INSTITUTE OF ENVIRONMENTAL MANGAEMENT ACCOUNTING AND RESEARCH, MUMBAI V. DIT (E), MUMBAI

ITA 5374/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8581 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 24-09-2012
• Assessment Year: misc
• Appeal Filed On: 30-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G KUTTY
• Assessee Lawyers: VISHWAS V MEHEDALE
• Section: 80G; 12A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I , BENCH MUMBAI BEFORE SHRI RAJENDRA SING H , AM & SHRI VIJAYPAL RAO, JM I TA NO. 5374 / MUM/ 20 1 0 ( ASSESSMENT YEAR : NA ) INSTITUTE OF ENVIRONMENTAL MANAGEMENT ACCOUNTING AND RESEARCH, 4, DWARKA SHASTRI HALL, JAOJI DADAJI RD., MUMBAI - 400 007. VS. DIT(E), 616, 6 TH FLOOR, PRIMAL CHAMBERS, PAREL, MUMBAI - 400 012 PAN/GIR NO . : AAA TIS 944 D ( APPELLANT ) .. ( RESPONDENT ) /A SSESSEE BY : MR. VISHWAS V. MEHEDALE /RE VENUE BY : MR. K.G.KUTTY DATE OF HEARING : 2 4 TH SEPT.2012 DATE OF PRONOUNCEMENT : 10 TH OCT.,2012 O R D E R PER VIJAY PAL RAO (J.M.) : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 9 - 4 - 2010, PASSED BY THE DIRECTOR OF I NCOME - TAX(EXEMPTION) [(IN SHORT DIT(E)], UNDER SECTION 80G OF THE INCOME - TAX ACT. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL : - 1) THE APPELLANT SUBMIT THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE DIRECTOR OF INCOME TAX EXEMPTION, M UMBAI ERRED IN REJECTING THE APPLICATION FOR EXEMPTION U/S 80G MADE BY THE APPELLANT TRUST WITHOUT GRANTING PERSONAL HEARING TO EXPLAIN THE OPERATIONS AND ACTIVITIES BEFORE REJECTING THE APPLICATION . 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE HONBLE DIRECTOR OF INCOME TAX EXEMPTION, MUMBAI ITA NO. 5374 /20 10 2 ERRED IN SUMMARILY REJECTING THE SUBMISSIONS GIVING DETAILS OF CHARITABLE ACTIVITIES WITHOUT ANY BASIS AND HOLDING THAT CHARITABLE OBJECTS ARE NOT FULFILLED THEREBY R EJECTING THE APPLICATION. 2. THE ASSESSEE TRUST WAS FORMED FOR VARIOUS OBJECTS AS ENUMERATED IN THE TRUST DEED DTD.1 - 3 - 2007. THE ASSESSEE TRUST HAS BEEN ACCORDED APPROVAL UNDER SECTION 12A VIDE ORDER DTD. 6 - 11 - 2007. A CERTIFICATE UNDER SECTION 80G OF INC OME TAX ACT WAS ALSO GRANTED TO THE ASSESSEE FOR THE PERIOD W.E.F. 22 - 1 - 2008 TO 31 - 3 - 2009 VIDE ORDER DATED 19 - 5 - 2008. SUBSEQUENTLY, THE ASSESSEE FILED AN APPLICATION DATED 17 - 12 - 2009 FOR GRANT/RENEWAL OF CERTIFICATE UNDER SECTION 80G. WHILE CONSIDERING THE APPLICATION OF THE ASSESSEE FOR GRANT OF CERTIFICATE UNDER SECTION 80G, THE DIT(E) NOTICED THAT THE ASSESSEE TRUST HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES DURING THE LAST THREE YEARS AND ALSO HAS NOT INCURRED ANY EXPENDITURE ON THE SAME. ACCORDINGLY , THE LETTER DATED 17 - 2 - 2010 WAS ISSUED TO THE ASSESSEE ASKING TO SHOW CAUSE AS TO WHY THE APPLICATION OF RENEWAL OF CERTIFICATE UNDER SECTION 80G SHOULD NOT BE REJECTED ON THE GROUND THAT NO CHARITABLE ACTIVITIES HAS BEEN CARRIED OUT BY THE ASSESSEE TRUST . IN RESPONSE TO THE SAID LETTER, THE ASSES SEE FILED ITS REPLY DATED 23 - 3 - 2010 EXPLAINING THE VARIOUS CHARITABLE ACTIVITIES CARRIED OUT BY THE ASSESSEE TRUST. THE DIT(E) DID NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE AND HELD THAT THE ASSESSEE TRUST IS NOT ENGAGED IN ANY CHARITABLE ACTIVITIES FOR THE BENEFIT OF PUBLIC AT LARGE AND, HENCE, THE APPROVAL UNDER SECTION 80G CANNOT ITA NO. 5374 /20 10 3 BE GRANTED TO THE ASSESSEE. ACCORDINGLY, THE APPLICATION DATED 17 - 12 - 2009 FILED BY THE ASSESSEE TRUST WAS REJECTED VIDE IMPUGNED ORDER. 3. BEFORE US, THE LEANED AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE TRUST WAS FORMED VIDE TRUST DEED DATED 1 - 3 - 2007. HE HAS REFERRED THE OBJECTS OF THE TRUST AS ENLISTED IN THE TRUST DEED. LEARNED AR HAS FURTHER SUBMITTED THAT THE ASSESSEE TRUST HAS CARRIED OUT VARIOUS CHARITABLE ACTIVITIES. HE HAS REFERRED PAGE NOS.44, 56, 66 TO 85 OF THE PAPER BOOK AND SUBMITTED THAT DR. VISHNU KANHERE, WHO IS THE TRUSTEE OF THE ASSESSEE TRUST HAS CARRIED OUT VARIOUS RESEARCH AND ALSO PUBLISHED THE PAPERS OF THESE RESEARCH WORK. THESE RESEARCH WORKS AND PAPER PUBLISHED BY THE TRUSTEE OF THE ASSESSEE TRUST ARE FOR PROMOTION OF ENVIRONMENTAL CONSERVATION, PRESERVATION, PROTECTION AND MANAGEMENT. THEREFORE, THE ASSESSEE HAS CARRIED OUT THE CHARITABLE WORK ON T HE CONSERVATION, PRESERVATION, PROTECTION AND MANAGEMENT OF THE ENVIRONMENT. LEARNED AR HAS REFERRED THE ANNUAL REPORTS OF THE ASSESSEE TRUST, WHEREIN THESE CHARITABLE WORKS HAVE BEEN REPORTED. LEARNED AR HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT REC EIVED ANY FUND/DONATION EXCEPT RS.1 ,30,000/ - TOWARDS THE FAG END OF THE YEAR ENDING ON 31ST MARCH, 2009 AND, THEREFORE, THE SAID AMOUNT WAS CARRIED FORWARD BEING ACCUMULATED FOR USE OF THE OBJECTS OF THE TRUST. LEARNED AR HAS POINTED OUT THAT SINCE THE AMO UNT OF RS. 1,30,000/ - WAS RECEIVED ONLY AT THE FAG END AND, THEREFORE, THE BALANCESHEET AND ACCOUNTS WHICH WAS CONSIDERED BY THE DIT(E) AS ON 31 - 3 - 2009, DID ITA NO. 5374 /20 10 4 NOT SHOW THE USE OF THE SAID AMOUNT, BUT IT WAS ACCUMULATED AND CARRIED FORWARD. HE HAS FURTHER SUB MITTED THAT THE OBSERVATION OF DIT(E) THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITIES FOR THE LAST 3 YEARS, IS CONTRARY TO THE FACT; WHEN THE ASSESSEE HAS BROUGHT ON RECORD THE ACTIVITIES CARRIED OUT BY THE ASSESSEE ON THE CONSERVATION, PRE SERVATION, PROTECTION, MANAGEMENT AS WELL AS RESEARCH OF THE ENVIRONMENT . LEARNED AR HAS SUBMITTED THAT APART FROM THIS AMOUNT OF RS. .1,30 , 000 / - , THE ASSESSEE HAS NOT RECEIVED ANY DONATION EXCEPT THE SUBSCRIPTION FEE FROM THE MEMBERS AND, THEREFORE, IT IS NOT A CASE OF NON - USE OF FUND. BUT, IN FACT, NO FUND WAS RECEIVED BY THE ASSESSEE IN SHAPE OF DONATION AND THE ONLY AMOUNT RECEIVED WAS TO BE USED ONLY IN THE SUBSEQUENT YEARS. 4. ON THE OTHER HAND, LEARNED DR HAS SUBMITTED THAT THE DIT(E) HAS CONSIDERED THE RECORD, WHICH WAS FILED BEFORE IT AND FROM THE SAID RECORD, IT IS CLEAR THAT THE ASSESSEE HAS NOT UTILIZED ANY FUND RECEIVED FOR THE PURPOSE OF CHARITABLE ACTIVITIES AND, THEREFORE, RIGHTLY REJECTED THE APPLICATION OF THE ASSESSEE FOR GRANT OF CERTIFI CATE UNDER SECTION 80G. HE HAS RELIED UPON THE IMPUGNED ORDER OF THE DIT(E). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AS WELL AS RELEVANT MATERIAL ON RECORD. THE DIT(E) HAS REJECTED THE APPLICATION ON THE GROUND THAT FROM THE AUDITED ACC OUNTS WITH PROFIT AND LOSS ACCOUNT, FOR THE LAST THREE YEARS, ANNEXED WITH THE APPLICATION, IT IS CLEAR THAT THE ASSESSEE TRUST HAS NOT MADE ANY EXPENDITURE ON THE ITA NO. 5374 /20 10 5 OBJECTS OF THE TRUST. HOWEVER, THE DIT(E) HAS IGNORED THE FACT THAT DURING THE LAST THREE YEARS THE ASSESSEE HAS NOT RECEIVED ANY AMOUNT OF DONATION EXCEPT RS. 1,30,000/ - AT THE END OF THE FINANCIAL YEAR 2008 - 09. THE DIT(E) HAS CONSIDERED THE ACCOUNTS UPTO 31ST MARCH, 2009 AND, THEREFORE, THE SAID AMOUNT OF .1,30,0O0I - WAS NOT SHOWN AS UTILIZE D FOR THE OBJECTS OF THE TRUST BUT THE SAME WAS ACCUMULATED AND CARRIED FORWARD. IT IS CLEAR FROM THE ANNUAL REPORTS FOR 2006 - 07 AND SUBSEQUENT YEARS THAT SOME RESEARCH WORK HAS BEEN CARRIED OUT BY DR. VISHNU KANHERE, THE CHAIRMAN OF BOARD OF TRUSTEE OF TH E ASSESSEE TRUST AND, THEREFORE, THIS FACT CANNOT BE NEGATED THAT THE ASSESSEE HAS CARRIED OUT AT LEAST SOME ACTIVITIES OF CHARITABLE IN NATURE RELATING TO CONSERVATION, PRESERVATION, PROTECTION AND MANAGEMENT OF THE ENVIRONMENT. HOWEVER, IT IS TRUE THAT U PTO 31 - 3 - 2009, THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR THE OBJECT OF THE ASSESSEE TRUST. BUT AT THE SAME TIMED, IT IS TO BE NOTED THAT THE ONLY AMOUNT OF DONATION RECEIVED BY THE ASSESSEE IS RS. 1,30,00 0 / - AND WHILE CONSIDERING THE APPLICATION OF THE ASSESSEE, THE DIT(E) OUGHT TO HAVE TAKEN INTO CONSIDERATION WHETHER THE SAID AMOUNT OF RS.1 ,30,000/ - WAS UTILISED BY THE ASSESSEE IN THE SUBSEQUENT YEAR FOR THE OBJECT OF THE ASSESSEE TRUST. SINCE THIS FACT HAS NOT BEEN EXAMINED WHILE PASSING THE IMPUG NED ORDER, THEREFORE, IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE RECORD OF THE DIT(E) FOR DECIDING THE APPLICATION OF THE ASSESSEE AFTER EXAMINING THE FACT OF UTILIZATION OF THE DONATION AMOUNT ITA NO. 5374 /20 10 6 RECEIVED BY THE ASSESSEE FOR THE OBJECTIVE OF TH E ASSESSEE OR NOT. THE ASSESSEE IS DIRECTED TO PRODUCE THE RELEVANT RECORD TO SHOW THAT THE AMOUNT RECEIVED BY THE ASSESSEE HAS BEEN ACTUALLY UTILIZED FOR THE OBJECT OF THE ASSESSEE. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED ON THIS 10 TH DAY OF OCT . , 2012. 10 TH OCT . , 2012 SD/ - SD/ - ( ) (RAJENDRA SINGH) ( ) (VIJAY PAL RAO) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 10 TH OCT ./ 2012. /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI