North Field Welfare Society, Hyderabad V. Director of Income Tax (Exemptions), Hyderabad

ITA 712/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66553 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 07-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: D RANGA RAO
• Keywords: Charitable institution

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMB ER ITA NO.712/HYD/2012 M/S. NORTHFIELD WELFARE SOCIETY, HYDERABAD ( PAN - AABAN 0301K ) V/S. DIRECTOR OF INCOME - TAX(EXEMPTION), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI D.RANGA RAO RESPONDENT BY : S HRI M.H.NAIK DR DATE OF HEARING 10.12 .2012 DATE OF PRONOUNCEMENT 10.12.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION), HYDERABAD DATED 27.2.2012, REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION UNDER S .12AA OF THE INCOME-TAX ACT, 1961. 2. BRIEFLY THE FACTS ARE THAT THE ASSESSEE CLAIMIN G ITSELF TO BE A CHARITABLE TRUST FILED AN APPLICATION IN FORM NO.10 A, SEEKING REGISTRATION UNDER S.12AA OF THE ACT. THE DIRECTOR OF INCOME-TA X (EXEMPTION), AFTER EXAMINING THE OBJECTS OF THE ASSESSEE-SOCIETY, CAME TO A CONCLUSION THAT IT IS ESTABLISHED FOR THE BENEFIT OF ITS MEMBERS ONLY AND NOT FOR GENERAL PUBLIC. THE DIRECTOR OF INCOME-TAX (EXEMPTION), HOLDING THA T NONE OF THE OBJECTS OF ITA NO.712/HYD/2012 M/S. NORTHFIELD WELFARE SOCIETY, HYDERABAD 2 THE SOCIETY CAN BE TERMED AS CHARITABLE IN TERMS OF THE PROVISIONS CONTAINED IN S.2(15) OF THE INCOME-TAX ACT, 1961, CONCLUDED T HAT THE ASSESSEE-SOCIETY IS NOT ENTITLED FOR REGISTRATION UNDER S.12AA OF TH E ACT. 3. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFO RE US. 4. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE A SSESSEE SUBMITTED BEFORE US THAT THE DIRECTOR OF INCOME-TAX (EXEMPTION) WAS WHOLLY UNJUSTIFIED IN REJECTING THE APPLICATION FOR REGIST RATION, WITHOUT PROPERLY EXAMINING THE FACTS PLACED BEFORE HIM AND ALSO WITH OUT APPRECIATING THE TRUE NATURE OF THE OBJECTS FOR WHICH THE ASSESSEE SOCIET Y HAS BEEN ESTABLISHED. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSE SSEE, REFERRING TO CLAUSE NO.3 OF THE BYE-LAWS OF THE SOCIETY, SUBMITTED THAT IT CLEARLY ESTABLISHES THE FACT THAT THE OBJECTS OF THE ASSESSEE SOCIETY IS F OR CHARITABLE PURPOSE. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE , REFERRING TO THE RECEIPTS AND PAYMENTS ACCOUNT FOR THE YEAR ENDED 31.3.2012, WHICH IS PART OF THE PAPER-BOOK, SUBMITTED THAT DURING THE RELEVANT FIN ANCIAL YEAR, THE ASSESSEE HAS INCURRED EXPENDITURE OF RS.1,01,525 TOWARDS CON STRUCTION OF A SCHOOL BUILDING. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SUPPO RTING THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION) SUBMITTED THAT THE ASSESSEE SOCIETY, HAVING BEEN CREATED FOR THE BENEFIT OF ITS MEMBERS ONLY, IT IS NOT ENTITLED FOR EXEMPTION UNDER S.12AA OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE IMPUGNED ORDER OF THE DIRECTOR(EXEMPTION) AND OTHER MATERIAL ON RECORD. THE AIMS AND OBJECTS OF THE SOCIETY, WHICH IS AT PAGE 3 OF THE PAPER-BOOK SUBMITTED BY THE SOCIETY, READS AS FOLLOWS- ITA NO.712/HYD/2012 M/S. NORTHFIELD WELFARE SOCIETY, HYDERABAD 3 (1) TO TAKE CARE OF WELFARE OF THE OWNERS OF PLOTS, FLA TS AND HOUSES AT BHANU VILLAGE, PATANCHERU MANDAL, MEDAK DISTRICT SANCTIONED BY HMDA NO.15/LO/PLG/HMDA/2010 (2) TO PROTECT THE LEGAL INTEREST OF THE OWNERS OF THE PROPERTIES IN THE ABOVE AREA; (3) THE SOCIETY IS PURELY A NON-PROFIT ORGANIZATION AND NO PORTION OF THE AMOUNT WILL BE PAID TO MEMBERS OR OFFICE BEARER S DIRECTLY OR INDIRECTLY AND SURPLUS WILL BE UTILISED FOR CHARITA BLE PURPOSE. .. A READING OF THE AFORESAID CLAUSES MAKES IT AMPLY C LEAR THAT THE SOCIETY HAS BEEN CREATED FOR THE WELFARE AND BENEFIT OF THE OWN ERS OF THE PLOTS, FLATS AND HOUSES AT BHANU VILLAGE, PATANCHERU MANDAL, MEDAK D ISTRICT. IT IS EVIDENT FROM THE SAID AIMS AND OBJECTS THAT THE GENERAL PUB LIC ARE IN NO WAY BENEFITTED BY THE ACTIVITIES OF THE ABOVE SOCIETY. EVEN CLAUSE (3) ON WHICH MUCH EMPHASIS WAS PUT BY THE LEARNED AUTHORISED RE PRESENTATIVE FOR THE ASSESSEE DOES NOT SPELL OUT WHAT ARE THE CHARITABLE PURPOSES FOR WHICH THE TRUST IS CREATED. THERE IS ALSO NO EVIDENCE ON RECO RD TO SHOW THAT THE ASSESSEE IN FACT IS INVOLVED IN ANY CHARITABLE ACTI VITY. IN THIS VIEW OF THE MATTER, WE FIND THAT THE DIRECTOR OF INCOME-TAX(EXE MPTION) IS JUSTIFIED IN REJECTING THE APPLICATION OF THE ASSESSEE FOR REGIS TRATION UNDER S.12AA OF THE ACT. WE ACCORDINGLY CONFIRM HIS ORDER AND REJECT T HE GROUNDS OF THE ASSESSEE IN THIS APPEAL. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 10.12.2012 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- 10 TH DECEMBER, 2012 ITA NO.712/HYD/2012 M/S. NORTHFIELD WELFARE SOCIETY, HYDERABAD 4 COPY FORWARDED TO: 1. M/S. NORTHFIELD WELFARE SOCIETY, C/O. M/S. 8 - 2 - 120/86/A/41, RAO & RAJU COLONY, BANJARA HILLS HYDERABAD-34 2. 3. 4. DIRECTOR OF INCOME-TAX(EXEMPTION), HYDERABAD DY. DIRECTOR OF INCOME-TAX(EXEMPTION), HYDERABAD DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.