Jat Sewa Singh, Delhi V. CIT(Exemption), New Delhi

ITA 5817/DEL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9659 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER I.T.A.NO. 5817/DEL/2019 [ASSESSMENT YEAR: 2019-20] ORDER PER K. NARSIMHA CHARY, J.M. AGGRIEVED BY THE REJECTION OF THE APPLICATION FOR G RANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX A CT, 1961 (FOR SHORT THE ACT), ASSESSEE PREFERRED THIS APPEAL. 2. LD. AR, AT THE OUTSET, SUBMITTED THAT THE THOUGH IN PARAGRAPH NO. 9 OF HIS ORDER LD. CIT(A) OBSERVED TH AT THE PROVISIONS UNDER SECTION 12AA STIPULATES TWO CONDIT IONS FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, NAMELY, THE OBJECTS OF JATSEWA SANGH, B - 21, 2 ND FLOOR, RAJDHANI PARK, 40 FT. ROAD, MUNDKA, NANGLOI, DELHI PAN-AACTJ6647E VS CIT (EXEMPTION), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. R.S. SINGHVI, CA RESPONDENT BY MS. NIDHI SRIVASTAVA, CIT DR DATE OF HEARING 16 . 09 . 2019 DATE OF PRONOUNCEMENT 23 .0 9 .2019 2 THE SOCIETY / TRUST TO BE CHARITABLE IN NATURE AND THE ACTIVITIES OF THE SOCIETY / TRUST SHOULD BE GENUINE, BUT REJECTED THE REQUEST OF THE ASSESSEE ON THE GROUND THAT IN THE ABSENCE OF P ROPER EXPLANATION IN RESPECT OF DONATIONS RECEIVED, THE G ENUINENESS OF THE ACTIVITIES OF THE TRUST CANNOT BE ESTABLISHED. 2. IT IS HIS FURTHERSUBMISSION THAT THERE IS A CATE NA OF DECISIONS INCLUDING THE DECISION OF HONBLE JURISDI CTIONAL HIGH COURT TO THE EFFECT THAT AT THE TIME OF REGISTRATIO N, THE RELEVANT CONSIDERATION IS ONLY IN RESPECT OF THE OBJECTS OF THE SOCIETY, AND THE PROPRIETY OF THE DONATIONS WILL FALL FOR CONSID ERATION AT THE TIME OF ASSESSMENT ITSELF. HE PLACED RELIANCE ON CIT VS. BABU RAM EDUCATIONAL SOCIETY [2018] 96 TAXMANN.COM 606 (ALL HC), BABU RAM EDUCATIONAL SOICETY VS. CIT [2013] 26 ITR (T) 351 ( AGRA), DIT VS. FOUNDATION OF OPTHALMIC& OPTOMETRY RESEARCH EDUCATI ON CENTRE [2013] 355 ITR 361 (DELHI HC), FATEH CHAND TRUST AN D COLLEGE COMMITTEE VS. CIT(E) [2018] 67 ITR (T) 564 (AGRA), KUL FOUNDATION VS. CIT [2015] 54 TAXMANN. COM 143 (PUNE) AND M/S UJJWA L SHIKSHA SAMITI VS. CIT (E). 4. PER CONTRA, LEARNED DR SUBMITTED THAT IN VIEW OF THE FACT THAT MOST OF THE DONATIONS WERE RECEIVED FROM THE E NTITIES WHICH HAVE NO LEGAL STATUS, THE GENUINENESS OF THE DONATI ONS REMAINED UNVERIFIABLE AND, THEREFORE, IT CANNOT BE SAID THAT THE ACTIVITIES OF THE SOCIETY WOULD BE GENUINE OR LEGAL. ON THIS PREM ISE, SHE JUSTIFIED THE IMPUGNED ORDER. 3 5. WE HAVE GONE THROUGH THE RECORD. IT COULD BE SEE N FROM THE TRUST DEED DATED 12.5.2017 AND ALSO AS NOTED BY THE LD. CIT(A) IN HIS ORDER VIDE PARAGRAPH NO. 2, THE OBJECTS OF T HE TRUST ARE AS FOLLOWS:- I. TO PROMOTE EDUCATIONAL DEVELOPMENT FOR UPLIFTMENT O F ADULTS AND CHILDREN OF ALL AGES WITHOUTANY DISTINCT ION OF CASTE OR RELIGION AND IN THE INTEREST OF MANKIND IN GENERAL AND TO OPEN SCHOOLS, COLLEGES, UNIVERSITY AND INSTITUTIONS FOR PROVIDING EDUCATION AND IMPARTING VOCATIONAL TRAINING. II. TO PROMOTE AND RUN COACHING INSTITUTE FOR COMPETITI VE EXAMINATION SKILL DEVELOPMENT CENTRES/ INSTITUTIONS FOR IMPARTING TRAINING TO THE PEOPLE OF ALL AGES IN COVERING VARI OUS AREAS OF WORKS SO AS TO ENABLE THEM TO TAKE UP JOBS FOR THEI R SURVIVAL AND SUSTAINABILITY. III. TO PURCHASE LAND, BUILDING AND TO CONSTRUCT FOR SET TING UP SCHOOLS, COLLEGES, TRAINING INSTITUTION,COACHING CE NTRES OR TAKE ON LEASE THE SCHOOLS, COLLEGES TRAINING INSTITUTIONS, COACHING CENTRES OR TAKE ON LEASE, THE SCHOOLS/INSTITUTIONS COLLEGES ALREADY EXISTING AND BEING RUN BY REGISTERED SOCIETIES, CORPORATES, STATE/CENTRAL GOVT. DEPARTMENT, GOVT. BODIES LOCAL GOVERNMENT, TR USTS, MULTI LATERAL AGENCIES AND INDIVIDUALS. IV. TO PROMOTE, DEVELOP MODERN AGRICULTURE TECHNOLOGIES BY UNDERTAKING ACTIVITIES OF RESEARCHAND DEVELOPMENT I N COOPERATION WITH GOVERNMENTS, NGOS FARMERS EDUCATION INSTITUTIO NS, UNIVERSITIES, MULTILATERAL AND MULTINATIONAL AGENCI ES. 6. IT COULD BE SEEN FROM THE IMPUGNED ORDER THAT TH E LD. CIT(A) DOES NOT DISPUTE ANY OF THE OBJECTS TO BE CH ARITABLE IN NATURE.ALL HIS OBJECTION, HOWEVER, REVOLVES ON THE FULCRUM OF THE SOURCE OF THE DONATIONS AND VERIFIABILITY OF THE SA ME. AS RIGHTLY CONTENDED BY THE LD. AR, THE SOURCE AND GENUINENESS OF DONATIONS AND THE CONDUCT OF THE ACTIVITIES OF THE TRUST WOULD FALL FOR CONSIDERATION AT THE TIME OF ASSESSMENT AND IT IS NOT RELEVANT 4 FACTORS TO REJECT THE REGISTRATION UNDER SECTION 12 AA OF THE ACT AS IS HELD IN THE DECISION HELD BY THE ASSESSEE ENUMER ATED (SUPRA). FURTHER IN DIT VS. FOUNDATION OF OPTHALMIC& OPTOMETRY RESEARCH EDUCATION CENTRE (SUPRA), THE HONBLE JURISDICTIONAL HIGH COURT CLEARLY HELD THAT WHILE EXAMINING APPLICATION UNDER SECTION 12AA, CONCERNED COMMISSIONER/DIRECTOR IS NOT REQUIRED TO EXAMINE THE QUESTION WHETHER THE TRUST HAD ACTUALLY COMMENCED A ND CARRIED ON ITS CHARITABLE ACTIVITIES, AND STATUTE DOES NOT PRESCRIBE A WAITING PERIOD FOR REGISTRATION TILL THE TRUST COMM ENCE ITS ACTIVITIES AND APPLIES THE DONATIONS PROPERLY. 7. IN VIEW OF THE SETTLED POSITION OF THE LAW, WE A RE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) IS NOT JUSTI FIED IN REJECTING THE REGISTRATION AND THEREFORE, WE DIRECT THE LD. C IT(A) TO GRANT REGISTRATION TO THE ASSESSEE TRUST UNDER SECTION 12 AA OF THE ACT. 87. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2019. SD/- SD/- (G.S. PANNU) (K. NARSIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 23 RD SEP, 2019 SH 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASS ISTANT REGISTRAR DRAFT DICTATED 16.09.2019 DRAFT PLACED BEFORE AUTHOR APPROVED DRAFT COMES TO THE SR.PS/PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. DATE OF UPLOADING ON THE WEBSITE 23.09.2019