Appeal details
Counselvise Citation
[2016] 130 COUNSELVISE.COM (IT) 9721 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-11-2016
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
02-12-2015
Assessment Year
misc
Appeal Filed On
12-11-2012
Judgement Text
ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.419/VIZAG/2012 ( / ASSESSMENT YEAR: NA) THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION, ELURU VS. CIT, RAJAHMUNDRY [PAN: AAATT4177B ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI P. HARIPRASADA RAO, DR / DATE OF HEARING : 15.09.2016 / DATE OF PRONOUNCEMENT : 30.11.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE CIT, RAJAHMUNDRY DATED 26.9.2012. ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE ASSOCIATION CARRYING ITS ACTIVITIES IN THE NAME AND STYLE OF THE ELURU JEWE LLERS AND BULLION MERCHANTS ASSOCIATION, ELURU, WEST GODAVARI DIST. THE ASSESSEES ASSOCIATION WAS REGISTERED UNDER SOCIETIES REGISTRA TION ACT ON 17.2.1947 WITH THE FOLLOWING OBJECTS: 1. PROTECTING THE BUSINESS INTERESTS OF JEWELLERS AND BULLION MERCHANTS IN ELURU AND PROVIDING THEIR BUSINESS AMENITIES. 2. PROPAGATION OF CO-OPERATION AND UNITY AMONG MEMBERS AND EXPLOITING ALL THE POSSIBILITIES FOR THE CO-OPERATION AMONG MEMBERS AN D FOR THE BENEFIT OF THE ASSOCIATION. 3. PROPAGATION OF BUSINESS UNANIMITY AMONG TRADERS AND STRENGTHENING THE ASSOCIATION. 4. PROVIDING ARBITRATION SETTLEMENTS IN BUSINESS AMONG MEMBERS OR THOSE CONNECTED TO MEMBERS THEREBY AVOIDING LOSSES IN A L ITIGATION FREE ENVIRONMENT. 5. DISSUADING MEMBERS FROM ANY INVOLVEMENTS WITH THOSE WHO WORK AGAINST THE OBJECTS OF THE ASSOCIATION. 6. REPRESENGING, THE MEMBERS IN VARIOUS FORUMS AND INT ERACTING WITH VARIOUS GOVERNMENTAL AND NON-GOVERNMENTAL ORGANIZATIONS, MA NUFACTURERS, COMMISSION AGENTS, BROKERS, REGISTERED ASSOCIATIONS BOTH LOCAL AND INTERNATIONAL, IN THE MATTER OF THEIR BUSINESS DIFF ICULTIES AND CONSTRAINS, THEREBY PROCURING CERTAIN CONCESSIONS, MONOPOLIES, BUSINESS UNDERSTANDINGS ETC., FOR THE BENEFIT OF TRADE AND MEMBERS. 7. PROVIDING BUSINESS LITERATURE TO THE MEMBERS AT AFF ORDABLE PRICES BY PROVIDING LIBRARIES, PROCURING DIFFERENT BUSINESS MAGAZINES, GAZETTES, ETC. AND TRANSLATING THEM INTO TELUGU LANGUAGE FOR EDUCATION OF MEMBERS. 8. ARRANGING FUNDS FOR CONDUCTING RELIGIOUS/CHARITABLE ACTIVITIES IN SOME TEMPLES PRE-DECIDED BY THE ASSOCIATION. 9. COLLECTING DONATIONS FOR THE BENEFIT OF THEPOOR AND UNDERPRIVILEGED; PROVIDING FINANCIAL HELP TO POOR STUDENTS FOR THEIR EDUCATION ; ARRANGING FOR THEIR TRAINING IN GOLDSMITHY AND OTHER ALLIED TECHNICALLY PROFESSI ONAL COURSES; CONDUCTING POOR FEEDING ACTIVITIES. ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 3 10. OBTAINING MEMBERSHIP IN OTHER SIMILAR OBJECTS ORIEN TED ASSOCIATIONS; WORKING IN ASSOCIATION WITH SUCH ORGANIZATIONS AND PROVIDING MEMBERSHIP TO SUCH ORGANIZATIONS IN THIS SOCIETY. 11. PROCURE FIXED ASSETS, BUILDINGS, FURNITURE, OTHER M OVABLE AND IMMOVABLES FOR THE USE OF THE ASSOCIATION BY COLLEC TING DONATIONS AND BY HIRING THOSE ASSETS; PROVIDING DHARMAKATA (WEIGH BALANCE) THE COLLECTIONS FROM WHICH ARE TO BE USED FOR THE BENEFIT OF THE AS SOCIATION. 12. ALLOWING THE ASSOCIATION PROPERTIES TO BE USED BY O THERS ON HIRE BASIS AND UTILIZE THE COLLECTIONS FOR THE BENEFIT AND IMP ROVEMENT OF THE ASSOCIATION ACTIVITIES. 3. THE ASSESSEE HAS FILED AN APPLICATION FOR REGIST RATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'TH E ACT') DATED 26.12.1998 BEFORE THE CIT, VISAKHAPATNAM ON 23.8.19 99 AND THE SAME WAS REJECTED BY THE COMMISSIONER DATED 28.2.2000. AGAINST THE ORDER PASSED BY THE COMMISSIONER, THE ASSESSEE HAS PREFER RED AN APPEAL BEFORE THE ITAT, VISAKHAPATNAM AND SUBMITTED THAT A SSESSEE IS CARRYING THE CHARITABLE ACTIVITIES BUT THE CIT WITHOUT CONSI DERING THE SAME REJECTED GRANT OF REGISTRATION U/S 12AA OF THE ACT. THE HONBLE ITAT BY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE REMITTE D MATTER BACK TO THE FILE OF THE LD. COMMISSIONER TO EXAMINE GRANT OF RE GISTRATION U/S 12AA OF THE ACT, AFRESH. 4. IN PURSUANCE TO THE DIRECTIONS GIVEN BY THE ITAT , THE LD. COMMISSIONER PASSED AN ORDER DATED 26.9.2012 AND OB SERVED THAT THE ASSESSEE SOCIETY IS FOR THE WELFARE OF THE JEWELERS AND THE BULLION MERCHANTS OF ELURU AND NO CHARITABLE ACTIVITIES ARE BEING CARRIED OUT. ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 4 THE ASSESSEE SOCIETY WAS FORMED FOR THE WELFARE OF THE GOLD AND BULLION MERCHANTS OF ELURU BY THE MEMBERS FOR THE BENEFIT O F THE MEMBERS OF THE SOCIETY CANNOT BE SAID TO BE FOR THE PURPOSE OF CHARITY AND REJECTED THE REGISTRATION U/S 12AA OF THE ACT. 5. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE SOCIETY IS EXISTED TO PROTECT THE INTEREST OF THE J EWELERS AND BULLION MERCHANTS OF ELURU TOWN AND ALSO SUBMITTED THAT ASS ESSEE SOCIETY IS ALSO CARRYING SOME CHARITABLE ACTIVITIES AND HENCE REGIS TRATION U/S 12AA OF THE ACT MAY BE GRANTED TO THE ASSESSEE. 7. THE LD. COUNSEL FOR THE ASSESSEE, TO SUPPORT HIS ARGUMENTS, HE HAS RELIED ON THE FOLLOWING CASE LAWS: 1. ADDITIONAL COMMISSIONER OF INCOME TAX VS. SURAT ON BEING AGGRIEVED, REVENUE CARRIED MATTER IN APPEAL BEFORE THE TRIBUNAL. SILK CLOTH MANUFACTURERS ASSOCIATION (1980) 121 ITR 0001. 2. ADDITIONAL COMMISSIONER OF INCOME TAX VS. MADRAS JEW ELLERS & DIAMOND MERCHANTS ASSOCIATION (1981) 129 ITR 0214 3. COMMISSIONER OF INCOME TAX VS. BANARAS BRASS MERCHA NT & MANUFACTURERS ASSOCIATION (2000) 241 ITR 0070 4. INCOME TAX OFFICER VS. INDIAN LEATHER PRODUCTS ASSOCI ATION (2016) 156 ITD 0393 (KOLKATA) 5. COMMISSIONER OF INCOME TAX VS. FEDERATION OF BOMBAY CLOTH DEALERS ASSOCIATION (1979) 7 TTJ 0056 ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 5 6. PHD CHAMBER OF COMMERCE & INDUSTRY VS. DIRECTOR OF INCOME TAX EXEMPTIONS (2014) 265 ITR 0318 (DELHI) 7. COMMISSIONER OF INCOME TAX VS. A.P. BANKERS & PAWNB ROKERS ASSOCIATION (1988) 170 ITR 0476 8. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE ASSESSEE IS EXISTED ONLY FOR THE BENEFIT OF MEMBERS OF THE ASSE SSEE SOCIETY AND NO CHARITABLE ACTIVITY IS BEING CARRIED ON BY THE ASSE SSEE, THEREFORE NO REGISTRATION U/S 12AA OF THE ACT HAS TO BE GRANTED TO THE ASSESSEE AS IT IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE AC T. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE ASSOCIATION WAS FORMED IN THE YEAR 1947 WI TH THE MAIN OBJECTS TO PROTECT THE INTEREST OF THE JEWELERS AND BULLION MERCHANTS. THOUGH SOME OF THE OBJECTS PROVIDE FOR CHARITY, PARTICULAR LY OBJECT NO.9 I.E. COLLECTING THE DONATIONS FOR THE BENEFIT OF THE POO R AND UNDER PRIVILEGED AND PROVIDING FINANCIAL HELP TO THE POOR STUDENTS F OR THEIR EDUCATION. FROM THE DETAILS FILED BY THE ASSESSEE, WE FIND THA T SINCE 1947, THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVIT Y PARTICULARLY TO HELP THE POOR STUDENTS EXCEPT SOME NEGLIGIBLE INCOME THE Y HAVE INCURRED FOR THE PURPOSE OF CHARITY. THE ASSESSEE SOCIETY IS ON LY EXISTED TO PROTECT THE INTERESTS OF THE JEWELERS AND BULLION MERCHANTS OF ELURU TOWN AND TO PROTECT THEIR PERSONAL INTEREST. EVEN IT IS NOT EX ISTED TO PROTECT THE ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 6 INTEREST OF THE TRADE AT LARGE BUT ONLY IT IS EXIST ED FOR FEW MEMBERS WHO ARE DOING BUSINESS IN A PARTICULAR TOWN. WE FIND T HAT THE ASSESSEE IS ONLY EXISTED FOR THE BENEFIT OF FEW MEMBERS PARTICU LARLY WHO ARE CARRYING BUSINESS ACTIVITY IN ELURU TOWN AND IT CAN NOT BE SAID THAT THE ASSESSEE IS DOING CHARITY. CHARITY MEANS TO HELP T HE POOR WHO ARE IN NEED. IN THIS CASE, ASSESSEE HAS NOT DONE ANYTHING TO THE POOR PEOPLE WHO ARE IN NEED, WHO ARE SUFFERING WITH ILL HEALTH, ETC., ETC. THE COMMISSIONER IN HIS ORDER HAS OBSERVED THAT THE SOC IETY WAS FORMED FOR THE WELFARE OF THE GOLD AND BULLION MERCHANTS OF EL URU BY THE MEMBERS FOR THE BENEFIT OF THE MEMBERS. SUCH SOCIETY CANNO T BE CONSIDERED FOR THE PURPOSE OF CHARITY. WE FIND THAT THE LD. COMMI SSIONER CORRECTLY HELD THAT ASSESSEE CANNOT BE CONSIDERED AS A CHARIT ABLE ORGANIZATION. A SOCIETY IS FORMED FOR THE BENEFIT OF THEMSELVES, IT CAN ONLY BE SAID THAT IT IS A MUTUAL BENEFIT TO EACH OTHER. IT CANNOT BE SAID THAT PEOPLE STARTED AN ASSOCIATION FOR THE BENEFIT OF THEMSELVE S IS A CHARITY. THE CONCEPT OF CHARITY MEANS DOING SOMETHING TO OTHERS WHO ARE IN POOR AND HELPLESS CONDITION. THE ASSESSEE ASSOCIATION E XISTED FOR THE PEOPLE WHO ARE IN A TRADE, THEY ARE NEITHER POOR NOR HELPL ESS. ALL THE MEMBERS OF THE ASSOCIATION EXISTED FOR THE PURPOSE OF CARRY ING THEIR BUSINESS WITH A PROFIT MOTIVE. CHARITY IS AN ANTI-THESIS OF PROF IT. IN VIEW OF THE ABOVE, WE FIND THAT THE ASSESSEE SOCIETY IS NOT ELIGIBLE F OR REGISTRATION U/S 12AA ITA NO.419/VIZAG/2012 THE ELURU JEWELLERS & BULLION MERCHANTS ASSOCIATION , ELURU 7 OF THE ACT. SO FAR AS CASE LAWS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE IS CONCERNED, WE HAVE CONSIDERED EACH CASE CAREFULLY AND FIND THAT FACTS ARE ENTIRELY DIFFERENT FROM THE CASE IN HAND. THEREFORE, THOSE CASE LAWS ARE NOT RELEVANT TO DECIDE THE ISSUE BEFO RE US. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH NOV16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 30.11.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE CIT, RAJAHMUNDRY 2. / THE RESPONDENT THE ELURU JEWELLERS AND BULLION MERCHANTS ASSOCIATION, CLOCK TOWER CENTRE, MAIN BAZAR, ELURU- 534 001. 3. ) ( ) / THE CIT(A), RAJAHMUNDRY 4. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM
