Pandit Pyare Lal Sharma Memorial Trust Society, Meerut V. CIT, Meerut

ITA 4092/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4113 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-05-2010
• Assessment Year: misc
• Appeal Filed On: 09-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H G MALIK
• Keywords: Charitable institution; Opportunity of being heard
• Section: 80G; 11

Judgement Text

ITA NO. 4092/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4092/DEL/2009 PANDIT PYARE LAL SHARMA MEMORIAL VS. COM MISSIONER OF INCOME TAX, TRUST SOCIETY, AAYAKAR BHAVAN, C/O M/S MALIK & CO., BHAINSALI GROUND, 305/7, THAPAR NAGAR, MEERUT MEERUT [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. H.G. MALIK, ADV. DEPARTMENT BY : SH. H.K. LAL, SR. DR. PER SHAMIM YAHYA: AM THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX, MEERUT DATED 25.9.2009 REJECTING THE APPLICATION FOR GRANT OF APPROVAL U/S 80G OF THE IT ACT. 2. IN THIS CASE AN APPLICATION WAS FILED FOR RENEWA L OF REGISTRATION U/S 80G ON 31.3.2009. CONSIDERING THE ASSESSEES SUBMISSION A ND APPLICATION IN THIS REGARD LD. COMMISSIONER OF INCOME TAX REFERRED TO THE PROV ISION OF SECTION 2(15) OF THE INCOME TAX ACT. HE HELD THAT THE SECTION CLEARLY ST IPULATES THAT ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE AND BUSINESS SHALL NOT BE A CHARITABLE PURPOSE WHEREAS THE TRUST IS ADMITTEDLY ENGAGED IN THE TRAD E, COMMERCE AND BUSINESS, AS IT IS RECEIVING RENT OUT OF PROPERTY LET OUT TO ANO THER TRUST AND HAS LEASED OUT ITA NO. 4092/DEL/2009 2 ANOTHER PROPERTY FOR HOLDING MARRIAGES AND OTHER FU NCTIONS OF COMMERCIAL TERMS FOR WHICH THE REPAIRS AND MAINTENANCE CHARGES HAVE BEEN RECEIVED. LD. COMMISSIONER OF INCOME TAX PROCEEDED TO HOLD THAT T HE IRRESPECTIVE OF THE APPLICATION OF INCOME FOR ANY CHARITABLE PURPOSE , IF AT ALL, THE TRUST IS NOT ENGAGED FOR ANY IN ANY CHARITABLE PURPOSE BUT ENGA GED IN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. ACCORDINGLY THE COMMI SSIONER OF INCOME TAX HELD THAT IT WAS NOT POSSIBLE TO RENEW THE APPROVAL U/S 80G W.E.F. 1.4.2009. 3. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 4. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE OBJECTS AND ACTIVIT IES OF THE TRUST WERE SUBJECT MATTER OF CONSIDERATION BY THIS TRIBUNAL IN ITA NOS . 7562, 3816 AND ORS. IN THE SAID DECISION VIDE ORDER DATED 24.3.2000, THE TRIBUNAL H AS ELABORATELY CONSIDERED THE VARIOUS ASPECTS OF ASSESSEES ACTIVITIES AND HAS CO NCLUDED AS UNDER:- 5.13 IN THE PRESENT CASE, WE FIND THAT THE TRUST W AS CONSTITUTED WITH THE OBJECT OF PERPETUATING THE MEMORIAL OF PT. PEARE LAL SHARMA. THE OBJECT WAS TO BE ATTAINED BY PROVIDING A HALL. A LIBRARY, A DISPENSARY, PUBLIC WORKERS ROOM AND SUCH OTHER AMENITIES AS MAY BE DESIRABLE AND FEASIBLE. TO ATT AIN THAT OBJECTIVE THE BUILDING WAS CONSTRUCTED. THE MERE FA CT THAT PART OF THAT WAS LET OUT TO MOOL CHAND SHARBATI DEVI HOS PITAL TRUST WILL NOT CHANGE THE CHARACTER OF THE TRUST. 5.14 WE HAVE TAKEN INTO CONSIDERATION THE ENTIRE CO NSPECTUS OF FACTS. IN OUR OPINION, THE ASSESSEE CAN BE CONSTRU ED TO BE A ITA NO. 4092/DEL/2009 3 PUBLIC CHARITABLE TRUST. AS SUCH, IT IS ENTITLED T O GET THE BENEFIT OF SECTION 11 SUBJECT TO THE FULFILMENT OF OTHER CON DITIONS CONTAINED IN THE SECTION. ACCORDINGLY, WE UPHOLD T HE IMPUGNED ORDER. 5. IN THE LIGHT OF AFORESAID LD. COUNSEL OF THE AS SESSEE CLAIMED THAT COMMISSIONER OF INCOME TAX HAS TOTALLY ERRED IN RE JECTING THE GRANT OF REGISTRATION U/S 80G TO THE TRUST. HE CLAIMED THA T THE SAID REGISTRATION WAS BEING GRANTED TO THE TRUST SINCE 1983 AND THE TRIBUNAL HA D AFTER DUE ELABORATION FOUND THE ASSESSEES ACTIVITIES TO BE CHARITABLE. HE CL AIMED THAT THE FUNCTION OF ORGANIZING MARRIAGE ETC. RENDERED BY THE COMMISSIO NER OF INCOME TAX WAS MEANT FOR ENABLING THE PERSONS OF WEAKER-SECTIONS TO ORGANIZE THEIR MARRIAGES IN THE TRUST PREMISES AND THE SAME WAS VERY MUCH FOR T HE CHARITABLE TRUST. 5.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND RELIED UPON THE ORDER OF THE COMMISSIONER OF INCOME TAX. 6. WE HAVE CAREFULLY CONSIDERED THE ISSUE. WE FIND THAT THERE IS NO MENTION IN THE COMMISSIONER OF INCOME TAXS ORDER AS TO WHETHE R SHE HAS CONSIDERED THE TRIBUNALS ORDER AS REFERRED BY THE LD. COUNSEL OF THE ASSESSEE AS ABOVE IN ASSESSEE OWN CASE. IN THE SAID ORDER THE TRIBUNA L HAS CLEARLY HELD THAT THE ASSESSEES ACTIVITIES WERE CHARITABLE IN NATURE. I T WAS INCUMBENT UPON THE LD. COMMISSIONER OF INCOME TAX TO CONSIDER TH E ISSUE AT HAND IN LIGHT OF THE ITA NO. 4092/DEL/2009 4 ABOVE SAID TRIBUNAL DECISION IN ASSESSEE OWN CASE. THERE IS NO DISCUSSION AS TO HOW THE PRESENT FACTS ARE DIFFERENT FROM THE ONE AD JUDICATED BY THE TRIBUNAL. THIS IS VERY MUCH WARRANTED BY THE CANONS OF JUDICIA L PROPRIETY AND STARE DECISES. ACCORDINGLY IN THE INTEREST OF JUSTICE WE REMIT THE ISSUE TO THE FILES OF THE COMMISSIONER OF INCOME TAX TO CONSIDER THE ISSUE AF RESH AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/05/2010 UP ON CONCLUSION OF HEARING. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 03/05/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES