Pushpadam Society, New Delhi V. DIT (Exemptions), New Delhi

ITA 5049/DEL/2012

• Counselvise Citation: 504920114 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 07-01-2015
• Assessment Year: misc
• Appeal Filed On: 26-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

ITA NO. 5049/ DEL/ 2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 5049 /DEL/20 1 2 A.Y. : ------- PUSHPADAM SOCIETY, 143/5, SHIV ENCLAVE, D - BLOCK, DICHAUN ROAD, NAJAFGARH, NEW DELHI 110 043 VS. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), PLOT NO. 15, 3 RD FLOOR, AAYAKAR BHAVAN, LAKSHMI NAGAR DISTRICT CENTRE, DELHI 110 092 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARING : 0 7 - 0 1 - 201 5 DATE OF ORDER : 0 9 - 01 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. DIRECTOR OF INCOME TAX (EXEMPTIONS), NEW DELHI DATED 31 . 7 .201 2. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS, HOWEVER, THE EFFECTIVE GROUND IS RELATED TO GRANT OF REGISTRATION U/S. 12A OF TO THE ASSESSEE SOCIETY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SOCIETY HAS FILED AN AP PLICATION IN FORM NO. 10A ON 27.2.2012 SEEKING ITA NO. 5049/ DEL/ 2012 2 REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961. ACCORDINGLY, THE ASSESSEE WAS ISSUED LETTER DATED 16.4.2012 REQUESTING IT TO SUBMIT THE VARIOUS DETAILS/ DOCUMENTS/ EXPLANATION ON O R BEFORE 26.4.2012. IN RESPONSE TO THE AFORESAID LETTER DATED 26.4.2012 ASSESSEE FILED THE DETAILS WHICH ARE PLACED ON RECORD. THE ASSESSEE SOCIETY WAS CREATED ON 8.12.2011 WITH VARIOUS AIMS AND OBJECTS. FROM THE PERUSAL OF THE INCOME AND EXPENDITURE ACC OUNT FURNISHED FOR THE PERIOD ENDING 31.5.2012, IT IS NOTED THAT ASSESSEE HAS CLAIMED TO HAVE SPENT MEAGER AMOUNT OF RS. 17,000/ - ON PROVIDING HELP CHURCHES RS. 5000/ - , AIDS TO CONVENT RS. 7000/ - AND MEDICAL HELP TO POOR RS. 5000/ - . ACTIVITIES ARE NOT VERIFIABLE. THE ACTIVITIES ARE VERY GENERALLY STATED, NO SPECIFIC VERIFIABLE ACTIVITY FINDS MENTION IN THE DETAILS SUBMITTED THE APPLICANT. CONSIDERING THE MEAGER AMOUNT SPENT ON THE ACTIVITIES, AND LACK OF EVIDENCE OF THE ACTIVITY ON FIELD, IT IS APP ARENT THAT THE ACTIVITIES ARE NOT VERIFIABLE. THE APPLICANT ALSO DOES NOT CLAIM THAT MEMBER OF ORGANIZATION IS DOING CHARITABLE ACTIVITIES WITHOUT BEING REMUNERATED THEREBY INDICATING THAT THOUGH THE EXPENSES ARE LOW, ACTUAL CHARITABLE WORK IS BEING DO NE ON THE FOUND. IN THE LIGHT OF THE FACT THAT NO MAJOR CHARITABLE ACTIVITIES HAVE BEEN CARRIED OUT, THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF REGISTRATION U/S. 12A WAS REJECTED VIDE IMPUGNED ORDER DATED 31.7.2012 BY THE LD. DIT(E). 4 . AGAINS T THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 5049/ DEL/ 2012 3 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, TWO LETTERS ON BEHALF OF THE ASSESSEE DATED 5.7.2014 AND 17.12.2014 HAVE BEEN FILED WHEREIN HE STATED THAT TO PLEASE ACCEPT THE HEARING NOTE AND TO DISPOSE THE APPEAL ON MERITS. WE ARE OF THE CONSIDERED VIEW THAT THE CASE MAY BE DECIDED EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR. 6. LD. DR RELIED UPON THE ORDER OF THE LD. DIT( E ). 7 . WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT RECORD S SPECIALLY THE ORDER OF THE LD. DIT( E ), HEARING NOTE SUBMITTED BY THE ASSESSEE. WE FIND THAT LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THE HEARING NOTE IN SUPPORT OF HIS CLAIM RELATING TO GRANT OF REGISTRATION U/S. 12A OF THE I.T. ACT WHICH REPRODUCED AS UNDER: - YOUR APPELLANT IS A CHARITABLE SOCIETY REGISTERED WITH REGISTRAR OF SOCIETIES, NEW DELHI. THE MAIN OBJECTIVES OF THE SOCIETY ARE: - 1) TO ESTABLISH, HELP, SUPPORT, RUN, MAINTAIN OR DEVELOP CONVENTS, CHURCHES, FORMATION AND STUDY HOUSES FOR IMPARTING TRAINING IN THE MANAGEMENT OF EDUCATIONAL, MEDICAL, RELIGIOUS AND CHARITABLE INSTITUTIONS. 2) ENGAGING IN HUMAN WELFARE ACTIVITIES AIMED AT IMPROVING THE LIVING CONDITIONS AND GENERAL, SPIRITUAL, MORAL AND CIVIC WELFARE OF THE PEOPLE OF WHATEVE R OCCUPATION IRRESPECTIVE OF RACE, RELIGION, SEX, CLASS, COMMUNITY, CASTE OR CREED. THE MEMBERS OF THE SOCIETY ARE CATHOLIC NUNS. ITA NO. 5049/ DEL/ 2012 4 IN CONNECTION WITH APPLICATION FOR REGISTRATION U/S 12A OF THE IT ACT, YOUR APPELLANT FILED THE FOLLOWING DETAILS BEFORE THE DIT (EXEMPTION). 1) RECIPIENTS ID PROOF 2) BOOKS, BILLS & VOUCHERS 3) ORIGINAL MEMORANDUM OF ASSOCIATION AND RULES & REGULATIONS OF THE SOCIETY 4) NOTES ON ACTIVITIES OF THE SOCIETY 5) RECEIPTS & PAYMENTS ALC UP TO 31.05.2012 THE DIT (EXEMPTION) REJECTED THE APPLICATION VIS 12A ON THE FOLLOWING GROUNDS: AMOUNT SPENT ARE MEAGRE, ACTIVITIES ARE NOT VERIFIABLE, NO EVIDENCE FOR THE ACTIVITY AND NO MAJOR CHARITABLE ACTIVITY IS DONE. YOUR APPELLANT HUMBLY SUBMIT THE FOLLOWING: - THE APPELLANT'S S O CIETY WAS FORMED ONLY ON 08.L2.2011 AND HAVE INCURRED A SUM OF RS. 34,393/ - FOR CHARITABLE PURPOSE AS DETAILED BELOW (AUDITED RECEIPTS & PAYMENTS A /C) PART ICULARS AMOUNT (RS.) PROVIDING HELP TO CHURCHES 5,000/ - AID TO CONVENT 7,000/ - MEDICAL HELP TO POOR 5,000/ - ADMINISTRATIVE EXPENSES 17,393/ - ITA NO. 5049/ DEL/ 2012 5 34 , 393 / - TILL 31.08.2012, THE APPELLANT'S SOCIETY HAS SPENT RS. 1,79,318/ - AS UNDER FOR CHARITABLE ACTIVITIES. (AUDITED RECEIPTS & PAYMENTS A / C . SI. NO. PARTICULARS AMOUNT (RS.) 1. MEDICAL AID 87,000 / - 2. HELP TO CHURCH 5,000 / - 3. HELP TO CONVENTS 7,000 / - 4. STUDY HELP 38,000 / - 5. HOUSING ASSISTANCE 10,000 / - 6. MARRIAGE HELP 5,000 / - 7. ADMINISTRATIVE EXPENSES 27,318/ - TOTAL 1 , 79 , 318/ ALL THE ABOVE EXPENSES ARE SUPPORTED BY VOUCHERS AND THE NAME & ADDRESS OF THE BENEFICIARIES ARE ALSO AVAILABLE IN THE BOOKS OF ACCOUNTS. THE ENTIRE BOOKS OF ACCOU NTS AND SUPPORTING DOCUMENTS WERE FURNISHED FOR VERIFICATION BEFORE THE DIT (EXEMPTIONS). THEREFORE THE REMARK OF THE DIT (EXEMPTIONS) THAT THE ACTIVITIES OF THE TRUST ARE NOT VERIFIABLE IS NOT CORRECT. THE CONTENTION OF THE DIT (EXEMPTIONS) THAT THE SOCI ETY HAS SPENT ONLY A MEAGRE AMOUNT TOWARDS CHARITABLE ACTIVITIES IS NOT CORRECT. DURING THE ABOVE PERIOD, THE SOCIETY HAS RECEIVED A SUM OF RS.43,500/ - AS DONATION FROM VARIOUS PERSONS. DETAILS OF THE ITA NO. 5049/ DEL/ 2012 6 DONOR ALONG WITH THEIR NAME AND ADDRESS WERE PRODUCED BEFORE THE DIT (EXEMPTIONS). OUT OF THE ABOVE DONATION, A SUM OF RS. 34,393 / - IS UTILIZED FOR CHARITABLE PURPOSE WHICH AMOUNTS TO 79% OF THE TOTAL RECEIPTS. THE DIT (EXEMPTIONS) HAS NOT APPRECIATED THE FACT THAT IT IS THE INITIAL PERIOD OF OPERATION, A S FAR AS THE APPELLANT IS CONCERNED (SOCIETY IS FORMED ONLY ON 08.L2.2011). THE DIRECTOR HAS NOT DISPUTED THE FACT THAT THE OBJECTS OF THE APPELLANT TRUST IS IN CONSONANCE WITH THE REQUIREMENTS OF SEC. 11/13 OF THE INCOME TAX ACT. IT IS A WELL SETTLED PRI NCIPLE THAT ONCE THE DIT (EXEMPTIONS) HAS NOT DOUBTED THE GENUINENESS OF ACTIVITIES OF AN APPLICANT NOR DOUBT ITS OBJECTS, THE DIT (EXEMPTIONS) CANNOT REFUSE TO GRANT REGISTRATION U / S 12AA OF THE INCOME TAX ACT. ACCORDING TO THE STATUTE, AT THE TIME OF GR ANTING REGISTRATION U/S 12AA OF THE INCOME TAX ACT, THE DIT (EXEMPTIONS) HAS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE INSTITUTION AND IN THAT ACTION, HE CAN MAKE ENQUIRIES, IF IT IS NECESSARY [SEC. 12AA (I)(A)]. THE OTHER REQUIREME NT WHICH IS LAID DOWN U/S 12AA (I) (B) OF THE ACT IS THAT THE DIT (EXEMPTIONS) HAS TO SATISFY ABOUT THE OBJECTS OF THE INSTITUTION. THE SUM AND SUBSTANCE OF THE PROVISION IS THAT THE DIT (EXEMPTIONS) IS REQUIRED TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND ALSO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, BEFORE GRANTING REGISTRATION U/S 12AA OF THE INCOME TAX ACT. FROM THIS IT IS CLEAR THAT THE PROVISIONS OF SEC 12AA OF THE ACT RESTRICT THE POWER OF THE DIT (EXEMPTIONS) TO EXAMINE AS TO WHETHE R AN APPLICANT IS ACTUALLY CARRYING ON ITA NO. 5049/ DEL/ 2012 7 ACTIVITIES WHICH ARE GENUINE OR NOT, AND ALSO TO VERIFY WHETHER THE OBJECTS OF AN APPLICANT IS IN CONSONANCE WITH THE REQUIREMENT OF SEC. 11 / 13 OF THE INCOME TAX ACT. ONCE THE DIT (EXEMPTIONS) HAS NOT DOUBTED ON THE GENUINENESS OF THE ACTIVITIES OF THE APPLICANT NOR DOUBTED ITS OBJECTS, HIS POWER ENDS AND HE CANNOT BE ALLOWED TO TRAVEL BEYOND IT. IN THE VIEW OF THE ABOVE, THE DIRECTOR OF INCOME TAX (EXEMPTIONS) IS NOT JUSTIFIED IN NOT GRANTING REGISTRATION U / S 12AA O F INCOME TAX ACT TO THE APPELLANT ON THE ONLY GROUND THAT THE SOCIETY HAS SPENT ONLY MEAGER AMOUNT FOR CHARITABLE PURPOSE, SINCE THE GENUINENESS OF THE ACTIVITIES AND THE OBJECTS OF THE APPELLANT ARE NOT QUESTIONED BY THE DIT (EXEMPTIONS) AT ALL. THE LEAR NED DIRECTOR OF INCOME TAX (EXEMPTIONS) ERRED IN HIS FINDING THAT THE ACTIVITIES OF THE APPELLANT ARE VERY GENERALLY STATED AND THERE IS NO SPECIFIC VERIFIABLE ACTIVITY. THE CONTENTION OF THE DIT (EXEMPTIONS) IS NOT FACTUALLY CORRECT. THE ACTIVITIES CARRI ED OUT BY THE SOCIETY DURING THE PERIOD FROM 08.12.2011 TO 31.05.2012 WERE AS UNDER: - PARTICULARS AMOUNT (RS.) PROVIDING HELP TO CHURCHES 5,000/ - AID TO CONVENT 7,000/ - MEDICAL HELP TO POOR 7,000/ - ADMINISTRATIVE EXPENSES 17,393/ - TOTAL 34393/ - ITA NO. 5049/ DEL/ 2012 8 THE ABOVE EXPENSES ARE VERIFIABLE IN THE FIELD AND ARE PROPERLY SUPPORTED BY VOUCHERS. THE CONTENTION OF THE DIT (EXEMPTIONS) THAT THE ACTIVITIES ARE NOT VERIFIABLE IS AGAINST FACTS. THE DETAILS OF THE ACTIVITIES CONDUCTED BY THE SOCIE TY TOGETHER WITH THE NAME AND ADDRESS OF THE BENEFICIARIES WERE PRODUCED BEFORE THE DIT (EXEMPTIONS). THE TOTAL ACTIVITIES CARRIED BY THE SOCIETY FROM 08.12.2011 T O 30.11.2014 IS AS UNDER : - PARTICULARS AMOUNT (RS.) PROVIDING HELP TO CHURCHES 23,50 0/ - AID TO CONVENT 31,000/ - MEDICAL HELP TO POOR 3,64,000/ - HELP FOR STUDY 1,57,500/ - HELP FOR HOUSE REPAIR 53,500/ - HELP TO MARRIAGE 25,500/ - 6,55,000 / - THE DIT (EXEMPTIONS) IS NOT JUSTIFIED IN GENERALLY STATING THAT THE ACTIVITIES ARE NOT VERIFIABLE AND MADE IT AS A GROUND FOR THE REJECTION OF APPLICATION FOR REGISTRATION VIS 12AA OF THE INCOME TAX ACT WITHOUT TAKING EVEN A SINGLE STEP FOR THE VERIFICATIO N OF ACTIVITIES WHICH ARE AVAILABLE IN THE FIELD. THE C ONT ENTION OF THE DIT (EXEMPTIONS) THAT THE APPELLANT DID NOT CLAIM THAT THE MEMBERS OF THE ORGANIZATION IS DOING CHARITABLE ACTIVITIES WITHOUT BEING REMUNERATED THERE BY ITA NO. 5049/ DEL/ 2012 9 INDICATING THAT THOUGH THE EXP ENSES ARE LOW, ACTUAL CHARITABLE WORK IS BEING DONE ON THE FIELD IS AGAINST FACTS. AT THE TIME OF HEARING ON 15.05.2012 BEFORE THE INCOME TAX OFFICER, HQ (E), THE APPELLANT HAS EXPLAINED ALL THE FACTS AND ALSO CLARIFIED THEIR POSITION THAT ALL THE MEMBERS OF THE SOCIETY ARE RELIGIOUSLY PROFESSED CHRISTIAN NUNS AND THEY ARE DOING CHARITABLE ACTIVITIES WITHOUT ANY REMUNERATION. CONSIDERING THE ABOVE, WE HUMBLY REQUEST THE HON'BLE TRIBUNAL BE MERCIFUL ENOUGH TO ALLOW THE APPEAL AND DIRECT THE DIT (EXEMPTIONS) TO GRANT REGISTRATION U/S 12A OF THE IT ACT. 7.1 AFTER HEARING THE LD. DR AND PERUSED THE IMPUGNED ORDERS ALONGWITH THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SOCIETY WAS CREATED ON 8.12.2011 WITH VARIOUS AIMS AND OBJECTS AND FIELD AN APPLICATION IN FORM NO. 10A ON 27.2.2012 FOR SEEKING THE REGISTRATION U/S. 12A OF THE I .T. ACT, 1961. LD. DIT(E) ISSUED A LETTER DATED 16.4.2012 REQUESTING THE ASSESEE TO SUBMIT 11 DOCUMENTS FOR SATISFYING HIMSELF BEFORE GRANTING THE REGISTRATION WHICH THE LD. DIT(A) HAS MENTIONED IN HIS IMPUGNED ORDER AT PAGE NO. 1. ASSESSEE HAS FILED SOME DETAILS EXAMINED BY THE LD. DIT(E) AND HE FOUND THAT INCOME AND EXPENDITURE ACCOUNT FURNISHED FOR THE PERIOD ENDING 31.5.2012, ASSESSEE HAS CLAIMED TO HAVE SPENT MEAGER AMOUNT OF RS. 17,000/ - ON PROVIDING HELP CHURCHES RS. 5000/ - , AIDS TO CONVENT RS. 7000 / - AND MEDICAL HELP TO POOR RS. 5000/ - . ACCORDING TO SECTION 12AA OF THE I.T. ACT THE COMMISSIONER ON RECEIPT OF APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB - SECTION (1) OF SECTION 12A SHALL CALL FOR SUCH DOCUMENT S OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINK S NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE ITA NO. 5049/ DEL/ 2012 10 TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQU I RIES A S HE MAY DEEM NECESSARY IN THIS BEHAL F; AND AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSIN G TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT. AFTER GOING THROUGH THE OBSERVATIONS MADE BY THE LD. DIT(E) HAS VERIFIED THE SAME AND HELD THAT NO SPECIFIC VERIFIABLE ACTIVITY FINDS MENTION IN THE DETAILS S UBMITTED BY THE APPLICANT. DUE TO LACK OF EVIDENCE OF THE ACTIVITIES, THE LD. DIT(E) HAS REJECTED THE APPLICATION FOR REGISTRATION FILED BY THE APPLICANT AND PASSED THE IMPUGNED ORDER. WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED IN THE IMPUGNED ORDE R, HENCE, WE UPHOLD THE SAME BY DISMISSING THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 0 9 / 0 1 /20 1 5 . SD / - S D / - [ S.V. MEHROTRA ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 0 9 / 0 1 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 5049/ DEL/ 2012 11