Sant Zolebaba Sansthan Chikhali , Pune V. Commissioner of Income-Tax, Exemption, Pune

ITA 581/PUN/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0850 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 19 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: 29-10-2020
• 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.581/PUN/2020 SANT ZOLEBABA SANSTHAN CHIKHALI, C/O ADV. MANOJ SAWAKE & ASSOCIATES, OFFICE NO.110, FIRST FLOOR, POORNIMA TOWERS, SHANKAR SETH ROAD, PUNE-411037. PAN : AAKAS7021G ....... / APPELLANT / V/S. CIT, EXEMPTION, PUNE. / RESPONDENT ASSESSEE BY : SHRI BHUVANESH KANKANI 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 04.10.2020 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.581/PUN/2020 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE APPELLANT IS A TRUST REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 ON 31.01.1983. THE TRUST WAS FORMED WITH THE FOLLOWING OBJECTS :- A. CONDUCTING ALL THE FUNCTIONS RELATED TO SANT ZOLEBABA TEMPLE, B. CONDUCTING YATRA, C. CELEBRATING DEATH ANNIVERSARY (PUNYATITTHI) D. PROVIDING ACCOMMODATION TO YATRA PILGRIMS, E. PROVIDING RELIGIOUS AND PHILOSOPHICAL EDUCATION (ABOVE POINTS ARE AT S.NO 1 TO 6 OF OBJECT CLAUSE OF TRUST DEED AT ENCL.5) F. PROVIDING FREE MEDICAL FACILITIES TO THE NEEDY (S.NO 7 OF OBJECT CLAUSE OF TRUST (AT PAGE NO.5 OF ENCL 5), G. HELPING POOR AND NEEDY STUDENTS (S.NO 8 OF OBJECT CLAUSE OF TRUST (AT PAGE NO.5 OF ENCL 5), H. GAU-RAKSHAN (S.NO 9 OF OBJECT CLAUSE OF TRUST (AT PAGE NO.5 OF ENCL 5). 4. ON PERUSAL OF THE SAID APPLICATION, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HAD REQUESTED ON 08.06.2020 TO UPLOAD CERTAIN INFORMATION THROUGH ITBA PORTAL. THE SAID INFORMATION WAS DULY FILED THROUGH ITBA PORTAL. ON PERUSAL OF THE INFORMATION FURNISHED BY THE APPELLANT SOCIETY, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HAD OBSERVED THAT THE APPELLANT SOCIETY HAD (A) NOT PROVIDED INFORMATION AS TO SOURCE OF ADDITION MADE TO THE VARIOUS CORPUS FUND FOR THE FINANCIAL YEAR 2018-19; (B) THE APPELLANT SOCIETY HAD NOT FILED THE EVIDENCE IN SUPPORT OF THE EXPENDITURE INCURRED FOR THE FINANCIAL YEARS 2016-17 TO 2018-19 RESPECTIVELY; AND, (C) THE APPELLANT SOCIETY HAD NOT PAID ANY TAXES ON DONATIONS WHICH ARE CREDITED TO THE CORPUS FUND BEFORE GRANT OF REGISTRATION. 5. FURTHER, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HAD PROCEEDED TO EXAMINE THE TAXABILITY OF THE CONTRIBUTION RECEIVED TOWARDS THE CORPUS FUNDS RELYING UPON THE SEVERAL JUDICIAL PRECEDENTS, FINALLY HE 3 ITA NO.581/PUN/2020 CONCLUDED THAT SINCE THE APPELLANT TRUST HAD FAILED TO PAY THE TAXES ON DONATIONS RECEIVED FORMING PART OF CORPUS FUNDS. ACCORDINGLY, HE REJECTED THE APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. 6. BEING AGGRIEVED BY THE ORDER OF LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE, THE APPELLANT SOCIETY IS BEFORE US IN THE PRESENT APPEAL. 7. BEFORE US, IT IS SUBMITTED THAT THE ISSUE OF GRANT OF REGISTRATION AND ASSESSMENT OF INCOME ARE DISTINCT AND SEPARATE. LD. AR FOR THE ASSESSEE RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF VASTUSHODH FOUNDATION VS. CIT VIDE ITA NO.562/PUN/2016 DATED 29.01.2019 AND THE JUDGEMENT OF THE HONBLE RAJASTHAN HIGH COURT AT JAIPUR BENCH IN THE CASE OF CIT VS. SHEKHAWATI PUBLIC SCHOOL SAMITI IN INCOME TAX APPEAL NO.173/2018 DATED 10.07.2018. 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 WHETHER OR NOT THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE WAS JUSTIFIED IN REJECTING THE GRANT OF REGISTRATION U/S 12AA OF THE ACT? IT IS SETTLED PROPOSITION OF LAW THAT AT THE TIME OF GRANT OF REGISTRATION, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE IS ONLY REQUIRED TO EXAMINE WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE OR NOT AND THE ACTIVITIES OF THE TRUST ARE GENUINE. IN THIS REGARD, RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST VS. CIT, 272 TAXMAN 7 CAN BE PLACED. FROM PERUSAL OF THE IMPUGNED ORDER, IT IS CLEAR THAT THE LD. 4 ITA NO.581/PUN/2020 COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE HAD REJECTED THE GRANT OF REGISTRATION U/S 12AA OF THE ACT ON NONE OF THE ABOVE GROUNDS. ON EXAMINATION OF FINANCIAL STATEMENTS OF LAST THREE FINANCIAL YEARS, THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE OBSERVED THAT THE DONATION RECEIVED TOWARDS CORPUS FUNDS ESCAPED ASSESSMENT TO TAX AND, THEREFORE, DENIED THE REGISTRATION. IT IS TRITE LAW THAT THE GRANT OF REGISTRATION AND THE ISSUE OF ASSESSMENT OR EXEMPTION U/S 11 OF THE ACT ARE SEPARATE AND DISTINCT. THE PROCESS OF REGISTRATION IS NOT ON OCCASION FOR DECIDING THE ISSUE OF EXEMPTION OF DONATION U/S 11 OF THE ACT. THE ISSUE OF EXEMPTION CANNOT BE EXAMINED DURING THE PROCESS OF REGISTRATION. 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. 10. 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 OF THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE IN DENYING THE GRANT OF REGISTRATION U/S 12AA OF THE ACT CANNOT BE SUSTAINED IN THE EYES OF LAW. IN THE CIRCUMSTANCES, WE SET-ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE AND DIRECT THE LD. COMMISSIONER OF INCOME TAX, EXEMPTION, PUNE TO GRANT THE 5 ITA NO.581/PUN/2020 REGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. 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.