Deputy Commissioner of Income-tax, V. World Institute of Sustainable Energy, Pune

ITA 5/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93840 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Charitable institution; Benefit of exemption
• Section: 80G; 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO S . 04 & 05 /PN/201 4 ASSESSMENT YEAR S : 2004 - 05 & 2005 - 06 DY. COMMISSIONER OF INCOME TAX, CIRCLE 7, PUNE VS. WORLD INSTITUTE OF SUSTAINABLE ENERGY, SURYA SUMAN, 49 HINDUSTAN ESTATES, ROAD NO. 2, KALYANI NAGAR, PUNE-411006 (APPELLANT) (RESPONDENT) PAN NO. AAATW0727A ASSESSEE BY: SHRI NIKHIL PATHAK REVENUE BY: SHRI B.C. MALAKAR DATE OF HEARING : 11-06-2015 DATE OF PRONOUNCEMENT : 26-06-2015 ORDER PER VIKAS AWASTHY, JM:- THE APPEALS HAVE BEEN FILED BY THE REVENUE IMPUGNING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 18- 10-2013 COMMON FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06. IN BOTH THE APPEALS, THE REVENUE HAS CHALLENGED THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) IN HOLDING THE ASSESSEE AS CHARITABLE INSTITUTE AND ELIGIBLE FOR EXEMPTION U/S. 11 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A TRUST REGISTERED UNDER THE SOCIETIES REGIS TRATION ACT, 1860. THE ASSESSEE IS ALSO REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950. THE ASSESSEE HAS BEEN FORMED WITH THE PRIMARY OB JECT OF 2 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 PROVIDING TRAINING IN SUSTAINABLE ENERGY AND CONSERVATION OF ENERGY. THE MAIN OBJECTS AS LISTED IN MEMORANDUM OF ASSOCIATION OF THE ASSESSEE ARE: TO CONDUCT SHORT-TERM AND LONG-TERM ACADEMIC AND OTH ER TRAINING PROGRAMMES IN FURTHERANCE OF THE FUTURISTIC HUMAN RESOU RCE NEEDS OF THE EMERGING SUSTAINABLE ENERGY, SUSTAINABLE DEVELOPMEN T AND ENERGY CONSERVATION SECTORS. TO BE A PREMIER OUTREACH CENTRE FOR COMMUNICATIONS, INFORMATION AND KNOWLEDGE TRANSFER IN THE FIELDS OF SUSTAINABLE E NERGY, SUSTAINABLE DEVELOPMENT AND ENERGY CONSERVATION. TO FUNCTION AS AN APEX POLICY THINK TANK, POLICY ADV OCACY CENTRE AND CONSULTANCY PROVIDER IN THE FIELD OF SUSTAINABLE ENER GY AND ENERGY CONSERVATION. TO TAKE UP TECHNICAL AND OTHER RESEARCH IN SELECTED AN D SPECIALIZED AREAS OF VITAL IMPORTANCE FOR AUGMENTING AND ACCELERAT ING SUSTAINABLE DEVELOPMENT IN A HOLISTIC MANNER, FOR A TR ANSITION TO A CLEANER AND GREENER WORLD. TO ESTABLISH, MAINTAIN AND OPERATE LIBRARIES, LABORAT ORIES AND PROTOTYPE TRAINING CENTRES AND HOLD SEMINARS AND TR AINING PROGRAMMES IN CONCORDANCE AND FURTHERANCE TO THESE OB JECTIVES. 3. THE ASSESSEE WAS GRANTED REGISTRATION U/S. 12A ON 0 5-03-2004. THE ASSESSEE WAS ALSO GRANTED APPROVAL FOR BENEFIT OF S ECTION 80G OF THE ACT ON 13-10-2005. THEREAFTER, THE REGISTRATION OF THE S OCIETY U/S. 12A WAS WITHDRAWN BY THE DEPARTMENT ON 30-03-2011. THE A SSESSEE FILED APPEAL AGAINST THE SAID ORDER. THE TRIBUNAL IN ITA NO. 930 /PN/2011 SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX CANCELLING R EGISTRATION AND RESTORED THE REGISTRATION OF THE ASSESSEE U/S. 12A VIDE ORDER DATED 28-02-2013. NOW, IN THE IMPUGNED ASSESSMENT YEARS THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPT ION U/S. 11 OF THE ACT. THE ASSESSING OFFICER REFUSED TO GRANT EXEMPTION TO THE ASSESSEE PRIMARILY ON FOUR GROUNDS: I. THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES; 3 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 II. THE OPERATIONS OF THE ASSESSEE EXTEND TO FOREIGN COUNTR IES (ABROAD); III. THE TRUSTEES ARE THE DIRECTORS OF MAJOR WINDMILL MANUFACTU RING COMPANIES, FROM WHICH THE ASSESSEE HAS PURCHASED WINDMILLS; AND IV. THE SALARY PAID TO SHRI G.M. PILLAI, DIRECTOR GENERAL OF ASSESSE E IS EXCESSIVE. AGGRIEVED BY THE ASSESSMENT ORDERS FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE PREFERRED APPEALS BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) ACCE PTED THE APPEALS OF THE ASSESSEE AND HELD THAT THE ASSESSEE IS E LIGIBLE FOR BENEFIT OF SECTION 11 OF THE ACT. AGAINST THE ORDER OF COMMISSIONE R OF INCOME TAX (APPEALS), THE REVENUE HAS FILED APPEALS FOR BOTH ASSES SMENT YEARS 2004-05 AND 2005-06 BEFORE THE TRIBUNAL. 4. SHRI B.C. MALAKAR APPEARING ON BEHALF OF THE REVENUE VE HEMENTLY SUPPORTING THE ASSESSMENT ORDER SUBMITTED, THAT THE A SSESSEE IN CLAUSE 3 OF THE MEMORANDUM OF ASSOCIATION HAS CATEGORICALLY MENT IONED THAT THE SCOPE OF WORK OF ASSESSEE EXTENDS TO ABROAD. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE IS NOT CARRYING OUT ANY ED UCATIONAL ACTIVITIES. THE ASSESSEE IS NEITHER RECOGNIZED NOR REGISTE RED WITH ANY BOARD OR UNIVERSITY. THE ASSESSEE HAS NOT BEEN ABLE T O SHOW ANY CHARITABLE ACTIVITY CARRIED OUT DURING THE PERIOD UNDER AP PEALS. THE LD. DR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER. 5. ON THE OTHER HAND SHRI NIKHIL PATHAK APPEARING ON BEH ALF OF THE ASSESSEE SUBMITTED THAT THE OBJECTS OF THE ASSESSEE A RE PARTLY EDUCATIONAL AND PARTLY FOR ADVANCEMENT OF OBJECTS OF GEN ERAL PUBLIC UTILITY. THE ASSESSEE IS CREATING AWARENESS AND EDUCATIN G PEOPLE 4 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 TOWARDS ENVIRONMENT PROTECTION AND CONSERVATION OF ENER GY. CHARITABLE PURPOSE AS DEFINED U/S. 2(15) INCLUDES PRESERVATION OF ENVIR ONMENT. THE LD. AR SUBMITTED THAT THE ASSESSEE WAS REGISTERED U NDER THE SOCIETIES REGISTRATION ACT, 1860 ON 18-12-2003 AND UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 ON 23-04-2004. THE ASSESSEE WAS GRANTED REGISTRATION U/S. 12A OF THE ACT ON 05-03-2004 AND THE BENEFIT OF SECTION 80G W.E.F. 13-10-2005. THE ASSESSEE HAS CONDUCTED TRAIN ING PROGRAMMES IN FURTHERANCE OF THE FUTURISTIC HUMAN RESOURC E NEEDS OF SUSTAINABLE ENERGY, SUSTAINABLE DEVELOPMENT AND ENERGY CO NSERVATION. THE ASSESSEE IS INVOLVED IN RESEARCH FOR A TRANSITION TO A CLEANER AND GREENER WORLD. TO ACHIEVE ITS OBJECTS THE ASSESSEE HA S PURCHASED FOUR WIND TURBINE GENERATORS BY INVESTING ITS ENTIRE CORPUS AN D BORROWINGS FROM THE BANKS. THE ASSESSEE IS PUBLISHING A BI-MONTHLY NEWSLETTER GREEN ENERGY, WHICH IS THE ONLY HOLISTIC PUBLICATION ON S USTAINABLE ENERGY IN INDIA. THE SAID PUBLICATION IS DISTRIBUTED FREE OF C OST. THE ASSESSEE IS ORGANIZING SEMINARS AND SHORT DURATION TRAININ G PROGRAMMES FOR CREATING AWARENESS IN SUSTAINABLE ENERGY AND CONSERV ATION OF ENERGY. THE LD. AR FURTHER CONTENDED THAT THE GOVERNING COUNCIL OF THE ASSESSEE APPOINTED SHRI G.M. PILLAI, I.A.S. (RETD.) AS THE DIRECT OR GENERAL. HE HAD WIDE EXPOSURE AND EXPERIENCE IN THE FIELD OF ENERGY DEVELOPMENT AND CONSERVATION. HE HAS REPRESENTED INDI A AT UNITED NATIONS DEVELOPMENT PLAN. THE LD. AR VEHEMENTLY SUPPORTE D THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMIS SING THE APPEALS OF THE REVENUE. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION RENDERED IN THE CASE OF DR. D.Y. PA TIL PRATISTHAN VS. DCIT REPORTED AS 154 TTJ 320 (PUNE). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. THE 5 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 REVENUE IN ITS APPEALS FOR ASSESSMENT YEARS 2004-05 AND 2005-06 HAVE IMPUGNED THE ORDERS OF FIRST APPELLATE AUTHORITY IN HOLDING THE ASSESSEE ELIGIBLE FOR CLAIMING EXEMPTION U/S. 11 OF THE ACT. THE ASSESS ING OFFICER HAS DENIED EXEMPTION TO THE ASSESSEE PRIMARILY ON FOUR GROUNDS: I. THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIE S SINCE ITS INCEPTION; II. THE ACTIVITIES OF THE ASSESSEE EXTEND TO FOREIGN COUNTRIES (ABROAD); III. THE TRUSTEES OF THE ASSESSEE ARE DIRECTORS OF WINDMILL MANUFACTURING COMPANIES FROM WHICH THE ASSESSEE HAS PURC HASED WINDMILLS. THUS, THE TRUSTEES ARE SUBSTANTIALLY INTERESTED IN THE SAID COMPANIES AND SERVING THE CAUSE OF THE SAID COMPANIES; AND IV. THE SALARIES/PERQUISITES OF SHRI G.M. PILLAI, DIRECTOR GENERAL OF ASSESSEE TRUST ARE HIGHLY EXCESSIVE. 7. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN A DETAILED AND WELL REASONED ORDER HAS DEALT WITH ALL THESE ISSUES IN AN EXHAUSTIVE MANNER. THE ASSESSING OFFICER IN THE FIRST INSTANCE HAS RA ISED QUESTION OVER THE CHARITABLE ACTIVITIES BEING CARRIED OUT BY THE AS SESSEE. EARLIER, THE COMMISSIONER OF INCOME TAX HAD INVOKED THE PROVISIONS OF SECTION 12AA(3) AND HAD CANCELLED REGISTRATION GRANTED TO THE AS SESSEE. THE COMMISSIONER OF INCOME TAX CANCELLED THE REGISTRATION ON T HE GROUND THAT THE ACTIVITIES OF THE TRUST ARE NOT GENUINE AND TH AT THEY ARE NOT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST AND PROVISIONS OF SECTION 13(1)(C) OF THE ACT. THE ASSESSEE CHALLENGED THE ORDER OF COMMISSIONER OF INC OME TAX BEFORE THE TRIBUNAL IN ITA NO. 930/PN/2011. THE TRIBU NAL AFTER APPRECIATING THE DOCUMENTS ON RECORD, VIDE ORDER DATED 28-02-2013 SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX AND RESTO RED THE REGISTRATION OF THE TRUST. NOW, AGAIN RAISING QUESTION OVE R THE CHARITABLE ACTIVITIES OF THE ASSESSEE, IS NOT TENABLE. THE COMMISSIONE R OF INCOME 6 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 TAX (APPEALS) WHILE REJECTING THE FIRST GROUND FOR DENYING EX EMPTION U/S. 11 HELD AS UNDER: 4.3.6. IN THE FACE OF SUCH IRREFUTABLE EVIDENCES THAT THE ASSESSING OFFICER HAD BEFORE HIM BUT CHOSE TO IGNORE, I THEREF ORE, FIND MYSELF UNABLE TO BE PERSUADED BY THE ASSESSING OFFICER'S OBJECTIO N THAT NO CHARITABLE ACTIVITIES HAVE BEEN CARRIED OUT. THE WORD 'CHARITY ' IS UNDOUBTEDLY OF THE WIDEST IMPORT. A CHARITABLE ORGANIZATION ENCOMPASSE S A COMPANY FORMED UNDER SECTION 25 OF THE COMPANIES ACT OR A SOCIETY FORMED UNDER SOCIETY REGISTRATION ACT, 1860 OR ANY STALE ACT FOR REGISTR ATION OF SOCIETIES. A CHARITABLE TRUST SHOULD HAVE PUBLIC CHARACTER IN TH E SENSE THAT ITS ACTIVITIES, WHILE NOT REACHING OUT TO HUMANITY AS A WHOLE, ARE AVAILABLE TO A CROSS SECTION OF THE PUBLIC. AT THE SAME TIME, CH ARITY NEED NOT BE CONFINED TO THE POOR. THE PHILANTHROPIC PURPOSE OF SERVING THE POOR IS BETTER SERVED, WHEN ITS FACILITIES ARE MADE AVAILABLE OR P UT TO USE FOR EARNING INCOME FROM WELL TO DO PATIENTS. WHAT IS BARRED IS PRIVATE PROFIT AS HELD BY THE SUPREME COURT IN P.C. RAJA RATNAM INSTITUTION V S MCD 181 ITR 354. THERE ARE ALSO A CATENA OF DECISIONS IN WHICH VARIE D OBJECTS OF GENERAL PUBLIC UTILITY AND NOT MERELY EDUCATION OR MEDICAL RELIEF, PER SE, HAVE BEEN HELD TO BE OF 'CHARITABLE NATURE', WHICH ARE ENUMER ATED AS UNDER; (I) MONITORING AGRICULTURAL PRODUCE [CIT VS AGRICUL TURAL PRODUCE AND MARKETING COMMITTEE 291 ITR 419 BOMBAY] (II) LEGAL AWARENESS [CIT VS ANDHRA CHAMBER OF COMM ERCE 55 ITR 722 SC] (III) PROMOTION OF DIAMOND BOURSE [DIT VS BHARAT DIA MAOND BOURSE 259 ITR 280 SC] (IV) YOGA TRAINING [CIT VS RAJNEESH FOUNDATION 200 ITR 553 BOMBAY] (V) EDUCATING PUBLIC IN SAFETY [DIT(EXEMPTIONS) VS NATIONAL SAFETY COUNCIL 305 ITR 257 BOMBAY] 4.3.7. THEREFORE, IN MY HUMBLE OPINION, THOUGH THE ASSESSING OFFICER HAS ACKNOWLEDGED THAT THE APPELLANT HAS CARRIED OUT ACT IVITIES RELATED TO THE CONSULTANCY, PUBLIC AWARENESS AND RESEARCH IN THE F IELD OF RENEWABLE ENERGY, HIS VIEW THAT SUCH ACTIVITIES WERE NOT OF G ENERAL PUBLIC UTILITY, IS NOT A CORRECT VIEW. IN ARRIVING IN THIS CONCLUSION, I AM SUPPORTED BY THE DECISION OF THE PUNE BENCH OF THE ITAT IN ITA NO. 9 30/PN/2011, WHEREIN THE VARIOUS ACTIVITIES CARRIED OUT BY THE APPELLATE IN THE FIELD OF EDUCATION TRAINING, PUBLIC AWARENESS, POLICY ADVOCACY AND RES EARCH IN THE CAUSE OF SUSTAINABLE DEVELOPMENT AND ENVIRONMENTAL PROTECTIO N HAVE BEEN DISCUSSED AND IN THE ABSENCE OF THE ANY SPECIFIC NE GATIVE FINDING BY THE COMMISSIONER OF INCOME TAX-IV, PUNE, IT HAS BEEN HEL D THAT HIS ACTION IN 7 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 CANCELLING THE REGISTRATION GRANTED TO THE APPELLAN T TRUST U/S 12A(A) BY INVOKING THE PROVISION OF SEC. 12AA(3) OF THE IT AC T WAS NOT JUSTIFIED. IN THE ULTIMATE, THE ITAT HAS RESTORED THE REGISTRATION OF THE TRUST THAT WAS ORIGINALLY GRANTED ON 05.03.2004. 8. THE SECOND GROUND FOR REJECTING THE EXEMPTION BY TH E ASSESSING OFFICER IS, THE ACTIVITIES OF THE ASSESSEE EXTEND BEYOND IND IAN GEOGRAPHICAL BOUNDARIES. THE REVENUE HAS NOT BEEN ABLE TO SHOW THAT THE ASSESSEE HAS CARRIED OUT ANY OF ITS ACTIVITIES ABROAD . ONE OF THE ESSENTIAL CONDITIONS FOR CLAIMING BENEFIT OF EXEMPTION U/S. 11 IS THAT THE ACTIVITIES HAVE TO BE CARRIED OUT BY THE TRUST IN INDIA. IN CASE THE CHARITABLE ACTIVITIES OF THE ASSESSEE ARE BEYOND INDIA TER RITORY, THE ASSESSEE WILL NOT BE ELIGIBLE FOR THE BENEFIT OF SECTION 11. TH E COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDERS HAS OB SERVED THAT THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ACTIVITIE S OF THE ASSESSEE EXTEND OUTSIDE INDIA. THE FINDINGS OF THE COMMISSIONER OF IN COME TAX (APPEALS) ON THIS ISSUE ARE AS UNDER: 4.3.10. THEREFORE, THIS OBJECTION OF THE ASSESSING OFFICER THAT THE SITUS OF THE TRUST SHOWS THAT THE ESSENTIAL CONDITI ON REGARDING APPLICATION OF INCOME WITHIN INDIA ONLY, IS NOT FULFILLED, IS S EEN TO BE BASED ON ONLY PRESUPPOSITIONS AND SURMISES WITHOUT ANY REFERENCE TO ANY CONCRETE FACTS. THERE IS NO MATERIAL THAT HAS BEEN BROUGHT ON RECOR D BY HIM TO SHOW THAT THE APPELLANT WAS CARRYING OUT ANY ACTIVITY OUTSIDE INDIA OR THAT THE CORPUS OF THE APPELLANT WAS LOCATED OUTSIDE INDIA. THIS VIEW IS ALSO CONTRARY TO THE LEGAL VIEW THAT SO LONG AS THE INCO ME DERIVED FROM PROPERTY HAS BEEN APPLIED FOR CHARITABLE OR RELIGIOUS PURPOS ES IN INDIA, A CHARITABLE ORIGINATION IS NOT PROHIBITED FROM INCURRING EXPEND ITURE OUTSIDE INDIA. 9. THE THIRD GROUND FOR DENYING EXEMPTION U/S. 11 TO THE ASSESSEE BY ASSESSING OFFICER IS, THE TRUSTEES ARE THE DIRECTORS OF TH E COMPANIES FROM WHICH THE ASSESSEE HAS PURCHASED WINDMILLS. THUS, THE TRU STEES OF THE ASSESSEE TRUST HAVE SUBSTANTIAL INTEREST IN THE COMPANIE S MANUFACTURING 8 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 WINDMILLS. THE COMMISSIONER OF INCOME TAX (APPEALS) DISCARD ED THESE FINDINGS OF THE ASSESSING OFFICER WITH FOLLOWING OBSERVATIONS: 4.3.16. IN THE PRESENT CASE, IT IS NOT DENIED THAT SUBSTANTIAL DONATIONS HAVE BEEN RECEIVED FROM THE COMPANIES NAM ELY THE WINDMILLS MANUFACTURERS M/S SUZLON ENERGY LTD. AND M/S ENERCO N INDIA LTD., BOTH TOWARDS THE CORPUS FUND AS WELL AS BY WAY OF OTHER DONATIONS DURING THE IMPUGNED F.Y. IT IS ALSO NOT DENIED THAT THE DIRECT ORS OF THESE COMPANIES ARE MEMBERS OF THE APPELLANT SOCIETY. HOWEVER, HAVI NG ESTABLISHED THAT THESE PERSONS ARE PERSONS COVERED UNDER SEC, 13(3), THE ASSESSING OFFICER HAD NECESSARILY TO ESTABLISH THAT ANY PART OF THE I NCOME OR THE PROPERTY OF THE INSTITUTION HAS BEEN USED OR APPLIED DIRECTLY O R INDIRECTLY FOR THE BENEFIT OF SUCH PERSON. THE SPECIFIC MODE OF INFRINGEMENT O F THE CONDITIONALITIES ATE PRESCRIBED U/S 13(2) SO AS TO MAKE THE GENERAL PROV ISION OF SEC. 13(1)(C) MORE SPECIFIC. IN THE PRESENT CASE, THE ASSESSING O FFICER MENTIONED THAT THE WINDMILLS COSTING RS.17,40,00,390/- HAVE BEEN P URCHASED FROM COMPANIES IN WHICH THE TRUSTEES ARE SUBSTANTIALLY I NTERESTED BUT HE HAS NOT BROUGHT ANY CLINCHING OR CORROBORATIVE EVIDENCE S ON RECORD TO SHOW THAT THE INCOME OF THE SOCIETY HAS BOON USED OR APP LIED FOR THE BENEFIT OF PERSONS COVERED U/S 13(3). THE ASSESSING OFFICER, A S THE COURTS HAVE HELD, HAS TO BRING ON RECORD THE ADEQUATE MATERIALS WHICH CAN ESTABLISH THAT THE PAYMENTS MADE ARE EXCESSIVE OR UNDUE TO GIVE BENEFI T TO THE PERSON COVERED U/S 13(3). THE ASSESSING OFFICER HAS FAILED TO DO SO IN THIS PROCEEDING AND THEREFORE, HIS FINDING IN RESPECT OF PAYMENTS MADE TO THE COMPANIES IN WHICH THE TRUSTEES ARE SUBSTANTIALLY I NTERESTED CANNOT BE UPHELD IN THE FACTS OF THE CASE AND THE LAW. IF THE CONTENTIONS OF THE ASSESSING OFFICER ARE CAREFULLY CONSIDERED IN AN UN BIASED MANNER, IT IS NOT DIFFICULT TO SEE THAT THE ASSESSING OFFICER HAS DRA WN HIS CONTENTIONS OR ARGUMENTS MOSTLY ON ASSUMPTIONS THAT SUZLON AND ENE RCON BEING LIFE MEMBERS OF THE TRUST MUST HAVE DERIVED UNDUE BENEFI T FROM THE INCOME OF THE TRUST. HOWEVER, WHEN THE QUESTION OF DENYING TH E BENEFIT OR EXEMPTION U/S. 11 TO THE TRUST ARISES, THE DECISION CANNOT BE TAKEN ON SUCH ASSUMPTIONS OR POSSIBILITIES. HARD FACTS AND EVIDEN CES HAVE TO BE BROUGHT ON RECORD BY THE ASSESSING OFFICER BEFORE INVOKING SEC. 13(1)(C) FOR DENYING THE BENEFIT OF SEC. 11. MORE SO WHEN COURTS ARE OF THE OPINION THAT THE ONUS TO INVOKE THE EXCEPTION CONTAINED IN SECTION 1 3(1)(C) IS ON REVENUE. FOR THE DISCUSSIONS MADE ABOVE AND IN THE LAW WHICH DEMANDS THE ASSESSING OFFICER TO DISCHARGE THE ONUS OF APPLICAT ION OF SEC. 13(1)(C) FOR DENYING THE BENEFIT OF SEC. 11, IT HAS TO BE HELD T HAT IN THE FACE OF THE FACT THAT NO EVIDENCES HAVE BEEN BROUGHT ON RECORD BY TH E ASSESSING OFFICER TO HOLD THE PAYMENT TO SUZLON AND ENERCON AS UNDUE OR EXCESSIVE, THE FINDING THAT THERE IS SOME INFRINGEMENT OF SEC. 13( 1)(C) IS ERRONEOUS. THE 9 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 ASSESSING OFFICER HAS FAILED TO BRING ON RECORD ADE QUATE MATERIALS WHICH CAN SUPPORT HIS FINDINGS. 10. THE LAST AND FOURTH GROUND FOR REFUSING TO GRANT EXE MPTION U/S. 11 BY ASSESSING OFFICER IS, EXCESSIVE REMUNERATION/PERQUISITES P AID TO SHRI G.M. PILLAI, DIRECTOR GENERAL OF THE ASSESSEE. UNDISPUTEDLY, S HRI G.M. PILLAI IS AN EMPLOYEE OF THE ASSESSEE TRUST AND NOT ITS TRU STEE. THEREFORE, THE PROVISIONS OF SECTION 13(2)(C) ARE NOT ATTRACTED. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER ASCERTAINING THE FACTS HAS OBSERVED AS UNDER: 4.3.18. I HAVE CONSIDERED THE SUBMISSIONS MADE AND FIND MYSELF UNABLE TO ACCEPT THE CONCLUSION DRAWN BY THE ASSESS ING OFFICER ON THIS ASPECT OF THE MATTER. IN THE FIRST PLACE, THE DIRE CTOR GENERAL IS A PROFESSIONAL WHO HAS BEEN HIRED BY THE APPELLANT TO MANAGE THE AFFAIRS OF THE TRUST. HE IS AN EMPLOYEE OF THE TRUST AND NOT A TRUSTEE. HIS PREVIOUS CREDENTIALS ARE IMPECCABLE, SINCE IT IS SEEN FROM T HE RECORD THAT HE HAS NOT ONLY ADMINISTRATIVE EXPERIENCE OF NEARLY 30 YEARS I N THE GOVERNMENT BUT HAS ALSO WORKED IN THE AREA OF SUSTAINABLE ENERGY A ND DEVELOPMENT. THE OBJECTION OF THE ASSESSING OFFICER THEREFORE THAT, THE SALARY PAID TO HIM IN HIS EXCESS OF THE NORMAL SALARY PAID LO OFFICE BEAR ERS OF OTHER CHARITABLE INSTITUTIONS IN NOT FACTUALLY AND LEGALLY SUSTAINAB LE. THE ASSESSING OFFICER HAS ALSO DRAWN AN INFERENCE THAT THE LEVEL OF SALAR Y PAID TO THE DIRECTOR GENERAL SHOWS THAT THE APPELLANT IS A PROFESSIONALL Y MANAGED INSTITUTE AND HIS THEREFORE NOT OF CHARITABLE NATURE. THIS IN FERENCE IS ALSO SEEN TO HAVE NO BASIS. THERE IS NO BAR UNDER THE LAW THAT C HARITABLE TRUST OR INSTITUTIONS SHOULD NOT BE EFFICIENTLY OR PROFESSIO NALLY MANAGED. SO LONG AS THE INSTITUTION IS NOT ENGAGED IN MAKING PRIVATE PR OFIT OR ITS INCOME HAS NOT BEEN DIVERTED FOR THE BENEFIT OF INTERESTED PERSONS , THERE IS NO REASON TO DENY AN ASSESSEE THE BENEFIT OF SEC. 11, SO LONG AS THE OTHER STATUTORY PROVISIONS ARE SATISFIED. THEREFORE, THE ASSESSING OFFICER'S CONTENTIONS THAT THE SALARY AND REMUNERATION PAID TO. THE DIRECTOR G ENERAL IS MORE THAN WHAT SHOULD HAVE BEEN PAID IS HELD TO HAVE NO BASIS AND CANNOT BE SUSTAINED. 11. WE CONCUR WITH THE FINDINGS OF THE COMMISSIONER OF INCO ME TAX (APPEALS). THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE WELL REASONED OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN REJECTING THE FINDINGS OF ASSESSING OFFICER. THUS, WE FIND NO MERIT IN THE 10 ITA NOS. 04 & 05/PN/2014, A.YS. 2004-05 & 2005-06 APPEAL OF THE REVENUE. THE IMPUGNED ORDER IS CONFIRMED AN D THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 26 TH DAY OF JUNE, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 26 TH JUNE, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 4 THE CIT (A) - III, PUN E THE CIT-IV, PUNE 5 6 THE DR, ITAT, B BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE