Maniben Popatlal Damji Doshi Parivar Charitable Trust, RAJKOT-GUJARAT V. The Commr. of Income Tax - 1, RAJKOT-GUJARAT

ITA 401/RJT/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85420 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2014
• Assessment Year: misc
• Appeal Filed On: 19-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M L MEENA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT , !' # $ , # % BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER &./ I.T.A. NO.401/RJT/2014 ( / ASSESSMENT YEAR : - ) MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE TRUST C/O. KALPESH S.DOSHI & CO., CAS, 411, COSMO COMPLEX MAHILA COLLEGE CIRCLE RAJKOT 360 001 / VS. THE COMMISSIONER OF INCOME TAX-1 AAYAKAR BHAVAN 2 ND FLOOR, RACE COURSE RING ROAD, RAJKOT #) !' & ./ * & ./ PAN/GIR NO. : AADTM 4614 R ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY : SHRI KALPESH DOSHI, C.A. ,-)+ / . ! / RESPONDENT BY : SHRI M.L. MEENA, CIT-D.R. 0 / ' / DATE OF HEARING 02/12/2014 12 / ' / DATE OF PRONOUNCEMENT 04/12/2014 !3 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX-1, RAJKOT (CIT IN SHORT) DATED 06.05.2014. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT, THE LEARNED COMMISSIONER OF I.TAX-I, RAJKOT HAS ERRED ON FACTS AND IN LAW IN REJECTING THE REGISTRATION U/S. 12A(1) OF THE I.T. ACT. ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 2 - 2. THAT, THE FINDINGS OF THE LEARNED COMMISSIONER OF I .TAX-I, RAJKOT ARE NOT JUSTIFIED AND REQUIRED TO BE DELETED. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE H AD FILED AN APPLICATION FOR REGISTRATION U/S.12A OF THE INCOME TAX ACT,1961 (HE REINAFTER REFERRED TO AS THE ACT). THE APPLICATION WAS REJECTED BY THE CIT. ASSESSEE FEELING AGGRIEVED BY THE ORDER OF THE CIT, HAD PREFERRED AN APPEAL BEFORE THE ITAT AND THE TRIBUNAL VIDE ORDER DATED 10/02/2014 R ESTORED THE APPLICATION TO THE FILE OF CIT FOR RECONSIDERATION. THE CIT ONCE AGAIN REJECTED THE APPLICATION VIDE ORDER DATED 06/05/20 14. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ORDER OF THE LD.CIT IS NOT JUSTIFIED IN REJECTING THE APPLICATIO N AND PRAYED THAT THE LD.CIT BE DIRECTED TO REGISTER THE TRUST U/S.12A OF THE ACT. HE SUBMITTED THAT THE LD.CIT REJECTED THE APPLICATION ON THE WHI MS & FANCIES AND WITHOUT CONSIDERING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. 4. ON THE CONTRARY, LD.CIT-DR SUPPORTED THE ORDER O F THE LD.CIT AND SUBMITTED THAT THE ORDER OF THE LD.CIT IS JUSTIFIED IN REJECTING THE APPLICATION. HE SUBMITTED THAT THE ASSESSEE HAS GI VEN DONATION TO THE OTHER TRUST AND, THEREFORE, HE HAS NOT APPLIED THE FUNDS FOR THE CHARITABLE PURPOSES. HE SUBMITTED THAT THE LD.CIT HAS RIGHTLY RELIED THE EXPLANATION TO THE SECTION 11(2) OF THE ACT. 4.1. IN THE REJOINDER, THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT A CONJOINT READING OF SECTION 11(1) & 11(2) WOULD MAK E IT CLEAR THAT THE ASSESSEE HAS APPLIED FUNDS FOR THE CHARITABLE PURPO SES. ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 3 - 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF T HE LD.CIT. WE FIND THAT THE LD.CIT IN PARAGRAPH NOS.3, 4, 5 & 6 IN HIS ORDER HAS DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 3. IN RESPECT OF ACTIVITIES CARRIED OUT BY THE TR UST, IT WAS SUBMITTED THAT IN F.Y.2013-14, THE TRUST HAS SHOWN TOTAL PAYMENT OF RS.2,200/- TOWARDS ITS OBJECTS. ON GOING THROUG H THE RELEVANT VOUCHERS, IT IS FOUND THAT ALL THE PAYMENTS WERE MA DE TO OTHER TRUSTS. FURTHER PERUSAL OF THE BOOKS OF ACCOUNTS F OR F.Y. 2014-15 ALSO SHOWS THAT ALL PAYMENTS CLAIMED TO HAVE BEEN M ADE TOWARDS ITS OBJECTS, WERE MADE TO OTHER TRUSTS/INSTITUTES. ON BEING ASKED, IT COULD NOT BE ESTABLISHED THAT THE OTHER TRUSTS WERE EVEN REGISTERED U/S.12A OF THE ACT. IN VIEW OF THE ABOVE FACTS, IT IS CLEAR THAT ALL PAYMENT CLAIMED TO BE MADE TOWARDS OBJECTS OF THE T RUST WERE MADE TO OTHER TRUST. 4. APART FROM THIS, THE TRUST DID NOT CARRY OUT A NY ACTIVITY TILL DATE. THE TRUST HAS BEEN CREATED TO CARRY A NUMBER OF ACT IVITIES AS GIVEN IN THE TRUST DEED, BUT INSTEAD OF MAKING EXPENDITUR E TOWARDS ITS OBJECTS, IT GAVE DONATIONS OUT OF THE TRUST FUND TO ANOTHER TRUSTS/INSTITUTES. GIVING A DONATION TO ANOTHER TR USTS/INSTITUTE OUT OF THE TRUST FUND CANNOT BE TERMED AS AN ACTIVITY T OWARDS ITS OBJECTS. 5. THE ABOVE INFERENCE IS SUPPORTED BY EXPLANATION APPENDED BELOW SECTION 11(2) OF THE ACT, WHEREIN IT IS PROVI DED THAT ANY AMOUNT PAID TO ANY TRUST, INSTITUTIONS, FUND, EDUCA TION INSTITUTION OR HOSPITAL, ETC. SHALL NOT BE TREATED A APPLICATION O F INCOME FOR CHARITABLE PURPOSE. WHEN THE LEGISLATURE CLEARLY P ROVIDES THAT IN CERTAIN CIRCUMSTANCES, PAYMENTS TO OTHER ORGANIZATI ON SHALL NOT BE APPLICATION OF INCOME FOR CHARITABLE PURPOSE, THE O NLY ACTIVITY OF GIVING DONATION TO ANOTHER TRUST CANNOT BE CONSIDER ED A GENUINE ACTIVITY TOWARDS ITS OBJECTS. BESIDES THE IMPROPER BOOKS OF ACCOUNTS ALSO SHOWS THAT THE ACTIVITIES OF THE TRUS T ARE NOT GENUINE. ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 4 - 6. AS PER THE PROVISIONS OF THE I.T.ACT, 1961, THE COMMISSIONER SHALL SATISFY HIMSELF WITH REGARD TO : I) OBJECTS OF THE TRUST/INSTITUTION AND II) GENUINENESS OF ITS ACTIVITIES IN VIEW OF THE ABOVE DISCUSSED FACTS, IT TRANSP IRES THAT THE ACTIVITIES O THE TRUST WERE NOT FOUND TO BE GENUINE AND OF CHARITABLE NATURE. THUS, THE TRUST IS NOT FULFILLING THE COND ITIONS LAID DOWN FOR REGISTRATION U/S.12AA OF THE I.T.ACT, 1961 AND RULE 17A OF THE I.T.RULES, 1962. I, THEREFORE, REJECT THE ASSESSEE S APPLICATION FOR REGISTRATION U/S.12A OF THE IT ACT. 5.1. BEFORE ADMITTING TO THE RIVAL CONTENTIONS OF T HE PARTIES, IT WOULD BE APPROPRIATE TO REPRODUCE HEREINBELOW THE RELEVANT P ROVISIONS OF SECTION 12AA OF THE ACT. PROCEDURE FOR REGISTRATION. (1) THE [*****] COMMISSIONER, ON RECEIPT OF AN APPLIC ATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB- SECTION (1)] OF SECTION 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE T RUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT T HE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIR IES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF TH E TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE T RUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICAN T : PROVIDED THAT NO ORDER UNDER SUB- CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEA RD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF COM MISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) B EF ORE THE 1ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE COM MISSIONER AND THE ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 5 - COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB- SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDE R CLAUSE (B) OF SUB- SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB- SECTION (1)] OF SECTION 12A.] [(3) WHERE A TRUST OR AN INST ITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB- SECTION (1) [OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A {AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (N O. 2) ACT, 1996 (33 OF 2009)}] AND SUBSEQUENTLY THE COMMISSIONER IS SAT ISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT B EING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION , AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGIS TRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB- SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD.] 5.2. AS PER THE ABOVE PROVISION, BEFORE GRANTING TH E REGISTRATION, THE CIT HAS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST AND IN ORDER TO DO SO, HE MAY MAKE ENQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF. WE FIND THAT AS PER TRUST-DEED, THE ASSESSEE IS HAVING THE FOLLOWING OBJECTS:- 1.TO UNDERTAKE MEDICAL AND EDUCATIONAL ACTIVITIES LIKE ESTABLISHING AND RUNNING PLAY-HOUSE, SCHOOL, COLLEG E, HOSTELS. ESTABLISHING AND RUNNING OLD-AGE HOMES, CENTERS FOR ADULT EDUCATION, ANGADWADIS, LIBRARIES FOR IMPROVING THE STANDARD OF EDUCATION. TO START UNITS FOR IMPARTING TECHNICAL EDUCATION. TO ESTABLISH UNITS FOR IMPARTING COMPUTER EDUCATION. TO UNDERTAKE ALL THE ACTIVITIES FOR THE DEVELOPMENT OF EDUCATION . TO GIVE SCHOLARSHIPS, STIPENDS AND PRIZES TO THE STUDENTS T O ENCOURAGE THEM. TO UNDERTAKE ALL THE ACTIVITIES THAT MAY BE HELPFUL IN ALL THE ABOVE MENTIONED ACTIVITIES. 2. TO PROVIDE MEDICINES ON SUBSIDIZED RATE OR FREE OF COST TO THE NEEDY PEOPLE. TO ESTABLISH AND RUN UNITS LIKE HOSP ITALS, DISPENSARIES, CLINICS, ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 6 - 3. TO UNDERTAKE REHABILITATION ACTIVITIES AT THE TIME OF NATURAL AND MAN-MADE CALAMITIES. TO PROVIDE HELP TO PEOPLE AND ANIMALS, AND TO HELP THE OTHER ORGANIZATIONS WORKING IN THIS FIELD. 4. TO UNDERTAKE ACTIVITIES FOR THE PRESERVATION OF IND IAN CULTURE AND WORK FOR THE REMOVAL OF BLIND BELIEFS, ORTHODOX TRADITIONS, CUSTOMS AND ADDICTIONS. TO STRIVE FOR THE PRIDE OF INDIAN CULTURE. TO CELEBRATE RELIGIOUS FESTIVALS. 5. TO UNDERTAKE AND HELP THE ACTIVITIES IN THE FIELD O F COMPASSION FOR ALL THE FORMS OF LIFE (JIV DAYA). TO ESTABLISH , RUN AND MAINTAIN CATTLE-CAMPS, DHOR-WADA, PANJRA POL, ETC. TO PROVIDE FOOD AND OTHER NECESSARY HELP TO THE MISERA BLE AND MUTE ANIMALS. TO UNDERTAKE ACTIVITIES IN THE FIELD OF WELFARE OF PEOPLE AND WELFARE OF ANIMALS AND PROVIDE HELP TO T HEM AT THE TIME OF NATURAL OR MANMADE CALAMITIES LIKE FAMINE, ETC. 6. TO PROVIDE GUIDANCE AND KNOWLEDGE TO PEOPLE TO PROT ECT THEMSELVES AGAINST VARIOUS DISEASES. TO ORGANIZE C AMPS FOR THIS. TO SPREAD AWARENESS AMONG PEOPLE REGARDING A DDITIONS AND CONSEQUENT DISEASES THERETO. TO START CAMPAIGN S FOR THE ADDITIONS REMOVAL. TO PROVIDE HELP IN ALL THESE AC TIVITIES. 7. TO TRY TO UNDERTAKE THE ACTIVITIES TO PROVIDE NEEDY PEOPLE WITH FOOD, CLOTHES AND DWELLING PLACE AND OTHER BASIC AM ENITIES. TO UNDERTAKE THE ACTIVITIES TO GENERATE EMPLOYMENT OPP ORTUNITIES FOR THE PEOPLE. TO PROVIDE GUIDANCE AND HELP IN TH ESE ACTIVITIES. 8. TO UNDERTAKE ALL THE ACTIVITIES THAT MAY BE HELPFUL TO WOMEN FOR THEIR SOCIAL, MORAL AND SPIRITUAL DEVELOPMENT FOR T HEIR ECONOMIC SELF-RELIANCE. TO ESTABLISH AND RUN THE U NITS FOR THE SAME. TO ESTABLISH AND RUN UNITS FOR THE ELEVATION OF STANDARD OF EDUCATION AMONG WOMEN. TO HELP ALL THE ACTIVITI ES MENTIONED ABOVE. 9. TO UNDERTAKE ACTIVITIES FOR THE PROTECTION OF ENVIR ONMENT, AFFORESTATION AND CONSERVATION OF FOREST. TO SAVE THE ENVIRONMENT FROM GETTING POLLUTED. TO UNDERTAKE AL L THE ACTIVITIES LIKE PLANTATION. 10. TO UNDERTAKE ACTIVITIES FOR RURAL DEVELOPMENT TO PR OVIDE HELP IN THESE ACTIVITIES. 11. TO ESTABLISH UNITS LIKE OLD-AGE HOMES FOR THE PHYSI CALLY WEAK AND FEEBLE OLD PEOPLE. TO ESTABLISH AND RUN UNITS LIKE FOOD COURT (ANN KSHETRA), AND PROVIDE HELP IN THESE ACTI VITIES. ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 7 - 12. TO UNDERTAKE SPORTS ACTIVITIES TO HELP PEOPLE TO MA INTAIN THEIR HEALTH. TO ESTABLISH NECESSARY UNITS IN THIS REGAR D. TO PROVIDE GUIDANCE TO PEOPLE ABOUT VARIOUS DISEASES, AND TO O RGANIZE NECESSARY CAMPS IN THIS REGARD. TO PROVIDE HELP TO ALL THE ACTIVITIES MENTIONED ABOVE. 5.3. THERE IS NO DISPUTE WITH REGARD TO NATURE OF T HE OBJECTS OF THE ASSESSEE-TRUST BEING CHARITABLE. HOWEVER, THE LD.C IT HAS GIVEN FINDING ON FACT THAT DURING THE F.Y. 2014-15, THE ASSESSEE HAS CARRIED OUT A SINGLE ACTIVITY, I.E. IT HAS GIVEN A SUM OF RS.2,501/- TO OTHER INSTITUTE. BEFORE THIS TRIBUNAL AS WELL, THE ASSESSEE HAS FAILED TO D EMONSTRATE ABOUT THE ACTIVITIES CARRIED OUT DURING THE YEAR. IT WAS INCU MBENT UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE ACTIVITIES, MERELY HAVING ITS OBJECTS AS CHARITABLE WOULD NOT BE SUFFICIENT TO ENTITLE THE A SSESSEE FOR REGISTRATION U/S.12A OF THE ACT. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT, SAME IS HEREBY UPHELD . THUS, GROUND RAISED IN THE ASSESSEES APPEAL IS REJECTED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 4TH DAY OF DECEMBER, 2014 AT RAJKOT. SD/- SD/- ( ) ( $ ) !' # # ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT; DATED 04/ 12 /2014 .. , .../ T.C. NAIR, SR. PS ITA NO.401/RJT/ 2014 MANIBEN POPATLAL DAMJI DOSHI PARIVAR CHARITABLE T RUST VS.CIT - 8 - / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. &6& 7 / CONCERNED CIT, RAJKOT-1 4. 7 ( ) / THE CIT(A)-CONCERNED 5. 9$ : , , , /DR,ITAT, RAJKOT 6. : EF G 0 / GUARD FILE. / BY ORDER, - 9 , //TRUE COPY// !/ '# $% ( DY./ASSTT.REGISTRAR) # %&# ' , / ITAT, RAJKOT 1. DATE OF DICTATION .. 2.12.2014 (DICTATION-PAD 6- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2.12.2014 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BA CK TO THE SR.P.S./P.S.4.12.14 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4.12.14 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER