M/s. Suma Foundations, CHENNAI V. ITO, Coimbatore

ITA 474/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64152 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-08-2012
• Assessment Year: misc
• Appeal Filed On: 05-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 474/MDS/2012 M/S SUMA FOUNDATIONS, 61, SATHY MAIN ROAD, COIMBATORE 641 006. PAN : AAJTS7326L (APPELLANT) V. THE INCOME TAX OFFICER, COMPANY WARD I, COIMBATORE. (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 09.08.2012 DATE OF PRONOUNCEMENT : 22.08.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT CIT DENIED APPROVAL UNDER SECTION 80G OF INCOME-TAX ACT , 1961 (IN SHORT 'THE ACT'). AS PER THE ASSESSEE, IT WAS PROVIDING EDUCATIONAL SUPPORT TO POOR STUDENTS, AND WAS ENGAGED IN CHARITABLE ACTIVI TIES AND IT WAS ALREADY HAVING REGISTRATION UNDER SECTION 12AA OF T HE ACT, AS A CHARITABLE INSTITUTION. 2 I.T.A. NO. 474/MDS/12 2. FACTS APROPOS ARE THAT ASSESSEE, A TRUST, HAD FI LED AN APPLICATION IN FORM NO.10G ON 7.7.2011 SEEKING APPROVAL UNDER S ECTION 80G(5)(VI) OF THE ACT. ASSESSEE WAS ALREADY REGISTERED UNDER SECTION 12A OF THE ACT VIDE ORDER DATED 28.6.2011 OF COMMISSIONER OF I NCOME TAX. CLAIM OF THE ASSESSEE WAS THAT IT WAS ENGAGED IN PROVIDIN G EDUCATIONAL SUPPORT TO POOR STUDENTS BY PAYING THEIR FEES, SUPP ORTING POOR PATIENTS BY PAYING THEIR HOSPITAL BILLS AND OTHER CHARITABLE ACTIVITIES OF SIMILAR NATURE. IN SUPPORT, ASSESSEE HAD FILED INCOME & EX PENDITURE AND RECEIPTS AND PAYMENTS FOR PREVIOUS YEARS RELEVANT T O ASSESSMENT YEARS 2010-11 AND 2011-12. ASSESSEE HAD ALSO FILED RETUR NS WITH JURISDICTIONAL ASSESSING OFFICER FOR THESE ASSESSMENT YEARS. HOWE VER, CIT DENIED APPROVAL UNDER SECTION 80G FOR A REASON THAT MANAGI NG TRUSTEE OF THE ASSESSEE WAS RUNNING A HOSPITAL AND HIS PRIMARY PRO FESSION WAS TO MANAGE THE HOSPITAL. FURTHER, AS PER THE CIT, CLAI M OF FINANCIAL ASSISTANCE WAS NOT PROVED CONCLUSIVELY AND SUCH ASS ISTANCE WAS SPORADIC IN NATURE. 3. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT, SUBMITTED THAT ADMITTEDLY, ASSESSEE HAD FILED RETUR NS FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12. ASSESSEE WAS ALREADY RE GISTERED UNDER SECTION 12A OF THE ACT AS A CHARITABLE TRUST. A CO PY OF THE ORDER DATED 28.6.2011 WAS FILED. IN SUCH ORDER IT WAS CLEARLY STATED THAT ASSESSEE HAD FILED A DETAILED NOTE ON ITS ACTIVITIES WHICH, INTER-ALIA, INCLUDED FREE 3 I.T.A. NO. 474/MDS/12 COUNSELING, AWARENESS CAMPS AND FREE TREATMENT TO C HILDLESS COUPLES FROM BACKWARD AND RURAL AREAS, FREE MEDICAL CAMPS F OR KIDNEY PATIENTS, ETC. AS PER THE LEARNED A.R., CIT(APPEALS) HAD MEN TIONED IN HIS ORDER UNDER SECTION 12AA OF THE ACT THAT ASSESSEE HAD FIL ED RETURNS OF INCOME FOR ASSESSMENT YEARS 2010-11 AND 2011-12. CIT HAD ALSO GRANTED THE ASSESSEE-TRUST REGISTRATION UNDER SECTION 12A OF TH E ACT. DESPITE THESE FACTS, ASSESSEES APPLICATION FOR APPROVAL UNDER SE CTION 80G WAS DENIED. 4. PER CONTRA, LEARNED D.R., STRONGLY SUPPORTING TH E ORDER OF CIT, SUBMITTED THAT ASSESSEE DID NOT PROVE RENDERING FIN ANCIAL ASSISTANCE TO POOR. FURTHER, IT HAD ONLY SPORADIC CHARITABLE ACT IVITIES AND THEREFORE, CIT WAS JUSTIFIED IN REJECTING THE APPLICATION FOR APPROVAL UNDER SECTION 80G OF THE ACT. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. A LOOK INTO THE ORDER DATED 28.6.2011 OF CIT, PASSED UNDER SECTION 12AA OF THE ACT, CLEARLY SHOWS THAT ASSESSEE WAS GRANTED REGISTRATION UNDER THE SAID SECTION. IT IS ALSO CLEARLY MENTIONED IN THE SAID ORDER THAT ASSESSEE HAD FILED DETAILS OF ITS CHARITABLE ACTIVI TIES FOR PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS 2010-11 AND 2011-12. ASSESSEE HAD ALSO FILED RETURNS FOR THESE YEARS. IF THE ASSESSEE WAS NOT DOING ANY CHARITABLE ACTIVITIES, THEN WITHOUT DOUBT, THE CIT WOULD HAVE DENIED 4 I.T.A. NO. 474/MDS/12 REGISTRATION SOUGHT UNDER SECTION 12A OF THE ACT. AFTER HAVING FOUND ASSESSEE TO BE ELIGIBLE FOR REGISTRATION UNDER SECT ION 12A OF THE ACT, WE ARE OF THE OPINION THAT DENIAL OF APPROVAL UNDER SE CTION 80G WAS NOT WARRANTED. JUST BECAUSE THE MANAGING TRUSTEE OF TH E ASSESSEE WAS RUNNING A HOSPITAL, ASSESSEE SHOULD NOT HAVE BEEN D ENIED SUCH APPROVAL. FINANCIAL ASSISTANCE CLAIMED BY THE ASSE SSEE IF NOT PROVED, JURISDICTIONAL ASSESSING OFFICER COULD ALWAYS DENY THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER THE ACT. WE ARE OF T HE OPINION THAT DENIAL OF APPROVAL UNDER SECTION 80G WAS NOT APPROP RIATE. ORDER OF CIT IS THEREFORE QUASHED AND HE IS DIRECTED TO GRANT TH E ASSESSEE APPROVAL UNDER SECTION 80G OF THE ACT. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON WEDNESDAY, THE 22 ND OF AUGUST, 2012, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND AUGUST, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-I, COIMBATORE (4) D.R. (5) GUARD FILE