Dam Bihari Goswami Smriti Nidhi, Agra V. CIT, Agra

ITA 443/AGR/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50344 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-08-2011
• Assessment Year: misc
• Appeal Filed On: 04-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHAMBHAR DAYAL
• Assessee Lawyers: M M AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 443/AGRA/2009 SEC. 80G(5)(VI) DAN BIHARI GOSWAMI SMRITI NIDHI, VS. THE COMMISS IONER OF VRINDABAN DISTT. MATHURA (U.P.). INCOME-TAX-I, A GRA. (PAN : AAATD 7550 J) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI M.M. AGARWAL, FCA FOR RESPONDENT : SHRI VISHAMBHAR DAYAL, JR. D.R. ORDER PER BENCH : THE ASSESSEE-TRUST HAS TAKEN UP TWO SUBSTANTIVE G ROUNDS IN THIS APPEAL, THE SUM AND SUBSTANCE OF WHICH IS THAT THE CIT ERRED IN REJECTI NG THE APPLICATION MADE BY THE ASSESSEE FOR APPROVAL U/S. 80G(5)(VI) OF THE INCOME-TAX ACT (TH E ACT FOR SHORT). IT IS ALSO MENTIONED THAT HE ERRED IN RECORDING A FINDING THAT THE ASSESSEE INCU RRED EXPENDITURE FOR RELIGIOUS PURPOSES, WHICH EXCEEDED THE LIMIT PRESCRIBED UNDER THE STATUTE. 2. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE MOVED A N APPLICATION FOR ITS APPROVAL BY FILING FORM NO. 10G ON 27.03.2009. THE APPLICATION WAS ACC OMPANIED INTER ALIA BY THE TRUST DEED. IT WAS NOTICED BY THE CIT THAT IT ALSO PROVIDED FOR ES TABLISHMENT AND MAINTENANCE OF SEWA, POOJA, BHOG, FLORAL DECORATION AND ANY KIND OF SEWA OF THA KUR SHRI BANKEY BIHARI JI MAHARAJ AND TEMPLE OF SHRI BANKEY BIHARI JI MAHARAJ. HE FORMED A TENTATIVE VIEW THAT THIS OBJECT IS RELIGIOUS IN NATURE. IT WAS FURTHER NOTICED THAT THE DEED DOE S NOT CONTAIN THE DISSOLUTION AND IRREVOCABLE CLAUSE. THUS, THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY THE APPLICATION MAY NOT BE REJECTED. IT WAS SUBMITTED THAT MOST OF THE OBJECTS OF THE TR UST ARE CHARITABLE IN NATURE AND SOME OF THE 2 OBJECTS ARE RELIGIOUS IN NATURE. HOWEVER, THE TRUST HAS NOT BEEN PERFORMING ANY ACTIVITY OF RELIGIOUS NATURE SINCE INCEPTION. IN LAW, IT WAS SU BMITTED THAT THE STATUTORY PROVISION PERMITS EXPENDITURE UP TO 5% OF THE TOTAL RECEIPTS FOR GRAN T OF THE APPROVAL. THE LEARNED CIT CONSIDERED THE OBJECTS AND THE EXPLANATION. HE CAME TO THE CON CLUSION THAT THE OBJECTS MENTIONED ABOVE ARE RELIGIOUS IN NATURE, AS THESE ARE FOR THE BENEFIT O F PEOPLE, WHO FOLLOW HINDU RELIGION. THEREAFTER, HE EXAMINED THE EXPENSES DEBITED TO PROFIT & LOSS A CCOUNT IN FINANCIAL YEAR 2005-06 AND 2006- 07 AND CAME TO THE CONCLUSION THAT UTSAV MAHOTSAVA EXPENSES, WHICH ARE FOR RELIGIOUS PURPOSE, EXCEEDED 5% OF THE TOTAL RECEIPTS FOR EACH OF THE Y EARS. THEREFORE, HE REJECTED THE APPLICATION OF THE ASSESSEE. AGGRIEVED BY THIS ORDER, THE ASSESSEE -TRUST IS BEFORE US IN APPEAL. THE GROUNDS TAKEN BY IT HAVE ALREADY BEEN SUMMARIZED BY US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE LAST PARA ON PAGE 1 OF THE IMPUGNED ORDER IN WHICH THE FACTS AND GROUNDS FOR NON-APPROV AL HAVE BEEN RECORDED. FURTHER, HE REFERRED TO PAGE NOS. 25 AND 18 OF THE PAPER BOOK WHICH CONTAI N PROFIT & LOSS ACCOUNTS FOR THESE TWO YEARS. WE MAY REFER TO PAGE NO. 25, WHICH SHOWS AGGREGATE DONATION OF RS.8,74,000/- AND EXCESS OF INCOME OVER EXPENDITURE AT RS.29,627/-. THE MAJOR E XPENDITURE IS ON ANNAKHETRA AND UTSAV MAHOTSAVA AT RS.6,49,585/- AND RS.77,395/- RESPECTI VELY. THE ONLY ARGUMENT MADE BY THE LEARNED COUNSEL BEFORE US IS THAT THE TWO EXPENSES ARE OF THE SAME NATURE, THE PURPOSE BEING TO FEED THE POOR AND SADHUS. THEREFORE, THE FINDING TH AT UTSAVA MAHOTSAVA EXPENSES REPRESENT EXPENSES OF RELIGIOUS NATURE, SUFFERS FROM INFIRMIT Y. THIS IS A CHARITABLE EXPENDITURE AND, THEREFORE, THE LEARNED CIT OUGHT TO HAVE GRANTED TH E APPROVAL TO THE ASSESSEE U/S. 80G. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDER OF THE L EARNED CIT. 3 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUB MISSIONS MADE BEFORE US. ONE OF THE FINDINGS OF THE LEARNED CIT IS THAT THE OBJECTS REG ARDING ESTABLISHMENT AND MAINTENANCE OF SEWA, POOJA, BHOG, FLORAL DECORATION AND ANY KIND OF SEWA OF THAKUR SHRI BANKEY BEHARI JI MAHARAJ AND TEMPLE OF SHRI BANKEY BEHARI JI MAHARAJ ARE REL IGIOUS IN NATURE AND FOR THE BENEFIT OF PERSONS FOLLOWING HINDU RELIGION. NO ARGUMENTS HAVE BEEN MADE BY THE LEARNED COUNSEL IN THIS RESPECT. AT THE SAME TIME, THE LEARNED CIT HAS HELD UTSAVA MAHOTSAVA EXPENSES AS EXPENSES ON RELIGIOUS ACTIVITIES WITHOUT GOING INTO THE DETAILS THEREOF AND WITHOUT MENTIONING THE REASONS AS TO HOW THESE ACTIVITIES ARE RELIGIOUS IN NATURE. IN VIEW THEREOF, WE ARE OF THE VIEW THAT THE WHOLE MATTER ABOUT THE RELIGIOUS OBJECTS AND EXPENDITURE ON ALLEGED RELIGIOUS ACTIVITIES HAS TO BE EXAMINED AGAIN WITH A VIEW TO PASS A SPEAKING ORDER . THEREFORE, WE RESTORE THE MATTER TO THE FILE OF THE LEARNED CIT FOR GRANTING FRESH OPPORTUNITY O F BEING HEARD TO THE ASSESSEE AND DECIDING THE APPLICATION DE NOVO AS PER LAW. 5. IN RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.08.20 11. SD/- SD/- (H.S. SIDHU) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10 TH AUGUST, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY