Anant Kripa Charitable Trust, Kanpur V. Commissioner of Income Tax (Exemption), Lucknow

ITA 509/LKW/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1189 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 04-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR A K SINGH
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 509/LKW/2017 ASSESSMENT YEAR: N.A. ANANT KRIPA CHARITABLE TRUST 104 - A/116 - C, RAM B AGH KANPUR V. CIT (EXEMPTIONS) LUCKNOW T AN /PAN : AADTA0046M (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH GARG, ADVOCATE RESPONDENT BY: DR A. K. SINGH, CIT (DR) DATE OF HEARING: 24 08 201 8 DATE OF PRONOUNCEMENT: 07 0 9 201 8 O R D E R PER P AR THA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW DATED 20/6/2017 AS PER FOLLOWING GROUNDS OF APPEAL: - 1 . BECAUSE THE CIT (EXEMPTIONS) HAS ERRED ON FACTS AND IN LAW IN ARBITRARILY REJECTING THE PETITION MOVED FOR REGISTRATION UNDER SECTION 12A( I )(A) OF THE INCOME - TAX ACT, 1961, WHICH ORDER REJECTING THE REGISTRATION BEING ERRONEOUS BE QUASHED. 2 . BECAUSE THE ASSESSEE TRUST HAVING BEEN CREATED FOR CHARITABLE PURPOS ES, THE OBJECTS OF WHICH HAVE NOT BEEN DISBELIEVED, THE CIT (EXEMPTIONS) HAS ERRED ON FACTS AND IN LAW IN ARBITRARILY REJECTING THE PETITION MOVED UNDER SECTION 12A( I )(A) OF THE ACT, 1961 ITA NO.509/LKW/2017 PAGE 2 OF 15 3 . BECAUSE ON A PROPER CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE FOUND THAT THE TRUST SO ESTABLISHED CARRYING OUT CHARITABLE ACTIVITIES WHICH HAVE NEVER BEEN FOUND OTHERWISE, THE CIT (EXEMPTIONS) HAS ERRED ON FACTS AND IN LAW IN NOT GRANTING REGISTRATION UNDER SECTION 12A( I )(A) OF THE INCOME - TAX ACT, 1 961 . 4 . BECAUSE ON A PROPER CONSIDERATION FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT (EXEMPTIONS) BE DIRECTED TO GRANT REGISTRATION TO THE APPELLANT TRUST UNDER SECTION 12A(L)(A) OF THE ACT, 1961. 2 . THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IS THE REJECTION OF APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. THE BRIEF FACTS AS APPEARING FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) ARE THAT ASSESSEE - TRUST HAD FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A(A) O F THE INCOME TAX ACT, 1961 WITH THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), LUCKNOW AND APPLICATION WAS ORIGINAL LY FILED ON 22/7/2011 WITH LD. CIT - 1, KANPUR. THE LD. CIT - 1, KANPUR VIDE HIS ORDER DATED 30.01.2012 HAD REJECTED THE APPLICATION ON THE PRETEXT THAT THE ASSESSEE - TRUST DID NOT FULFILL THE CONDITIONS LAID DOWN UNDER SECTION 12AA(1) OF THE INCOME TAX ACT, 1961. AGGRIEVED BY THE ORDER OF THE LD . CIT - 1, KANPUR , ASSESSEE - TRUST HAD FILED AN APPEAL WITH THE TRIBUNAL . THE TRIBUNAL VIDE ITS ORDER DATED 18 .06.2012 IN ITA NO. 101/LKW/12 SET ASIDE THE ORDER OF THE LD. CIT - 1, KANPUR AND RESTORED THE MATTER TO RE - EXAMINE THE ISSUE OF REGISTRATION AFRESH. SUBSEQUENTLY , ASSESSEE - TRUST FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A(A) OF THE INCOME TAX AC T, 1961 WITH THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), LUCKNOW. THEREAFTER, AS RECORD SHOWS, ON THE DATE FIXED FOR HEARING ADJOURNMENT WAS SOUGHT BY THE LD. A.R. OF THE ASSESSEE AND ULTIMATELY LD. COMMISSIONER OF INCOME - ITA NO.509/LKW/2017 PAGE 3 OF 15 TAX (EXEMPTIONS) , LUCKNOW HAS TAK EN A DECISION ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) OBSERVES THAT CHARITABLE ACTIVITIES , FOR WHICH TRUST HAS BEEN FORMED AND THE ACTIVITIES OF THE TRUST , ARE NOT GENUINE. FURTHER, AS APPEARING IN HI S ORDER, ASSESSEE TRUST WAS NOT ABLE TO PRODUCE CERTAIN VOUCHERS IN RESPECT OF EXPENSES CLAIMED FOR VERIFICATION AND BECAUSE OF THESE REASONS REGISTRATION UNDER SECTION 12AA WAS DENIED TO THE ASSESSEE - TRUST. 3 . AT THE TIME OF HEARING BEFORE US, LD. A.R. OF TH E ASSESSEE PLACED HIS ARGUMENT ON TWOFOLD. FIRSTLY HE VEHEMENTLY ARGUED THAT THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW DATED 20/6/2017 CANNOT DENY THE CLAIM OF REGISTRATION UNDER SECTION 12AA AND THAT SINCE MORE THAN SIX MONTHS HAD PASSED, IT WOULD BE A CASE OF DEEMED REGISTRATION. LD. A.R. OF THE ASSESSEE IN SUPPORT OF HIS CONTENTION PLACED RELIANCE ON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SOCIETY FOR PROMOTION OF EDUCATION, ADVENTURE SPORT AND CONSERVATION OF ENVIRONMENT VS. CIT [2008] 216 CTR 167 WHICH WAS UPHELD BY THE HON'BLE APEX COURT VIDE ORDER DATED 16/2/2016 IN SLP (C) NO.9705 OF 2009 IN CIVIL APPEAL NO.1478 OF 2016. 4 . THE SECOND LIM B OF THE ARGUMENT OF THE LD. A.R. OF THE ASSESSEE WAS TH AT ALL DOCUMENTARY EVIDENCES WERE FURNISHED BEFORE THE REVENUE AUTHORITIES AND ENTIRE REQUIREMENT OF STATUTE FOR GETTING REGISTRATION UNDER SECTION 12AA HAS BEEN COMPLIED WITH BEFORE THE REVENUE AUTHORITIES. THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) , LUCKNOW HAD RAISED VARIOUS QUERIES THROUGH DETAILED QUESTIONNAIRE TO WHICH ASSESSEE HAS ALSO FILED REPLY AND ALL THESE DOCUMENTS FIND PLACE IN THE PAPER BOOK. LD. A.R. OF THE ASSESSEE VEHEMENTLY RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS, ESPECIALLY THE ITA NO.509/LKW/2017 PAGE 4 OF 15 DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RED ROSE SCHOOL [2007] 212 CTR 394 AND THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME - TAX (EXEMPTIONS) VS. M EENAKSHI AMMA ENDOWMENT TRUST [2013] 354 ITR 219. 5 . TH E LD. D.R., ON THE OTHER HAND, SUBMITTED THAT IN THE CASE OF THE ASSESSEE , QUESTION OF DEEMED REGISTRATION DOES NOT APPLY SINCE ALREADY ORDER REJECTING APPLICATION FOR REGISTRATION WAS PASSED BY THE CIT (EXEMPTIONS) AND THERE WAS NO INACTION BY THE REVENUE AUTHORITIES. THE LD. D.R. FURTHER RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW. 6 . WE HAVE PERUSED THE CASE RECORD AND HEARD THE RIVAL CONTENTIONS. FIRST WE WOULD LIKE TO ADDRESS THE ISSUE OF DEEMED REGISTRATION. ON A CA REFUL EXAMINATION OF THE ENTIRE DOCUMENTS PLACED BEFORE US AND THE CASE LAWS, ESPECIALLY THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SOCIETY FOR PROMOTION OF EDUCATION, ADVENTURE SPORT AND CONSERVATION OF ENVIRONMENT VS. CIT (SUPRA) WHICH W AS UPHELD BY THE HON'BLE APEX COURT VIDE ORDER DATED 16/2/2016 IN SLP (C) NO.9705 OF 2009 IN CIVIL APPEAL NO.1478 OF 2016 , WE OBSERVE THAT IN THE AFORESAID CASE S, THE JUDICIAL FINDING WAS THAT ASSESSEE SHOULD NOT SUFFER BECAUSE OF INACTION OF THE REVENUE A UTHORITIES. IF EVEN SIX MONTHS HAVE PASSED AND NO DECISION HAS BEEN TAKEN BY THE REVENUE AUTHORITIES REGARDING EITHER GRANTING OR REJECTING REGISTRATION UNDER SECTION 12AA OF THE ACT, IN SUCH CASE , AS HELD BY THE HON'BLE APEX COURT , CONCEPT OF DEEMED REGI STRATION SHALL APPLY IN ORDER TO PROTECT THE BONA - FIDE ASSESSEE. IN THE INSTANT CASE, ORDER FOR REJECTION OF APPLICATION UNDER SECTION 12AA WAS PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW AND IT CANNOT BE SAID THAT THERE WAS INACTIO N SO ITA NO.509/LKW/2017 PAGE 5 OF 15 FAR REVENUE AUTHORITIES ARE CONCERNED. THUS, IN THIS CASE THE CONCEPT OF DEEMED REGISTRATION SHALL NOT APPLY. 7 . MOVING ON TO THE SECOND ASPECT OF THE ARGUMENT PUT FORTH BY THE LD. A.R. OF THE ASSESSEE , WE FIND THAT ALL NECESSARY DOCUMENTS AND EVIDENCES AS REQUIRED BY THE STATUTE FOR GRANT OF REGISTRATION UNDER SECTION 12AA WERE FILED BEFORE THE REVENUE AUTHORITIES AND COPY OF WHICH ARE PLACED BEFORE US IN THE PAPER BOOK. FOR READY REFERENCE, WE WOULD MAKE THESE DOCUMENTS AS PART OF ORDER ( AS A NNEX URE A TO I ) . A PERUSAL OF PAGE 10 OF THE PAPER BOOK WHEREIN THE TRUST PROVIDES ENTIRE DETAILS AND DOCUMENTARY EVIDENCES AND THE LIST IS PROVIDED THEREIN AT PAGES 10 & 11. SIMILARLY, AT PAGE 5 OF THE PAPER BOOK TRUST HAS FILED COPY OF TRUST DEED, COPY OF FORM 10A, LIST OF TRUSTEES WITH PAN, COPY OF BANK PASSBOOK. LIKEWISE , FROM PAGES 6 TO 13 THERE ARE SERIES OF CORRESPONDENCE ENTERED INTO BETWEEN ASSESSEE - TRUST AND THE DEPARTMENT WHICH DEMONSTRATE THAT DOCUMENTARY EVIDENCES WERE FILED WITH THE REVENUE AUTHORIT IES. WE TAKE GUIDANCE FROM THE JUDICIAL PRINCIPLES AS ENUMERATED IN THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RED ROSE SCHOOL (SUPRA) AND THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR O F INCOME - TAX (EXE MPTIONS) VS. M EENAKSHI AMMA ENDOWMENT TRUST (SUPRA) WHEREIN IT IS HELD THAT THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WILL ESSENTIAL LY LOOK INTO THE GENUINENESS OF THE A CTIVITIES OF THE TRUST AND MAKE ENQUIRIES IN T HIS REGARD, BUT AT THE SAME TIM E SCOPE OF SECTION 12AA DOES NOT SEEK THAT LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) WILL ALSO SEE WHETHER THE INCOME DE RIVED BY THE TRUST IS SPENT FOR CHARITABLE PURPOSES OR WH ETHER THE TRUST IS EARNING ANY PROFIT OR NOT. IN THE INSTANT CASE ALL THE RELEVANT DOCUMENTARY EVIDENCES WERE FILED BEFORE THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) BY THE ITA NO.509/LKW/2017 PAGE 6 OF 15 ASSESSEE - TRUST AND AT THIS JUNCTURE OF GRANTING REGISTRATION , AS HELD BY VARI OUS COURTS REFERRED TO HEREINABOVE , THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) WILL NOT SEE WHETHER THE INCOME OF THE TRUST IS SPENT FOR CHARITABLE PURPOSES OR NOT. IF ANY DISCREPANCY IS ARRIVED AT , THAT CAN BE DEALT WITH AT THE TIME OF ASSESSMENT. IN VIEW OF THE MATTER, ASSESSEE TRUST SUCCEEDS ON THE SECOND LIM B OF ARGUMENT PUT FORTH BY THE LD. A.R. OF THE ASSESSEE AND ON THE BASIS OF MERIT ITSELF , AS EXAMINED HEREINABOVE BASED ON THE JUDICIAL PRINCIPLES , WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRE CT LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) TO GRANT REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE ASSESSEE - TRUST. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 / 0 9 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PART HA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH SEPTEMBER , 201 8 JJ: 2708 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ITA NO.509/LKW/2017 PAGE 7 OF 15 ANNEXURE - A ITA NO.509/LKW/2017 PAGE 8 OF 15 ANNEXURE - B ITA NO.509/LKW/2017 PAGE 9 OF 15 ANNEXURE - C ITA NO.509/LKW/2017 PAGE 10 OF 15 ANNEXURE - D ITA NO.509/LKW/2017 PAGE 11 OF 15 ANNEXURE - E ITA NO.509/LKW/2017 PAGE 12 OF 15 ANNEXURE - F ITA NO.509/LKW/2017 PAGE 13 OF 15 ANNEXURE - G ITA NO.509/LKW/2017 PAGE 14 OF 15 ANNEXURE - H ITA NO.509/LKW/2017 PAGE 15 OF 15 ANNEXURE - I