M. Krishna Sinduri Memorial Trust, Hyd., Hyderabad V. CIT(Exemptions), Hyd, Hyderabad

ITA 465/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6270 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 31-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B V GOPINATH
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.465/HYD/2016 M. KRISHNA SINDHURI MEMORIAL TRUST, HYDERABAD. PAN AADTM8550A VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. B.V. GOPINATH DATE OF HEARING : 04.08.2016 DATE OF PRONOUNCEMENT : 24.08.2016 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS AN APPEAL BY ASSESSEE TRUST AGAINST THE ORDER OF CIT (EXEMPTIONS), HYDERABAD DATED 19.02.2016 REJE CTING THE APPLICATION FILED BY THE TRUST FOR GRANTING APPROVAL UND ER SECTION 80G(5)(VI) OF THE I.T. ACT, 1961. 2. ASSESSEE IS A TRUST INCORPORATED ON 14.08.2014. W HEN THE ASSESSEE APPLIED FOR REGISTRATION UNDER SECTION 12A A OF THE ACT, ITS OBJECTS WERE MODIFIED BY THE AMENDMENTS CARRIED OUT TO TRUST DEED ON 30.12.2014 AND ALSO ON 25.02.2015. VID E ORDER DATED 25.02.2015, THE TRUST WAS REGISTERED UNDER SECTIO N 12AA OF THE ACT BY THE CIT(EXEMPTIONS) HYDERABAD. LATER, IT APP LIED FOR APPROVAL UNDER SECTION 80G(5). IT WAS SUBMITTED BY THE ASSESSEE THAT : 2 ITA.NO.465/HYD/2016 M. KRISHNA SINDHURI MEMORIAL TRUST, HYDERABAD. (I). THE ASSESSEE IS CREATED ON 14-08-201 AND OBTA INED 12A REGISTRATION FROM THE INCOME-TAX DEPARTMENT VID E ORDER DATED 25.02.2015. THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31.03.2015 BEING FIRS T YEAR AND PROVISIONAL FINANCIAL STATEMENTS FOR THE P ERIOD FROM 01.04.2015 TO 08.02.2016 ARE ENCLOSED AS ANNEXURE -II. (II) WE SUBMIT THAT OUR TRUST HAS FULFILLED ALL THE FIVE CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) SUB-SECT ION (5) OF SECTION 80G AS DETAILED HEREUNDER. (I) OUR TRUST IS NOT CARRYING ON ANY BUSINESS. (II) THERE IS NO SUCH PROVISION IN THE TRUST DEED THAT EITHER FOR TRANSFER OR APPLICATION OF THE WHOLE OR PART OF THE INCOME OR ASSETS OF OUR TRUST FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE. (III) THE SERVICES OF OUR TRUST ARE OPEN FOR ALL PEOPLE WITHOUT ANY DISCRIMINATION OF CASTE AND CREED. HENCE OUR TRUST IS NOT EXPRESSED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. (IV) OUR TRUST IS MAINTAINING BOOKS OF ACCOUNT FOR THE RECEIPTS AND EXPENSES REGULARLY. (V) OUR INSTITUTION IS REGISTERED AS A CHARITABLE TRUST. (III) WE SUBMIT THAT THE MAIN OBJECTS OF OUR TRUST ARE (I) TO ESTABLISH, SPONSOR, CONTROL AND ASSIST EDUCATIONAL INSTITUTIONS. (II) TO ESTABLISH, SCHOOLS, COLLEGES AND OTHER INSTITUTIONS TO PROMOTE MUSIC AND DANCE. (III) TO AVAIL THE SERVICES OF OUR TRUST TO ALL PEOPLE WITHOUT ANY DISCRIMINATION OF CASTE AND CREED. 3 ITA.NO.465/HYD/2016 M. KRISHNA SINDHURI MEMORIAL TRUST, HYDERABAD. (IV) TO DO ALL OTHER ACT, DEEDS AND THINGS WHICH ARE NECESSARY AND/OR INCIDENTAL FOR THE FULFILLMENT OF THE ABOVE OBJECTS. TO ACHIEVE THE OBJECTS OUR TRUST IS AT PRESENT RUNNING A MUSIC SCHOOL UNDER THE NAME AND STYLE OF 'SANKLPA' (THE HOUSE OF FINE ARTS). AT PRESENT THER E ARE MORE THAN 180 STUDENTS ARE ATTENDING VARIOUS CLASSE S. WE FURTHER SUBMIT THAT THE SCHOOL IS RUNNING ON NON - PROFIT MOTIVE AND CHARGING NOMINAL FEES FROM THE STUDENTS WHICH IS NOT SUFFICIENT TO MEET THE FACULT IES SALARIES. NO TRUSTEE OR THEIR RELATIVES ARE BEING BENEFITTED DIRECTLY OR INDIRECTLY FROM THE TRUST. I N FACT TRUSTEES ARE CONTRIBUTING REQUIRED FUNDS TO RUN SCH OOL FROM TIME TO TIME. THE TRUST IS REQUIRED MUCH MORE FUNDS FOR THE PROPOSED INFRASTRUCTURE TO BE CREATED AND GRANT OF REGISTRATION U/S 80G WILL FACILITATE TO MO BILISE THE FUNDS. 2.1. ASSESSEE ALSO SUBMITTED THE DETAILS OF TRUST ACTIVI TIES AND RECEIPT-PAYMENT DETAILS. 3. LD. CIT(E) HAS HOWEVER NOT APPROVED THE TRUST AND REJECTED THE APPLICATION IN FORM 10G STATING AS UNDER : 2. THE INFORMATION FILED IS PERUSED. NO EVIDENCE FOR ACTIVITIES HAS BEEN FILED ALONG WITH THE APPLICATIO N IN FORM NO.1QG, AS REQUIRED UNDER RULE 11AA(2) OF I.T. RULES, 1962. 2.1. FURTHER, AS SEEN FROM BENEFICIARY LIST, IT INC LUDES CHILDREN OF WESTERN DANCE, WHICH IS NOT IN ACCORDAN CE WITH THE OBJECTS OF THE TRUST FOR WHICH IT WAS ESTABLISHED. THE OBJECT CLAUSE 2(B) SPEAKS OF INDIA N CLASSICAL DANCE AND MUSIC, BUT NOT WESTERN DANCE. HOWEVER, THE BENEFICIARIES INCLUDE WESTERN DANCE STUDENTS AS OPPOSED TO THE OBJECTS. AS THE ACTIVITY IS NOT IN ACCORDANCE WITH THE OBJECT, THE TRUST, IN MY VIEW IS NOT ELIGIBLE FOR APPROVAL U/S.80G(5) OF THE ACT. 3. IN VIEW OF THE ABOVE REASONS, THE APPLICANT SOCI ETY, CANNOT BE GRANTED APPROVAL U/S.80G(5)(VI) OF THE AC T. 4 ITA.NO.465/HYD/2016 M. KRISHNA SINDHURI MEMORIAL TRUST, HYDERABAD. HENCE, THE SAID APPLICATION IN FORM 10G FILED BY TH E APPLICANT IS REJECTED. 4. IT WAS THE SUBMISSION OF THE LEARNED COUNSEL THAT THE TRUST HAS FURNISHED THE DETAILS OF THE ACTIVITIES SO THAT THE CIT(E) COULD EXAMINE AND REJECT THE APPLICATION, SO THE ALLEG ATION STATED IN PARA-2 THAT NO EVIDENCE FOR ACTIVITIES HAS BEEN FIL ED IS NOT CORRECT. REGARDING THE ACTIVITIES OF WESTERN MUSIC, IT WAS SUBMITTED THAT THE SAME IS COVERED BY CLAUSE-9 OF THE OBJ ECTS WHICH IS AS UNDER : (G) TO BRING OUT, ENCOURAGE AND DEVELOP THE INVENT IVE AND RESEARCH FACULTIES OF THE PUPILS AND TEACHERS AND T O AFFORD OPPORTUNITY FOR RESEARCH WORK IN ART, SCIENC E AND INDUSTRIAL UNDERTAKINGS. 5. WHEN IT WAS POINTED OUT THAT THE SAME IS TO BE REA D WITH CLAUSE (B) WHICH READS AS UNDER : (B) TO ESTABLISH SCHOOLS, COLLEGES AND OTHER INSTI TUTIONS TO PROMOTE INDIAN CLASSICAL MUSIC- KARNATIC, HINDUSTAN I, LIGHT MUSIC BOTH VOCAL AND INSTRUMENTAL AND INDIAN CLASSICAL DANCES- BHARATA NATYAM, KUCHIPUDI, KATHAKALI AND MANIPURI ETC., TO ALL INTERESTED PEOP LE WITHOUT ANY DISCRIMINATION OF CASTE AND CREED. LD. COUNSEL FAIRLY ADMITTED THAT THE SAME CAN NOT BE STRIC TLY CONSTRUED AND SUBMITTED THAT THE TRUST WOULD MODIFY ITS OBJE CT AND APPLY AGAIN. 7. IN VIEW OF THE SUBMISSION OF THE LD. COUNSEL, WITH OUT GOING INTO THE MERITS OF THE APPLICATION MADE AND THE APPEAL GROUNDS, WE ARE OF THE OPINION THAT THERE IS NO NEED TO ADJUDICATE THE CONTENTIONS AT PRESENT. ASSESSEE IS FREE TO MAKE NEC ESSARY MODIFICATIONS TO THE OBJECTS OF THE TRUST WITH THE APPROV AL OF THE 5 ITA.NO.465/HYD/2016 M. KRISHNA SINDHURI MEMORIAL TRUST, HYDERABAD. CIT(E) UNDER SECTION 12AA AND APPLY AFRESH FOR APPRO VAL UNDER SECTION 80G(5). IN VIEW OF THE ABOVE, WE REJECT THE GR OUNDS RAISED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 24.0 8.2016. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED 24 TH AUGUST, 2016 VBP/- COPY TO 1. M. KRISHNA SINDHURI MEMORIAL TRUST, HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABA D. 3. THE INCOME TAX OFFICER (EXEMPTIONS), WARD-2, HYDE RABAD. 4. D.R. ITAT B BENCH, HYDERABAD. 5. GUARD FILE