One World Foundation India, New Delhi V. DIT (Exemptions), New Delhi

ITA 6084/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3408 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 21-07-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS Y KAKKAR SENIOR
• Assessee Lawyers: R VENKATARAMAN
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) SMT. DIVA SINGH, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.6084/DEL./2010 (ASSESSMENT YEAR : 2010-11) ONE WORD FOUNDATION INDIA, VS. DIRECTOR OF INCOME -TAX (EXEMPTIONS), C 5, 3 RD FLOOR, QUTAB INSTITUTIONAL AREA, NEW DELI. DELHI 110 016. (PAN : AABCO1426C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. VENKATARAMAN, CA REVENUE BY : MRS. Y. KAKKAR, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDE R OF DIRECTOR OF INCOME-TAX (EXEMPTIONS), DELHI DATED 27.10.2010. 2. THE ASSESSEE IS A COMPANY REGISTERED UNDER SECTI ON 25 OF THE COMPANIES ACT, 1956 ON DECEMBER 22, 2008. THE MAIN OBJECTS OF THE COMPANY ARE AS UNDER :- TO PROMOTE ELIMINATION OF POVERTY THROUGH PROVISIO N OF USEFUL INFORMATION AND KNOWLEDGE BY THE USE OF INTERNET AN D OTHER INFORMATION AND COMMUNICATION TECHNOLOGIES AS A MEA NS OF ADDRESSING THE DEVELOPMENT NEEDS OF THE POOREST COM MUNITIES, NOT WITH MOTIVES OF PROFIT. ITA NO.6084/DEL./2010 2 THE ASSESSEE HAS TAKEN IN TOTAL 11 GROUNDS AND WHEN A SPECIFIC QUERY WAS MADE THAT THE GROUNDS ARE ARGUMENTATIVE THEN THE LEARNED AR S UBMITTED THAT HE WILL PLEAD ON THE GROUND NO.10, WHICH READS AS UNDER :- 10. THE DIT (E) QUESTIONS THE VERY INCEPTION OF TH E CHARITABLE INSTITUTION AND ITS AVOWED INTENTIONS, AIMS AND OBJ ECTS AND CONCLUDES WITHOUT ANY BASIS THAT THE ACTIVITIES OF THE INSTIT UTION ARE NOT GENUINE. THE ASSESSEE QUESTIONS THE VERY BONAFIDE CONCLUSION OF THE DIT(E) THAT ITS ACTIVITIES ARE NOT GENUINE WITHOUT ANY REA SONS, JUSTIFICATIONS AND THE ORDER PASSED IS NOT A SPEAKING ORDER. THE ASSESSEES APPLICATION FOR REGISTRATION U/S 12A FOR ASSESSMENT YEAR 2009-10 WAS DISMISSED BY THE DIRECTOR OF INCOME-TAX (EXEMPTIONS ) ON 29.12.2009 AND THAT ORDER WAS CHALLENGED BEFORE THE ITAT F BENCH, NEW DELHI IN ITA NO.837/DEL/2010. THE ITAT VIDE ORDER DATED 31.08.2010 HAS DISPOSED O FF THE ASSESSEES AFORESAID APPEAL WITH THE FOLLOWING OBSERVATIONS :- 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS MADE BEFORE US. WE HAVE ALSO PERUSED THE PROVISION AL ACCOUNTS OF THE COMPANY FOR THE PERIOD 01.04.2009 TO 30.09.2009 , WHICH WERE FILED BEFORE THE DIT (E). THESE ACCOUNTS SHOW THE RECEIPTS OF THE SUBSCRIPTION AMOUNTING TO RS.5,64,283/-, THE DETAI LS OF WHICH HAVE NOT BEEN FURNISHED. THE LEARNED DIT(E) HAS FURNISH ED THE DETAILS OF THE RECEIPTS IN PARAGRAPH 3 OF HIS ORDER, BUT THE P ERIOD TO WHICH THEY RELATE HAS NOT BEEN MENTIONED. THESE RECEIPTS ARE IN THE NATURE OF SERVICE CHARGES OR SALE PROCEEDS RECEIVED FROM DIFF ERENT PARTIES. THEREFORE, THE ACTIVITIES ARE COMMERCIAL IN NATURE AND THE CASE HAS TO BE SEEN IN THE LIGHT OF THE PROVISION CONTAINED IN THE FIRST PROVISO TO SECTION 2(15). IT IS ALSO SEEN THAT A SECOND PROVI SO WAS INSERTED IN THIS SECTION BY FINANCE ACT, 2010, RETROSPECTIVELY FROM 01.04.2009 TO THE EFFECT THAT THE FIRST PROVISO SHALL NOT APPLY I F THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THE REIN IS RS.10,00,000/- OR LESS IN THE PREVIOUS YEAR. FROM THE DETAILS OF THE RECEIPTS MENTIONED ABOVE, THE AGGREGATE VALUE DOES NOT EXCEE D RS.10 LAC. HOWEVER, THE ACCOUNTS FOR THE PERIOD 01.04.2009 TO 30.09.2009 ARE ONLY FOR SIX MONTHS AND, THEREFORE, NOTHING CAN BE SAID ABOUT THE AGGREGATE VALUE OF THE RECEIPTS FOR THE FULL YEAR WHICH HAS ALREADY EXPIRED ON 31.03.2010. THUS, THE CASE OF THE ASSES SEE IS TO BE ITA NO.6084/DEL./2010 3 EXAMINED NOT ONLY IN THE LIGHT OF FIRST PROVISO BUT ALSO SECOND PROVISO TO SECTION 2(15), WHICH HAS NOT BEEN DONE. 4.1 A CASE AHS ALSO BEEN MADE OUT THAT PRE-CONDITIO NS FOR GRANT OF REGISTRATION ARE NOT SATISFIED. HOWEVER, THE LEARN ED DIT (E) DID NOT DEAL WITH THIS ISSUE IN DETAILS IN PARAGRAPH 4 AS O NLY THE TWO PRE- CONDITIONS HAVE BEEN MENTIONED. 4.2 THUS, WE ARE OF THE VIEW THAT THE CASE REQUIRES FURTHER EXAMINATION IN TERMS OF THE AFORESAID SECOND PROVIS O AND THE NATURE OF THE ACTIVITIES OF THE ASSESSEE COMPANY. CONSEQU ENTLY, THE MATTER IS RESTORED TO THE FILE OF THE LEARNED CIT (A) FOR REC ONSIDERATION OF THE WHOLE MATTER WITH A VIEW TO PASS A FRESH ORDER AFTE R GRANTING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. IT WAS SPECIFICALLY POINTED OUT THAT IN PARA 4.2, T HE ITAT DELHI BENCH F HAS RESTORED THE MATTER FOR FURTHER EXAMINATION. SINCE THE ISSUE INVOLVED IN THIS APPEAL ALSO IS REGARDING THE REGISTRATION OF ASSESSEE U/S 12A, THEREFORE, WITH THE CONSENT OF BOTH THE SIDES, THIS ISSUE IS ALSO RESTORED TO THE FILE OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), DELHI FOR FURTHER EXAMINATION. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 22 ND DAY OF JULY, 2011 AFTER CONCLUSION OF THE HEARING. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 22 ND DAY OF JULY, 2011/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.DIT (E), DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.