Surajmal Luhariwala Charity Trust, Bangalore V. DIT(Exemption), Bangalore

ITA 644/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0663 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-11-2009
• Assessment Year: misc
• Appeal Filed On: 19-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWATHI S PATIL
• Assessee Lawyers: V MOHAN
• Section: 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.644/BANG/2009 ASSESSMENT YEAR : NOT APPLICABLE SURAJMAL LUHARIWALA CHARITY TRUST, NO.64, 1 ST R BLOCK, RAJAJINAGAR, BANGALORE 560 010. : APPELLANT VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE. : RESPONDENT APPELLANT BY : SHRI V. MOHAN RESPONDENT BY : SMT. SWATHI S. PATIL O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE TRUST AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE DATE D 27.4.2009 REJECTING TRUSTS APPLICATION U/S. 80G(5)(VI) OF THE INCOME-T AX ACT, 1961. 2. THE ASSESSEE TRUST WAS CREATED BY A TRUST DEED DATED 19.5.1995 AND WAS GRANTED REGISTRATION VIDE ORDER DATED 19.1. 1996. THE TRUST FILED APPLICATION IN FORM 10G ON 3.10.2008 SEEKING RENEWA L OF RECOGNITION U/S. 80G. THE DIT(E) ISSUED LETTERS DATED 19.12.08 AND 19.3.09 CALLING FOR ITA NO. 644/BANG/2009 PAGE 2 OF 4 DETAILS WITH REGARD TO DEFICIENCIES FOUND IN THE AP PLICATION. ON PERUSAL OF FURNISHING OF DETAILS BY THE TRUST, THE DIT(E) OBSE RVED THAT INSPITE OF THE TRUSTS EXISTENCE FOR SEVERAL YEARS, IT HAS NOT MAD E ANY HEADWAY TOWARDS APPLICATION OF FUNDS RECEIVED BY IT TOWARDS THE DEC LARED OBJECTS. HE WAS OF THE VIEW THAT THE CHARITABLE ACTIVITIES CARRIED OUT BY THE ASSESSEE TRUST ARE MAINLY TO PROVIDE DONATIONS TO OTHER TRUSTS. THE D IT(E) EXAMINED THE APPLICATION OF THE TRUST IN LIGHT OF THE CBDT INSTR UCTION NO.1582 DATED 19.10.1984 AND RECORDED THE DISCREPANCIES IN ANNEXU RE-2 TO HIS ORDER AND HE HELD AS UNDER: FROM THE TABLE ABOVE, IT IS CLEAR THAT THE MAJORI TY OF THE DONATIONS ARE MADE TO THE TRUST WHEREIN THE RECEIPT S ISSUED BY THE THOSE DONEE TRUST DOES NOT SPECIFY ITS 12A AND 80G STATUS. ONE OF THE IMPORTANT CONDITION AND GUIDELINES OF 80G IS TH AT THE RECEIPTS FOR HAVING RECEIVED DONATION SHOULD INVARIABLY MENT ION THE 12A AND 80G PARTICULARS OF THE TRUST. IN THE ABSENCE O F THESE DETAILS ON THE RECEIPTS IT IS REASONABLE TO INFER THAT THE APPLICANT TRUST HAS MADE DONATIONS TO TRUST WHICH ARE NOT RECOGNIZED U/S. 80G, HENCE, THE DONATION MADE TO THEM CANNOT ON THE BASIS OF THE EVIDENCE ADDUCED BE CONSIDERED AS FOR A CHARITA BLE PURPOSE ELIGIBLE FOR EXEMPTION U/S. 11/12 OF THE IT ACT, 1962. REFERRING TO THE CONDITIONS SPECIFIED IN SECTIONS 8 0G(5) AND 80G(5)(II) OF THE INCOME-TAX ACT, 1961, THE LD. DIT(E) FURTHER RE JECTED THE APPLICATION FOR RENEWAL OF RECOGNITION HOLDING AS FOLLOWS: IF THE INCOME OF THE TRUST IS UTILIZED FOR NON CH ARITABLE PURPOSE THEN THE TRUST IS DEBARRED FROM ENJOYING EX EMPTION UNDER SECTION 11, HENCE IN TERMS OF SECTION 80G(5), THE A PPLICANT BECOME INELIGIBLE FOR CONSIDERATION UNDER THE SAID SECTION. ADDITIONALLY, IN TERMS OF CONDITIONALITY U/S. 80G(5 )(II) ALSO THE APPLICANT IS INELIGIBLE. HENCE, IN VIEW OF THE ABO VE FACTS AND STATUTORY LEGAL POSITION, THE APPLICATION FOR RENEW AL OF RECOGNITION U/S. 80G HAS TO BE REJECTED. ITA NO. 644/BANG/2009 PAGE 3 OF 4 3. AT THE OUTSET, THE LD. AR PLEADED THAT THE ASSE SSEE COULD ESTABLISH BEYOND DOUBT THAT THE AMOUNTS WERE SPENT TOWARDS TH E OBJECTS OF THE TRUST EITHER DIRECTLY OR THROUGH OTHER WELL ESTABLISHED T RUSTS AND ORGANIZATIONS. THE AUTHENTICITY OF ALL THE ORGANIZATIONS AND TRUST S IN WHICH ASSESSEE HAS PROVIDED FUNDS COULD BE VERIFIED SINCE THE ASSESSEE TRUST HAD MAINTAINED ALL THE PARTICULARS OF SUCH ORGANIZATIONS. THE LD. AR FURTHER PLEADED THAT ONE MORE OPPORTUNITY MAY BE PROVIDED TO THE ASSESSE E SO THAT THE ASSESSEE COULD PRODUCE ALL RELEVANT DOCUMENTS BEFOR E THE LD. DIT(E) TO ESTABLISH THAT THE ASSESSEE TRUST HAD NOT VIOLATED ANY OF THE PROVISIONS OF THE ACT LEADING TO DENIAL OF RECOGNITION U/S. 80G O F THE ACT. THE LD. DR ALSO HAD NO OBJECTION FOR REMITTING BACK THE CASE TO THE LD. DIT(E) FOR FRESH CONSIDERATION. THEREFORE, IN THE INTEREST OF JUSTI CE, WE RESTORE THE CASE BACK TO THE FILE OF LD. DIT(E) FOR FRESH CONSIDERAT ION. WE MAKE IT CLEAR THAT WE HAVE NOT MADE ANY OBSERVATIONS ON THE MERITS OF THE CASE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF NOVEMBER, 2009. SD/- SD/- (GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH NOVEMBER, 2009. DS/- ITA NO. 644/BANG/2009 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.