ADVANCE SECURITY TRAINING EDUCATION SOCIETY, MUMBAI V. DIT (E), MUMBAI

ITA 7168/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9285 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 24-02-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 03-12-2012
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: SANJIV G BRAHME
• Keywords: Gift; Charitable institution
• Section: 12A

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , ,, , , ! '# ! '# ! '# ! '#, ,, , $ $ $ $ BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 7168/MUM./2012 ( & ' (' / ASSESSMENT YEAR : 201314 ) ADVANCES SECURITY TRAINING EDUCATION SOCIETY, C/O MANOHAR BIDAYE 1901/1902, A WING, OBEROI GARDENS, KANDIVALI (E), MUMBAI 400 101 .. )* / APPELLANT & V/S DIT (E) 6 TH FLOOR, PIRAMAL CHAMBER, PAREL MUMBAI -400012 .... +,)* / RESPONDENT ) . / PERMANENT ACCOUNT NUMBER AABAA9448A & '.! / 0 / ASSESSEE BY: SHRI.JAYANT BHAT & SANJIV G. BRAHME / 0 / REVENUE BY : SMT. S. PADMAJA & / !1 / DATE OF HEARING 24.02.2015 ' 2( / !1 / DATE OF ORDER 11.3.2015 ' ' ' ' / ORDER ! '# ! '# ! '# ! '#, ,, , 3 3 3 3 / PER AMIT SHUKLA, J.M. THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 23 RD SEPTEMBER 2011, PASSED BY THE LEARNED DIRECTOR OF ADVANCE SECURITY TRAINING EDUCATION SOCIETY 2 INCOME TAX(E), MUMBAI,[DIT(E)]U/S.12AA(B)(II) REJEC TING THE ASSESSEES APPLICATION FOR REGISTRATION U/S.12AOF TH E I.T. ACT, 1961. 2. THE ASSESSEE TRUST WAS CONSTITUTED BYWAY OF MEMORA NDUM OF ASSOCIATION (MOA) DATED 13.01.2010. THE SAID TRUST WA S ALSO REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI VIDE CERTIFICATE DATED 22.04.2010. IT HAS APPLIED FOR APPLICATION IN FORM NO.10A ON 31.03.2011 FOR REGISTRATION U/S.12A. THE LD. DIT(E) AFTER EXAMINING THE VARIOUS OBJECTS ENUMERATED IN THE MOA REJECTED T HE ASSESSES APPLICATION ON THE GROUND THAT SOME OF THE OBJECTS OF T HE TRUST CANNOT BE HELD TO BE CHARITABLE IN NATURE AND THE GENUINENE SS OF ITS ACTIVITIES ALSO COULD NOT BE PROVED. THE LD. DIT(E) HAD TOOK SP ECIFIC NOTE OF FOLLOWING OBJECTS FOR REJECTING THE ASSESSEES REGIS TRATION:- (9) TO UNDERTAKE AND PROMOTE RESEARCH AND DEVELOPM ENT ACTIVITIES IN INDUSTRY TRADE AND COMMERCE THROUGH THE ESTABLISHMENT OF RESEARCH AND DEVELOPMENT CENTRES A ND BY EXTENDING TECHNICAL AND FINANCIAL ASSISTANCE TO THE EXI STING R & D CENTRES FUNCTIONING IN INDUSTRIES AND EDUCATIONAL I NSTITUTIONS. (27) TO ESTABLISH, RUN, TAKE OVER RETAIL AND WHOLES ALE STORES OF MEDICINES, GARMENTS, GROCERIES, GIFTS ETC. TO RAISE T HE FUNDS FOR THE WELFARE OF THE SOCIETY AND TO TAKE DISTRIBUTORSHI P OF ANY PRODUCT FOR RAISING THE FUND FOR THE SAME. 3. THEREAFTER, THE ASSESSEE MADE AN AMENDMENT TO ITS O BJECTS AND DELETED THE AFORESAID TWO OBJECTS ON THE BASIS OF WHIC H DIT(E) HAD ADVANCE SECURITY TRAINING EDUCATION SOCIETY 3 REJECTED THE ASSESSEES APPLICATION. AFTER AMENDING/D ELETING THE SAID OBJECTS, THE ASSESSEE AGAIN HAD APPLIED FOR REGISTRAT ION U/S.12A IN THE PRESCRIBED FORM NO.10A ON 28.3.2012. THE LD. DIT(E) ON THE PERUSAL OF THE TRUST DEED AND THE OVERALL OBJECTS NOTED THAT, T HE TRUST HAS AGAIN BOTH CHARITABLE AS WELL AS NON CHARITABLE BUSI NESS OBJECTS SUCH AS, DESIGNING, MANUFACTURE AND DISTRIBUTION OF ANY OR ALL TYPES OF EDUCATIONAL MATERIAL, TEACHING AIDS, PHYSICAL EDUCAT ION MATERIAL INCLUDING SUPPORTS MATERIAL AND EQUIPMENT ETC., PROMO TION OF RESEARCH AND DEVELOPMENT ACTIVITIES IN INDUSTRY, TRADE AND COM MERCE, SPONSORSHIP AND UNDERTAKING OF ANY TRAINING, INVESTIG ATION OR RESEARCH IN THE FIELD OF SECURITY MANAGEMENT, ESTABLISHMENT OR MAINTENANCE OF HOSTELS AND RESIDENTIAL QUARTERS FOR STAFF OF THE APPL ICANT, ESTABLISHMENT AND TAKING OVER OF RETAIL AND WHOLESALE STORES OF MEDICINES, GARMENTS, GROCERIES, GIFTS ETC., TO RAISE F UNDS FOR WELFARE OF THE APPLICANT, ESTABLISHMENT OF RESTAURANTS, HOTELS, MA LLS, APARTMENTS ETC. TO RAISE FUNDS FOR WELFARE OF THE APPLICANT ETC. A LL THOSE OBJECTS CANNOT BE SAID TO BE STRICTLY IN THE NATURE OF CHARITAB LE PURPOSES. 4. BEFORE THE DIT(E), THE ASSESSEE HAD SUBMITTED THAT ALL THE OBJECTS WERE PURELY FOR CHARITABLE PURPOSE ONLY WITH OUT ANY PROFIT MOTIVE AND WITHOUT ANY COMMERCIAL BASIS. HOWEVER, TH E LD. DIT(E) ADVANCE SECURITY TRAINING EDUCATION SOCIETY 4 REJECTED THE ASSESSEES APPLICATION AFTER OBSERVING AND HOLDING AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF THE APPLICANT CA REFULLY, BUT THE SAME ARE NOT ACCEPTABLE. IT IS OBSERVED FROM THE R ECORD THAT THE APPLICANT IS ENGAGED IN PROVIDING GOOD QUALITY SE CURITY GUARDS WHICH BY ITSELF IS ASSESSEE BUSINESS OR COMMERCIAL A CTIVITY. THUS, IN VIEW OF MIXED CHARITABLE AS WELL AS NON-CHARITABL E/BUSINESS OBJECTS AND LACK OF BINDING LEGAL OBLIGATION ON THE TRUSTEES IN REGARD TO APPLICATION OF INCOME, I AM UNABLE TO SATIS FY MYSELF ABOUT THE GENUINE CHARITABLE CHARACTER OF OBJECTS OF THE TRUST WHICH IS A CONDITION PRECEDENT FOR GRANT OF REGISTRA TION. AS THE APPLICANT TRUST HAS FAILED TO COMPLY WITH THE MANDATOR Y REQUIREMENTS PRESCRIBED U/S.12AA READ WITH RULE 17A, ITS APPLICATION FOR GRANT OF REGISTRATION IS REJECTED. 5. BEFORE US, LEARNED COUNSEL SUBMITTED THAT THE ASS ESSEE HAD ALREADY DELETED THE OBJECTS ON WHICH THE DIT(E) HAD RE VISED OBJECTIONS IN HIS EARLIER ORDER DATED 23.9.2011. NOW ALL THE OB JECTS ARE MOSTLY IN THE NATURE OF CHARITABLE PURPOSES, THEREFORE, REGI STRATION 12A SHOULD BE GRANTED. HE ALSO DREW OUR ATTENTION TO THE OBJECTS W HICH WERE OMITTED, VIDE AMENDMENT DEED. THUS, HE SUBMITTED THAT N OW THE ASSESSEES APPLICATION FOR 12A SHOULD BE ACCEPTED A ND REGISTRATION SHOULD BE GRANTED. ADVANCE SECURITY TRAINING EDUCATION SOCIETY 5 6. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON OR DER OF THE DIT(E) AND SUBMITTED THAT SOME OF THE OBJECT OF THE ASS ESSEE ARE DEFINITELY COMMERCIAL IN NATURE WHICH CANNOT HELD TO BE FOR CHARITABLE PURPOSES. THIS FACT HAS BEEN DULY NOTED BY THE DIT(E) WHILE REJECTING ASSESSES APPLICATION. THUS, OBJECTS AND GENUINENESS OF THE CHARITABLE CHARACTER OF THE TRUST DOES NOT SATISFY THE CONDITIONS M ENTIONED IN SECTION 12AA. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PER USED THE RELEVANT MATERIAL PLACED ON RECORD. FROM THE PERUSA L OF THE OBJECTS OF THE ASSESSEE, IT IS SEEN THAT APPLICANT TRUST HAS AS M ANY AS 34 OBJECTS DEALING WITH VARIETY OF ACTIVITIES WHICH ARE TO BE CAR RIED OUT BY THE TRUST. THESE ACTIVITIES ENCOMPASSES ALL THE POSSIBLE ACTIVITIES IN THE FIELD OF EDUCATION AND ALLIED ACTIVITIES; MEDICAL REL IEF, MEDICAL HOSPITALS, ESTABLISHMENT OF HOSTELS; NURSING HOMES, PRIMARY HEALTH CENTERS ETC; ESTABLISHMENT AND MAINTENANCE OF HOSTELS/BOARDING HOUS ES; RELIEF TO THE ORPHANS AND CHILDREN; PROVIDING AID, SCHOLARSHIP AND LOAN TO THE POOR STUDENTS; PROVIDING RELIEF TO THE ELDERLY PEOPLE , TRAINING OF SECURITY GUARDS AND IN THE FIELD OF SECURITY MANAGEMEN T AND HOST OF SEVERAL OTHER OBJECTS. DESPITE THIS, THE ASSESSEE VIDES CLAUSE NO.30 OF MOA THE ASSESSEE INTENDS TO CARRY THE FOLLOWING OBJECT S WHICH READS AS UNDER; ADVANCE SECURITY TRAINING EDUCATION SOCIETY 6 30. TO ESTABLISH, HOSPITALS, NURSING HOMES, RESTAURA NT, HOTELS, MALLS, APARTMENTS OR OTHER VARIOUS CONSTRUCTIONS TO RAI SE THE FUND FOR THE WELFARE OF THE SOCIETY. THE AFORESAID OBJECT, DEFINITELY DOES NOT FALLS WIT HIN THE AMBIT OF CHARITABLE PURPOSE AS DEFINED IN SECTION 2(15). IN ALL ITS 34 OBJECTS, THE APPLICANT ASSESSEE HAS COVERED HUNDREDS OF ACTIVITIES IN ALL THE POSSIBLE FIELDS. THERE IS NO DOMINANT OBJECT FOR WHC H THE APPLICANT TRUST HAS BEEN FORMED. IN ORDER TO ESTABLISH THAT SUCH ACTIVITIES HAVE BEEN ACTUALLY CARRIED OUT OR INTENDED TO BE CARRIED OUT; THE ASSESSEE HAS NOT FURNISHED ANY IOTA OF EVIDENCE OR ANY MATERIA L TO SHOW THAT ANY OF ITS INNUMERABLE ACTIVITIES HAVE BEEN CARRIED O UT IN LAST FOUR YEARS. EVEN THE INCOME AND EXPENDITURE ACCOUNT HAVE N OT BEEN FILED BEFORE US, TO ESTABLISH WHAT ACTIVITY IS BEING CARRIE D OUT WHICH CAN BE TERMED AS CHARITABLE ACTIVITIES. THUS, THE GENUINENESS OF THE CHARITABLE ACTIVITIES COULD NOT BE ESTABLISHED BY THE ASSESSEE, E ITHER BEFORE THE LD.DIT(E) IN TWO ROUND OF PROCEEDINGS, OR BEFORE US . THE FINDINGS OF THE LD. DIT(E) THAT APPLICANT ASSESSEE IS ENGAGED IN TH E PROVIDING GOOD QUALITY SECURITY GUARDS HAVE NOT BEEN REBUTTED BEFORE US BY THE ASSESSEE, BY WAY OF ANY MATERIAL OR EVIDENCES. IF T HE ASSESSEES ACTIVITIES ARE PROVIDING QUALITY SECURITY GUARDS, THE N DEFINITELY IT LEADS TO INFERENCE THAT IT IS IN THE NATURE OF BUSINESS OR COMMERCIAL ACTIVITY, WHICH DOES NOT WANT ANY GRANTING REGISTRATION U/S.12A. NOT ONLY THE ADVANCE SECURITY TRAINING EDUCATION SOCIETY 7 ASSESSEES OBJECTS OF THE TRUST SHOULD BE RESTRICTED WI THIN THE REALMS OF CHARITABLE PURPOSES AS DEFINED IN SECTION 2(15) BUT ALSO ITS CHARITABLE ACTIVITIES SHOULD BE GENUINE. THE GENUINENESS OF THE ACTIVITIES DESPITE LAPSE OF 5 YEARS IS SERIOUSLY LACKING. HERE IN THIS CASE ASSESSEE THE TRUST WAS FORMED WAY BACK IN JANUARY 2010 AND SINCE THEN PERIOD OF 5 YEARS HAVE EXPIRED, STILL THE ASSESSEE HAS BEEN UNAB LE TO PROVIDE ANY MATERIAL BEFORE US TO SHOW THE GENUINENESS OF ITS AC TIVITIES VIS--VIS ITS OBJECTS. THUS, WE ARE UNABLE TO PERSUADE OURSELV ES TO ACCEPT THE CONTENTION OF THE ASSESSEE IN FAVOUR OF GRANTING REG ISTRATION U/S.12A. ACCORDINGLY, THE ORDER OF THE DIT(E) IS CONFIRMED AN D ASSESSEES APPEAL IS DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DAY OF MARCH 2015. SD/- SD/- SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - ! ! ! ! '# '# '# '# AMIT SHUKLA JUDICIAL MEMBER MUMBAI, 4& 4& 4& 4& DATED: 11. 03.2015 PATEL ADVANCE SECURITY TRAINING EDUCATION SOCIETY 8 ' / +!5 65(! / COPY OF THE ORDER FORWARDED TO : (1) & '.! / THE ASSESSEE; (2) / THE REVENUE; (3) 7() / THE CIT(A); (4) 7 / THE CIT, MUMBAI CITY CONCERNED; (5) 5 :; +!& , , / THE DR, ITAT, MUMBAI; (6) ;<' = / GUARD FILE. ,5! +! / TRUE COPY '& / BY ORDER > / ? / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI