ITO (E) 1(2), MUMBAI V. CANCER AID & RESEARCH FOUNDATION, MUMBAI

ITA 733/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8216 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 11-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH SHRI VIJAY MEHTA
• Assessee Lawyers: CULLA MUMBAI P A NO AAATCB
• Keywords: Depreciation; Charitable institution; Benefit of exemption; Cancellation of registration
• Section: 143(3); 142(1); 12A; 12AA; 12; 11

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.733/MUM/2016 ASSESSMENT YEAR: 2010-11 INCOME TAX OFFICER (EXEMPTION)-1(2), ROOM NO.501, 5 TH FLOOR, PIRAMAL CHAMBER, LALBAUG, MUMBAI-400012 / VS. CANCER AID & RESEARCH FOUNDATION, 10 TH FLOOR, BRIDGE VIEW, 16 HANSRAJ LANE, BYCULLA, MUMBAI-400027 ( / REVENUE) ( ! ' /ASSESSEE) P.A. NO.AAATC3013B / REVENUE BY SHRI H.N.SINGH CIT-DR ! ' / ASSESSEE BY SHRI VIJAY MEHTA # $ % ' & / DATE OF HEARING : 30/11/2017 % ' & / DATE OF PRONOUNCEMENT 30/11/2017 ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 27/11/2015 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI, HOLDING THAT THERE WAS NO CONTRAVENTION OF THE PROVISIONS OF SECTION 13 OF THE INCOME TAX ACT, 196 1 (HEREINAFTER THE ACT), IGNORING THE FACT THAT BMW C AR WAS PURCHASED IN THE NAME OF TRUSTEE, WHEREBY THE FUNDS OF THE TRUST WERE DIVERTED AND USED FOR THE BENEFIT OF EXC LUDED PERSON AS COVERED WITHIN THE PROVISIONS OF SECTION 13(1(C)(II) AND SECTION 13(2)(G) R.W.S. 13(3)(CC) OF THE ACT AN D NO LOG BOOK WAS PRODUCED TO SHOW THAT THE CAR WAS USED ONL Y FOR THE WORK OF THE TRUST AND FURTHER HOLDING THAT THE TRUST WAS ENTITLED TO BENEFIT OF EXEMPTION U/S 11 AND DELETIN G THE ADDITIONS MADE ON ACCOUNT OF DONATIONS RECEIVED OF RS.3,85,23,511/-, INCOME FROM OTHER SOURCES OF RS.9,32,319/- AND INCOME OF RS.5,41,508/- RECEIVED ON ACCOUNT OF INVESTMENT IGNORING THE PROVISION OF SEC TION 13 OF THE ACT. 2. DURING HEARING, SHRI H. N. SINGH, LD. CIT-DR, ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUN D ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 3 RAISED. ON THE OTHER HAND, SHRI VIJAY MEHTA, LD. CO UNSEL FOR THE ASSESSEE CONTENDED THAT THE IMPUGNED ISSUE IS C OVERED BY THE DECISION OF THE TRIBUNAL, WHICH WAS UPHELD B Y HON'BLE DELHI HIGH COURT (ITA NO.505 OF 2015) (PAGE S 38 TO 42 OF THE PAPER BOOK) AND ALSO ORDER OF THE TRIBUNA L IN ITS OWN CASE FOR ASSESSMENT YEAR 2009-10 (ITA NO.4789/MUM/2013) AND ANOTHER ORDER (ITA NO.1782/MUM/2014). ALL THESE ORDERS WERE MADE AVAIL ABLE BY THE ASSESSEE IN ITS PAPER BOOK. THIS FACTUAL MAT RIX WAS NOT CONTROVERTED BY LD. CIT-DR. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION OF THE ORDER OF THE TRIBUNAL DATED 13/11/2015 FOR ASSESSMENT YEAR 2009-10 (ITA NO.4789/MUM/2013) FOR READY REFERENCE AND ANALYSIS:- THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 4789/MUM/2013, IS DIRECTED AGAINST THE ORDER DATED 31-03- 2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- 1 , MUMBAI (HEREINAFTER CALLED THE CIT( A)), FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN THE MEMO OF APPEAL FILED:- ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 4 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THERE WAS NO CONTRAVEN TION OF PROVISIONS OF SECTION 13 IGNORING THE FACT THAT BMW CAR WAS PU RCHASED IN THE NAME OF THE TRUSTEE WHEREBY THE FUNDS OF THE TRUST WERE DIVERTED AND USED FOR THE BENEFIT OF EXCLUDED PERSON AS COVERED WITHIN THE PROVISION OF SECTION 13( 1 )(C)(II) & SECTION 13(2)(G) R.W.S. 13(3)(CC) OF THE INCOME TAX ACT, 1961 AND NO LOG BOOK WAS PRODUCED T O SHOW THAT THE SAID CAR WAS USED ONLY FOR THE WORK OF THE TRUST. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS ENTIT LED TO BENEFIT OF EXEMPTION U/S 11 AND DELETING THE ADDITIONS MADE ON ACCOUNT OF DONATIONS RECEIVED OF RS. 3,34,58,111/-, INCOME FRO M OTHER SOURCES OF RS. 16,16,4021- AND INCOME OF RS. 5,13,384/- RECEIV ED ON ACCOUNT OF INVESTMENT, IGNORING THE FACT THAT THERE WAS CONTRA VENTION OF PROVISIONS OF SECTION 13 OF THE INCOME TAX ACT, 196 1. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROU NDS STATED ABOVE, THE ORDER OF THE CIT (A)-I, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST IS REGISTERED AS CHARITABLE ORGANIZATION WITH DIT (E), MUMBAI U/S 12A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CA LLED THE ACT) AND ALSO REGISTERED WITH THE CHARITY COMMISSI ONER, MUMBAI. THE ASSESSEE TRUST CASE WAS SELECTED FOR SC RUTINY UNDER THE SELECTIVE SCRUTINY NORMS AND NOTICES U/S 143(2) & 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISS UED. IT WAS OBSERVED BY THE LD. ASSESSING OFFICER (HEREINAFTER CALLED THE AO) THAT THE OBJECTS OF THE ASSESSEE TRUST IS TO P ROVIDE MONETARY, MEDICAL AND OTHER ASSISTANCE AND HELP TO THE NEEDY, DESERVING AND POOR PEOPLE WHO ARE SUFFERING FROM CA NCER IN PARTICULAR AND OTHER DISEASES IN GENERAL AND CANNOT AFFORD THE MEDICAL/SURGICAL TREATMENT RECOMMENDED BY THE SPECI ALIST AND THEREBY HELP THEM , AS FAR AS POSSIBLE , TO LEAD A HEALTHY AND NORMAL LIFE. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE AO OBSERVED THAT THE ASSESSEE TRUST HAS PURCHASED B MW CAR FROM THE FUNDS OF THE TRUST IN THE PERSONAL NAME OF THE TRUSTEE SHRI ABDUL QADIR KAZI VIDE BILL DATED 20.3.2009 FRO M M/S NAVNIT MOTORS FOR RS. 32,20,000/- FOR WHICH THE PAY MENT HAS BEEN MADE BY THE TRUST FROM THE FUNDS OF THE TRUST. HENCE, IN THE OPINION OF THE A.O., THE FUNDS OF THE TRUST AMO UNTING TO RS. ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 5 32,20,000/- HAVE BEEN DIVERTED AND USED FOR THE BEN EFIT OF EXCLUDED PERSONS AS COVERED WITHIN THE PROVISIONS O F SECTION 13(1)(C)(II) AND SECTION 13(2)(G) READ WITH SECTION 13(3)(CC) OF THE ACT FOR WHICH NOTICE DATED 25TH NOVEMBER 2011 W AS ISSUED U/S 142(1) OF THE ACT TO THE ASSESSEE TRUST ASKING TO FURNISH A REPLY AS TO WHY IT SHOULD NOT BE CONCLUDED THAT FUN DS OF THE TRUST AMOUNTING TO RS. 32,20,000/- HAVE BEEN DIVERT ED AND USED FOR THE BENEFIT OF EXCLUDED PERSONS AS COVERED WITHIN THE PROVISIONS OF SECTION 13(1)(C)(II) AND SECTION 13(2 )(G) READ WITH SECTION 13(3)(CC) OF THE ACT. 4. THE ASSESSEE TRUST IN REPLY TO NOTICE DATED 25TH NOVEMBER 2011 TO AO SUBMITTED THAT THE PURCHASE OF THE CAR W AS FOR THE BENEFIT AND USE OF THE ASSESSEE TRUST AND FOR THE U SE OF THE CHAIRMAN, TRUSTEES AND INFLUENTIAL DONORS IN THEIR ROLE AND ACTIVITIES AS OFFICE BEARERS/WELL WISHERS OF THE TR UST. THE ASSESSEE TRUST SUBMITTED THAT PROF.(RETD.) A.A. KAZ I IS THE CHAIRMAN OF THE ASSESSEE TRUST AND ENTITLED TO SUCH FACILITIES THAT ARE PROVIDED BY THE ASSESSEE TRUST TO DO THE W ORK FOR THE TRUST. THE CHAIRMAN DOES NOT DRAW ANY SALARY FROM T HE ASSESSEE TRUST ALTHOUGH HE IS DEVOTING HIS FULL TIM E TO THE ACTIVITIES OF THE TRUST. THE CHAIRMAN IS ENTIRELY D EVOTED TO THE ACTIVITIES OF THE ASSESSEE TRUST AND THE BMW CAR WA S USED ONLY FOR OFFICIAL ACTIVITIES INCLUDING MEETING DOCTORS, DONORS, SOCIAL PERSONALITIES, ORGANIZING/ATTENDING EVENTS TO RAISE AWARENESS AND MEETING GOVERNMENT OFFICIALS FOR APPROVALS REQU IRED FOR THE ACTIVITIES OF THE TRUST. THE BMW CAR WAS PURCHA SED AFTER A RESOLUTION APPROVING THE PURCHASE WAS PASSED BY THE TRUSTEES IN THEIR BOARD MEETING HELD ON MARCH, 07, 2009. THE BMW CAR WAS FINANCED BY AVAILING LOAN FROM THE ICICI BA NK. THE LOAN WAS APPROVED AS A PURCHASE FOR THE ASSESSEE TR UST AND ON THE BASIS OF THE FINANCIAL POSITION OF THE ASSESSEE TRUST BUT THE BMW CAR WAS ERRONEOUSLY REGISTERED IN THE NAME OF P ROF. A.A. KAZI DUE TO GAP IN COMMUNICATION BETWEEN THE OFFICE STAFF OF THE ASSESSEE TRUST AND THE SELLER OF THE CAR AND WH EN IT WAS DISCOVERED DURING THE AUDIT PROCESS , THE ERROR WAS IMMEDIATELY BROUGHT TO THE ATTENTION OF NAVNIT MOTO RS PVT. LTD, THE SELLERS OF THE CAR AND STEPS WERE TAKEN TO GET THE CAR ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 6 TRANSFERRED IN THE NAME OF THE TRUST. THE AUDITORS OF THE TRUST IN THE NOTES TO ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31-3-2009 HAS CLEARLY POINTED OUT THAT THE TRUST HAS PURCHASE D THE MOTOR CAR DURING THE YEAR FOR THE OBJECT OF THE TRUST WHI CH IS PRESENTLY REGISTERED IN THE NAME OF ONE OF THE TRUS TEE ON ACCOUNT OF MISTAKE ON THE PART OF VENDOR AND NECESS ARY STEPS HAS BEEN INITIATED BY THE ASSESSEE TRUST TO GET THE BMW CAR TRANSFERRED IN THE NAME OF TRUST. THE PURCHASE OF C AR WAS CAPITALIZED AND REFLECTED IN THE FINANCIAL ACCOUNTS FOR THE YEAR 2008-09 AND SINCE THE OPERATING EXPENSES OF THE CAR WERE VERY HIGH , IT WAS DECIDED TO SELL THE CAR. THE SALE PRO CEEDS WERE CREDITED DIRECTLY TO THE ASSESSEE TRUST BANK ACCOUN TS AND CORRESPONDING CHANGES WERE MADE IN THE ASSESSEE TRU ST BALANCE SHEET. THE CAR HAD A LARGE LOGO OF THE ASSE SSEE TRUST STUCK ON EACH SIDE TO INDICATE THAT IT BELONGED TO THE TRUST. THE CAR WAS DRIVEN BY AN OFFICIAL DRIVER EMPLOYED BY TH E TRUST. IT WAS ALSO SUBMITTED BY THE ASSESSEE TRUST THAT THE A CTIVITIES OF THE ASSESSEE TRUST ARE GENUINE AND IN ACCORDANCE WI TH ITS MISSION TO FIGHT CANCER. THE ASSESSEE TRUST SUBMITT ED THAT IT HAS PLAYED A PIVOTAL ROLE IN THE BATTLE AGAINST THE DRE ADED DISEASE OF CANCER AND THE SAME IS RECOGNIZED BY LEADING NAT IONAL AND INTERNATIONAL AGENCIES. THE ASSESSEE TRUST ALSO SUB MITTED THAT THE ICICI BANK LOAN ACCOUNT STATEMENTS CLEARLY MENT IONED THAT THE ASSESSEE TRUST IS THE APPLICANT AND THE ASSET W AS ALWAYS INTENDED TO BE THE OFFICIAL PROPERTY OF THE ASSESSE E TRUST AND LOAN HAS BEEN AVAILED BY THE ASSESSEE TRUST. 5.THE A.O. AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE TRUST REFERRED TO SECTION13(1)(C)(II),13(2)(G) AND 13(3)(CC) OF THE ACT AND HELD THAT THE FUNDS OF THE ASSESSEE TRU ST WAS UTILIZED FOR PURCHASE OF BMW CAR WHICH IS REGISTERE D IN THE NAME OF THE PROF A A KAZI , TRUSTEE OF THE ASSESSEE TRUST WHICH AMOUNTS TO DIVERSION OF TRUST FUNDS TO THE TRUSTEE AND IT IS NOT A SMALL AMOUNT AND THE JUSTIFICATION GIVEN BY THE ASS ESSEE TRUST TO JUSTIFY THE PURCHASE OF CAR WAS NOT GENUINE. NOT HING STOPPED THE TRUST TO PURCHASE A DECENT CAR IN THE RANGE OF RS. 10-12 LACS SUCH AS HONDA CITY OR TOYOTA COROLLA INSTEAD O F BUYING A LUXURY BMW CAR COSTING RS. 32,20,000/-. UTILIZATION OF SUCH ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 7 HUGE FUNDS FOR BUYING BMW CAR INSTEAD OF USING THE SAME FOR CHARITABLE PURPOSES FOR WHICH SAID FUNDS ARE RAISED AND LYING WITH THE ASSESSEE TRUST REFUTES THE BASIC CONCEPT O F CHARITY. ACCORDINGLY, THE A.O. REJECTED THE CONTENTIONS OF T HE ASESSEE TRUST AND HELD THAT THE USAGE OF BMW CAR, A LUXURIO US CAR WILL CREATE A DOUBT ABOUT THE GENUINENESS OF THE ACTIVIT IES OF THE ASSESSEE TRUST. THE A.O ALSO HELD THAT NO LOG BOOK OR ANY OTHER EVIDENCE IS PRODUCED TO JUSTIFY THAT THE BMW CAR IS USED ONLY FOR THE WORK OF THE TRUST DURING THE YEAR AND NOT F OR PERSONAL USE BY THE TRUSTEE AND HENCE THE TRUST HAS DIVERTED THE FUNDS AND USED FOR THE BENEFIT OF EXCLUDED PERSONS COVERE D BY PROVISIONS OF SECTION 13(1)(C)(II), 13(2)(G) AND 13 (3)(CC) OF THE ACT AND IN VIEW OF THIS , THE EXEMPTION U/S 11 OF T HE ACT IS DENIED TO THE ASSESSEE TRUST BY THE AO VIDE ORDERS DATED 28.12.2011 U/S 143(3) OF THE ACT AND ACCORDINGLY AD DITIONS WERE MADE TO THE INCOME OF THE TRUST ON ACCOUNT OF DONATIONS RECEIVED OF RS. 3,34,58,111/-, INCOME FROM OTHER SO URCES OF RS. 16,16,4021- AND INCOME OF RS. 5,13,384/- RECEIVED O N ACCOUNT OF INVESTMENT. 6. AGGRIEVED BY THE ASSESSMENT ORDERS DATED 28.12.2 011 U/S 143(3) OF THE ACT PASSED BY AO, THE ASSESSEE TRUST PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE ASSESSEE TRUST REI TERATED ITS SUBMISSIONS AS MADE BEFORE THE AO. THE CIT(A) CALLE D FOR REMAND REPORT FROM A.O. AS THE ASSESSEE TRUST SUBMI TTED THAT THE DETAILS SUBMITTED VIDE LETTER DATED 2-12-11, 7- 12-11 AND 13-12-11 WERE NOT CONSIDERED BY THE A.O. THE A.O. I N HIS REMAND REPORT DATED 05.12.2012 SUBMITTED THAT THE C ONTENTIONS OF THE ASSESSEE TRUST WERE DULY CONSIDERED BEFORE P ASSING THE ORDER DATED 28.12.2011 U/S 143(3) OF THE ACT. IN RE PLY TO THE REMAND REPORT, THE ASSESSEE TRUST ONCE AGAIN REITER ATED ITS SUBMISSIONS AS MADE EARLIER AND ALSO SUBMITTED AS U NDER:- 5.3.1 REGARDING PURCHASE OF BMW CAR: THE AO HAD PROPOSED CANCELLATION OF EXEMPTION U/S. 11 ON ACCOUNT OF APPLICABILITY OF SECTION 13 FOR PURCHASE OF BMW CAR FROM THE FUNDS OF THE TRUST IN THE PERSONAL NAM E OF THE TRUSTEE. A. O. HAS ALSO OBSERVED THAT TRUST FUNDS T O THE EXTENT OF RS. 32,20,000/- HAVE BEEN DIVERTED AND USED FOR THE BENEFIT ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 8 OF EXCLUDED PERSONS. ACCORDINGLY AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE VIDE LETTER DATED 02.12.2011 AND 13.12.2011, IT IS HELD THAT THE PROVISIONS OF S ECTION 13(1)(C)(II) AND SECTION 13(2)(G) R.W.S. 13(3)(CC)A RE ATTRACTED TO THE TRUST. AGAINST THE SAME, ASSESSEE, THROUGH ITS AUTHORIZED REPRESENTATIVES HAD SUBMITTED VIDE LETTER NO. UA/08/JUNE/IT/2012 DATED 26TH JUNE, 2012 THAT THE L EARNED ASSESSING OFFICER HAD ERRED IN WITHDRAWING THE EXEM PTION GRANTED TO THE TRUST U/S 11. FURTHER, AS PER THE PR OVISIONS OF SECTION 12AA OF THE INCOME TAX ACT CLEARLY STATE TH AT THE REGISTRATION U/S 12 AA GRANTED TO A TRUST CAN ONLY BE REVOKED BY THE COMMISSIONER OF INCOME TAX OR DIRECTOR OF IN COME TAX (EXEMPTION), IF HE IS SATISFIED THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION TO WHOM REGISTRATION WAS GRANTED ARE NO T GENUINE OR ARE NOT BEING CARRIED OUT ACCORDING TO THE OBJEC TS OF THE TRUST, BY PASSING AN ORDER ON WRITING CANCELLING TH E REGISTRATION OF SUCH TRUST OR INSTITUTION. HOWEVER, SUCH ORDER FOR CANCELLING THE REGISTRATION CAN ONLY BE PASSED AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEAR D. THE ASSESSEE TRUST FURTHER SUBMITTED IN ITS SAME RE PLY THAT THE PAYMENT FOR BMW CAR WAS MADE FROM BANK ACCOUNT OF T HE ASSESSEE TRUST, THE CAR LOAN WAS OBTAINED IN THE AS SESSEE TRUST NAME,THE REPAYMENT OF BANK LOAN FROM ICICI BANK IS MADE FROM THE ASSESSEE TRUST BANK ACCOUNT, THE SALE PROC EED OF BMW CAR WAS CREDITED IN THE ASSESSEE TRUST BANK ACCOUNT . THE CAR WAS REGISTERED IN THE NAME OF TRUSTEE BY MISTAKE AN D THE BMW CAR WAS PURCHASED KEEPING IN VIEW THE SIZE AND SCAL E OF THE ASSESSEE TRUST ACTIVITIES. AND ALSO IN SUPPORT IN REPLY TO REMAND REPORT OF AO , THE ASSESSEE TRUST ALSO RELIED UPON THE DECISION IN THE CASE OF CIT V. DILIP SINGH SARDARSINGH BAGGA (1993) 201 ITR 995 (BOM) AND ADDL. CIT VS. U.P. STATE AGRO INDUSTRIAL CORPOR ATION LTD.(1981) 127 ITR 97(ALL). 7. THE CIT(A) AFTER CONSIDERING THE SUBMISSION OF T HE ASSESSEE TRUST ALLOWED THE APPEAL OF THE ASSESSEE TRUST VIDE ORDERS DATED 31.03.2013 BY HOLDING THERE IS NO CONTRAVENTION OF SECTION13 ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 9 OF THE ACT AND THE ASSESSEE TRUST IS ENTITLED TO EX EMPTION U/S11 OF THE ACT BY OBSERVING AS UNDER:- 8. I HAVE CAREFULLY CONSIDERED THE FACTS OF CASE, A SSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. 8.1 AS REGARDS THE OBJECTION THAT THE AO CANNOT DEN Y EXEMPTION U/S 11 FOR VIOLATION OF SECTION 13 WITHOU T THE DIT(E) CANCELLING THE REGISTRATION, THERE IS NO SUBSTANCE IN THIS OBJECTION. SECTION 13 STARTS WITH A NON OBSTANTE CL AUSE WHICH STIPULATES THAT WHERE THERE IS ANY VIOLATION OF SEC TION 13 THEN THE BENEFIT OF SECTION 11 WILL NOT BE AVAILABLE. 8.2 AS REGARDS THE OTHER OBJECTIONS HOWEVER, I FIND SUBSTANCE IN THEM. THE APPELLANT STATED THAT THE CAR WAS PURC HASED FOR THE PURPOSE OF THE TRUST AND NOT FOR THE PERSONAL U SER OF THE TRUSTEE. THE LOAN WAS APPLIED IN THE NAME OF THE TR UST. THE LOAN WAS ALSO GRANTED IN THE NAME OF THE TRUST. IT IS ONLY BY MISTAKE THE CAR DEALER MENTIONED THE TRUSTEE AS THE PURCHASER. THE AO HAD ALSO NOT CONDUCTED ANY INDEPENDENT INQUI RIES AS REGARDS THE ACTUAL USER OF THIS VEHICLE. HE MERELY DEPENDED ON ONE FACT I.E. THE NAME MENTIONED IN THE INVOICE RAI SED BY M/S NAVNIT MOTORS. FURTHER, THE AO STATES THAT BUYING O F SUCH LUXURY CAR FOR THE USE OF INFLUENTIAL DONOR IS AGAI NST THE BASIC CONCEPT OF CHARITY AND NOTHING STOPPED THE ASSESSEE TRUST FROM PURCHASING A DECENT CAR IN RS. 10-12 LACS RANGE SUC H AS A HONDA CITY OR TOYOTA COROLLA, FOR THE USE OF THE TR UST AND ITS GUESTS/ DONORS. THE AO'S ADVICE MAY APPARENTLY APPE AR TO BE VERY SOUND BUT IN THE CONTEXT OF EXEMPTION U/S 11 I S NOT RELEVANT FOR THE REASON THAT THERE IS NO BAR IN BUY ING SUCH CARS EXCEPT THAT THE USER SHOULD BE FOR THE PURPOSES OF THE TRUST. THE A.O. HAS NOT GIVEN ANY FINDING THAT THE CAR WAS USE D FOR NON- TRUST PURPOSES. IN VIEW OF THE HON. BOMBAY HIGH COU RT DECISION IN CIT V. DILIP SINGH SARDARSINGH BAGGA (1 993) 201 ITR 995 WHEREIN IT WAS HELD THAT REGISTRATION UNDER THE MOTOR VEHICLES ACT IS NOT AN ESSENTIAL PRE-REQUISITE FOR THE ACQUISITION OF OWNERSHIP OF THE MOTOR VEHICLES AND IN VIEW OF THE FACT THAT THE LOAN FOR PURCHASING THE CAR WAS T AKEN IN THE NAME OF THE TRUST AND NOT IN THE NAME OF THE TRUSTE E, I AM OF THE CONSIDERED VIEW THAT THERE IS NO CONTRAVENTION OF P ROVISIONS OF SECTION 13. 8.3 THEREFORE, FOLLOWING THE ABOVE DISCUSSION, GROU ND NO. 1 AND 2 ARE ALLOWED. ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 10 8. AGGRIEVED BY THE ABOVE DECISION OF THE CIT(A), T HE REVENUE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 9. THE LD. D.R. SUBMITTED THAT THE ASSESSEE TRUST H AD PURCHASED BMW CAR FOR RS. 32,20,000/- IN THE NAME OF THE TRUS TEE WHICH IS A DIVERSION OF FUND AND VIOLATION OF SECTION 13( 1)(C)(II) AND SECTION 13(2((G) R.W.S. 13(3)(CC) OF THE ACT., HENC E THE A.O. HAS RIGHTLY DISALLOWED THE EXEMPTION U/S 11 OF THE ACT VIDE ORDERS OF ASSESSMENT DATED 28.12.2011 AND HE RELIED UPON T HE ORDERS OF THE A.O.. 10. ON THE OTHER HAND, THE ASSESSEE TRUST SUBMITTED THAT THE BMW CAR IS PURCHASED BY THE TRUST BUT BY MISTAKE RE GISTERED IN THE NAME OF PROF. A.A. KAZI, THE TRUSTEE AND CHAIRM AN OF THE ASSESSEE TRUST. THE ASSESSEE TRUST REITERATED ITS S UBMISSIONS BEFORE US AS MADE BEFORE THE AUTHORITIES BELOW WHIC H ARE NOT REPEATED FOR SAKE OF BREVITY. THE ASSESSEE TRUST FU RTHER SUBMITTED THAT THE REGISTRATION U/S 12AA OF THE ACT WAS CANCELLED BY THE REVENUE AND ONE OF THE GROUNDS, IN TER-ALIA, FOR CANCELLATION OF REGISTRATION OF THE ASSESSEE TR UST WAS THE REGISTRATION OF THE AFORE-STATED BMW CAR IN THE NAM E OF THE MR A A KAZI, THE CHAIRMAN AND TRUSTEE OF THE ASSESSEE TRUST AND THE MUMBAI TRIBUNAL IN ITA NO. 1782/MUM/2014 VIDE O RDERS DATED 16-07- 2014 HAS RESTORE THE REGISTRATION OF T HE TRUST U/S 12AA OF THE ACT BY HOLDING AS UNDER : 18. THE SECOND OBJECTION OF THE LEARNED DIT(E) IS THAT THE ASSESSEE HAD PURCHASED BMW 325I CAR IN PERSONAL NAM E OF THE TRUSTEE MR. A.A. KAZI, VIDE BILL DATED 20TH MAR CH 2009. THE CAR WAS PURCHASED OUT OF THE FUNDS OF THE TRUST . THE LEARNED DIT(E) HELD THAT NOTHING HAS BEEN BROUGHT O N RECORD TO SHOW THE NEED OF BUYING SUCH A LUXURY CAR. AS BR OUGHT ON RECORD, THIS ISSUE WAS SUBJECT MATTER OF SCRUTINY I N THE THE CANCER AID & RESEARCH FOUNDATION ASSESSMENT YEAR 20 0910, WHEREIN THE ASSESSING OFFICER HAS INVOKED THE PROVI SIONS OF SECTION 13 TO DENY THE EXEMPTION TO THE ASSESSEE TR UST. THE MATTER HAD TRAVELLED UP TO THE STAGE OF FIRST APPEL LATE PROCEEDINGS, WHEREIN THE LEARNED COMMISSIONER (APPE ALS) HAS REVERSED THE FINDINGS AND THE CONCLUSION OF THE ASS ESSING OFFICER BY HOLDING THAT THE CAR WAS USED FOR THE PU RPOSE OF THE TRUST ONLY AND AFTER RECORDING DETAIL REASONS, HE D ECIDED THE ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 11 ISSUE IN FAVOUR OF THE ASSESSEE TRUST BY HOLDING TH AT THERE IS NO VIOLATION OF SECTION 13. IT HAS ALSO BEEN BROUGHT O N RECORD THAT THE SAID CAR WAS SOLD IN THE NEXT YEAR. SUCH AN OBJ ECTION OF THE LEARNED DIT(E) IN THE PRESENT CASE, CANNOT BE THE S UBJECT MATTER OF CANCELLATION OF REGISTRATION UNDER SECTIO N 12AA(3), FIRSTLY, IT IS STILL A DABATABLE MATTER WHICH IS SU BJUDICE, WHETHER THERE IS ANY VIOLATION OF SECTION 13 OR ANY MISUSE OF TRUST FUND; SECONDLY, EVEN IF THE CAR HAS BEEN PURCHASED IN THE NAME OF THE TRUSTEE, THEN AT THE MOST, IT NEEDS TO BE EXAMINED WITHIN THE SCOPE OF SECTION 13, AND IF AT ALL THERE IS ANY VIO LATION, THEN THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH A VIOLATI ON TOOK PLACE, GETS EXCLUDED FROM THE EXEMPTION PROVIDED UN DER SECTION 11 I.E., SURPLUS INCOME BECOMES TAXABLE FOR THAT YEAR. IF THERE IS ANY KIND OF MISUSE OF TRUST FUNDS BY TH E TRUSTEE OR A RELATED PERSON OF THE TRUSTEE, THEN THE STATUTE PRO VIDES ENOUGH POWER TO THE ASSESSING OFFICER TO FORFEIT THE EXEMP TION AND TAX THE SURPLUS. HOWEVER, IN SUCH A SITUATION, IT CANNO T BE HELD THAT THE ENTIRE ACTIVITIES OF THE TRUST HAVE BEEN R ENDERED NON GENUINE OR ITS ACTIVITIES ARE NOT CARRIED OUT IN AC CORDANCE WITH THE OBJECTS OF THE TRUST. SIMILAR ISSUE HAD ALSO CO ME UP FOR CONSIDERATION BEFORE THE BANGALORE BENCH OF THE TRI BUNAL IN KRUPANIDHI EDUCATIONAL TRUST (SUPRA), (AS RELIED UP ON BY THE LEARNED COUNSEL FOR THE ASSESSEE), WHEREIN ON SIMIL AR PURCHASE OF THE BMW CAR PURCHASED IN THE NAME OF TH E TRUSTEE, THE TRIBUNAL HELD THAT IT CANNOT BE THE BA SIS FOR CANCELLATION OF REGISTRATION UNDER SECTION 12AA(3), AT THE CANCER AID & RESEARCH FOUNDATION THE MOST, IT CAN B E A VIOLATION OF PROVISIONS OF SECTION 13. THUS, THIS O BJECTION OF THE LEARNED DIT(E) CANNOT BE HELD TO BE SUFFICIENT GROU ND FOR CANCELLATION OF THE REGISTRATION. . 20. IN VIEW OF THE AFORESAID DISCUSSION, WE FIND TH AT NONE OF THE OBJECTIONS AND THE GROUNDS WHICH HAVE BEEN TAKEN BY THE LEARNED DIT(E) IN THE IMPUGNED ORDER FOR CANCELLING THE REGISTRATION CAN BE HELD TO BE SUSTAINABLE EITHER O N FACTS OR IN LAW, SO AS TO HOLD THAT THE ACTIVITIES OF THE TRUST ARE EITHER NOT GENUINE OR THEY ARE NOT BEING CARRIED OUT IN ACCORD ANCE WITH THE OBJECTS WITHIN THE SCOPE OF SECTION 12AA(3). MO REOVER, NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE APPLICATION OF THE INCOME OF THE TRUST FROM YEARTO YEAR HAS NOT BEEN MADE TOWARDS ATTAINMENT OF THE OBJECTS I.E ., FOR THE ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 12 CHARITABLE PURPOSES. IF NO DISCREPANCY HAS BEEN FOU ND IN THE INCOME AND EXPENDITURE ACCOUNT AND THERE IS A PROPE R APPLICATION OF INCOME TOWARDS THE OBJECTS IN ACCORD ANCE WITH THE PROVISIONS OF SECTION 11, THEN NEITHER THE CHAR ITABLE NATURE OF THE TRUST SHOULD BE DOUBTED NOR IT CAN BE HELD T HAT ITS ACTIVITIES ARE NOT GENUINE OR ARE NOT IN ACCORDANCE THE CANCER AID & RESEARCH FOUNDATION WITH THE OBJECTS FOR WHIC H REGISTRATION WAS GRANTED. ACCORDINGLY, WE REVERSE T HE FINDINGS OF THE LEARNED DIT(E) AND HOLD THAT THE REGISTRATIO N GRANTED TO THE ASSESSEE CANNOT BE CANCELLED UNDER SECTION 12AA (3) ON THE GROUND STATED BY THE LEARNED DIT(E) IN THE IMPUGNED ORDER. THE GROUNDS THUS RAISED BY THE ASSESSEE ARE ALLOWED . 21. * +, ' * ' ' 20. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. T HE ASSESSEE TRUST REITERATED THAT ONE OF THE GROUNDS FOR CANCEL LING OF THE ASSESSEES REGISTRATION U/S 12AA(3) OF THE ACT WAS PURCHASE OF THE AFORESTATED BMW CAR FOR RS.32,20,000/- IN THE N AME OF THE TRUSTEE INSTEAD OF THE ASSESSEE TRUST USING THE FUN DS OF THE ASSESSEE TRUST AND MUMBAI TRIBUNAL IN ITA APPEAL 1782/MUM/2014 HAS HELD THAT THE REGISTRATION OF THE ASSESSEE TRUST CANNOT BE CANCELLED U/S 12AA(3) OF THE ACT ON THE GROUNDS STATED BY DIT(E) WHICH, INTER-ALIA, INCLUDE D THIS PURCHASE OF BMW CAR IN THE NAME OF MR A A KAZI, CHA IRMAN CUM TRUSTEE OF THE ASSESSEE TRUST . THE ASSESSEE TRUST ALSO SUBMITTED THAT DEPRECIATION ON THE SAID BMW CAR WAS ALSO TAKEN BY THE ASSESSEE TRUST UNDER THE ACT AND THE CAR WAS ULTIMATELY SOLD IN SUBSEQUENT YEAR AND THE SALE PROCEEDS WERE CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE TRUST . THE LOAN RE-PAYMENTS TO ICICI BANK WAS ALSO PAID FROM THE BANK ACCOUNT OF THE ASSESSEE TRUST AS WELL AS PAYMENT OF THE INITIAL FUNDS FOR THE PURCHASE OF TH E BMW CAR WAS ALSO PAID FROM THE BANK ACCOUNT OF THE ASSESSEE TRUST AND THESE ALL EVIDENCES THAT THE SAID BMW CAR WAS PURCH ASED BY THE ASSESSEE TRUST FOR ITS ACTIVITIES AND WAS OWNED BY THE ASSESSEE TRUST. THE ASSESSEE TRUST SUBMITTED IN PAP ER BOOK WHICH IS PLACED ON RECORD THE FOLLOWING DOCUMENTS W HICH INTER-ALIA INCLUDES FOLLOWING DOCUMENTS AND ALSO DU LY CERTIFIED ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 13 BY THE ASSESSEE TRUST TO BE PLACED BEFORE THE AUTHO RITIES BELOW DURING THE RELEVANT PROCEEDINGS RELATING TO THE ASS ESSEE TRUST: 1. THE COPY OF AMENDED TRUST DEED OF THE ASSESSEE T RUST 2. AUDITED ACCOUNTS OF THE ASSESSEE TRUST FOR THE F INANCIAL YEAR 2008-09 3. COPIES OF LEDGER ACCOUNTS OF THE ASSESSEE TRUST EVIDENCING THAT THE BMW CAR IS CAPITALIZED IN THE BOOKS OF ACC OUNTS AND ALSO COPIES OF LEDGER ACCOUNT OF THE ICICI BANK CAR LOAN REFLECTING THAT THE REPAYMENTS OF LOAN ARE FROM THE ASSESSEE TRUST BANK ACCOUNT 4. AFFIDAVIT DATED 16.12.2011 BY PROF . (RETD) ABDU LQADIR ABDULLA KAZI , THE CHAIRMAN CUM TRUSTEE OF THE ASSE SSEE TRUST WHEREBY HE SOLEMNLY AFFIRMED IN NUTSHELL THAT HE IS DEVOTING HIS FULL TIME TO THE ACTIVITIES OF THE TRUST WITHOU T DRAWING ANY SALARY AND ABOUT THE ACTIVITIES OF THE TRUST IN SPR EADING AWARENESS ABOUT PREVENTION AND EARLY DETECTION OF C ANCER AS WELL PROVIDING FINANCIAL AID TO CANCER PATIENTS ETC AS WELL THAT THE SAID BMW CAR WAS PURCHASED PURSUANT TO BOARD RESOLUTION AND THE CAR WAS UTILIZED THEREAFTER FOR ACTIVITIES OF THE ASSESSEE TRUST ONLY. 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE TRUST HAD PURCHASED THE BMW CAR FOR RS. 32 ,20,000/- WHICH IS REGISTERED IN THE NAME OF PROF. (RETD ) AB DULQADIR ABDULLA KAZI , CHAIRMAN AND TRUSTEE OF THE ASSESSEE TRUST ALTHOUGH THE SAID CAR HAS BEEN CAPITALIZED AND REFL ECTED IN THE BALANCE SHEET OF THE ASSESSEE TRUST AND ALSO IN THE AUDITED ACCOUNTS. THE DEPRECIATION ON THE AFORE-STATED BMW CAR WAS ALSO AVAILED BY THE ASSESSEE TRUST AS PROVIDED UNDE R THE ACT. THE ASSESSEE TRUST HAS ALSO AVAILED THE LOAN FACILI TY FROM ICICI BANK IN THE NAME OF THE ASSESSEE TRUST FOR WHICH RE PAYMENTS OF LOAN HAS BEEN MADE FROM THE ASSESEEE TRUST BANK ACC OUNTS AND ULTIMATELY THE CAR HAS BEEN SOLD IN THE SUBSEQUENT YEAR AND SALE PROCEEDS WERE CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE TRUST. THE ASSESSEE TRUST HAS ALSO SUBMITT ED BEFORE US THAT THERE WAS A MISTAKE INADVERTENTLY COMMITTED BY THE STAFF ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 14 OF THE ASSESSEE TRUST IN GETTING THE SAME REGISTERE D IN THE NAME OF TRUSTEE OF THE ASSESSEE TRUST WHILE BUYING THE B MW CAR INSTEAD OF GETTING IT REGISTERED IN THE NAME OF THE ASSESSEE TRUST AND IT HAS BEEN STATED IN THE AUDITED ACCOUNTS FOR THE FINANCIAL YEAR 2008-09 OF ASSESSEE TRUST IN SCHEDULE P -NOTE S FORMING PART OF ACCOUNTS AS UNDER : 4. THE TRUST PURCHASED A MOTOR CAR FOR RS.32,34,85 3/- DURING THE YEAR FOR THE OBJECT OF THE TRUST WHICH IS PRESE NTLY REGISTERED IN THE NAME OF ONE OF THE TRUSTEE ON ACC OUNT OF MISTAKE ON THE PART OF VENDOR. THE TRUST HAS INITIA TED NECESSARY FORMALITIES TO TRANSFER THE SAID MOTOR CAR IN THE N AME OF THE TRUST. PENDING SUCH TRANSFER FORMALITIES IN THE NAM E OF THE TRUST SAID MOTOR CAR HAS BEEN SHOWN AS FIXED ASSET IN THE BOOKS OF ACCOUNTS. THE AUDITED ACCOUNTS FOR THE FINANCIAL YEAR 2008-09 WAS SIGNED ON 17TH SEPTEMBER 2009 IN WHICH ABOVE NOTE W AS INCORPORATED AND SIGNED BY THE TRUSTEES AND THE AUD ITORS OF THE ASSESSEE TRUST. THIS CLEARLY EVIDENCES ON THE T OUCH STONE OF PREPONDERANCE OF PROBABILITIES THAT THERE WAS A MIS TAKE HAPPENED AT THE TIME OF PURCHASE OF THE BMW CAR WHE REBY IT GOT REGISTERED IN THE NAME OF THE TRUSTEE INSTEAD O F THE ASSESSSEE TRUST ALTHOUGH IT WAS PURCHASED BY THE AS SESSEE TRUST AND ONCE THE MISTAKE WAS DETECTED , THE STEPS WERE INITIATED TO CORRECT THE MISTAKE AND TO TRANSFER THE MOTOR CAR I N THE NAME OF THE ASSESSEE TRUST. WE HAVE ALSO OBSERVED THAT THE REGISTRATION OF THE ASSESSEE TRUST U/S 12AA OF THE ACT WAS CANCELLED BY THE REVE NUE AND ONE OF THE GROUNDS FOR CANCELLATION OF REGISTRATION OF THE ASSESSEE TRUST WAS THE REGISTRATION OF THE AFORE-ST ATED BMW CAR IN THE NAME OF THE TRUSTEE AND THE MUMBAI TRIBU NAL IN ITA NO. 1782/MUM/2014 VIDE ORDERS DATED 16-07-2014 HAS RESTORED THE REGISTRATION OF THE TRUST U/S 12AA OF THE ACT BY HOLDING AS UNDER : 18. THE SECOND OBJECTION OF THE LEARNED DIT(E) IS THAT THE ASSESSEE HAD PURCHASED BMW 325I CAR IN PERSONAL NAM E OF THE TRUSTEE MR. A.A. KAZI, VIDE BILL DATED 20TH MAR CH 2009. THE CAR WAS PURCHASED OUT OF THE FUNDS OF THE TRUST . THE LEARNED DIT(E) HELD THAT NOTHING HAS BEEN BROUGHT O N RECORD ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 15 TO SHOW THE NEED OF BUYING SUCH A LUXURY CAR. AS BR OUGHT ON RECORD, THIS ISSUE WAS SUBJECT MATTER OF SCRUTINY I N THE THE CANCER AID & RESEARCH FOUNDATION ASSESSMENT YEAR 20 0910, WHEREIN THE ASSESSING OFFICER HAS INVOKED THE PROVI SIONS OF SECTION 13 TO DENY THE EXEMPTION TO THE ASSESSEE TR UST. THE MATTER HAD TRAVELLED UP TO THE STAGE OF FIRST APPEL LATE PROCEEDINGS, WHEREIN THE LEARNED COMMISSIONER (APPE ALS) HAS REVERSED THE FINDINGS AND THE CONCLUSION OF THE ASS ESSING OFFICER BY HOLDING THAT THE CAR WAS USED FOR THE PU RPOSE OF THE TRUST ONLY AND AFTER RECORDING DETAIL REASONS, HE D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE TRUST BY HOLDING TH AT THERE IS NO VIOLATION OF SECTION 13. IT HAS ALSO BEEN BROUGHT O N RECORD THAT THE SAID CAR WAS SOLD IN THE NEXT YEAR. SUCH AN OBJ ECTION OF THE LEARNED DIT(E) IN THE PRESENT CASE, CANNOT BE THE S UBJECT MATTER OF CANCELLATION OF REGISTRATION UNDER SECTIO N 12AA(3), FIRSTLY, IT IS STILL A DABATABLE MATTER WHICH IS SU BJUDICE, WHETHER THERE IS ANY VIOLATION OF SECTION 13 OR ANY MISUSE OF TRUST FUND; SECONDLY, EVEN IF THE CAR HAS BEEN PURCHASED IN THE NAME OF THE TRUSTEE, THEN AT THE MOST, IT NEEDS TO BE EXAMINED WITHIN THE SCOPE OF SECTION 13, AND IF AT ALL THERE IS ANY VIO LATION, THEN THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH A VIOLATI ON TOOK PLACE, GETS EXCLUDED FROM THE EXEMPTION PROVIDED UN DER SECTION 11 I.E., SURPLUS INCOME BECOMES TAXABLE FOR THAT YEAR. IF THERE IS ANY KIND OF MISUSE OF TRUST FUNDS BY TH E TRUSTEE OR A RELATED PERSON OF THE TRUSTEE, THEN THE STATUTE PRO VIDES ENOUGH POWER TO THE ASSESSING OFFICER TO FORFEIT THE EXEMP TION AND TAX THE SURPLUS. HOWEVER, IN SUCH A SITUATION, IT CANNO T BE HELD THAT THE ENTIRE ACTIVITIES OF THE TRUST HAVE BEEN R ENDERED NON GENUINE OR ITS ACTIVITIES ARE NOT CARRIED OUT IN AC CORDANCE WITH THE OBJECTS OF THE TRUST. SIMILAR ISSUE HAD ALSO CO ME UP FOR CONSIDERATION BEFORE THE BANGALORE BENCH OF THE TRI BUNAL IN KRUPANIDHI EDUCATIONAL TRUST (SUPRA), (AS RELIED UP ON BY THE LEARNED COUNSEL FOR THE ASSESSEE), WHEREIN ON SIMIL AR PURCHASE OF THE BMW CAR PURCHASED IN THE NAME OF TH E TRUSTEE, THE TRIBUNAL HELD THAT IT CANNOT BE THE BA SIS FOR CANCELLATION OF REGISTRATION UNDER SECTION 12AA(3), AT THE CANCER AID & RESEARCH FOUNDATION THE MOST, IT CAN B E A VIOLATION OF PROVISIONS OF SECTION 13. THUS, THIS O BJECTION OF THE LEARNED DIT(E) CANNOT BE HELD TO BE SUFFICIENT GROU ND FOR CANCELLATION OF THE REGISTRATION. . ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 16 20. IN VIEW OF THE AFORESAID DISCUSSION, WE FIND TH AT NONE OF THE OBJECTIONS AND THE GROUNDS WHICH HAVE BEEN TAKEN BY THE LEARNED DIT(E) IN THE IMPUGNED ORDER FOR CANCELLING THE REGISTRATION CAN BE HELD TO BE SUSTAINABLE EITHER O N FACTS OR IN LAW, SO AS TO HOLD THAT THE ACTIVITIES OF THE TRUST ARE EITHER NOT GENUINE OR THEY ARE NOT BEING CARRIED OUT IN ACCORD ANCE WITH THE OBJECTS WITHIN THE SCOPE OF SECTION 12AA(3). MO REOVER, NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE APPLICATION OF THE INCOME OF THE TRUST FROM YEARTO YEAR HAS NOT BEEN MADE TOWARDS ATTAINMENT OF THE OBJECTS I.E ., FOR THE CHARITABLE PURPOSES. IF NO DISCREPANCY HAS BEEN FOU ND IN THE INCOME AND EXPENDITURE ACCOUNT AND THERE IS A PROPE R APPLICATION OF INCOME TOWARDS THE OBJECTS IN ACCORD ANCE WITH THE PROVISIONS OF SECTION 11, THEN NEITHER THE CHAR ITABLE NATURE OF THE TRUST SHOULD BE DOUBTED NOR IT CAN BE HELD T HAT ITS ACTIVITIES ARE NOT GENUINE OR ARE NOT IN ACCORDANCE THE CANCER AID & RESEARCH FOUNDATION WITH THE OBJECTS FOR WHIC H REGISTRATION WAS GRANTED. ACCORDINGLY, WE REVERSE T HE FINDINGS OF THE LEARNED DIT(E) AND HOLD THAT THE REGISTRATIO N GRANTED TO THE ASSESSEE CANNOT BE CANCELLED UNDER SECTION 12AA (3) ON THE GROUND STATED BY THE LEARNED DIT(E) IN THE IMPUGNED ORDER. THE GROUNDS THUS RAISED BY THE ASSESSEE ARE ALLOWED . 21. FU/KKZFJFR FD VIHY LOHDQR FD TKRH GSA 20. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR NOTICE BY REVENUE TO CONTROVERT THE CONTENTIONS OF THE ASSESSEE TRUST . IN OUR CONSIDERED VIEW BASED ON OUR ABOVE FINDINGS , THE C IT(A) HAS RIGHTLY ALLOWED THE EXEMPTION U/S 11 OF THE ACT TO THE ASSESSEE TRUST BY PASSING A WELL REASONED ORDER. WE FIND NO INFIRMITY IN THE ORDERS OF THE CIT(A) AND ACCORDINGLY WE UPHOLD THE SAME AND HOLD THAT THE ASSESSEE TRUST IS ENTITLED FOR EX EMPTION U/S 11 OF THE ACT . WE ORDER ACCORDINGLY. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. IT IS FURTHER NOTICED THAT IN THE AFORESAID ORDER, THE TRIBUNAL HAS MADE AN ELABORATE DISCUSSION WITH RESPECT TO PU RCHASE OF BMW CAR AND SIMILAR OBSERVATION WAS MADE BY THE ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 17 REVENUE FOR ASSESSMENT YEAR 2009-10 ALSO AND FINALL Y, THE APPEAL OF THE ASSESSEE WAS ALLOWED DIRECTING THE DI T(E) THAT THE REGISTRATION GRANTED U/S 12AA OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. IT IS ALSO NOTED THAT THE O RDER OF THE TRIBUNAL WAS AFFIRMED BY HON'BLE HIGH COURT OF BOMB AY VIDE ORDER DATED 25/07/2017 (ITA NO.505 OF 2015). N O CONTRARY FACTS/DECISION WERE BROUGHT TO OUR NOTICE BY EITHER SIDE AND MORE SPECIFICALLY THE REVENUE, THEREFORE, CONSIDERING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL AND FOLLOWING THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED . FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 30/11/2017. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; G DATED : 30/11/2017 F{X~{T? P.S/. .. , ITA NO.733/MUM/2016 CANCER AID & RESEARCH FOUNDATION 18 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. HIJ / THE APPELLANT 2. K,IJ / THE RESPONDENT. 3. L L # M' , ( H ) / THE CIT, MUMBAI. 4. L L # M' / CIT(A)- , MUMBAI 5. O+ K' , L H& , # $ / DR, ITAT, MUMBAI 6. P Q$ / GUARD FILE. / BY ORDER, ,OH' K' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI