Seva Samiti, V. CIT,

ITA 529/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5523 (ITAT-DELHI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-01-2010
• Assessment Year: misc
• Appeal Filed On: 12-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BHARATI
• Assessee Lawyers: DR RAKESH GUPTA ASHWANI TANEJA
• Keywords: Depreciation; Charitable institution
• Section: 80G; 12AA; 12; 11

Judgement Text

ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 529/DEL/2009 SEVA SAMITI, FARIDABAD VS. COMMISSIONER O F INCOME TAX, C/O RAKESH RAJ & ASSOCIATES, FARIDABAD 565, SECTOR-7B, FARIDABAD AND C.O. NO. 55/DEL/2009 (IN ITA NO. 529/DEL/2009) COMMISSIONER OF INCOME TAX, VS. SEVA SAMITI, FARID ABAD FARIDABAD C/O RAKESH RAJ & ASSOCIATES, 565, SECTOR-7B, FARIDABAD [APPELLANT] (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, ASHWANI TANEJA, A DV. DEPARTMENT BY : SH. S.K. BHARATI, SR. DR ORDER PER RAJPAL YADAV, JM ITA NO. 529/DEL/2009 THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (CIT), FARIDABAD DATED 30.12.2008 VIDE WHICH HE HAS DENIED RENEWAL OF APPROVAL UNDER SECTION 80G OF T HE IT ACT. ON RECEIPT OF NOTICE IN THE ASSESSEES APPEAL LD. CIT HAS FILED THE CROS S OBJECTIONS BEARING NO. 55/DEL/2009 IN SUPPORT OF HIS ORDER DATED 30.12.200 8. ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 2 2. THE GROUND OF THE APPEAL TAKEN BY THE ASSESSEE A RE NOT IN CONSONANCE WITH THE RULE 8 OF THE ITAT RULES. THEY ARE DESCRIPTIV E AND ARGUMENTATIVE IN NATURE. IN BRIEF THE GRIEVANCE OF THE ASSESSEE RELATES TO THE DENIAL OF REGISTRATION UNDER SECTION 80G OF THE IT ACT. 3. THE BRIEF FACTS OF THE CASE ACCORDING TO ASSES SEE ARE THAT IT WAS ESTABLISHED WAY BACK IN 1957. THE ASSESSEE WAS REGISTERED UNDE R THE SOCIETIES REGISTRATION ACT ON 22.09.1957. ITS FOUNDATION WAS LAID BY THE THEN HONBLE UNION COMMERCE AND INDUSTRY MINISTER WHO THEREAFTER BECOME THE P RIME MINISTER OF INDIA SHRI LAL BAHADUR SHASTRI JEE ON 17.5.1957. THE ASSESSE E HAD STARTED A PUBLIC LIBRARY ON THAT POINT OF TIME AND THEREAFTER CONDUCTED VARI OUS CLASSES OF SOCIAL AND PHYSICAL EDUCATION. A REGISTRATION UNDER SECTIO N 12AA(1) OF THE IT ACT, 1961 WAS GRANTED TO THE ASSESSEE ALONGWITH ITS APPLICATION F OR GRANT OF REGISTRATION UNDER SECTION 80G. ASSESSEEE HAS ANNEXED THE ORDER PASSE D UNDER SECTION 12AA(1) OF THE IT ACT. IT ALSO PLACED ON RECORD COPY OF REGIS TRATION CERTIFICATE ISSUED BY THE REGISTRAR OF COMPANIES AND ALSO ANNEXED THE ACTIVIT IES CARRIED OUT BY THE ASSESSEE IN THE LAST 3 YEARS. THE ASSESSEE HAS POINTED O UT THAT APPROVAL UNDER SECTION 80G WAS GRANTED TO IT VIDE ORDER DATED 13.9.2005, W HICH WAS VALID UPTO 31.3.2008. ON EXPIRY OF THIS REGISTRATION ASSESSEE HAS APPLIED FOR ITS RENEWAL, IT ALSO ANNEXED THE STATEMENT OF ACCOUNT FOR THE LAST THREE YEARS. 4. THE LD. CIT IN ORDER TO GIVE LOGICAL END TO THE PROCEEDINGS HAD ISSUED A SHOW CAUSE NOTICE WHICH REQUIRED THE ASSESSEE TO SU BMIT VARIOUS DETAILS. THE SHOW CAUSE NOTICE ISSUED BY THE LD. CIT DURING THE COURSE OF ENQUIRY AND THE REPLY SUBMITTED BY THE ASSESSEE ARE BEING REPRODUCED BY T HE LD. CIT IN THE DETAILED ORDER IMPUGNED HEREIN. ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 3 5. LD. COUNSEL FOR THE ASSESSEE WHILE IMPUGNING TH E ORDER OF THE LD. CIT POINTED THAT RENEWAL OF REGISTRATION UNDER SECTION 80G HAS BEEN DENIED TO THE ASSESSEE BY THE CIT PRIMARILY FOR THREE REASONS. THE FIRST REASON ASSIGNED BY HIM IS THAT THE ASSESSEE FAILED TO FURNISH THE ORIGINAL COPY OF THE MOA AS WELL AS THE CERTIFICATE ISSUED BY THE REGISTRAR OF THE SOCIETIE S. THE SECOND REASON ASSIGNED BY THE LD. CIT IS THAT THE ASSESSEE FAILED TO MAINT AIN PROPER RECORD REGARDING DONATIONS EXCEEDING RS. 5000/-. THE THIRD REASON G IVEN BY THE LD. CIT IS THAT SOME OF THE OBJECTS OF THE SOCIETY ARE FOUND TO BE REPUGN ANT TO SECTION 2(15), THEY ARE NOT CHARITABLE IN NATURE. THE LAST REASON ASSIGNE D BY THE LD. CIT IS RELATED TO INCORRECT AUDIT REPORT AND ACCUMULATION OF FUNDS I N EXCESS OF THE PERMISSIBLE LIMIT OF 15% WITHOUT INTIMATION TO ASSESSING OFFI CER IN FORM NO. 10 AS REQUIRED BY SECTION 11 OF THE IT ACT. LD COUNSEL FOR THE AS SESSEE CONTENDED THAT AS FAR AS THE FIRST REASON ASSIGNED BY THE LD. CIT IS CONCER NED ASSESSEE HAS FILED A PHOTOCOPY OF THE MOA, REGISTRATION CERTIFICATE AND THE BYE-LAWS OF THE SOCIETY. THIS PHOTOCOPY WAS DULY ATTESTED BY THE PRESIDEN T OF THE SOCIETY AND IT WAS CONTENDED THAT IN THE LAST 51 YEARS THE MANAGEMENT OF THE SOCIETY HAS BEEN CHANGED ON A NUMBER OF OCCASIONS. IN THE PROCESS O F HANDING OVER CHARGES THE ORIGINAL DOCUMENTS APPEARS TO HAVE BEEN NOT TRACEAB LE, THUS THE PRESENT MANAGEMENT WAS UNABLE TO LAY ITS HEAD ON THE ORIGIN AL DOCUMENTS. THE PRESIDENT OF THE SOCIETY HAS FILED AN AFFIDAVIT TO THE FACT THAT A TRUE PHOTOCOPY OF THE MOA IS BEING FILED. HE HAS UNDERTOOK TO FILE THE CERTIFIED COPY OF THESE DOCUMENTS AFTER OBTAINING THEM FROM THE REGISTRARS OFFICE. LD. COUNSEL HAS EMPHASIZED ON THE POINT THAT ALL ALONG IN THE PAST THESE DOCUMENTS WERE SHOWN TO THE DEPARTMENT ON A NUMBER OF OCCASIONS AND THE IR PHOTOCOPIES WERE PLACED ON RECORD OF THE INCOME TAX DEPARTMENT. LD. CI T HAS PERUSED THESE DOCUMENTS ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 4 WHILE GRANTING APPROVAL ON 13.9.2005. THUS ACCORD ING TO HIM IT IS NOT A VERY SERIOUS LAPSE ON THE PART OF THE ASSESSEE WHICH COU LD DISENTITLE IT TO CLAIM APPROVAL UNDER SECTION 80G OF THE ACT. WITH REGARD TO THE SECOND REASON ASSIGNED BY THE LD. CIT, HE POINTED OUT THAT ASSESS EE HAS BEEN MAINTAINING PROPER ACCOUNTS. WITH REGARD TO THE DONATIONS RECEIVED BY IT, HE POINTED OUT THAT THE ASSESSEE USED TO PROVIDE RECEIPTS OF THE DONATIONS TO THE DONOR WHO DIRECTLY COME TO SEVA SAMITI, FARIDABAD. THE ASSESSEE USED TO COLLECT DONATIONS THROUGH DONATION BOXES WHICH WERE KEPT AT DIFFERENT PLACES OF THE CITY. IN RESPECT OF THESE DONATIONS, IT IS DIFFICULT FOR THE ASSESSEE T O IDENTIFY THE DONOR. SIMILARLY, WITH REARED TO THE THIRD REASON LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE OTHER AIMS AND OBJECTS CONSIDERED BY THE LD. CIT AS REPUGNANT TO SECTION 2(15) OF THE ACT. HE DREW OUR ATTENTION TO PAGES 22 TO 23 OF THE IMPUGNED ORDER AND POINTED OUT THAT NONE OF THE OBJECTS REFERRED BY TH E LD. CIT IS CAPABLE OF PROVIDING ANY OPPORTUNITY OF TRADE, COMMERCE OR B USINESS. THESE ARE ANCILLARY OBJECTS OF THE SOCIETY WHICH ARE CHARITABLE IN NATU RE. IT WAS ALSO POINTED THAT ASSESSEE WAS NOT INVOLVED IN CARRYING OUT ANY ACTI VITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR IT WAS COLLECTING FEES FOR ANY OF ITS ACTIVITY. WITH REGARD TO ACCUMULATION OF FUNDS IN EXCESS OF PERMISSIBLE L IMIT OF 15%, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO ACCUMULATION O F PROFIT IN EXCESS OF 15%. THE CIT HAS WORKED OUT IT BY TREATING THE DEPRECIATION AS NON-APPLICATION OF INCOME. ON THE STRENGTH OF THE HONBLE GUJRAT HIGH COURT DE CISION IN THE CASE OF CIT VS. SETH MANI LAL RANCHOODAS VISHRAM BHAWAN TRUST 105 C TR 303. HE CONTENDED THAT DEPRECIATION HAS TO BE ALLOWED WHILE COMPUTIN G INCOME FOR THE PURPOSE OF SECTION 11. HE ALSO POINTED OUT THAT EVEN IF DEPR ECIATION IS EXCLUDED OTHER THAN ALSO THERE IS NO DEFICIT IN APPLICATION OF INCOME A T 85%. ACCORDING TO THE LD. ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 5 COUNSEL SUCH TYPE OF ISSUES ARE TO BE SUBJECT MATER OF REGULAR ASSESSMENT AND NOT TO BE ENQUIRED FOR THE PURPOSE OF SECTION 80G. A PPRISING US WITH THE SCOPE OF ENQUIRY FOR THE PURPOSE OF SECTION 80G, HE MADE A R EFERENCE TO THE ITATS ORDER IN THE CASE OF SHIKSHA PRASARAK MANDALI VS. CIT REP ORTED IN 117 TTJ 337. HE SUBMITTED THAT ASSESSEE HAS FULFILLED ALL THE REQUI SITE CONDITIONS PRESCRIBED BY SECTION 80G(5) OF THE IT ACT IN ORDER TO CLAIM APPR OVAL UNDER SECTION 80G. LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES WITH THE EARLIER YEARS WHEN THE LD. CIT HAS GRANTED REGISTRATION TO IT VIDE ORDER DATED 13.9.95, WHICH IS VALID UPTO TO 31.3.08. IN THE IMPUGNED ORDER THE CIT HAS ALSO NOT POINTED OUT ANY CHANGE IN THE FACTS AND CIRCUMSTANCES OR IN THE LAW. 6. THE LD. DR ON THE OTHER HAND RELIED UPON THE OR DER OF THE LD CIT, HE POINTED THAT LD. CIT HAS CONSIDERED THE ISSUE EXHAU STIVELY. HE HAS REPRODUCED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WE LL AS THE SHOW CAUSE NOTICE ISSUED BY HIM. LD. CIT HAS CONFRONTED THE ASSESSEE WITH THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE YOGIRAJ CHARIT Y TRUST VS. CIT 103 ITR 777, WHEREIN IT HAS BEEN HELD THAT IF SOME OF THE OBJECTS ARE NON-CHARITABLE AND SOME OF WHICH ARE CHARITABLE AND NO DEFINITE PART O F THE PROFIT OR ITS INCOME IS ALLOCATED TO CHARITABLE PURPOSES AND IT WOULD BE O PEN TO TRUSTEES TO APPLY THE WHOLE INCOME TO ANY OF THE NON-CHARITABLE OBJECTS, THEN NO EXEMPTION CAN BE CLAIMED. SIMILARLY, LD. CIT HAS CONFRONTED THE A SSESSEE WITH THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. GA NGUBAI CHARITIES 142 ITR 718. LD. DR CONTENDED THAT ASSESSEE WAS UNABLE TO POINT OUT AS TO HOW ALL ITS OBJECTS ARE CHARITABLE IN NATURE AND THEY ARE NOT REPUGNAN T TO SECTION 2(15) OF THE ACT. ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 6 7. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT REGISTRATION UNDE R SECTION 12AA OF THE ACT HAS BEEN GRANTED TO THE ASSESSEE AND APPROVAL UNDER SEC TION 80G(5) WAS GRANTED TO IT VIDE ORDER DATED 13.9.95 WHICH WAS VALID UPTO 31.3. 08. THERE IS NO DISPUTE WITH REGARD TO THE ABOVE FACTS. AS FAR AS THE APPROVA L UNDER SECTION 80G IS CONCERNED, SECTION 80(2)(A)(IV) PROVIDES THAT IN CO MPUTING TOTAL INCOME OF AN ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF THE S AID SECTION, THERE SHALL BE DEDUCTION OF AN AMOUNT EQUIVALENT TO 50% OF ANY SU M PAID BY THE ASSESSEE IN THE PREVIOUS YEAR, AS A DONATION, TO ANY FUND OR ANY IN STITUTION, OTHER THAN THE ONES SPECIFIED IN SECTION 80G, TO WHICH THIS SECTION APP LIES. SECTION 80G(5)(VI) PROVIDES THAT, IN ORDER TO BE ELIGIBLE FOR DEDUCTION UNDER S ECTION 80G(2)(A)(IV), THE INSTITUTION OR FUND TO WHICH THE AMOUNT IS PAID AS DONATION, IS FOR THE TIME BEING APPROVED BY THE CIT IN ACCORDANCE WITH THE RULES FR AMED IN THIS BEHALF. THUS, IF AN ASSESSEE HAD PAID ANY DONATION TO ANY FUND OR IN STITUTION THEN THEY WILL BE ABLE TO CLAIM DEDUCTION UNDER SECTION 80G(2)(A)(V), IF SUCH FUND OR INSTITUTION WAS ENJOYING APPROVAL/REGISTRATION GRANTED BY THE LD. CI T. SECTION 80G(5)(I TO V) LAID DOWN THE CRITERIA FOR EXAMINING THE FACTS AND CIRCU MSTANCES OF THE CASE OF THE ASSESSEE FOR GRANTING SUCH REGISTRATION / APPROVAL. THESE CLAIMS READ AS UNDER:- (I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCOM E, SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER ANY OF THE PROV ISIONS OF SECTIONS 11 AND 12 OR CLAUSE (23AA) OR CLAUSE (23C) OF SECTION 10; PROVIDED............(NOT RELEVANT FOR OUR PURPOSE S) (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED DOES NOT, OR THE RULES GOVERNING THE INSTITUTION OR FUND DO NOT, CONTAIN A NY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME OF THE WHOLE OR ANY PART OF THE INCOME OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOSE OTHER THAN THE CHARITABLE P URPOSES; (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO B E FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 7 (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACC OUNTS OF ITS RECEIPTS AND EXPENDITURE; AND (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED A S A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860, OR ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA OR UNDER SECTION 25 OF THE COM PANIES ACT, 1956 OR IS A UNIVERSITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUCATIONAL INS TITUTION RECOGNIZED BY THE GOVERNMENT OR BY THE UNIVERSITY ESTABLISHED BY LAW, OR AFFILIA TED TO ANY UNIVERSITY ESTABLISHED BY LAW, OR IS AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNMENT OR A LOCAL AUTHORITY. 8. THE ITAT, PUNE IN THE CASE OF SHIKSHA PARASARK M ANDALI VS. CIT (SUPRA) HAS MADE A LUCID ENUNCIATION OF THE LAW AND FACTS ON THE ISSUE. IN THIS ORDER THE TRIBUNAL HAS EXAMINED THE SCOPE OF ENQUIRY UNDER SE CTION 80G(5) AND THE PROCEDURE FOR SUBMITTING RELEVANT DETAILS REQUIRED BY RULE 11AA OF THE IT RULES, 1962. WE CANNOT DO BETTER THEN TAKING NOTE OF THE DISCUSSION MADE BY THE TRIBUNAL IN PARAGRAPH 9 OF THIS ORDER, WHICH READ A S UNDER:- 9. IN OUR CONSIDERED VIEW, [FOR THE PURPOSE OF DECIDI NG ON WHETHER OR NOT TO GRANT APPROVAL UNDER SECTION 80G, A CIT HAS TO ONLY EXAMINE WHETHER OR NOT THE CONDITIONS SET OUT IN SECTION 80G(5)(I) TO (V) ARE SATISFIED. THE FIRST AND FOREMOST THING TO BE SEEN IS WHETHER OR NOT ANY INCOME EARNE D BY THE ASSESSEE IS NOT BEING LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER ANY O F THE PROVISIONS OF SECTIONS 11 AND 12 OR CLAUSE (23AA) OR CLAUSE (23C) OF SECTION 10. IT HAS TO BE BORNE IN MIND THAT SINCE THE ASSESSEE IS GRANTED APPROVAL FOR THE FUTURE YEARS, AND SINCE THERE IS NO WAY THAT ANYONE CAN HAVE THE CLAIRVOYANCE OF KNO WING WHETHER OR NOT THE ASSESSEE WILL BE ABLE EVENTUALLY TO COMPLY WITH THE CONDITIONS, IF ANY ATTACHED TO THE EXEMPTIONS, AS LONG AS THE EXEMPTION IS AVAILAB LE IN PRINCIPLE ARID AS LONG AS THE ASSESSEE CAN REASONABLY CLAIM TO BE ABLE TO SAT ISFY THE CONDITIONS ATTACHED TO SUCH EXEMPTION, ONE HAS TO PROCEED ON THE BASIS THA T THE CONDITION LAID DOWN UNDER SECTION 80G(5)(I) IS SATISFIED. IT CANNOT (BE ) OPEN TO THE CIT TO REJECT THE APPROVAL UNDER S/80G ONLY ON THE GROUND THAT IT IS NOT CONCLUSIVELY ESTABLISHED NOW THAT THE ASSESSEE WILL BE FINALLY ELIGIBLE IN F UTURE FOR EXEMPTION UNDER SECTIONS 11, 12 AND 10(23AA) OR 10(23(33 SUCH AN IN TERPRETATION CAN ONLY LEAD TO ABSURDITY THAT IN YEAR X, THE ASSESSEE MUST HAVE A FINDING ABOUT APPLICABILITY FOR EXEMPTION IN YEARS X+1, X+2, X+3 AND SO ON PARTICUL ARLY WHEN EVEN THE ELIGIBILITY FOR EXEMPTION IS DEPENDENT ON THE CONDUCT OF THE AS SESSEE, SUCH AS FILING OF RETURN AND MAINTENANCE OF BOOKS OF ACCOUNTS, IN THE YEARS X+1, X+2, X+3 AND SO ON. IN PRINCIPLE, ELIGIBILITY FOR EXEMPTION, AND EXISTENCE OF THE CONDITIONS, IF ANY, ATTACHED TO THE EXEMPTION, WHICH CAN BE REASONABLY COMPLIED WITH IN OUR CONSIDERED VIEW, SUFFICIENT TO SATISFY SECTION 80G( 5)(I). THAT CONDITION IS SATISFIED ON THE FACTS OF THIS CASE. THE NEXT THING TO BE ENS URED BY THE CIT IS NON-EXISTENCE, IN THE INSTRUMENT, CONSTITUTION OR RULES GOVERNING THE INSTITUTION, OF ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME OF THE WHOLE OR ANY PART OF THE INCOME ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 8 OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOS ES OTHER THAN THE CHARITABLE PURPOSES. THAT CAN OF COURSE BE DONE BY EXAMINING T HE PROVISIONS IN INSTRUMENTS AND RULES OF THE INSTITUTION. THE ASSESSEE HAD DULY FURNISHED THE DOCUMENTS TO THE CIT, AND NO SUCH DISCREPANCY IS NOTED THEREIN. THE PROVISION OF SECTION 80G(5)(III) IS ALSO THUS SATISFIED. THE NEXT THING TO BE ENSURED IS THAT THE INSTITUTION OR FUND IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. THAT IS ALSO NOT THE CASE BEFOR E US, AND THERE IS NO DISPUTE ON THAT ASPECT. AS REGARDS THE REQUIREMENTS OF SECTION 80G(5)(IV), ALL THAT IS TO BE SEEN IS THAT THE ASSESSEE MAINTAINS ACCOUNTS OF ITS RECEIPTS AND EXPENDITURE. THE DISCREPANCIES POINTED OUT BY THE DEPARTMENTAL REPRE SENTATIVE IN WRONG ACCOUNTING TREATMENT TO RECEIPTS BY TAKING THE SAME DIRECTLY TO BALANCE SHEET ARE NOT REALLY RELEVANT IN THIS CONTEXT, BECAUSE ALL TH AT LAW REQUIRES IS THAT ACCOUNTS OF RECEIPTS AND EXPENDITURE BE MAINTAINED BY THE ASSES SEE. THE CORRECTNESS OF FINE ISSUE IN ACCOUNTING TREATMENT ARE NOT COVERED BY TH E SCOPE OF SECTION 80G(5)(IV). THE ACCOUNTS HAVING BEEN REGULARLY MAINTAINED BY TH E ASSESSEE, IT CANNOT EVEN BE CASE OF THE CIT THAT THE ASSESSEE IS WANTING IN THI S RESPECT. FINALLY, IN TERMS OF THE PROVISIONS OF SECTION 80G(5)(V), THE CIT HAS TO ENS URE THAT THE ASSESSEE INSTITUTION OR FUND HAS THE NATURE OF ONE OF THE ORGANIZATIONS SPECIFIED IN THAT CLAUSE. THE SOCIETIES REGISTERED UNDER SOCIETIES REGISTRATION A CT, 1960, AS ADMITTEDLY THE ASSESSEE IS, ARE ONE SUCH FORM OF ORGANIZATION. THI S CONDITION IS ALSO THEREFORE SATISFIED. IN THE COURSE OF HEARING BEFORE US, THER E WAS GOOD DEAL OF DISCUSSION ON THE OBJECTIONS RAISED BY THE ASSESSING OFFICER IN T HE COURSE OF ASSESSMENT YEARS 2003-04 AND 2004-05 AND ARGUMENTS ON MERITS WERE AD VANCED BY BOTH THE SIDES. HOWEVER, AS LEARNED CIT(A) IS IN SEASON OF THE MATT ER, WE REFRAIN FROM MAKING ANY SPECIFIC OBSERVATIONS ON THESE ASPECTS. SUFFICE TO SAY THAT PRIMA FACIE CORRECTNESS OF THE FINDINGS OF THE ASSESSING OFFICE R CANNOT BE SAID TO BE ENTIRELY FREE FROM DOUBT AND, IN ANY EVENT, THESE FINDINGS A T BEST CHALLENGE ASSESSEES COMPLIANCE WITH CERTAIN RULE AND PROCEDURES WHICH D O NOT, IN ANY WAY, CHALLENGE THE FACT CHARITABLE ACTIVITIES ACTUALLY HAVING BEEN CARRIED OUT. THEREFORE, BASED ON THESE FINDINGS, ONE CANNOT COME TO THE CONCLUSIO N THAT THE CHARITABLE ACTIVITIES OF THE ASSESSEE SOCIETY WERE NOT GENUINE IN ANY EVE NT, AS WE HAVE STATED EARLIER AS WELL, ALL THAT THE LEARNED CIT HAS TO SEE, FOR THE PURPOSE OF DECIDING WHETHER OR NOT THE APPROVAL IS TO BE GRANTED FOR THE PURPOSE O F SECTION 80G IS WHETHER OR NOT THE CONDITIONS OF SECTION 80G(5)(I) TO (V) ARE SATI SFIED, AND, AS PER THE MANDATE OF RULE 11AA(4), ONCE THESE CONDITIONS ARE SATISFIED, HE HAS TO GRANT THE APPROVAL. GENUINENESS OF THE CHARITABLE/ACTIVITY, IN THE ABSE NCE OF ANY SPECIFIC MENTION ABOUT CONNOTATIONS OF THAT EXPRESSION IN THE INCOME -TAX ACT OR INCOME-TAX RULES, MUST REMAIN CONFINED TO THE ASPECT THAT THE CHARITA BLE ACTIVITIES ARE ACTUALLY CARRIED OUT BY THE ASSESSEE. THE ACCOUNTING TREATME NT OF RECEIPT AND FIXATION OF FEES IN EXCESS OF THE NORMS LAID DOWN BY THE CONTRO LLING BODIES, EVEN IF THAT BE SO DO NOT DECIDE THE GENUINENESS OF ACTIVITIES OF TRUS T OR INSTITUTION. 9. IN THE LIGHT OF THE ABOVE ANALYSIS LETS EXAMINE THE FACTS OF THE PRESENT CASE. IT IS OBSERVED FROM THE RECORDS THAT ASSES SEE IN ORDER TO AVAIL APPROVAL ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 9 UNDER SECTION 80G HAS PLACED ON RECORD A NOTE ON TH E ACTIVITIES OF THE ASSESSEE. IT ALSO PLACED ON RECORD THE COPY OF REGISTRATION GRA NTED UNDER SECTION 12AA AND THE APPROVAL GRANTED UNDER SECTION 80G VALID UPTO 3 1.3.2008. THE ASSESSEE HAS PLACED ON RECORD COPY OF MOA, THOUGH A PHOTOSTAT CO PY, BUT DULY ATTESTED BY THE PRESIDENT OF THE SOCIETY. WE DO NOT SEE ANY MOTIVE AT THE END OF THE PRESIDENT TO FILE ANY FABRICATED COPY BECAUSE THE SOCIETY IS WOR KING FOR THE LAST MORE THAN 50 YEARS. ITS CHARITY STATUS WAS NEVER DOUBTED BY TH E INCOME TAX DEPARTMENT AND IT HAS BEEN AVAILING ALL SORT OF EXEMPTIONS AVAILABLE UNDER THE INCOME TAX ACT. THE ASSESSEE HAS FILED COPY OF THE INCOME TAX RETURNS FOR THE LAST THREE ASSESSMENT YEARS. THE GRIEVANCE OF THE CIT IS THAT THE ASS ESSEE IS FAILED TO FILE THE ORIGINAL COPY OF THE MOA. IN OUR OPINION, THIS SHOULD N OT BE CONSIDERED AS A VERY SERIOUS LAPSE, BECAUSE THIS COPY WAS SUPPLIED TO T HE DEPARTMENT ON A NUMBER OF OCCASIONS IN THE LAST 50 YEARS, IT COULD HAVE BEEN VERIFIED FROM THE RECORDS. MORE SO, THE PRESIDENT HAS GIVEN AN UNDERTAKING TH AT HE WOULD FILE CERTIFIED COPY AFTER OBTAINING IT FROM THE REGISTRAR OFFICE. THE MOA INDICATE THAT THERE IS NO PROVISION FOR TRANSFER OR APPLICATION OF INCOME OF THE ASSESSEE FOR ANY OTHER PROVISION. THE ASSESSEE HAS DEMONSTRATED THAT IN T HE PAST OR IN THESE YEARS IT HAS NEVER UNDERTAKEN ANY TRADING ACTIVITY OR IT RECEIVE D ANY FEES. THUS TO OUR MIND THE ASSESSEE HAS FULFILLED ALL THE INGREDIENTS RELE VANT FOR AVAILING APPROVAL UNDER ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 10 SECTION 80G. ONE OF THE OBJECTION RAISED BY THE LD . CIT THAT IT FAILED TO INFORM THE ASSESSING OFFICER IN THE AUDIT REPORT ABOUT ACCUMUL ATION OF MORE THAN 15% IS CONCERNED, WE ARE OF THE OPINION THAT THE STAND OF THE ASSESSEE IS THAT CIT HAS EXCLUDED DEPRECIATION FROM APPLICATION OF THE INCOM E. SUCH TYPE OF ISSUES CAN BE EXAMINED AT THE TIME OF ASSESSMENT PROCEEDINGS. L D. CIT HAS NARRATED CERTAIN PERIPHERALS OBJECTS OF THE ASSESSEE AS REPUGNANT T O SECTION 2(15). WE HAVE GONE THROUGH THESE OBJECTS AVAILABLE ON PAGE 22 AND 23 OF THE IMPUGNED ORDER AND WE DO NOT SEE THAT THERE IS ANY POSSIBILITY TO CARRY OUT ANY TRADING ACTIVITY ON CHARGING OF FEES OR RECEIPT IN THESE OBJECTS. THU S TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE LD. CIT TO GRANT APPROVAL UNDER SECTION 80G OF THE ACT FOR THE PERIOD ADMISSIBLE TO THE ASSESSEE, AS PER LAW. C.O. NO. 55/DEL/2009 10. AS FAR AS CROSS OBJECTION BY THE LD. CIT IS CONC ERNED, WE ARE OF THE OPINION THAT SUB-SECTION (4) OF SECTION 253 AUTHORISES THE RESPONDENT TO FILE CROSS OBJECTION ON RECEIPT OF NOTICE IN AN APPEAL AGAINST ANY PART OF THE ORDER IMPUGNED IN THE APPEAL. THUS THE BASIC CONDITION FOR FILIN G THE CROSS OBJECTION IS THAT THE RESPONDENT SHOULD BE AGGRIEVED WITH THE ORDER IMPUG NED IN APPEAL OR ANY PART OF THAT ORDER. IN THE CROSS OBJECTION LD. CIT HAS NOT POINTED OUT AS TO HOW HE IS ITA NO. 529/DEL/09 & CO NO. 55/DEL/09 11 AGGRIEVED WITH THE ORDER DATED 30.12.2008 PASSED BY HIM. HIS OBJECTIONS ARE MERELY IN SUPPORT OF HIS ORDER, AS SUCH THEY ARE NOT MAINTAINABLE. THUS THE CROSS OBJECTION FILED BY THE REVENUE IS REJECTED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE CROSS OBJECTION FILED BY THE REVENUE IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/02/201 0. SD/- SD/- [SHAMIM YAHYA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 12/02/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES