Coastal Charitable Foundation, Visakhapatnam V. CIT (Exemptions), Hyderabad

ITA 544/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3966 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 30-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBA KUMAR SONAWAL
• Assessee Lawyers: R VENKATARAMAN
• Section: 80G; 12A; 12AA; 12; 2

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 S . 543 & 544 / VIZ /201 7 COASTAL CHARITABLE FOUNDATION, D.NO. 15 - 1 - 37/3, JAYAPRADA APARTMENTS , NOWROJI ROAD, MAHARANIPETA, V ISAKHAPATNAM. V S . CIT (EXEMPTIONS) , HYDERABAD . PAN NO. AABTC 7705 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. VENKATARAMAN C A. DEPARTMENT BY : SHRI DEBA KUMAR SONAWAL CIT DR DATE OF HEARING : 08 / 0 5 /201 8 . DATE OF PRONOUNCEMENT : 18 / 0 5 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTIONS) , HYDERABAD , DATED 22 /0 9 /201 7 , WHEREBY REGISTRATION UNDER SECTION 12AA AND APPROVAL UNDER SECTION 80G OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') HAVE BEEN REJECTED . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE FILED AN APPLICATION IN FORM NO. 10A FOR SEEKING REGISTRATION UNDER SECTION 12AA OF THE ACT. THE LD. CIT(E) AFTER VERIFICATION OF THE TRUST DEED, 2 ITA NO S . 543 & 544/VIZ/2017 ( COASTAL CHARITABLE FOUNDATION ) NOTI C ED THAT THE TRUST HAS NOT INCORPORATED AMENDMENT CLAUSE A ND INVESTMENT CLAUSE , AND THEREFORE, REJECTED THE REGISTRATION ON THE GROUND THAT THE AMENDMENT IS ONE OF THE NECESSARY CLAUSES FOR THE PUR P OSE OF REGISTRATION UNDER SECTION 12AA OF THE ACT. 3 . LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS SUBMITTED THAT THERE IS NO AMENDMENT CLAUSE INCORPORATED IN THE OBJECTS , A S IT IS NOT NECESSARY FOR REGISTRATION UNDER SECTION 12AA OF THE ACT . HE ALSO RELIED ON THE DECISION OF THE ITAT, JODHPUR BENCH IN THE CASE OF SHRI AGARWAL PANCHAYAT VS. ITO IN ITA NO. 532/JODH/ 2014 , DATED 04/09/2015 . 4 . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LD. CIT(E) . 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDER OF THE LOWER AUTHORIT Y. 6 . THE ASSESSEE IS A CHARITABLE FOUNDATION AND APPLIED FOR REGISTRATION UNDER SECTION 12AA BY FILING APPLICATION IN FORM NO. 10A. THE LD. CIT(E) AFTER VERIFICATION OF THE TRUST DEED, FOUND THAT IN THE OBJECTS OF THE ASSESSEE, NO AMENDMENT & INVESTMENT CLAUSE S ARE INCORPORATED AND THEREFORE REJECTED FOR REGISTRATION. DURING THE C O URSE OF HEARING, WHEN WE ASKED, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AS TO WHY AMENDMENT IS NOT INCORPORATED, IT IS SUBMITTED THAT IT IS NOT NECESSARY TO INCORPORATE 3 ITA NO S . 543 & 544/VIZ/2017 ( COASTAL CHARITABLE FOUNDATION ) THE AMENDMENT AT THE TIME OF REGISTRATION AND IT CAN BE AMENDED SUBSEQUENTLY ALSO . WE HAVE CONSIDERED THE ARGUMENTS OF THE LD.AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND FIND THAT WHEN THE ASSESSEE HAS FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12 AA IN F ORM NO. 10A, IT HAS TO COMPLY WITH THE REQUIREMENT OF SECTION 12A AND RULE 17A OF IT RULES, 1962 . CLAUSE ( D ) OF RULE 17A PROVIDES AS UNDER: - (D) SELF - CERTIFIED COPY OF THE DOCUMENTS EVIDENCING ADOPTION OR MODIFICATION OF THE OBJECTS, IF ANY; AS PER THE AFORESAID CLAUSE (D) OF RULE 17A, THE MODIFICATION CLAUSE HAS TO BE INCORPORATED IN THE OBJECTS OF THE ASSESSEE FOUNDATION. AS THE ASSESSEE HAS FAILED TO INCORPORATE THE ABOVE CLAUSE, WHICH AMOUNTS TO VIOLATION OF RULE 17A, THEREFORE, IN OUR OP INION , LD. CIT(E) HAS RIGH T LY REJECTED THE REGISTRATION UNDER SECTION 12AA TO THE ASSESSEE. THE CASE LAW RELIED ON BY THE ASSESSEE IN THE CASE OF SHRI AGARWAL PANCHAYAT ( SUPRA), HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. HOWEVER, KEEPING IN VIEW OF THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT , IF ASSESSEE SO ADVISED, HE CAN FILE A REVISED OBJECTS BY INCLUDING AMENDMENT CLAUSE BEFORE THE LD. CIT(E). IF ASSESSEE FILES AGAIN WITH INCORPORATED AMENDMENT CLAUSE, THE LD. CIT(E) IS DIRECTED TO 4 ITA NO S . 543 & 544/VIZ/2017 ( COASTAL CHARITABLE FOUNDATION ) C ONSIDER THE SAME AND PASS NECESSARY ORDERS IN ACCORDANCE WITH LAW. 7 . SO FAR AS RECOGNITION OF SECTION 80G IS CONCERNED, UNLESS ASSESSEE IS REGISTERED UNDER SECTION 12AA, IS NOT ELIGIBLE FOR RECOGNITION. HOWEVER, IT IS OPEN TO THE ASSESSEE TO FILE ANOTHER APPLICATION FOR APPROVAL UNDER SECTION 80G, AFTER GETTING REGISTRATION UNDER SECTION 12AA OF THE ACT. 8 . IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATIS TI CAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 8 T H DAY OF MAY , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 8 T H MAY , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE - COASTAL CHARITABLE FOUNDATION, D.NO. 15 - 1 - 37/3, JAYAPRADA APARTMENTS, NOWROJI ROAD, MAHARANIPETA, VISAKHAPATNAM . 2. THE REVENUE CIT (EXEMPTIONS), HYDERABAD. 3. THE D.R . , VISAKHAPATNAM. 4. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.