M/s G.K. Education & Charitable Trust, Visakhapatnam V. THE CIT - 1, Visakhapatnam

ITA 631/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0260 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-09-2015
• Assessment Year: misc
• Appeal Filed On: 21-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CH OMKARESWAR
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.631/VIZAG/2013 ( / ASSESSMENT YEAR : NA ) M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATNAM VS. CIT-1 VISAKHAPATNAM [ PAN: AABTG 8625L ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI CH. OMKARESWAR, CIT(DR) / 3 / DATE OF HEARING : 15.09.2015 / 3 / DATE OF PRONOUNCEMENT : 24.09.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT-1, VISAKHAPATNAM DATED 28.8.2013. ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 2 2. THE ASSESSEE IS A CHARITABLE TRUST FILED AN APPL ICATION FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT, 1961 ( HEREIN AFTER CALLED ACT) ALONG WITH FORM NO.10A ON 26.2.2013 WITH THE FOLLOWING OBJECTS: 1. NOURISH HE MINDS OF PEOPLE OF ALL AGE GROUPS BY MEA NS OF PROVIDING ALL STANDARDS OF EDUCATION BY SEEKING REQUIRED RECOGNIT ION. 2. ANCHOR AND AVAIL PROVISIONAL FINANCIAL GRANTS TO BU ILD HOMES FOR THE AGED, DESTITUTE AND ORPHANS TO PROVIDE ' RELIEF AND REHABILITATION. - 3. TEACH AND TRAIN THE INDIVIDUALS AND GROUPS SOCIAL W ITH THE SCOPE OF HIGHER EDUCATIONAL OPPORTUNITIES IN INDIA AND ABROAD. 4. IMPART BASIC LITERACY PRIVILEGES, PRIMARY EDUCATION , HIGHER STUDIES FOR SUSTAINABLE LIVING AND MODERATE CAREER AND EMPL OYMENT. 5. OPERATE SERVICE CENTERS FOR THE SUPPORT AND REHABIL ITATION OF PHYSICALLY CHALLENGED AND VISUALLY DISABLED PERSONS . 6. NURTURE VARIOUS COMPREHENSIVE PROJECTS BY MEANS OF RAISING INDIGENOUS CONTRIBUTIONS, SPONSORSHIP, DONATIONS AN D FUNDS. 7. ACCELERATE PROVISIONS, PRIVILEGES AND POWERS TO ENT ER INTO ANY DEEDS, CONTRACTS WITH OTHER INDIVIDUALS AND PARTIES; SOCIE TIES, ORGANIZATIONS. 8. LIBERATE PEOPLE AND COMMUNITIES FROM PATHETIC LIVIN G CONDITIONS, MISERABLE ECONOMIC EXPLOITATION, SUPERSTITION, PROS TITUTION, CHILD LABOR, OPPRESSION OF THE LANDLESS PEASANTS ETC. 9. IMPART NEEDFUL EDUCATION AND TRAINING FOR SUITABLE C AREER AND EMPLOYMENT; AND TO SUPPORT AND FACILITATE AND FELIC ITATE ACADEMICIANS, SCIENTISTS AND ENTREPRENEURS. 10. NAVIGATE VARIOUS SCHEMES AND PROGRAMS TO INITIATE A ND DEVELOP PHYSICAL, SPIRITUAL AND MENTAL ABILITIES AND APTITU DES, IN PURSUIT OF BUILDING A HEALTHY SOCIETY. 11. TRANSFORM RURAL AND TRIBAL COMMUNITIES BY BRINGING AWARENESS OF FUNDAMENTAL RIGHTS, CIVIL LIBERTY MOVEMENTS, LAW AN D ORDER, NATURAL AND SOCIAL JUSTICE BY PROVIDING LEGAL AID. 12. ENDEAVOUR TO EXPLORE EDUCATIONAL AND EMPLOYMENT OPP ORTUNITIES IN INDIA AND ABROAD BY VIRTUE OF ELIGIBILITY CRITERIA; AND TO PROVIDE NECESSARY CAREER GUIDANCE. 13. RAISE NECESSARY FUNDS, GRANTS LOANS ETC FOR THE EST ABLISHMENT AND IMPLEMENTATION OF PROPOSED SHORT TERM AND TONG TERM PROJECTS FROM CREDIBLE FINANCIAL INSTITUTIONS. ENHANCE BENEFICIAL PROVISIONS TO INTRODUCE AND IMPLEMENT NEW INNOVATIVE EDUCATIONAL, SOCIAL AND SCIENTIFIC PROGRAMS BY PROVIDING OPPORTUNITIES FOR CROSS- CULTURAL INTERACTION WITH FOREIGN INSTITUTIONS. 14. SAFEGUARD SECULAR, RELIGIOUS AND SPIRITUAL INTEREST S OF ALL FAITHS AND TO TRANSFORM INDIVIDUALS, GROUPS AND COMMUNITIES WI TH THE SENSE OF RELIGIOUS TOLERANCE 15. TRAIN UP GROUPS AND COMMUNITIES SKILLS TO CREATE OP PORTUNITIES TO ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 3 ISSUE CERTIFICATES AND DIPLOMAS; AND TO ENSURE TIE- UPS WITH FRANCHISES OFFERING SIMILAR COURSES OF STUDY UNDER: STATE AND CENTRAL SYLLABUS, OPEN UNIVERSITIES, REGULAR/DISTANCE MODE ETC. 3. THE LD. COMMISSIONER AFTER CONSIDERING THE ABOVE OBJECTS OF THE TRUST OBSERVED THAT THE ASSESSEE EXCEPT PROVIDI NG NOTE BOOKS TO THE STUDENTS OF Z.P. HIGH SCHOOL, GURAMMAPALEM, VIS AKHAPATNAM WORTH RS.9000/-, THERE ARE NO OTHER ACTIVITIES CARR IED BY THE ASSESSEE TRUST IN CONSONANCE WITH THE OBJECTS OF THE TRUST A ND DENIED THE REGISTRATION U/S 12A OF THE ACT. ASSESSEE CARRIED THE MATTER BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE IS IN THE INITIAL STAGE OF COLLECTING THE DONATIONS TO ACHIEVE ITS OBJECTS AND THE COMMISSIONER IS NOT JUSTIFIED IN DENYING TH E REGISTRATION U/S 12A OF THE ACT. HE RELIED ON THE COORDINATE BENCH DECI SION IN THE CASE OF VIZIANAGARAM ROTARY EYE TRUST VS. CIT-1, VISAKHAPAT NAM IN ITA NO.677/VIZAG/2013 DATED 23.7.2015. 5. ON THE OTHER HAND, THE LD. D.R. HAS STRONGLY SUP PORTED THE ORDER PASSED BY THE COMMISSIONER. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS A CHARITABLE TRUST APPLIED FOR REGISTRATION U/S 12AA OF THE ACT. WE HAVE ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 4 GONE THROUGH THE OBJECTS OF THE TRUST AND WE FIND T HAT THE MAIN OBJECT OF THE TRUST IS COMMITTED TO CONDUCT VARIOUS PROGRA MMES AND BY ORGANIZING OTHER ACTIVITIES TO AID CHARITY TO THE P EOPLE. THE ASSESSEE TRUST IS ALSO COMMITTED TO IMPART PRIMARY AND HIGHE R EDUCATION TO THE DESERVED PEOPLE. THIS FACT WAS NOT DISPUTED BY THE COMMISSIONER. THE COMMISSIONER REJECTED THE REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT CA RRIED ANY ACTIVITY IN CONSONANCE WITH THE OBJECTS OF THE TRUST EXCEPT DON ATING BOOKS WORTH RS.9,000/-. WE FIND THAT WHEN THE ASSESSEE TRUST IS IN ITS INITIAL STAGE, UNLESS AND UNTIL THE ASSESSEE IS ABLE TO COLLECT TH E DONATIONS, IT IS DIFFICULT FOR THE TRUST TO CARRY OUT THE OBJECTS. OVER A PERIOD OF TIME, ASSESSEE COULD GATHER SUFFICIENT FUNDS AND IT MAY A CHIEVE ITS OBJECTS BASED ON THE AVAILABILITY OF THE FUNDS. WHEN THE A SSESSEE IS IN INITIAL STAGE, IT IS DIFFICULT TO THE ASSESSEE TRUST TO ACH IEVE THE OBJECTS FOR WHICH IT WAS ESTABLISHED. THE COORDINATE BENCH OF THE TR IBUNAL IN THE CASE OF VIZIANAGARAM ROTARY EYE TRUST (SUPRA) HAS CONSIDERE D THIS ASPECT AND IT HAS BEEN HELD THAT THE ASSESSEE TRUST BEING IN THE FIRST YEAR, ASSESSEE HAVING NOT RECEIVED ANY DONATIONS OR FUNDS FROM THE OUTSIDERS EXCEPT THE INITIAL CONTRIBUTION, IT CANNOT COMMENCE ITS AC TIVITIES SINCE IT NEEDS SUFFICIENT FUNDS TO COMMENCE ITS ACTIVITIES. THE L D. COMMISSIONER APPEARS TO HAVE BEEN DENIED THE REGISTRATION ONLY O N THE GROUND THAT ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 5 ASSESSEE HAS NOT CARRIED ANY ACTIVITY, WHICH IN OUR CONSIDERED OPINION CANNOT BE A REASON FOR DENYING THE REGISTRATION IN THE LIGHT OF THE DECISION CITED (SUPRA). 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE AND ALSO THE DECISION OF THE COORDINATE BENCH, WE ARE O F THE OPINION THAT THE COMMISSIONER IS NOT JUSTIFIED IN REJECTING THE REGI STRATION U/S 12A OF THE ACT TO THE ASSESSEE. WE THEREFORE, QUASH THE ORDER PASSED BY THE COMMISSIONER AND DIRECTED TO GRANT THE REGISTRATION U/S 12A OF THE ACT TO THE ASSESSEE TRUST. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 24 TH SEPT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . . . . . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 24 TH SEPT15 VG/SPS ITA NO.631/VIZAG/2013 M/S. G.K. EDUCATION & CHARITABLE TRUST, VISAKHAPATN AM 6 / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT M/S. G.K. EDUCATION & CHARITABLE TRUST, FLAT NO.403 , RAMA PLAZA APARTMENTS, SEETHAMMAPETA, VISAKHAPATNAM 2. -., / THE RESPONDENT CIT-1, VISAKHAPATNAM 3. ; () / THE CIT(A), VISAKHAPATNAM 4. -, , / // / DR, ITAT, VISAKHAPATNAM 5 . . . . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM