JAMAIAT ULAMA-E-RELIEF FOUNDATION, MUMBAI V. DIT (E), MUMBAI

ITA 6737/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8233 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 21-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Source of fund
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH J, MU MBAI BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6737/MUM/2013 FOR (ASSESSMENT YEAR : 2012-13 ) JAMIAT ULAMA-E-RELIEF FOUNDATION, IMAM BADA COMPOUND, OPP. B.I.T. CHAWL NO.1, IMAM BADA ROAD, NEAR BHINDI BAZAR, MUMBAI-400009 PAN: AABTJ5386R VS. DIT(E)-5(2), ROOM NO. 616, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DHIRENDRA M. SHAH (AR) REVENUE BY : SHRI ALOK JOHRI (DR ) DATE OF HEARING : 14.02.2017 DATE OF PRONOUNCEMENT : 22.02.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. DIRECTOR OF INCOME-TAX (EXEMPTIONS ) [FOR SHORT THE DIT(E)], MUMBAI DATED 30.09.2013 FOR ASSESSMENT YEAR (AY) 20 12-13. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED WITH CHARITY COMMISSIONER, MUMBAI VIDE REGISTRATION NO. F 42591 (MUM). THE ASSESSEE FILED AN APPLICATION WITH DIT(E) FOR REGISTRATION U/S 12A OF THE ACT. THE APPLICATION OF ASSESSEE WAS REJECTED BY LD. DIT(E) VIDE ORDER DATE D 30.09.2013. THUS, AGGRIEVED BY THE ORDER OF LD. DIT(E), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : THE HONBLE DIRECTOR OF INCOME-TAX (EXEMPTIONS), M UMBAI SERIOUSLY ERRED IN LAW AND ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE IN PASSING THE IMPUGNED ORDER U/S 12AA(1)(B)(II) R.W.S. 12A OF THE INCOME TAX ACT 1961 AND REJECTING YOUR APPELLANTS APPLICATION FOR GRANT OF REGISTRATION. THE APPLICATION FOR GRANT OF REGISTRATION OUGHT TO HAVE BEEN ALLOWED IN VIEW OF THE DETAILED AND EXHAUSTIVE SUBMISSIONS, EVIDENCES, PRAYERS, AND ARGUMENTS MADE DURING THE PROCEEDINGS THEREOF. 2 ITA NO. 6737/M/2013 JAMIAT ULAMA -E-RELIEF FOUNDATION THE APPLICATION FOR GRANT OF REGISTRATION U/S 12AA R.T.W.S. 12A OF THE ACT BE ALLOWED AND REGISTRATION BE GRANTED. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) FOR THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR OF THE ASSESSEE ARGUED THAT DU RING THE REGISTRATION PROCEEDING BEFORE THE ASSESSEE WAS ASKED TO FURNISH THE INFORM ATION RELATED WITH DETAILS AND PARTICULARS OF MEMBERS OF MANAGING COMMITTEE, THEIR BANK ACCOUNTS, NOC FOR OFFICE PREMISES, COPY OF REGISTRATION FROM CHARITY COMMISS IONER, COPY OF AUDITED ACCOUNTS AND ITS ACTIVITIES UNDERTAKEN ALONG WITH THE DOCUME NTARY EVIDENCE. THE ASSESSEE FURNISHED ALL DETAILED PARTICULARS WHICH WERE REQUI RED BY LD DIT(E). THOUGH,THE APPELLANT FULFILLED ALL THE REQUISITE CONDITION RE QUIRED FOR REGISTRATION U/S 12A OF THE ACT, YET THE APPELLANT WAS NOT GRANTED REGISTRATION . IT WAS FURTHER ARGUED THAT WHILE EXAMINING THE APPLICATION FOR REGISTRATION THE LD D IT(A) WAS REQUIRED TO EXAMINE THE OBJECT OF THE TRUST AND GENUINENESS OF ITS ACTIVITY . THE ASSESSEE FURNISHED THE SUFFICIENT EVIDENCE WITH REGARD TO THE LAWFUL OBJEC T OF THE SOCIETY AND ITS GENUINE ACTIVITIES. THE LD AR FOR ASSESSEE ARGUED THAT LD DIT (E) OBJECTED THAT OBJECT NO. 3 OF THE SOCIETY IS COMMERCIAL IN NATURE. THE LD AR FOR APPELLANT SUBMITTED THAT AFTER FILING THE PRESENT APPEAL, THE APPELLANT APPROACHED THE CH ARITY COMMISSIONER FOR CHANGE OF CLAUSE-3 OF MEMORANDUM OF ASSOCIATION WHICH HAS BEE N ALLOWED BY THE CHARITY COMMISSIONER VIDE ORDER DATED 26.10.2016. THE COPY OF ORDER PASSED BY CHARITY COMMISSIONER AND THE APPLICATION OF ASSESSEE IS ALS O PLACED ON RECORD. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. DIT(E) AND WOULD ARGUE THAT THE APPLICATION OF THE ASSESSEE WAS REJECTED ON FI VE GROUNDS I.E (I) THE COLLECTION RECEIPT OF THE SOCIETY IS WITHOUT ANY SUPPORTING D OCUMENTARY EVIDENCE, (II) FAILED TO FURNISH REQUISITE SATISFACTION WITH DOCUMENTARY EVI DENCE /MATERIAL ABOUT THE OBJECT AND GENUINITY OF THE ACTIVITIES, (III) OBJECT NO.3 OF SOCIETY IS COMMERCIAL IN NATURE AND THERE IS NO LEGAL AND BINDING CLAUSE FOR UTILIZ ING THE FUNDS OF SOCIETY SOLELY FOR CHARITABLE PURPOSE (IV) SOCIETY IS PROVIDING LEGAL ASSISTANCE TO THE PERSON WHO ARE ALLEGEDLY INVOLVED IN ANTI-NATIONAL ACTIVITIES AND (V) THE MEMBERSHIP IS RESTRICTED TO MEMBER JAMIAT ULAMA-E-RELIEF FOUNDATION ONLY. IT WAS ARGUED THAT THE APPELLANT IS ENGAGED IN ANTI-SOCIAL ACTIVITIES AND WERE PROVI DING LEGAL ADD/ASSISTANCE TO THE ACCUSED WHO WERE INVOLVED IN VARIOUS TERRORIST ACTI VITIES. THE ASSESSEE PROVIDED THE LEGAL ASSISTANCE TO THE ACCUSED INVOLVED IN (1) AKS HAR DHAM ATTACK CASE, (2) TIFFIN 3 ITA NO. 6737/M/2013 JAMIAT ULAMA -E-RELIEF FOUNDATION BOMB BLAST CASE, (3) BANGALORE BLAST CASE, (4) NAND ED BLAST CASE, (5) CRPF RAMPUR ATTACK CASE, (6) LUCKNOW CASE, (7) GATEWAY O F INDIA, MUMBAI BLAST CASE. THUS, THE OBJECT AND THE ACTIVITIES OF THE ASSESSEE ARE NEITHER GENUINE NOR LAWFUL. ACCORDINGLY, THE APPLICATION OF THE ASSESSEE WAS RI GHTLY REJECTED BY LD. DIT(E). IN THE REJOINDER SUBMISSION LD AR OF ASSESSEE SUBMITTED TH AT THE APPELLANT SOCIETY PROVIDED LEGAL AID TO THE ACCUSED WHO WERE IMPLICATED IN VAR IOUS CRIMINAL CASES. THE LEGAL AID IS THE PRIMARY AND BASIC RIGHT OF EVERY PERSON, EVE N THE STATE PROVIDES THE LEGAL AID TO THE PERSON WHO ARE FOUND INVOLVED IN VARIOUS CRIMIN AL CASES. THE APPELLANT IS READY TO PROVE THE GENUINENESS OF ITS ACTIVITY AFTER AMENDME NT IN THE MEMORANDUM OF ASSOCIATION VIDE AMENDMENT DATED 23.08.2016. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF LD. DIT(E), THE VARIOUS DOCUMENTS PLACED ON RECORD BY AR OF THE ASSESSEE IN VARIOUS DECISIONS FILED IN THE FORM OF PAPER BOOK. THOUGH T HE AR OF THE APPELLANT FILED A LEGAL PAPER BOOK, HOWEVER, NONE OF THE DECISION WAS REFERRED DURING HIS SUBMISSION. THE APPELLANT SOCIETY WAS FORMED ON 11.06.2013. THE APPELLANT FILED AN APPLICATION UNDER FORM NO. 10 A ON 11.03.2013 SEEKING REGISTRAT ION UNDER SECTION 12A OF THE ACT. THE ASSESSEE IN RESPONSE TO THE QUERIES FURNIS HED INFORMATION ABOUT THE OBJECT OF THE SOCIETY AND THE DETAILS OF ITS ACTIVITIES. HOWE VER, THE LD DIT(E) REJECTED THE APPLICATION OF THE APPELLANT ON FIVE GROUNDS AS MEN TIONED IN SUB-PARA (A) TO (E) OF PARA 3 OF ITS ORDER DATED 30.09.2013. ALL THE REASONS OF REJECTION ARE NARRATED BY LD DR FOR THE REVENUE WHICH ARE NOT REPEATED HERE FOR THE SAK E OF BREVITY. 5. SECTION 12AA OF THE ACT PRESCRIBES THE PROCEDURE OF THE REGISTRATION BY LD DIT(A). THE LD DIT(A) IS REQUIRED ONLY AFTER EXAMINING THE RECORD AND SATISFYING HIMSELF ABOUT THE OBJECT OF THE SOCIETY(TRUST)/ INSTITUTION AND GENUINENESS OF ITS ACTIVITIES, THE LD DIT(E) HAS TO PASS THE ORDER EITHER FOR GRANTING REGISTRATION UNDER SECTION 12A OR HIS REFUSAL. THE LD DIT (E) OBJECTED ON THE OBJECTS AS WELL AS ON THE ACTIVITIES OF THE SOCIETY. THE FIRST OBJECTION OF LD DIT(E) IS ON THE FUNDING OF THE SOCIETY AS NO SUPPORTING DOCUMENTS WAS FURNISHED ABOUT THE SOURCE OF FUNDING. THE SECOND OBJECTION OF LD DIT (E) IS THAT NO MATERIAL AND SUP PORTING DOCUMENT FOR EXPENSES INCURRED IN ITS ACTIVITY IS PROVIDED. THE THIRD OBJ ECTION OF LD DIT(E) IS THAT SOCIETY IS COMMERCIAL IN NATURE. NOW, THE SOCIETY HAS DELETED THE OBJECT CLAUSE NO.3 OF ITS MEMORANDUM OF ASSOCIATION. THE FOURTH OBJECTION OF LD DIT (E) IS THAT THE SOCIETY IS 4 ITA NO. 6737/M/2013 JAMIAT ULAMA -E-RELIEF FOUNDATION PROVIDING THE LEGAL ASSISTANCE TO THE PERSONS ALLEG EDLY INVOLVED IN THE ANTI-NATIONAL ACTIVITIES. IN RESPONSE TO SUCH QUERIES THE APPELLA NT SUBMITTED THAT BEFORE LD DIT(E) THAT THE AIM OF THE SOCIETY IS TO FIND OUT THE TRUT H BEHIND SUCH INCIDENTS AND ACTIVITIES. THE FIFTH OBJECTION OF THE LD DIT(E) IS THAT THE ME MBERSHIP IS RESTRICTED TO MEMBER JAMIAT ULAMA-E-RELIEF FOUNDATION, MAHARASHTRA ONLY . AS WE HAVE RECORDED EARLIER THAT THE LD DIT(E) WHILE GRANTING OR REFUSING REGIS TRATION HAS TO EXAMINE THE OBJECTS OF THE SOCIETY AND ITS ACTIVITIES. CONSIDERING THE SUB MISSION OF THE LD AR OF THE ASSESSEE THAT THE APPELLANT IS READY TO SATISFY THE LD DIT(E ) ABOUT THE LAWFUL OBJECT OF THE APPELLANT AND GENUINENESS OF ITS ACTIVITY, WE RESTO RE THE CASE TO THE FILE OF LD DIT(E) TO EXAMINE THE CASE AFRESH IN ACCORDANCE WITH LAW. THE LD DIT(E) IS AT LIBERTY TO EXAMINE THE SOURCE OF FUNDING AND ITS EXPENDITURE AS THE SAME IS INTEGRAL PART OF ACTIVITY OF THE APPELLANT. NEEDLESS TO SAY THAT THE APPELLANT SHALL BE PROVIDED SUFFICIENT OPPORTUNITY BEFORE PASSING THE ORDER AFRESH. THE LD DIT(E) SHALL NOT BE INFLUENCE BY ANY OBSERVATION IN THIS ORDER. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND FEBRUARY, 2017. SD/- SD/- (D.KARUNAKARA RAO) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/02/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/