Bhonwal Educational Trust, Lucknow V. CIT, Lucknow

ITA 700/LKW/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9125 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-02-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VERMA
• Assessee Lawyers: A P SINHA
• Section: 80G; 12A; 12AA; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, LUCKNOW BENCH 'A', LUCKNOW BEFORE SHRI H. L. KARWA, HON'BLE VICE PRESIDENT AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NOS.700 & 701/LUC/10 ASSESSMENT YEARS: N.A. BHONWAL EDUCATIONAL TRUST, VS. C.I.T.-I, GOKHALE MARG, LUCKNOW. LUCKNOW. PAN:AABTB5182D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A. P. SINHA, ADVOCATE RESPONDENT BY: SHRI ANADI VERMA, D. R. O R D E R PER N. K. SAINI: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE SEPARATE ORDERS OF THE LEARNED CIT EACH DATED 27/09 /2010. THE ISSUES AGITATED BY THE ASSESSEE IN THESE APPEALS RELATE TO THE REGISTRATION U/S 12AA(1) OF THE I.T. ACT, 1961 AND THE APPROVAL U/S 80G(5) OF THE I.T. ACT. SINCE THE ISSUE ARE CORRELATED AND THE APPEALS WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FACTS RELATED TO THIS CASE, IN BRIEF, ARE TH AT THE ASSESSEE TRUST WAS CREATED ON 24/12/2008. THE ASSESSEE FILED AN A PPLICATION U/S 2 12A(1)(A) OF THE I.T. ACT ON 30/03/2010 SEEKING REG ISTRATION UNDER THE SAID SECTION. ANOTHER APPLICATION OF THE SAME DATE WAS FILED FOR RECOGNITION U/S 80G OF THE I.T. ACT. THE LEARNED CIT, DURING THE C OURSE OF PROCEEDINGS, DREW THE ATTENTION OF THE LEARNED COUNSEL FOR THE A SSESSEE TO CLAUSE 5(N) WHICH MEANT PARTICULAR RELIGIOUS COMMUNITY/CASTE. THE SAID CLAUSE READ AS UNDER: CLAUSE 5(N) TO CARRY OUT PROGRAMS FOR WELFARE OF WEAKER SECTION OF THE SOCIETY AND DEVELOPMENT OF BACKWARD AND RURAL AREAS OF THE COUNTRY. ALSO TO WORK FOR THE UPLIFTM ENT OF DOWNTRODDEN I.E. SC, ST, OBC & MINORITIES AND OTHER OPPRESSED CONSTITUENTS OF THE SOCIETY. 2.1 THE LEARNED CIT ALSO POINTED OUT THAT IN CLAUSE-6 T HE AREA OF OPERATION OF THE ASSESSEE TRUST WAS GLOBAL THUS, TH E ACTIVITY OF THE ASSESSEE IS NOT CONFINED TO INDIA BUT WHOLE WORLD. THE ASSESSEE SUBMITTED TO THE LEARNED CIT THAT THE TRUST HAS BEE N CREATED FOR THE BENEFIT OF ALL PARTS OF THE SOCIETY AND NOT FOR ANY SPECIFI C COMMUNITY AND SIMILARLY THE AREA OF OPERATION WAS MENTIONED AS GLOBAL BUT T HAT IS THE MAXIMUM LIMIT OF THE AREA WHERE TRUST MAY FUNCTION BUT THE TRUSTEES OF THE TRUST HAVE DECIDED TO CARRY ON ALL THE ACTIVITIES OF THE TRUST IN INDIA ONLY. THE LEARNED CIT WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND DENIED THE REGISTRATION U/S 12AA OF THE I.T. ACT. THE RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF 3 AHMEDABAD RANA CASTE ASSOCIATION VS. CIT 82 ITR 70 4 (GUJ) AND SINCE THE REGISTRATION WAS NOT GRANTED U/S 12AA(1) OF THE I.T. ACT, THE LEARNED CIT ALSO REJECTED THE APPLICATION FOR APPROVAL OF T HE RECOGNITION U/S 80G OF THE I.T. ACT. NOW THE ASSESSEE IS IN APPEAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMI TTED THAT THE LEARNED CIT, NOWHERE POINTED OUT THAT THE OBJECTS OF THE AS SESSEE WERE NOT CHARITABLE IN NATURE AND THAT THE ASSESSEE SOCIETY WAS NOT FOR THE BENEFIT OF ANY PARTICULAR COMMUNITY OR CASTE RATHER IT WAS FOR THE BENEFIT OF SC/ST/OBC AND MINORITY WHICH INCLUDED VARIOUS FRACT IONS OF THE SOCIETY AND INCLUDED VARIOUS COMMUNITIES NOT A PARTICULAR C OMMUNITY. 4. IN HIS RIVAL SUBMISSIONS THE LEARNED D. R. SUPPO RTED THE ORDER OF LEARNED CIT. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, IT APPEARS THAT THE LEARNED CIT DID NOT APPRECIATE THE FACTS IN RIGHT PERSPECTIVE. HE ALTHOUGH MENTIONED THAT THE OBJECT OF THE TRUST WAS NOT CHARITABLE IN NATURE, HOWEVER HE DID NOT POINT OUT HOW AND IN WHAT MANNER THE OBJECTS OF THE ASSESSEE SOCIETY WERE NOT CHARIT ABLE IN NATURE PARTICULARLY WHEN HE HAS NOT DISCUSSED WHAT WERE TH E OBJECTS OF THE 4 ASSESSEE. IT ALSO APPEARS THAT THE LEARNED CIT, WI THOUT POINTING OUT ANY PARTICULAR COMMUNITY, CAME TO THE CONCLUSION THAT T HE ASSESSEE TRUST WAS CREATED FOR THE BENEFIT OF ANY SPECIFIC COMMUNITY. HE ALSO IGNORED THIS EXPLANATION OF THE ASSESSEE THAT THE TRUST HAD BEEN CREATED FOR THE BENEFIT OF ALL PART OF THE SOCIETY AND NOT FOR ANY PARTICUL AR COMMUNITY. CONSIDERING THE TOTALITY OF THE FACTS, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION AT THE LEVEL OF LEARNED CIT. WE, THER EFORE, SET ASIDE THE IMPUGNED ORDERS PASSED BY THE LEARNED CIT AND RESTO RE BOTH THE ISSUES I.E. THE ISSUE RELATING TO THE REGISTRATION U/S 12A A(1)(A) AND APPROVAL U/S 80G(5) OF THE I.T. ACT TO HIS FILE TO BE DECIDED AF RESH IN ACCORDANCE WITH LAW AFTER PROVIDING A DUE AND REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. (THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28/ 02/2011) SD/. ( H. L. KARWA ) VICE PRESIDENT SD/. (N. K. SAINI) ACCOUNTANT MEMBER DATED: 28/02/2011 *SINGH COPY FORWARDED TO THE: - 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR