Vizinanagaram Rotary Parvati Devi anchalia voluntary Blood Bank Trust, Vizianagaram V. The Commissioner of Income Tax (Exemption), Hyderabad

ITA 617/VIZ/2019

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The case involves the Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Hyderabad, denying their application for registration under sections 12A and 80G of the Income Tax Act, 1961. The Trust argued that they were in the process of setting up a blood bank and had completed the necessary construction and applied for a license, which was granted on 13.12.2019. The CIT(E) had dismissed their application based on the absence of active charitable activities at the time of application. The Tribunal considered the arguments and evidence presented, including the completion of the blood bank and the granting of the license, and decided to remit the matter back to the CIT(E) for further examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135925 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 30-01-2023
• Assessment Year: misc
• Appeal Filed On: 04-11-2019
• Other Referred Cases: Progressive Educational & Charitable Trust Vs. CIT in ITA No.447/Coch/2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80G; 12A

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.617/Viz/2019 & 618/Viz/2019 (ननधधारण वर्ा / Assessment Year : 2019-20) Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust C/o Balaji Associates 19-6-1/3, AG Road Vizianagaram [PAN : AACTV7569D] Vs. Commissioner of Income Tax (Exemptions) Hyderabad (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri M.N.Murthy Naik, CIT(DR) सुनवधई की तधरीख / Date of Hearing : 31.01.2023 घोर्णध की तधरीख/Date of Pronouncement : 16 .02.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : These appeals are filed by the assessee against the order of Commissioner of Income Tax (Exemptions) [CIT(E)], Hyderabad in F.No.CIT(E)/Hyd/227(03)/12A&80G/2018-19 dated 26.09.2019. Since the grounds raised in these appeals are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. Facts are extracted from I.T.A. 617/Viz/2019. 2 I.T.A. No.617 & 618/Viz/2019, A.Y.2019-20 Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust, Vizianagaram 2. Brief facts of the case are that the assessee filed an application before the Ld.CIT(E) in Form No.10G seeking approval u/s 80G of the Income Tax Act, 1961 (in short ‘Act’) on 30.03.2019. The Ld.CIT(E) issued a notice dated 14.08.2019 to the assessee to appear and produce it’s original Memorandum of Association (MoA) / Trust Deed for verification and to furnish a detailed reply on specific points. The Managing Trustee appeared before the Ld.CIT(E) and submitted that the assessee is in the process of setting up of blood bank, and applied to the competent authority for approval. Relying on the decision of Hon’ble ITAT, Cochin in the case of Progressive Educational & Charitable Trust Vs. CIT in ITA No.447/Coch/2014, the Ld.CIT(E) dismissed the appeal of the assessee as there is no charitable activity carried out by the assessee for grant of approval u/s 80G of the Act and rejected the application in Form No.10G. The Ld.CIT(E) also rejected the assessee’s application for registration u/s 12A which is mandatory for granting approval u/s 80G. 3. On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds : 1. The Learned Commissioner of Income Tax (Exemptions) ought not to have rejected the application under Form 10G for exemption u/s 80G of the Act in the facts and circumstances of the case. 3 I.T.A. No.617 & 618/Viz/2019, A.Y.2019-20 Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust, Vizianagaram 2. The Learned CIT(E) ought to have seen that the appellant is in fact carrying on charitable activities as per the objects of the Trust. 3. The Learned CIT(E)’s conclusions regarding the assessee are totally erroneous and in complete contradiction to the facts and evidence placed before him, which facts and evidence the Learned CIT(E) does not dispute. 4. The Learned CIT(E) ought not to have relied on the judgement in ITA No.447/Coch/2014, as the facts, evidence and circumstances of the assessee’s case are clearly distinguishable from that case. 5. For these and any other grounds that may be urged at the time of hearing the assessee prays for the Hon’ble Bench to direct the Learned CIT(E) to grant registration u/s 80G to the assessee trust. 6. The appellant craves, leave to add, alter, amend or delete any of the grounds. 4. It was the submission of the assessee that the Ld.CIT(E) has not granted 12A registration since the assessee has not started it’s charitable activity. He further submitted that the assessee with a view to run blood bank, the assessee has completed the construction of the blood bank and applied for the license, but the license was not granted as there is no laboratory established for the purpose of running a blood bank. The Ld.CIT(E) without considering the objects of the assessee society denied registration u/s 12A. Hence, pleaded for grant of registration u/s 12A. 4 I.T.A. No.617 & 618/Viz/2019, A.Y.2019-20 Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust, Vizianagaram 5. On the other hand, the Ld.DR submitted that there is no evidence that the assessee society is carrying out any charitable activity as prescribed in the application, though the license was granted on 13.12.2019. Therefore, the Ld.CIT(E) has rightly denied the registration u/s 12A. 6. We have heard both the parties and perused the material available on record. There is no dispute that running a blood bank is a charitable activity. But the only grievance of the revenue is that the assessee has not started the activity on the date of filing of the application. On this aspect, the contention of the assessee is that without constructing the laboratory, it is difficult to run blood bank. Further contention of the assessee is that on 13.12.2019, the license was granted and immediately the assessee started it’s charitable activity. After considering the arguments of the assessee as well as the revenue, we are of the firm view that without laboratory it is difficult to run a blood bank. There is no proof to establish that the assessee has been running a blood bank after issuance of license by the competent authorities. Therefore, we remit the matter back to the file of the CIT(E) to examine and grant 12A registration from the date of application, if the assessee is carrying the charitable activity from 5 I.T.A. No.617 & 618/Viz/2019, A.Y.2019-20 Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust, Vizianagaram 13.12.2019, otherwise, the assessee is not entitled for grant of registration u/s 12A. 7. In the result, the appeals of the assessee are allowed for statistical purpose. Order pronounced in the open court on 16 th February, 2023. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated :16 .02.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Vizianagaram Rotary Parvati Devi Anchalia Voluntary Blood Bank Trust, C/o Balaji Associates, 19-6-1/3, AG Road Vizianagaram 2. रधजस्व/The Revenue – Commissioner of Income Tax (Exemptions), 2 nd Floor, Ayakar Bhavan, Basheerbagh, Hyderabad 3. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 4..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam