M/s. Swayamsiddha Mahila Utkarsha Foundation, Pune V. Commissioner of Income-tax - 1,

ITA 373/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2767 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-11-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Assessee Lawyers: S N DOSHI; DHIRAJ DANDGAVAL
• Keywords: Charitable institution; Additional evidence; Competent authority
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 373/PN/2014 $& ' !(' / ASSESSMENT YEAR : 2014-15 M/S. SWAYAMSIDDHA MAHILA UTKARSHA FOUNDATION, FLAT NO. 18/20, C WING, AMBIENCE EMPIRE, BEHIND EMPRESS GARDEN, GHORPADI, PUNE-411001 PAN : AAOCS5058B ....... / APPELLANT )& / V/S. COMMISSIONER OF INCOME TAX-I, PUNE / RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI & SHRI DHIRAJ DANDGAVAL REVENUE BY : SHRI S.K. RASTOGI / DATE OF HEARING : 15-12-2015 / DATE OF PRONOUNCEMENT : 03-02-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX-I, PUNE DATED 31-12-2013, VIDE WHICH THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION U/S. 1 2A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) HAS BEEN REJECTED. 2 ITA NO. 373/PN/2014, A.Y. 2014-15 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: THE ASSESSEE IS A COMPANY INCORPORATED U/S. 25 OF THE COMPA NIES ACT, 1956. THE ASSESSEE MADE AN APPLICATION DATED 01-06-201 3 IN THE PRESCRIBED FORM FOR GRANT OF REGISTRATION U/S. 12A OF THE ACT. THE COMMISSIONER OF INCOME TAX REJECTED THE APPLICATION OF THE ASSESSEE PRIMARILY ON THE GROUND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE OF WATER AND THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE NOT COMMENSURATE TO THE MAIN OBJECTS. THE COMMISSIONER OF I NCOME TAX FURTHER OBSERVED THAT THE ASSESSEE IS CARRYING ON ACTIV ITIES ON COMMERCIAL BASIS, THEREFORE, THE ACTIVITIES OF THE ASSESSEE A RE OUTSIDE THE PURVIEW OF CHARITABLE PURPOSE AS DEFINED U/S. 2(15) OF THE ACT. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TAX, TH E ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI S.N. DOSHI AND SHRI DHIRAJ DANDGAVAL APPEARING ON B EHALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOM E TAX HAS ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE IS H IT BY THE PROVISO TO SECTION 2(15) OF THE ACT. THE ASSESSEE COMPANY HAS B EEN INCORPORATED WITH THE PREDOMINANT OBJECT OF WOMEN EMPO WERMENT AND UPLIFTMENT OF WOMEN IN THE SOCIETY. THE ASSESSEE HAS ENGA GED THE SERVICES OF SEVERAL WOMEN IN SUPPLYING PURIFIED WATER IN VILLAG ES AT THE NOMINAL RATE OF 80 PAISE PER LITRE UNDER THE PROJECT JAL DOOT. THE ASSESSEE IS MAINLY USING THE SERVICES OF WOMEN DRIVERS TO SUPPLY CLEAN DRINKING WATER IN RURAL AREAS. THE ASSESSEE HAS TAKEN U P AN INNOVATIVE ACTIVITY OF COLLECTING THE WATER, PURIFYING THE SAME AND PRO VIDING TO THE FAMILIES STAYING IN VILLAGES DIRECTLY AT THEIR DOORSTEPS. THE ASSESSEE IS ARRANGING FINANCE FOR THESE ENTREPRENEURS (MAINLY WOMEN) T HROUGH BANK OF MAHARASHTRA TO ENABLE THEM TO MEET THE INFRASTR UCTURE COST 3 ITA NO. 373/PN/2014, A.Y. 2014-15 PRIMARILY FOR PURCHASING THREE WHEELER RICKSHAW MOUNTED W ITH THE WATER TANKER, ATTACHED WITH PURIFYING MACHINE. THUS, WHO ARE DRIVING THESE WATER TANKERS RICKSHAWS OWNED BY THE ASSESSEE, ARE GIVEN MONTHLY SALARY OF ` 6,000/- TO 7,000/-. THUS, THE ASSESSEE IS MAKING WOMEN SELF RELIANT AS WELL AS PROVIDING CLEAN WATER TO THE VILLAGES WITHIN THE RADIUS OF 25 KMS. IN SHIRUR TALUKA AT NOMINAL RATES. W ITH THE SUPPLY OF CLEAN WATER, THE ASSESSEE IS ALSO CREATING AWAR ENESS AMONGST THE VILLAGERS TO PROTECT THEMSELVES FROM VARIOUS DISEASES SUCH AS GASTRO ENTERITIS, CHOLERA, TYPHOID, ETC. THE CONSUMPTION OF FILTERED D RINKING WATER HAS RESULTED IN MAINTAINING SOUND HEALTH OF THE PUB LIC AT LARGE AND REDUCING THE MEDICAL EXPENSES SUBSTANTIALLY. THE ACT IVITY OF SUPPLYING WATER IS CARRIED OUT BY THE ASSESSEE WITHOUT ANY BUSINESS MOTIVE OR TO EARN PROFITS. THE LD. AR SUBMITTED THAT A PE RUSAL OF THE INCOME AND EXPENDITURE ACCOUNT OF THE EARLIER YEARS WOULD SHOW THAT THE ASSESSEE IS HAVING NEGATIVE INCOME. THE LD. AR POINTE D OUT THAT IN THE FINANCIAL YEAR ENDING ON 31-03-2012 THERE WAS SURPLUS OF ` 98,621/-, IN THE FINANCIAL YEAR ENDING ON 31-03-2013 THERE WAS DEFICIT OF ` 18,61,753/- AND IN THE FINANCIAL YEAR ENDING ON 31-03-2014 THERE WAS AGAIN DEFICIT OF ` 79,45,740/-. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE DOES NOT COME WITHIN THE FOURTH LIMB OF DEFINIT ION OF CHARITABLE PURPOSE AS DEFINED U/S. 2(15) OF THE ACT. THER EFORE, NEITHER THE REGISTRATION CAN BE CANCELLED NOR REFUSED. IN SUPPOR T OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING CASE LAWS: I. GHATKOPAR JOLLY GYMKHANA VS. DIT, 40 TAXMANN.COM 207 ( MUM- TRIB.); II. MAHATMA GANDHI CHARITABLE SOCIETY VS. CIT, 33 TAXMANN.COM 142 (COCHING-TRIB.); III. MADRAS MOTOR SPORTS CLUB VS. DIT, 30 TAXMANN.COM 134 (CHENNAI-TRIB.); 4 ITA NO. 373/PN/2014, A.Y. 2014-15 IV. KAPOORTHALA IMPROVEMENT TRUST VS. CIT, ITA NO. 732(ASR) OF 2013 FOR THE ASSESSMENT YEAR 2009-10 DECIDED ON 11-06-2015. 3.1 THE LD. AR POINTED OUT THAT IN THE OBJECT CLAUSES OF M EMORANDUM OF ASSOCIATION OF THE COMPANY, IT HAS BEEN SPECIFICALLY MENTI ONED THAT NO OBJECTS OF THE COMPANY SHALL BE CARRIED ON THE COMME RCIAL BASIS. THE LD. AR ALSO PLACED ON RECORD THE DETAILED LIST OF ENTREP RENEURS WITH LOANS AVAILED BY THEM, LIST OF VEHICLES OWNED BY THE ENTREPR ENEURS AND THE ASSESSEE ALONG WITH VEHICLE REGISTRATION NUMBERS, LICENS ES OF THE DRIVERS, ANNUAL REPORT FOR FINANCIAL YEAR 2012-13. THE LD. AR ALSO PLACED ON RECORD THE PROJECT REPORT OF JALDOOT AND T HE BROCHURE CONTAINING THE ACTIVITIES CARRIED OUT BY THE ASSESSEE. 4. ON THE OTHER HAND SHRI S.K. RASTOGI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSE E IN THE FORM PROJECT REPORT, BROCHURES, THE LIST OF ENTREPRENEURS, TH E LIST OF VEHICLES, ETC. WERE NOT AVAILABLE BEFORE THE COMMISSIONER OF INCOME T AX AT THE TIME OF PASSING OF THE IMPUGNED ORDER. ALL THESE DOCUMENT S ARE REQUIRED TO BE VERIFIED. HOWEVER, THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX IN REJECTING THE APP LICATION OF ASSESSEE FOR GRANT OF REGISTRATION U/S. 12A OF THE ACT. THE LD. DR PLAC ED RELIANCE ON THE DECISION RENDERED IN THE CASE OF INDIAN C HAMBER OF COMMERCE VS. COMMISSIONER OF INCOME TAX REPORTED AS 101 ITR 796 (SC). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE DOCUMENTS PLACED ON RECORD BY T HE LD. AR OF THE ASSESSEE AS ADDITIONAL EVIDENCE AND THE CASE LAWS ON WHICH THE 5 ITA NO. 373/PN/2014, A.Y. 2014-15 RELIANCE HAVE BEEN PLACED TO SUPPORT THE SUBMISSIONS. THE ASSESSEE IS A COMPANY REGISTERED U/S. 25 OF THE COMPANIES ACT, 1956. AS PER THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE COMPANY THE M AIN OBJECT OF THE COMPANY IS TO PROMOTE ECONOMIC, EDUCATIONAL, CULTURA L, SOCIAL, HEALTH, MEDICAL, FITNESS ACTIVITIES, EMPLOYMENT ACTIVITIES, SELF- EMPLOYMENT ACTIVITY FOR THE WELL BEING OF WOMEN AND TO RAISE CONSCIOUSNESS AMONG WOMEN WITH RESPECT TO DISEASES. A FURTHER PERUSAL OF THE MAIN OBJECTS OF THE COMPANY SHOWS THAT IT HAS BEEN CATEGORICALLY MENTIONED THAT; NO OBJECTS OF THE COMPANY SHALL BE OUT ON THE COMMERCIAL B ASIS AND SHALL NOT BE COMMENCED WITHOUT THE PERMISSION OF T HE COMPETENT AUTHORITY WHOMSOEVER. A PERUSAL OF OTHER OBJECTS INCIDENTAL OR ANCILLARY TO THE M AIN OBJECTS FURTHER SHOWS THAT THEY ARE PRIMARILY TOWARDS THE SOCIAL C AUSE. 6. THE ASSESSEE HAS FILED THE FOLLOWING DOCUMENTS AS ADDIT IONAL EVIDENCE: SR. NO. PARTICULARS 1 LIST OF INDIVIDUAL CUSTOMERS 2 LIST OF INDUSTRIAL CUSTOMERS 3 MUTUAL AGREEMENT (ENGLISH TRANSLATION) 4 DETAILED LIST OF ENTREPRENEURS WITH LOANS AVAILED BY THEM 5 LIST OF VEHICLES OWNED BY THE ENTREPRENEURS AND THE ASSESSEE AS WELL WITH VEHICLE NUMBERS 6 LICENSES OF THE DRIVERS 7 ANNUAL REPORT FOR FY 2012 - 13 8 BROCHURE NO. 1 9 BROCHURE NO. 2 10 ALBUM CONTAINING PHOTOGRAPHS OF ACTIVITIES OF INVOLVED IN JALDOOT PROJECT THE ASSESSEE HAS FILED THESE DOCUMENTS TO SUBSTANTIATE THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE NOT COMMERCIA L IN NATURE. WE 6 ITA NO. 373/PN/2014, A.Y. 2014-15 ARE OF THE CONSIDERED VIEW THAT THESE DOCUMENTS ARE NE CESSARY TO ASCERTAIN THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE. 7. IN THE LIGHT OF THE ADDITIONAL DOCUMENTS FILED BY ASSESSEE TO SHOW THAT THE ASSESSEE IS CARRYING ACTIVITIES WHICH ARE CHARITA BLE IN NATURE, WE DEEM IT APPROPRIATE TO REMIT THE FILE BACK TO THE COMM ISSIONER OF INCOME TAX FOR DECIDING THE APPLICATION OF THE ASSESSEE F OR GRANT OF REGISTRATION U/S. 12A OF THE ACT, AFRESH, AFTER CONSIDERING THE ADDITIONAL DOCUMENTS, IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE IMPUGNED ORDER IS SET ASIDE AND T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 03 RD DAY OF FEBRUARY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 03 RD FEBRUARY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT-I, PUNE 4. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 5. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE