M/s. Sukhmani Society for Citizen Services, MANSA V. The Commissioner of Income-tax, Bathinda

ITA 551/ASR/2011

• Counselvise Citation: 55120914 RSA 2011
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-09-2012
• Assessment Year: misc
• Appeal Filed On: 21-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Opportunity of being heard; Competent authority
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.551(ASR)/2011 PAN :AAJTS6705E M/S. SUKHMANI SOCIETY FOR CITIZEN VS. THE COMMISSIO NER OF INCOME TAX, SERVICES, D.C. OFFICE, MANSA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. VARINDER WADHWA, CA RESPONDENT BY:SH. AMRIK CHAND, DR DATE OF HEARING:04/09/2012 DATE OF PRONOUNCEMENT:26/09/2012 ORDER PER BENCH ; THE SUKHMANI SOCIETY FOR CITIZEN SERVICES (SUWIDHA CENTRE) D.C. OFFICE, DISTT. ADMINISTRATIVE COMPLEX MANSA (HEREIN AFTER CALLED THE SOCIETY) FILED AN APPLICATION FOR REGISTRATION UN DER SECTION 12AA OF THE INCOME-TAX ACT, 1961 ( IN SHORT THE ACT), ON 30.0 3.2011 IN THE PRESCRIBED FORM TO THE LD. COMMISSIONER OF INCOME TAX, BATHIND A. IN ORDER TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE-S OCIETY, THE LD. CIT, BATHINDA CALLED THE SOCIETY ALONWITH COMPLETE SET O F BOOKS OF ACCOUNT AND 2 OTHER RELEVANT DOCUMENTS FOR THE LAST THREE YEARS F OR 21.04.2011. IN COMPLIANCE OF THE SAME, THE AUTHORISED REPRESENTATI VE OF THE SOCIETY ATTENDED THE PROCEEDINGS AND FURNISHED THE REQUISIT E INFORMATION. THE APPLICATION OF THE SOCIETY WAS REFERRED TO THE ITO WARD 1(4), MANSA, TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE SOC IETY, IN COMPLIANCE OF THE SAME, THE ASSESSING OFFICE VIDE HIS REPORT DATED 05 .09.2011 STATED THAT THE SOCIETY HAS FAILED TO PRODUCE THE BOOKS OF ACCOUNT IN ABSENCE OF WHICH, IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF ACTIVITIE S OF THE SOCIETY AND KEEPING IN VIEW ALL THESE FACTS, THE AO DID NOT REC OMMEND THE CASE OF THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THE JT. C.I.T. RANGE-1, ALSO ENDORSED THE FINDINGS OF THE A.O. THE LD. CIT BATHINDA FIXED THE CASE FOR HEARING IN HIS OFFICE ON 27.03.2011 AN D AUTHORISED REPRESENTATIVE OF THE SOCIETY ATTENDED THE PROCEEDINGS AND ALSO FI LED THE REQUISITE INFORMATION ALONGWITH THE DETAILS OF ACTIVITIES AND OTHER DOCUMENTS. 2. THE SOCIETY IS REGISTERED WITH THE ADDITIONAL RE GISTRAR OF SOCIETIES, MANSA VIDE NO.44 OF 22.03.2004. THE AIMS AND OBJECT S OF THE SOCIETIES ARE CONTAINED IN MEMORANDUM OF ASSOCIATION OF THE SOCIE TY. AFTER PERUSING THE OBJECTS AND FUNCTIONS OF THE SOCIETY, THE LD. CIT B ATHINDA IS OF THE VIEW THAT THE ACTIVITIES OF THE SOCIETY ARE IN COMMERCIA L NATURE RATHER THAN CHARITABLE IN NATURE. THE LD. CIT, BATHINDA HAS AL SO PERUSED THE INCOME AND 3 EXPENDITURE OF THE SOCIETY WHICH REVEALS THAT THE S OCIETY HAS BEEN EARNING HUGE PROFIT AND, THEREFORE, HE WAS OF THE VIEW THAT THE ACTIVITIES OF THE SOCIETY ARE OF COMMERCIAL IN NATURE AND AIMED AT D ERIVING PROFIT AND NOT FOR CHARITABLE PURPOSE. 3. THE LD. CIT, BATHINDA CONFRONTED THE ABOVE SAID FACTS TO THE SOCIETY AND THE SOCIETY CONTENDED THAT THE MAIN OBJECT OF T HE SOCIETY IS TO PROVIDE CITIZENS SERVICES TO THE COMMON PEOPLE FOR THEIR C ONVENIENCE AND THE SOCIETY ALSO EXPLAINED THAT THE SOCIETY RECEIVES A PPLICATION FROM THE COMMON CITIZEN FOR VARIOUS SERVICES ON BEHALF OF TH E DEPARTMENTS OF STATE GOVT, FORWARDS THE SAME TO THE CONCERNED DEPARTMENT AND DELIVER BACK THE SAME TO THE CITIZEN WITHIN A SPECIFIED TIME FRAME. THE SOCIETY IS CHARGING PRESCRIBED FEE FROM THE CITIZEN FOR PROVIDING SERVI CES. THE LD. CIT, BATHINDA PERUSED THE CHART PRODUCED BY THE SOCIETY SHOWING CHARGES RECEIVED BY THE SOCIETY AND HE IS OF THE VIEW THAT THE SOCIETY CHARGES AS MUCH AS RS.1000/- FOR ISSUING NOC FOR PETROL PUMP, RS.500 FOR REGISTRATION OF MARRIAGE, RS.500 FOR NOC ON BUILDING PLAN AND SO ON. HE IS ALSO OF THE VIEW THAT THESE CHARGES ARE IN ADDITION TO THE STAT UTORY FEES CHARGED BY THE STATE GOVT. DEPARTMENTS. THESE CHARGES/FEES ARE CH ARGED BY THE SOCIETY FOR PROVIDING ALLEGED CITIZEN SERVICES. THE LD. CIT, BA THINDA FINALLY HELD THAT THE ACTIVITY OF THE SOCIETY IS IN THE NATURE OF TRA DING, COMMERCE OR BUSINESS 4 AND ACTIVITY OF RENDERING SERVICE IN RELATION TO TH E TRADE, COMMERCE OR BUSINESS FOR A FEE. THE SOCIETY PROVIDES CERTAIN SE RVICES TO THE COMMON MAN AND CHARGES FEE FOR THE SAME AND THIS ACT OF THE SO CIETY HARDLY GO TO ESTABLISH ANY CHARITABLE PURPOSE. FINALLY, THE LD. CIT ALSO H ELD THAT THE SOCIETY IS DOING ALL WORK AND RENDERING SERVICES TO THE CITIZE NS WHICH THE STATE GOVT. WAS SUPPOSED TO PERFORM WITHOUT CHARGING ANY SUCH A DDITIONAL FEES. THEREFORE, HE IS SATISFIED THAT THE ACTIVITIES OF T HE SOCIETY/INSTITUTIONS NOT CHARITABLE IN NATURE WITHIN THE MEANING OF PROVISO TO SECTION 2(15) OF THE ACT AND IT DOES NOT QUALIFY TO BE TREATED AS A CHARITAB LE INSTITUTION. HENCE, HE REJECTED THE REQUEST OF THE ASSESSEE FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT, VIDE IMPUGNED ORDER DATED 26.09.20 11. 4. THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 26.09.2011 PASSED BY THE LD. CIT, BATHINDA AND FILED THE PRESE NT APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE SOCIETY WAS REGISTERED ON 22.0.30004 WITH THE ADDITIONAL REGISTRAR OFFICE, MANSA AND FORMATION OF THE SOCIETY WAS ON INITIATION AND INSTRUCTIONS O F GOVERNMENT OF PUNJAB TO IMPLEMENT SUWIDHA (SINGLE USERS FRIENDLY WINDOW DISPOSAL HELPLINE FOR APPLICANTS) AND IS A PROJECT OF THE STATE GOVE RNMENT. THE STATE GOVT. HAD INSTRUCTED ALL THE DISTRICT OFFICES TO FORM SO CIETIES ON A SIMILAR PATTERN, WITH OFFICIAL WEBSITE SUWIDHA.NIC.IN. THE MAIN OBJE CT OF THE SOCIETY IS TO 5 PROVIDE SINGLE WINDOW SERVICES TO THE CITIZENS AGA INST A MINIMUM FEES FOR THEIR SERVICES AND TO PROVIDE SERVICES WITHIN SCHED ULED TIME. HE FURTHER STATED THAT THE ORGANISATION OF THE SOCIETY WAS FRA MED AND DEPUTY COMMISSIONER, MANSA IS AN EX-OFFICIO MEMBER ALOGWI TH VARIOUS OTHER ADDITIONAL COMMISSIONERS AS WELL AS SUB-DIVISIONAL MAGISTRATES AND OTHER OFFICERS OF THE DISTRICT MANSA, AS THE OFFICE BEARE RS FOR THE COMPLETION OF THE SOCIETY. HE FURTHER STATED THAT THE D.C. MANSA IS T HE CHAIRMAN OF THE PRESENT SOCIETY AND THE ADDITIONAL DEPUTY COMMISSIONER (GEN ERAL) IS A MEMBER/SECRETARY, ADDITIONAL DEPUTY COMMISSIONER (D EVELOPMENT) MEMBER, SDM, MANSA AND EXECUTIVE ENGINEER, PWD, B&R , MANSA, ARE THE MEMBERS OF THE SOCIETY. HE STATED THAT THE MOTIVE O F THE SOCIETY IS TO PROVIDE SERVICES FROM A SINGLE WINDOW, TAKING UP MI NIMUM POSSIBLE CHARGES AS PER CHART OF FACILITATION CHARGES, WHICH ARE FIX ED BY THE STATE GOVERNMENT. HE HAS ALSO PRODUCED COPY OF CHART SHOWING SERVICE- WISE CHARGES TAKEN BY THE SOCIETY FROM THE CITIZENS FOR RENDERING ITS SER VICES. HE HAS ALSO DREW OUR ATTENTION TOWARDS THE OBJECT OF THE SOCIETY WHICH A RE MENTIONED IN THE MEMORANDUM OF ASSOCIATION I.E. ABOUT 29 OBJECTS. HE HAS ALSO DREW OUR ATTENTION TOWARDS PRESENT BOARD OF GOVERNORS AND ST ATED THAT ALMOST ALL THE BOARD MEMBERS ARE HIGH OFFICIALS OF THE PUNJAB GOVE RNMENT. FINALLY, HE STATED THAT THE SOCIETY IS WORKING FOR CHARITABLE PURPOSES AS WELL AS FOR 6 PUBLIC UTILITY PURPOSES AND HE REQUESTED THAT THE S OCIETY DESERVES REGISTRATION UNDER SECTION 12AA OF THE ACT. BUT THE LD. CIT, BHATINDA HAS WRONGLY REJECTED THE REQUEST OF THE ASSESSEE VIDE I MPUGNED ORDER DATED 26.09.2011. IN SUPPORT OF HIS CONTENTION HE HAS PLA CED RELIANCE ON THE FOLLOWING DECISIONS: I) COMMISSIONER OF INCOME TAX, PANCHKULA VS. HARYAN A WAREHOUSING (2011) 196 TAXMAN 260 (P&H). II) COMMISSIONER OF INCOME TAX, PANCHKULA VS. HARYA NA BUILDING OTHER CONSTRUCTION WORKS WELFARE BOARD 196 TAXMAN 2 55 (P&H). III) COMMISSIONER OF INCOME TAX VS. GUJARAT MARITIME BOA RD (2007) 289 ITR 139 (GUJ.) IV) COMMISSIONER OF INCOME TAX VS. AGGARWAL SABHA MAHAJ ARAJ AGGARSAIN BHAWAN (2011) 198 TAXMANN 172 (P&H) V) SANJEEVAMMA HANUMAN THE GOWDA CHARITABLE TRUST VS. DIRECTOR OF INCOMETAX (EXEMPTIONS) (2006) 285 ITR 3 27 (KAR). VI) BAR COUNCIL OF MAHARASHTRA VS. CIT 126 ITR 27. VII) COMMISSIONER OF INCOME TAX VS. DREDGING CORPORATION OF INDIA (1988) 174 ITR 682 (AP). 6. ON THE CONTRARY, THE LD. DR, SH. AMRIK CHAND, RE LIED UPON THE ORDER PASSED BY THE LD. CIT, BATHINDA AND STATED THAT THE SOCIETY HAS NOT DONE ANY CHARITABLE AS WELL AS PUBLIC UTILITY WORK TILL DATE . THE LD. DR FURTHER STATED THAT THE ASSESSEE IS CHARGING A VERY HUGE FEES FROM THE PUBLIC FOR RENDERING ITS SERVICES TO THE SOCIETY, WHICH IS IN ADDITION T O THE CHARGES LEVIED BY THE PUNJAB GOVERNMENT AND IS ADDITIONAL BURDEN UPON THE COMMON MAN. LASTLY, HE STATED THAT THE ACTIVITIES OF THE SOCIETY ARE NO T CHARITABLE IN NATURE WITHIN 7 THE MEANING OF PROVISO TO SECTION 2(15) OF THE ACT, BECAUSE THE ASSESSEE IS DOING ITS BUSINESS AND GAINING A HUGE PROFIT BY DOI NG THE WORK OF PUBLIC AND HAS NOT DONE ANY SINGLE CHARITABLE WORK TILL DATE. THEREFORE, THE REQUEST OF THE ASSESSEE FOR REGISTRATION OF THE SOCIETY U/S 12 AA OF THE ACT, HAS RIGHTLY BEEN REJECTED BY THE LD. CIT, BATHINDA. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. THE LD. COUNSEL FOR THE ASSESSEE FILED A CHART OF SERVICES AND CHARGES AGAINST THE SERVICES RENDERED BY THE SO CIETY THAT ARE ABOUT 36 IN NUMBER. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE T HE 17 SERVICES RENDERED BY THE SOCIETY AND THE CHARGES TAKEN BY THE SOCIETY , WHICH ARE AS UNDER: SUKHMANI SOCIETY FOR CITIZEN SERVICES VS. CIT. BAT HINDA I.T.A. NO. 551/ASR- 2011 SERVICE FACILI. CHARGES TIME FRAME FINANCIAL YEAR 2008-09 FINANCIAL YEAR 2009-10 FINANCIAL YEAR 2010-11 (RS.) DAYS NO. OF CASES %AGE OF TOTAL NO. OF CASES %AGE OF TOTAL NO. OF CASES %AGE OF TOTAL 1 ISSUANCE OF NATIONALITY CERTIFICATE 20 15 0 0 0 0.00% 11856 24.70% 2 ISSUANCE OF BIRTH CERTIFICATE 20 7 5001 32.46% 5419 11.62% 7462 15.55% 3 DRIVING LICENCES RELATED SERVICES 20 7 0 0.00% 20041 42.96% 7326 15.26% 4 ARM LICENCES RELATED SERVESS 500 45 4282 27.79% 5 855 12.55% 5173 10.78% 5 ISSUANCE OF AFFIDAVITS 20 SAME DAY 1036 6.72% 4258 9.13% 5011 10.44% 6 REGISTRATION OF VEHICLE SERVICES 100 5 0 0.00% 6096 13.07% 4675 9.74% 7 ISSUANCE OF COPY OF A DOCUMENT 30 7 1473 9.56% 12 57 2.69% 1904 3.97% 8 ISSUANCE OF DEATH CERTIFICATE 20 7 975 6.33% 951 2.04% 1577 3.29% 9 SUBMISSION OF PASSPORT APPLICATIONS 100 20 2101 13.63% 1654 3.55% 1282 2.67% 8 10 AGRICULTURE RELATED 100 30 274 1.78% 779 1.67% 614 1.28% 11 NON-ENCUMBERENCE CERTIFICATE 20 0 0 0.00% 0 0.00% 374 0.78% 12 FORM SEELING 0 0 0 0.00% 0 0.00% 160 0.33% 13 ISSUANCE OF SURETY BONDS 50 SAME DAY 5 0.03% 29 0.06% 151 0.31% 14 REGISTRATION OF MARRIAGE 500 SAME DAY 60 0.39% 88 0.19% 63 0.13% 15 OTHERS 0 0 202 1.31% 218 0.47% 373 0.78% 16 NOC OF PETROL PUMP 1000 40 0 0.00% 0 0.00% 0 0.00% 17 NOC FOR BUILDING PLAN 500 30 0 0.00% 0 0.00% 0 0.00% TOTAL 15409 46645 48001 (COUNSEL FOR THE ASSESSEE (APPELLANT) 7.1. THE LD. CIT, BATHINDA HAS ALSO MENTIONED IN PA RA 3.3 AT PAGE 3 & 4 IN THE IMPUGNED ORDER THAT THE APPLICANT HAS FURNISHED A CHART SHOWING FEE CHARGEABLE FOR PROVIDING VARIOUS SERVICES TO THE CI TIZENS. A PERUSAL OF THE CHART SHOWS THAT THE APPLICANT CHARGES AS MUCH AS R S.1000/- FOR ISSUING NOC FOR PETROL PUMP, RS.500 FOR REGISTRATION OF MARRIAG E, RS.500 FOR NOC ON BUILDING PLAN AND SO ON. IT IS PERTINENT TO MENTION HERE THAT THESE CHARGES ARE IN ADDITION TO THE STATUTORY FEES CHARGED BY THE ST ATE GOVT. DEPARTMENTS. THESE CHARGES/FEES ARE CHARGED BY THE APPLICANT FOR PROVIDING THE ALLEGED CITIZENS SERVICES. 7.2. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED BAL ANCE SHEET AS ON 31.03.2009 IN WHICH THE SOCIETY HAS SHOWN LIABILITI ES AND ASSETS AS WELL AS INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31. 3.2009. FOR THE SAKE OF 9 CONVENIENCE, THE BALANCE SHEET AS ON 31.03.2009 AS WELL AS INCOME & EXPENDITURE FOR THE PERIOD ENDED 31.03.2009 OF THE SOCIETY ARE REPRODUCED AS UNDER: SUKHMANI SOCIETY FOR CITIZEN SERVICES (D.C. OFFICE) , MANSA BALANCE SHEET AS ON 31.03.2009 LIABILITIES AMOUNT (RS) ASSETS AMOAUNT GENERAL FUNDS FIXED ASSETS 1452088.00 O. BALANCE- 3389932.99 (DETAILS ATTACHED) LESS: OLD DEP 1028849.00 ADD : TFD FROM 1344307.50 TELEPHONE SECURITY 500.00 I & E A/C _____________3705391.49 LOAN TO DISTT.NA ZAR 143150.00 STATE GOVT. 500000.00 RECEIVABLE FROM EX. 77860.00 CLERK CUM ACCOUNTANT SH. ASHOK KUMAR. SECURITY FROM COMPUTER 10000.00 BANK BALANCES: S.B.O.P., MANSA 1573840.99 AMOUNT MORE DEPOSITED IN 270.0 SBOP, MANSA ( I/A) 371818.00 BANK ACCOUNT PNB, BUDHLADA 334408.50 SBOP, SARDULGARH 257726.00 CASH IN HEAD 4270.00 --------------- ---------------- 4215661.49 4215661.49 ---------------- ---------------- REPORT :- SUBJECT TO OUR SEPARATE AUDITED FOR REPORT OF EVEN DATE FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCONTANTS PLACE : MANSA (SANJEEV KUMAR) DATED : 18.08.2009 M. NO. 500277 10 SUKHMANI SOCIETY FOR CITIZEN SERVICES (D.C. OFFICE) , MANSA INCOME & EXPENDITUE ACCOUNT FOR THE PERIOD ENDING 31.03.2009 EXPENDITURE AMOUNT (RS) INCOME AMOUNT AMOUNT(RS) TO PB. STATE E-GOVERANCE 381533.50 BY RECEIPTS 25 92150.00 SOCIETY, CHD BY BANK INTEREST48843.00 TO PRINTING & STATIONERY 29907.00 TO SALARY 539204.00 TO BANK EXP. 490.00 TO COMPUTER REPAIR 27735.00 TO AUDIT FEE 11000.00 TO ELECTRICITY BILL 34028.00 TO TELEPHONE 5727.00 TO SMS EXP. 945.00 TO PHOTOSTATE 1035.00 TO ELECTRIC REPAIR 225.00 TO TRAVELLING 5150.00 TO DEPRECIATION 259706.00 TO INCOME OVER EXP. 1344307.50 --------------- --------------- 2640933.00 2640933.00 ---------------- --------------- - REPORT :- SUBJECT TO OUR SEPARATE FOR REPORT OF EVEN DATE FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCUONTANTS PLACE : MANSA (SANJEEV KUMAR) DATED : 18.08.2009 M. NO. 500277 11 7.3. SIMILARLY, THE BALANCE SHEET AS ON 31.03.2010 AS WELL AS THE INCOME & EXPENDITURE ACCOUNT FOR THE PERIOD ENDING 31.03.201 0 ARE ALSO REPRODUCED AS UNDER: SUKHMANI SOCIETY FOR CITIZEN SERVICES (D.C. OFFICE) , MANSA BALANCE SHEET AS ON 31.03.2010 LIABILITIES AMOUNT (RS) ASSETS AMOAUNT GENERAL FUNDS FIXED ASSETS 1431952.00 O. BALANCE- 3705391.49 (DETAILS ATTACHED) ADD : TFD FROM 1487573.50 TELEPHONE SECURITY 500.00 I & E A/C _____________5192964.99 LOAN TO DISTT.NA ZAR 15000.00 SECURITY FROM COMPUTER 10000.00. SDM BUDHLA DA. 3000.00 SUPPLIER CH. ISSUED NOT PRESENTED 16356.00 S.B.O.P.(S WEEP IN) 2784690.00 BANK BALANCE : S.B.O.P, MANSA 50281.00 SBOP, MANSA ( I/A) 377866.00 PNB, BUDHLADA 9349.00 SBOP, BUDHLALDA 296960.00 SBOP, SARDULGARH 429722.00 --------------- ---------------- 5219320.99 5219320. ---------------- ---------------- REPORT :- SUBJECT TO OUR SEPARATE AUDITED FOR REPORT OF EVEN DATE FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCOUNTANT S PLACE : MANSA (SANJEEV KUMAR) DATED : 22.06.2010 M. NO. 500277 INCOME & EXPENDITURE ACCOUNT FORTHE PERIOLD ENDING ON 31.3.2010 EXPENDITURE AMOUNT INCOME AMOUNT 12 TO PB. STATE E-GOVERNANCE 486084.50 BY RECEIPTS 3 420275.00 SOCEITY CHD. TO PRINTING & STATIONERY 146145.00 BY BANK INTERES T 86517.00 TO SALARY 917004.00 BY EXCESS DEPOSIT 250. 00 TO BANK EXP. 911.00 BY EXCESS CREDIT BANK 10.00 TO COMPUTER REPAIR 64880.00 TO AUDIT FEE 7000.00 TO ELECTRICITY BILL 49702.00 TO TELEPHONE [phone] TO SMS EXP. 1122.00 TO ADVERTISEMENT 13113.00 TO ELECTRIC REPAIR 4969.00 TO TRAVELLING 2346.00 TO MISC. EXP. 670.00 TO POSTAGE 500.00 TO DEPRECIATION 314442.00 TO INCOME OVER EXP. 1487573.00 ---------------------------- 3507052.00 3507052.00 REPORT :- SUBJECT TO OUR SEPARATE FOR REPORT OF EVEN DATE FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCOUNTANT S PLACE : MANSA (SANJEEV KUMAR) DATED : 22.06.2010 M. NO. 500277 13 7.4. LASTLY, THE BALANCE SHEET AS ON 31.03.2011 AS WELL AS INCOME & EXPENDITURE ACCOUNT FOR THE PERIOD ENDING 31.03.20 11 ARE REPRODUCED AS UNDER: BALANCE SHEET AS ON 31.03.2011 LIABILITIES AMOUNT (RS) ASSETS AMOAUNT GENERAL FUNDS FIXED ASSETS 1285660.00 O. BALANCE- 5192964.99 (DETAILS ATTACHED) ADD : TFD FROM 901085.93 TELEPHONE SECURITY 500.00 I & E A/C _____________6094050.92 LOAN TO DISTT.NA ZAR 15000.00 SECURITY FROM COMPUTER 10000.00. SDM BUDHLA DA. 3000.00 SUPPLIER SALARY PAYABLE 114120.00 STAMP PAPER AND STA MPS 40147.00 PSEGS PAYABLE 63697.00 TDS 45253.00 CH. ISSUED NOT PRESENTED 358996.00 NICI, DELHI 352000.00 S.B.O.P(SWEEP IN) 4807579.58 BANK BALANCES : SBOP, MANSA 3088.00 SBOP, BUDHLADA 8547.50 SBOP, SARDULGARH 3590.00 SBOP, (NCC) MANSA 75589.84 CASH IN HAND 909.00 --------------- ---- ------- 6640863.92 6640863.92 ---------------- ------------ - REPORT :- SUBJECT TO OUR SEPARATE AUDITED FOR REPORT OF EVEN DATE FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCOUNTANTS PLACE : MANSA (SANJEEV KUMAR) DATED : 05.09.2011 M. NO. 500277 14 INCOME & EXPENDITURE ACCOUNT FORTHE PERIOLD ENDING ON 31.3.2011 EXPENDITURE AMOUNT INCOME AMOUNT TO PB. STATE E-GOVERNANCE 478259.50 BY RECEIPTS 3 132591.00 SOCIETY CHD. TO PRINTING 154873.00 BY BANK INTEREST 327855. 43 TO SALARY 1413932.00 BY EXCESS DEPOSIT 1969.00 TO BANK EXP. 350.00 BY EXCESS CREDIT BANK 10.00 TO STATIONERY 74842.00 TO COMPUTER REPAIR 67450.00 TO AUDIT FEE 7000.00 TO ELECTRICITY BILL 62279.00 TO TELEPHONE [phone] TO SMS EXP. 279.00 TO ADVERTISEMENT 13084.00 TO ELECTRIC REPAIR 8806.00 TO TRAVELLING 12760.00 TO MISC. EXP. 3135.00 TO DEPRECIATION 223130.00 TO INCOME OVER EXP. 901085.93 --------------------------- 3462515.43. 3462515.43 REPORT :- SUBJECT TO OUR SEPARATE REPORT OF EVEN DATE 15 FOR SANJEEV AMAR & ASSOCIATES CHARTERED ACCOUNTANTS PLACE : MANSA (SANJEEV KUMAR) DATED : 05.09.2011 M. NO. 500277 7.5. AFTER GOING THROUGH THE AFORESAID BALANCE SHEE TS AS WELL AS INCOME & EXPENDITURE ACCOUNTS OF THE ASSESSEE FOR THE LAST T HREE YEAS, WE HAVE NOT FOUND ANY EXPENDITURE INCURRED BY THE SOCIETY ON CH ARITABLE AS WELL AS PUBLIC UTILITY WORK. ALMOST ALL THE EXPENDITURE HAS BEEN INCURRED BY THE SOCIETY ON PRINTING AND STATIONERY, SALARY TO THEIR EMPLOYEES, BANK EXPENDITURE, COMPUTER REPAIR, AUDIT FEE, ELECTRICIT Y BILL, TELEPHONE, ELECTRIC REPAIR, TRAVELING, MISC. EXPENDITURE, POSTAGE ETC. 7.6. THE PRESENT SOCIETY HAS FILED AN APPLICATION T O THE LD. CIT, BATHINDA FOR REGISTRATION. AS PER SECTION 12AA OF THE ACT, T HE LD. CIT, BATHINDA ON RECEIPT OF AN APPLICATION FOR REGISTRATION CAN CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE PRESENT SOCIETY AS HE THINKS N ECESSARY IN ORDER SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THI S BEHALF. IF THE LD. CIT, BATHINDA IS SATISFIED HIMSELF OF THE OBJECTS O F THE TRUST OF THIS SOCIETY AND GENUINENESS OF ITS ACTIVITIES, HE SHALL PASS AN ORDER IN WRITING REGISTERING 16 THE PRESENT SOCIETY AND IF HE IS NOT SATISFIED THEN HE SHALL PASS ORDER IN WRITING REFUSING TO REGISTER THE SOCIETY AFTER GIVI NG REASONABLE OPPORTUNITY OF BEING HEARD. IN THE PRESENT CASE ALSO, THE LD. CIT , BATHNDA REFERRED THE APPLICATION OF THE SOCIETY TO THE ITO WARD 1(4), MA NSA TO VERIFY THE GENUINENESS OF ACTIVITIES OF THE PRESENT SOCIETY AN D IN COMPLIANCE OF THE SAME, THE AO VIDE HIS REPORT DATED 05.09.2011 HAS S TATED THAT THE ASSESSEE HAS FAILED TO PRODUCE BOOKS OF ACCOUNT BEFORE HIM A ND IN THE ABSENCE OF WHICH, IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE PRESENT SOCIETY AND LASTLY THE AO HAS NOT RECOMMEND ED THE CASE OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT, THRO UGH THE JT. CIT, BATHINDA. AFTER RECEIVING THE SAID REPORT DATED 05.09.2011 FR OM THE AO, THE LD. CIT, BATHINDA FIXED THE CASE FOR HEARING ON 27.03.2011. AFTER HEARING THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, THE LD. CIT EXAMINED THE DOCUMENTARY EVIDENCE AVAILABLE WITH HIM AND STATED THAT THE ACTIVITIES OF THE SOCIETY ARE COMMERCIAL IN NATURE. HE HAS ALSO REPRO DUCED THE SAME OBJECTS OF THE PRESENT SOCIETY AT PAGES 2 & 3 IN PARA 3.1(I) TO PARA 3(III). FOR THE SAKE OF CONVENIENCE, THE OBJECTS OF THE SOCIETY ARE REPR ODUCED HEREUNDER: 3.1. THE APPLICANT SOCIETY IS REGISTERED WITH THE ADDL. REGISTRAR OF SOCIETIES, MANSA VIDE NO. 44 OF 22.03.2004.THE AIMS AND OBJECTIVES OF THE SOCIETIES ARE CONTAINED IN MEMORANDUM OF ASS OCIATION OF THE SOCIETY, A COPY OF WHICH HAS BEEN OBTAINED AND IS P LACED ON FILE. AS MANY AS 29 OBJECTIVES HAVE BEEN MENTIONED IN THE LI ST IN PARA 4 UNDER THE TITLE OBJECTIVES AND FUNCTIONS OF THE SOCIETY. SOME OF THE 17 OBJECTIVES ARE SUCH THAT ACTIVITIES OF THE SOCIETY SEEM TO BE OF COMMERCIAL NATURE RATHER THAN OF CHARITABLE NATURE. THE OBJECTIVES OF SUCH NATURE ARE AS UNDER: (I) TO WORKOUT AND RECOMMEND THE SERVICE FEE OR USER CHARGE THAT COULD BE CHARGED FROM THE END CUSTOMERS FOR THE APPROVAL OF THE COMPETENT AUTHORITY AND CONCERN ED DEPARTMENTS/ORGANIZATIONS OVER THE ABOVE AND THE PRESCRIBED BILL AMOUNT/FEE/STATUTORY FEE FOR PROVI DING THE SERVICES THROUGH SUKHMANI CENTRES/FINANCIAL INSTITU TIONS OR FRANCHISEES. (II) TO BUY, SELL, LET ON HIRE, LEASE, TRADE, IMPORT, RE PAIR OR OTHERWISE DEAL WITH IT RESOURCES, SERVICES & SUPPOR T ON TURKEY BASIS LIKE HARDWARE, SOFTWARE, CONNECTIVITY, NETWORKING, TRAINING, STATIONERY, CONSUMABLES ETC. INCLUDING OPERATIONAL & MANAGERIAL MANPOWER, HIRING OF PROFESSIONALS, CONSULTANCY SERVICES BY FOLLOWING TH E PROCEDURE PRESCRIBED. TO ENSURE THE OTHER INFRASTRU CTURE REQUIREMENTS INCLUDING SITE PREPARATION AND TIMELY AVAILABILITY OF THE NECESSARY RESOURCES FOR THE VAR IOUS ACTIVITIES UNDER THE PROJECT. (III) TO ESTABLISH AND MAINTAIN ANY AGENCIES AND FRANCHIS ES IN THE DISTRICT FOR THE CONDUCT OF THE BUSINESS OF THE SOCIETY. THE LD. CIT ALSO PERUSED THE INCOME AND EXPENDITUR E ACCOUNTS, WHICH WE HAVE REPRODUCED HEREINABOVE AND FINALLY CONCLUDED THAT THE ABOVE FACTS CLEARLY REVEALS THAT THE ACTIVITIES OF THE SOCIETY ARE OF COMMERCIAL IN NATURE AIMED AT DERIVING PROFIT AND NOT FOR CHARITY. 7.7. WE HAVE ALSO PERUSED THE INCOME & EXPENDITURE ACCOUNTS, WHICH WE HAVE REPRODUCED HEREINABOVE AS WELL AS THE IMPUGNED ORDER ALONGWITH RELEVANT PROVISIONS OF SECTION 12AA OF THE ACT AND SECTION 2(15) OF THE ACT. 18 FOR THE SAKE OF CONVENIENCE, PROVISIONS OF SECTION 12AA AND SECTION 2(15) OF THE ACT ARE REPRODUCED AS UNDER: SECTION 12AA.(1) THE COMMISSIONER, ON RECEIPT OF A N APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) [ OR CLAUSE (AA) OF SUB SECTION(1) OF SECTION 12A, SHALL A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRU ST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SAT ISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEMED NECES SARY IN THIS BEHALF; AND B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE T RUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUS T OR INSTITUTION; II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND COPY OF THE SUCH ORDER SHALL BE SENT TO THE APP LICANT. SECTION 2(15): CHARITABLE PURPOSE INCLUDES RELIE F OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRON MENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, ] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. 7.8. KEEPING IN VIEW THE AFORESAID DISCUSSIONS AS P ER RECORDS AS WELL AS PER DOCUMENTARY EVIDENCE GIVEN BY THE ASSESSEE, WE FIND THAT THE MAIN PROJECT WAS INITIATED BY THE GOVT. OF PUNJAB IN THE MONTH O F AUGUST, 2002 AT FATEHGARH SAHIB. IT WAS INAUGURATED BY THE CHIEF MI NISTER OF PUNJAB ON 31.10.2002. THE PROJECT WAS FOUNDED BY THE GOVT. OF INDIA, DEPARTMENT OF COMMUNICATION & INFORMATION TECHNOLOGY. THE GOVT. O F PUNJAB HAS DECIDED TO IMPLEMENT THIS PROJECT IN ALL DISTRICTS OF PUNJAB ALONGWITH 19 SUWIDHA BACK-END SERVICES (SUBS) OF THE DEPUTY COM MISSIONER BRANCHES IN DECEMBER, 2004. THE PROJECT REPLICATION STARTED IN ALL DISTRICTS WITH TECHNICAL SUPPORT OF NIC-DISTRICT CENTRES. AS OF NOW, THE PROJECT IS BEING EXECUTED IN ALL DEPUTY COMMISSIONERS OFFICES . THE APPELLANT SOCIETY IS REGISTERED WITH THE ADDITIONAL REGISTRAR OF SOCI ETIES, MANSA VIDE NO.44 OF 22.03.2004 AND ITS AIMS AND OBJECTS ARE CONTAINED IN MEMORANDUM OF ASSOCIATION OF THE SOCIETY WHICH WE HAVE ALREADY ME NTIONED IN THE FORE- GOING PARAGRAPHS. AFTER PERUSING THE OBJECTS OF TH E SOCIETY, WE FIND THAT THE LD. CIT, BATHINDA, HAS REPRODUCED SOME IMPORTANT OB JECTS OF THE SOCIETY IN PARA 3.1 (PAGES 2 & 3) OF THE IMPUGNED ORDER WHICH SHOWS THAT THIS SOCIETY HAS BEEN ESTABLISHED FOR MAINTAINING THE AGENCIES A ND FRANCHISES IN THE DISTRICT FOR THE CONDUCT OF THE BUSINESS OF THE SOC IETY, WHICH CLEARLY ESTABLISHES THAT THE PRESENT SOCIETY IS DOING BUSIN ESS WITH OTHER AGENCIES AND FRANCHISES IN THE DISTRICT FOR THE CONDUCT OF THE B USINESS. WE HAVE NOT SEEN ANY OBJECT OF THE SOCIETY WHICH SHOWS THAT THE PRES ENT SOCIETY IS DOING ANY CHARITABLE ACTIVITIES FOR THE GENERAL PUBLIC UTILIT Y. THE LD. CIT, BATHINDA HAS ALSO REFERRED THE MATTER TO THE ITO WARD 1(4), MANS A TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE PRESENT SOCIET Y WHO VIDE HIS REPORTED DATED 05.09.2011 HAS STATED THAT THE ASSESSEE HAS F AILED TO PRODUCE BOOKS OF ACCOUNT IN THE ABSENCE OF WHICH IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS 20 OF THE ACTIVITIES OF THE SOCIETY AND THE AO HAS NOT RECOMMENDED THE CASE OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT. EVEN OTHERWISE, THE ASSESSEE HAS FAILED TO ESTABLISH BEFORE THE LD. CI T(A) THAT THE SOCIETY IS DOING ANY CHARITABLE WORK KEEPING IN VIEW ITS OBJE CTS. MERELY, MENTIONING ABOUT VARIOUS OBJECTS IN THE NATURE OF CHARITABLE A CTIVITIES IN THE MEMORANDUM OF ASSOCIATION, DOES NOT MEAN THAT THE SOCIETY IS DOING ANY CHARITABLE ACTIVITIES FOR THE GENERAL PUBLIC UTILIT Y AND IS ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. ACCORDI NG TO SECTION 12AA OF THE ACT, THE COMMISSIONER ON RECEIPT OF APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION HAS TO SATISFY HIMSELF ABOUT THE GE NUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION. IN THE PRESENT CASE, THE LD. CIT, BATHINDA HAS MADE THE INQUIRY FROM THE CONCERNED ITO, WHO HAS NOT RECOMME NDED THE CASE OF THE SOCIETY FOR REGISTRATION . EVEN OTHERWISE, THE ASSE SSEE HAS ALSO FAILED TO ESTABLISH THAT THE OBJECTS OF THE SOCIETY ARE CHAR ITABLE IN NATURE. 7.9. KEEPING IN VIEW THE AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ACTIVITIES OF THE ASSESSEE-SOCIETY AR E NOT CHARITABLE IN NATURE WITHIN THE MEANING OF PROVISIONS OF SECTION 2(15) O F THE ACT AND IT DOES NOT QUALIFY TO TREAT AS CHARITABLE INSTITUTION. SINCE T HE ASSESSEE HAS NOT ESTABLISHED THAT ITS SOCIETY IS FORMED WITH OBJECT S OF ANY CHARITABLE PURPOSE, THEN THE QUESTION OF DISCUSSION OF CITATIONS RELIED UPON BY THE SOCIETY DOES 21 NOT ARISE, EVEN OTHERWISE THESE JUDGMENTS ARE DIFFE RENT FROM THE FACTS OF PRESENT CASE AND ARE NOT HELPFUL THE SOCIETY. THE P RESENT SOCIETY IS DOING ITS BUSINESS AND CHARGING HUGE FEES FROM THE PUBLIC WHI CH IS IN ADDITION TO THE PRESCRIBED FEE OF THE PUNJAB GOVT. EVEN OTHERWISE, THE FEES CHARGED BY THE PRESENT SOCIETY IS IN ADDITION TO THE BURDEN FORCED UPON THE COMMON-MAN. BECAUSE OF THIS SERVICE HAS TO BE RENDERED BY THE P UNJAB GOVT. FREE OF COST TO THE PUBLIC AGAINST THE FEE PRESCRIBED IN THE CHART AS REPRODUCED IN THE FORE- GOING PARAGRAPHS. WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT, BATHINDA.. THEREFORE, WE UPHOLD THE IMPUGNED ORDER DATED 26. 09.2011 BY DISMISSING THE PRESENT APPEAL FILED BY THE ASSESSEE-SOCIETY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE -SOCIETY IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 26TH SEPTEMBER, 2012. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. SUKHMANI SOCIETY FOR CITIZENS SER VICES, D.C. OFFICE, MANSA. 2. THE COMMISSIONER OF INCOME, BATHINDA. 3. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER