MESERS SUKHMANI SOCIETY FOR CITIZENS SERVISES, JALANDHAR V. INCOME TAX (EXEMPTIONS) , JALANDHAR

ITA 656/ASR/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7525 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 12-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 11; 143(3); 12A; 12AA; 13; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 656/Asr/2017 Assessment Year: 2013-14 M/s Sukhmani Society for Citizens Services, Administrative Complex, Ladowali Road, Jalandhar [PAN: AAFTS 7460M] Vs. I.T.O. (Exemptions), C. R. Building, Jalandhar (Appellant) (Respondent) Appellant by : Sh. None Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 17.05.2022 Date of Pronouncement: 14.07.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal was filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-2, Jalandhar [in brevity the CIT(A)], bearing Appeal No. 2/10006/16-17/CIT(A)/Jal dated 12.07.2017 u/s 250(6) of the Income Tax Act, 1961 [in brevity the Act], in respect of Assessment Year 2013-14. ITA No. 656/Asr/2017 Sukhmani Society for C. S. v. DCIT 2 The impugned order was originated from the order of the ld. Income Tax Officer (Exemption) Ward, Jalandhar (in brevity the AO) passed u/s 143(3) of the Act dated 29.02.2016. 2. Tersely, we are adverting the fact of the case. The assessee is a society and is registered with Registrar of Societies under the Society Registration Act (XXI of 1860) and as amended by Punjab Amendment Act, 1957 vide Regd. No. DJC/JAL/331 of 2004-05 dated 10.03.2015. The society is also registered u/s 12AA of the Income Tax Act, 1961 vide order No. CIT/JAL-II/U/s-12A/R- III/Jal/09-10 dated 22.03.2010. The assessee society is engaged in providing single widow services to citizen through “Suvidha Centres” located at four cities viz. Jalandhar, Nakodar, Shahkot and Phillaour. As per Memorandum and Articles of Association the society is essentially engaged in providing services to the public to facilitate them in obtaining different kinds of permission and registration the Birth, Death, Marriage Certificates, Driving Licenses, Ration Cards Arms Licenses and senior citizens Card. Accordingly, the assessee charges fees from each time of services. The fee is fixed by the Regulatory Authority of Government of Punjab. The ld. AO pointed out that the assessee is not doing charitable activity from section 2(15) of the Act. But doing the business, all activities of the assessee is not for the charitable purposes, but it is under trade, commerce or business. Perusal of ITA No. 656/Asr/2017 Sukhmani Society for C. S. v. DCIT 3 the assessee’s income expenditure account it is pointed out that services received by the assessee Rs.85,80,501/- and the surplus was amounting to Rs.5,43,840/-. During assessment the service was added back with the total income of the assessee and the ld. AO did not allow the exemption u/s 11 of the Act. Aggrieved, the assessee filed an appeal before the ld. CIT(A) for adjudication. The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved, the assessee filed an appeal before us. 3. From the observation of the order of ld. CIT(A) in page no. 12 and 13 is extracted as below: “4.2 I have gone through the assessment order passed by the AO, submissions made in this regard by the appellant and find that the claim of exemption u/s 11 of the IT Act has been disallowed by the AO on the ground that the activities carried out by the society are in the nature of Business or Commerce. AO has also stated that the provisions of first proviso to section 2(15) of the IT Act are attracted in this case as the total receipts are more than Rs. 25 lacs. Therefore, the surplus of income over expenditure of Rs. 5,43,840/- as declared in the income and expenditure account was treated as income of the appellant and was taxed in the capacity of an AOP. 4.3. The appellant has submitted that there is no justification in the action taken by the AO and activities of the society are for charitable purposes which is covered under section 2(15) of the IT Act. It is also stated that assessee society is registered under section 12AA of the IT Act and the nature of activities cannot be questioned by the AO. The appellant has also placed reliance on the decision of Hon’ble TTAT, Delhi Bench in the case of Devki Devi Foundation to support its contentions. ITA No. 656/Asr/2017 Sukhmani Society for C. S. v. DCIT 4 4.4. 1 have carefully considered the material available on record and find that the issue of claim of exemption u/s 11 of the IT Act in the case of the appellant has already been considered by the undersigned in the case of the appellant in A.Y. 2012-13 after placing reliance on the order passed by my Ld. Predecessor in appeal no. 466/12-13 vide order dated 12.11.2013 for A.Y. 2010-1 1. It was held by my Ld. Predecessor that AO is justified in denying exemption u/s 11 of the IT Act to the appellant society after placing reliance on the decisions of the Jurisdictional Bench of Hon’ble ITAT in the case of M/s. Sukhmani Society for Citizen Services, Mansa 153 TTJ 235 (2013) Amritsar, where it was held- that the society is not engaged in any type of charitable activity. 4.5. Thus, following the order passed earlier, as there is no change in the facts of the case and also no other decision of Hon’ble ITAT Amritsar Bench has been brought on record by the appellant, I hold that AO was justified in assessing the surplus income of the society after denying the claim of exemption u/s 1 1 of the IT Act. Accordingly, I hold that AO was justified in assessing the income of the society in the capacity of an AOP.” 4. The ld. Sr. DR vehemently argued and relied on the order of the Revenue Authorities. 5. We have considered the available documents in the record and express our thoughtful observations as follows. The assessee is registered u/s 12A as per the order of the ld. CIT. The assessee was designated for this work for providing services to the citizens as per the direction of Government of Punjab. During the adjudication of appeal, the ld. CIT(A) referred the order of coordinate bench in the case of Sukhmani Societies for Citizens Services, Mansa (2013) 153 TTJ 235 (Asr). But in this case, the society was not registered u/s 12AA. It is not come under the factual matrix with the assessee’s fact. The respectful observation of the ITA No. 656/Asr/2017 Sukhmani Society for C. S. v. DCIT 5 order of Hon’able High Court of Delhi in the case of Commissioner of Income- tax, (Exemption) v. Association of Third-Party Administrators [2020] 114 taxmann.com 534 (Delhi) is as follows: - “9. Having given our thoughtful consideration to this issue, we are not persuaded by the submissions advanced by Mr. Maratha, learned Senior Standing Counsel. Merely because the objects of the trust are for the advancement of the business of TPA, it would not ipso facto render the trust to be non-charitable. The objects of the trust are not exclusively for the promotion of the interests of the TPA members. The objects are to provide benefit to general public in the field of insurance and health facilities. In the course of carrying out the main activities of the trust, the benefits accruing to the TPA members cannot, by itself, deny the institution the benefit of being a charitable organization.” From above discussion the assessee-trust is giving service for benefit of the people as per the scheduled activities directed by the State Government. The assessee-trust cannot be solely in business purpose. The observation of income and expenditure account the assessee-trust is maintaining accounts as per provision of section 11 of the Act. The objective is the benefit to the people in their social activity which the assessee-trust is served through its activities. The larger people of society have been benefitted through the activities. The income expenditure account of the assessee-trust is maintained as per the provisions of section 11 of the Act. Here, we are not inclining to the order of Revenue Authorities. The assessee is eligible for ITA No. 656/Asr/2017 Sukhmani Society for C. S. v. DCIT 6 deduction u/s 11 as per the Act. Accordingly, the addition of the assessee is deleted. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 14.07.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order