M/s. Tata Community Initatives Trust, New Delhi V. CIT(E), New Delhi

ITA 4219/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6198 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 29-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMITA BISWAS
• Assessee Lawyers: ROHIT BAJAJ CAS; H P AGRAWAL MS SURABHI AGARWAL
• Keywords: Charitable institution; Opportunity of being heard; Reasonable cause
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT AND AND AND AND SHRI KULDIP SINGH SHRI KULDIP SINGH SHRI KULDIP SINGH SHRI KULDIP SINGH, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA ITAITA ITA NO NONO NO . .. . 4219/DEL/2015 4219/DEL/2015 4219/DEL/2015 4219/DEL/2015 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : N.A. N.A. N.A. N.A. M/S TATA COMMUNITY M/S TATA COMMUNITY M/S TATA COMMUNITY M/S TATA COMMUNITY INITIATIVES TRUST, INITIATIVES TRUST, INITIATIVES TRUST, INITIATIVES TRUST, C/O TATA SERVICES LIMI C/O TATA SERVICES LIMI C/O TATA SERVICES LIMI C/O TATA SERVICES LIMITED, TED, TED, TED, 10 1010 10 TH THTH TH FLOOR, FLOOR, FLOOR, FLOOR, JEEVAN BHARTI TOWER JEEVAN BHARTI TOWER JEEVAN BHARTI TOWER JEEVAN BHARTI TOWER- -- -1, 1, 1, 1, 124, CONNAUGHT CIRCUS, 124, CONNAUGHT CIRCUS, 124, CONNAUGHT CIRCUS, 124, CONNAUGHT CIRCUS, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN : AACTT4708J. PAN : AACTT4708J. PAN : AACTT4708J. PAN : AACTT4708J. VS. VS. VS. VS. COMMISSIONER OF INCOME TAX COMMISSIONER OF INCOME TAX COMMISSIONER OF INCOME TAX COMMISSIONER OF INCOME TAX (EXEMPTIONS), (EXEMPTIONS), (EXEMPTIONS), (EXEMPTIONS), 26 2626 26 TH THTH TH FLOOR, E FLOOR, E FLOOR, E FLOOR, E- -- -2 BLOCK, 2 BLOCK, 2 BLOCK, 2 BLOCK, PRATYAKSH KAR BHAWAN, CIVIC PRATYAKSH KAR BHAWAN, CIVIC PRATYAKSH KAR BHAWAN, CIVIC PRATYAKSH KAR BHAWAN, CIVIC CENTRE, J.L. NEHRU MARG, CENTRE, J.L. NEHRU MARG, CENTRE, J.L. NEHRU MARG, CENTRE, J.L. NEHRU MARG, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. (A PPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.P. AGRAWAL, MS . SURABHI AGARWAL AND SHRI ROHIT BAJAJ, CAS. RESPONDENT BY : SMT. PARMITA BISWAS , CIT - DR. DATE OF HEARING : 28.01.2019 28.01.2019 28.01.2019 28.01.2019 DATE OF PRONOUNCEMENT : 29.01.2019 29.01.2019 29.01.2019 29.01.2019 OR OROR ORDER DER DER DER PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT : :: :- -- - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), DE LHI DATED 29 TH APRIL, 2015. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE COMMISSIONER OF INCOME TAX (EXEMPTIONS ) HAS ERRED ON FACTS AND IN LAW IN REGISTERING THE AP PELLANT UNDER SECTION 12AA READ WITH SECTION 12A OF INCOME- TAX ACT, 1961 (ACT) AS A SPECIFIC CATEGORY, I.E. GEN ERAL PUBLIC UTILITY. ITA-4219/DEL/2015 2 2. THAT THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS ERRED ON FACTS AND IN LAW IN NOT GRANTING REGIS TRATION UNDER SECTION 12AA OF THE ACT AT AN ENTITY LEVEL FO R THE APPELLANT. 3. THAT THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) ERRED ON FACTS AND IN LAW IN NOT CONSIDERING ALL TH E OBJECTIVES OF THE APPELLANT SUCH AS EDUCATION, MEDI CAL RELIEF, ETC. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT LEARNED CIT(EXEMPTIONS) PASSED THE ORD ER U/S 12AA DIRECTING THE REGISTRATION OF THE TRUST AS GENERAL PUBLIC UTILITY TRUST. HE STATED THAT LEARNED CIT(EXEMPTIONS) IS SUPPOSED TO REGISTER THE TRUST OR REFUSE TO REGISTER THE TRUST U/S 12AA. TH ERE WAS NO NECESSITY OF QUALIFYING THE TRUST AS A GENERAL PUBLIC UTILIT Y TRUST. HE STATED THAT THE OBJECTS OF THE TRUST ARE WIDE ENOUGH AND SOME O F THEM WOULD FALL WITHIN THE AMBIT OF EDUCATION, RELIEF TO POOR ETC. HE FURTHER STATED THAT THE REGISTRATION GIVEN BY LEARNED CIT(EXEMPTIONS) I S WITH THE CONDITION THAT THE EXEMPTION TO THE ASSESSEE U/S 11, 12 AND 1 3 WOULD BE AVAILABLE ONLY AFTER THE ASSESSING OFFICER IS SATIS FIED ABOUT THE GENUINENESS OF THE ACTIVITIES CLAIMED TO BE CARRIED ON IN EACH FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR. THUS, EVERY YEAR, THE ASSESSING OFFICER WILL EXAMINE WHETHER THE ACTIVITY OF THE AS SESSEE FALLS WITHIN THE AMBIT OF SECTION 2(15) OR NOT. THEREFORE, THE ORDER OF LEARNED CIT(EXEMPTIONS) SHOULD BE MODIFIED AND THE TRUST SH OULD BE REGISTERED WITHOUT ANY QUALIFICATION BEING GENERAL PUBLIC UTI LITY TRUST. 4. LEARNED CIT-DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF LEARNED CIT(EXEMPTIONS). 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT SECTION 12AA PROVIDES THE PROCEDURE FOR REGISTRATION OF THE TRUS T. IT READS AS UNDER:- ITA-4219/DEL/2015 3 12AA. (1) THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGI STRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) [OR CLAUSE (AB)] OF SUB-SECTION (1)] OF SECTIO N 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINGS NECESSARY IN ORDER TO S ATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIE S, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : PROVIDED PROVIDED PROVIDED PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE [PRINCIP AL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER ON WHICH NO ORD ER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1 ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER AND THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTI ON FROM THE STAGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFOR E THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN W HICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [OR C LAUSE (AA) [OR CLAUSE (AB)] OF SUB-SECTION (1)] OF SECTIO N 12A.] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) [O R HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO.2) AC T, 1996 (33 OF 1996)]] AND SUBSEQUENTLY THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER IS SATISFIED THAT THE ITA-4219/DEL/2015 4 ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GEN UINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUC H TRUST OR INSTITUTION : PROVIDED PROVIDED PROVIDED PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GI VEN A REASONABLE OPPORTUNITY OF BEING HEARD.] [(4) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (3), WHERE A TRUST OR AN INSTITUTION 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 (NO.2) AC T, 1996 (33 OF 1996)] AND SUBSEQUENTLY IT IS NOTICED T HAT THE ACTIVITIES OF THE TRUST OR THE INSTITUTION ARE BEIN G CARRIED OUT IN A MANNER THAT THE PROVISIONS OF SECTIONS 11 AND 12 DO NOT APPLY TO EXCLUDE EITHER WHOLE OR ANY PART OF TH E INCOME OF SUCH TRUST OR INSTITUTION DUE TO OPERATION OF SU B-SECTION (1) OF SECTION 13, THEN, THE PRINCIPAL COMMISSIONER OR THE COMMISSIONER MAY BY AN ORDER IN WRITING CANCEL THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT THE REGISTRATION SHALL NOT BE CANCELL ED UNDER THIS SUB-SECTION, IF THE TRUST OR INSTITUTION PROVE S THAT THERE WAS A REASONABLE CAUSE FOR THE ACTIVITIES TO BE CAR RIED OUT IN THE SAID MANNER.]. 6. FROM THE ABOVE, IT IS CLEAR THAT SECTION 12AA(1) (B) PROVIDES THAT IF THE PRINCIPAL COMMISSIONER OR COMMISSIONER IS SA TISFIED ABOUT THE OBJECT OF THE TRUST AND THE GENUINENESS OF ITS ACTI VITIES, HE SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST AND IF NO T SO SATISFIED, PASS AN ORDER REFUSING TO REGISTER THE TRUST. THUS, THE PO WER OF THE CIT IS TO REGISTER OR TO REFUSE THE REGISTRATION OF THE TRUST . HE IS NOT SUPPOSED TO QUALIFY THE TRUST AS GENERAL PUBLIC UTILITY TRUST . FROM THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15), WE FIND THAT FOLLOWING ACTIVITIES FALL WITHIN THE AMBIT OF CHARITABLE PURPOSE :- 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUI RES, - [(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE P OOR, EDUCATION, [YOGA,] MEDICAL RELIEF, [PRESERVATION OF ITA-4219/DEL/2015 5 ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILD LIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: [PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF REN DERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRES PECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY, UNLESS (I) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF AC TUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJEC T OF GENERAL PUBLIC UTILITY; AND (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR A CTIVITIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT OF THE TOTAL RECEIPTS, OF THE TRUST OR INSTITUTION UND ERTAKING SUCH ACTIVITY OR ACTIVITIES, OF THAT PREVIOUS YEAR; ]]. 7. IT IS FOR THE ASSESSING OFFICER TO EXAMINE EVERY YEAR AFTER CONSIDERING THE ACTIVITIES OF THE TRUST WHETHER THE Y FALL WITHIN ANY OF THE ABOVE CLAUSES OF CHARITABLE ACTIVITIES. THE CI T IS NOT SUPPOSED TO SPECIFY WHILE REGISTERING THE TRUST THE ACTIVITIES WHICH CAN OR WOULD BE PERFORMED BY THE TRUST. IN VIEW OF THE ABOVE, WE D IRECT THAT THE TRUST WOULD BE GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT WITHOUT ANY QUALIFICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AS ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON 29.01.2019 . SD/- SD/- (KULDIP SINGH (KULDIP SINGH (KULDIP SINGH (KULDIP SINGH ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT VK. ITA-4219/DEL/2015 6 COPY FORWARDED TO: - 1. APPELLANT : M/S TATA COMMUNITY INITIATIVES T RUST, M/S TATA COMMUNITY INITIATIVES TRUST, M/S TATA COMMUNITY INITIATIVES TRUST, M/S TATA COMMUNITY INITIATIVES TRUST, C/O TATA SERVICES LIMITED, C/O TATA SERVICES LIMITED, C/O TATA SERVICES LIMITED, C/O TATA SERVICES LIMITED, 10 1010 10 TH THTH TH FLOOR, JEEVAN BHARTI TOWER FLOOR, JEEVAN BHARTI TOWER FLOOR, JEEVAN BHARTI TOWER FLOOR, JEEVAN BHARTI TOWER- -- -1, 1, 1, 1, 124, CONNAUGHT CIRCUS, NEW 124, CONNAUGHT CIRCUS, NEW 124, CONNAUGHT CIRCUS, NEW 124, CONNAUGHT CIRCUS, NEW DELHI DELHI DELHI DELHI 110 001. 110 001. 110 001. 110 001. 2. RESPONDENT : COMMISSIONER OF INCOME TAX (EXEMPTI ONS), COMMISSIONER OF INCOME TAX (EXEMPTIONS), COMMISSIONER OF INCOME TAX (EXEMPTIONS), COMMISSIONER OF INCOME TAX (EXEMPTIONS), 26 2626 26 TH THTH TH FLOOR, E FLOOR, E FLOOR, E FLOOR, E- -- -2 BLOCK, PRATYAKSH KAR BHAWAN, 2 BLOCK, PRATYAKSH KAR BHAWAN, 2 BLOCK, PRATYAKSH KAR BHAWAN, 2 BLOCK, PRATYAKSH KAR BHAWAN, CIVIC CENTRE, J.L. NEHRU MARG, NEW DELHI CIVIC CENTRE, J.L. NEHRU MARG, NEW DELHI CIVIC CENTRE, J.L. NEHRU MARG, NEW DELHI CIVIC CENTRE, J.L. NEHRU MARG, NEW DELHI 110 002. 110 002. 110 002. 110 002. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR