Indian Poultry Equipmentd Manufacturers, Nashik V. CIT-I, Nashik

ITA 460/PUN/2009

• Counselvise Citation: 46024514 RSA 2009
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-08-2011
• Assessment Year: misc
• Appeal Filed On: 20-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: DR SUNIL PATHAK
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 460/PN/2009 INDIAN POULTRY EQUIPMENTS MANUFACTURERS ASSOCIATION E-36 D ROAD, MIDC SATPUR NASIK 422 007 PAN AABCI 7513 G APPELLANT VS. C.I.T. - I NASIK RESPONDENT APPELLANT BY: DR. SUNIL PATHAK RESPONDENT BY: SHRI HARESHWAR SHARMA ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT-I PUNE DATED 31-3-2009 REFUSING REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE TR UST. 2. THE ASSESSEE FILED AN APPLICATION IN FORM NO. 10 A FOR REGISTRATION OF CHARITABLE TRUST U/S 12A OF THE ACT . THE ASSESSEE-TRUST CAME INTO EXISTENCE WITH EFFECT FROM 6-8- 2007 AND REGISTERED U/S 25 OF THE COMPANYS ACT 195 6. ON A PERUSAL OF THE ENQUIRY CONDUCTED BY THE ITO WA RD 1(1) NASIK, IT WAS REVEALED THAT THE OBJECTS OF THE TRUST DID NOT LOOK TO BE CHARITABLE AND HENCE IT WAS NOT RECOMMENDED FOR REGISTRATION U/S 12AA OF THE ACT. T HE ASSESSEE EXPLAINED THAT THE MAIN OBJECT OF THE TRUS T IS TO PROMOTE THE DEVELOPMENT OF POULTRY INDUSTRY IN RURA L AREA AND TO ARRANGE SEMINARS TO EDUCATE POOR FARMERS. HO WEVER, 2 ITA NO. 1096/PN/2009 MANASI SALES A.Y. 2005-06 THE CONCERNED CIT AFTER GOING THROUGH VARIOUS CLAUS ES OF THE TRUST DEED FOUND THAT THE OBJECTS DO NOT LOOK T O BE CHARITABLE. THE VARIOUS CLAUSES OF THE TRUST ENUM ERATED IN THE TRUST DEED ARE BASICALLY MEANT FOR THE GROWT H OF POULTRY INDUSTRY AND FOR THE BENEFIT OF THEIR MEMB ERS. ACCORDING TO THE CONCERNED CIT, THE ASSESSEE-TRUST DID NOT FULFILL THE CONDITIONS TO BE ELIGIBLE FOR REGISTRAT ION U/S 12AA. AFTER TAKING INTO CONSIDERATION ALL THE FACTU AL AND LEGAL ASPECTS ON THE ISSUE, THE CIT REJECTED THE AP PLICATION OF THE TRUST FOR REGISTRATION U/S 12A OF THE ACT. 3. DURING THE PROCEEDINGS BEFORE US, THE LEARNED CO UNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BE FORE THE COMMISSIONER. THE MAIN OBJECTS OF THE TRUST ARE INTENDED TO PROMOTE GROWTH OF POULTRY EQUIPMENT IND USTRY OWNED AND OPERATED BY MEMBERS AND ENCOURAGE FRIENDS HIP AMONGST THE POULTRY COMMUNITY IN INDIA. THE LEARNED COUNSEL ALSO SUBMITTED THAT THE MAIN OBJECT OF THE TRUST SUGGESTED THE PRESENCE OF CHARITABLE CHARACTER OF T HE TRUST. RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL BANGALORE BENCH IN THE CASE OF MARAA VS. ITO (EXEMP TIONS) (2010) 130 TTJ (BANG) 489. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDER OF THE COMMISSIONER REFUSING REGISTRATION SOUGHT FOR BY THE ASSESSEE. THE LEARNE D DR RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. SURAT CITY GYMKHANA (2008) 300 ITR 214 FOR THE PROPOSITION THAT ONCE THE REGISTRATION OF A TRUST U/S 12A IS DONE, FURTHER PROBE INTO OBJECTS AFTER REGIS TRATION IS NOT PERMISSIBLE. 4. HAVING HEARD BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE CONCERNED COMMISSIONER WAS NOT JUSTIFIED IN REFUSING REGISTRA TION TO 3 ITA NO. 1096/PN/2009 MANASI SALES A.Y. 2005-06 THE ASSESSEE-TRUST. THE TRUST WAS CREATED ON 28-9-2 007 AND IT CONDUCTED AN EXHIBITION WITHIN A SHORT SPAN OF TIME OF ITS CREATION AND THE INCOME COLLECTED WAS ABOVE RS. 1 CRORES. OUT OF THIS INCOME COLLECTED, ADMINISTRATI VE EXPENSES AND PERSONAL EXPENSES INCURRED AMOUNTED TO RS. 92.52 LAKHS THUS, THE NET SURPLUS REMAINED AT RS. 6 .94 LAKHS. FROM THE VERY NATURE OF EXPENSES INCURRED, IT IS CLEAR THAT ASSESSEE EXPENDED THE ABOVE AMOUNT AS PE R OBJECT. THE GENERAL PEOPLE/FARMERS ARE BENEFITED FR OM THE SO CALLED CHARITY ALLEGED TO HAVE DONE BY THE ASSES SEE. CONSIDERING THE TOTALITY OF THE FACTS AND LEGAL ASP ECTS OF THE CASE, THE ORDER OF THE CIT REFUSING REGISTRATION TO THE ASSESSEE-TRUST U/S 12A IS SET ASIDE. HE IS DIRECTED TO GRANT THE SAME. 5. IN THE RESULT, THE APPEAL IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST 2011. SD/ - (G.S. PANNU) ACCOUNTANT MEMBER SD/ - SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 30 TH AUGUST 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- I PUNE 4. THE CIT I PUNE 5. THE D.R, ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES, PUNE. 4 ITA NO. 1096/PN/2009 MANASI SALES A.Y. 2005-06