Smt. Raj Rani Bansal Charitable Trust, Abohar V. The Commissioner of Income-tax, Bathinda

ITA 473/ASR/2014

• Counselvise Citation: 47320914 RSA 2014
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-04-2015
• Assessment Year: misc
• Appeal Filed On: 21-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.473(ASR)/2014 ASSESSMENT YEAR: PAN :AALTS3792G SMT. RAJ RANI BANSAL CHARITABLE TRUST VS. COMMIS SIONER OF INCOME TAX, 730/SHYAM KUNJ, STREET NO.1-B, BATHINDA. 2 ND CHOWK, ABOHAR-152 116. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.P.N.ARORA, ADVOCATE RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING:05/02/2015 DATE OF PRONOUNCEMENT:19/02/2015 ORDER PER B.P.JAIN,AM: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX, BATHINDA, DATED 24.06.2014, PASSED U NDER SECTION 12AA(1)(B) OF THE INCOME TAX ACT, 1961 ( IN SHORT, THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L ORDER REJECTING THE REQUEST OF ASSESSEE FOR GRANT OF REGISTRATION WAS P ASSED BY THE LD. CIT ON 05.09.2012. WITHIN FIVE DAYS OF THE SAID ORDER, THE ASSESSEE FILED FRESH 2 APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT, DATED 10.09.2012. THE EARLIER REQUEST WAS REJECTED BY THE LD. CIT, WAS CH ALLENGED BEFORE THE ITAT, AMRITSAR BENCH, WHO HAS SET ASIDE THE ORDER O F THE LD. CIT, BATHINDA VIDE ORDER DATED 13.02.2014 AND THE LD. CIT WAS DIR ECTED TO PASS A SPEAKING ORDER AFTER AFFORDING OPPORTUNITY OF BEING HEARD. A CCORDINGLY, THE ASSESSEE WAS PROVIDED OPPORTUNITY. ON PERUSAL OF INCOME & EX PENDITURE ACCOUNTS FOR THE PERIOD 01.04.2012 TO 31.03.2013 AND 01.04.2013 TO 31.03.2014, THE LD. CIT OBSERVED THAT THE ASSESSEE HAS DEBITED NOMINAL EXPENSES FOR THE PERIOD 01.04.2012 TO 31.03.2013 TOWARDS GAUSHALA AT RS.18 00/- & TOWARDS PSEB BOOKS PURCHASED AT RS.5,995/-. NO OTHER WORTHWHILE CHARITABLE ACTIVITIES MENTIONED IN THE AIMS AND OBJECTIVES HAVE BEEN CARR IED OUT BY THE TRUST DURING THE PERIOD. PERUSAL OF THE INCOME & EXPENDI TURE ACCOUNT SHOWS THAT THERE HAVE BEEN NO RECEIPTS DURING THE FINANCIAL YE AR 2012-13. AS REGARDS, THE BALANCE SHEET, THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.1,16,205/- UNDER THE HEAD CORPUS ACCOUNT AND THAT TOO REMAINS DEPO SITED WITH ICICI BANK. IT REVEALED THAT NO PART OF THE CORPUS FUND HAD BEE N UTILIZED FOR ANY CONSTRUCTION/RENOVATION/ADVANCEMENT OF TRUST/CHARIT ABLE ACTIVITY DURING THIS PERIOD. FURTHER, PERUSAL OF THE INCOME & EXPENDITUR E ACCOUNT FOR THE FINANCIAL YEAR 2013-14 ALSO REVEALED THAT NO WORTHW HILE CHARITABLE ACTIVITY WAS CARRIED OUT EXCEPT THE PAYMENT OF RS.51,000/- T O GAUSHALA COMMITTEE 3 FOR CONSTRUCTION OF BUILDING AND NOMINAL EXPENSES OF RS.502/- ON COW FEED AND RS.2,100/- PAID TO BHARAT VIKAS PANRISHAD FOR E YE CAMP. DURING THIS PERIOD ALSO, NO RECEIPT HAS BEEN SHOWN EXCEPT FDR I NTEREST OF RS.8,319/-. ADEQUATE OPPORTUNITY HAS BEEN PROVIDED TO THE ASSES SEE AT VARIOUS STAGES BUT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE G ENUINENESS OF CHARITABLE ACTIVITIES MENTIONED IN THE TRUST DEED FOR THE PURP OSE OF REGISTRATION U/S 12AA OF THE ACT. IT IS PERTINENT TO MENTION HERE TH AT THERE ARE 11 OBJECTS OF THE TRUST AND AS PER THE INCOME & EXPENDITURE ACCOU NTS, THE ASSESSEE-TRUST HAS INCURRED NOMINAL EXPENSES TOWARDS ONE OR TWO OB JECTS ONLY. FROM THE ABOVE FACTS, IT IS VERY CLEAR THAT THERE WERE NEGLI GIBLE ACTIVITIES AND MOST OF THE EXPENSES ALLEGED TO HAVE BEEN INCURRED ARE NEIT HER IN ACCORDANCE WITH THE OBJECTS OF THE TRUST NOR THESE ACTIVITIES ARE O F THE NATURE OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THER EFORE, NO REASONABLE SATISFACTION CAN BE RECORDED ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST WHICH IS A PRE-REQUISITE U/S 12AA(1)(A) OF TH E ACT, FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. 3. THE LD. CIT(A) FOLLOWING THE DECISION OF THE ITA T, AMRITSAR BENCH IN THE CASE OF M/S. SIDANA EDUCATIONAL AND WELFARE SOCIETY, AMRITSAR VS. CIT-II, AMRITSAR IN ITA NO.431(ASR)/20009 DATED 18. 12.2009 REJECTED THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATI ON U/S 12AA OF THE ACT. 4 4. THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N.AROR A, ADVOCATE POINTED OUT THE VARIOUS OBJECTS OF THE TRUST AT PAGE 4 & 5 OF LD. CITS ORDER AND STATED THAT THE EXPENSES HAVE BEEN INCURRED ON THE AIMS AND MAIN OBJECTS OF THE TRUST I.E. THE ASSESSEE, ESPECIALLY THE AIMS AN D OBJECTS NO. 6 TO 11. MOREOVER, THE LD. CIT HIMSELF IN HIS ORDER AT PARA 7 HAS ACCEPTED THAT THE ASSESSEE TRUST HAS INCURRED NOMINAL EXPENSES FOR ON E OR TWO OBJECTS ONLY. THEREFORE, IT CANNOT BE PRESUMED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES FOR THE PURPOSE OF AIMS AND O BJECTS FOR WHICH THE TRUST HAS BEEN REGISTERED. THEREFORE, THE ASSESSEE HAS FU LFILLED THE CONDITIONS MENTIONED IN SECTION 12AA(1) WITH REGARD TO THE GEN UINENESS OF THE ACTIVITIES AND THAT OF THE AIMS AND OBJECTS. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD. CIT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. ON PERUSAL OF BALANCE SHEET AND INCOME & EXPENDITUR E ACCOUNT FOR THE YEAR ENDING 31.03.2013 AND 31.03.2014 AVAILABLE AT PB 22 TO 28 AND 36 TO 40 ALONGWITH COPIES OF VOUCHERS OF EXPENDITURE, WE FIN D THAT THE ASSESSEE HAS INCURRED EXPENSES FOR PURCHASE OF BOOKS AMOUNTING T O RS.5,995/- DURING THE YEAR ENDING 31.03.2013 AND BOOKS STATED TO HAVE BE EN PURCHASED FOR THE POOR STUDENTS OF S.D.GIRLS HIGH SCHOOL, WHICH IS A OBJECT NO. V & VI OF THE AIMS AND OBJECTS REPRODUCED AT PARA 5 AND PAGE 4 OF LD. CITS ORDER. FURTHER 5 EXPENSES HAVE BEEN INCURRED ON GREEN FODDER FOR THE COWS WHICH IS OBJECT NO. VI OF THE AIMS AND OBJECTS. FURTHER, THE AMOUNT OF RS.1400/- HAS BEEN GIVEN TO GAUSHALLA FOR COW-FEED IS AN OBJECT NO.VI OF THE MAIN AIMS AND OBJECTS. THE VOUCHERS FOR THE SAID EXPENDITURE ARE PLACED ON RECORD AND WERE PRODUCED BEFORE THE LD. CIT. AS REGARDS THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31.03.2014, THE ASSESSEE HAS IN CURRED AN EXPENDITURE FOR COW-FEED WHICH IS OBJECT NO.VI AND OBJECT NO. VII IS THE PAYMENTS TO GAUSHALLA MANAGING COMMITTEE FOR COW FEE AND OBJECT NO.9 IS FOR CONSTRUCTION OF BUILDING FOR THE PURPOSE OF TRUST I S THE AIMS AND OBJECTS OF THE TRUST. NO AMOUNT OF EXPENDITURE HAS BEEN INCURR ED FOR NON-CHARITABLE PURPOSES. THE FINDINGS OF THE LD. CIT THAT THESE AR E NEGLIGIBLE ACTIVITIES AND MOST OF THE EXPENSES HAVE NEITHER BEEN INCURRED WIT H THE OBJECTS OF THE TRUST NOR THESE ACTIVITIES ARE OF THE NATURE OF ADVANCE MENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY, CANNOT BE ACCEPTED IN VIEW OF OUR FINDINGS HEREINABOVE. AS PER THE FINDINGS HEREINABOVE, THE A SSESSEE HAS INCURRED THOUGH NOMINAL EXPENSES FOR AIMS AND OBJECTS OF THE TRUST CERTAINLY CARRIED OUT ACTIVITIES FOR THE ADVANCEMENT OF THE OBJECTS OF THE TRUST. THE LD. CIT IN PARAS 7 & 8 DOES NOT DENY OF INCURRING EXPENDI TURE ON THE OBJECTS OF THE TRUST ON ONE HAND WHEREAS, ON THE OTHER HAND IN PAR A 8 HAS GIVEN THE FINDING THAT THE ASSESSEE HAS NOT INCURRED EXPENDITURE FOR ADVANCEMENT OF THE OBJECTS 6 OF THE TRUST. THE CONTROVERSIAL FINDINGS BY THE LD. CIT, ARE AGAINST THE FACTS OF THE PRESENT CASE. IN FACT, THE ASSESSEE HAS CARR IED OUT CHARITABLE ACTIVITIES FOR THE AIMS AND OBJECTS OF THE TRUST. THEREFORE, THE LD. CIT, BATHINDA IS NOT JUSTIFIED IN REJECTING GRANT OF REGISTRATION U NDER SECTION 12AA OF THE ACT, TO THE ASSESSEE-TRUST AND IS THEREFORE, DIREC TED TO GRANT THE SAID REGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.473(ASR)/2014. IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH FEBRUARY, 2015. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SMT.RAJ RANI BANSAL CHARITABLE TRUST, ABOHAR. 2. THE CIT 3. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.