Kamdhenu Gaushala Sewa Trust, Kanpur V. CIT, Kanpur

ITA 722/LKW/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9060 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-03-2011
• Assessment Year: misc
• Appeal Filed On: 07-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VERMA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 12AA; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A - BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NO.722(LKW.)/2010 . KAMDHENU GAUSHALA SEWA TRUST, VS. THE C.I.T.-I, 49/49-A, GENERALGANJ, KANPUR. KANPUR. PAN AABTK4480F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT SHUKLA, ADVOCATE RESPONDENT BY : SHRI ANADI VERMA, SR.D.R. O R D E R PER N.K.SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE O RDER DATED 30.9.2010 OF THE LD.CIT(A)-I, KANPUR. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL: 1. BECAUSE, THE LD. 'CIT' HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE 'OBJECTS' OF THE 'APPELLANT TRUST' CAN NOT BE HELD TO BE CHARITABLE IN NATURE IN TERMS OF SECTION 2(15), AND THEREBY REJECTING THE APPLICATION FILED BY THE APPELLANT FOR GRANT OF REG ISTRATION UNDER SECTION 12AA. 2. BEAUSE, THE LD. 'CIT' HAS ERRED IN LAW AND ON F ACTS IN HOLDING THAT FOLLOWING 'OBJECT' NUMBERED (XVIII) RE ADING AS UNDER:- ' T O PROVIDE FOR AND ARRANGE REL I EF T O AN I MALS , BI RDS A ND ALL SENTIEN T B E ING S AND TO ESTABLISH SUPPORT MAINTA I N AND/O R GRANT A I D AND/OR OTHE R ASS IST A NCE T O ANY GAUSHALAS AND/OR OTHER ASSISTANCE T O A NY GAUSHALAS AND/OR OTHE R C ENTRES FEEDING AND/OR IMPROVING , BREED IN G OF COW S , 2 AND/OR OTHE R ANIMALS , B IRDS AND/OR SENTIENT BEING . ' IS NOT COVERED UNDER THE DEFINITION OF SECTION 2(15 ), WITHOUT APPRECIATING THAT THE AFORESAID OBJECT COMES WITHIN THE PURVIEW OF GENERAL PUBLIC UTILITY AND IS CLEARLY A CHARITABLE OBJECT.' 3. BECAUSE, THE LD. 'CIT' HAS FAILED TO APPRECIATE OTHER 'OBJECTS' AS ENUMERATED IN CLAUSE 4(I) TO (XXIII) O F THE 'OBJECTS' CONTAINED IN THE TRUST DEED DATED 04.03.2009 WHICH CLEARLY WERE IN THE NATURE OF CHARITABLE OBJECTS IN SECTION 2(15) A ND THE VIEW TAKEN BY THE 'CIT' SOLELY ON THE BASIS OF ONE OBJECT THAT 'A PPELLANT TRUST' IS NOT ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA IS ERR ONEOUS BOTH ON FACTS AND IN LAW. 4. BECAUSE, LD. 'CIT' HAS ERRED IN LAW AND ON FACT S IN HOLDING THAT 'APPELLANT TRUST' HAS FAILED TO FURNISH THE SU PPORTING DOCUMENTARY EVIDENCES IN SUPPORT OF ITS ACTIVITIES IS WHOLLY ER RONEOUS AND FACTUALLY INCORRECT AS ALL THE DETAILS, EVIDENCES AND SUBMISS IONS WERE PRODUCED NOT ONLY BEFORE THE CIT HIMSELF BUT ALSO BEFORE T HE ASSESSING OFFICER (DCIT-1, KANPUR) WHO HAS EXAMINED THE SAME AND GAVE A FAVOURABLE REPORT WHICH HAS BEEN NOT TAKEN INTO CON SIDERATION WITHOUT ASSIGNING ANY REASON. 5. BECAUSE, THE LD. 'CIT' HAS ERRED IN LAW AND ON FACTS IN REJECTING THE REPORT CALLED BY HIM FROM DCIT, KANP UR WHEREIN AFTER DETAILED ENQUIRY AND INVESTIGATION HAS CLEARLY FOUN D THAT APPELLANT TRUST WAS CARRYING ON CHARITABLE ACTIVITIES AND GA VE A FAVOURABLE REPORT FOR GRANT OF REGISTRATION HOWEVER, THE LD. ' CIT' WITHOUT ANY COGENT REASON HAS REJECTED THE SAME, WHICH VITIATES ITS OWN FINDING AND VIEW FOR REJECTING THE REGISTRATION UNDER SECTI ON 12AA. 6. BECAUSE, THE ORDER APPEALED AS AGAINST IS CONTR ARY TO THE FACTS LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE GRIEVANCE OF THE ASSESSEE RELATES TO THE ACTION OF THE LD.CIT IN REJ ECTING THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF REGISTRATION UNDER SEC TION 12AA OF THE INCOME- TAX ACT, 1961. 3 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE FILED AN APPLICATION DATED 30.3.2010 IN FORM NO.10A FOR GRANT OF REGISTR ATION UNDER SECTION 12A(1) OF THE I.T.ACT. THE LD.CIT ASKED THE REPORT FROM THE DY.CIT- I,KANPUR, WHO SUBMITTED THE REPORT DATED 8.9.2010 A ND ENDORSEMENT DATED 14.9.2010. THE LD.CIT FROM THE APPLICATION OF THE A SSESSEE OBSERVED THAT THE ASSESSEE-TRUST WAS CREATED ON 4.3.2009 AND THE DETA ILS FILED ALONGWITH FORM NO.10A REVEALED THAT THE ASSESSEE WAS ENGAGED AT TH E RELEVANT TIME IN CONSTRUCTING A BUILDING FOR THE COWS AND RESIDENTIA L QUARTERS FOR THE EMPLOYEES/WORKERS TAKING CARE OF THE ANIMALS. HE P OINTED OUT THAT THE LAND ON WHICH THE SAID CONSTRUCTION WAS GOING ON WAS TA KEN ON RENT BUT NO RENT AGREEMENT AS PER LAW HAD BEEN EXECUTED AND IT WAS IN THE FORM OF A LETTER ON A STAMP OF RS.100 NOT SIGNED BY BOTH THE PARTIE S, SO IT CANNOT BE SAID TO BE AN AGREEMENT. THE LD.CIT FURTHER OBSERVED THAT T HE OBJECTS OF THE ASSESSEE AS PER CLAUSE NO.XVIII WERE AS UNDER : ' T O PROVIDE FOR AND ARRANGE REL I EF T O AN I MALS , BI RDS A ND ALL SENTIEN T B E ING S AND TO ESTABLISH SUPPORT MAINTA I N AND/O R GRANT A I D AND/OR OTHE R ASS IST A NCE T O ANY GAUSHALAS AND/OR OTHER ASSISTANCE T O A NY GAUSHALAS AND/OR OTHE R C ENTRES FEEDING AND/OR IMPROVING , BREED IN G OF COW S , AND/OR OTHE R ANIMALS , B IRDS AND/OR SENTIENT BEING . ' ACCORDING TO THE LD.CIT THE ABOVE OBJECT WAS NOT CO VERED UNDER SECTION 2(15) OF THE I.T.ACT AS IT DOES NOT FALL BETWEEN FOUR CLASSES OF THE FOLLOWING OBJECTS: (I) RELIEF OF POOR, (II) EDUCATION, (III) MEDICAL RELIEF, (IV) OBJECTS OF GENERAL PUBLIC UTILITY. THE LD.CIT DID NOT FIND THE OBJECT OF THE ASSESSEE TO BE CHARITABLE AND ALSO MENTIONED THAT THE ASSESSEE FAILED TO FURNISH ANY S UPPORTING DOCUMENTARY 4 EVIDENCE IN SUPPORT OF ITS ACTIVITIES CARRIED ON. A CCORDINGLY, THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF REGISTRATION UND ER SECTION 12AA(1) OF THE I.TACT WAS REJECTED. 5. NOW, THE ASSESSEE IS IN APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT DID NOT CONSIDER ALL THE OBJECTS AS ENUMERATED IN CLAUSE 4( I) TO (XXIII) OF THE OBJECTS CONTAINED IN THE TRUST DEED DATED 4.3.2009 WHICH W ERE CLEARLY IN THE NATURE OF CHARITABLE OBJECTS AS DEFINED IN SECTION 2(15) O F THE I.T.ACT. IT WAS FURTHER SUBMITTED THAT THE VIEW TAKEN BY THE LD.CIT WAS BA SED SOLELY ON ONE OF THE OBJECTS, WHICH IS ALSO CHARITABLE IN NATURE AS HAS BEEN HELD BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE CIT VS. SWASTIK TEXT ILE TRADING CO. (P.) LTD. (1978) 113 ITR 853(GUJ.). IT WAS SUBMITTED THAT EST ABLISHING, RUNNING AND HELPING GAUSHALA IS AN OBJECT OF GENERAL PUBLIC UTI LITY AS HAS BEEN HELD BY THE HON'BLE GUJARAT HIGH COURT IN THE AFORESAID CAS E, THEREFORE, THE LD.CIT WAS NOT JUSTIFIED IN REJECTING THE APPLICATION OF T HE ASSESSEE. 7. IN HIS RIVAL SUBMISSIONS, THE LD.D.R. STRONGLY S UPPORTED THE ORDER OF THE LD.CIT. IT WAS SUBMITTED THAT THE ASSESSEE DID NOT FURNISH SUPPORTING DOCUMENTARY EVIDENCE TO SUBSTANTIATE THAT ITS OBJ ECTS WERE CHARITABLE IN NATURE, THEREFORE, THE LD.CIT WAS JUSTIFIED IN REJE CTING THE APPLICATION OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT ALTHOUGH ASKED THE REPORT FROM THE DY.CIT-I, KANPUR AND ADDITIONAL CIT, RANGE-I, KANPUR VIDE LETTER DAT ED 26.4.2010 AND THE CONCERNED AUTHORITIES FURNISHED THEIR RESPECTIVE RE PORTS ON 8.9.2010 AND 5 14.9.2010. HOWEVER, THE LD.CIT HAD NOT DISCUSSED IN THE IMPUGNED ORDER WHETHER THE CONCERNED AUTHORITIES HAD RECOMMENDED T HE REGISTRATION AFTER BEING SATISFIED OR NOT. IT IS ALSO NOTICED THAT THE LD.CIT ONLY CONSIDERED ONE OF THE OBJECT OF THE ASSESSEE WHICH WAS RELATING TO ESTABLISH, MAINTAIN, SUPPORT AND ASSISTANCE TO GAUSHALA OR OTHER CENTRE S FEEDING AND/OR IMPROVING, BREEDING OF COWS AND/OR OTHER ANIMALS, BIRDS AND/OR SENTIENT BEING. HE HAD NOT DISCUSSED OTHER OBJECTS OF THE ASSESSEE MENTIONED IN CLAUSE 4(I) TO (XXIII) OF THE TRUST DEED DATED 4.3. 2009, SO IT IS NOT CLEAR FROM THE IMPUGNED ORDER OF THE LD.CIT AS TO WHAT WERE T HE MAIN OBJECTS OF THE ASSESSEE AND AS TO WHETHER THOSE WERE CHARITABLE IN NATURE OR NOT. FURTHERMORE, THE LD.CIT CONSIDERED THAT ESTABLISHI NG, RUNNING AND HELPING GAUSHALAS WAS NOT AN OBJECT OF CHARITABLE NATURE. T HE SAID VIEW IS CONTRARY TO THE VIEW EXPRESSED BY THE HON'BLE GUJARAT HIGH C OURT IN THE AFORESAID REFERRED TO CASE OF CIT VS. SWASTIK TEXTILE TRADIN G CO. LTD. (SUPRA). IT APPEARS THAT THE SAID JUDGMENT WAS NOT BROUGHT TO THE NOTICE OF THE LD.CIT AT THE TIME OF PASSING THE IMPUGNED ORDER. 8.1 WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE PRESENT CASE, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE LD.CIT TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PR OVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE PREFERABLY WITHIN THREE MONTHS FROM THE RECEIPT OF THIS ORDER. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.3.20 11. SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER MARCH 28TH ,2011. 6 COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.