Sri. B.S. Padmamma Charitable Trust, Bangalore V. CIT, Bangalore

ITA 603/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7602 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-08-2017
• Assessment Year: misc
• Appeal Filed On: 24-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution; Principle of natural justice; Non compliance
• Section: 80G; 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 603 /BANG/201 6 SRI B S PADMAMMA CHARITABLE TRUST, NO. 20, 2 ND MAIN, BINNY LAYOUT, ATTIGUPPE, VIJAYANAGAR, BANGALORE 560 040. PAN: AACTB 5631L VS. THE COMMISSIONER OF INCOME TAX(EXEMPTIONS), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : MS. NEERA MALHOTRA, C IT (DR) DATE OF HEARING : 31 .0 8 .201 7 DATE OF PRONOUNCEMENT : 08 .09 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIRE CTED AGAINST THE ORDER OF LD. CIT(E), BANGALORE DATED 12.02.2016 PASSED BY HI M U/S. 12AA OF THE IT ACT, 1961. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE I D. CIT (E) WAS ERRED IN THE REJECTING THE REGISTRATION U/S 12 A WITHOUT GIVING PROPER OPPORTUNITY OF HEARING BY VIO LATING THE PRINCIPLES OF NATURAL JUSTICE. 2)THE ORDER OF REJECTION OF REGISTRATION WAS PASSED ON 12- 02-2016 WITHOUT GIVING REASONABLE TIME TO PUT UP IT S CASE WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 3)THE CIT (E) WAS ERRED IN NOT EXAMINING THE ISSUE ON MERIT IN PROPER PROSPECTIVE, THOUGH THE ACTIVITIES AS PRE SCRIBED IN SECTION 2(15) OF THE INCOME TAX ACT, 1961 AND RELIA NCE PLACED BY (CIT) E AS VARIOUS JUDGMENTS IS TOTALLY M ISPLACED. ITA NO.603/BANG/2016 PAGE 2 OF 4 4)THE HON'BLE BENCH MAY AWARD SUITABLE COST IN THE INTEREST OF JUSTICE AND EQUITY. 5)THAT THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AND AMEND MODIFY, SUBSTITUTE, DELETE AND OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEA RING, IF NECESSARY SO ARISES. 6)AS FOR AS MERITS IS CONCERNED IN NUMBER OF CASES THE HON'BLE COURTS AND TRIBUNALS HELD THAT, REGISTRATIO N U/S 12A CANNOT BE REJECTED WHEN THE OBJECTS OF THE TRUST AR E CHARITABLE IN NATURE AND ARE GENUINE IN NATURE. IN THIS REGARD WE RELIED ON THE HON'BLE BANGALORE INCOME TA X APPELLATE TRIBUNAL DECISION IN THE CASE OF ST.GEORGE EDUCATIONAL TRUST VS. DIRECTIOR OF INCOME TAX (EXEMPTION) (2006) 9 SOT 636 (BANG), WHEREIN IT WAS HELD THAT IS REQUIRED TO SEEN WHILE CONSIDERING THE APPLICATION U/S 12A IS THAT THERE IS AN APPLICATION AND THE TRUST IS FORMED BY A VALID DOCUMENT AND THAT ITS OB JECTS ARE CHARITABLE/RELIGIOUS AND GENUINE IN NATURE. 7)THE TRUST HAS PAID SCHOOL FEES FOR POOR AND MERIT ORIOUS STUDENTS AND IN THIS REGARD THE INCOME TAX OFFICER (EXEMPTIONS) DEMANDED THE CONFORMATION FROM THE STU DENTS WHO GET BENEFIT FROM THE TRUST. HOWEVER, ITO (E) NO T CONSIDERED THE OBJECT OF THE TRUST IN THIS CONNECTI ON THE ASSESSEE HAS PLACED ITS RELIANCE ON THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT HELD IN THE CASE OF MEENAKSHEE AMMAENDOWMENT TRUST VS. DIRECTIOR OF INCOME TAX (EXEMPTION) 2013 354 ITR 219 (KAR), WHEREIN THE HIGH COURT OBSERVED THAT, WITH THE MONEY AVAILABLE WITH THE TRUST, IT CANNOT BE EXPECT ED TO CARRY OUT ACTIVITY OF THE CHARITY IMMEDIATELY. CONS EQUENTLY, IN SUCH A CASE, IT CANNOT BE CONCLUDED THAT THE TRU ST HAS NOT INTENDED TO ANY ACTIVITY OF CHARITY. IN SUCH A SITU ATION, THE OBJECTS OF THE TRUST AS MENTIONED IN THE TRUST DEED HAVE TO BE TAKEN INTO CONSIDERATION BY THE AUTHORITIES FOR SATISFYING THEMSELVES ABOUT THE GENUINENESS OF THE TRUST AND N OT THE ACTIVITIES CARRIED OUT BY IT. LATER ON, IF IT FOUN D FROM THE SUBSEQUENT RETURNS FILED BY THE TRUST, THAT IS NOT CARRYING ANY CHARITABLE ACTIVITY, IT WOULD BE OPEN TO THE CONCER NED AUTHORITIES TO WITHDRAW THE REGISTRATION GRANTED OR CANCEL THE REGISTRATION AS PER THE PROVISION OF SECTION 12AA(3). 8)UNDER THE CIRCUMSTANCES AND BASED ON THE NUMBER O F DECIDED CASES OF VARIOUS COURTS AND TRIBUNALS, THE CIT(E) W AS NOT JUSTIFIED IN REJECTING THE REGISTRATION U/S 12A AND RECOGNITION U/S 80G OF THE INCOME TAX ACT, 1961. ITA NO.603/BANG/2016 PAGE 3 OF 4 THE APPELLANT REQUEST THE HONBLE TRIBUNAL TO SET A SIDE THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER IN T HE INTEREST OF JUSTICE. 3. THIS APPEAL WAS EARLIER FIXED FOR HEARING ON 01.06. 2017 AND THE NOTICE OF HEARING WAS SENT TO ASSESSEE BY RPAD WHICH HAS COME BACK UNSERVED WITH THE REMARKS DOOR LOCKED INTIMATION DROPPED ON 19.0 4.2017 AND 20.04.2017. ON 01.06.2017, THE BENCH DID NOT FUNC TION AND THE CASE WAS AGAIN FIXED FOR HEARING ON 31.08.2017 TO PROVIDE ON E MORE OPPORTUNITY TO THE ASSESSEE AND THE NOTICE OF HEARING WAS SENT AGA IN BY RPAD TO THE ASSESSEE ON THE SAME ADDRESS BECAUSE THAT IS THE ON LY ADDRESS AVAILABLE ON RECORD AND IT WAS PROVIDED BY THE ASSESSEE IN COLUM N NO. 10 OF FORM 36. ON THIS DATE ALSO, NONE APPEARED AND HENCE, APPEAL WAS HEARD EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE SUBMITTED THAT THE ORDER OF LD. CIT(E) SHOULD BE CONFIRMED BECAUSE THE LD. CIT(E) HAS ALSO ISSUED A LETTER DATED 10.08.2015 CALLING FOR CERTAIN DETAILS / CLARIFICAT IONS WHICH WERE NOTED BY THE LD. CIT(E) ON THE FIRST PAGE OF HIS ORDER AND T HE ASSESSEE WAS ASKED TO MAKE COMPLIANCE ON 04.09.2015 BUT TILL THE DATE OF PASSING OF THE ORDER ON 12.02.2016, COMPLIANCE WAS NOT MADE BY THE ASSESSEE ALTHOUGH TWO MORE LETTERS WERE ISSUED BY THE LD. CIT(E) ON 27.11.2015 AND 13.01.2016 ASKING THE ASSESSEE FOR COMPLIANCE ON 22.12.2015 AND 25.01 .2016 RESPECTIVELY. THEREAFTER ON 05.02.2016, THE LD. CIT (E) HAS MADE AN ATTEMPT TO CONTACT THE ASSESSEE OVER PHONE AND THE CA OF ASSESSEE MS. BHAGYA WAS INFORMED ON THIS DATE. INSPITE OF THESE NON COMPLIANCES BEF ORE CIT, BEFORE THE TRIBUNAL ALSO, NONE HAS APPEARED AND THEREFORE, THE ORDER OF LD. CIT (E) SHOULD BE CONFIRMED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FROM THE FACTS NOTED ABOVE, IT IS APPARENT THAT THE ASSESSEE HAS NOT MADE ANY COMP LIANCE ALTHOUGH SEVERAL REMINDERS WERE GIVEN BY LD. CIT (E) AND BEFORE THE TRIBUNAL ALSO, NONE HAS APPEARED. THE LD. CIT(E) HAS NOTED SEVERAL JUDGMEN TS INCLUDING TWO ITA NO.603/BANG/2016 PAGE 4 OF 4 JUDGMENTS OF HONBLE APEX COURT AS REPORTED IN 106 ITR 653 AND 118 ITR 461 IN WHICH, IT WAS HELD THAT THE LAW ASSISTS THOS E WHO ARE VIGILANT AND NOT THOSE, WHO SLEEPS OVER THEIR RIGHTS. CONSIDERING T HESE FACTS AND FOLLOWING THE JUDGMENT OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE OF SELF EMPLOYERS INSTITUTION VS CIT AS REPORTED IN 247 ITR 18, WE HOLD THAT THERE IS NO MATERIAL BEFORE THE COMMISSIONER TO BE SATISF IED OF THE GENUINENESS OF ACTIVITY OF THE TRUST AND THEREFORE, THE ORDER O F THE LD. COMMISSIONER REJECTING THE ASSESSEES APPLICATION FOR REGISTRATI ON IS UPHELD. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (VIJAY PAL RAO) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANTMEMBER BANGALORE, DATED, THE 08 TH SEPTEMBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.