Rastriya Paryatan Vikas Sewa Sansthan Nyas, V. CIT, Kanpur

ITA 507/LKW/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9177 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-01-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 02-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VERMA
• Assessee Lawyers: PRADEEP MEHROTRA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A - BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NO.507(LKW.)/2010 A.Y. : 2010-11 ONWARD RASTRIYA PARYATAN VIKAS SEWA SANSTHAN VS. THE CIT-I ., NYAS, SITAPUR, CHITRAKOOT. KANPUR. PAN AABTN0441K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRADEEP MEHROTRA, ADVOCATE RESPONDENT BY : SHRI ANADI VERMA, SR.D.R. O R D E R PER N.K.SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE O RDER DATED 25.5.2010 OF THE LD.CIT-II, KANPUR. 2. THE REGISTRY HAS POINTED OUT THAT THE APPEAL IS BARRED BY LIMITATION FOR THREE DAYS. THE ASSESSEE MOVED AN APPLICATION FOR C ONDONATION OF DELAY BY STATING THAT AN APPLICATION WAS FILED BEFORE THE NSDL FOR CORRECTION OF NAME IN PAN CARD ON ACCOUNT OF FILING OF FEES. IT WAS STATED THAT THE FEES WAS TO BE DEPOSITED WITH THE RESERVE BANK OF INDIA, KANPUR AND THAT CORRECTION WAS MADE ON 1.8.2010. DUE TO THAT REASON , THE DELAY OCCURRED. THEREFORE, A REQUEST HAS BEEN MADE TO CONDONE THE D ELAY. 2 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE REITERATED THE CONTENTS OF THE AFORESAID APPLICATIO N AND SUBMITTED THAT THE ASSESSEE FILED THE APPEAL ON 2.8.2010 AFTER THE NEC ESSARY CORRECTION WAS MADE IN THE PAN CARD ON 1.8,.2010. THEREFORE, THE D ELAY WAS BEYOND THE CONTROL OF THE ASSESSEE. HE ACCORDINGLY REQUESTED F OR CONDONATION OF DELAY. THE LD.D.R., ALTHOUGH SUBMITTED THAT THE DELAY MAY NOT BE CONDONED, BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF TH E LD. COUNSEL FOR THE ASSESSEE. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES, WE ARE OF THE VIEW THAT IT IS A FIT CASE WHERE THE DELAY OF A FE W DAYS DESERVES TO BE CONDONED. WE ACCORDINGLY CONDONE THE DELAY AND THE APPEAL IS ADMITTED. 5. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE ASSESS EE RELATES TO THE ACTION OF THE LD.CIT IN DENYING EXEMPTION UNDER SECTION 12 AA(1)OF THE I.T.ACT,1961. 6. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A PUBLIC CHARITABLE TRUST REGISTERED UNDER INDIAN TRUSTS A CT, 1802 WITH THE SUB- REGISTRAR OF DISTRICT OFFICE, KARVI, DISTRICT CHITR AKOOT (UTTAR PRADESH) ON 10.10.2006. THE ASSESSEE AMENDED THE TRUST DEED ON 1.10.2007 AND APPLIED FOR GRANT OF REGISTRATION UNDER SECTION 12AA(1) OF THE I.T.ACT ON 23.11.2009 IN FORM NO.10A BEFORE THE LD.CIT-II, KANPUR. THE LD .CIT CALLED FOR REPORT FROM THE JCIT, RANGE-6, KANPUR AND THE ITO-6(4), BA NDA. BOTH THE AUTHORITIES SUBMITTED THEIR REPORTS. THEREAFTER, THE LD.CIT ASKED THE ASSESSEE TO PRODUCE ALL THE BOOKS OF ACCOUNTS, BILL S AND VOUCHERS AND RELEVANT MATERIAL ETC. THE LD.CIT THEN DISCUSSED OBJECTS AND CONDITIONS AS 3 MENTIONED IN THE REVISED TRUST DEED WHICH HAD BEEN REPRODUCED IN PAGE 2 OF THE IMPUGNED ORDER. THE ASSESSEE VIDE REPLY DATED 2 5.5.2010 SUBMITTED TO THE LD.CIT AS UNDER : 1 . THE OBJECTS OF THE ORGANIZATION ARE OF CHARITABLE N ATURE. IN SPITE OF TOURISM PROGRAMME, THEY ARE ENGAGED IN AIDS, AWA RENESS, PLANTATION WATER CONSERVATION ETC.. 2. ALL THE BOOKS OF ACCOUNTS ALREADY PRODUCED AND C OPY IS ALSO ENCLOSED. 3. THE RETURN HAS BEEN FILED REGULARLY. 4. THE BOOKS OF ACCOUNTS ALREADY INSPECTED BY ASSES SING OFFICER AS WELL AS ITO (TECH.). REPORT HAS SUBMITTED. 6.1 THE LD.CIT, AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, OBSERVED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS OR ANY ACTIVITY OF RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTI VE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH AC TIVITY. ACCORDING TO HIM, THE MAIN OBJECT MENTIONED IN THE TRUST DEED WAS TO PROVIDE GUIDES TO THE TOURISTS VISITING CHITRAKOOT, WHICH DID NOT COME IN THE PURVIEW OF CHARITABLE ACTIVITIES. THE LD.CIT OBSERVED THAT THE ASSESSEE HAD CLAIMED THAT THE OBJECTS AND ACTIVITIES WERE RELATED TO GENERAL PUBL IC UTILITY AND WERE NOT OF BUSINESS/TRADE IN NATURE. ACCORDING TO HIM, THE SAI D CLAIM OF THE ASSESSEE WAS NOT CORRECT BECAUSE THESE OBJECTS WERE NOT CHA RITABLE IN NATURE SINCE THE MEMBERS OF THE SOCIETY MEET TOURIST BUSES/TOURISTS, WHEN THEY REACH CHITRAKOOT AND GUIDE THEM AT THESE PLACES AND TOUR ISTS VOLUNTARILY GIVE SOME CONTRIBUTIONS TO THE MEMBERS OF THE SOCIETY, WHICH SHOWS THAT THOSE PERSONS 4 RECEIVE REMUNERATION FOR THEIR SERVICES AND THEIR A CTIVITIES ARE CLEARLY IN THE NATURE OF BUSINESS/PROFESSION. HE ACCORDINGLY REJE CTED THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION UNDER SECTION 12 AA(1)OF THE I.T.ACT. 7. NOW, THE ASSESSEE IS IN APPEAL. 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD.CIT AND FURTHER SUBMITTED THAT THE L D.CIT HAS NOT CONFRONTED THE REPORTS OF THE ITO AS WELL AS THE JCIT TO THE ASSESSEE AND EVEN DID NOT DISCUSS THE MAIN OBJECTS OF THE ASSESSEE WHICH ARE FOR THE GENERAL PUBLIC UTILITY AND CHARITABLE IN NATURE. HE FURTHER SUBMI TTED THAT THE LD.CIT ONLY DISCUSSED THE OBJECTS IN THE AMENDED TRUST DEED, BU T DID NOT DISCUSS ALL OTHER OBJECTS MENTIONED IN THE ORIGINAL TRUST DEED, WHICH ARE CHARITABLE IN NATURE. 9. IN HIS RIVAL SUBMISSIONS, THE LD.D.R. STRONGLY S UPPORTED THE ORDER OF THE LD.CIT AND FURTHER SUBMITTED THAT THE MAIN OBJE CT OF THE ASSESSEE TRUST IS TO PROVIDE HELP TO THE TOURISTS AND IN LIEU OF THAT THE ASSESSEE IS ACCEPTING CONTRIBUTION, THEREFORE, THE ACTIVITY WAS CLEARLY IN THE NATURE OF BUSINESS/PROFESSION AND AS SUCH, THE LD. CIT WAS JU STIFIED IN REJECTING THE APPLICATION MOVED BY THE ASSESSEE UNDER SECTION 12A A(1) OF THE I.T.ACT. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN TH E PRESENT CASE, IT APPEARS THAT THE LD.CIT WHILE DENYING THE REGISTRATION UNDE R SECTION 12A OF THE I.T.ACT TO THE ASSESSEE, CONSIDERED THE OBJECTS MEN TIONED IN THE AMENDED TRUST DEED AND DID NOT DISCUSS THE MAIN OBJECTS WHI CH ARE MENTIONED IN THE ORIGINAL TRUST DEED. THE COPY OF THE SAID DEED IS A VAILABLE ON RECORD AND 5 SOME OF THE OBJECTS OF THE TRUST DEED DATED 10.10.2 006 ARE TO ESTABLISH EDUCATIONAL AND TRAINING CENTRES, PROVIDE HELP TO NEEDY & INCOMPETENT PERSONS OF THE SOCIETY; TO DO ACTIVITIES FOR SOCIA L DEVELOPMENT ETC., BUT THE LD.CIT HAD NOT CONSIDERED THOSE OBJECTS. EVEN THE REPORTS SOUGHT BY HIM FROM THE JCIT,RANGE-6, KANPUR AND THE ITO 6(4), BAN DA HAD NOT BEEN CONFRONTED TO THE ASSESSEE. MOREOVER, THE LD.CIT HA D NOT DISCUSSED THE CONTENTS OF THE SAID REPORTS. CONSIDERING ALL THESE FACTS, WE ARE OF THE OPINION THAT THE ISSUE UNDER CONSIDERATION REQUIRES FRESH A DJUDICATION AT THE LEVEL OF THE LD.CIT. WE, THEREFORE, REMAND THIS ISSUE BACK T O THE FILE OF THE LD.CIT TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW, AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE. 11. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.1.11. SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER JANUARY 18TH, 2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.