Nirman Bharti Samajik Avam Arthik Vikas Society, Lucknow V. Commissioner of Income Tax-1, Lucknow

ITA 695/LKW/2013

• Counselvise Citation: 69523714 RSA 2013
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-07-2014
• Assessment Year: 2014-2015
• Appeal Filed On: 03-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J J MEHROTRA
• Section: 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.695/LKW/2013 ASSESSMENT YEAR: N.A. NIRMAN BHARTI SAMAJIK AVAM ARTHIK VIKAS SOCIETY, D - 88, VIGYANPURI, MAHANAGAR, LUCKNOW. PAN:AAAAN4496N VS. C.I.T. - 1, LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI J. J. MEHROTRA, C.A. RESPONDENT BY SHRI MANOJ KUMAR GUPTA, CIT, D.R. DATE OF HEARING 09/07/2014 DATE OF PRONOUNCEMENT 2 1 /08/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT - I, LUCKNOW DATED 29/07/2013 PASSED BY HIM U/S 12AA OF THE INCOME TAX ACT. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LD. COMMISSIONER OF INCOME TAX - I HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN REFUSING REGISTRATION TO THE APPELLANT - SOCIETY UNDER SECTION 12A OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. COMMISSION ER OF INCOME TAX - I HAS FAILED TO APPRECIATE THAT THE MAIN OBJECTS OF THE APPELLANT - SOCIETY ARE CHARITABLE IN NATURE AND, THEREFORE, ALL THE MORE THERE IS NO JUSTIFICATION IN REFUSING TO REGISTER THE APPELLANT SOCIETY UNDER SECTION 12A OF THE INCOME TAX AC T, 1961. 2 3. THAT THE VARIOUS OBSERVATION MADE BY THE LD. COMMISSIONER OF INCOME TAX - I ARE MISPLACED AND CONTRARY TO THE ACTIVITIES CARRIED ON BY THE APPELLANT - SOCIETY AND ON NON - APPRECIATION OF THE CORRECT FACTS AND, THEREFORE, IN ANY VIEW OF THE MATTER T HE ID. COMMISSIONER OF INCOME TAX - I IS NOT JUSTIFIED IN REFUSING REGISTRATION TO THE APPELLANT SOCIETY U/S 12A OF THE INCOME TAX ACT, 1961. 4. THAT THE ORDER PASSED BY THE ID - COMMISSIONER OF INCOME TAX - I IS WITHOUT PROPER OPPORTUNITY AND BAD IN LAW. 5. THAT THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX - I, IS AGAINST THE MERITS, CIRCUMSTANCES AND LEGAL ASPECTS OF THE CASE. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OR ALL THE GROUNDS OF APPEAL ON OR BEFORE THE DATE O F HEARING. 3. IT IS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE COPY OF MEMORANDUM AND BYE - LAWS OF THE ASSESSEE ARE AVAILABLE ON PAGE N O. 6 TO 11 OF THE PAPER BOOK. R EGARDING THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE SOCIETY, IT WAS SUBMITTED TH AT THE ASSESSEE SOCIETY IS PROVIDING FINANCIAL AWARENESS TO POOR WOMEN OF UTTARANCHAL, U.P. AND M.P. HE SUBMITTED THAT SINCE CHARITABLE ACTIVITIES ARE UNDERTAKEN BY THE ASSESSEE SOCIETY, THE REGISTRATION SHOULD BE GRANTED TO THE ASSESSEE U/S 12AA OF THE A CT. 4. AS AGAINST THIS, LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE FOR THE YEAR ENDING ON 31/03/2011 IS AVAILABLE ON PAGE NO. 61 OF THE PAPER BOOK AND AS PER THE SAME, THE ASSESSEE HAS RECEIVED A SUM OF RS.5 LAC TOWARDS TECHNICAL ASSISTANCE FOR FINANCIAL AWARENESS AND THE ASSESSEE HAS INCURRED EXPENDITURE OF RS.4.32 3 LAC ON ACCOUNT OF CLIENTS FINANCIAL AWARENESS TRAINING FEE. A S PER LETTER FROM VINDHYANCHAL FINLEASE PRIVATE LIMITED DATED 01/02/2011, AVAILABLE ON PAGE NO. 18 AND 19 OF THE PAPER BOOK, IT IS SEEN THAT THIS COMPANY HAS ENGAGED THE ASSESSEE SOCIETY FOR ASSISTING THEM IN PROVIDING FINANCIAL AWARENESS TO CLIENTS BY WAY OF A TRAINING PROGRAMME FOR EDUCATING THE CLIENTS IN THE ESSENTIALS OF FINANCIAL LITERACY FOCUSED ON AVOIDING OF OVER INDEBTEDNESS, EVILS OF MULTIPLE BORROWING, MICROFINANCE METHODOLOGY AND THE NEED OF TIMELY REPAYMENT AND RIGHTS OF A BORROWER. THEY HAVE UNDERTAKEN TO PROVIDE A SUM OF RS.35/ - FOR EACH CLIENT WHO TAKES PART IN THE SAID LITERACY PROGRAMME. IT IS ALSO NOTED THAT THEY ARE HAVING ABOUT 10,000 CLIENTS IN THE CITY OF LUCKNOW , VARANASI, DEHRADUN, SAHARANPUR AND BHOPAL. ULTIMATELY IT WAS AGREED THAT THEY WILL PROVIDE THE TRAININ G AGAINST THE TOTAL SUM OF RS.5 LAC. AS PER THE AUDITED INCOME & EXPENDITURE ACCOUNT, THE ASSESSEE SOCIETY HAS RECEIVED THIS SUM OF RS.5 LAC AND HAS INCURRED EXPENDITURE OF RS.4.32 LAC FOR PROVIDING TRAINING. IN OUR CONS IDERED OPINION, RECEIVING FIXED AMOUNT AS CONSIDERATION FROM A FINANCING COMPANY TO PROVIDE SOME TRAINING TO THEIR CLIENTS CANNOT BE CONSIDERED AS CHARITABLE ACTIVITY. WE ALSO FIND THAT IT IS NOTED BY CIT IN PARA 3 OF HIS ORDER THAT THIS CLAIM OF EXPENDIT URE OF RS.4.32 LAC COULD NOT BE SUBSTANTIATED BY THE ASSESSEE SOCIETY BY REQUISITE EVIDENCE. NOTHING HAS BEEN PRODUCED BEFORE US TO CONTROVERT THIS FINDING OF LEARNED CIT. REGARDING THE CLAIM OF THE ASSESSEE THAT IT HAS GOT 8689 PERSONS INSURED BY LIC AL SO , IT DOES NOT CONSTITUTE ANY CHARITABLE ACTIVITY BECAUSE THE INSURANCE PREMIUM WAS PAID BY THE PERSONS INSURED AND THE APPLICANTS ROLE IN THIS REGARD WAS FOUND NOT VERIFIABLE. ON THIS ASPECT ALSO , NOTHING HAS BEEN PRODUCED BEFORE US TO CONTROVERT THIS FINDING OF CIT. R EGARDING THE THIRD ASPECT, IT IS NOTED BY CIT THAT THE ASSESSEE HAS SHOWN RS.1.32 LAC AS LOAN FOR SUICIDAL PHONE COUNSELING. HE HAS GIVEN A FINDING THAT THE PURPOSE OF OBTAINING THIS LOAN AND UTILIZATION OF AMOUNT SO RECEIVED IS NOT 4 EX PLAINED WITH REFERENCE TO EXPENSES INCURRED AND SHOWN IN ACCOUNTS AND THE VERY SOURCE OF THIS LOAN REMAIN UNEXPLAINED. HE HAS ALSO GIVEN A FINDING THAT THE ASSESSEE S CLAIM THAT IT UNDERTOOK COUNSELING OF PERSONS THROUGH SUICIDAL HELPLINE HAVE ABSOLUTELY NO EVIDENCE. ON THIS ASPECT ALSO, NOTHING HAS BEEN PRODUCED BEFORE US TO CONTROVERT THIS FINDING OF CIT. CONSIDERING ALL THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE SOCIETY COULD NOT ESTABLISH THAT ANY CHARITABLE ACTIVITY WAS UNDERTAK EN BY IT AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 /08/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR