PARMANDAND FOUNDATION, MUMBAI V. DIT (E), MUMBAI

ITA 5873/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3795 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH OJHA
• Keywords: Charitable institution; Period of limitation; Time period of passing order
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSA IN, JM ./ I.T.A. NO. 5873/MUM/2012 ( / ASSESSMENT YEAR: 2012-13) PARMANAND FOUNDATION SHOP NO.8, TRIPTI SADAN, SHANTAWADI, ANDHERI (W), MUMBAI-400 058. / VS. DIRECTOR OF INCOME-TAX (EXEMPTION) 6 TH FLOOR, R.N. 616, PIRAMAL CHAMBERS, PAREL, MUMBAI-12. ./ ./PAN/GIR NO. AGSPK 3020G ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI PRAKASH OJHA / DATE OF HEARING : 20/11/2015 !'# / DATE OF PRONOUNCEMENT : 10/08/2016 $% / O R D E R PER SANDEEP GOSAIN, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTION) PASSED U/S 80G OF THE ACT DATED 16.08.2012 ON THE GROUNDS OF APPEAL MENTIONED HEREIN BELOW. 2 ITA NO. 5873/MUM/2012(A.Y. 2012-13) PARMANAND FOUNDATION VS. DIT(E) 1. ON THE FACTS AND UNDER THE LAW AS PER THE PROV ISIONS OF THE SECTION 80G(5) READ WITH RULE 11AA OF THE ACT AND IT RULES 1962 (THE RU LES), THE LEARNED DIRECTOR OF INCOME- TAX (EXEMPTION) MUMBAI HAS ERRED BY PASS ING AN ORDER REJECTING THE REQUEST OF THE ASSESSEE APPELLANT TRU ST FOR GRANT OF CERTIFICATE U/S 80G, BEYOND THE LIMITATION PERIOD OF 6 MONTHS FROM THE DATE OF APPLICATION AS PROVIDED UNDER RULE 11AA OF THE RULES. THEREFORE IT IS TO BE PRESUMED THAT SUCH ORDER IS INVALID AND THE APPELLANT TRUST IS PRESUME D TO HAVE BEEN GRANTED A CERTIFICATE U/S 80G ON LAPSE OF TIME OF LIMITATION AND NECESSARY INSTRUCTION FOR ISSUE OF SUCH CERTIFICATE BE GIVEN TO THE OFFICE OF THE DIRECTOR OF INCOME TAX (EXEMPTION) MUMBAI. 2. ON THE FACTS AND UNDER THE LAW AS PER THE PROVI SIONS OF THE SECTION 80G(5) READ WITH RULE 11AA OF THE ACT AND IT RULES 1962 (THE RU LES). THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION) HAS ERRED BY PASSING AN O RDER REJECTING THE REQUEST OF THE ASSESSEE APPELLANT TRUST FOR GRANT O F CERTIFICATE U/S 80G, TRAVELLING BEYOND THE SCOPE OF ENQUIRY AND REASONS FOR REJECTI ONS PROVIDED UNDER THE SAID PROVISIONS OF THE ACT AND THE RULES AND GIVING A RE ASON FOR REJECTION WHICH IS BEYOND THE VALID REASON PROVIDED UNDER RULE 11AA(5) OF THE RULES AS' WHERE IS THE COMMISSIONER IS SATISFIED THAT ONE OR MORE OF T HE CONDITIONS LAID DOWN IN CLAUSE (I) TO (V) OF SUB SECTION (5) OF SECTION 80G ARE NOT FULFILLED, HE SHALL REJECT THE APPLICATION FOR APPROVAL, AFTER RECORDING THE R EASONS FOR SUCH REJECTION IN WRITING .' AND WHEREAS AL THE CONDITIONS LAID IN CL AUSE (I) TO (V) OF SUB SECTION 5 OF SECTION 80G ARE COMPILED BY THE APPELLANT ASSESSEE TRUST. 3. THE APPELLANT RESERVES THE RIGHT TO ADD, AMEND, MODIFY, OR SUBTRACT ANY GROUND OF APPEAL AT ANY STAGE OR HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST I.E. PARMANAND FOUNDATION HAD FILED AN APPLICATION ON 25.11.2011 F OR GRANT OF CERTIFICATE U/S 80G OF THE I.T. ACT, 1961. AS PER THE ASSESSEE THE APPL ICATION WAS MADE IN THE PRESCRIBED FORM 10G AND WAS ACCOMPANIED WITH VARIOU S DETAILS AND DOCUMENTS. THE DIRECTOR OF INCOME-TAX (EXEMPTION) AFTER SEEKIN G REPLY AND DETAILS FROM THE ASSESSEE/APPLICANT HAD REJECTED THE APPLICATION FOR GRANT OF CERTIFICATE U/S 80G OF THE ACT VIDE ORDER DATED 16.08.2012. 3 ITA NO. 5873/MUM/2012(A.Y. 2012-13) PARMANAND FOUNDATION VS. DIT(E) 3. AGGRIEVED BY THE ORDER OF THE DIRECTOR OF INCOME -TAX (EXEMPTION) THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN ABOVE. 4. AT THE VERY OUTSET, WHEN THE CASE WAS CALLED FOR HEARING, NONE HAS APPEARED ON BEHALF OF ASSESSEE AND ON THE PERUSAL OF ORDER S HEET WE HAVE NOTICED THAT NOBODY WAS APPEARING ON BEHALF OF ASSESSEE FOR THE LAST DATES. ALTHOUGH THE NOTICES WERE ALSO SERVED UPON THE ASSESSEE FOR APPEARING BE FORE US, BUT EVEN THEN THE ASSESSEE HAS NOT PREFERRED TO APPEAR AND EVEN NO AP PLICATION FOR ADJOURNMENT WAS MOVED BEFORE US. ON THE OTHER HAND LD. DR IS PRESEN T IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WIT H THE HEARING OF THE CASE EX- PARTE WITH THE ASSISTANCE OF THE LD. DR AND THE MAT ERIAL ON RECORD. GROUND NO.1 &2 BOTH THE GROUNDS RAISED BY THE ASSESSEE RELATES TO REJECTING THE REQUEST FOR GRANT OF CERTIFICATE U/S 80G AND SINCE BOTH GROUNDS ARE INTER-CONNECTED AND INTER- RELATED THEREFORE WE THOUGHT IT FIT TO DISPOSE OFF THE SAME THROUGH THE PRESENT COMMON ORDER. 4 ITA NO. 5873/MUM/2012(A.Y. 2012-13) PARMANAND FOUNDATION VS. DIT(E) 5. BEFORE WE COME ON TO THE MERITS OF THE CASE WE W ANT TO ANALYSE THE ORDERS PASSED BY THE DIRECTOR OF INCOME-TAX (EXEMPTION) A ND THE OPERATIVE PARA OF THE SAME IS REPRODUCED BELOW: 4. IN RESPONSE TO THE SAME THE TRUST HAS MADE ITS SUBMISSION ON 13.06.2012 & 18.07.2012. THE RELEVANT PORTION OF THE SUBMISSION IS REPRODUCED AS UNDER :- 'THE TRUST HAS CARRIES OUT THE CHARITABLE ACTIVITY AND THE COPY OF SUCH PROOF HAS BEEN ALREADY BEEN SUBMITTED TO YOUR GOOD OFFICE WIT H LETTER DATED 28.12.11. FURTHER THE FUND WHICH LIES BEEN RECEIVED BY THE TR UST SUBSEQUENTLY IS TOWARDS THE CORPUS OF THE TRUST WITH SPECIFIC PURPOSE FOR DEVEL OPING TRAINING AND MEDITATION CENTER WITHIN THE STATE OF MAHARASHTRA AND THEY WIL L BE UTILIZED FOR THAT SPECIFIC PURPOSE ON ACCUMULATION OF REQUIRED/ REQUISITE FUND . THUS AS POINT OUT BY YOUR GOOD OFFICE THAT NO CHARITABLE ACTIVITY HAS BEEN CA RRIED OUT BY THE TRUST IS NOT CORRECT. WITH REGARDS TO DETAILS OF DONATION RECEIVED INCLUD ING THE CORPUS IS ENCLOSED HEREWITH FOR YOUR READY REFERENCE. IN THIS REGARDS WE WOULD LIKE TO STATE THAT THE TRUST HAD ORGANIZED FUNCTION REGARDING THERE FUTURE PROSPECTS AND IN THIS REGARDS THEY HAD COLLECTED THE DONATION WHICH HAS BEEN DEPO SITED INTO THE BANK. THE LIST OF DONOR ALONGWITH THE PHOTGHRAPH AND COVERAGE OF T HE SAME IN THE LOCAL NEWSPAPER OF THE FUNCTION ARE ENCLOSED HEREWITH. TH US IT CAN BE SEEN THAT TRUST HAS INITIATED THE PROCESS TO TAKE THE DONATION SO T HAT THE PURPOSE OF THE TRUST CAN BE ACHIEVED AND IT CAN ARRANGE FOR THE REQUISITE FU ND FOR THE SAME THROUGH DONATION.' 4. THE SUBMISSION MADE BY THE TRUST IS DULY CONSIDE RED. IN THE SUBMISSION FILED ON 28.12.2011 THE TRUST HAS FILED XEROX COPY BILL DATED 02.05.2011 ISSUED BY ASHA TRADERS AMOUNTING TO RS.1 ,326/- TOWARDS PURCH ASE OF NOTEBOOKS, COMPASS BOX, SCHOOL BAG ETC. HOWEVER THE BILL ISSUED IS NOT GENUINE SINCE CS POINTED OUT ABOVE, ILL THE AUDITED INCOME & EXPENDITURE ACCOUNT FILED AS ON 31.03.11 & 31.03.12, THIS EXPENSES IS NOT REFLECTED. THE GENUI NITY OF THESE EXPENSES IS {NUS NOT PROVED. MOREOVER THE TRUST HAS NOT OFFERED ANY EXPLANATION WHY THE EXPENSES INCURRED IS NOT REFLECTED IN THE INCOME & EXPENDITU RE ACCOUNT. 5. OUT OF THE TOTAL DONATION RECEIVED OF RS.6,52,36 1/- THE CORPUS DONATION IS RS.90,000/-. THE TRUST HAS RECEIVED GENERATION DONA TION OF RS.5,62,361/- WHICH WAS REQUIRED TO BE USED FOR THE CHARITABLE OBJECTS TOWARDS POVERTY, EDUCATION AND RELIEF TO POOR, WHICH THE TRUST HAS FAILED TO D O SO INSPITE OF HAVING FUNDS. BESIDES THE PURPOSE OR GETTING APPROVAL U/S.80G IS TO ENCOURAGE MORE DONATIONS FROM DONORS WHICH COULD BE CERTIFIED FOR CHARITABLE PURPOSE WHICH AN INSTITUTION IS PURSUING. HOWEVER M THE PRESENT CASE THE TRUST I S HAVING SURPLUS FUNDS AS ITS ACCOUNTS WHICH REMAINED TO BE UTILIZED BY IT WHERE QUESTIONS ARISES FOR GETTING 5 ITA NO. 5873/MUM/2012(A.Y. 2012-13) PARMANAND FOUNDATION VS. DIT(E) MORE DONATIONS FROM DONORS AND TAKING APPROVAL U/S. 80G OF I.T. ACT WHEN NO CHARITABLE ACTIVITIES ARE BEING CARRIED OUT BY THE TRUST. 6. AS THE TRUST HAS FAILED TO CARRY OUT THE CHARITA BLE ACTIVITIES AS PER ITS OBJECTS INSPITE OF HAVING FUNDS IN FORM OF GENERATION DONAT IONS RECEIVED THE APPLICATION MADE FOR CERTIFICATE U/S.80G IS HEREBY REJECTED. 5.1 AFTER ANALYZING THE AFORE MENTIONED ORDER, WE F OUND THAT THE DIT(E) HAS DULY CONSIDERED THE DOCUMENTS/DETAILS FILED BY THE ASSESSEE AND HAS RECORDED A FINDING TO THE EFFECT THAT THE BILL ISSUED ARE NOT GENUINE AS THESE EXPENSES ARE NOT REFLECTED IN THE AUDITED INCOME & EXPENDITURE ACCOU NT AND SINCE THE GENUINITY OF THESE EXPENSES WERE NOT PROVED BY THE APPLICANT AND NO EXPLANATION WAS OFFERED AS TO WHY THE EXPENSES INCURRED ARE NOT REFLECTED IN T HE INCOME & EXPENDITURE ACCOUNT. THE DIT(E) ALSO OBSERVED THAT THE TRUST HA S RECEIVED GENERATION DONATION OF RS.5,62,361/- WHICH WAS REQUIRED TO BE USED FOR THE CHARITABLE OBJECTS BUT THE TRUST HAS FAILED TO DO SO. THE DIT(E) ALSO FOUND TH AT IN THE PRESENT CASE THE TRUST IS HAVING SURPLUS FUNDS IN ITS ACCOUNT WHICH REMAINED UN-UTILIZED. THEREFORE NO QUESTIONS HAS ARISEN FOR GETTING MORE DONATIONS FRO M DONORS AND TAKING APPROVAL U/S 80G OF THE ACT WHEN MORE PARTICULARLY NO CHARIT ABLE ACTIVITIES ARE BEING CARRIED OUT BY THE TRUST. 7. AFTER ANALYZING THE AFORE MENTIONED ORDER WE FOU ND THAT THE CIT(A) HAS DEALT WITH ALL THE ISSUES AND HAS PASSED JUDICIOUS AND WELL REASONED ORDER AND NO NEW CIRCUMSTANCES HAVE BEEN BROUGHT BEFORE US IN OR DER TO CONTROVERT OR REBUT THE 6 ITA NO. 5873/MUM/2012(A.Y. 2012-13) PARMANAND FOUNDATION VS. DIT(E) FINDINGS RECORDED BY THE CIT(A). THEREFORE, WE SEE NO REASON TO DEVIATE OR INTERFERE INTO THE FINDINGS RECORDED BY THE CIT(A) AND HENCE, WE REJECT THESE GROUNDS RAISED BY THE ASSESSEE AND UPHOLD THE ORDER OF THE CIT(A). 8. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 10TH AUGUST , 2016 SD/- SD/- (JASON P. BOAZ) (SANDEEP GOSAIN) $ / ACCOUNTANT MEMBER &' $ / JUDICIAL MEMBER ( ) MUMBAI; *$ DATED :10.08.2016 PS. ASHWINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT - CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI