Pratap Charitable Trust, New Delhi V. DIT (Exemptions), New Delhi

ITA 4615/DEL/2011

• Counselvise Citation: 461520114 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 20-12-2011
• Assessment Year: misc
• Appeal Filed On: 19-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: P S KOHLI
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 4615/DEL/2011 ASSESSMENT YEAR: -- PRATAP CHARITABLE TRUST, VS. DIT(EXEMPTIONS), C/O P.S. KHOLI & COMPANY, 3 RD FLOOR, 5/70, WEA, PADAM SINGH ROAD, AAYAKAR BHAWAN, KAROL BAGH, NEW DELHI. DISTRICT CENTRE, AAATP7180L LAXMI NAGAR, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P.S. KOHLI, FCA RESPONDENT BY : MS. Y. KAKKAR, SR. DR DATE OF HEARING: 20.12.2011 DATE OF PRONOUNCEMENT: ORDER PER K.G. BANSAL, A.M. IN THIS APPEAL, THE ASSESSEE HAS TAKEN UP SIX GROU NDS. THE SUM AND SUBSTANCE OF THE GROUNDS IS THAT THE LD . DIRECTOR OF INCOME TAX (EXEMPTIONS) ERRED IN REJECTING THE A PPLICATION OF THE ASSESSEE FOR ITS APPROVAL U/S 80G(5) WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD MOVED AN APPLICATION ON 10.02.2011 FOR RENEWAL OF THE APP ROVAL EARLIER GRANTED U/S 80G(5). IN THE COURSE OF HEARI NG OF THE ITA NO. 4615/D/11 2 APPLICATION, THE DIT(E) ASKED FOR EVIDENCE/EXPLANAT ION ON TEN ISSUES. THE DETAILS AS REQUIRED WERE FILED. THE L D. DIT(E) EXAMINED THE ACCOUNTS FOR THE YEARS ENDED ON 31.03. 2008, 31.03.2009 AND 31.03.2010. IT WAS FOUND THAT THE A SSESSEE HAD DECLARED INCOME BY WAY OF INTEREST FROM THE BAN K. NO AMOUNT WAS EXPANDED TOWARDS CHARITABLE ACTIVITIES. IT WAS IN THE PROCESS OF DEVELOPING AN AVIATION ACADEMY FOR T RAINING THE PILOTS AND OTHER AIR PERSONNEL. ACCORDING TO THE L D. DIT(E) COMMON PERSON WILL NOT BE BENEFITED BY THE DEVELOPM ENT OF THE ACADEMY. THIS IS ONE OF THE GROUNDS FOR DENYIN G APPROVAL. IT WAS ALSO FOUND THAT THE ASSESSEE DID NOT RECEIVE ANY DONATION IN FINANCIAL YEARS 2008-09 & 2009-2010. I T APPEARS THAT THE CONCLUSION OF THE LD. DIT(E) IS THAT IN AB SENCE OF RECEIPT OF ANY DONATIONS, THERE IS NO NECESSITY FOR GRANT OF APPROVAL. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAD EARLIER BEEN GRANTED APPROVAL U/S 80G(5) ON 31.03.2008. THEREFORE, THIS APPLICATION IS FOR RENEWAL OF THE APPROVAL. THE ASSESSEE PURCHASED LA ND FOR SETTING UP THE ACADEMY IN PURSUANCE OF ONE OF ITS O BJECTS REGARDING EDUCATION. THEREFORE, IT IS ARGUED THA T IT HAS TAKEN ITA NO. 4615/D/11 3 STEPS FOR SETTING UP THE AVIATION ACADEMY WHICH IS IN THE NATURE OF AN EDUCATIONAL INSTITUTION. IN REPLY, TH E LD. SR. DR RELIED ON THE ORDER OF THE DIT(E). IN PARTICULAR, IT HAS BEEN MENTIONED THAT NO EXPENDITURE HAS BEEN INCURRED TOW ARDS THE OBJECTS AND SETTING UP AVIATION ACADEMY WILL NOT BE FOR THE BENEFIT OF PUBLIC AT LARGE. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE FIND THAT THERE IS NO MENTION IN THE IMPUGNED ORDER OR IN ANY OF THE DOCUMENTS PL ACED IN THE PAPER BOOK BEFORE US THAT THE ASSESSEE HAS BEEN REGISTERED U/S 12AA OR HAS BEEN GRANTED APPROVAL U/ S 10(23C) OF THE ACT, WHICH IS A PRIME CONDITION FOR APPROVAL U/S 80G. HOWEVER, FROM ARGUMENTS FROM BOTH SIDES IT DOES APP EARS TO THAT THE ASSESSEE HAS BEEN REGISTERED OR APPROVED A S AFORESAID. THE REASON IS THAT NO OBJECTION HAS BEE N TAKEN BY THE LD. DIT(E) IN THIS BEHALF. FURTHER, WE FIND TH AT THE OBJECTS OF THE ASSESSEE HAVE NOT BEEN PLACED IN THE PAPER B OOK FILED BEFORE US. THEREFORE, IT IS NOT FEASIBLE TO COME T O ANY CONCLUSION REGARDING THE CHARITABLE NATURE OF AIMS AND OBJECTS. THE CASE OF THE LD. COUNSEL IS THAT EDUCA TION IS ONE OF THE OBJECTS. THEREFORE, REAL QUESTION TO BE SEE N WOULD BE ITA NO. 4615/D/11 4 WHETHER SETTING UP OF THE AVIATION ACADEMY IS AN OB JECT FALLING WITHIN THE OBJECTS OF THE ASSESSEE. THEREAFTER, TH E MATERIAL CONSIDERATIONS ARE MENTIONED IN SECTION 80G(5). TH E LD. DIT(E) HAS NOT SPECIFIED WHETHER CONDITIONS MENTION ED THEREIN ARE SATISFIED OR NOT. IN VIEW OF THE ABOVE, IT IS NOT FEASIBLE TO PASS A SPEAKING ORDER ON THE GROUNDS TAKEN IN THE A PPEAL. THEREFORE, THE MATTER IS RESTORED TO THE FILE OF TH E DIT(E) WITH THE DIRECTION THAT HE SHALL DECIDE THE MATTER AGAIN ON THE BASIS OF CONDITIONS OF APPROVAL MENTIONED IN SECTION 80G( 5). 5. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. SD/- SD/- (R.P. TOLANI) (K.G. BANS AL) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 20.12.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR ITA NO. 4615/D/11 5 ITA NO. 4615/D/11 6 ITA NO. 4615/D/11 7 ITA NO. 4615/D/11 8 ITA NO. 4615/D/11 9 ITA NO. 4615/D/11 10