Satvara Education Foundation, RAJKOT-GUJARAT V. The Commissioner of Income Tax, Rajkot-I, RAJKOT-GUJARAT

ITA 45/RJT/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67279 (ITAT-RAJKOT)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2013
• Assessment Year: misc
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV RANADE DR C
• Assessee Lawyers: D M THAKKAR CA C
• Section: 12AA

Judgement Text

0 , H IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . HR . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 4 5 /RJT/2013 HW W / ASSESSMENT YEAR SATVARA EDUCATION FOUNDATION, SATVARA VIDYARTHI BHAVAN, PLOT NO.4, N EA R RAIYA CIRCLE, RAIYA ROAD, RAJKOT. ( / APPELLANT) THE COMMISSIONER OF INCOME - TAX, RAJKOT - I, RAJKOT. , / RESPONDENT HWEC / ASSESSEE BY SHRI D. M. THAKKAR , CA. 6 C / REVENUE BY SHRI RAJIV RANADE, DR. C 0 / DATE OF HEARING 14 - 06 - 2013 C 0 / DATE OF PRONOUNCEMENT 21 - 06 - 2013 / ORDER . . , HR / T. K. SHARMA, J. M. : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 1 2 - 0 7 - 201 2 OF CIT , RAJKOT REJECTING THE APPLICATION FOR REGISTRATION U/S.12A OF THE I.T. ACT, 196 1. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE - TRUST MADE AN A PPLICATION FOR REGISTRATION U/S.12A OF THE I.T. ACT, 1961 IN PRESCRIBED FORM NO.10A. THIS APPLICATION WAS ACCOMPANIED WITH THE XEROX COPY OF THE MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE FOUNDATION AND REGISTRATION CERTIFICATE UNDER THE COMPANIES ACT DATED 06 - 06 - 2012. THE MAIN OBJECTS OF THE FOUNDATION ARE TO PROMOTE, ESTABLISHMENT, DEVELOP, RUN SUPPORT, MAINTAIN AND ADVANCE THE CAUSE OF EDUCATION AND TO GRANT AID OR OTHER ASSISTANCE TO ALL TYPES OF EDUCATIONAL INSTITUTIONS INCLUDING SC HOOLS, COLLEGES, UNIVERSITIES, LIBRARIES, READING ROOMS, FORMAL AND NON FORMAL EDUCATIONS AND VOCATIONAL TRAINING CENTERS AND OTHER INSTITUTIONS FOR THE BENEFIT OF THE STUDENTS. 3. ON VERIFICATION OF THE INFORMATION, THE LD. CIT NOTICED THAT NO SUBSTANTIA L CHARITABLE ACTIVITIES WERE CARRIED OUT BY THE ABOVE FOUNDATION. HE ACCORDINGLY ISSUED A NOTICE BEARING NO.CIT.R.1/TECH/12A/SEF/2012 - 13 DATED 21.11.2012 TO ITA 4 5 - 201 3 2 THE FOUNDATION TO SHOW CAUSE AS TO WHY THE APPLICATION FOR REGISTRATION SHOULD NOT BE REJECTED AS THE FOUNDATION FAILED TO COMPLY WITH THE STATUTORY REQUIREMENT. IN RESPONSE TO THIS NOTICE, ON BEHALF OF THE FOUNDATION, IT WAS STATED THAT THEY INTEND TO PROMOTE AND ENCOURAGE EDUCATION BY PROVIDING THEM FINANCIAL ASSISTANCE, ESPECIALLY OF WEAKER SECTION . IN SUPPORT, COPY OF THREE RECEIPT VOUCHERS, PURPORTED TO BE SIGNED BY THE STUDENTS, WERE PROVIDED. ON PERUSAL OF THE VOUCHERS, IT WAS NOTICED THAT TWO OF THE THREE VOUCHERS WERE BLANK CONTAINING SIGNATURE OF THE PURPORTED RECIPIENTS ONLY, WITHOUT MENTI ONING ANY NAME AND AMOUNT CLAIMED TO BE SO PAID AS SCHOLARSHIP. THE LD. CIT FURTHER OBSERVED THAT FOUNDATION DID NOT PROVIDE CLEAR CUT CRITERIA FOR WEAKER SECTIONS. THE SCHOLARSHIPS, AS CLAIMED, HAVE BEEN GIVEN TO THE FAMILIES WITH INCOME RANGING TO RS. 90,000 - 1,00,000/ - P.A. BESIDES, SCHOLARSHIPS HAVE NOT BEEN GIVEN TO ANY EXTRAORDINARY BRILLIANTS STUDENTS. ACCORDING TO THE LD. CIT, S INCE NO OTHER MAJOR ACTIVITIES HAVE BEEN CARRIED OUT, THE TRUST HAS NOT SATISFIED WITH THE GENUINENESS OF THE FOUNDATION. HE ACCORDINGLY, REJECTED THE APPLICATION U/S.12A OF THE I.T. ACT,1961. AGGRIEVED WITH THE ORDER OF LD. CIT, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS: - 1 . THAT THE LEARNED COMMISSIONER OF INCOME TAX, RAJKOT - I, RAJKOT HAS ERRE D IN LAW AND ON FACTS IN REFUSING THE REGISTRATION U/S.12AA OF THE INCOME TAX ACT, 1961 READ WITH RULE 17A OF THE INCOME TAX RULES, 1962. 2 . THAT THE LEARNED COMMISSIONER OF INCOME TAX, RAJKOT - I, RAJKOT OUGHT TO HAVE GRANTED THE REGISTRATION AS PER FACTS AND EVIDENCE MENTIONED IN APPLICATION U/S. 12A(A) AND FURTHER WRITTEN SUBMISSIONS. 3 . THE APPELLANT CRAVES LEAVE TO ADD AND OR TO AMEND AND OR TO DELETE THE GROUNDS OF APPEAL UPTO AND AT THE TIME OF HEARING OF APPEAL. 4 . AT THE TIME OF HEARING BEFORE US, ON BEHAL F OF ASSESSEE, SHRI D. M. THAKKAR, CA APPEARED AND CONTENDED THAT THE LD. CIT, MERELY ON THE GROUND THAT NO SUBSTANTIAL CHARITABLE ACTIVITIES ARE CARRIED OUT BY THE FOUNDATION AND DOUBTING THE SIGNATURE OF PURPORTED RECIPIENTS, HELD THAT THE LD. CIT DECLIN ED THE REGISTRATION TO THE ASSESSEE - TRUST. HE SUBMITTED THAT NOWHERE IN THE ACT, IT IS MENTIONED THAT AT WHAT MAGNITUDE THE CHARITABLE ACTIVITIES ARE TO BE CARRIED OUT. ITA 4 5 - 201 3 3 HE DREW OUR ATTENTION TO BALANCE - SHEET OF THE ASSESSEE - TRUST AND POINTED OUT THAT IT IS THE FIRST YEAR OF THE FOUNDATION. THE TOTAL AMOUNT OF DONATION RECEIVED IS ONLY RS.7103/ - . CONSIDERING THE AMOUNT OF RECEIPT, THE CHARITABLE ACTIVITIES CARRIED OUT BY THE ASSESSEE - TRUST ARE FAIR AND REASONABLE. HE FURTHER SUBMITTED THAT INCOME RANGED LESS THAN RS.1 LAKH OF THE FAMILY TO WHOSE C HILDREN THE ASSESSEE HAS GIVEN SCHOLARSHIP IS NEITHER ARISEN NOR UNREASONABLE. HE ACCORDINGLY SUGGESTED THAT LD. CIT (A) DECLINED THE REGISTRATION U/S.12AA ON IRRELEVANT GROUND, THEREFORE HE BE DIRECTED TO ALLOW THE REGISTRATION TO THE FOUNDATION. AS AGAINST THIS, SHRI RAJIV RANDE, DR APPEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT. 5 . HAVING HEAR BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINEN T TO NOTE THAT AS PER MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION, THE FOUNDATION IS REGISTERED U/S.25 OF THE COMPANIES ACT UNDER REGISTRATION CERTIFICATE DTD.06 - 06 - 2012. THE TOTAL DONATION RECEIVED BY THE ASSESSEE - TRUST IS ONLY RS.7103/ - . THE T OTAL AMOUNT GIVEN AS DONATION/SCHOLARSHIP TO GIRL STUDENTS IS ABOUT RS.4000/ - . LOOKING TO THE MAGNITUDE OF THE INCOME IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, THE CHARITABLE ACTIVITIES CARRIED OUT CANNOT BE CALLED AS LOW MAGNITUDE. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT LD. CIT REFUSING REGISTRATION U/S.12AA OF THE I.T. ACT, 1961 IR RELEVANT CONSIDERATION S . WE THEREFORE, DIRECT HIM TO GRANT THE REGISTRATION TO THE FOUNDATION U/S. 12AA OF THE I. T. ACT, 1961. 6 . IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7 . THIS O RDER PRONOUNCED IN O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . 6 D. K. SRIVASTAVA ) ( 0 . . W / T. K. SHARMA) / ACCOUNTANT MEMBER HH 6 / JUDICIAL MEMBER / ORDER DATE 21 - 0 6 - 2013. /RAJKOT NVA/ - ITA 4 5 - 201 3 4 1 RJO 0 O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - SATVARA EDUCATION FOUNDATION, SATVARA VIDYARTHI BHAVAN, PLOT NO.4, NEAR RAIYA CIRCLE, RAIYA ROAD, RAJKOT 2 . , / RESPONDENT - THE COMMISSIONER OF INCOME - TAX, RAJKOT - I, RAJKOT. . 3 . T / CONCERNED JT. CIT , RR.1, RAJKOT. . 4 . T - / CIT ,RAJKOT - I , RAJKOT 5 . HH , 0 , / DR, ITAT, RAJKOT 6 . W / GUARD FILE. / BY ORDER TRUE COPY. SENIOR PRIVATE SECRETARY, ITAT, RAJKOT