Satish Kunti Goyal Foundation, JODHPUR V. CIT-1, JODHPUR

ITA 520/JODH/2010

• Counselvise Citation: 52023314 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 02-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M N MOURYA
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH , JODHPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO. 520/ JU/2010 U/S 12AA PAN: AAJTS 0503 R M/S. SATISH KUNTI GOYAL FOUNDATION VS. THE CIT -1 JODHPUR JODHPUR (APPELLANT ) (RESPONDENT) ITA NO. 521/ JU/2008 U/S 80G PAN: AAJTS 0503 R M/S. SATISH KUNTI GOYAL FOUNDATION VS. THE CIT -1 JODHPUR JODHPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI ARUN CHORDIA DEPARTMENT BY : SHRI M.N. MOURYA DATE OF HEARING: 16-12-2011 DATE OF PRONOUNCEMENT: 19-01-2012 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED THE APPEALS AGAINST THE ORD ERS OF THE LD. CIT U/S 12AA AND 80G DATED 29-09-2010. 2.1 THE ASSESSEE FILED THE APPLICATION FOR REGISTRA TION U/S 12A OF THE ACT. THE LD CIT NOTICED FROM THE TRUST DEED THAT NO OUTSIDER CAN I NTERFERE IN THE AFFAIRS OF THE TRUST AND THE SAME IS TO BE CONTROLLED BY THE GOYAL FAMILY. THE G OYAL FAMILY RUNS ONE OF THE MOST WELL KNOWN NURSING HOME IN THE CITY OF JODHPUR. THE TRUST DURING THE F.Y. 2006-07 BORROWED A SUM OF RS.13.50 LACS FROM M/S. SHUBHANAN D CHARITABLE TRUST WHICH IS AGAIN FORMED AND MANAGED BY THE MEMBERS OF GOYAL FAMILY. AN AMBULANCE HAS BEEN 2 PURCHASED FROM THE SUM BORROWED FROM M/S. SHUBHANAN D CHARITABLE TRUST DURING THE F.Y. 2006-07. THE AMBULANCE WAS NOT PUT TO USE AS C AN BE SEEN FROM THE INCOME AND EXPENDITURE STATEMENT. NO OTHER ACTIVITY OF CHARITA BLE NATURE WAS CONDUCTED. DURING THE F.Y. 2007-08, A FURTHER SUM OF RS. 35.50 LACS WAS BORROWED FROM M/S. SHUBHANAND CHARITABLE TRUST AND THE ASSESSEE TRUST PURCHASED A LAND FOR RS. 27.00 LACS. 2.2 BEFORE THE LD. CIT, IT WAS SUBMITTED THAT AN AM BULANCE WAS USED FOR POOR AND NEEDY PEOPLE. EXCEPT FOR A SUM OF RS. 36,000/-TOWAR DS DRIVERS SALARY AND RS. 14,310/- FOR MAINTENANCE EXPENSES, NO OTHER DETAILS WERE AVA ILABLE TO PROVE THAT AMBULANCE WAS USED FOR CHARITABLE PURPOSES. THE AMBULANCE WAS FOU ND PARKED AT THE GOYAL HOSPITAL IN WHICH THE TRUSTEE OF THE ASSESSEE TRUST ARE DIRECTO RS / MANAGERS. NO LOG BOOK WAS MAINTAINED. NO EVIDENCE WAS FORTHCOMING THAT THE AM BULANCE WAS PUT FOR CHARITABLE PURPOSES OF THE ASSESSEE TRUST. THE LD. CIT RECORDE D THE FINDINGS THAT THE AMBULANCE WAS UTILIZED BY GOYAL HOSPITAL AND RESEARCH CENTRE. THE LAND PURCHASED BY THE TRUST WAS GIVEN ON NEGLIGIBLE SUM OF RS. 20,000/-PER MONTH TO M/S. GOYAL HOSPITAL AND RESEARCH CENTRE. THE LD. CIT NOTICED THAT THE PROVISIONS OF SECTION 13(1) ARE ATTRACTED. ACCORDINGLY, THE LD CIT HAS NOT ALLOWED THE REGISTR ATION. 2.3 BEFORE US, THE LD.AR HAS FILED THE WRITTEN SUBM ISSIONS CONTAINING 10 PAGES IN THE WRITTEN SUBMISSIONS, IT WAS SUBMITTED THAT THE ASSE SSEE TRUST HAS MAINTAINED THE BOOKS OF ACCOUNTS AND THESE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE LD. CIT. THE OBJECTS OF THE TRUST ARE CHARITABLE. THE LD.AR DREW OUR ATTENT ION TO CLAUSE 14 OF THE TRUST DEED IN WHICH IT IS NOWHERE MENTIONED THAT TRUSTEES WILL BE TAKEN FROM GOYAL FAMILY. THE TRUST HAS RAISED THE INTEREST FREE BORROWINGS FOR PURCHAS ING THE AMBULANCE. THE CONDITIONS OF SECTION 13 ARE NOT VIOLATED. HOWEVER, THE REGISTRAT ION CANNOT BE DENIED SIMPLY ON THE 3 GROUND THAT SECTION 13 IS VIOLATED. OUR ATTENTION W AS DRAWN TO ITAT JODHPUR BENCH DECISION IN THE CASE OF MODERN DEFENCE SHIKSHAN SAN STHAN VS CIT, 108 TTJ 732 IN WHICH IT HAS BEEN MENTIONED THAT UNTIL REGISTRATION IS GR ANTED, THE QUESTION OF APPLICATION OF FUNDS DOES NOT ARISE AT ALL. ITAT JODHPUR BENCH IN THE CASE OF SMT.MANSUKHI DEVI BIHANI JAN HITARI TRUST VS CIT, 94 ITD 1 HELD THAT REGISTR ATION CANNOT BE REFUSED ON THE GROUND THAT BOARD OF TRUSTEES WERE FROM THE SAME FAMILY AN D THERE WAS A CLAUSE IN TRUST DEED THAT IN CASE OF A VACANCY IN THE BOARD OF TRUSTEES, THE REMAINING TRUSTEES ARE TO CO-OPT ANOTHER PERSON FROM THE VERY FAMILY OF THE OUTGOING TRUSTEE . THE LD.AR HAS ALSO RELIED UPON THE FOLLOWING DECISIONS. 1. AGGARWAL MITRA MANDAL TRUST VS DIRECTOR OF INCOM E-TAX (EXEMPTION), 109 TTJ 128 (DEL.) 2. GLOBAL EDUCATION NET (GENET) VS CIT, 1 DTR 443 ( TRIBUNAL) COCHIN 3.. NLB CHARITABLE TRUST VS CIT, 38 SOT 291 (DEL.) 4. DREAM LAND EDUCATION TRUST VS CIT 109 TTJ 850 (ASR. ). 2.4 ON THE OTHER HAND, LD DR DREW OUR ATTENTION TO THE FINDINGS GIVEN BY THE LD CIT IN HIS ORDER U/S 12AA OF THE ACT. THE ASSESSEE TRUST H AS NOT DONE ANY CHARITABLE ACTIVITY AND THEREFORE, THE LD. CIT WAS JUSTIFIED IN DENYING THE REGISTRATION U/S 12AA OF THE ACT. 2.5 WE HAVE HEARD BOTH THE PARTIES. THE COPY OF THE TRUST DEED IS AVAILABLE AT PAGES 33 TO 37 OF THE PAPER BOOK. THE CHARITABLE ACTIVITIES MENTIONED IN THE TRUST DEED ARE AS UNDER:- 1. GRANTING SCHOLARSHIP, AWARDS AND FUNDS FOR RESEA RCH LEADING TO THE BENEFIT OF THE MANKIND IN ALL SPHERES. 2. INITIATING THE ESTABLISHING NEW SCHOOL, COLLEGES , LIBRARIES, UNIVERSITIES OR GRANT FUNDS TO EXISTING ONE. 4 3. TO PROVIDE SCHOLARSHIPS AND INTEREST FREE LOANS TO DESERVING MERITORIOUS STUDENTS TO PURSUE ENGINEERING OR MEDI CAL EDUCATION OR FOR PROFESSIONAL CAUSES LIKE MASTER OF BUSINESS MANAGEM ENT ETC. 4. TO PROVIDE AWARDS OF 250 DOLLARS PER YEAR AT TRI -STATE UNIVERSITY ANGOLA. 5. THE KUNTI GOYAL INTERNATIONAL AWARD OF $ 500 OR EQUIVALENT IN INDIAN RUPEES. 6. ANY OTHER AWARD AS DECLARED BY THE BOARD OF DIRE CTORS . ARRANGE KUNTI GOYAL MEMORIAL LECTURE EACH YEAR ALONGWITH SU ITABLE HONORARIUM TO THE SPEAKER. 7. CREATING AWARENESS, DIAGNOSIS AND TREATMENT OF F ATAL DISEASES LIKE AIDS, CANCER, CARDIAC ETC. PROVIDING SEED MONEY OR SUITABLE FUNDS FOR PURCHASES OF SOPHISTICATED , COSTLY MEDICAL EQUIPME NTS. PURCHASE, DONATE OR PARTLY SUBSCRIBE FOR AMBULANCES FOR EXISTING HOS PITALS. 8. TO GRANT FUNDS TO CHARITABLE TRUSTS OR SIMILAR O RGANIZATION ENGAGED IN SIMILAR ACTIVITIES. 9. TO ARRANGE FOR PERFORMING DRAMAS, DANCES, RECITA LS ETC 10. THERE ARE OTHER OBJECTS FOR PROVIDING HELP TO T HE POOR PERSONS. 2.6 THE APPLICATION FOR REGISTRATION WAS FILED ON 2 2-03-2010. HENCE, IT IS NOT A CASE WHERE THE APPLICATION HAS BEEN FILED FOR REGISTRATI ON IN THE FIRST YEAR IN WHICH TRUST IS CREATED. IN THE CASE OF TRUST, WHICH HAS ALREADY ST ARTED ITS OPERATION, THE LD CIT CAN SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. THE LD. CIT IN HIS ORDER HAS REFERRED TO THE FACT THAT THE ASSESSEE HAS NOT PLAC ED ANY MATERIAL ON RECORD TO SHOW THAT AMBULANCE WAS PUT TO USE FOR CHARITABLE PURPOSES. I T IS NOTICED THAT THIS TRUST IS GETTING INTEREST FREE LOAN FROM OTHER TRUST CONTROLLED BY THE SAME GOYAL FAMILY. IN THE F.Y. 2006-07, THE ASSESSEE HAS SHOWN THE RECEIPT OF INTE REST. IN F.Y. 2007-08 AGAIN, THERE IS ONLY INTEREST. CASH IN HAND AS ON 31-03-09 IS TO TH E EXTENT OF RS. 4,80,722/-. THE INCOME 5 AND EXPENDITURE ACCOUNT DOES NOT INSPIRE ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. IT IS TRUE THAT REGISTRATION CANNOT BE DENIE D ON ACCOUNT OF VIOLATION OF SECTION 13. THE LD. CIT HAS TO SATISFY HIMSELF ABOUT THE GENUIN ENESS OF THE ACTIVITIES OF THE TRUST. THE LD. CIT CAN CALL FOR SUCH DOCUMENTS OR INFORMATIONS FROM THE TRUST TO SATISFY HIMSELF THAT THE TRUST IS ENGAGED IN THE CHARITABLE ACTIVITIES. THE FACTUAL FINDINGS RECORDED BY THE LD. CIT CANNOT BE CONSIDERED AS INCORRECT. WE THEREFORE , HOLD THAT THE LD CIT WAS JUSTIFIED IN NOT ALLOWING REGISTRATION. ONCE THE REGISTRATION IS NOT ALLOWED THEN THE TRUST CANNOT BE APPROVED FOR PURPOSE OF SECTION 80G OF THE ACT. HEN CE, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. 3. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED. THE ORDER IS PRONOUNCED ON 19-01-2012 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 19 /01/2012 *MISHRA COPY FORWARDED TO :- 1. M/S. SATISH KUNTI GOYAL FOUNDATION, JODHPUR 2. THE LD. CIT -1 3. THE LD. CIT BY ORDER 4. THE LD.DR 5. THE GUARD FILE (ITA NO. 520/JU /10) A.R, ITAT, JAIPUR