Sai Love, Hyd, Secunderabad V. CIT(Exemptions), Hyd, Hyderabad

ITA 566/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6272 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-08-2016
• Assessment Year: misc
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PALLAVI AGARWAL
• Assessee Lawyers: K K GUPTA
• Keywords: Charitable institution; Corroborative evidences; Onus to prove
• Section: 80G; 12A; 12AA; 11

Judgement Text

ITA NO 566 OF 2016 SAI LOVE HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.566/HYD/2016 (ASSESSMENT YEAR: NA) SAI LOVE HYDERABAD PAN: AANTS 5840 B VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.K. GUPTA FOR REVENUE : SMT. PALLAVI AGARWAL, DR DATE OF HEARING : 18.08.2016 DATE OF PRONOUNCEMENT : 24 .08.2016 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL AGAINST THE REJECTION OF ASSESSEES APPLICATION FOR REGISTRATION U/S 80G OF THE I.T. AC T BY THE CIT (E) VIDE ORDER DATED 29.02.2016. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TR UST HAD APPLIED FOR REGISTRATION U/S 12AA OF THE ACT AND WA S ACCORDINGLY GRANTED REGISTRATION BY THE CIT (EXEMPTIONS). THERE AFTER, THE ASSESSEE FILED AN APPLICATION IN FORM NO.10G ON 03. 08.2015, SEEKING APPROVAL U/S 80G(5)(VI) OF THE ACT. DURING THE COURSE OF HEARING, THE ASSESSEE WAS DIRECTED TO FURNISH THE D ETAILED REPLY ON SPECIFIC POINTS. ASSESSEE FILED SUCH INFORMATION CALLED FOR. THE CIT (E), AFTER PERUSAL OF THE RECORD, NOTICED THAT THE EXPENSES DEBITED TOWARDS CHARITABLE ACTIVITIES ARE TOO LOW A ND ARENOT ITA NO 566 OF 2016 SAI LOVE HYDERABAD PAGE 2 OF 5 SUPPORTED BY ANY EVIDENCE. HE ALSO OBSERVED THAT TH E DETAILS OF THE ACTIVITIES CARRIED OUT ALSO ARE NOT MENTIONED I N THE REPLY AND THE ASSESSEE DID NOT GIVE REPLY TO THE QURIES AT SL .NOS. 5 AND 8 OF NOTICE DATED 29.12.2015. IN VIEW OF THE SAME, THE C IT (E) REJECTED THE ASSESSEES APPLICATION FOR REGISTRATION U/S 80G OF THE ACT. AGGRIVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS A CHARITABLE TRUST AND AFTER CONSIDERIN G THE ASSESSEES APPLICATION FOR REGISTRATION AND THE GENUINENESS OF THE OBJECTIVES OF THE ASSESSEE, THE CIT (E) HAS GRANTED REGISTRATI ON U/S 12A OF THE ACT. HE SUBMITTED THAT THE REFUSAL TO GRANT REG ISTRATION U/S 80G IS ON UNSUSTAINABLE GROUNDS. HE SUBMITTED THAT IN REPLY TO NOTICE DATED 29.12.2015, THE ASSESSEE HAS FURNISHED ALL THE RELEVANT DETAILS. IN SUPPORT OF HIS CONTENTIONS, TH E ASSESSEE HAS DRAWN OUR ATTENTION TO PAGES 12 & 13 OF THE PAPER B OOK FILED BY HIM ON 18.8.2016, WHEREIN IN RESPONSE TO QUERIES N OS.5 & 8 OF THE NOTICE DATED 29.12.2015, THE ASSESSEE HAS FURNI SHED ALL THE REQUIRED DETAILS. IN THE SAID NOTICE, QUESTIONS NO. 5 AND 8 READ AS UNDER AND THE ASSESSEES REPLY THERETO IS AS UNDER: Q.5 GIVE A DETAILED NOTE FOR DISCHARGE THE BURDEN OF PROOF ON YOU AS TO WHY AND HOW YOU ARE ENTITLED TO BENEFITS U/S 11/80G BY POINTING OUT THE PRECISE NATURE AND EXTENT OF CHARITABLE ACTIVITIES PERFORME D WITH SUPPORTING EVIDENCE THEREOF. CONCRETE DETAILS OF ACTIVITIES UNDER EACH OBJECTIVE ARE TO BE GIVEN JUSTIFYING HOW THE ACTIVITIES ARE IN ACCORDANCE WIT H THE OBJECTS OF THE INSTITUTION AND UNDER WHICH OBJECT(S ) THEY HAVE BEEN UNDERTAKEN. A. THE TRUST HAS RENDERED MEDICAL SERVICES AND HAS DISTRIBUTED FREE MEDICINES AMOUNTING TO RS.13,500. ITA NO 566 OF 2016 SAI LOVE HYDERABAD PAGE 3 OF 5 THE ACTIVITY IS IN ACCORDANCE WITH AIMS AND OBJECTS OF THE TRUST. Q.8 DETAILS OF DONATIONS RECEIVED WITH COMPLETE NAM E & ADDRESS, DATE AND MODE OF PAYMENT. A. DETAILS OF DONATIONS ARE AS FOLLOWS: HARITH 17,500 LAKSHMI 25,000 GOPI KRISHNA 1,000 VENKATESH 5,000 KARTHIK 3,000 OTHERS 13,000 ----------- 65,000 ----------- THUS, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSE SSEE, THE DENIAL OF REGISTRATION U/S 80G IS NOT JUSTIFIABLE A ND HENCE SHOULD BE RECALLED. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT (E). 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE FOLLOWING ARE THE GROUNDS ON WHICH THE CIT (E) HAS DENIED THE EXEMPTION U/S 80G: (I) EXPENSES DEBITED TOWARDS CHARITABLE ACTIVITIES ARE LOW; (II) DETAILS OF THE ACTIVITIES ARE CARRIED OUT ARE NOT MENTIONED IN THE REPLY; (III) THE APPLICANT DID NOT GIVE REPLY TO THE QUERI ES AS PER QUESTION NO.5 AND 8 OF THE NOTICE DATED 29.12.15. 6. WE FIND THAT ALL THE THREE GROUNDS ON WHICH THE CIT (E) HAVE DENIED REGISTRATION ARE UNSUSTAINABLE AS IT IS VERY CLEAR ITA NO 566 OF 2016 SAI LOVE HYDERABAD PAGE 4 OF 5 FROM THE DOCUMENTS FILED BY THE ASSESSEE THAT THE A SSESSEE HAS MENTIONED THE ACTIVITIES CARRIED OUT AND HAS ALSO G IVEN ITS REPLY TO THE QUERIES NO.5 & 8 OF THE NOTICE DATED 29.12.2 015 THOUGH MAY NOT BE TO THE SATISFACTION OF THE CIT (E), BUT THE CIT (E)S OBSERVATION THAT THE ASSESSEE HAS NOT REPLIED IS NO T CORRECT. AS REGARDS THE DETAILS OF THE ACTIVITIES CARRIED OUT, THE ASSESSEE HAD STATED THAT IT HAD DISTRIBUTED FREE MEDICINES AMOUN TING TO RS.13,500/-. THE ONLY OTHER GROUND LEFT OUT IS THAT THE EXPENSES TOWARDS CHARITABLE ACTIVITIES ARE TOO LOW AND ARE N OT SUPPORTED BY ANY EVIDENCE. AS REGARDS THIS ISSUE, IT IS SEEN THAT FOR GRANTING OF REGISTRATION U/S 80G OF THE ACT, THE ASSESSEE I S ONLY REQUIRED TO FULFILL THE CONDITIONS LAID DOWN U/S 80G(V). IN THE CASE BEFORE US, THE CIT (E) HAS NOT BROUGHT OUT THE CONDITION W HICH HAS NOT BEEN FULFILLED BY THE ASSESSEE. 7. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUN AL AT PUNE IN THE CASE OF ASHOKA EDUCATION FOUNDATION VS. CIT IN ITA NO.549 & 1294/PN/2009 HAS CONSIDERED THE CONDITIONS TO BE FULFILLED FOR ISSUANCE OF REGISTRATION U/S 80G AND THE CIRCUMSTANCES UNDER WHICH THE 80G CAN BE DENIED AND AT PARA 21 & 22 OF ITS ORDER HAS HELD AS UNDER: 21. WHILE GRANTING THE EXEMPTION OR RENEWAL OF EXEM PTION UNDER SECTION 80G(5) OF THE ACT, THE ROLE OF CIT IS LIMITED TO LO OK INTO THE NATURE OF ACTIVITIES BEING CARRIED ON BY THE INSTITUTION OR F UND AND THE VIOLATION IF ANY, OF THE PROVISIONS OF SECTION 13 OF THE ACT AND ITS VARIOUS SUBSECTIONS ARE TO BE LOOKED INTO BY THE ASSESSING OFFICER WHIL E DECIDING THE ISSUE OF GRANT OF DEDUCTION UNDER SECTIONS 11 AND 12 OF THE ACT. THE CIT WHILE ISSUING THE EXTENSION OF EXEMPTION UNDER SECTION 80 G(5) OF THE ACT HAS A LIMITED ROLE TO PLAY I.E. TO SEE WHETHER THE ACTIVI TIES OF THE ASSESSEE TRUST WERE CHARITABLE IN NATURE. AS POINTED OUT IN THE PA RAS HEREINABOVE, THE ASSESSEE WAS ENGAGED IN PROMOTING EDUCATIONAL ACTIV ITIES BY WAY OF RUNNING SCHOOLS, COLLEGES, ETC. THE ACTIVITIES CARR IED ON BY THE ASSESSEE ITA NO 566 OF 2016 SAI LOVE HYDERABAD PAGE 5 OF 5 WERE PURELY CHARITABLE IN NATURE WHICH ENTITLED IT TO CLAIM THE EXEMPTION UNDER SECTION 80G(5) OF THE ACT. .. 22. EVEN OTHERWISE, WHILE GRANTING THE EXEMPTION UN DER SECTION 80G(5) OF THE ACT, THE HONBLE GUJARAT HIGH COURT IN ORPAT CHARITABLE TRUST VS. CIT (SUPRA) WHILE DECIDING THE ISSUE OF RENEWAL OF CERTIFICATE UNDER SECTION 80G(5) OF THE ACT, HELD THAT EVEN IF THE GR OUND ABOUT CONTRAVENTION OF SECTION 11(5) OF THE ACT WAS VALID LY TAKEN BY THE CIT, THAT WOULD HAVE BEARING ONLY AT THE POINT OF THE AS SESSMENT AND WOULD NOT BE A MATERIAL CONSIDERATION IN SO FAR AS THE GR ANTING APPROVAL UNDER SECTION 80G(5) OF THE ACT WAS CONCERNED 7. IN THE CASE BEFORE US, THERE IS NO ALLEGATION TH AT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE IN VIOLA TIONS OF THE PROVISIONS OF SECTION 12A OF THE ACT. IN VIEW OF TH E SAME, WE SET ASIDE THE ORDER OF THE CIT (E) AND DIRECT HIM TO GR ANT REGISTRATION U/S 80G OF THE ACT TO THE ASSESSEE. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST, 2016. S D/ - S D/ - (S.RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 24 TH AUGUST, 2016. VNODAN/SPS COPY TO: 1. K.K.GUPTA, F.C.A, CA 3464,DUNDOO VIHAR, RP ROAD, SECUNDERABAD 500003 2. COMMISSIONER OF INCOME TAX (EXEMPTIONS) 5 TH FLOOR, POSNETT BHAVAN, RAMKOTI, TILAK ROAD, HYDERABAD 500001 3. INCOME TAX OFFICER (EXEMPTION) WARD 4 HYDERABAD 4. THE DR, ITAT, HYDERABAD 5. GUARD FILE BY ORDER