M/s Lal Bahadur Shastri Bahuudeshya International Society, Dehradun V. CIT, Dehradun

ITA 4030/DEL/2013

• Counselvise Citation: 403020114 RSA 2013
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-03-2014
• Assessment Year: misc
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROMAL JAIN
• Assessee Lawyers: SULEKHA VERMAC I T
• Keywords: Benefit of exemption
• Section: 11; 12AA

Judgement Text

ITA NO. 4030/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `D NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI A.D. JAIN, JUDICIAL MEMBER I.T.A.NO.4030/DEL/2013 ASSESSMENT YEAR : ------ LAL BAHADUR SHASTRI BAHUUDESHYA VS COMMISSION ER OF INCOME TAX INTERNATIONAL SOCIETY, INCOME TAX OFFICE, MANDA HOUSE, RAJPUR ROAD, SUBHA SH ROAD, DEHRADUN. DEHRADUN. (PAN: AAATL4286D) (APPELLANT) (RESPONDENT ) APPELLANT BY: MS SULEKHA VERMA,C.I.T.DR RESPONDENT BY : SHRI ROMAL JAIN O R D E R PER R.S. SYAL, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 31.05.2013 PASSED BY THE COMMISSIONER OF INCOME-TAX DENYING REGISTRATION U/S 12AA(1)(B)(II) OF THE INCOME-TAX ACT, 1961 (HER EINAFTER ALSO CALLED `THE ACT). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE APPLIED FOR REGISTRATION OF THE TRUST U/S 12A(A) OF THE ACT BY MEANS OF APPLICATION WHICH WAS FILED ON 20.11.2012. THE LD. COMMISSIONE R OF INCOME-TAX REQUIRED THE ASSESSEE TO FILE CERTAIN DETAILS. THE REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE COMMISSIONER OF INCOME -TAX AND FURNISHED ITA NO. 4030/DEL/2013 2 NECESSARY DETAILS. ON PERUSAL OF SUCH MATERIAL, TH E LD. COMMISSIONER OF INCOME-TAX NOTICED THAT THE SOCIETY WAS REGISTERED SINCE 1997 AND HAS VARIOUS OBJECTIVES SUCH AS PRESERVATION OF ENVIRONM ENT, PRESERVATION OF INDIAN HILLY CULTURE ETC. IT WAS SEEN THAT THE AS SESSEE WAS PURSUING ONLY ONE OBJECT RELATING TO MEDICAL RELIEF WHICH WAS BEING U NDERTAKEN SINCE 2010 BY ORGANIZING FREE MEDICAL CAMPS. A REGISTER WAS PROD UCED AS EVIDENCE SHOWING A LIST OF 36 CAMPS ARRANGED BY THE ASSESSEE FROM 20.4.2011 TO 31.3.2012. THE LD. COMMISSIONER OF INCOME-TAX NOTI CED THAT APART FROM THE NAMES IN SUCH REGISTER, THERE WERE NO OTHER SUBSTA NTIAL PARTICULARS OF THE PERSONS WHO GOT TREATMENT THROUGH SUCH CAMPS. IT W AS ALSO SEEN THAT THE SUBSCRIPTION RECEIVED FROM THE BENEFICIARIES WAS MO RE OR LESS THE SAME AS OTHER LABORATORIES WERE CHARGING COMMERCIALLY FOR M EDICAL TREATMENT GIVEN FOR X-RAY, ULTRASOUND, BLOOD TEST, ETC. SINCE BIL LS FOR THE ACTIVITIES DONE BY THE ASSESSEE WERE MAINLY ISSUED BY DOON TRAUMA CE NTER, THE LD. COMMISSIONER OF INCOME-TAX CALLED UPON THE ASSESSEE TO EXPLAIN THE RELATIONSHIP OF DOON TRAUMA CENTER WITH DR. LUVKUSH AS THE PRESCRIBING DOCTOR. A CERTIFICATE ON BEHALF OF DOON TRAUMA CEN TER WAS FURNISHED WHICH HAS BEEN REPRODUCED IN THE IMPUGNED ORDER BY WHICH IT WAS CERTIFIED THAT DOON TRAUMA CENTER WAS PRIVILEGED TO BE ASSOCIATED WITH THE NOBLE CAUSE UNDERTAKEN BY THE ASSESSEE SOCIETY FOR PROVIDING ME DICAL RELIEF TO THE ITA NO. 4030/DEL/2013 3 DEPRIVED SECTIONS OF THE SOCIETY. THE LD. COMMISSI ONER OF INCOME-TAX, CONSIDERING THE FACTS IN ENTIRETY, DENIED REGISTRAT ION U/S 12AA BY HOLDING THAT THERE WAS NO EVIDENCE OF ORGANIZING CAMPS BY W AY OF ADVERTISEMENT, PUBLICITY OR OTHERWISE; THE REGISTERS DO NOT HAVE E VEN A SINGLE COMPLETE ADDRESS; DOCTORS CERTIFICATE PRESCRIBING MEDICINES IN BULK MADE NO SENSE SINCE THE MEDICINES WERE AVAILABLE WITHOUT PRESCRIP TION; THERE WAS NO CLEAR RELATIONSHIP BETWEEN DR. SUNANDA KALRA AND DOON TR AUMA CENTRE; DR. LAVKUSH OF DOON TRAUMA CENTRE WAS NOT ABLE TO CLARI FY AS TO HOW MANY CAMPS WERE ATTENDED BY HIM. IN THE LIGHT OF ABOVE FACTS, THE LD. COMMISSIONER OF INCOME-TAX OPINED THAT THE PRIMARY CLAIM OF THE ASSESSEE IN PROVIDING MEDICAL RELIEF WAS NOT SUBSTANTIATED. HE, THEREFORE, REFUSED TO GRANT REGISTRATION TO THE ASSESSEE SOCIETY, AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE FACT THAT THE A SSESSEE WAS CARRYING OUT CHARITABLE ACTIVITIES BY ORGANIZING MEDICAL RELIEF CAMPS FOR THE UNDERPRIVILEGED SECTIONS OF THE SOCIETY. THE REGIS TRATION CAME TO BE DENIED BY THE LD. COMMISSIONER OF INCOME-TAX BROADLY FOR THE REASONS WHICH HAVE BEEN NOTICED ABOVE. THE FIRST REASON GIVEN BY THE LD. COMMISSIONER OF INCOME-TAX IS THAT THE ASSESSEE DID NOT HAVE ANY E VIDENCE OF HOLDING CAMPS ITA NO. 4030/DEL/2013 4 BY WAY OF ADVERTISING, PUBLICITY OR OTHERWISE. WE ARE UNABLE TO FIND ANY BAR UNDER THE LAW TO ORGANIZE ANY MEDICAL RELIEF CAMP W ITHOUT ISSUE OF ADVERTISEMENT OR PUBLICITY. THE ESSENCE OF THE MA TTER IS THAT CHARITABLE ACTIVITIES SHOULD BE PERSUED AND THE MANNER OF CON DUCTING SUCH ACTIVITIES CANNOT BE PRESCRIBED BY THE REVENUE. THE SECOND REA SON GIVEN BY THE LD. COMMISSIONER OF INCOME-TAX FOR DENYING REGISTRATION IS THAT THE REGISTER DID NOT HAVE A SINGLE COMPLETE ADDRESS WHICH COULD HELP HIM TO VERIFY THE GENUINENESS OF THE RELIEF CAMPS. ON THIS SCORE, WE AGAIN FIND THAT THE ASSESSEE DID FILE A REGISTER BEFORE THE COMMISSION ER OF INCOME-TAX WHICH HAD THE NECESSARY DETAILS UNDER THREE BROAD HEADS V IZ. TREATMENT, ATTENDANTS NAME AND SUBSCRIPTION. WHEN SUCH DETAI LS WERE AVAILABLE, THE LD. COMMISSIONER OF INCOME-TAX OUGHT NOT TO HAVE DE NIED REGISTRATION FOR LACK OF COMPLETE ADDRESS. ORDINARILY, WHEN CAMPS A RE ORGANIZED IN FAR FLUNG PLACES, SUCH AS, VILLAGES ETC., THE NAME OF THE V ILLAGE ITSELF REPRESENTS THE ADDRESS OF THE PERSONS GETTING TREATMENT. THE NEXT REASON ADDUCED BY THE LD. COMMISSIONER OF INCOME-TAX FOR NOT GRANTING REGISTR ATION IS THAT THE DOCTORS CERTIFICATE PRESCRIBING MEDICINES IN BULK MADE NO S ENSE SINCE THE MEDICINES WERE AVAILABLE WITHOUT PRESCRIPTION FOR COMMON DISE ASES. WE FAIL TO COMPREHEND AS TO HOW THIS REASON CAN COME IN THE W AY OF REFUSING REGISTRATION WHEN THE ASSESSEE IS OTHERWISE ENGAGED IN CARRYING ON CHARITABLE ITA NO. 4030/DEL/2013 5 ACTIVITIES. THE OTHER POINT, BEING THAT DR. SUNAN DA KALRA WAS ATTENDING THE CAMPS ON HONORARY BASIS AND ALL THE TEST REPORTS FI LED BEFORE HIM STATED SO, DOES NOT BRING THE CASE OF LD. COMMISSIONER OF INCO ME-TAX ANY FURTHER JUSTIFYING THE REGISTRATION. IN SO FAR AS THE CON NECTION BETWEEN DOON TRAUMA CENTER AND DR. LUVKUSH IS CONCERNED, IT IS S EEN THAT DR. LUVKUSH GAVE A CERTIFICATE, WHICH WAS DULY PRODUCED BEFORE THE LD. COMMISSIONER OF INCOME-TAX AS WELL INDICATING HIS PRIVILEGE OF BEI NG ASSOCIATED WITH THE ASSESSEE SOCIETY IMPARTING MEDICAL RELIEF TO THE UN DERPRIVILEGED SECTIONS OF THE SOCIETY. IN VIEW OF THE FOREGOING REASONS, WE ARE SATISFIED THAT THE LD. COMMISSIONER OF INCOME-TAX DID NOT HAVE ANY JUSTIFI ABLE REASON TO REFUSE REGISTRATION TO THE ASSESSEE SOCIETY WHICH WAS OTHE RWISE ENGAGED IN DOING CHARITABLE ACTIVITIES. 4. THE LD. DR SUBMITTED THAT SECTION 12AA E MPOWERS THE CIT TO CONDUCT INQUIRIES IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST AND IN THE PRESENT CASE, TH E LD. CIT WAS NOT BEYOND HIS POWERS TO CONDUCT SUCH INQUIRIES ABOUT THE ACTIVITI ES OF THE TRUST, WHICH DIVULGED THAT THE ASSESSEE WAS NOT ENGAGED IN CHARI TABLE ACTIVITIES. WE FULLY ENDORSE THE POINT ARGUED BY THE LD. DR. HOWEVER, IT IS RELEVANT TO NOTE THAT SUCH POWER HAS BEEN GIVEN TO HIM IN THE BACKDROP OF HIS JURISDICTION TO GRANT OR REFUSE REGISTRATION, WHICH STAGE CAN QUITE POSSI BLY BE BEFORE THE ESPOUSING ITA NO. 4030/DEL/2013 6 OF THE ACTUAL ACTIVITIES. LAW PERMITS AN ASSESSEE T O SEEK REGISTRATION BEFORE THE ACTUAL TAKING UP OF CHARITABLE AND RELIGIOUS AC TIVITIES. THE INQUIRY CONTEMPLATED AT THIS JUNCTURE IS BASICALLY `OBJECTS FOCUSED PRIMARILY MEANT FOR SATISFYING HIMSELF ABOUT THE OBJECTIVITY OF THE CHARITABLE OR RELIGIOUS OBJECTS OF THE TRUST OR INSTITUTION AND IN ORDER TO REACH SUCH SATISFACTION ALSO CONDUCT INQUIRIES WHICH ARE `ACTIVITIES FOCUSED, IF THE ACTIVITIES HAVE BEEN EMBARKED UPON. THE PRINCIPAL FOCUS IS ON THE EXAMI NATION OF OBJECTS OF THE TRUST OR INSTITUTION AND `ACTIVITIES FOCUSED INQUI RY IS ONLY SUBSIDIARY OR SUPPLEMENTARY TO THE `OBJECTS FOCUSED INQUIRIES. THAT APART, THERE ARE SUFFICIENT SAFEGUARDS UNDER THE ACT TO TURN HEAT ON THE ASSESSEE AND PROTECT THE EXPLOITATION OF THE BENEFIT OF GRANT OF REGISTR ATION, IF THE ASSESSEE FAILS TO COMPLY WITH THE NECESSARY REQUIREMENTS AFTER SECUR ING SUCH REGISTRATION. PROVISIONS OF SECTION 11 READ WITH SECTION 13 ARE T HERE TO TAKE AWAY THE BENEFIT OF EXEMPTION OTHERWISE AVAILABLE U/S 11 PUR SUANT TO GRANT OF REGISTRATION U/S 12AA. EVEN SUB-SECTION (3) OF SE CTION 12AA IS IN THE NATURE OF ANOTHER PROTECTION, WHICH UNEQUIVOCALLY E MPOWERS THE CIT HIMSELF TO CANCEL THE REGISTRATION OF TRUST OR INS TITUTION AFTER HIS GRANTING THE SAME UNDER SUB-SECTION (1), IF HE IS SATISFIED TH AT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CAR RIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CAS E MAY BE. THIS POWER GIVEN ITA NO. 4030/DEL/2013 7 U/S 12AA(3) IS WIDE ENOUGH TO HAVE A CHECK ON THE S OCIETIES WHICH ARE OTHERWISE REGISTERED AS CHARITABLE BUT NOT PURSUIN G SUCH ACTIVITIES AS PER LAW. IT THUS FOLLOWS THAT THE FOCUS OF INVESTIGATIO N AT THE STAGE OF GRANT OF REGISTRATION IS CHIEFLY ON THE OBJECTS OF TRUST OR INSTITUTION. 5. ADVERTING TO THE FACTS OF THE INSTANT CA SE, WE FIND THAT THERE IS NO DOUBT ABOUT THE CHARITABLE OBJECTS OF THE ASSESSEE. NO `OBJECTS FOCUSED INVESTIGATION BY THE LD. CIT YIELDED ANY RESULTS JE OPARDIZING THE CHARITABLE CHARACTER OF THE ASSESSEE. EVEN THE LD. CIT HAS NO T MADE OUT A CASE ON THIS LINE. THE `ACTIVITIES FOCUSED INQUIRIES CONDUCTED BY THE LD. CIT DO NOT IN ANY MANNER WHATSOEVER THWART THE CHARITABLE OBJECTS OF THE ASSESSEE. THIS LEADS US TO IRRESISTIBLE CONCLUSION THAT THE REFUSA L TO THE GRANT OF REGISTRATION BY THE LD. CIT LED TO THE MISCARRIAGE OF JUSTICE. W E, THEREFORE, OVERTURN THE IMPUGNED ORDER AND DIRECT THE GRANTING OF REGISTRAT ION CONTEMPLATED U/S 12AA(1)(B)(I). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (A.D. JAIN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 21ST MARCH 2014 GS ITA NO. 4030/DEL/2013 8 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR