Parampujya Bapa Sitaram Madhuli Seva Trust, Vadaliya Simran, RAJKOT-GUJARAT V. The Commissioner of Income Tax, JAMNAGAR

ITA 470/RJT/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72656 (ITAT-RAJKOT)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-12-2013
• Assessment Year: misc
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N R SONI DR
• Assessee Lawyers: DR ADHIA
• Keywords: Charitable institution

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO.470/RJT/2013 PARAMPUJYA BAPA SITARAM MADHULI SEVA TRUST, VADALIYA SINHAN, TAL. JAM-KHAMBHALIYA, DIST. JAMNAGAR PAN : AAGTS 4513 B ( / APPELLANT THE COMMISSIONER OF INCOME-TAX JAMNAGAR / RESPONDENT !' / ASSESSEE BY SHRI D. R. ADHIA, AR #$ !' / REVENUE BY SHRI N.R. SONI, DR ! % $& ' / DATE OF HEARING 31.12.2013 () ' / DATE OF PRONOUNCEMENT 31.12.2013 / ORDER .. , / T. K. SHARMA, J. M.: THIS APPEAL BY THE ASSESSEE- TRUST IS AGAINST THE ORDER DATED 15.10.2013 OF COMM ISSIONER OF INCOME-TAX, JAMNAGAR REFUSING THE RECOGNITION TO THE ASSESSEE-TRUST U/S 80G(5) OF THE INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST WAS CREATED ON 15.07.2003. IT WAS REGISTERED UNDER BPT ACT WITH THE ASSISTANT CHARITY COMMISSIONER, JAMNAGAR VIDE REGISTRATION NO.A/1571/JAMNAGAR DATED 17.05.2004. T HE TRUST MADE AN APPLICATION FOR RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT ON 24. 12.2012. LEARNED CIT, JAMNAGAR REJECTED THE APPLICATION OF THE ASSESSEE FOR THE DE TAILED REASON GIVEN IN THE IMPUGNED ORDER WHICH READS AS UNDER:- IN VIEW OF THE CBDT, NEW DELHIS CIRCULAR F.NO.197 /21/2010-ITA-I DATED 27.10.2010 (CIRCULAR NO.7/2010), IT WAS INTENDED TH AT THE RECOGNITION U/S 80G(5) IS TO BE GIVEN FOR LIFE TIME. THEREFORE, IT IS REQU IRED TO VERIFY ALL THE DOCUMENTS BEFORE GRANTING RECOGNITION. A NOTICE DTD. 12.06.20 13 AND THEREAFTER ON 26.09.2013 WERE ISSUED TO THE TRUST, WHEREBY IT WAS REQUESTED TO PRODUCE THE ORIGINAL DOCUMENTS FOR VERIFICATION AND AN EXPLANAT ION REGARDING NON-UTILIZATION OF 85% OF ITS INCOME TOWARDS CHARITABLE ACTIVITIES. TH E TRUST HAS PRODUCED ORIGINAL DOCUMENTS FOR VERIFICATION. AS REGARDING DISCREPANC IES THE TRUST VIDE ITS LETTER DATED 11.10.2013 HAS SUBMITTED THAT ACTUALLY DUE T O LACK OF KNOWLEDGE IN RESPECT OF ACCOUNTING OF TRUST, ACCOUNTANT HAD MERG ED ALL TYPE OF DONATION IN ONE HEAD. WHEREAS SOME OF THE FUND WAS THERE FOR THE SP ECIFIC PURPOSE ONLY. I.E. CORPUS FUND AND DUE TO THIS REASON IT IS NOT LIKE T HAT THEY HAVE NOT UTILIZE 85% OF TRUST INCOME FOR ITS OBJECTS. 470-RJT-2013 - PARAMPUJYA BAPA SITARAM MADHULI SEVA TRUST 2 THE SUBMISSION OF THE TRUST IS NOT ACCEPTABLE BECAU SE THE SAID PROVISION IS ONE OF THE PRIMARY CONDITION FOR APPROVAL U/S 80G(5) OF TH E I.T. ACT, 1961. THE APPLICANT TRUST IS NOT FOUND TO BE FULFILLING THE CONDITIONS LAID DOWN UNDER THE ACT. IN VIEW OF THESE FACTS, I AM, THEREFORE, SATISFIED THAT THE APPLICANT TRUST AT THIS POINT OF TIME, FAILS TO FULFILL THE CONDITION LAID DOWN IN RULE-11AA(2)(I) OF THE IT RULES, 1962 AND HENCE THE RECOGNITION U/S 80G(5) OF THE ACT IS HEREBY REFUSED. AGGRIEVED WITH THE ORDER OF LD COMMISSIONER OF INC OME-TAX, JAMNAGAR, THE ASSESSEE-TRUST IS NOW IN APPEAL BEFORE THIS TRIBUNA L, ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME-TAX HAS ERRED IN LAW AND FACTS IN REFUSING TO GRANT APPROVAL U/S 80G(5) OF THE INCOME-TAX ACT, 1961. THE TRUST DESERVES RECOGNITION U/S 80G(5). 2. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION THAT APPELLANT IS NOT FULFILLING THE CONDITION FOR APPROVAL OF THE PROVIS IONS OF SECTION 80G(5) OF THE IT ACT. THE TRUST DESERVES RECOGNITION U/S 80G(5). 3. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLU SION BASED ON IRRELEVANT ASPECT THAT THE TRUST HAS NOT CARRIED OUT ACTIVITIE S WHICH ENTITLE ITS FOR RECOGNITION U/S 80G(5) AS PER OBJECT OF THE TRUST. THE TRUST D ESERVES RECOGNITION U/S 80G(5). 4. THE LD. C.I.T. HAS ERRED IN NOT CONSIDERING THE REAL ASPECT OF THE PROVISIONS OF SECTION 80G(5) OF THE IT ACT, 1961. T HE TRUST DESERVES RECOGNITION U/S 80G(5). 5. TAKING INTO CONSIDERING THE LEGAL, FACTUAL AND S TATUTORY ASPECT OF THE OBJECT OF THE TRUST, THE LD. C.I.T. OUGHT TO HAVE GRANTED RECOGNITION U/S 80G(5)(VI) AS APPLIED FOR. IT IS THEREFORE PRAYED THAT THE ORDER PASSED BY THE LD. C.I.T. REFUSING TO GRANT RECOGNITION U/S 80G(5) MAY KINDLY BE CANCE LLED AND HE MAY BE DIRECTED TO GRANT RECOGNITION U/S 80G(5) TO THE APPELLANT AS APPLIED FOR. 6. WITHOUT PREJUDICE, THE LD.CIT HAS ERRED IN NOT G RANTING ADEQUATE AND REASONABLE OPPORTUNITY. THE ORDER PASSED BY THE LD. CIT NEEDS CANCELLATION / RESTORATION TO CONSIDER AFRESH THAT THE TRUST DESER VES RECOGNITION U/S 80G(5). 7. WITHOUT PREJUDICE, THE ORDER PASSED U/S 80G(5) I S BAD IN LAW DESERVES CANCELLATION. 8. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN D/OR SUBSTITUTE ANY OR ALL GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAKES P LACE. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF A SSESSEE-TRUST, SHRI D R ADHIA, AUTHORIZED REPRESENTATIVE, APPEARED AND POINTED OUT THAT THE ASSESSEE-TRUST IS DULY REGISTERED U/S 12A(A) OF THE INCOME-TAX ACT, 1961 W ITH LEARNED CIT, JAMNAGAR VIDE ORDER DATED 30.11.2011. IN RESPECT OF UTILIZATION OF FUND, HE CONTENDED THAT AT THE TIME OF GRANTING APPROVAL FOR EXEMPTION U/S 80G, ONLY OB JECT OF THE TRUST IS REQUIRED TO BE EXAMINED AND APPLICATION OF FUNDS CAN BE EXAMINED B Y ASSESSING OFFICER AT THE TIME 470-RJT-2013 - PARAMPUJYA BAPA SITARAM MADHULI SEVA TRUST 3 FRAMING ASSESSMENT. IN SUPPORT OF THIS, THE AUTHOR IZED REPRESENTATIVE FOR THE ASSESSEE-TRUST RELIED UPON THE JUDGMENT OF THE HON BLE PUNJAB & HARYANA HIGH COURT IN ITS JUDGMENT DELIVERED ON 02.05.2013 IN THE CASE OF CIT V. O.P. JINDAL GLOBAL UNIVERSITY, REPORTED IN (2013) 38 TAXMANN.COM 366 (P&H). HE AL SO RELIED UPON THE DECISION OF THE ITAT, SMC BENCH, RAJKOT IN THE CASE OF SHREE GOVIND BHAI JETHALAL NATHVANI CHARITABLE TRUST IN ITA NO.402/RJT/2013, WHEREIN THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HONBLE PUNJAB &HARYANA HIGH COURT IN THE CASE OF O.P. JIND AL GLOBAL UNIVERSITY(SUPRA). 4. AS AGAINST THE SUBMISSION MADE BY THE LEARNED AUTHORIZED REPRESENTATIVE; SHRI N. R. SONI, DR, APPEARED ON BEHALF OF THE REVE NUE, VEHEMENTLY SUPPORTED THE ORDER OF LD. COMMISSIONER OF INCOME-TAX, JAMNAGAR. THE LEARNED DR POINTED OUT THAT IN THE ORIGINAL DOCUMENTS FURNISHED BEFORE THE LD. CIT , DISCREPANCIES WERE NOTICED TO WHICH THE ASSESSEE-TRUST SUBMITTED THAT ACTUALLY D UE TO LACK OF KNOWLEDGE IN RESPECT OF ACCOUNTING OF TRUST, ACCOUNTANT HAD MERGED ALL TYPE OF DONATION IN ONE HEAD. WHEREAS SOME OF THE FUND WAS THERE FOR THE SPECIFIC PURPOSE ONLY. I.E. CORPUS FUND AND DUE TO THIS REASON IT IS NOT LIKE THAT THEY HAVE NOT UTILI ZE 85% OF TRUST INCOME FOR ITS OBJECTS. IN THIS VIEW OF THE MATTER, THE LD. CIT, JAMNAGAR RIGH TLY HELD THAT THE ASSESSEE-TRUST IS NOT ENTITLED FOR RECOGNITION U/S 80G(5) OF THE INCOME-T AX ACT, 1961. 5. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX, JAMNAGAR AND THE ORDERS RELIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE-TRUST. TH E HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. O.P. JINDAL GLOBAL UNIV ERSITY (SUPRA) HELD THAT AT THE TIME OF GRANTING APPROVAL FOR EXEMPTION U/S 80G, OBJECT OF THE TRUST IS REQUIRED TO BE EXAMINED AND APPLICATION OF FUNDS CAN BE EXAMINED BY ASSESSI NG OFFICER AT THE TIME OF FRAMING ASSESSMENT. THE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF O.P. JINDAL GLOBAL UNIVERSITY (SUPRA) HAS BEEN FOLLOWED BY THIS TRIBUNAL IN THE CASE OF SHREE GOVINDBHAI JETHALAL NATHVANI CHARITABLE TRUST IN IT A NO.402/RJT/2013 ALSO. THE LD.CIT, JAMNAGAR HAS GRANTED REGISTRATION U/S 12A(A) OF THE INCOME-TAX ACT, 1961 TO THE ASSESSEE-TRUST ON 30.11.2011, COPY OF WHICH IS PROD UCED BEFORE US BY THE ASSESSEE- TRUST. WE, RESPECTFULLY FOLLOWING THE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE 470-RJT-2013 - PARAMPUJYA BAPA SITARAM MADHULI SEVA TRUST 4 CASE OF O.P. JINDAL GLOBAL UNIVERSITY (SUPRA), SET ASIDE THE IMPUGNED ORDER OF LD COMMISSIONER OF INCOME-TAX, JAMNAGAR AND DIRECT HIM TO GRANT RECOGNITION U/S 80G(5) OF THE INCOME-TAX ACT, 1961 TO THE ASSESSEE-TRUST. 6. IN THE RESULT, APPEAL OF THE ASSESSEE-TRUST IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (B. R. JAIN) (T. K. SHARMA) '' !*# / ACCOUNTANT MEMBER !*# /JUDICIAL MEMBER *'+ ,*-/ ORDER DATE 31.12.2013 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- PARAMPUJYA BAPA SITARAM MADHULI SEVA T RUST, VADALIYA SINHAN, TAL. JAM-KHAMBHALIYA, DIST. JAMNAGAR 2. /RESPONDENT- THE COMMISSIONER OF INCOME-TAX, JAMNA GAR 3. !-2- % 3 / JT. CIT, RANGE-3, JAMNAGAR 4 . 4$56 , , / DR, ITAT, RAJKOT 5 . 67 89 / GUARD FILE. *'+ !' / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.