DELHI MAHILA SAMAJ TRUST, NEW DELHI V. ITO(E), TRUST WARD- III, NEW DELHI

ITA 5831/DEL/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5530 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 12-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: P C YADAV MS NIDA FATIMA
• Keywords: Charitable institution; Rule of consistency; Assessment record; Set aside
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI G.D. AGARWAL, VICE PRESIDENT & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.5830 AND 5831/DEL/2017 ASSESSMENT YEAR: 2010-2011 AND 2013-14 DELHI MAHILA SAMAJ TRUST, PLOT NO 52, TUGHLAKABAD IND. AREA, NEW DELHI PAN: AAATD0152E VS ITO (E), TRUST WARD III, NEW DELHI APPELLANT RESPONDENT ASSESSEE BY SHRI P.C.YADAV, ADVOCATE MS. NIDA FATIMA, ADVOCATE REVENUE BY MS ASHIMA NEB, SR. DR ORDER PER BENCH AGGRIEVED BY THE THE ORDERS DATED 01/06 2017 AND 05/06/2017 IN APPEAL RELATING TO THE ASSESSMENT YEARS 2010-11 AND 2013-14 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS)-40, NEW DELHI {CIT(A)} IN ASSESSEE PREFERRED THIS APPEAL. DATE OF HEARING 05.11.2018 DATE OF PRONOUNCEMENT 05.11.2018 2 2. BRIEF FACTS OF THE CASE EMANATING FROM THE ORDERS OF THE AUTHORITIES BELOW AND AS ARGUED BY THE PARTIES ARE THAT THE ASSESSEE IS A REGISTERED SOCIETY UNDER THE PROVISIONS OF THE SOCIETIES REGISTRATION ACT, 1860 AND 29 TH OF JUNE 1959 AND ALSO UNDER THE PROVISIONS OF SECTION 12 A (A) OF THE INCOME TAX ACT, 1961 (THE ACT) ON 09/07/1974. THE ASSESSEE HAS BEEN CARRYING ON THE CHARITABLE ACTIVITIES WITHIN THE MEANING OF SECTION 2 (15) OF THE ACT. DURING THE SCRUTINY OF THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-11 AND 2013-14, ASSESSING OFFICER FOUND THAT THE ASSESSEE WAS RECEIVING RENTAL INCOME UNDER THE HEAD OF INCOME FROM HOUSE PROPERTY BESIDES PLACING OUT SOME PORTION OF ITS PROPERTY/LAND TO RELIANCE, VODAFONE, NDIM AND RECEIVING RENTAL AS WELL AS MAINTENANCE CHARGES. AT THE SAME TIME FROM THE INCOME AND EXPENDITURE ACCOUNTS OF THE ASSESSEE LD. ASSESSING OFFICER FOUND THAT NO EXPENSES RELATED TO THE PROMOTION OF THE CARS OF UNDERPRIVILEGED SECTIONS OF SOCIETY ESPECIALLY GIRL CHILD AND DOWNTRODDEN WOMAN. LD. AO, THEREFORE, REACHED A CONCLUSION THAT THE ASSESSEE WAS INVOLVED IN THE ACTIVITIES OF RENTING OUT PROPERTIES, COLLECTION OF MAINTENANCE CHARGES AND OTHER FEES AND ALL THE RECEIPTS OF THE ASSESSEE ARE RENTAL/CONTRACTUALLY NATURE. GOING BY THE DOMINANT ACTIVITIES CARRIED OUT BY THE ASSESSEE UNDER THE GARB OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS PER THE DEFINITION CONTAINED IN SECTION 2 (15) OF THE ACT, ASSESSING OFFICER HELD THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE WERE NOT CHARITABLE IN NATURE AND THEREFORE THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION OF INCOME UNDER SECTION 11 AND 12 OF THE ACT. 3. WHEN THE ASSESSEE PREFERRED APPEALS AGAINST THE ASSESSMENT ORDERS FOR THESE 2 YEARS, LD. CIT(A) RECORDED A FINDING THAT IT IS VERY IMPORTANT THAT THE 3 OBJECTS OF THE TRUST SHOULD BE KNOWN TO CONSIDER WHETHER THE PURPOSES ARE CHARITABLE OR NOT, IS ALSO NECESSARY TO CONSIDER THE ENTIRE OBJECT AND CONSTITUTION BEFORE A MEETING ANY INFERENCE, BUT THE SAID OBJECTS COULD NOT BE VERIFIED FROM THE TRUST DEED WHICH WAS SUBMITTED BY THE ASSESSEE. ACCORDING TO THE LD. CIT(A) THE DOCUMENT THAT WAS FILED APPEARS TO BE THE VIRGINAL CUSTODY IN WHICH THE OBJECTS OF THE TRUST HAVE NOT BEEN LAID DOWN BUT AS PER CLAUSE 3 OF THE SAID IT TRUSTED AIDE, THESE HAVE BEEN LEFT TO THE TRUSTEES TO DECIDE. FURTHER IT COULD BE SEEN FROM THE ASSESSMENT RECORD THAT NO DOCUMENT WAS FILED INCLUDING THE MEMORANDUM OF ASSOCIATION ARE ANYWAYS IT TRUSTED AIDE OR ANY OTHER DOCUMENT WHICH LAYS DOWN THE OBJECTS OF THE TRUST. INASMUCH AS IT IS IMPORTANT THAT THE OBJECTS OF THE TRUST MUST BE CHARITABLE IN NATURE TO CLAIM ANY EXEMPTION LD. CIT(A) HELD THAT THE PROPERTY MENTIONED IN THE CUSTODY AS THE PROPERTY UNDER THE TRUST IS NOT THE SAME AS THE ONE WHICH IS THE PROPERTY FROM WHICH THE ASSESSEE HAS BEEN DERIVING RENTAL INCOME AND CARRYING OUT ITS ACTIVITIES. ON THIS PREMISE LD. CIT(A) DISMISSED THE APPEALS. 4. THE ASSESSEE IS THEREFORE BEFORE US IN THESE APPEALS. IT IS THE ARGUMENT OF THE LD. AR THAT IS NOT AS THOUGH FOR THE 1 ST TIME THEIR RETURNS OF INCOME OF THE ASSESSEE WAS SCRUTINISED BY THE AUTHORITIES AND AS A MATTER OF FACT QUITE FOR A LONG TIME THE AUTHORITIES BELOW HAVE BEEN ACCEPTING THE ACTIVITIES OF THE ASSESSEE IS CHARITABLE AND MORE PARTICULARLY THE ASSESSEE HAS BEEN RECEIVING THE RENTS AS NOTED IN THE ASSESSMENT ORDERS IN THE EARLIER YEARS ALSO. HOWEVER STRANGELY LD. CIT(A) RECORDED THAT THE TRUST DEED DOES NOT SPELL OUT THE OBJECTS OF THE TRUST BUT AS PER CLAUSE 3 OF THE SAID TRUST DEED IT WAS LEFT TO THE TRUSTEES TO DECIDE. HE SUBMITTED THAT QUITE FOR A LONG TIME THE ASSESSEE HAS 4 BEEN RECEIVING THE RENTS AND APPLYING THEM FOR CHARITABLE PURPOSES, AND BOTH IN EARLIER AND SUBSEQUENT YEARS RUNNING UNACCEPTED THE VERY SIMILAR ACTIVITIES OF THE ASSESSEE IS CHARITABLE IN NATURE. 5. PER CONTRA, LD. DR PLACE HEAVY RELIANCE ON THE ORDER OF THE 1 ST APPELLATE AUTHORITY TO THE EFFECT THAT THERE IS NO DOCUMENTARY EVIDENCE TO BRING OUT THE PURPOSES AND OBJECTIVES OF THE TRUST AND THE MATERIAL FURNISHED BY THE ASSESSEE IS NOT ENOUGH TO REACH A DIFFERENT CONCLUSION THAT THE ASSESSEE HAS BEEN CONDUCTING THE TRUST IN ACCORDANCE WITH THE TRUST OBJECTIVES. SHE SUBMITTED THAT WHEREVER THE ASSESSEE HAS BEEN CONDUCTING SIMILAR ACTIVITIES FOR THE EARLIER AND SUBSEQUENT YEARS AND WAS ACCEPTED BY THE LD. ASSESSING OFFICER HAS TO BE VERIFIED, WITHOUT WHICH IT WOULD NOT BE REASONABLE TO REACH A CONCLUSION THAT BY APPLYING THE RULE OF CONSISTENCY THE ASSESSEE HAS BEEN CONDUCTING THE ACTIVITIES IN ACCORDANCE WITH THE OBJECTIVES OF THE TRUST AND SIMILAR ACTIVITIES HAVE IN FACT BEEN CONDUCTED BY THE ASSESSEE BOTH IN THE EARLIER AND SUBSEQUENT YEARS. 6. WE HAVE GONE THROUGH THE RECORD. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT TO MEET THE EXPENSES TO RUN THE CHARITABLE PROGRAMS, AS PERMITTED BY THE DDA, THE ASSESSEE HAS BEEN LETTING OUT 25% OF THEIR BUILDINGS, AND THE BALANCE AMOUNT WHICH IS NOT USED IN A PARTICULAR YEAR ARE TRANSFERRED TO CARCASS FUNDS TO BE UTILISED IN THE NEXT YEAR AND IS KEPT IN BANKS ONLY FOR READY LIQUIDITY. THE AUTHORITIES BELOW, HOWEVER, NOT ACCEPTED THIS PLEA TAKEN BY THE ASSESSEE. 7. BE THAT AS IT MAY, AS RIGHTLY POINTED OUT BY THE LD. DR THAT WHETHER THE ASSESSEE HAS BEEN CARRYING OUT SIMILAR ACTIVITIES IN RESPECT OF OTHER YEARS 5 ALSO AND A RULE OF CONSISTENCY DEMANDS THAT THE AUTHORITIES SHOULD HAVE TAKEN A CONSISTENT VIEW FOR THIS YEAR ALSO IS A VERIFIABLE FACT WITHOUT WHICH IT IS NOT POSSIBLE TO REACH A DEFINITE CONCLUSION IN RESPECT OF THE YEARS UNDER CONSIDERATION. WE, THEREFORE, FIND THAT IT IS A FIT CASE TO SET ASIDE THE IMPUGNED ORDERS AND RESTORE THE ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER FOR VERIFICATION WHETHER THERE IS ANY CHANGE IN THE ACTIVITIES OF THE ASSESSEE DURING THE YEARS UNDER CONSIDERATION AND IF NOT TO CONSIDER AS TO WHY BY FOLLOWING THE RULE OF CONSISTENCY, A SIMILAR VIEW AS WAS TAKEN FOR THE OTHER YEARS SHOULD NOT BE TAKEN FOR THESE YEARS ALSO. 8. WITH THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDERS AND RESTORE THE ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER FOR VERIFICATION AND CONSIDERING THE MATTER AFRESH IN THE LIGHT OF THE ABOVE OBSERVATIONS. 9. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH NOVEMBER , 2018. SD/- SD/- (G.D. AGARWAL) (K. NARASIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 5 TH NOVEMBER, 2018 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 DRAFT DICTATED ON 05.11.2018 DRAFT PLACED BEFORE AUTHOR 05.11.2018 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON DATE OF UPLOADING ORDER ON THE WEBSITE 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.