31 INFOTECH FOUNDATEION, NAVI MUMBAI V. DIT (E), MUMBAI

ITA 5017/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8585 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 20-01-2011
• Assessment Year: misc
• Appeal Filed On: 02-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMARD EEP
• Assessee Lawyers: KARTHIK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI BEFORE SHRI. D.K. AGARWAL (J.M.) AND SHRI T.R. SOOD (A.M.) ITA NO.5017/MUM/2009 3I INFOTECH FOUNDATION TOWER5, 4 TH FLOOR, INTERNATIONAL INFOTECH PART, MUMBAI 400 705. PAN : AAATZ0593K VS. THE DIRECTOR OF INCOME-TAX (EXEMPTION), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KARTHIK RESPONDENT BY : SHRI AMARDEEP O R D E R PER D.K. AGARWAL, J.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.06.2009 PASSED BY THE DIRECTOR OF INCOME -TAX (EXEMPTION), MUMBAI (DIT[E]) TAKING FOLLOWING GROUN DS OF APPEAL: 1. THE LEARNED DIT (EXEMPTION) ERRED IN REJECTING T HE APPLICATION MADE BY THE ASSESSEE U/S12A OF THE ACT FOR REGISTRATION OF THE TRUST. 2. THE LEARNED DIT(E) ERRED IN OBSERVING AS UNDER: (A) THE APPELLANT HAS NOT REPLIED ANY OF THE QUERIES PU T FORTH TO HIM VIDE THE SHOW CAUSE NOTICE. (B) ON PERUSAL OF THE OBJECT STATED IN THE TRUST DEED T HEY ARE CLEARLY OF COMMERCIAL IN NATURE AS MARKETING OR REN DERING TECHNICAL ASSISTANCE OR PROVIDING CONSULTANCY SERVICES ARE AC TIVITIES WHICH ARE IN NATURE OF TRADE AND BUSINESS. HENCE THE OBJE CTS OF THE APPLICANT DO NOT FALL WITHIN THE PARAMETERS OF SECT ION 2(15) OF THE I.T. ACT. IT IS HELD IN THE CASE OF YOGIRAJ CHARIT Y TRUST VS. CIT, 103 ITR 77 (SC) THAT EVEN IF ONE OBJECT IS NON-CHARITAB LE THE TRUST WILL LOSE ITS EXEMPTION. ITA NO.5017/MUM/2009 2 (C) FURTHER IT HAS BEEN NOTED THAT THE CLAUSE (17)( U) OF THE TRUST DEED HAS PROVIDED FOR POWER OF THE TRUSTEES. THEY HAVE BEEN GIVEN ABSOLUTE DISCRETION TO ENTER INTO CONTRACT OR OTHER AGREEMENTS IN THE NAME OF THE TRUST OR IN THE NAME OF THE TRUSTEE TO CARRY ON ACTIVITIES WHICH ARE PURELY COMMERCIAL IN NATURE. IN FACT, THE POWER OF THE TRUSTEE SHOULD BE RESTRICTED TO THE OBJECT OF THE TRUST. BUT IN THE CASE OF THE APPLICANT THE PO WER OF THE TRUSTEE GOES BEYOND THE OBJECT AND INCLUDES A NUMBER OF COM MERCIAL ACTIVITIES. SUCH AN ARRANGEMENT CANNOT BE ALLOWED AND REGISTRATION CANNOT BE GRANTED. 2. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE VIDE LETTER DATED 24.1.2011 INTERALIA SUBMITS THAT IN TH IS REGARD 3I INFOTECH FOUNDATION WISHES TO WITHDRAW THE ABOVE MENTIONED APP EAL. IT WAS, THEREFORE, SUBMITTED THAT THE ASSESSEE MAY BE ALLOWED TO WITHDRAW THE APPEAL FILED WHICH WAS NOT OBJECTED TO BY THE LD D R. 3. THAT BEING SO AND IN THE ABSENCE OF ANY OTHER SUPPOR TING MATERIAL PLACED ON RECORD BY THE LD COUNSEL OF THE ASSESSEE , THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, REJECTED BE ING NOT PRESSED. 4. IN THE RESULT, THE ASSESSEES APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF JANUARY, 2011. SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 31 ST JANUARY, 2011. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- , MUM BAI 4. COMMISSIONER OF INCOME TAX, CITY- , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH , MUMBAI ITA NO.5017/MUM/2009 3 //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI