Sai Ashish Charitable Trust, New Delhi V. DIT (Exemptions), Delhi

ITA 5501/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77753 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-05-2014
• Assessment Year: misc
• Appeal Filed On: 31-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: ANIL KUMAR GOEL
• Keywords: Charitable institution
• Section: 80G; 12A; 12

Judgement Text

ITA NO. 5501/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 5501/DEL/2012 ASSESSMENT Y EAR: ----- SAI ASHISH CHARITABLE TRUST, V DIT(EXEMPTIONS) , ALINE D SILVA, PLOT NO. 15, 3 RD FLOOR, C2C/2/239-B, AAYAKAR BHAWAN, JANAKPURI, LAXMI NAGAR DISTRICT CENTRE, NEW DELHI. DELHI-110092 (PAN: AAITS7425B) (APPELLANT) (RESPON DENT) APPELLANT BY: SHRI ANIL KUMAR GOEL RESPONDENT BY: SHRI RAMESH CHANDRA, CIT DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED AGAINST THE ORDER O F THE DIT(E), DELHI DATED 27.8.2012 PASSED U/ 12AA(1)(B) R/W SECTION 12 A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. ALTHOUGH THE ASSESSEE APPELLANT HAS TAKEN AS MAN Y AS SEVEN GROUNDS IN THIS APPEAL BUT EXCEPT GROUND NO. 1, OTHER GROUN DS ARE ARGUMENTATIVE AND SUPPORTIVE TO THE MAIN GROUND NO. 1 WHICH READS AS UNDER:- 1. THAT LD. DIT, HQ (EXEMPTION) HAS TOTALLY ERRED IN REFUSING REGISTRATION U/S 12A OF THE INCOME TAX ACT , 1961 AND CONSEQUENTIAL EXEMPTION U/S 80FG OF THE INCOME TAX ACT. ITA NO. 5501/DEL/2012 2 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT THE ASSESSEE TRUST WAS CREATED VIDE TRUST DEED DATED 26.09.2009 WITH THE OBJECT TO CARRY OUT CHARITABLE ACTIVITIES. THE ASSESSEE TRUST APPL IED FOR REGISTRATION U/S 12A AND 80G OF THE ACT VIDE APPLICATION DATED 17.2.2012 ON FORM NO. 10A AND FORM NO. 10G RESPECTIVELY. THE DIT(E) DENIED REGIS TRATION ON THE INTERPRETATION OF THE FACTS AND BY STATING THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE TRUST DO NOT MATCH TO THE TUNE OF DONATION S RECEIVED AND, THEREFORE, THE ACTIVITIES WERE NOT GENUINE. NOW THE AGGRIEVED ASSESSEE TRUST IS BEFORE THIS TRIBUNAL WITH THE MAIN GROUND AS REPRODUCED HE REINABOVE. 4. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD PLACED BEFORE US. 5. LD. AR SUBMITTED THAT THE DIT(E) HAS FAILED TO P OINT OUT THAT THE ACTIVITIES DONE BY THE TRUST ARE NOT GENUINE. THE AR FURTHER SUBMITTED THAT DIT(E) ERRED IN PASSING IMPUGNED ORDER BY CONSIDERI NG THE QUANTUM OF EXPENDITURE WITH RESPECT TO DONATION COLLECTION AND IN HOLDING THAT SINCE THE QUANTUM OF EXPENDITURE IS MUCH BELOW IN COMPARISON TO THE RECEIPT AND THEREFORE, THE ACTIVITIES ARE NOT GENUINE. THE AR FURTHER CONTENDED THAT THE DIT(E) WAS NOT JUSTIFIED IN POINTING OUT AS TO WHAT WRONG THE ASSESSEE TRUST HAS DONE BY ACCUMULATING FUNDS AS PER PROVISIONS OF THE ACT. ITA NO. 5501/DEL/2012 3 6. LD. AR PLACED RELIANCE ON THE RECENT DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF D IT VS FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE (2 013) 355 ITR 361 (DEL) AND SUBMITTED THAT THE REGISTRATION U/S 12A OF THE ACT IS NOT DEPENDENT ON COMMENCEMENT OF CHARITABLE ACTIVITY AN D NON-COMMENCEMENT OF CHARITABLE ACTIVITY CANNOT BE A VALID GROUND FOR REJECTION OF APPLICATION U/S 12A OF THE ACT. THE AR ALSO PLACED RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS R.S. BAJAJ SOCIETY (2014) 222 TAXMAN 111 (ALLAHABAD) AND SUBMITTED THAT WHILE GRANTING OF REGISTRATION U/S 12A OF THE ACT, ONLY GENUINENESS O F THE OBJECT ARE TO BE SEEN. THE REGISTRATION AUTHORITY IS NOT REQUIRED TO VERIF Y THE ACTIVITIES OF THE TRUST WHILE GRANTING REGISTRATION U/S 12A OF THE ACT. TH E AR VEHEMENTLY CONTENDED THAT ONLY THE GENUINENESS OF THE OBJECTS WAS TO BE TESTED AT THE TIME OF REGISTRATION AND NOT THE ACTIVITIES WHICH W ERE NOT COMMENCED BY THAT TIME. 7. REPLYING TO THE ABOVE, LD. DR SUPPORTED THE IMPU GNED ORDER AND SUBMITTED THAT THE ASSESSEE TRUST HAD NUMBER OF AIM S AND OBJECTS FOR CHARITABLE PURPOSES AND THE ASSESSEE TRUST HAS NOT DONE ANY CHARITABLE ACTIVITIES TOWARDS SUCH OBJECTS WHICH COULD ESTABLI SH THAT THE ASSESSEE TRUST IS DOING GENUINE CHARITABLE ACTIVITIES BUT THE ASSESSE E TRUST SPENT A MEAGER ITA NO. 5501/DEL/2012 4 AMOUNT ON EDUCATION SUPPORT WHICH CANNOT BE HELD AS A GENUINE ACT OF CHARITY. THEREFORE, THE DIT(E) RIGHTLY DENIED REGI STRATION U/S 12A AS WELL AS 80G OF THE ACT. 8. ON CAREFUL CONSIDERATION OF ABOVE RIVAL CONTENTI ONS AND SUBMISSIONS OF BOTH THE PARTIES AND CAREFUL PERUSAL OF RECORD, INTER ALIA THE IMPUGNED ORDER, WE CLEARLY OBSERVE THAT THE DIT(E) HAS NOT P OINTED OUT ANY DEFECT OR DOUBT ABOUT THE CHARITABLE OBJECTS OF THE ASSESSEE TRUST. FROM THE IMPUGNED ORDER, WE CLEARLY OBSERVE THAT THE DIT(E) HAS REJEC TED THE APPLICATION OF THE ASSESSEE TRUST FOR GRANT OF REGISTRATION U/S 12A OF THE ACT BY HOLDING THAT IN ABSENCE OF ANY GENUINE CHARITABLE ACTIVITY, THE GEN UINENESS OF THE CHARITABLE ACTIVITIES CANNOT BE HELD TO BE ESTABLISHED. AT TH E SAME TIME, WE OBSERVE THAT AS PER RATIO OF THE DECISION OF HONBLE JURISD ICTIONAL HIGH COURT OF DELHI IN THE CASE OF DIT VS FOUNDATION OF OPHTHALMI C & OPTOMETRY RESEARCH EDUCATION CENTRE (SUPRA), REGISTRATION U/S 12A IS NOT DEPENDENT ON COMMENCEMENT OF CHARITABLE ACTIVITY. THE REGISTRAT ION GRANTING AUTHORITY IS NOT REQUIRED TO EXAMINE THE QUESTION WHETHER THE TR UST HAS ACTUALLY COMMENCED AND CARRIED ON ITS CHARITABLE ACTIVITIES. WE ALSO TAKE COGNIZANCE OF DECISION OF HONBLE HIGH COURT OF ALLAHABAD IN T HE CASE OF CIT V R.S.BAJAJ SOCIETY (SUPRA) AS RELIED BY THE ASSESSEE APPELLANT, WHEREIN THEIR ITA NO. 5501/DEL/2012 5 LORDSHIPS HELD THAT AT THE TIME OF REGISTRATION ONL Y GENUINENESS OF THE OBJECTS WAS TO BE TESTED, NOT THE ACTIVITIES WHICH WERE NOT COMMENCED BY THAT TIME. 9. IN VIEW OF ABOVE, WE HOLD THAT THE DIT(E) REJECT ED THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12A OF THE ACT ON WRONG PREMISE AND UNJUSTIFIED GROUNDS. AT THE COST OF REPETITION, WE NOTE THAT WHILE THE DIT(E) HAS NOT RAISED ANY DOUBT OR OBJECTION ABOUT THE CHA RITABLE OBJECTS OF THE ASSESSEE TRUST, REGISTRATION U/S 12A CANNOT BE DENI ED ON THE GROUND THAT THE GENUINENESS OF THE CHARITABLE ACTIVITIES CANNOT BE HELD TO BE ESTABLISHED IN ABSENCE OF ANY GENUINE CHARITABLE ACTIVITY. ACCORD INGLY, SOLE GROUND OF THE ASSESSEE TRUST IS ALLOWED AND, CONSEQUENTLY, THE IM PUGNED ORDER IS SET ASIDE BY DIRECTING THE DIT(E) TO GRANT REGISTRATION U/S 1 2A OF THE ACT FOR THE ASSESSEE TRUST. 10. SINCE THE APPLICATION FOR REGISTRATION U/S 80G OF THE ACT WAS CONSEQUENTLY REJECTED WITHOUT CONSIDERING THE MERIT S, THEREFORE, THE DIT(E) IS DIRECTED TO RECONSIDER THE SAME AS PER PROVISION S OF THE ACT BY AFFORDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN THE TERMS AS MENTIONED HEREINABOVE. ITA NO. 5501/DEL/2012 6 ORDER PRONOUNCED IN THE OPEN COURT ON 20.06.2014. SD/- SD/- (S.V. MEHROTRA) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 20TH JUNE 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. COMMISSIONER OF INCOME TAX(A) 4. CIT. 5. DR BY ORDER ASSTT. REGISTRAR