLINED THE CONDONATION OF DELAY THE REOF ON THE REASONS THAT ASSES SEE HAS NOT FILED T HE RETURN FOR THE LAST THREE YE ARS AND, THE REFORE, IT DID NOT COMPLY WI TH THE CONDITIONS LAID DOWN IN SECTION 12A(1) (B); THAT THE ASSES SEE HAD NOT SPENT EVEN A SINGLE PIE FOR T HE WELFARE OF THE GENERAL PUBLIC EXCEPT THE CLAI M OF RS.54,249/- AS REPAIR AND MAINT ENANCE OF THE DHARAM SHALA AND T HAT IT HAD ALSO PURCHASED A CAR WHICH COULD NOT BE PUT INTO T HE FRA ME OF THE OBJECTS OF THE SOCIETY; THAT THE T RUST DEED DID NOT STIPULATE T HAT I T WILL TAKE CARE OF REGULAR EXPENSES OF THE SETTLER OF THE TRUST AND IT COULD NOT P ROVE THAT IT HAD SEPARATE ACCOUNT FOR THE PERSONAL EXPENSES OF THE SETTLER. HE ALSO REJECTED T HE PRA YER OF CONDONATION OF DELAY B Y OBSERVING THAT THESE DA YS CHARITABLE TRUSTS/SOCIETIES ARE CREATED/ESTABLISHED MOSTLY WITH AN E YE ON THE CONCESSIONAL P ROVISIONS OF THE ACT AND B Y OBSERVING THAT THE FACT THAT THE T RUST WAS SITUATED IN A REMOTE RU RAL A REA OF HARY ANA AND T HE T RUSTEES WERE NOT AWARE OF THE TECHNICAL PROVISIONS WAS NOT A G ROUND WHICH COULD PREVENT THE M FRO M APPLY ING FOR REGISTRATION UNDER SECTION 12AA OF THE ACT IN TI ME. ACCORDING TO HIM, THE TRUST DEED MUST HAVE BEEN W RITTEN UNDER SOM E VIGILANT GUIDANCE WHO MU ST HAVE GUIDED THE TRUSTEES FOR SEEKING REGISTRATION OF THE TRUST UNDE R SECTION 12AA OF THE ACT RETROSPECTIVEL Y SO AS TO CLAI M THE APPLICATION OF FUNDS AS DEDUCTION WHICH OTHE RWISE WOULD HAVE BEEN TAXABLE UNDER THE ACT. 3 ITA NO.372/DEL./2008 4. THE ASSES SEE IS IN APPEAL. LEARNED COUNSEL OF THE ASSE SSE E, SH RI NAVIN GUPTA APPEARED BEFORE US AND MS. P RATI MA KAUSHIK, SENIOR DR ON BEHALF OF THE REVENUE. 5. IN OUR OPINION, THE CIT WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSE SSEE. APPARENTLY , THE TRUST IS A CHARITABLE ONE ESTABLISHED FOR THE GENE RAL WELFARE OF PUB LIC U TILITY . THE REASON GIVEN FOR REJECTION THAT IT HAD NOT FILED RETURN FOR THE PAST THREE Y EARS IS NO GROUND AND IS ALSO NOT A CONDITION FOR GRANTING REGISTRATION AS ASSU ME D BY THE CI T THAT THE SOCIETY DOES NOT QUALIFY THE CONDITION UNDER SECTION 12A (1)(B ) AS THIS IS T O BE SEEN B Y THE ASSES SING OFFICER WHILE GRANTING EXE MPTION UNDER SECTION 11 AND 12 IN THE ASSES SM EN T AND IT IS NOT A RE LEVANT FACTOR FOR GRANTING O R REJECTING OF REGISTRATION. T HE OTHER REASON THAT IT HAD NOT SPENT EVEN A PIE FOR THE WELFARE OF PUBLIC UTILIT Y IS ALSO NOT RE LEVANT AS HE HIM SEL F HAS STATED THAT A SU M OF RS.54,249/- HAS BEEN SPENT ON REPAI R AND M AINTENANC E OF DHA RA MS HALLA WHICH IS AN OBJECT OF GENERAL PUBLIC WELFARE. AS FAR AS THE CAR IS CONCERNED, THE SA ME HAS BEEN GIVEN AS A DONATION AND WAS NOT PURCHASED B Y THE T RUST AND, THE REFORE, NOTHING ADVERSE CAN BE INFERRED THEREFRO M. IT IS ALSO NOT A GROUND FOR REFUSING REGISTRATION. T HE LAST GROUND STATED BY HIM THAT THE TRUST DEED DOES NOT STIPULATE THAT IT WILL TAKE CARE OF THE LIVING EXPENSES OF THE SETTLER IS ALSO NOT A VALID G ROUND. IT IS NOT A CONDITION TO BE INCORPO RATED IN DEED OF THE T RUST BUT IT IS A M ATTER OF FACT TO BE ASCERTAINED AS TO WHETHER THE EXPENSES OF THE SETTLER WOULD HAVE BEEN BORNE B Y THE T RUST O R NOT AND ANY EXPENDITU RE OF THE SETTLER HAVE BEEN MET B Y THE TRUST. NO SUCH CASE HAS BEEN MADE OUT IN THIS CASE. 4 ITA NO.372/DEL./2008 THIS IS, THE REFORE, NOT A VALID G ROUND ON WHICH THE R EGISTRATION SHOULD BE REFUSED. 6. LOOKING TO THE FACTS AND CI RCU MST ANCES OF THE CASE, I N OUR OPINION, THE CIT WAS NO T JUSTIFIED IN RE JECTING THE CLAIM OF THE ASSES SEE. T HE CI T IS DIRECTED TO GRANT REG ISTRATION TO THE ASSE SSE E TRUST AS APPLIED FOR. 7. AS REGARDS THE CONDONATION OF DELAY ALSO, WE DO NOT FIND AN Y M ERIT IN THE REJECTION OF THE APPLICATION B Y THE CI T. WE FIND THAT THE ASSES SEE HAD A REASONABLE CAUSE FOR DELAY IN FILING OF THE APPLICATION AS IT WAS SITUATED IN A REMOT E RU RAL AREA OF HAR YANA AND THE TRUSTEES WERE NOT AWARE OF THE TECHNICAL PROVISIONS OF THE ACT AND THAT WOULD HAVE PREVENTED T HE M FRO M APPL YING THE REGISTRATION ON TIME. I T IS T RUE THAT THE T RUST DEED MU ST HAVE BEEN W RITTEN UNDER SO ME VIG ILANT GUIDANCE WHO MU ST HAVE GUIDED THE T RUSTEES FOR SEEKING REGISTRATION OF T HE TRUST BU T THAT IS ONLY A PRESU MPTION AND NOT A FACT. T HE ASSE SSEE IS SITUATED IN A R E MOTE R URAL A REA AND THE TRUSTEES WE RE NOT AWARE OF THE TECHNICAL P ROVISIONS, IN THESE CIRCU MSTANC ES, WE ARE OF THE VIEW T HAT THE DELAY SHOULD HAVE BEEN CONDONED . 8. IN THE RESULT, THE APPEAL OF THE ASSE SSEE IS ALLOWED. O RDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF APRIL 2009. ( RAJPAL YADAV) (R. P. GARG) JUDICIAL MEM BER SENIOR VICE P RESIDENT DATED THE 24 TH DA Y OF AP RIL 2009/ TS COPY FORWARDED TO: 5 ITA NO.372/DEL./2008 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-X II I, NEW DELHI. 5.CIT (I TAT), NEW DELHI. AR, I TA T NEW DE LHI.