Appeal details
Counselvise Citation
[2012] 140 COUNSELVISE.COM (IT) 65338 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 8 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-09-2012
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
H
Next Hearing Date
20-06-2012
Assessment Year
misc
Appeal Filed On
22-12-2009
Judgement Text
ITA 4819/DEL.2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 4819/DEL/2009 ASSESSMENT Y EAR: -- TRI NETRA SEWA SANSTHA, VS DIT(E), B-1/21, YAMUNA VIHAR, PLOT NO.1 5, 3 RD FLOOR, NEW DELHI. A AYAKAR BHAWAN, LAXMI NAGAR, DISTRICT CENTRE, NEW DELHI-110092 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SAMEER KAPOOR RESPONDENT BY: DR. B.R.R. KUMAR, SR.DR O R D E R PER CHANDRAMOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE DIRECTOR OF INCOME TAX(EXEMPTION), DELHI DATED 23.1 0.2009 PASSED U/S 80G(5) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) READ WITH RULE 11AA OF INCOME TAX RULES, 1962(HEREI NAFTER REFERRED TO AS THE RULES). 2. THE GROUNDS SUBMITTED WITH THE APPEAL WERE DESCR IPTIVE AND ARGUMENTATIVE IN NATURE, THEREFORE, AS PER OUR ORDE R DATED 29.9.2010, THE ITA 4819/DEL.2009 2 ASSESSEE WAS INSTRUCTED TO SUMMARISE GROUNDS OF APP EAL WHICH READ AS UNDER:- 1. THE LEARNED DIRECTOR OF INCOME TAX - (EXEMPTION ) HAS PASSED THE ORDER OF REJECTION OF APPLICATION OF RENEWAL OF EXEMPTION U/S 80G (5) (VI) OF THE INCOME TAX ACT, ARBITRARILY ON ERRONEOUS FACTS AND SUPERFLUOUS REASONS WITHOUT BRINGING OUT THE RELEVANT MATERIAL FACTS. 2. AUTHORITIES NEVER PROVIDED REASONABLE TIME AND OPPORTUNITY OF BEING HEARD, AS LAID DOWN IN RULE 11AA(5), BEFORE REJECTING THE APPLICATION U/S 80G(5 )(VI) 3. THE LEARNED DIRECTOR OF INCOME TAX - (EXEMPTION) HAS RAISED FOLLOWING IRRELEVANT OBJECTIONS. A. THE TOTAL EXPENSES SHOWN ON CHARITABLE ACTIVITIE S AMOUNT TO ONLY 15.50% OF DONATION RECEIVED. THE ASSESSEE HAS DULY COMPLIED ALL REQUIREMENTS U/S 80G(5) (I) TO 80G(5) (VI) AND RULE IIAA(1),(2),(3). THE ASSESSEE HAS TAKEN UNUTILIZED CHARITABLE RECEIPTS ( I.E. 84.5%) IN COMPUTATION OF TAXABLE INCOME AN ACCUMULATED SAME FOR THE ACCOMPLISHMENT OF VARIOUS CHARITABLE ACTIVITIES IN NEAR FUTURE. TAX WILL BE LEVIED IF UTILIZATION OF CHARITABLE REC EIPTS (FOR CHARITABLE PURPOSES) FALLS BELOW 85%, BUT IT IS NO WHERE PRESCRIBED THAT NON UTILIZATION OF 85% OF CHARITABL E RECEIPTS WOULD RESULT IN DISAPPROVAL U/S 80G. B. CASH MEMO ARE FAKE & BOGUS ON THE BASIS THAT C ASH MEMO DO NOT BEAR SHOP NAME OR BILL NO., ARE IN SAME HANDWRITING, AND NO SHOPS IN INDIAN MARKETS SELL VEGETABLES, RICE, FLOUR, REFINED OIL UNDER ONE ROOF CASH MEMO NOT BEARING SHOP NAME IS GENERALLY FOUND IN COMMON PARLANCE. FURTHER THE RELEVANT SHOPKEEPERS O F THE VILLAGE (DILSHAD EXT. BHOPURA) ARE NOT LITERATE ENOUGH. ASSESSEE HAS PURCHASED A FOOD ITEMS FROM SA ME ITA 4819/DEL.2009 3 GROCERY SHOPKEEPER THEREBY BEARING THE SAME HANDWRITING AND SIGNATURE. C. THE STATEMENT OF DISTRIBUTION OF FOODS IS ABSOL UTELY NEAT AND CLEAN, WITHOUT EVEN A SPECK OF DIRT, THERE BY RENDERING THE DOCUMENT INELIGIBLE AS CONTEMPORANEOU S (OF THAT PERIOD) RECORD. IF ONLY THOSE DOCUMENTS ARE ADMISSIBLE AS EVIDENCE WHICH SHOW SPECK OF DIRT THEN ONE CAN EASILY CONVERT A DOCUMENT IN THAT SITUATION. D. NO EXPLANATIONS HAVE BEEN OFFERED AS TO HOW MUC H EXPENSE HAVE BEEN INCURRED ON GAS/KEROSENE, SALT CHILLIES, MASALA ETC, AND HIRING OF COOK. THE AUTHORITIES HAS NEITHER ASKED THE EXPLANATIONS FROM US NOR GIVEN US THE PROPER OPPORTUNITY AN4 REASONAB LE TIME TO PRESENT CLARIFICATIONS. FURTHER THE EXPENSE S RELATED TO GAS/ KEROSENE, SALT, CHILLIES, MASALA ET C, AND MANY OTHER RELATED ITEMS HAVE BEEN PROVIDED BY THE VOLUNTEERS AT NO COST BASIS. E. IT IS ABSURD TO EVEN THINK THAT ALL THESE ITEMS TOTALING TO AROUND 397 KGS( IN THE BILL DATED 08. 11.2008) A RE PREPARED IN 31 KGS. OF REFINED OIL AND HAVE BEEN CONSUMED BY ONLY 19 PEOPLE. ASSESSEE HAS DISTRIBUTED FOOD AND MOST OF PEOPLE WE RE ALSO GIVEN FOOD FOR THEIR ENTIRE FAMILY MEMBERS F. NO EVIDENCE AT ALL HAS BEEN SUBMITTED SHOWING THAT THE BOOKS OF VALUE RS. 6.780/- WERE PURCHASED. THE AUTHORITIES HAVE NEVER INSISTED TO SUBMIT THE B ILLS EVIDENCING THE PURCHASE OF BOOKS OF RS. 6,780/-THE SAME IS IN THE POSSESSION OF THE ASSESSEE AND THE SAME C AN BE PRODUCED BEFORE THE OFFICER, IF ASKED FOR. ITA 4819/DEL.2009 4 G. THE CLAUSE (I) TO (VI) OF 80 G (5) OF THE ACT, NOWHERE PRESCRIBE THE DIRECTOR TO SCRUTINIZE THE RELEVANT VOUCHERS, SUPPORTINGS ETC. HERE THE ASSESSEE IS SEE KING AN EXEMPTION U/S 80G AND NOT COMPLYING OF NOTICE IS SUED U/S 143(2) OF THE ACT FOR SCRUTINY ASSESSMENT U/S 1 43(3) 4. THEREFORE 'YOUR HONOUR' IT IS REQUESTED TO ACCE PT MY ARGUMENT AND CLARIFICATION ON EXCEPTIONAL BASIS AND ALLOW THE RENEWAL OF EXEMPTION U/S 80 G OF THE INCO ME TAX ACT 5. THE ASSESSEE RETAIN THE RIGHT TO ADD/DELETE/MOD IFY ANY OF THE ABOVE GROUNDS OF APPEAL AT ANY STAGE. 3. BRIEFLY STATED, THE FACTS OF THE CASE GIVING RIS E TO THIS APPEAL ARE THAT THE ASSESSEE FILED AN APPLICATION IN FORM NO.10G SE EKING EXEMPTION U/S 80G OF THE ACT BEFORE DIT(E) DELHI. IN REPLY TO LETTER DATED 14.9.2009 OF DIT(E), THE ASSESSEE SUBMITTED A LETTER DATED 23.09 .2009 GIVING DESCRIPTION OF CHARITABLE ACTIVITIES HELD DURING FINANCIAL YEAR 2006-07, 2008-08 AND 2008-09. THE DIT(E) OBSERVED THAT THE CHARITABLE A CTIVITIES SHOWN BY THE ASSESSEE WERE BOGUS BECAUSE NO SUCH ACTIVITY OF FEE DING POOR PEOPLE WAS ACTUALLY DONE. HE FURTHER NOTED THAT REGARDING THE CLAIM OF CHARITY BY DONATING BOOKS OF POOR CHILDREN/STUDENTS, NEITHER A NY BILLS OF PURCHASE OF BOOKS NOR ANY OTHER EVIDENCE WAS SUBMITTED TO SHOW THAT THE BOOKS OF RS.678 WERE PURCHASED AND DONATED TO THE ECONOMICAL LY CHALLENGED STUDENTS. WITH THESE OBSERVATIONS, THE DIT(E) REJE CTED THE APPLICATION OF THE ITA 4819/DEL.2009 5 ASSESSEE FOR EXEMPTION U/S 80G OF THE ACT. HENCE, THIS APPEAL BEFORE THIS TRIBUNAL. GROUND NO. 1 & 2 4. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY CONSIDERED THE DOCUMENTS AND EVIDENCE PLACED BEFORE US ON RECORD. THE ASSESSEES REPRESENTATIVE SUBMITTED THAT THE ASSESS EE DULY COMPLIED WITH THE PROVISIONS OF CLAUSES (I), (II) & (V) OF SECTION 80 G(5) OF THE ACT AND THE DIT(E) RAISED IRRELEVANT OBJECTIONS AND REJECTED TH E APPLICATION OF THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE USED I TS RESOURCES TOWARDS MAIN OBJECTS AND CHARITABLE ACTIVITIES. HE ALSO SUBMITT ED THAT THE DIT(E) STARTED THE PROCEEDINGS WITH A LETTER TO THE ASSESSEE DATED 14.09.2009 AND THE ASSESSEE PROMPTLY REPLIED TO LETTER DATED 23.09.200 9 SHOWING CHARITABLE ACTIVITIES OF THE ASSESSEE INSTITUTION AND SUBMITTE D REQUIRED DETAILS. THE AR VEHEMENTLY SUBMITTED THAT ON BARE READING OF THE IM PUGNED ORDER, IT CAN BE EASILY SAID THAT DIT(E) MENTIONED ABOUT REPLY OF TH E ASSESSEE BUT HE DID NOT GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE INSTITUTION AS REQUIRED BY THE PROVISO TO SECTION 11AA(5) OF THE ACT. 5. THE LD. DR REPLYING TO THE ABOVE CONTENTIONS SUB MITTED THAT IT IS THE DUTY OF THE TRUST OR INSTITUTION TO ELABORATE ITS O BJECTS AND TO ESTABLISH THAT THE RESOURCES OF THE TRUST AND INSTITUTION HAVE BEE N USED FOR CHARITABLE ITA 4819/DEL.2009 6 PURPOSES. HE FURTHER SUBMITTED THAT WHEN CHARITABL E TRUST OR INSTITUTION FILED AN APPLICATION SEEKING EXEMPTION U/S 80G OF THE ACT , THEN IT IS OBLIGATORY ON ITS PART TO FULFILL REQUIREMENT OF RULE 11AA FOR AP PROVAL U/S 80G OF THE ACT. 6. AS THE ASSESSEE APPELLANT HAS RAISED A GROUND TH AT HE WAS NOT GIVEN AN OPPORTUNITY OF BEING HEARD BY THE DIT(E) AS PER RUL E 11AA(5) OF THE RULES, THEREFORE, WE FIND IT APPROPRIATE TO REPRODUCE THE RELEVANT PROVISIONS. THUS, RULE 11AA(5) AND ITS PROVISIONS READ AS UNDER:- 4 [ REQUIREMENTS FOR APPROVAL OF AN INSTITUTION OR FUND UNDER SECTION 80G. 11AA. (1) XXXXXX (2) XXXXXXX (3) XXXXXXX (4) XXXXXXX (5) WHERE THE COMMISSIONER IS SATISFIED THAT ONE OR MORE OF THE CONDITIONS LAID DOWN IN CLAUSES ( I ) TO ( V ) OF SUB-SECTION (5) OF SECTION 80G ARE NOT FULFILL ED, HE SHALL REJECT THE APPLICATION FOR APPROVAL, AFTER RE CORDING THE REASONS FOR SUCH REJECTION IN WRITING : PROVIDED THAT NO ORDER OF REJECTION OF AN APPLICATION SHALL BE PASSED WITHOUT GIVING THE INSTITUTION OR FUND AN OPPORTUNITY OF BE ING HEARD. (6) XXXXXXXXX 7. FROM THE IMPUGNED ORDER, WE OBSERVE THAT THE DIT (E) ISSUED A LETTER TO THE ASSESSEE AND THE ASSESSEE FILED ITS REPLY ON 23.09.2009. THE DIT(E) CONSIDERED THE REPLY OF THE ASSESSEE AND EVIDENCE E NCLOSED WITH IT AND PROCEEDED TO DECIDE THE APPLICATION OF THE ASSESSEE FOR EXEMPTION U/S 80G OF THE ACT AND AFTER NOTING SOME OBSERVATIONS, HE ARRI VED TO A CONCLUSION THAT IN THE ABSENCE OF GENUINE EVIDENCE OF CHARITABLE ACTIV ITIES OF THE ASSESSEE, THE ITA 4819/DEL.2009 7 ASSESSEE FAILED TO ESTABLISH THAT APPLICANT ASSESSE E CONTINUES TO SATISFY THE CONDITIONS LAID DOWN U/S 80G(5) OF THE ACT AND ACCO RDINGLY, THE COMMISSIONER OF INCOME TAX(A) REJECTED THE APPLICAT ION FOR EXEMPTION. 8. AS PER PROVISO ATTACHED TO THE SUB-RULE (5) OF R ULE 11AA OF THE RULES, IT IS A STATUTORY REQUIREMENT THAT NO ORDER OF REJE CTION OF APPLICATION U/S 80G(5) OF THE ACT SHALL BE PASSED WITHOUT GIVING TH E INSTITUTION, TRUST OR FUND AN OPPORTUNITY OF BEING HEARD. IN THE CASE IN HAND , THE DIT(E) ISSUED A LETTER ON 14.09.2009 TO THE ASSESSEE TO SUBMIT DOCUMENTS A ND EXPLANATION AND THE ASSESSEES REPRESENTATIVE SUBMITTED A REPLY ALONG W ITH RELEVANT EVIDENCE ON THE FIXED DATE OF HEARING I.E. 23.09.2009. FROM TH E IMPUGNED ORDER, WE OBSERVE THAT THE REPLY AND EVIDENCE WITH IT WAS CON SIDERED BY THE DIT(E) BUT HE PROCEEDED TO DECIDE THE APPLICATION AND REJECTED THE SAME WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, ENAB LING HIM TO EXPLAIN HIS SUBMISSIONS AND RELEVANT EVIDENCE SHOWING CHARITABL E ACTIVITIES TO ESTABLISH ITS CLAIM FOR EXEMPTION U/S 80G OF THE ACT. ACCORD INGLY, WE ARE INCLINED TO CONCLUDE WITH THE OBSERVATION THAT THE ASSESSEE CHA RITABLE INSTITUTION WAS NOT GIVEN AN OPPORTUNITY OF BEING HEARD BY THE DIT(E). THEREFORE, IT WOULD BE JUST AND PROPER TO RESTORE THE MATTER TO THE FILE O F DIT(E) WITH A DIRECTION THAT HE WOULD DECIDE THE MATTER AFRESH DE NOVO GIVI NG AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS REQUIRED BY THE PROV ISO TO SUB-RULE (5) OF RULE ITA 4819/DEL.2009 8 11AA OF THE RULES. THE ASSESSEE IS ALSO UNDER OBLI GATION TO ATTEND THE HEARING AND SUPPORT THE PROCEEDINGS. GROUNDS NO. 3, 4 AND 5 9. AS THE MAIN ISSUE RAISED IN GROUNDS NO. 1 AND 2 HAV E BEEN RESTORED TO THE FILE OF THE DIT(E), THEREFORE, GROUNDS NO. 3, 4 AND 5 REQUIRE NO ADJUDICATION AND ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5.9.2012. SD-/ SD/- ( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 5TH SEPTEMBER 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR
