Sarthi Youth Foundation, Solapur V. Commissioner of Income-Tax Exemption, Pune

ITA 562/PUN/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0849 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 19-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12AA; 251; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NO.562/PUN/2020 SARTHI YOUTH FOUNDATION, A28, PANCHSHIL NAGAR, KUMTHA NAKA, SOLAPUR-413005. PAN : AALTS4266M ....... / APPELLANT / V/S. CIT, EXEMPTION, PUNE. / RESPONDENT ASSESSEE BY : SHRI SARANG GUDHATE REVENUE BY : SHRI DEEPAK GARG / DATE OF HEARING : 17.12.2020 / DATE OF PRONOUNCEMENT : 18.12.2020 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE TRUST DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE DATED 18.09.2020 PASSED U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DENYING THE REGISTRATION U/S 12AA OF THE ACT. 2. THE SOLITARY ISSUE RAISED BY THE APPELLANT IN THE PRESENT APPEAL RELATES TO THE DENYING OF REGISTRATION BY THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE U/S 12AA OF THE ACT. 2 ITA NO.562/PUN/2020 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE APPELLANT, NAMELY, SARATHI YOUTH FOUNDATION IS A TRUST ESTABLISHED IN THE YEAR 2010 AND IS ENGAGED IN CARRYING OUT ACTIVITIES SUCH AS CONDUCTING WORKSHOPS IN SCHOOLS/COLLEGES, CREATING AWARENESS FOR DE-ADDICTION, TOBACCO FREE SCHOOL PROJECT, CONDUCTING SKILL DEVELOPMENT PROGRAMMES, ORGANISING TREE PLANTATION PROGRAMMES, CLOTHES DISTRIBUTION, ETC. 4. THE APPELLANT SOCIETY FILED AN APPLICATION IN FORM NO.10 FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT ON 07.11.2019. THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE, ON PERUSAL OF THE SAID APPLICATION, ISSUED A LETTER THROUGH ITBA PORTAL ON 24.12.2019 CALLING UPON THE APPELLANT SOCIETY TO FILE CERTAIN INFORMATION/CLARIFICATION BY 09.01.2020. THE SAID INFORMATION WAS DULY FILED THROUGH ITBA PORTAL. 5. ON PERUSAL OF THE INFORMATION FURNISHED BY THE APPELLANT SOCIETY, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HELD THAT THE ASSESSEE HAD FAILED TO FILE EVIDENCE IN SUPPORT OF THE EXPENDITURE OF RS.6.57 LAKHS INCURRED ON THE CHARITABLE OBJECTS DURING THE FINANCIAL YEAR 2018-19. IN THESE CIRCUMSTANCES, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HELD THAT THE GENUINENESS OF ACTIVITIES OF THE TRUST CANNOT BE EXAMINED AND, ACCORDINGLY, REJECTED THE GRANT OF REGISTRATION U/S 12AA OF THE ACT VIDE ORDER DATED 18.09.2020. 6. BEING AGGRIEVED BY THE ORDER OF LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE, THE APPELLANT SOCIETY IS BEFORE US IN THE PRESENT APPEAL. 3 ITA NO.562/PUN/2020 7. BEFORE US, IT IS SUBMITTED THAT THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE WAS NOT JUSTIFIED IN REJECTING THE GRANT OF REGISTRATION, INASMUCH AS, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE IS ONLY EXPECTED TO EXAMINE WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE AND EXAMINE THE ACTIVITIES OF THE TRUST ARE GENUINE. HE ALSO RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST VS. CIT, 272 TAXMAN 7. 8. ON THE OTHER HAND, LD. CIT-DR PLACED HEAVILY RELIANCE ON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE. 9. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO THE GRANT OF REGISTRATION U/S 12AA OF THE ACT. FROM THE PERUSAL OF THE IMPUGNED ORDER, IT IS CLEAR THAT THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE DENIED THE GRANT OF REGISTRATION U/S 12AA OF THE ACT SOLELY ON THE GROUND THAT THE APPELLANT TRUST HAD FAILED TO FURNISH THE EVIDENCE OF EXPENDITURE OF RS.6.57 LAKHS INCURRED DURING THE FINANCIAL YEAR 2018-19. THERE IS NO ALLEGATION BY THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE THAT THE EXPENDITURE HAS BEEN INCURRED BY THE APPELLANT TRUST FOR OBJECTS OTHER THAN THE CHARITABLE OBJECTS. NOR WAS IT THE CASE OF THE LD. COMMISSIONER OF INCOME TAX THE OBJECTS OF THE TRUST ARE NOT CHARITABLE IN NATURE. IT IS TRITE LAW THAT AT THE TIME OF GRANT OF REGISTRATION, THE COMMISSIONER OF INCOME TAX IS ONLY EXPECTED TO EXAMINE AND SATISFY HIMSELF THAT THE OBJECTS OF THE TRUST ARE CHARITABLE AND ITS ACTIVITIES ARE IN FURTHERANCE OF THE CHARITABLE IN NATURE I.E. SATISFY HIMSELF ABOUT THE 4 ITA NO.562/PUN/2020 GENUINENESS OF THE ACTIVITIES CARRIED ON BY THE ASSESSEE AS HELD BY THE HONBLE APEX COURT IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST (SUPRA). 10. IN THE PRESENT CASE AS OBSERVED BY US SUPRA THAT THE EXERCISE UNDERTAKEN BY THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE BY CALLING FOR THE EVIDENCE IN SUPPORT OF THE EXPENDITURE IS BEYOND SCOPE OF HIS POWERS VESTED WITH HIM U/S 12AA OF THE ACT AND FURTHERMORE THE PROOF OF THE EXPENDITURE IS AN ITEM OF ASSESSMENT. THE GRANT OF REGISTRATION AND THE ASSESSMENT OF INCOME THE TRUST ARE TWO DIFFERENT DISTINCT PROCEDURE PRESCRIBED UNDER THE ACT. IN THIS REGARD, RELIANCE CAN BE PLACED ON CATENA OF THE DECISIONS :- (I) FIFTH GENERATION EDUCATION SOCIETY VS. CIT, 185 ITR 634; (II) SHANTAGAURI RAMNIKLAL TRUST VS. CIT, 239 ITR 528; (III) M. VISVESVARAYA INDUSTRIAL RESEARCH AND DEVELOPMENT CENTRE VS. ITAT, 251 ITR 852; (IV) NEW LIFE IN CHRIST EVANGELISTIC ASSOCIATION VS. CIT, 246 ITR 532; (V) N.N. DESAI CHARITABLE TRUST VS. CIT, 246 ITR 452; AND, (VI) CIT VS. VIJAY VARGIYA VANI CHARITABLE TRUST, 369 ITR 360. 11. FROM THE PERUSAL OF THE IMPUGNED ORDER, IT IS CRYSTAL CLEAR THAT THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HAD LOST SIGHT DISTINCTION BETWEEN THE PROCESS OF REGISTRATION AND THE EXEMPTION OR ASSESSMENT OF INCOME U/S 11 OF THE ACT. THEREFORE, THE REASONING GIVEN BY THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE CANNOT BE SUSTAINED IN LAW AND, ACCORDINGLY, WE SET-ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE DATED 18.09.2020 PASSED U/S 12AA OF THE ACT AND 5 ITA NO.562/PUN/2020 DIRECT THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE TO GRANT THE REGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON THIS 18 TH DAY OF DECEMBER, 2020. SD/- SD/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 18 TH DECEMBER, 2020. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT, EXEMPTION, PUNE. 4 . , , , / DR, ITAT, B BENCH, PUNE. 5. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.