Jhankar Sai Seva Trust, Bhuj V. The Commissioner of Income Tax-I, RAJKOT-GUJARAT

ITA 463/RJT/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6751 (ITAT-RAJKOT)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-04-2014
• Assessment Year: misc
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO.463/RJT/2013 JHANKAR SAI SEVA TRUST ARIHANT NAGAR, GARBI CHOWK BHUJ-KUTCH PAN : AABTJ 7282 N ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX, RAJKOT-I RAJKOT / RESPONDENT / ASSESSEE BY SHRI VIMAL DESAI, CA / REVENUE BY DR M L MEENA, D.R. / DATE OF HEARING 09.04.2014 !'# / DATE OF PRONOUNCEMENT 11.04.2014 / ORDER THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE OR DER DATED 27.09.2013 OF COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT REJECT ING THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12A OF THE INCO ME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST NAMELY JHANKAR SAI SEVA TRUST MADE AN APPLICATION FOR REGISTRATION U/S 12A OF THE INCOME-TAX ACT ON 10.09.2013 IN FORM NO.10A. IN ORDER TO VERIFY THE A PPLICATION U/S 12A OF THE ACT AND GENUINENESS OF ITS ACTIVITIES, THE OFFICE OF THE CI T ISSUED NOTICE DATED 23.08.2013 TO THE ASSESSEE-TRUST ASKING TO PRODUCE NECESSARY EVID ENCES IN SUPPORT OF ITS APPLICATION ALONGWITH BOOKS OF ACCOUNTS, DONATION R ECEIPT BOOK AND INVOICES FOR EXPENSES ETC.. ON THEIR PERUSAL, THE LD. CIT NOTICE D THAT THE MAIN ACTIVITY OF THE TRUST WAS ARRANGEMENT OF FREE VISIT OF THE WIDOWS AT DIFF ERENT PILGRIMAGES. IN PARAGRAPH 4 OF THE IMPUGNED ORDER, LD. CIT OBSERVED THAT THOUGH TH E OBJECT OF THE TRUST AS PRESCRIBED IN PARAGRAPH 3 OF THE CONSTITUTION OF THE TRUST, TH ERE IS NO SUCH OBJECT WHICH ENABLES THE TRUST TO ARRANGE TOUR FOR PILGRIMAGE TO HARIDWA R. HE ACCORDINGLY HELD THAT THE ACTIVITY OF THE TRUST IS NOT FOUND IN ACCORDANCE WI TH ITS PRESCRIBED OBJECTS AND THEREFORE, THE SAME WERE NOT GENUINE. MERELY ON TH IS GROUND, LD. CIT IN THE IMPUGNED ORDER HELD THAT THE ASSESSEE-TRUST HAS NOT FULFILLED THE CONDITIONS LAID DOWN FOR REGISTRATION AS LAID U/S 12AA OF THE INCOME-TAX ACT, 1961 AND RULE 17A OF THE INCOME-TAX RULES, 1962. HE ACCORDINGLY REJECTED TH E APPLICATION OF THE ASSESSEE- 2 463-RJT-2013 - JHANKAR SAI SEVA TRUST (SMC) TRUST FOR REGISTRATION U/S 12A OF THE ACT. AGGRIEV ED WITH THE ORDER OF LD. CIT, THE ASSESSEE-TRUST IS NOW IN APPEAL BEFORE THIS TRIBUNA L ON THE FOLLOWING GROUNDS:- 1. THE ORDER U/S 12AA(1)(B)(II) IS BAD IN LAW. 2. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN REJECTING THE APPLICATION FOR REGISTRATION OF THE APPELLANT TRUST. 3. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THE CHARITABLE OBJECTS OF THE TRUST AND IN HOLDING THAT THE ACTIVITIES OF THE TRUST WERE NOT TOWARDS THE OB JECTS. 3. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E-TRUST, SHRI VIMAL DESAI, CA, APPEARED AND POINTED OUT THAT LD. CIT HAS FAILED TO APPRECIATE THAT THE TRUST IS CARRYING OUT WELFARE ACTIVITIES SUCH AS EDUCATIONAL , MEDICAL, ADVANCEMENT OF YOUTH, ENHANCEMENT OF ART AND CULTURE AND SUCH OTHER SOCIA L ACTIVITIES. MOREOVER, AS PER CLAUSE 3(5)(I) OF THE OBJECTS OF THE TRUST, THE OTH ER ACTIVITIES INCLUDES PROVIDING FINANCIAL RELIEF AND HELP TO FINANCIALLY WEAKER AND NEEDY PERSON BY OTHER MEANS LIKE PROVIDING FOOD, CLOTHES, SHELTER, MEDICAL, CASH REL IEF AND OTHER WAYS. FURTHER, IN CLAUSE 3(6) OF THE TRUST DEED IT IS MENTIONED THAT TRUST MAY CARRY ON ANY ACTIVITIES WHICH ARE INCIDENTAL TO THE OBJECTS OF THE TRUST. 4. CONTINUING HIS ARGUMENTS, THE LD. COUNSEL OF THE ASSESSEE FAIRLY ADMITTED THAT THE TRUST HAS UNDERTAKEN THE ACTIVITIES TO ARRANGE TOUR AT FREE CHARGES FOR POOR AND OLD AGE WIDOWS AT DIFFERENT HISTORICAL PLACES. THE TRUS T HAS ARRANGED SUCH TYPE OF TOUR TO SHIRDI IN THE YEAR 2012 AND TO HARIDWAR IN THE YEAR 2013 AND ALMOST 40 PARTICIPANTS WITHOUT DISCRIMINATION OF ANY COLOUR, CASTE AND CRE ED ARE BENEFITTED BY SUCH ACTIVITY. HE FURTHER SUBMITTED THAT THE AFORESAID ACTIVITIES OF THE ASSESSEE-TRUST FALL UNDER THE DEFINITION OF CHARITABLE PURPOSE GIVEN IN SECTION 2(15) OF THE ACT BEING ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. IN S UPPORT OF THIS, HE DREW MY ATTENTION TO SECTION 2(15) OF THE ACT WHICH READS AS UNDER:- 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY A CTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, FOR A CESS OR FEE OR ANY 3 463-RJT-2013 - JHANKAR SAI SEVA TRUST (SMC) OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY:] [PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREI N IS [TWENTY-FIVE LAKH RUPEES] OR LESS IN THE PREVIOUS YEAR;] 5. THE LD. COUNSEL OF THE ASSESSEE RELIED UPON THE DECISION OF ITAT CHENNAI BENCH IN THE CASE OF A.V.S. EDUCATIONAL TRUST V. IT O, [2013] 30 TAXMANN.COM 168, WHEREIN IT WAS OBSERVED BY THE TRIBUNAL THAT FOR RE GISTRATION OF NEWLY REGISTERED TRUST, UNDER SECTION 12AA, OBJECTS FOR WHICH IT WAS FORMED SHOULD BE EXAMINED AND NOT ITS ACTIVITIES. HE ACCORDINGLY SUBMITTED THAT SINCE T HE ASSESSEE-TRUST HAS FULFILLED ALL THE CONDITIONS AS PER RULE 17A OF THE INCOME-TAX RULES, 1962 AND HAVE SUBMITTED ALL THE REQUISITE DOCUMENTS AT THE TIME OF REGISTRATION U/S 12A OF THE ACT. 6. ON THE OTHER HAND, SHRI M.L. MEENA, DR, APPEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT REJECTING THE APPLICATION OF THE ASSESSEE- TRUST FOR REGISTRATION U/S 12A OF THE INCOME-TAX AC T, 1961. HE SUBMITTED THAT NO SUCH OBJECT IS MENTIONED IN THE TRUST DEED WHICH ENABLES THE TRUST TO ARRANGE TOUR FOR PILGRIMAGE TO HARIDWAR. THEREFORE, THE ORDER OF LD. COMMISSIONER OF INCOME-TAX, RAJKOT-I, RAJKOT REJECTING THE APPLICATION OF THE A SSESSEE-TRUST FOR REGISTRATION U/S 12A OF THE ACT BE UPHELD. 7. HAVING HEARD BOTH THE SIDES, I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE OBJECTS OF THE TRU ST, WHICH INTER-ALIA INCLUDED FINANCIAL RELIEF AND TO PROVIDE HELP BY OTHER MEANS TO FINANC IALLY WEAKER AND NEEDY PERSON BY PROVIDING FOOD, CLOTHES, SHELTER, MEDICAL, CASH REL IEF AND OTHER WAYS. IN THE IMPUGNED ORDER, THE LD. CIT REJECTED THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12A SOLELY ON THE GROUND THAT IN THE TRUST-DEED NOW HERE IT IS PROVIDED THE OBJECT WHICH ENABLE THE ASSESSEE-TRUST TO ARRANGE TOUR FOR PILGRIMAGE TO HARIDWAR. IN MY OPINION, VARIOUS OBJECTS CONTAINED IN THE TRUST-DEE D INCLUDE THE ACTIVITIES WHICH HAVE BEEN PROVIDED BY THE ASSESSEE-TRUST TO WIDOWS, WITH OUT THE DISCRIMINATION OF ANY COLOUR, CASTE AND CREED ETC. EVEN OTHERWISE, WHILE GRANTING REGISTRATION OF NEWLY TRUST U/S 12AA THE OBJECTS FOR WHICH IT WAS FORMED SHOULD BE EXAMINED AND NOT ITS ACTIVITIES AS HELD BY ITAT CHENNAI BENCH IN THE CAS E OF A.V.S. EDUCATIONAL TRUST V. 4 463-RJT-2013 - JHANKAR SAI SEVA TRUST (SMC) ITO (SUPRA). IN THE CASE BEFORE ME, IN THE IMPUGNED ORDER NEITHER LD. CIT BROUGHT ON RECORD THAT THE ACTIVITIES OF THE ASSESSEE-TRUST AR E NON GENUINE NOR THE OBJECTS OF THE ASSESSEE-TRUST ARE NOT CHARITABLE WITHIN THE MEANIN G OF SECTION 2(15) OF THE ACT. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF LD. CIT AND DIRECT HIM TO GRANT THE REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE-TRUST IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 11.04.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- JHANKAR SAI SEVA TRUST, ARIHANT NAGAR , GARBI CHOWK, BHUJ-KUTCH 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX, RAJK OT-I, RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT, GANDHIDHAM 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT