Bhagya Harsh Trush, Vapi V. The CIT, Valsad

ITA 545/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1835 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-11-2009
• Assessment Year: misc
• Appeal Filed On: 19-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Charitable institution; Set aside
• Section: 12AA; 191; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.545/AHD/2009 DATE OF HEARING:24.11.09 DRAFTED:25.11.09 BHAGYA HARSH TRUST, A/F-4, ANKUR APARTMENT, JALARAM SOCIETY, KACHIGAM ROAD, VAPI-396 191 PAN NO. AABTB4426C V/S . THE COMMISSIONER OF INCOME-TAX, VALSAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- NONE RESPONDENT BY:- SHRI C.K.MISHRA, SR DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX, VALSAD VIDE NO. CIT/VLS/12A/BHT/008-09 DATED 23-12-2008. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX, VALSAD IN NOT GRANTING REGISTRATION TO THE TRUST U/S.12A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO P ERUSED THE CASE RECORDS INCLUDING THE ORDER OF CIT VALSAD. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE BHAGYA HARSH TRUST, VAPI IS A PUBLIC C HARITABLE TRUST HAVING TRUST REGISTRATION NO.E/2425/VALSAD. THIS TRUST WAS CREA TED ON 17-03-2006 AND MADE APPLICATION FOR REGISTRATION U/S.12A(A) OF THE ACT BEFORE CIT VALSAD ON 25-06-2008. ITA NO.545/AHD.//2009 BHAGYA HARSH TRUST VAAPI V. CIT, VAPI PAGE 2 THE CLAIM OF THE ASSESSEE IS THAT THE MAIN OBJECT O F THE TRUST ARE TO DO VARIOUS TYPES OF EDUCATION, MEDICAL, DO RELIEF WORK AT THE TIME OF NATURAL CALAMITIES AND ETC. THE TRUST IS NOT CREATED FOR PARTICULAR CAST, COMMUNITY OR CREED AND IT IS FOR THE GENERAL PUBLIC. WE FIND THAT THE CIT VALSAD HA S REJECTED THE APPLICATION ON THE GROUND THAT THE TRUST HAS NOT STARTED AN ACTIVI TY THEREFORE IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OR CHARITABLE PURPOSES OF TH E INSTITUTION. THE ASSESSEE- TRUST CLAIM THAT AS PER THE PROVISIONS OF SECTION 1 2A(A) OF THE ACT THERE ARE THREE CONDITIONS AND NOWHERE IT IS MENTIONED THAT THE ASS ESSEE-TRUST WAS STARTED ACTIVITY THE REGISTRATION IS GRANTED. IT WAS CLAIM ED THAT THE ASSESSEE-TRUST WAS SEVEN MONTHS OLD AND TRUSTEE HAS TO START ACTIVITI ES AFTER GETTING REGISTRATION SO THAT IT CAN AVAIL BENEFIT U/S.11 OF THE ACT. WE FIN D THAT THE CIT VALSAD HAS REJECTED THE REGISTRATION BY GIVING THE FINDING ONLY ON THE ASPECT THAT THE ASSESSEE-TRUST HAS VIOLATED THE PROVISION FOR REGISTRATION U/S.12A OF THE ACT AS UNDER:- 4. FURTHER A LETTER GIVING OPPORTUNITY TO THE ASSE SSEE WAS ISSUED ON 15.12.2008 REQUESTING THE ASSESSEE TO FILE DETAILS AS BELOW (A) NATURE & PROOF OF ACTIVITIES DONE TILL DATE IN DETAIL (B) COPY OF ACCOUNTS TILL THE DATE (C) CERTIFIED COPIES OF TRUST DEED & REGISTRATION W ITH CHARITY COMMISSIONER AND EXPLAIN AS TO WHY ITS APPLICATION FOR REGISTRAT ION U/S.12A MAY NOT BE REJECTED, ON OR BEFORE 22.12.2008. 5. IN RESPONSE TO THE ABOVE, SHRI V. PAREKH, ITP OF THE ASSESSEE FILED A WRITTEN SUBMISSION ALONG WITH COPIES OF AUDIT ACCOU NTS FOR F.Y. 2007-08 BUT NO PROOF REGARDING THE ACTIVITIES DONE HAS BEEN SUBMIT TED. THE ADDL. CIT ALSO, HAS REPORTED THAT THE TRUST HAS NOT STARTED ANY AC TIVITY THEREFORE IT IS NOT POSSIBLE TO SAY THAT THE ACTIVITY OF THE TRUST / IN STITUTION IS GENUINE OR CHARITABLE. IN VIEW OF THE ABOVE FACTS, IT IS SUBMITTED THAT TH E GENUINENESS OF THE ACTIVITIES OF THE TRUST AND OBJECTIVES ARE IN DOUBT AND NO EXP ENSES HAVE BEEN MADE ON ACTIVITIES AS PER OBJECTIVES OF THE TRUST. THEREFO RE, THE APPLICATION OF THE TRUST FOR REGISTRATION UU/S/12A IS HEREBY REJECTED. 4. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT IN VIEW OF THE PROVISION OF SECTION 12AA OF THE ACT REGISTR ATION CAN BE REFUSED ONLY ON THE GROUND THAT THE CIT IS SATISFIED THAT THE ACTIVITY OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION AS THE CASE MAY BE. BUT IN THE PRESENT CASE, SUCH IS NOT THE CASE AND IN CASE, THAT THERE A VIOLATION OF PROVISION OF SECTIO N 11 OF THE ACT BY NOT EXPENDING 85% OF ITS INCOME OF THE TRUST, THE OBJECTION OF TH E TRUST CANNOT BE DEFEATED. IN CASE ITA NO.545/AHD.//2009 BHAGYA HARSH TRUST VAAPI V. CIT, VAPI PAGE 3 THE TRUST HAS VIOLATED THE PROVISION OF SEC. 11 AND NOT EXPENDED 85% OF ITS INCOME, THE SAME CAN BE ADDED IN THE TOTAL INCOME AND CANNO T BE REFUSED REGISTRATION. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE REGISTRATION U/S.12A(A) OF THE ACT CANNOT BE DENIED WITHOUT RECORDING A FINDING THAT HOW THE TRUST IS NOT GENUINE. ACCORDINGLY, WE DIRE CT THE CIT, VALSAD TO DECIDE THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION AFTER GOING THROUGH THE DOCUMENTS FILED BY THE ASSESSEE AND RECORD A FINDING WHETHER THE TRUST IS A GENUINE OR NOR BY A SPEAKING ORDER. ACCORDINGLY, THIS APPEAL OF THE ASS ESSEE IS SET ASIDE TO THE FILE OF CIT VALSAD. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 18/12/2009 SD/- SD/- (N.S.SAINI) (MA HAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 18/12/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT-VALSAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD