Bharath School Trust, Mangalore V. The Commissioner of Income Tax (EXemptions), Bangalore

ITA 607/BANG/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7896 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2021
• Assessment Year: 2020-2021
• Appeal Filed On: 29-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 80G; 12AA; 250; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI B. R. BASKARAN, ACCOUNTANT MEMBER ITA NO.607/BANG/2020 ASSESSMENT YEAR :2020-21 M/S. BHARATH SCHOOL TRUST, KADRI ROAD, MANGALORE 575 003, KARNATAKA. PAN : AADTB 6287 F VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), BENGALURU. ASSESSEEE BY : SMT. SHEETAL, ADVOCATE REVENUE BY : NONE DATE OF HEARING : 18.1.2021 DATE OF PRONOUNCEMENT : 1 8 . 1 .20 2 1 O R D E R PER N. V. VASUDEVAN, VICE PRESIDENT THIS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.4.2020 PASSED BY THE CIT(E), BENGALURU, REJECTED THE APPLICATION FILED BY THE ASSESSE FOR GRANT OF RECOGNITION UNDER SECTION 80G OF THE INCOME TAX ACT, 1961(HEREINAFTER CALLED THE ACT). 2. THE ASSESSEE IS A TRUST WHICH CAME INTO EXISTENCE BY VIRTUE OF DEED OF DECLARATION OF TRUST DATED 23.10.2018. THE OBJECT FOR WHICH THE TRUST WAS FORMED WAS TO ESTABLISH AND ADMINISTER EDUCATIONAL INSTITUTION. THE ASSESSEE FILED APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT AS WELL AS APPLICATION FOR GRANT OF RECOGNITION UNDER SECTION 80G OF THE ACT ON 18.9.2019. BY AN ORDER DATED 27.4.2020, THE CIT(E), BENGALURU, GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE ASSESSEE. THUS THE OBJECTS OF THE TRUST WERE RECOGNIZED AS CHARITABLE IN NATURE. AS ITA NO. 607/BANG/2020 PAGE 2 OF 4 FAR AS THE APPLICATION FOR RECOGNITION UNDER SECTION 80G OF THE ACT IS CONCERNED, THE CIT(E) REFUSED TO GRANT RECOGNITION TO THE ASSESSEE BY THE IMPUGNED ORDER FOR THE FOLLOWING REASONS: THE DETAILS SUBMITTED ARE VERIFIED. AS VERIFIED FROM THE DOCUMENTS AND FINANCIALS SUBMITTED, THERE ARE NO NOTICEABLE CHARITABLE ACTIVITIES AS ON DATE FROM THE DATE OF FORMATION OF TRUST. HENCE, IN THE ABSENCE OF NO NOTICEABLE CHARITABLE ACTIVITIES, THE GENUINENESS OF THE CHARITABLE ACTIVITY COULD NOT BE EXAMINED TO DECIDE TO GRANT RECOGNITION U/S 80G OF THE I T ACT. HENCE THERE IS NO OPTION BUT TO REJECT THE APPLICATION FOR GRANT OF RECOGNITION U/S 80G (5)(VI) OF THE IT ACT 1961, AS NOT ELIGIBLE. 3. AGGRIEVED BY THE AFORESAID ORDER OF THE CIT(E), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE DETAILS OF ACTIVITIES OF THE TRUST WAS FURNISHED BY THE ASSESSEE BEFORE THE CIT(E). A NOTE FILED BY THE ASSESSEE IN THIS REGARD IS AT PAGE 21 OF THE PAPER BOOK. THE ASSESSEE HAD ALSO FILED PHOTOGRAPHS OF ACTIVITIES CONDUCTED BY THE TRUST. AS PER THE NOTE FILED BY THE ASSESSEE, IT WAS MENTIONED THAT THE ASSESSEE HAD ESTABLISHED A SCHOOL BY NAME BHARATH ACADEMY AT BLUEBERRY HILLS, YEYYADI ROAD, MANGALORE, AND THAT THE SCHOOL COMMENCED ACTIVITIES FROM 3.6.2019 WITH THREE CLASSES HAVING STUDENT STRENGTH OF 48 AND RUNNING CLASSES UPTO 3 RD STANDARD FOR THE ACADEMIC YEAR 2019-20. PHOTOGRAPHS OF THE CLASS ROOMS AND THE ACTIVITIES OF THE STUDENTS WERE ALSO FILED BEFORE THE CIT(E). IT WAS THE SUBMISSION OF THE ASSESSEE THAT IN THE IMPUGNED ORDER, THE CIT(E) HAS NOT COMMENTED ON ANYTHING ON THE DETAILS FURNISHED BY THE ASSESSEE AND HAS REJECTED THE APPLICATION FOR GRANT OF RECOGNITION WITHOUT PROPER APPLICATION OF MIND. LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE C BENCH OF ITAT, BENGALURU, IN THE CASE OF SJF PHILANTHROPIC ORGANISATION VS. CIT(E) IN ITA NO.2283/BANG/2018 ORDER DATED 05.12.2019 WHEREIN THIS HONBLE TRIBUNAL TOOK A VIEW THAT WHEN A TRUST IS NEWLY SET UP AND WHEN AN APPROVAL UNDER SECTION 80G IS SOUGHT FOR AND WHEN THE TIME BETWEEN THE FORMATION OF TRUST AND EXAMINATION OF APPLICATION OF THE ASSESSEE FOR GRANT OF APPROVAL UNDER SECTION 80G OF THE ACT WAS LESS (5 MONTHS IN ITA NO. 607/BANG/2020 PAGE 3 OF 4 THAT CASE), IT IS NOT POSSIBLE FOR THE TRUST TO DEMONSTRATE THE ACTUAL CARRYING OF ITS ACTIVITIES. SHE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT(E) VS. MEENAKSHI AMMA ENDOWMENT TRUST, 354 ITR 219 (KAR) AND DECISION OF ITAT JAIPUR BENCH IN THE CASE OF ANAND INCUBATION CENTRE VS. CIT(E), 86 TAXMANN.COM 250 (JAIPUR TRIB). SHE ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE CO- ORDINATE BENCH IN THE CASE OF VIDYASHILP COMMUNITY TRUST VS. CIT(E) IN ITA NO.1619/BANG/2019, ORDER DATED 15.11.2019 WHEREIN ON IDENTICAL FACTS, THE TRIBUNAL REMANDED THE QUESTION OF RECOGNITION UNDER SECTION 80G TO THE CIT(E) FOR FRESH CONSIDERATION. RELIANCE WAS ALSO PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE DECISION OF THE SUPREME COURT IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST VS. CIT, CIVIL APPEAL NO.5437-5438/2012 JUDGMENT DATED 19.2.2021 WHAT IS REQUIRED TO BE CONSIDERED BY THE CIT(E) WHILE GRANTING REGISTRATION IS ALSO PROPOSED ACTIVITIES. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. WE ARE OF THE VIEW THAT THE ISSUE WITH REGARD TO GRANT OF RECOGNITION U/S.80G OF THE ACT TO THE ASSESSEE HAS TO BE REMANDED TO THE AO FOR CONSIDERATION AFRESH IN THE LIGHT OF THE LAW AS EXPLAINED BY THE DECISIONS REFERRED TO BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US. AS HELD BY THE HONBLE SUPREME COURT, THE PROPOSED ACTIVITIES CAN ALSO BE EXPLAINED BY THE ASSESSEE WHICH CAN BE EXAMINED BY THE CIT(E). BESIDES THE ABOVE, THE CIT(E) HAS NOT COMMENTED ON THE NOTE OF ACTIVITIES AND PROOF OF ACTIVITIES OF THE TRUST WHICH HAVE BEEN FILED BY THE ASSESSEE BEFORE CIT(E). AS HELD IN THE CASE OF VIDYASHILP COMMUNITY TRUST (SUPRA) THE ASSESSEE CAN FURNISH ADDITIONAL INFORMATION ON THE ACTIVITIES OF THE TRUST IN THE SET ASIDE PROCEEDINGS FOR EXAMINATION BY CIT(E). SINCE THE ORDER OF CIT(E) IS A NON-SPEAKING ORDER, HE IS DIRECTED TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE LAW AS EXPLAINED IN THE DECISIONS CITED ABOVE AND THE EVIDENCE THAT MAY BE FILED BY THE ASSESSEE WITH REGARD TO ACTIVITIES OF THE ASSESSEE. THE CIT(E) WILL AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 607/BANG/2020 PAGE 4 OF 4 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- BANGALORE. DATED: 19.01.2021. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. (B. R. BASKARAN) ( N. V. VASUDEVAN) ACCOUNTANT MEMBER VICE PRESIDENT