S.R.K.R.E.C. Alumni Association, Bhimavaram V. CIT, Exemptions, Hyderabad

ITA 534/VIZ/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8766 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 14-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBA K SONAWAL
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 533 & 534 / VIZ /201 7 M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION , D.NO. Z - 40, 1 ST FLOOR , GENERAL AMENITIES BUILDING, SRKR ENGINEERING COLLEGE, CHINA AMIRAM, BHIMAVARAM, W.G . DISTRICT. V S . CIT (EXEMPTIONS), HYDERABAD . PAN NO. AAOAS 9060 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI DEBA K. SONAWAL CIT DR DATE OF HEARING : 08 / 02 /201 8 . DATE OF PRONOUNCEMENT : 23 / 02 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THESE APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX ( EXEMPTIONS ) , HYDERABAD , DATED 26 /0 9 /201 7 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION , BHIMAVARAM IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT ON 07/04/2016 AND FILED AN APPLICATION IN FORM NO S . 10A & 10G OF THE INCOME TAX ACT, 1961 2 ITA NO. 533 & 534 /VIZ/2017 ( M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION ) (HEREINAFTER REFERRED TO AS 'ACT') ON 10/03/2017 SEEKING REGISTRATION UNDER SECTION 12AA OF THE ACT AND ALSO APPROVAL UNDER SECTION 80G OF THE ACT WITH THE FOLLOWING OBJECTS: - 1. TO PROVIDE A FORUM TO ESTABLISH A LINK BETWEEN THE ALUMNI WORLD - WIDE. 2. TO PROVIDE A FORUM TO ESTABLISH A LINK BETWEEN THE ALUMNI WORLD - WIDE, STAFF AND STUDENTS OF SRKREC, BVRM. 3. TO ENABLE THE ALUM NI TO INITIATE AND ACTIVELY PARTICIPATE IN ACTIVITIES WHICH WOULD CONTRIBUTE TO THE GENERAL DEVELOPMENT OF SRKREC, ITS STAFF AND STUDENTS; 4. TO INSTITUTE PRIZES AND SCHOLARSHIPS, AND RENDER FINANCIAL AID TO DESERVING STUDENTS OF SRKRBC. 5. TO ORGANIZE AN D ENABLE THE NETWORKING AND INTERACTION ON ACTIVITIES OF COMMON INTEREST AMONG ALUMNI OF SRKREC. 6. TO MAINTAIN A BENEVOLENT FUND TO HELP INDIVIDUAL MEMBER OF ALUMNI IN CASE OF DISTRESS. 7. TO APPROVE/PROMOTE ESTABLISHMENT OF UNITS, CHAPTERS IN DIFFERENT G EOGRAPHICAL LOCATIONS HAVING ADEQUATE CONGREGATION OF ALUMNI MEMBERS. 8. TO DO ALL SUCH THINGS AS MAY BE DEEMED INCIDENTAL OR CONDUCIVE TO THE ATTAINMENT OF THE FOREGOING OBJECTS. 3 . THE LD. CIT(E) AFTER VERIF YING THE OBJECTS AND ACTIVITIES OF THE ASSESSEE OBSERVED THAT THE ASSESSEE - SOCIETY IS ENGAGED IN PROVIDING SOFT SKILL TRA I NING PROGRAMMES, SPONSORING STUDENTS TECHNICAL FEST AND CONDUCTING ALUMNI OF MEETS, INDUCTION PROGRAM FOR FRESHENERS , ARRANGING GUEST LECT URES AND FOOD COUPONS TO POOR STUDENTS. HOWEVER, ALL THE BENEFICIARIES OF THESE PROGRAMMES ARE FROM THE SAME COLLEGE I.E. STUDENTS OF S.R.K.R. ENGINEERING COLLEGE AND THESE ACTIVITIES ARE NOT EXTENDED TO THE STUDENTS OF OTHER COLLEGES. ACCORDING TO THE LD. CIT(E) , THE SOCIETY IS FORMED 3 ITA NO. 533 & 534 /VIZ/2017 ( M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION ) ONLY TO CATER TO THE NEEDS OF THE STUDENTS OF S.R.K.R. ENGINEERING COLLEGE ONLY. THERE IS NO PUBLIC UTILITY INVOLVED IN THE ACTIVITIES OF THE APPLICANT SOCIETY AS PER THE PROVISIONS OF SECTION 2(15) OF THE ACT. ACCORDING LY, HE DENIED REGISTRATION UNDER SECTION 12AA AND ALSO REJECTED 80G . 4 . ON APPEAL BEFORE US, LD. CO UNSEL FOR THE ASSESSEE HAS SUBMITTED THAT GENUINENESS OF THE SOCIETY AND THE CHARI T ABLE ACTIVITIES CARRIED OUT BY THE ASSESSEE , HAS NOT BEEN DOUBTED BY THE LD. CIT(E). THE ONLY OBJECTION RAISED BY THE LD. CIT(E) IS THAT THE ASSESSEE SOCI E TY IS EXISTED ONLY TO TAKE CARE OF THE STUDENTS OF S.R.K.R. ENGINEERING COLLEGE AND ONLY ONE SECTION OF PEOPLE ARE GETTING BENEFIT AND NOT PUBLIC AT LARGE. IT IS ALSO SUBMI TTED THAT STUDENTS OF S.R.K.R. ENGINEERING COLLEGE ARE CONSISTING OF VARIOUS BRANCHES OF ENGINEERING STUDENTS AND BELONGING TO VARIOUS DISTRICTS OF ANDHRA PRADESH AND DIFFERENT CASTES AND RELIGION . T HEREFORE, THE LD. CIT(E) IS NOT CORRECT IN OBSERVING THAT THE SOCIETY IS TAKING CARE OF ONLY A PARTICULAR CLASS OF PEOPLE IS NOT CORRECT AND SUBMITTED THAT 12AA REGISTRATION MAY BE GRANTED. HE RELIED ON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF SREE ANJANEYA MEDICAL TRUST VS. CIT [ 382 ITR 399) (KER.) ] . 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(E). 4 ITA NO. 533 & 534 /VIZ/2017 ( M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION ) 6 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDER OF THE LD. CIT(E). 7 . THE OBJECTS OF THE ASSESSEE - M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION , BHIMAVARAM SHOWS THAT IT WAS STARTED BY STUDENTS OF S.R.K.R. ENGINEERING COLLEGE, BHIMAVARAM TO ESTABLISH LINK BETWEEN THE OLD STUDENTS AND THE STUDENTS , WHO ARE STUDYING IN THE COLLEGE AND ALSO A LINK BETW EEN ALUMNI WORLDWIDE STAFF . IT IS ALSO CONDUCTING SOFT SKILL TRAINING PROGRAMMES, SPONSORING STUDENTS TECHNICAL FEST AND CONDUCTING ALUMNI OF MEETS, INDUCTION PROGRAM FOR FRESHENERS, ARRANGING GUEST LECTURES AND FOOD COUPONS TO POOR STUDENTS. FROM THE AC TIVITIES CARRIED ON BY THE ASSESSEE , IT IS VERY CLEAR THAT THE ASSESSEE IS CARRYING AS PER ITS OBJECTS AND PROVIDING VARIOUS FACILITIES TO THE S.R.K.R. ENGINEERING COLLEGE STUDENTS. WE HAVE NO DOUBT THAT THE ASSESSEE IS CARRYING CHARITABLE ACTIVITIES. THE LD. CIT(E) ALSO NOT EXPRESSED ANY DOUBT SO FAR AS THE ACTIVIT I ES CARRIED ON BY THE ASSESSEE. THE ONLY OBJECTION RAISED BY THE LD. CIT(E) IS THE ACTIVITIES OF THE ASSESSEE SOCIETY IS ONLY TO THE BENEFIT OF THE STUDENTS OF S.R.K.R. ENGINEERING COLLEGE A ND NOT FOR OTHER COLLEGE STUDENTS. IN OUR OPINION, THE S.R.K.R. ENGINEERING COLLEGE STUDENTS ARE CONSISTING OF STUDENTS BELONGING TO VARIOUS PARTS OF THE STATE AND ALSO BELONGING TO THE DIFFERENT RELIGION AND DIFFERENT CASTES. IN OUR 5 ITA NO. 533 & 534 /VIZ/2017 ( M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION ) OPINION, IT IS NOT N ECESSARY THAT THE ASSESSEE SOCIETY HAS TO CARRY ITS ACTIVITIES TO ALL THE STUDENTS OF BHIMAVARAM , WHO ARE STUDYING IN VARIOUS COLLEGES. IF THE ASSESSEE IS CARRYING ITS CHARIT A BLE ACTIVITIES IRRESPECTIVE OF CASTE, CREED, THE ASSESSEE IS ENTITLED FOR BENEFIT OF SECTION 12AA OF THE ACT. 8 . UNDER SIMILAR CIRCUMSTANCES, THE HON'BLE APEX COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION VS. CIT (82 ITR 704) HAS HELD THAT AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC U TILITY. TO SERVE A CHARITABLE PURPOSE IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR ALL PERSONS IN A PARTICULAR COUNTRY OR STATE . IT IS SUFFICIENT IF THE INTENTION TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIED INDIVIDUAL IS PRESENT. 9 . THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ANDHRA PRADESH POLICE WELFARE SOCIETY [148 ITR 287 (AP)] HAS CONSIDERED THE OBJECT OF GENERAL PUBLIC UTILITY AND OBSERVED THAT THE EXPRESSION OBJECT OF GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE ACT IS NOT RESTRICTED TO OBJECTS BENEFICIAL TO THE WHOLE OF MANKIND . AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY. TO SERVE A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR EVEN ALL PERSONS LIVING IN A PARTI C ULAR COUNTRY OR 6 ITA NO. 533 & 534 /VIZ/2017 ( M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION ) PROVINCE. IN THE PRESENT CASE, T HE OBJECTS OF THE ASSESSEE SOCIETY SHOW THAT SOCIETY IS EXISTED SOLELY FOR THE BENEFIT OF THE ENTIR E STUDENTS OF S.R.K.R. ENGINEERING COLLEGE AND ITS STAFF. THEREFORE, EVEN IF THE BENEFITS ARE RESTRICTED TO THE COLLEGE AND STAFF, THE ASSESSEE IS ENTITLED TO BENEFIT OF SECTION 12AA AS PER THE JUDGMENT S OF THE HON'BLE APEX COURT AS WELL AS THE JURISDICTIONAL HIGH COURT AS REFERRED TO SUPRA. 10 . KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO BY FOLLOWING THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION (SUPRA) AND ALSO THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANDHRA PRADESH POLICE WELFARE SOCIETY (SUPRA) , WE HOLD TH A T ASSESSEE IS ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. ACCORDINGLY, WE DIRECT THE LD. CIT(E) TO GRANT REGISTRATION AS RE QUESTED BY THE ASSESSEE SOCIETY IN TERMS OF SECTION 12A OF THE ACT. 1 1 . SO FAR AS 80G IS CONCERNED , THE LD. CIT(E) IS DIRECTED TO CONSIDER THE ASSESSEE SOCIETY FOR APPROVAL UNDER SECTION 80G AFTER GRAN T ING REGISTRATION UNDER SECTION 12A AS PER LAW AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 7 ITA NO. 533 & 534 /VIZ/2017 ( M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION ) 1 2 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN ITA NO. 533/VIZ/2017 IS ALLOWED AND ITA NO. 534/VIZ/2017 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 3 R D DAY OF FEB . , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 3 R D FEBRUARY , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. S.R.K.R.E.C. ALUMNI ASSOCIATION, D.NO. Z - 40, 1ST FLOOR, GENERAL AMENITIES BUILDING, SRKR ENGINEERING COLLEGE, CHINA AMIRAM, BHIMAVARAM, W.G. DISTRICT. 2. THE REVENUE CIT (EXEMPTIONS), HYDERABAD. 3. THE D.R . , VISAKHAPATNAM. 4. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.