Dr. D V Raju Multi Organ Foundation, Kakinada V. THE CIT, Kakinada

ITA 662/VIZ/2013

• Counselvise Citation: 66225314 RSA 2013
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 11-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: BODA ANAND KUMAR
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

ITA NOS.661&662/VIZAG/2013 DR. D.V. RAJU MULTI ORGAN FOUNDATION, KAKINADA IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NOS.661&662/VIZAG/2013 ASSESSMENT YEAR : 2013 - 14 DR. D.V. RAJU MULTI ORGAN FOUNDATION KAKINADA VS. CIT KAKINADA (APPELLANT) (RESPONDENT) PAN NO.AABTD 9159Q ASSESSEE BY: SHRI BODA ANAND KUMAR, AR REVENUE BY: SHRI K.V.N. CHARYA, DR DATE OF HEARING : 05.12.2014 DATE OF PRONOUNCEMENT : 05.12.2014 ORDER PER D. MANMOHAN, VICE PRESIDENT:- THESE TWO APPEALS BY THE ASSESSEE TRUST ARE DIRECT ED AGAINST THE ORDER PASSED BY THE CIT RAJAHMUNDRY, WHEREIN HE REF USED TO GRANT REGISTRATION U/S 12AA OF THE ACT AND CONSEQUENT REC OGNITION U/S 80G OF THE INCOME-TAX ACT. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE TRUST HAS C OME INTO EXISTENCE ON 07.03.2013 AND THE TRUST DEED WAS REGISTERED WITH T HE JOINT REGISTRAR, KAKINADA. IT IS NOT IN DISPUTE THAT THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE. THE TRUST FILED AN APPLICATION IN FORM 10A DATED 15.03.2013 ON 22.3.2013 FOR REGISTRATION U/S 12AA OF THE ACT. TH E TRUST WAS ESTABLISHED TO DEVELOP, MAINTAIN AND GRANT AID IN CASH OR IN KIND FOR CREATING A FACILITY OR FOR ESTABLISHING AN INSTITUTION FOR MULTI ORGAN REPLACE MENT FOR THE BENEFIT AND USE OF GENERAL PUBLIC. ALLIED ACTIVITIES WERE ALSO INCLUDED IN THE TRUST DEED. 3. THE TRUST HAS ALSO SOUGHT EXEMPTION U/S 80G OF T HE ACT ALONG WITH REQUIRED DOCUMENTS AND A DECLARATION U/S 13(1)(C) O F THE ACT. 4. THE LD. COMMISSIONER REFUSED TO GRANT REGISTRATI ON ON THE GROUND THAT NO EXPENDITURE WAS INCURRED BY THE TRUST BEFORE 31. 3.2013 TOWARDS THE ITA NOS.661&662/VIZAG/2013 DR. D.V. RAJU MULTI ORGAN FOUNDATION, KAKINADA 2 OBJECT OF THE TRUST; IT ONLY MOBILIZED FUNDS AND KE PT IN NATIONALISED BANKS. HOWEVER, HE HAD TAKEN NOTE OF THE FACT THAT SOME EX PENDITURE WAS INCURRED AFTER 1.4.2013 TO PROPAGATE THE OBJECTS OF THE TRUS T INCLUDING TRAINING OF ITS EMPLOYEES. YET, HE STRESSED UPON THE FACT THAT THE TRUST, PRIOR TO 31 ST MARCH WAS YET TO CONDUCT ACTIVITIES. FURTHER, IN THE MEM ORANDUM, DISSOLUTION CLAUSE IS NOT PROPERLY WORDED AS PER I.T. ACT. THOU GH HE ADMITTED THAT THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE, HE R EJECTED THE CLAIM OF REGISTRATION MAINLY ON THE GROUND THAT NO ACTIVITIE S HAVE BEEN CONDUCTED BY THE TRUST AND DISSOLUTION CLAUSE IS NOT PROPERLY WO RDED. CONSEQUENT THERETO, THE CLAIM OF RECOGNITION U/S 80G OF THE ACT WAS ALS O DENIED ON THE GROUND THAT UNLESS REGISTRATION U/S 12AA OF THE ACT IS GRA NTED, THE CLAIM FOR RECOGNITION U/S 80G OF THE ACT IS PREMATURE. 5. AGGRIEVED, ASSESSEE PREFERRED APPEALS BEFORE THE TRIBUNAL. HE PLACED BEFORE US COPY OF THE TRUST DEED, NOTE ON JUSTIFICA TION FOR SEEKING RECOGNITION U/S 80G OF THE ACT AND ALSO THE MEMORANDUM OF UNDER STANDING TO SUBMIT THAT WITHIN 15 DAYS FROM THE DATE OF REGISTRATION O F THE TRUST, IT CANNOT BE EXPECTED TO CONDUCT CHARITABLE ACTIVITIES AND THE C OMMISSIONER WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF REGISTRATION ME RELY ON THAT GROUND. HE RELIED UPON THE FOLLOWING ORDERS OF THE TRIBUNAL, W HEREIN THE BENCH OBSERVED THAT SO LONG AS THE OBJECTS OF THE TRUST ARE CHARIT ABLE IN NATURE, CLAIM FOR REGISTRATION CANNOT BE REJECTED MERELY ON THE GROUN D THAT NO ACTIVITY WAS CARRIED ON IN THIS YEAR; HE ALSO ADVERTED THE ATTEN TION TO PARA 26 OF THE TRUST DEED TO SUBMIT THAT ON DISSOLUTION OF THE TRUST, TH E NET ASSETS OF THE TRUST SHALL BE TRANSFERRED TO AN ASSOCIATION OF PERSONS O R TRUST HAVING SIMILAR OBJECTS AND EVEN OTHERWISE ONCE A TRUST IS REGISTER ED WITH A SUB-REGISTRAR AS A CHARITABLE TRUST, THE NET ASSETS/INCOME WOULD OBV IOUSLY BE TAKEN OVER BY A CHARITY COMMISSIONER AND HENCE REJECTION OF REGISTR ATION ON THIS GROUND IS NOT VALID. 1. ITAT M UMBAI C BENCH, MUMBAI IN ITA NO.1935/M/2013 IN TH E CASE OF M/S. ORGANISATION FOR AUTISTIC INDIVIDUALS (OAI) VS. OFFICE OF THE DIRECTORATE OF INCOME TAX (E) DATED 30.9.2013. 2. ITAT VISAKHAPATNAM BENCH IN ITA NO.699/VIZAG/201 3 IN THE CASE OF SRI RAJARAJESWARI CHARITABLE TRUST VS. CIT DATED 2. 7.2014. ITA NOS.661&662/VIZAG/2013 DR. D.V. RAJU MULTI ORGAN FOUNDATION, KAKINADA 3 6. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDERS PASSED BY THE COMMISSIONER OF INCOME-TAX. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. THE APPLICATION SEEKING REGISTRATION U/S 1 2AA OF THE ACT WAS REJECTED MAINLY ON THE GROUND THAT THE ASSESSEE HAS NOT COMM ENCED ANY ACTIVITY AND THE DISSOLUTION CLAUSE IS NOT PROPERLY WORDED, WHER EAS IN THE LIGHT OF THE DECISIONS PLACED BEFORE US, WE ARE OF THE VIEW THAT THE ASSESSEE FULFILLED ALL THE CONDITIONS FOR GRANT OF REGISTRATION. RESPECTF ULLY FOLLOWING THE DECISIONS CITED SUPRA, WE DIRECT THE COMMISSIONER TO GRANT RE GISTRATION U/S 12AA OF THE ACT AND CONSEQUENTLY TO CONSIDER THE APPLICATION FI LED IN FORM 10G FOR RECOGNITION U/S 80G OF THE ACT. 8. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 5 TH DECEMBER14 SD/- SD/- (J. SUDHAKAR REDDY) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT VG/SPS VISAKHAPATNAM, DATED 5 TH DECEMBER, 2014 COPY TO 1 DR. D.V. RAJU MULTI ORGAN FOUNDATION, D.NO.34-1-2 7, DUVURI VARI LANE, TEMPLE STREET, KAKINADA-533 001, EAST GODAVARI DIST RICT 2 THE CIT, RAJAHMUNDRY 3 THE CIT(A), RAJAHMUNDRY 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM