NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIPUR V. COMMISSIONER OF INCOME TAX (EXEMPTION), JAIPUR

ITA 453/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3644 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 05-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Keywords: Charitable institution; TDS
• Section: 80G; 12AA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 453/JP/2018 NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIPUR CUKE VS. CIT(EXEMPTION), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACTN5192L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ASHOK KUMAR GUPTA & SHRI S. L. JAIN (ADVOCATE) JKTLO DH VKSJ LS @ REVENUE BY : SHRI MUKESH VERMA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/06/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE TRUST AGAIN ST THE ORDER OF LD. CIT(E)- JAIPUR DATED 08.02.2018 DENYING APPROVAL U/ S 80G(5)(VI) OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE, A CHARITABLE TRUST INCORPORATED ON 08.11.2016, MOVED AN APPLICATION ON 09.08.2017 F OR SEEKING APPROVAL U/S 80G(5)(VI) OF THE ACT. THE LD. CIT(E) TAKEN INTO CO NSIDERATION THE OBJECTS OF THE ASSESSEE TRUST AND THE PROVISIONAL RECEIPT AND PAYMENT ACCOUNTS SUBMITTED FOR THE PERIOD ENDED 31 ST MARCH, 2018 OBSERVED THAT NO SIGNIFICANT CHARITABLE ACTIVITIES HAVE BEEN STARTED BY THE APPL ICANT TRUST AS PER ITS OBJECTS. THE LD. CIT(E) OBSERVED THAT APPROVAL U/S 80G(5)(VI ) CAN BE GRANTED ONLY WHEN THE APPLICANT IS IN A POSITION TO SHOW THAT IT HAS MAINTAINED REGULAR ACCOUNTS AND CARRIED OUT THE ACTIVITIES AS PER THE OBJECTS. IN THE PRESENT CASE, AS THE APPLICANT HAS NOT STARTED ANY ACTIVITIES AS PER ITS OBJECTS, IT HAS NOT ITA NO. 453/JP/2018 NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIP UR VS CIT(E), JAIPUR 2 COMPLIED WITH THE PROVISIONS SUB CLAUSES (IV) AND ( VI) SECTION 80G(5) OF THE ACT AND THEREFORE IT IS NOT A FIT CASE FOR GRANTING EXEMPTION U/S 80G AT THIS STAGE. HOWEVER, THE APPLICANT WAS GRANTED LIBERTY T O APPLY AFRESH AFTER STARTING THE CHARITABLE ACTIVITIES. AGAINST THE SAI D ORDER OF THE LD CIT(E), THE ASSESSEE TRUST IS IN APPEAL BEFORE US. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE ASS ESSEE TRUST HAS BEEN GRANTED APPROVAL U/S 12AA ON 08.02.2018. HOWEVER, O N THE SAME DATE, APPROVAL U/S 80G WAS REJECTED. REGARDING CARRYING O N THE CHARITABLE ACTIVITIES, THE LD. AR SUBMITTED THAT WITH THE VIEW OF AIDING A ND HELPING IN PROVIDING THE MEDICAL FACILITIES TO THE POOR AND NEEDY PERSONS OF THE SOCIETY, THE ASSESSEE TRUST HAD ENTERED INTO AN MOU DATED 29.05.2017 WITH S. R. GOYAL RAJKIYA HOSPITAL ATTACHED WITH SMS MEDICAL COLLEGE, JAIPUR. AS PER MOU, THE ASSESSEE TRUST WAS SUPPOSED TO GET THE FIRST FLOOR CONSTRUCT ED IN THE EXISTING HOSPITAL BUILDING ALONG WITH NECESSARY EQUIPMENT. IT WAS SUB MITTED THAT THE SAID ACTIVITY WAS IN CONSONANCE WITH THE ASSESSEES TRUS T OBJECTS OF PROVIDING THE MEDICAL FACILITIES TO POOR AND NEEDY SECTION OF THE SOCIETY. 4. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE TRUST HAS ALREADY SPENT MORE THAN RS 75,00,000/- FOR CONSTRUCTION OF THE HOSPITA L BUILDING WHICH INCLUDES CIVIL CONSTRUCTION, PURCHASE OF OTIS LIFT, AIR COND ITIONER, HOSPITAL EQUIPMENTS. IT WAS SUBMITTED THAT ALL THE AFORESAID PAYMENTS WE RE MADE THROUGH ACCOUNT PAYEE CHEQUE AND TDS PROPERLY DEDUCTED WHICH IS DUL Y VERIFIED WITH THE BOOKS ACCOUNT AND BANK STATEMENT AS SUBMITTED DURIN G THE COURSE OF EXAMINATION BEFORE THE LD. CIT(E). THE ASSESSEE ACC ORDINGLY SUBMITTED THAT THE AFOREMENTIONED WORK HAS BEEN CARRIED OUT BY THE ASSESSEE TRUST AS PER ITS OBJECT CLAUSE AND THEREFORE, THE LD. CIT(E) WAS NOT CORRECT IN HOLDING THAT NO CHARITABLE ACTIVITIES WERE CARRIED OUT AS PER THE O BJECTS OF THE TRUST. 5. IT WAS FURTHER SUBMITTED THAT THE FINANCIAL STAT EMENT FOR THE PERIOD ENDED 31.08.2017 AND THEREAFTER ANOTHER FINANCIAL S TATEMENT UPTO 31 ST MARCH, 2018 WAS DULY SUBMITTED BEFORE THE LD. CIT(E). IT W AS ACCORDINGLY SUBMITTED ITA NO. 453/JP/2018 NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIP UR VS CIT(E), JAIPUR 3 THAT THE ASSESSEE TRUST IS MAINTAINING REGULAR BOOK S OF ACCOUNTS AND THE LD. CIT(E) WAS NOT CORRECT IN HOLDING THAT IT HAS NOT M AINTAINED REGULAR BOOKS OF ACCOUNTS. IT WAS ACCORDINGLY SUBMITTED THAT THE NEC ESSARY DIRECTIONS MAY BEEN GIVEN TO THE LD. CIT(E) TO GRANT APPROVAL U/S 80G(5)(VI) OF THE IT ACT, 1961 TO THE ASSESSEE TRUST. 6. THE LD CIT DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATTER. IT WAS SUBMITTED BY THE LD DR THAT THE ACTIVITIES SO CARRI ED OUT BY THE ASSESSEES TRUST THOUGH PER SE ARE CHARITABLE IN NATURE HOWEVE R SUCH ACTIVITIES HAVE TO BE SEEN IN THE CONTEXT OF OBJECTS OF THE ASSESSEES TR UST FULFILMENT OF WHICH IT HAS BEEN ESTABLISHED. IN OTHER WORDS, ACTIVITIES EVEN THOUGH CHARITABLE IN NATURE, WHERE THE SAME ARE NOT IN CONSONANCE WITH THE OBJEC TS OF THE TRUST, THE APPROVAL UNDER SECTION 80G HAS BEEN RIGHTLY DENIED IN THE INSTANT CASE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THE ASSESSEE TRUST HAS EN TERED INTO AN MEMORANDUM OF UNDERSTANDING DATED 29.05.2017 WITH S . R. GOYAL RAJKIYA HOSPITAL POPULARLY KNOWN AS SATELLITE HOSPITAL ATTA CHED WITH SMS MEDICAL COLLEGE, WHICH IS A GOVERNMENT HOSPITAL. AS PER THE MOU, THE ASSESSEE TRUST WAS SUPPOSED TO GET THE FIRST FLOOR CONSTRUCTED IN THE EXISTING HOSPITAL BUILDING ALONG WITH NECESSARY EQUIPMENT AND THE SUBSEQUENT R UNNING AND MAINTENANCE OF THE HOSPITAL BLOCK SO CONSTRUCTED ON THE FIRST FLOOR WILL BE WITH THE GOVERNMENT HOSPITAL. THEREAFTER, DURING THE FI NANCIAL YEAR 2017-18, THE ASSESSEE TRUST HAS INCURRED EXPENDITURE ON HOSPITAL CONSTRUCTION AND PURCHASE OF EQUIPMENTS WORTH OVER RS 75 LACS WHICH IS EVIDEN T FROM THE PROVISIONAL RECEIPTS AND PAYMENT ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018. THE ASSESSEE TRUST VIDE ITS SUBMISSION DATED 15.01.2018 HAS SUBMITTED THAT IT STARTED FUNCTIONING DURING THE FINANCIAL YEAR 2017- 18 ITSELF AND THE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS AND PROVISIONAL BALANC E SHEET AND RECEIPTS AND PAYMENT ACCOUNTS WERE SUBMITTED FOR NECESSARY VERIF ICATION BEFORE THE LD CIT(E). THE LD CIT(E) WHILE ACKNOWLEDGING AND REFE RRING TO SUCH BOOKS OF ITA NO. 453/JP/2018 NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIP UR VS CIT(E), JAIPUR 4 ACCOUNTS AND PROVISIONAL RECEIPTS AND PAYMENTS ACCO UNTS HAS HELD THAT THE ASSESSEE TRUST HAS NOT CARRIED OUT ANY SIGNIFICANT CHARITABLE ACTIVITIES. WE FIND THAT THE SAID FINDINGS OF THE LD CIT(E) ARE DEVOID OF FACTS AS EMERGING FROM THE RECORDS AND THE SAME CANNOT BE ACCEPTED. THE F ACT OF CONSTRUCTING A FLOOR OF A HOSPITAL BUILDING ATTACHED TO A GOVERNME NT HOSPITAL IS AS MUCH A CHARITABLE ACTIVITY AS AN ACT OF PROVIDING MEDICINE S OR MEDICAL EQUIPMENTS TO THE POOR AND NEEDY SECTION OF THE SOCIETY. WHERE TH E ASSESSEE TRUST IS SUPPORTING THE CONSTRUCTION OF A FLOOR OF A HOSPITA L BUILDING, IT IS ACTUALLY PROVIDING SUPPORT IN FORM OF INFRASTRUCTURE WHICH I S LONG LASTING AND ENDURING AND WHICH WILL BE USED BY PATIENTS OVER THE NEXT CO UPLE OF DECADES. IT THUS SHOWS THE COMMITMENT AND GENUINENESS OF THE CHARITA BLE ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE TRUST. WE HAVE ALSO GON E THROUGH THE OBJECTS OF THE ASSESSEE TRUST AND FIND THAT THE SAID ACTIVITIE S OF SUPPORTING THE CONSTRUCTION OF THE HOSPITAL BUILDING IS WELL WITHI N THE OBJECTS OF THE ASSESSEE TRUST FOR WHICH THE NECESSARY REGISTRATION UNDER SE CTION 12AA IS IN PLACE. 8. IN LIGHT OF ABOVE DISCUSSIONS, WE HEREBY DIRECT LD CIT(E) TO GRANT THE NECESSARY APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 07/06/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 07/06/2018 *GANESH KR VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: ITA NO. 453/JP/2018 NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIP UR VS CIT(E), JAIPUR 5 1. VIHYKFKHZ@ THE APPELLANT - NAGARMAL PISTA DEVI MANAKSIA CHARITABLE TRUST, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT - CIT (E), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 453/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.