Krushi Gau Seva Trust, Nashik V. CIT-I, Nashik

ITA 63/PUN/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3212 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 13-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Keywords: Charitable institution; Retrospective amendment; Set aside
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 63/PN/10 KRUSHI GAU SEVA TRUST C.P. TOWERS, MALEGAON STAND PANCHAVATI, NASHIK 422003 PAN NO. AAATK2393L .... APPELLANT VS. CIT-I, NASHIK . RESPONDENT APPELLANT BY : SMT. DEEPA KHARE RESPONDENT BY : SHRI A.S. SINGH ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E CIT-I, NASHIK DATED 25/09/2009 AND THE GROUNDS RAISED IN APPEAL ARE AS U NDER:- I) THE LEARNED HONABLE COMMISSIONER OF INCOME TAX IS WRONG IN REJECTING THE RENEWAL OF EXEMPTION UNDER SECTION 80 G OF KRUSHI GAU SEVA TRUST, NASHIK AS THE TRUST IS DOING BUSINESS BY WAY OF SALE OF MILK, SHENKAT (COW-DUNG, HIT BY SECTION 2(15) OF I.T. ACT, 1961. II) THE LEARNED HONABLE CIT FAILED TO APPRECIATE T HE FACT THAT THE MAIN OBJECT OF THE TRUST IS TO PROTECT THE ANIMALS AND B EAR THE MAINTENANCE OF ONLY CLIPPED ANIMALS AND COWS GIVEN BY THE POLICE AUTHOR ITY COLLECTED FROM SLAUGHTER HOUSE. TO FULFILL THE OBJECT THE MILK OF THE COWS AND SHENKHAT ARE SOLD TO CREATE THE FUNDS FOR THE MAINTENANCE OF CLI PPED ANIMALS AND FOR THEIR MEDICINES AND TREATMENT. III) THE LEARNED HONABLE CIT IS FAILED TO APPRECIA TE THAT THE SECTION 2(15) IS AMENDED BY THE FINANCE (NO.2) ACT, 2009 TO INCLU DE PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILD LIFE). AT THE VERY OUTSET, LD AR FOR THE REVENUE MENTIONED TH AT THE GROUNDS UNDER CONSIDERATION HAVE BEEN DECIDED IN FAVOUR OF THE ASSE SSEE WHILE ADJUDICATING THE APPEAL VIDE ITA NO 1536/PN/2008 IN THE ASSESSEES O WN CASE VIDE THE ORDER DATED ITA NO. 63/PN/10 PAGE 2 OF 3 9 TH JULY, 2010. IN THIS REGARD, LD COUNSEL RELIED ON THE PARAGRAPHS 2 TO 4 OF THE ORDER. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF TH E CIT. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER OF T HE REVENUE. WE FIND THE RATIO OF THE SAID DECISION RELIED UPON HAS APPLICABIL ITY TO THE INSTANT CASE. RELEVANT PARAGRAPHS OF THE SAID ORDER ARE REPRODUCED AS UNDER. IN SUPPORT OF THE GROUNDS, THE LEARNED AR FOR THE ASSESSEE POINTED OUT THAT AFTER AMENDMENT IN SECTION 2(15) OF THE ACT, THE FI RST PROVISO THERETO SHALL NOT APPLY WHEN THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS RS. 10 LAKHS OR LESS IN THE PREVIOUS YEAR. THE LEARNED AR SUBMITTED FURTHER THAT RECEIPT FROM SALE OF MILK IS INCIDENTAL TO THE OBJECT OF THE ASSESSEE TRUST. THE MAIN OBJECT OF THE ASSES SEE TRUST IS TO PROVIDE SHELTER TO THE AGED CATTLE AND TAKING CARE OF THEM. THE LEARNED AR REFERRED PAGE NO. 11 OF THE PAPER BOOK I.E. INCOME AND EXPEN DITURE ACCOUNT FOR THE YEAR SHOWING RECEIPT OF RS.1,87,591/- FROM SALE OF BARDANA AND SHENKHAT AND RS. 4,19,690/- FROM SALE OF MILK. 3. THE LEARNED DR, ON THE OTHER HAND, OPPOSED THE A PPEAL AND PLACED RELIANCE ON THE ORDER IMPUGNED. 4. HAVING GONE THROUGH THE ORDER IMPUGNED IN VIEW O F THE ABOVE SUBMISSIONS, WE FIND THAT THE LEARNED CIT HAS DENIE D RENEWAL OF EXEMPTION U/S. 80G OF THE ACT MAINLY ON THE BASIS THAT THE TRUST IS DOING BUSINESS BY WAY OF SALE OF MILK, SHENKHAT AND BARDANA ETC. AND EARNS PROFIT. IN THIS REGARD THE LEARNED CIT HAS TAKEN SUPPORT FROM THE P ROVISIONS OF SECTION 2(15) OF THE ACT AS AMENDED AS PER FINANCE ACT, 2008 WITH EFFECT FROM 01/04/2009 . THE LEARNED CIT HAS REPRODUCED THE SAID AMENDED P ROVISIONS U/S. 2(1) OF THE ACT. THE LEARNED CIT FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. S.S. NAVIGATIO N CO. LTD. 42 ITR 589 (SC) HELD THAT THE LAW APPLICABLE TO THE ASSESSMENT OF AN ASSESSMENT YEAR IS THAT AS IT IS STOOD ON THE 1 ST APRIL OF THE SAID ASSESSMENT YEAR, WHICH MEANS THAT THE PREVIOUS YEAR WOULD BE THE FINANCIAL YEAR PRECEDING THE SAID ASSESSMENT YEAR. THE LEARNED CIT ACCORDINGLY HELD T HAT THE AMENDED PROVISIONS IN SECTION 2(15) IS TO BE APPLIED IN THE ASSESSEES CASE FOR THE FINANCIAL YEAR 2008-09. HE ALSO OBSERVED THAT ASSES SEE TRUST HAS ALREADY ENJOYED THE EXEMPTION U/S. 80G UPTO 31 ST MARCH, 2008 . UNDER THIS BACKGROUND THE LEARNED CIT CAME TO THE CONCLUSION T HAT THE ASSESSEE TRUST DOES NOT FULFILL THE TEST OF CHARITABLE PURPOSE W HEN VIEWED IN THE CONTEXT OF THE AMENDED DEFINITION, BECAUSE OF ITS ACTIVITY WHI CH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND WHICH DISENTITLE THE ASSES SEE TRUST FROM EXEMPTION. ON THE CONTRARY, THE CONTENTION OF THE L EARNED AR REMAINED THAT WITH RETROSPECTIVE EFFECT FROM 01-04-2009 VIDE FINA NCE ACT, 2008 A FURTHER PROVISO HAS BEEN INSERTED IN SUB-SECTION (15) TO S ECTION 2 OF THE ACT AS PER WHICH THE FIRST PROVISO SHALL NOT APPLY IF THE AGGR EGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS RS. 10 L AKHS OR LESS IN THE PREVIOUS YEAR. IN SUPPORT THE LEARNED AR ALSO REFERRED PAGE NO. 11 OF THE PAPER BOOK SHOWING THAT INCOME FROM SALE OF BARDANA AND SHENKH AT (RS. 1,87,591/-) AND SALE OF MILK (RS. 4,19,690/-) IS MUCH BELOW RS. 10 LAKHS IN THE PREVIOUS YEAR. IN VIEW OF THE INSERTION OF FURTHER PROVISO WITH RE TROSPECTIVE EFFECT FROM 01- 04-2009 VIDE FINANCE ACT, 2010 IN SUB-SECTION (15) TO SECTION 2 OF THE ACT, AS ITA NO. 63/PN/10 PAGE 3 OF 3 DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE LEARNE D CIT WAS NOT JUSTIFIED IN DENYING RENEWAL OF APPROVAL OF BENEFIT TO THE ASSES SEE U/S. 80G OF THE ACT SINCE UNDISPUTEDLY THE AGGREGATE VALUE OF THE RECEI PT FROM THE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS WAS BELOW RS 10 LAKHS IN THE PREVIOUS YEAR. WE THUS SET ASIDE THE ORDER IMPUGNED WITH DIRECTION TO THE LEARNED CIT TO ALLOW THE CLAIM FOR RENEWAL OF APPRO VAL OF BENEFIT U/S 80G OF THE ACT ON THE APPLICATION DATED 22-01-2008 IN FORM NO. 10G MADE BY THE APPELLANT IN THIS REGARD. THE GROUNDS AND APPEAL AR E THUS ALLOWED. 3. CONSIDERING THE ABOVE SETTLED POSITION OF THE ISS UE IN THE ASSESSEES OWN CASE, WE ARE OF THE OPINION, THE ORDER OF THE CIT HAS TO BE SET ASIDE AND WITH DIRECTION TO THE LEARNED CIT TO ALLOW THE CLAIM FOR REN EWAL OF APPROVAL OF BENEFIT U/S 80G OF THE ACT AS DESIRED BY THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 28 TH OCTOBER, 2010 R COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT-I, NASHIK 4. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE