M/s. Aggarwal Sabha Bhuna, Haryana V. CIT (Exemptions), Chandigarh

ITA 5536/DEL/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9336 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMITA SINGH
• Assessee Lawyers: V RAJ KUMAR
• Keywords: Charitable institution
• Section: 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A , NEW DELHI BEFORE SHRI G.D.AGRAWAL, VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 5536 /DEL/201 6 AY: M/S AGGARWAL SABHA BHUNA HISAR ROAD BHUNA DIST. FATEHABAD HARYANA 125 111 VS . CIT(E), C.R.BUILDING 5 TH FLOOR, SECTOR 17 - E CHANDIGARH 160 017 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.SAMPATH, ADV . & SH. V.RAJ KUMAR, ADV. DEPARTMENT BY : S MT. SUMITA SINGH, CIT, D .R. DATE OF HEARING : 06/12/ 2018 DATE OF PRONOUNCEM ENT : 17/12/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER P RESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORD ER DATED 01/07/16 PASSED BY LD.CIT (E XEMPTION), CHANDIGARH ON FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER OF THE LD.CIT(E), CHANDIGARH REJECTING THE APPLICATION FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961 IS ARBITRARY, MISCONCEIVED, FALLACIOUS AND ILLEGAL AND HAVING BEEN DONE ON IMAGINARY, FICTITIOUS AND UNSUBSTANTIATED GROUNDS MUST BE QUASHED WITH FURTHER DIRECTIONS TO GRANT THE REGISTRATION AS SOUGHT. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: A SSESSEE FILED APPLICATION FOR REGISTRATION UNDER SECTION 12 A OF THE INCOME TAX ACT, 1961 (THE ACT) ON 1 0 /0 3 /16 BEFORE ITA NO. 5536/DEL/2016 AGGARWAL SABHA BHUNA, BHUNA 2 COMMISSIONER OF INCOM E TAX ( E XEMPTIONS), CHANDIGARH . LD. CIT ( E ) , ACCORDINGLY ISSUED NOTICE ON 28/07/1 6 , ASKING DETAILS REGARDING APPLICATION FOR REGISTRATION UNDER SECTION 12 A OF THE A CT. IN RESPONSE TO SAME , ASSESSEE SUBMITTED AIMS AND OBJECTIVES OF ASSESSEE . LD.CIT(E) AFTER PERUSING DETAILS FILED BY ASSESSEE , OBSERVED THAT ASSESSEE WAS NOT CARRYING OUT ANY CHARITABLE ACTIVITIES AS ACCORDING TO HIM UNDER PROVISIONS OF SECTION 12 AA (1) (A) ASSESSEE FAILED TO PROVE G ENUINENESS OF ACTIVITIES . HE ALSO HELD THAT, ASSESSEE S CASE SUFFERS FROM INCOMPLETE DISCLOSURE AND THAT ASSESSEE ATTEMPTS TO PROVIDE A GARB OF CORPUS DONATION S TO THE CREDITS ACCRUING TO IT . LD. CIT (E) THUS REJECTED THE APPLICATION FILED BY ASSESSEE. 3. AGGRIEVED BY THE ORDER PASSED BY LD. CIT (E) OF THE ACT ASSE SSEE IS IN APPEAL BEFORE US NOW. 4. LD. C OUNSEL FILED IN PAPER BOOK DETAILS OF MEMBERS OF SOCIETY WITH THEIR ADDR ESSES AND PAN NUMBERS, COPY OF C ERTIFICATE OF R EGISTRATION OF S OCIETY WITH THE D ISTRICT R EGISTRARS OF F ORMS AND S OCIETIES , FARIDABAD, COP IES OF M EMORANDUM OF ASSOCIATION AND BY E - LAWS OF THE SOCIETY, COPIES OF AUDITED BALANCE SHEET FOR THE YEAR ENDING 31/03/13, 31/03/14, 31/03/15 AND 31/03/16. HE ALSO PLACED ON RECORD LIST OF CORPUS DONATION S RECEIVED BY SOCIETY AND DETAILS OF BANK ACCOUNTS MAINTAINED BY SOCIETY FOR PRECEDING A SSESSMENT Y EARS. LD.C OUNSEL SUBMITTED THAT ASSESSEE HAD SUBMITTED ALL RELEVANT DETAILS AS REQUIRED , IN ORDER TO CONSIDER APPLICATION FILED BY ASSESSEE , FOR PURPOSES OF OBTAINING REGISTRATION UNDER SECTION 12 A OF THE A CT. HE SUBMITTED THAT MAIN OBJECTIVE OF THIS SOCIETY IS TO FIND SOLUTIONS TO MAJOR PROBLEMS LIKE CHILD MARRIAGE, HELPING POOR AND NEEDFUL ITA NO. 5536/DEL/2016 AGGARWAL SABHA BHUNA, BHUNA 3 PEOPLE FOR EDUCATION, FINANCIAL HELP FOR MARRIAGE OF GIRLS BELONGING TO POOR FAMILIES , PROVIDING MEDICAL AID TO REQU IRED PEOPLE IN THE AREA . LD.COUNSEL SUBMITTED THAT THERE HAVE BEEN NO FINDINGS BY LD. CIT (E) REGARDING OBJECTS OF THE TRUST BEING NOT CHARITABLE IN NATURE , INSTEAD HE IS RECORDING THAT NO EVIDENCE OF ANY WORK BEING DONE BY THE SOCIETY HAS BEEN ADDUCED IN THE FILE. IT WAS ARGUED BY HIM THAT FOR THE PURPOSES OF REGISTRATION OF A TRUST UNDER SECTION 12 A OF THE A CT , LD. CIT (E) IS NOT REQUIRED TO EXAMINE WHETHER THE SOCIETY HAS ACTUALLY COMMENCED OR HAS IN FACT CARRIED ON CHARITABLE ACTIVITIES. 5. ON THE CON TRARY , LD.DR PLACED RELIANCE UPON ORDER OF LD.CIT (E) . IT WAS SUBMITTED BY HIM THAT REGISTRATION CANNOT BE GRANTED WITHOUT LOOKING INTO GENUINENESS OF ITS ACTIVITIES OR OBJECTS. 6. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS P LACED BEFORE US. 7. AT PAGE 37 OF THE PAPER BOOK, NOTES ON ACTIVITIES PERFORMED BY SOCIETY HAVE BEEN MENTIONED WHICH ARE AS UNDER: IN THIS MODERN WORLD, A SOCIAL COMMITTEE PLAYS A KEEN ROLE IN THE PROGRESS OF SOCIETY. IT HAS ITS OWN IMPORTANCE TO RESOLVE DAY TO DAY ISSUES AND TO UPLIFT THE SOCIETY TO A HUGE EXTENT. TO CONSIDER THE SAME, BHUNA A SMALL VILLAGE IN THE DISTRICT FATEHABAD HAVING POPULATION OF AROUND 25000 HAS PLANNED TO FORM A NEW COMMITTEE NAMES AGGARWAL SABHA . THIS COMMITTEE HAS BEEN EST ABLISHED UNANIMOUSLY BY ALL THE MEMBERS OF AGARWAL SOCIETY. EVERY MEMBER OF THE COMMITTEE HAS AN ESTEEMED IMAGE IN THE SOCIETY. MR.RAJ KUMAR SINGHAL A HINDI PROFESSOR HAS BEEN ELECTED AS THE PRESIDENT OF THE SOCIETY. HE KNOWN FOR HIS DISCIPLINED NATURE AND TEACHING SKILLS. HE SERVED THE VILLAGE FOR MORE THAN 30 YEARS. ITA NO. 5536/DEL/2016 AGGARWAL SABHA BHUNA, BHUNA 4 MR.KAILASH BANSAL, THE HEAD OF VYAPAR MANDAL BHUNA HAS BEEN ELECTED AS VICE PRESIDENT. THE MAIN MOTIVE OF THIS COMMITTEE IS TO FIND SOLUTIONS TO MAJOR PROBLEMS IN THE SOCIETY. SOME OF TH E MAJOR ISSUES INCLUDES HELPING POOR AND NEEDFUL PEOPLE IN THEIR EDUCATION, FINANCIAL HELP FOR MARRIAGES OF GIRLS BELONGING TO POOR FAMILIES, PROVIDE MEDICAL AND OTHER REQUIRED HELP TO WIDOWS. VILLAGE BHUNA DOES NOT HAVE APPROPRIATE PLACES TO ACCOMMODATE PEOPLE FOR MARRIAGE AND OTHER PURPOSES SO THE SOCIETY HAS PLANNED TO CONSTRUCT DHARAMSHALA NAMED AGGRASAIN BHAWNA FOR THE SAME. THE VILLAGE PANCHAYAT HAS DONATED LAND FOR THIS PURPOSE AND THE FINANCIAL DONATION WILL BE COLLECTED FROM THE SOCIETY. THIS PLACE IS CONSTRUCTED FOR THE GOOD CAUSE AND NOT TO EARN MONEY. THE PEOPLE ASSOCIATED WITH SOCIETY IS DOING A LOT OF HARD WORK FOR SUCH A NOBEL CAUSE. 7.1. IT IS PERTINENT TO NOTE THAT WORDING IN SECTION 12 A, 12 AA OF THE A CT DOES NOT MAKE ANY REFERENCE TO CHARITY OR CHARITABLE PURPOSE . IN FACT SECTION 2 (15) OF THE ACT DEFINES CHARITABLE PURPOSE AS UNDER: SECTION 2(15): CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUB LIC UTILITY. 7.2. IT HAS BEEN HELD IN VARIOUS DECISIONS THAT WHERE PURPOSE OF TRUST /SOCIETY IS ONE OF THE 3 DECLARED CHARITIE S AS PER SECTION 2 (15) OF THE A CT, NO QUESTION OF EXAMINATION OF PROFIT MOTIVE IS REQUIRED. FURTHER WHAT IS INTENDED ON A PLAIN READING OF SECTION 12 A AND 12 AA OF THE A CT , IS ONLY REGISTRATION OF TRUST/SOCIETY ONCE IT CLEARS THE THRESHOLD OF HAVING OBJECTS WHICH ARE CHARITABLE IN NATURE . THIS STAGE FOR CONSIDERATION OF RELEVANT OBJECT OF TRUST /SOCIETY AND APPLICATION OF ITS FUND S ARISES AT THE STAGE OF ITA NO. 5536/DEL/2016 AGGARWAL SABHA BHUNA, BHUNA 5 ASSESSMENT , WHERE BENEFITS ARE CLAIMED BY ASSESSEE UNDER SECTION 11 AND 12 OF THE A CT . 7.3 . I N PRESENT FACTS OF CASE ASSESSEE HAS MADE AN APPLICATION FOR REGISTRATION OF SOCIETY AND GOING BY VARIOUS JUDGEMENTS OF HON BLE SUPREME CO URT, MORE PARTICULARLY IN THE CASE OF ADITANAR EDUCATIONAL I NSTITUTION VS . CIT (1997) 2 2 4 ITR 310 AND CIT VS . SUDHAR A RT S ILK COTH M ANUFACTURERS ASSOCIATION (1980) 121 ITR 1 , WHAT IS TO BE LOOKED INTO IS , WHETHER THE SOCIETY IS GENUINE ONE , OR WHETHER IT I S A SHAM INSTITUTION FLOATED ONLY TO AVAIL BENEFITS OF EXEMPTION UNDER THE A CT. WE DO N OT FIND ANY SUCH FINDING BY LD. CIT ( E ) IN HIS ORDER. 7.4 . THUS , IN LIGHT OF ABOVE OBSERVATIONS , IMPUGNED ORDER PASSED BY LD. CIT( E ) IS SET ASIDE. THE LD.CIT( E ) IS DIRE CTED TO GRANT REGISTRATION TO ASSESSEE IN TERMS OF SECTION 12 A OF THE A CT. IT IS ALSO MADE CLEAR THAT DEPARTMENT IS AT LIBERTY TO PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW IN ASSESSMENT ON RETURNS TO BE FILED BY SOCIETY OR PERSONS MAKING CONTRIBUTIO NS TO IT IN TERMS OF SECTION 10, 11 AND 12 OF THE A CT. 8. ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS ALLOWED. 9. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/12/2018. SD/ - SD/ - ( G.D.AGRAWAL ) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER DT. 17 TH DECEMBER, 2018 *GMV ITA NO. 5536/DEL/2016 AGGARWAL SABHA BHUNA, BHUNA 6 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES S.NO. DETAILS DATE 1 DRAFT DICTATED ON DRAGON 17.12.18 2 DRAFT PLACED BEFORE AUTHOR 17.12.18 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 17/12/2018 7. ORDER UPLOADED ON 8 FILE SENT TO BENCH CLERK 9 DATE ON WHICH THE FILE GOES TO HEAD CLERK 10 DATE ON WHICH FILE GOES TO A.R. 11 DATE OF DISPATCH OF ORDER