Aswini Medical Relief Trust(Regd), Bangalore V. DIT, Bangalore

ITA 517/BANG/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9528 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 21-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JASON P BOAZ
• Assessee Lawyers: H N KHINCHA
• Keywords: Charitable institution; Principle of natural justice
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI K.P.T. THANGAL, VICE PRESIDENT AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.517/BANG/2009 ASSESSMENT YEAR : NOT APPLICABLE ASHWINI MEDICAL RELIEF TRUST (REGD.), A.P.M.C. BUILDING, YESHWANTHPUR, TUMKUR ROAD, BANGALORE 560 022. : APPELLANT VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE. : RESPONDENT APPELLANT BY : SHRI H.N. KHINCHA RESPONDENT BY : SHRI JASON P. BOAZ O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE-TRUST IN ITA NO.5 17/B/09 IS DIRECTED AGAINST THE ORDER OF LD. DIT (EXEMPTION), BANGALORE, DATED 24.3.2009 U/S. 80G OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED SIX GROUNDS IN ITS GROUN DS OF APPEAL. HOWEVER, THE ESSENCE AND CRUX OF THE ISSUE IS THAT - ITA NO. 517/B/09 PAGE 2 OF 6 THE LD. DIT(EXEMPTION) ERRED BY DENYING RENEWAL OF RECOGNITION U/S. 80G OF THE INCOME-TAX ACT, 1961 ON THE GROUND THAT THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SE CTION 80G(5)(IV) OF THE ACT. 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AP PELLANT IS A TRUST FORMED AND FUNCTIONAL FOR PROVIDING MEDICAL RELIEF AND REC OGNITION WAS GRANTED U/S. 80G OF THE ACT FROM 1.4.2005 TO 31.3.2008, PURSUANT TO ITS EXISTENCE FROM 7.10.1983. ON 26.9.2008, THE APPELLANT TRUST HAD FI LED AN APPLICATION FOR RENEWAL OF RECOGNITION U/S. 80G OF THE ACT. THE LD . DIT (E) REJECTED THE APPLICATION HOLDING THAT THE TRUST HAD NOT ADHERED TO THE PROVISIONS OF SECTION 80G (5)(I) TO (V) OF THE ACT AND RULE 11AA( 5) OF I.T. RULES. ON A PERUSAL OF THE RECEIPTS AND PAYMENTS ACCOUNT OF THE TRUST FOR THE YEARS- ENDING 31.3.2007 AND 31.3.2008, THE LD. DIT(E) OBSE RVED THAT THERE WERE HUNDI COLLECTIONS AMOUNTING TO RS.1,17,094/- AND RS .1,55,166/- RESPECTIVELY. SINCE THE ASSESSEE WAS NOT ABLE TO F URNISH THE PARTICULARS OF THE PERSONS WHO CONTRIBUTED TO HUNDI COLLECTIONS, T HE LD. DIT (E) ARRIVED AT A CONCLUSION THAT BY VIRTUE OF SECTION 115BBC OF TH E ACT, THE ASSESSEE-TRUST BECOMES INELIGIBLE FOR RECOGNITION U/S 80G OF THE A CT IN LIEU OF NON- MAINTENANCE OF RECEIPTS AND PAYMENTS AS PER THE PRO VISIONS OF S.80G (5)(IV) OF THE ACT. ACCORDINGLY, THE ASSESSEE-TRUS TS APPLICATION FOR RENEWAL FOR RECOGNITION U/S 80G OF THE ACT WAS REJECTED. 4. AGGRIEVED, THE ASSESSEE-TRUST HAS COME UP WITH THE PRESENT APPEAL. THE CONTENTIONS OF LD. AR WERE THAT THE HUNDI COLLE CTIONS PERTAIN TO NOMINAL CHARGES COLLECTED AT THE OUT-PATIENTS COUNT ER WHICH RANGES FROM 3 TO 10 PER PATIENT. THE LD. AR HAD ALSO FURNISHED A PAPER-BOOK, DURING THE ITA NO. 517/B/09 PAGE 3 OF 6 COURSE OF HEARING, WHICH CONSISTS OF LEDGER ACCOUNT S OF HOSPITAL HUNDI COLLECTION FOR THE PERIODS FROM 1.4.2006 TO 31.3.20 08, MERCHANTS HUNDI COLLECTION FOR THE PERIOD FROM 24.4.2006 TO 31.3.20 08, HOSPITAL HUNDI COLLECTION - DENTAL AND EYE CARE FOR THE PERIOD 30. 4.2007 TO 29.3.2008 ETC. 4.1. THE LD. AR HAD VEHEMENTLY ARGUED THAT A SUBSTA NTIAL PORTION OF THESE HUNDI COLLECTIONS COMPRISED OF COLLECTION FRO M OUT-PATIENTS OF ASHWINI MEDICAL DENTAL AND EYE CARE CENTRE (A UN IT OF THE TRUST) AND A PART FROM MERCHANTS. THE LD. AR, FURTHER, ASSERT IVELY CONTENDED THAT ALL THESE PERSONS FROM WHOM THE COLLECTIONS RECEIVED WE RE THE OUT-PATIENTS AND THE MERCHANTS WERE IDENTIFIABLE BY THE TRUST. MOREOVER, ALL SUCH COLLECTIONS RECEIVED WERE DULY RECORDED IN THE BOOK S OF THE ACCOUNT OF THE TRUST WHICH WAS DULY VERIFIED, VOUCHED AND AUDITED. THE LD. AR FURTHER SUBMITTED THAT THE LD. DIT (E) HAD NEITHER ASKED FO R ANY DETAILS NOR REQUIRED THE ASSESSEE-TRUST TO IDENTITY THE CONTRIB UTORS TO THE HUNDI DURING THE COURSE OF THE PROCEEDINGS BEFORE HIM. IT WAS R ATHER A SURPRISE TO THE ASSESSEE-TRUST THAT THE LD. DIT(E) IN HIS ORDER HAD BALDLY OBSERVED THAT THE ASSESSEE WAS NOT ABLE TO IDENTIFY THE CONTRIBUTORS TO THE HUNDI. THE LD. AR PLEADED THAT HAD THE DIT(E) PROVIDED AN OPPORTUNITY TO THE ASSESSEE-TRUST, THE ASSESSEE-TRUST WOULD HAVE DEFINITELY PRODUCED AND IDENTIFIED THE CONTRIBUTORS, AS REQUIRED. IN CONCLUSION, IT WAS PLEADED THAT, IF THIS HONBLE BENCH BE PLEASED TO REMIT BACK THE ISSUE ON THE FILE OF THE DIT(E) WHICH WOULD FACILITATE THE ASSESSEE-TRUST TO RESOL VE THE SHORT-COMINGS AS OBSERVED BY THE LD. DIT(E) IN THE IMPUGNED ORDER. SUBSEQUENT TO THE DATE ITA NO. 517/B/09 PAGE 4 OF 6 OF HEARING, THE APPELLANT SUBMITTED A REQUEST IN TH IS REGARD VIDE ITS LETTER DATED 17.8.2009. 4.2. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORT ED THE STAND OF THE LD. DIT(E) AND PRAYED THAT IN THE LIGHT OF THE DIT( E)S FINDINGS, THE REQUEST OF THE ASSESSEE-TRUST REQUIRES TO BE REJECTED. 5. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIO NS AND ALSO MINUTELY PERUSED THE MATERIALS ON RECORD. FROM THE PAPERBOO K SUBMITTED BY THE ASSESSEE, WE ARE NOT IN A POSITION TO MAKE OUT WHET HER THE CONTRIBUTORS TO THE HUNDI COLLECTION ARE IDENTIFIABLE. IT IS APPAR ENT FROM THE ASSESSEES SUBMISSION THAT THE ASSESSEE-TRUST WAS IN RECEIPT O F SUCH HUNDI COLLECTIONS. THE LEDGER STATEMENT SUBMITTED BY THE APPELLANT REF LECTS AS FOLLOWS: SL.NO. PARTICULARS 1.4.06 TO 31.3.07 1.4.07 TO 31.3.08 1. HOSPITAL HUNDI COLLECTION 96,814.00 80,217. 00 2. MERCHANT HUNDI COLLECTION 20,280.00 20,138. 00 3. HOSPITAL HUNDI COLLECTION DENTAL & EYE CARE - 44,811.00 ------------------ ----------------- 1,17,094.00 1,45,166.00 ------------------ ----------------- - 5.1 . THE ONLY PRAYER OF THE LD. AR WAS THAT ALL TH ESE PERSONS FROM WHOM SUCH COLLECTIONS RECEIVED ARE IDENTIFIABLE AND THAT THESE DETAILS COULD NOT BE FURNISHED BEFORE THE DIT(E) AS THEY WERE NOT CALL ED FOR. ITA NO. 517/B/09 PAGE 5 OF 6 5.2 . IT IS ALSO QUITE APPARENT FROM THE IMPUGNED O RDER THAT THE LD. DIT (E) HAD DONE NOTHING EXCEPT MERE PERUSAL OF THE RECEIPT S AND PAYMENTS OF ACCOUNTS. HE OUGHT TO HAVE CALLED FOR THE DETAILS AND SHOULD HAVE AFFORDED AN OPPORTUNITY TO FURNISH ALL THE MATERIAL S OF RELEVANCE. ADHERENCE TO PRINCIPLES OF NATURAL JUSTICE IS MANDATORY WHICH SHOULD STRICTLY BE COMPLIED WITH BY THE REVENUE. IT APPEARS FROM THE ORDER THAT THE LD. DIT(E) HAD NOT PUT FORTH THE QUERIES LINGERING IN HIS MIND TO THE ASSESSEE-TRUST. IT IS ALSO AN IMPORTANT FACTOR WORTH-MENTIONING HERE T HAT THE APPELLANT TRUST HAD ENJOYED RECOGNITION U/S. 80G UPTO 31.3.2008. 5.3. IT IS ALSO WORTHWHILE TO KEEP IN MIND THE FINA NCE MINISTERS BUDGET SPEECH WHICH WAS DELIVERED ON 6.7.2009 DURING THE COURSE OF BUDGET 2009-2010 PRESENTATION WHICH IS EXTRACTED HERE-BEL OW: ANONYMOUS DONATIONS TO CHARITABLE INSTITUTIONS ARE PRESENTLY LIABLE TO TAX SO AS TO PREVENT UNACCOUNTED MONEY BEING ROU TED TO SUCH ENTITIES IN THE GARB OF ANONYMOUS DONATIONS. HOWEV ER, SOME ORGANIZATIONS ARE FACING GENUINE PROBLEMS IN COMPLY ING WITH THE PROCEDURAL REQUIREMENTS. IN ORDER TO MITIGATE THE PRACTICAL DIFFICULTIES BEING FACED BY SUCH CHARITABLE ORGANIZ ATIONS, I PROPOSE TO GRANT RELIEF TO SUCH ORGANIZATIONS BY NOT TAXING AN ONYMOUS DONATIONS RECEIVED TO THE EXTENT OF 5% OF THE TOTAL INCOME OR A SUM OF RS.1 LAKH WHICHEVER IS HIGHER. 5.4. IN AN OVERALL CONSIDERATION OF THE FACTS AND C IRCUMSTANCES OF THE ISSUE AND IN THE INTEREST OF JUSTICE, WE ARE OF THE UNANIMOUS VIEW THAT THE MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE L D. DIT(E) WITH DIRECTIONS TO AFFORD A REASONABLE OPPORTUNITY TO THE ASSESSEE-TRU ST IN ORDER TO FURNISH ALL THE RELEVANT DETAILS WHICH WOULD FACILITATE THE LD. DIT(E) TO CONSIDER THE ITA NO. 517/B/09 PAGE 6 OF 6 ASSESSEE-TRUSTS APPLICATION AFRESH AND TO DECIDE T HE ISSUE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. IT IS ORDERED ACCOR DINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF SEPTEMBER, 2009. SD/- SD/- ( K.P.T. THANGAL ) (A. MOHAN ALANKAMONY ) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 4 TH SEPTEMBER, 2009. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.