SAMJUBEN SHAMALJI AJMERA TRUST, MUMBAI V. DIT(E), MUMBAI

ITA 52/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49076 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 13-06-2011
• Assessment Year: misc
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Set aside
• Section: 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E : MUMBAI BEFORE SHRI R.S. PADVEKAR,(JM) AND SHRI RAJENDRA S INGH ,(AM) ITA NO.52/MUM/2010 ASSESSMENT YEAR :NOT APPLICABLE SMT. SAMJUBEN SHAMALJI AJMERA TRUST 2 ND FLOOR, REHMAN BLDG., 24, VEER NARIMAN ROAD, FORT MUMBAI-400 001. ..( APPELLANT ) P.A. NO. (AABTS 9219 E) VS. THE DIRECTOR OF INCOME TAX (EXEMPTION) ROOM NO.616, 6 TH FLOOR PIRAMAL CHAMBERS, PAREL MUMBAI-. ..( RESPONDENT ) APPELLANT BY : SHRI PRAKASH JOTWANI RESPONDENT BY : SHRI R .K. GUPTA O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 23.11.2009 OF DIRECTOR OF INCOME TAX (EXEMPTION) [ DIT(E)] UNDER SECTION 80G OF THE INCOME TAX ACT, 1961 (THE ACT) REJECTING THE APPLICATION OF THE ASSESSEE. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE WHO IS A TRUST REGISTERED UNDER SECTION 12A OF THE ACT HAD FILED A PPLICATION DATED 8.4.2009 BEFORE THE DIT(E) FOR GRANT OF CERTIFICATE UNDER SE CTION 80G OF THE ACT. DIT(E) AFTER EXAMINATION OF INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31.3.2007 OBSERVED THAT THE ASSESSEE HAD EXP ENDED AN AMOUNT OF RS.11,41,685/- ON RELIGIOUS ACTIVITIES OUT OF TOTAL INCOME OF RS.1,48,75,083/- FOR THE SAID YEAR. THE ASSESSEE HAD THUS EXCEEDED THE MONETARY LIMIT OF 5% OF TOTAL INCOME TO BE SPENT ON RELIGIOUS ACTIVITIES UNDER THE PROVISIONS OF SECTION 80G(5B) OF THE ACT. THE DIT(E) ASKED THE ASSESSEE AS TO WHY ITA NO.52/M/10 A.Y:NA 2 APPLICATION FOR GRANT OF CERTIFICATE UNDER SECTION 80G SHOULD NOT BE REJECTED. THE ASSESSEE EXPLAINED THAT ONLY IN ASSESSMENT YEAR 2007-08 EXPENSES INCURRED WERE MORE THAN 5% I.E. 7.68% AND ALSO EXPL AINED THAT IN THE ASSESSMENT YEARS 2008-09 AND 2009-10 THESE EXPENSES WERE SUBSTANTIALLY LOWER THAN 5%. THE ASSESSEE ALSO UNDERTOOK NOT TO EXCEED THE LIMIT IN FUTURE. IT WAS ACCORDINGLY REQUESTED THAT CERTIFIC ATE MAY BE GRANTED . DIT(E) HOWEVER DID NOT ACCEPT THE CONTENTIONS RAISE D. IT WAS OBSERVED BY HIM THAT THERE WAS NO PROVISIONS TO CONDONE ANY INF RINGEMENT OF THE STATUTORY PROVISIONS CONTAINED IN SECTION 80G(5B). HE, THEREFORE REJECTED THE APPLICATION FILED BY THE ASSESSEE UNDER SECTION 80G , AGGRIEVED, BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE APPLICANT TRUST WAS RUNNING A SCHOOL IN PUNE, A HOSPITAL IN V ASAVAD AND A GAUSHALA AT GONDAL. THE APPLICANT WAS THUS ENGAGED IN CHARITAB LE ACTIVITIES. SOME EXPENDITURE HAD HOWEVER BEEN INCURRED ON RELIGIOUS ACTIVITIES. EXPENDITURE OF RS.11,41,685/- OUT OF TOTAL EXPENDITURE OF RS.1, 48,75,083/- HAD BEEN SHOWN UNDER THE HEAD RELIGIOUS ACTIVITIES. THE DET AILS OF SUCH EXPENSES, IT WAS POINTED OUT, WERE AVAILABLE AT PAGE-4 OF THE PA PER BOOK. THE DETAILS OF EXPENDITURE SHOW THAT A SUM OF RS.1.75 LACS WHICH H AD BEEN SHOWN ON ACCOUNT OF LATE TDN CHARITABLE TRUST, RS .19,750/- ON ACCOUNT OF HARESHBHAI FOR DONATION OF COMPUTER SYSTEM, RS.5.00 LACS ON AC COUNT OF SHREE J.L. SANGH AND RS.46,435/- ON ACCOUNT OF SHREE VASAVAD G RAM PANCHAYAT KACHERI PAID TO PRAFUL ENGG. FOR THE PURCHASE OF S UBMERSIBLE PUMP AND ELECTRICAL ITEMS FOR THE GRAM PANCHAYAT. IT WAS PO INTED OUT THAT DETAILS OF THESE EXPENSES HAVE NOT BEEN EXAMINED AND THEREFORE , IT WAS NOT CLEAR WHETHER EXPENDITURE ALSO INCLUDED EXPENDITURE ON CH ARITABLE ACTIVITIES. IT WAS SUBMITTED THAT DETAILS OF THESE EXPENSES HAD BE EN GIVEN BUT THE SAME HAD NOT BEEN EXAMINED. IT WAS ACCORDINGLY REQUESTE D THAT THE MATTER MAY BE REFERRED BACK TO DIT(E) FOR FRESH EXAMINATION. THE LD. DR EXPRESSED NO OBJECTION IN THE MATTER. ITA NO.52/M/10 A.Y:NA 3 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE IS REGARDING GRANT OF CERTIFICATE/REGISTRAT ION UNDER SECTION 80G OF THE ACT. SUB SECTION 5B OF SECTION 80G HAS PUT A LIMIT OF 5% OF TOTAL INCOME ON RELIGIOUS ACTIVITIES AND THEREFORE, IN CASE EXPENDI TURE ON RELIGIOUS ACTIVITIES EXCEEDS 5% LIMIT, THE EXEMPTION UNDER SECTION 80G C ANNOT BE GRANTED. IN THIS CASE THE ASSESSEE HAD SHOWN EXPENDITURE OF RS .11,41,865/- OUT OF TOTAL INCOME OF RS.1,48,75,083/- WHICH COMES TO RS.7.68%. SUCH EXPENDITURE HAD BEEN SHOWN AS RELIGIOUS. HOWEVER DETAILS OF TH ESE EXPENSES HAVE NOT BEEN EXAMINED. THE DETAILS FILED IN PAPER BOOK AND AS POINTED OUT BY THE LD. AR DO NOT SHOW CLEARLY WHETHER ENTIRE SUCH EXPENDI TURE WAS EXPENDED ON RELIGIOUS ACTIVITIES. IN OUR VIEW, WITHOUT MAKING ANY DETAILED EXAMINATION OF THE EXPENDITURE, IT IS NOT POSSIBLE TO ARRIVE AT AN Y CONCLUSION, WHETHER THE ENTIRE EXPENDITURE WAS RELIGIOUS IN NATURE. IT IS A SETTLED LEGAL POSITION THAT NOMENCLATURE OF THE EXPENDITURE IS NOT CONCLUSIVE I N DECIDING THE TRUE NATURE OF EXPENDITURE. WE THEREFORE, SET ASIDE THE ORDER OF THE DIT(E) AND RESTORE THE MATTER BACK TO HIM FOR PASSING A FRESH ORDER AF TER DETAILED EXAMINATION OF EXPENDITURE AND AFTER ALLOWING OPPORTUNITY OF HEARI NG TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13.6.2011. SD/- SD/- (R.S. PADVEKAR) (RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 13.6.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.