M/s Ruqaiya Mushtaq Anwar Education Foundation, Kanpur V. Commissioner Of Income Tax-I, Kanpur

ITA 55/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4812 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-12-2015
• Assessment Year: 2015-2016
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJEET KUMAR SINGH
• Keywords: Charitable institution; Benefit of exemption
• Section: 143(3); 12AA; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.55/LKW/2015 ASSESSMENT YEAR 2015-16 THE COMMISSIONER OF INCOME TAX KANPUR U.P. 208 001 VS. M/S RUQAIYA MUSHTAQ ANWAR EDUCATION FOUNDATION, 14/106, CIVIL LINES, KANPUR- 208 001 PAN AACTR 2294 P (RESPONDENT) (APPELLANT) SHRI B.P. YADAV, CA APPELLANT BY SHRI AJEET KUMAR SINGH, CIT, DR RESPONDENT BY 29 / 12 /201 5 DATE OF HEARING 13/01/2016 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT-I DENYING THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS FURNISH ED ALL RELEVANT RECORDS, BOOKS OF ACCOUNTS, BILLS AND VOUCHERS ETC. AND THE OBJECT OF THE TRUST BEFORE THE CIT BUT HE HAS NOT EXAMINED THE SAME AND HAS CONCLUDED THAT GENUINENESS OF CHARITABLE ACTIVITIES OF THE ASSESSEE CANNOT BE VERIFIED AND C HARITABLE TRUST IS BEING RUN ONLY FOR MINORITY COMMUNITIES, THEREFORE, THE REGISTRATI ON CANNOT BE GRANTED. LD. COUNSEL FOR THE ASSESSEE HAS FURTHER INVITED OUR AT TENTION TO THE OBJECT OF THE ASSESSEE TRUST, WITH THE SUBMISSION THAT IN THE OBJ ECT OF TRUST, IT HAS BEEN CLEARLY MENTIONED THAT ASSESSEE TRUST IS SETUP TO CARRY ON ANY OTHER OBJECT OF GENERAL 2 PUBLIC UTILITIES IN THE FIELD OF EDUCATION, MEDICIN E AND DEVELOPMENT OF HEALTH. IT IS ALSO CLARIFIED THAT THE OBJECT OF THE TRUST IS TO E STABLISH, MAINTAIN OR RUN HOSPITALS, DISPENSARIES AND SOME OTHER CHARITABLE HUMANITARIAN ORGANIZATIONS AND UNITS. IT WILL ALSO RUN ANY OTHER INSTITUTION, ORGANIZATION F OR THE WELFARE OF GENERAL PUBLIC. MEANING THEREBY, THE TRUST IS NOT CREATED ONLY FOR PARTICULAR COMMUNITY OR CASTE. IT WAS CREATED TO PROVIDE HEALTH TO THE PUBLIC IN L ARGE, THOUGH THE PREFERENCE MAY BE GIVEN TO MINORITY COMMUNITIES BUT FOR THIS R EASON, THE REGISTRATION U/S 12AA CANNOT BE DENIED. 2.1 HE HAS ALSO INVITED OUR ATTENTION TO ITS REPLY TO THE QUERY RAISED BY THE ACIT DURING THE COURSE OF PENDENCY OF THE APPLICATI ON FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. IN REPLY, THE ASSESSEE HAS SUP PLIED THE EVIDENCE SOUGHT BY THE ACIT THROUGH VARIOUS QUERIES AND DETAILS. COPY OF THE TRUST DEED, PAN NUMBER, APPLICATION OF FUNDS, ACTIVITIES UNDERTAKEN BY THE ASSESSEE, LIST OF DONORS AND THE DETAILS OF CHARITABLE ACTIVITIES CAR RIED OUT BUT CIT DID NOT LOOK INTO IT AND HAS DENIED THE REGISTRATION. SINCE THE ASSES SEE HAS FURNISHED ALL RELEVANT MATERIALS BEFORE THE CIT WITH RESPECT TO ITS ACTIVI TIES, THE REGISTRATION OUGHT TO HAVE BEEN GRANTED. HE ALSO PLACED RELIANCE UPON VAR IOUS JUDGMENTS IN SUPPORT OF HIS CONTENTION THAT AT THE INITIAL STAGE WHILE GRAN TING REGISTRATION U/S 12AA OF THE ACT, THE CIT IS REQUIRED TO EXAMINE THE NATURE OF O BJECTS OF THE SOCIETY. IF THE NATURE OF OBJECT IS CHARITABLE IN NATURE, THE REGIS TRATION SHOULD BE GRANTED. THE REAL ACTIVITIES UNDERTAKEN BY THE ASSESSEE CAN BE E XAMINED WHILE FRAMING A REGULAR ASSESSMENT AND IF THE ASSESSEE ACTS IN VIOL ATION OF PROVISIONS OF SECTION 11(2) OR 13 OF THE ACT REGISTRATION EARLIER GRANTED CAN BE WITHDRAWN. THER EFORE, IT IS NOT A BLANKET GRANT OF REGISTRATION U/S 12AA OF THE ACT. LD. AR OF THE ASSESSEE HAS PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS:- I) MALIK HASMULLAH ISLAMIC EDUCATIONAL AND WELFARE SOCIETY VS. CIT, FAIZABAD REPORTED IN 2012(138)-ITD-0519-TLUC. II) NOBLE FOUNDATION VS. DIRECTOR OF INCOME TAX REP ORTED IN 2013-(ID1)-GJX- 3858-TBOM 3 III) ST. JOSEPH ACADEMY VS. DIRECTOR OF INCOME-TAX( EXEMPTION) REPORTED IN 2015-(153)-ITD-0669-THYD IV) M/S TUNBRIDGE ENGLISH HIGH SCHOOL EDUCATION SO CIETY VS. THE DIRECTOR OF INCOME-TAX REPORTED IN 2012-(ID1)-GJX-3966-TBAN V) CIT VS. CHRISTIAN MEDICAL COLLEGE REPORTED IN 20 14-(IT1)-GJX-1231-P&H 3. LD. DR HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT. 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES, WE FIND THAT BEFORE THE CIT AT THE TIME OF GRANT OF REGISTRATION , ASSESSEE HAS FILED THE TRUST DEED, AUDIT REPORT AND OTHER EVIDENCE WITH REGARD T O ACTIVITIES UNDERTAKEN BY IT AND ALSO THE LIST OF DONORS. FROM PERUSAL OF THE TR UST DEEDS, WHICH ARE AVAILABLE ON PAGES 7 TO 17 OF THE COMPILATION OF THE ASSESSEE , WE FIND THAT THOUGH THE TRUST WAS PRIMARILY CREATED FOR THE BENEFIT OF THE MINORITIES BUT IT HAS NOT BLOCKED ITS BENEFIT TO THE PUBLIC AT LARGE. UNDER ITS OBJEC T NO.12, THE ASSESSEE SOCIETY CARRIES ON OTHER PROJECT OF GENERAL PUBLIC UTILITY IN THE FIELD OF EDUCATION, MEDICINE AND DEVELOPMENT OF HEALTH. SIMILARLY, THE TRUST CAN RUN THE HOSPITAL, DISPENSARY, ORPHANAGES OFFICES AND SUCH CHARITABLE HUMANITARIAN ORGANIZATION FOR GENERAL PUBLIC ALSO. THEREFORE, THE OBJECT OF TRUST WAS NOT LIMITED TO THE MINORITY COMMUNITIES. THOUGH PREFERENTIAL TREATMENT IS TO BE GIVEN TO THE MINORITY COMMUNITIES BUT FROM THE OBJECT, IT CANNOT BE HELD THAT TRUST IS CREATED ONLY FOR THE BENEFIT OF THE MINORITIES. THROUGH CERTAIN CLAU SES, IT HAS ALSO OPENED THE FIELD FOR GENERAL PUBLIC. WE HAVE ALSO CAREFULLY EXAMINED THE JUDGMENT RENDERED BY THE ASSESSEE, WE FIND THAT IN THOSE JUDGMENTS, IT H AS BEEN HELD THAT IF THE TRUST IS CREATED FOR THE BENEFIT OF GENERAL PUBLIC THOUGH FO R A LIMITED FIELD IT CANNOT BE HELD THAT TRUST OF SOCIETY IS NOT CREATED FOR CHARI TABLE PURPOSES. 5. IN THE LIGHT OF THESE FACTS, WE ARE OF THE CONSI DERED VIEW THAT THE TRUST IS CREATED FOR CHARITABLE PURPOSES. SO FAR AS THE ACCO UNTS AND ACTIVITIES ARE CONCERNED, WE HAVE CAREFULLY EXAMINED THE QUERIES L ETTERS ISSUED BY THE ACIT FROM THE OFFICE OF THE CIT, WHICH ARE APPEARING AT PAGE NOS. 18 AND 22 OF THE COMPILATION OF THE ASSESSEE. THROUGH THIS LETTERS, ASSESSEE WAS ASKED TO EXPLAIN 4 THE OBJECT OF THE TRUST AND THE ACTIVITIES UNDERTAK EN BY IT AND ALSO LIST OF DONORS FOR THE ACCUMULATION OF FUND. THE ASSESSEE HAS DULY REPLIED THESE QUERIES AND HAS FURNISHED THE ALL DETAILS WITH REGARD TO ACTIVI TIES UNDERTAKEN BY ASSESSEE TRUST. THE OBJECT OF TRUST WAS ALREADY FILED BEFORE THE CIT AND LIST OF DONATIONS/CORPUS FUND, MEMBERS FEE WERE ALSO FURNIS HED BEFORE THE CIT FOR HIS PERUSAL VIDE LETTER DATED 14.08.2014. SINCE THE ASS ESSEE HAS FURNISHED ALL RELEVANT INFORMATION, AS DESIRED BY THE CIT BEFORE HIM FOR HIS PERUSAL, THE REGISTRATION CANNOT BE DENIED BY THE CIT ONLY FOR T HE REASON THAT THE ASSESSEE HAS FURNISHED THE COMPLETE INFORMATION. 6. FROM CAREFUL PERUSAL OF THE RECORD, WE FIND THAT THE ASSESSEE HAS FURNISHED THE REQUISITE INFORMATION BEFORE THE CIT FOR THE PU RPOSE OF GRANT OF REGISTRATION U/S 12AA OF THE ACT. UNDISPUTEDLY, THE ASSESSEE TRU ST WAS CREATED ON 18.08.2013 AND REGISTRATION U/S 12AA WAS APPLIED ON 08.05.2014 , THEREFORE THERE WAS NOT A MUCH TIME IN WHICH CHARITABLE ACTIVITIES HAVE BEEN UNDERTAKEN. MOREOVER, IT WAS CONTENDED THAT THE ASSESSEE HAS DECIDED TO SETUP TH E EDUCATIONAL INSTITUTION IN WHICH IT HAS PURCHASED THE LAND AND THE BUILDING WA S UNDER CONSTRUCTION. IN THIS REGARD, THE EVIDENCE IS FILED ON PAGES 56 TO 66 OF THE COMPILATION OF THE ASSESSEE. THE AUDIT REPORT IS ALSO FILED TO DEMONST RATE THE APPLICATION OF FUNDS COLLECTED BY THE ASSESSEE FROM ITS MEMBERS. THE AUD IT REPORT IS AVAILABLE ON PAGES 67 TO 81 OF THE COMPILATION OF THE ASSESSEE. IN THE LIGHT OF ALL THESE FACTS AND THE EVIDENCE PLACED, IT IS ABUNDANTLY CLEAR THA T THE ASSESSEE WAS ENGAGED IN SETTING UP THE EDUCATIONAL INSTITUTION, WHICH IS ON E OF THE CHARITABLE ACTIVITIES, FOR WHICH THE REGISTRATION U/S 12AA SHOULD NOT BE DENIE D. MOREOVER, GRANT OF REGISTRATION U/S 12AA IS NOT A BLANKET GRANT OF EXE MPTION U/S 11 OF THE ACT. WHILE COMPLETING THE REGULAR ASSESSMENT U/S 143(3) OF THE ACT, THE ASSESSING OFFICER HAS ALL OPPORTUNITIES TO EXAMINE THE NATURE OF ACTI VITIES UNDERTAKEN BY THE ASSESSEE IN THE LIGHT OF FUNDS COLLECTED BY IT. IF THE ASSESSING OFFICER FINDS ANY EVIDENCE WITH REGARD TO VIOLATION OF ANY PROVISIONS OF SECTION 13(1) THE BENEFIT OF EXEMPTION U/S 11 CAN BE DENIED AND THE REGISTRATION CAN BE WITHDRAWN BUT AT 5 THE TIME OF GRANT OF REGISTRATION THE CIT SHOULD NO T GO IN DEPTH TO FIND OUT THE COLLECTION AND APPLICATION OF FUNDS. IF THE TIME GA P BETWEEN THE CREATION OF TRUST AND APPLICATION OF GRANT OF U/S 12AA IS NOT MUCH, T HE CIT SIMPLY SHOULD EXAMINE THE OBJECT OF THE TRUST BEFORE THE GRANT OF REGISTR ATION. BUT IF THE TRUST IS OLD, THE CIT SHOULD EXAMINE THE DETAILS OF THE ACCOUNT ACTIV ITIES OF THE TRUST AND THE APPLICATION OF FUND. BUT, IN THE INSTANT CASE, THE TIME GAP IS NOT THAT MUCH THEREFORE, THE OBJECT OF THE SOCIETY IS RELEVANT PI ECE OF EVIDENCE FOR GRANT OF REGISTRATION. 7. KEEPING IN VIEW THE TOTALITY OF THE FACTS OF CIR CUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT SINCE THE ASSESSEE HAS PLAC ED ENORMOUS EVIDENCE ON RECORD TO JUSTIFY THAT IT WAS ENGAGED IN CHARITABLE ACTIVITIES, THE REGISTRATION U/S 12AA OUGHT TO HAVE BEEN GRANTED. WE ACCORDINGLY, SE T ASIDE THE ORDER OF CIT AND DIRECT HIM TO GRANT REGISTRATION U/S 12AA OF TH E ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 13 TH JANUARY, 2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR