M/s Shushruta Educational Trust, Bangalore V. DIT(Exemptions), Bangalore

ITA 665/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0692 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 14 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: 09-11-2009
• Assessment Year: misc
• Appeal Filed On: 29-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWATHI S PATIL
• Assessee Lawyers: V CHANDRASHEKAR
• Keywords: Charitable institution
• Section: 80G; 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBE R AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NOS.665 & 666/BANG/2009 ASSESSMENT YEAR : N.A. M/S. SHUSHRUTA EDUCATIONAL TRUST, GURU KRUPA, 2366/27, 12 TH MAIN, A BLOCK, RAJAJINAGAR, 2 ND STAGE, BANGALORE 560 010. : APPELLANT VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE. : RESPONDENT APPELLANT BY : SHRI V. CHANDRASHEKAR RESPONDENT BY : SMT. SWATHI S. PATIL O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THESE APPEALS ARE FILED BY THE ASSESSEE TRUST AGAI NST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE, DATED 27.4.09 AND 24.4.2009 REJECTING THE APPLICATIONS FOR REGISTRAT ION U/S. 12A AND 80G OF THE ACT RESPECTIVELY. 2. THE ASSESSEE TRUST IS A PUBLIC CHARITABLE TRUST AND RUNNING EDUCATIONAL INSTITUTIONS, THE MAIN OBJECT IS TO IMP ART EDUCATION. IT WAS ITA NOS. 665 & 666/B/09 PAGE 2 OF 4 FORMED BY WAY OF A TRUST DEED ON 2.3.1995. IT FILE D AN APPLICATION IN FORM NO.10A ON 23.10.2008 SEEKING REGISTRATION U/S. 12A. 3. THE LD. DIT(E) ON VERIFICATION OF THE BOOKS OF A CCOUNT FOUND THE FOLLOWING DEFICIENCIES: (A) THE RECEIPTS IN ONE ACCOUNT DID NOT HAVE CORRES PONDING ENTRIES IN THE OTHER ACCOUNT. (B) THE CASH BOOKS HAD DEFICIT CASH BALANCE ON SOME DAYS. THE DETAILS OF THESE DEFICIENCIES ARE LISTED OUT AT ANNEXURES 1 & 2 FORMING PART OF HIS ORDER. HE REJECTED THE APPLICA TION FOR REGISTRATION BY HOLDING AS UNDER: PERUSAL OF THE ANNEXURE REVEALS THAT THE APPLICANT TRUST HAS SHOWN RECEIPTS IN ITS BOOKS FOR WHICH THERE ARE NO TAXABLE SOURCES. SECTION 11 AND 12 OF THE I.T. ACT, 1961 D EALS ONLY WITH CERTAIN RECEIPTS WHICH ARE EXEMPTED FROM TAXATION. THIS IS AS PER SECTION 11 IT SHOULD BE INCOME DERIVED FROM PROPERT Y HELD UNDER THE TRUST (WHICH MEANS THE PROPERTY HELD BY THE TRU ST SHOULD BE AN EFFECTIVE SOURCE OF INCOME) AND VOLUNTARY CONTRIBUT ION MADE WITH SPECIFIC DIRECTION OR VOLUNTARY CONTRIBUTION RECEIV ED BY THE TRUST AS PER SECTION 12. THE RECEIPTS OF THE INCOME AS L ISTED IN THE ANNEXURE DO NOT FORM PART OF THE RECEIPTS AS REQUIR ED UNDER SECTION 11 AND 12. THUS THE APPLICATION FILED BY T HE APPLICANT FOR SEEKING REGISTRATION IS HEREBY REJECTED. 4. FURTHER, THE LD. DIT(E) IN HIS ORDER LISTED OUT THE DETAILS OF INCOME AND AMOUNT ACCUMULATED FOR THE ASSESSMENT YEARS 200 4-05 TO 2008-09 AND HE WAS OF THE OPINION THAT THE TRUST HAS NOT EX PENDED THE REQUIRED 85% OF ITS RECEIPTS TOWARDS CHARITABLE PURPOSE, NOR HAS FILED FOR ACCUMULATION AND HENCE IT IS DISENTITLED TO EXEMPTION U/S. 11. HE ALSO NOTED THAT THE TRUST HAD SOUGHT FOR ADJOURNMENT FOR 15 DAYS BY LETTER DA TED 24.4.09, BUT THE SAME WAS NOT CONSIDERED DUE TO TIME BARRING NATURE. FOR THE ABOVE ITA NOS. 665 & 666/B/09 PAGE 3 OF 4 REASONS, REGISTRATION U/S. 12A WAS REJECTED AND IN VIEW OF THE SAME, FURTHER APPLICATION U/.S 80G WAS ALSO REJECTED. 5. THE LD. AR SUBMITTED THAT THE TRUST IS RUNNING T WO COLLEGES, THE TRUSTEES ARE ONLY ACADEMICIANS WITH LITTLE COMMERCI AL KNOWLEDGE AND THEY WERE NOT PROPERLY GUIDED IN INCOME-TAX PROCEDURES. THE EDUCATIONAL INSTITUTIONS WERE STARTED WITH A VIEW TO CONTRIBUTE TO THE SOCIETY AND IN THE INITIAL YEARS EVEN THE SALARIES TO THE STAFF WERE P AID OUT OF THE OWN EARNINGS OF THE TRUSTEE. THE REGISTRATION APPLICATION FILED ON EARLIER OCCASION ON 26.8.04 CAME TO BE REJECTED ON FAILURE TO COMPLY WI TH THE REQUIREMENTS OF THE DEPARTMENT. SUBSEQUENTLY THE IMPUGNED APPLICAT ION DATED 28.3.08 WAS FILED. HE SUBMITTED THAT EVEN THOUGH CASH WAS RECEIVED SEPARATELY FROM THE TWO INSTITUTIONS THEY ARE MERGED AND HELD AS ONE IN THE HANDS OF THE TRUST AND THUS THERE WAS NO NEGATIVE CASH BALAN CE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE TRUST HAD A GOOD CASE A ND ONE MORE OPPORTUNITY BE PROVIDED TO REPRESENT ITS CASE EFFEC TIVELY WITH NECESSARY EVIDENCE AND DOCUMENTS FOR GRANT OF RECOGNITION U/S . 80G AND 12A OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE ARE OF THE VIEW THAT THE ASSESSEE MUST BE AFFORDED ONE MORE OPPORTUNITY TO REPRESENT ITS CASE BEFORE THE DIT(E) . ACCORDINGLY, IN THE INTEREST OF JUSTICE, THE APPEALS ARE RESTORED BACK TO THE FILE OF THE LD. DIT(E) FOR FRESH CONSIDERATION. THE ASSESSEE IS ALSO DIREC TED TO PRODUCE ALL THE RELEVANT EVIDENCE AND DOCUMENTS BEFORE THE LOWER AU THORITY AS REQUIRED AND COOPERATE WITH THE PROCEEDINGS. ITA NOS. 665 & 666/B/09 PAGE 4 OF 4 7. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF NOVEMBER, 2009. SD/- SD/- ( SHAILENDRA KUMAR YADAV) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMB ER BANGALORE, DATED, THE 13 TH NOVEMBER, 2009. DS/- 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.