BHARAT BHUSHAN JAIN CHARITABLE TRUST, NEW DELHI V. CIT(E), NEW DELHI

ITA 750/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4378 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 01-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Cancellation of registration
• Section: 80G; 12A; 12AA; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A : DELHI BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI L.P. SAHU, A.M. ITA.NO.750/DEL./2018 BHARAT BHUSHAN JAIN CHARITABLE TRUST, 4239/A, SHAKAHAR BUILDING, 1, ANSARI ROAD, DARYAGANJ, NEW DELHI 110 002. PAN AABYB9681P VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI C.S. AGGARWAL, SR. ADVOCATE, AND SHRI D.B. JAIN, C.A. FOR REVENUE : SHRI SANJAY GOYAL, CIT-D.R. DATE OF HEARING : 07.02.2019 DATE OF PRONOUNCEMENT : 12.02.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(E), NEW DELHI, DATED 27 TH /28 TH DECEMBER 2017, REJECTING THE APPLICATION FOR APPROVAL UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED THE APPLICATION SEEKING FOR APPROVAL/EXEMPTION UNDER 2 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. SECTION 80G OF THE INCOME TAX ACT, 1961. THE ASSESSEE FILED THE SUBMISSIONS AND DETAILS TO LD.CIT(E) IN RESPECT OF APPLICATION FILED FOR REGISTRATION UNDER SECTION 12A AS WELL AS EXEMPTION UNDER SECTION 80G OF THE INCOME-TAX ACT, 1961. THE LD.CIT(E) FOUND THAT ASSESSEE HAS FAILED TO PROVIDE ANY COGENT PROOF THAT COULD VERIFY THAT THE ASSESSEE IS ACTUALLY CARRYING-OUT THE ACTIVITIES IN PURSUANCE OF THE OBJECTS SET FORTH IN THE TRUST DEED. THE ASSESSEE-TRUST WHICH CAME INTO EXISTENCE IN 2012, HAD SUFFICIENT OPPORTUNITY AT HAND TO CARRY-OUT CHARITABLE ACTIVITIES DURING THE PERIOD BUT EXCEPT FOR A DONATION GIVEN TO KANYA GURUKUL MAHAVIDYALAYA NOTHING SUBSTANTIAL OR CONCRETE HAS BEEN DONE BY THE ASSESSEE IN THE FIELD OF CHARITY. THE LACK OF CHARITABLE ACTIVITIES CONDUCTED BY THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE HAS REMAINED DORMANT ALL THIS TIME. THE LD.CIT(E), THEREFORE, FOUND THE APPLICATION OF ASSESSEE TO BE PREMATURE AND THE SAME WAS ACCORDINGLY REJECTED. 3. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD.CIT(E). HE HAS SUBMITTED 3 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. THAT ASSESSEE HAD CAME INTO EXISTENCE UNDER TRUST DEED WITH THE ONLY OBJECT TO CARRY-OUT THE CHARITABLE ACTIVITIES IN ACCORDANCE WITH ITS OBJECTS AS HAVE BEEN SET-OUT IN THE TRUST DEED, DATED 1 ST APRIL 2012 AND HAS NOT BEEN FOUND TO HAVE CARRIED-OUT ANY ACTIVITY WHICH IS CONTRARY TO THE OBJECTS OF THE TRUST. IT IS TO BE SEEN WHETHER THE OBJECTS OF THE TRUST SEEKING APPROVAL UNDER SECTION 80G IS FOR CHARITABLE PURPOSE. HE HAS SUBMITTED THAT THERE IS NO DENYING OF THE FACT THAT ASSESSEE HAS GIVEN DONATION TO KANYA GURUKUL MAHAVIDYALAYA, COPY OF WHICH IS FILED AT PAGES 50 AND 51 OF THE PAPERWORK, WHICH IS ALSO APPROVED UNDER SECTION 80G OF THE INCOME TAX ACT, 1961. APART FROM THIS, IT WAS STATED THAT DURING THE YEAR, ASSESSEE HAS ALSO BEEN ALLOWED TO USE THE PREMISES AT ANSARI ROAD, DARYAGANJ, FOR CARRYING-OUT ITS CHARITABLE ACTIVITIES. HE HAS SUBMITTED THAT ASSESSEE IN THE ABSENCE OF APPROVAL UNDER SECTION 80G OF THE INCOME TAX ACT, 1961 HAS NOT BEEN ABLE TO RECEIVE ANY DONATION AND AS SUCH IT WOULD NOT CARRY-OUT CHARITABLE ACTIVITIES TO ACHIEVE ITS OBJECTS. HE HAS SUBMITTED THAT THE LD.CIT(E), DELHI, HAS GRANTED REGISTRATION UNDER 4 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. SECTION 12AA OF THE INCOME TAX ACT, 1961, VIDE ORDER DATED 28 TH DECEMBER, 2017 IN WHICH IT IS CLEARLY PROVIDED THAT LD. CIT(E) IS SATISFIED ABOUT THE GENUINENESS OF THE ACTIVITIES PROMISED OR CLAIMED TO BE CARRIED-OUT FOR THE RELEVANT FINANCIAL YEAR. HE HAS, THEREFORE, SUBMITTED THAT SINCE THE ASSESSEE HAS CARRIED-OUT CHARITABLE ACTIVITIES AND THAT CONDITIONS OF SECTION 80G(5) OF THE INCOME TAX ACT, 1961, HAVE NOT BEEN DOUBTED BY THE LD.CIT(E), THEREFORE, ASSESSEE IS ENTITLED FOR APPROVAL UNDER SECTION 80G(5) OF THE INCOME TAX ACT, 1961. HE HAS RELIED UPON ORDER OF THE TRIBUNAL IN THE CASE OF SIKSHAN PRASARAK MANDALI VS CIT (2008) 117 TTJ (PUNE) 337. 4. ON THE OTHER HAND, LD. D.R. RELIED UPON THE IMPUGNED ORDER. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT IMPUGNED ORDER CANNOT BE SUSTAINED IN LAW. IT IS NOT IN DISPUTE THAT ASSESSEE HAS BEEN GRANTING REGISTRATION UNDER SECTION 12A OF THE INCOME TAX ACT, 1961, VIDE ORDER DATED 28 TH DECEMBER, 2017, MEANING THEREBY, 5 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. LD.CIT(E) WAS SATISFIED ABOUT THE CHARITABLE ACTIVITIES CARRIED-OUT BY THE ASSESSEE AND THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE. THE LD. CIT(E) HAS NOT DISPUTED THAT ASSESSEE HAS SATISFIED THE CONDITIONS OF SECTION 80G(5) OF THE INCOME TAX, 1961. IT IS ALSO NOT IN DISPUTE THAT ASSESSEE HAS CARRIED-OUT SOME OF THE CHARITABLE ACTIVITIES IN FURTHERANCE TO ITS OBJECTS. THEREFORE, THERE WAS NO BASIS FOR LD.CIT(E) TO REJECT THE APPLICATION UNDER SECTION 80G(5) OF THE INCOME TAX ACT, 1961. WE MAY NOTE THAT THE ITAT, DELHI A-BENCH, DELHI IN THE CASE OF BHARAT VIKAS PARISHAD MAHARANA PRATAP NYAS, GURGAON, HARYANA VS., CIT (EXEMPTIONS) (HQ.), CHANDIGARH IN ITA.NO.6487/DEL./2018 VIDE ORDER DATED 6 TH FEBRUARY 2019 ON SIMILAR CIRCUMSTANCES HAS ALLOWED THE EXEMPTION/ APPROVAL UNDER SECTION 80G(5) OF THE INCOME TAX ACT, 1961. THE ORDER OF THE TRIBUNAL IS REPRODUCED AS UNDER : IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A : DELHI BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI L.P. SAHU, A.M. ITA.NO.6487/DEL./2018 6 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. BHARAT VIKAS PARISHAD MAHARANA PRATAP NYAS, FLAT NO.157, HEWO APARTMENTS, SECTOR-15, PART-II, GURGAON, HARYANA. PAN AADTB1479P VS. THE CIT (EXEMPTIONS) (HQ.), CHANDIGARH. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI VED JAIN, ADVOCATE, SHRI RISHABH JAIN, C.A. AND MISS. UMANG LUTHRA, ADVOCATE FOR REVENUE : SHRI SANJAY GOYAL, CIT-D.R. DATE OF HEARING : 04.02.2019 DATE OF PRONOUNCEMENT : 06.02.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(E), CHANDIGARH, DATED 29.08.2018, UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 7 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT AN APPLICATION IN THE PRESCRIBED FORM WAS FILED FOR APPROVAL UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961. THE LD. CIT(E) NOTED THAT IN THIS CASE THE APPLICANT ALSO FILED AN APPLICATION UNDER SECTION 12A OF THE I.T. ACT DID NOT MEET THE REQUIREMENT FOR APPROVAL AS MANDATED BY RULE 11AA OF THE I.T. RULES. EVEN THOUGH, THE APPLICANT HAS BEEN GRANTED REGISTRATION UNDER SECTION 12A RECENTLY, THE REAL PURPOSE AS PER THE STATED OBJECT CANNOT BE CORROBORATED AT PRESENT GIVEN THAT THE ENTITY IS STILL TO REDEEM ITSELF AFTER THE GRANT OF 12A REGISTRATION. THE APPLICATION WAS FOUND PREMATURE AND THE SAME WAS REJECTED. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE IS A CHARITABLE TRUST AND CARRIED OUT VARIOUS ACTIVITIES SINCE INCEPTION LIKE PROVIDING FREE MORTUARY VANS FREE OF COST TO CIVIL HOSPITALS, PROVIDING FREE FOODS TO THE PATIENTS OF CIVIL HOSPITALS, FREE WATER ATMS ETC. THE LD. CIT(E) GRANTED REGISTRATION UNDER SECTION 12AA VIDE ORDER DATED 29.08.2018 (PB-55) BUT 8 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. DECLINED TO GRANT APPROVAL UNDER SECTION 80G OF THE I.T. ACT, 1961. HE HAS RELIED UPON DECISION OF HONBLE JURISDICTIONAL PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT (E) VS. SANT GIRDHAR ANAND PARMHANS SANT ASHRAM (2018) 408 ITR 79 (P & H) IN WHICH IT WAS HELD AS UNDER : IT WAS RECORDED BY THE TRIBUNAL THAT SINCE ASSESSEE HAD BEEN GRANTED EXEMPTION U/S 12AA WHICH WAS IN EXISTENCE AND IN CASE OF ANY VIOLATION, THE SAME WAS SUBJECT TO VARIATION/WITHDRAWAL BY THE CIT(E), THERE WAS NO LOGIC IN DENYING APPROVAL U/S 80G(5)(VI) OF THE ACT. THERE SEEMS NO REASON TO DIFFER WITH THE VIEW TAKEN BY THE TRIBUNAL. IN CASE, IN SUBSEQUENT YEARS, THE REVENUE IS SATISFIED THAT THE ACTIVITIES OF ASSESSEE ARE NOT QUALIFIED FOR CHARITABLE PURPOSES, IT SHALL BE OPEN FOR THE DEPARTMENT TO INITIATE ACTION FOR CANCELLATION OF REGISTRATION U/S 12AA AND ALSO FOR PASSING 9 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. APPROPRIATE ORDERS REGARDING APPROVAL GRANTED U/S 80G(5)(VI) IN ACCORDANCE WITH LAW. 3.1. HE HAS ALSO RELIED UPON SIMILAR DECISION OF HONBLE JURISDICTIONAL PUNJAB AND HARYANA HIGH COURT IN THE CASE OF SONEPAT HINDU EDUCATIONAL AND CHARITABLE SOCIETY VS. CIT (2005) 278 ITR 262 (P & H) IN WHICH IT WAS HELD THAT REGISTRATION OF AN INSTITUTION UNDER SECTION 12A OF THE ACT IS SUFFICIENT TO OF ITS BEING ESTABLISHED FOR CHARITABLE PURPOSES. THUS, REGISTRATION UNDER SECTION 80G CANNOT BE DENIED. HE HAS ALSO RELIED UPON DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE 2012 (8) TMI 77 (DEL.) IN WHICH IT WAS HELD AS UNDER : DENIAL OF REGISTRATION AS CHARITABLE TRUST UNDER SECTION-12AA (1)(B) - NO CHARITABLE ACTIVITY HAD IN FACT TAKEN PLACE SINCE THE SOCIETY WAS A NEWLY ESTABLISHED ONE - HELD THAT:- CONSIDERING THE PROCEDURE FOR REGISTRATION AS LEAD IN SECTION 12AA 10 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. THE STATUTE DOES NOT PROHIBIT OR ENJOIN THE COMMISSIONER FROM REGISTERING TRUST SOLELY BASED ON ITS OBJECTS, WITHOUT ANY ACTIVITY, IN THE CASE OF A NEWLY REGISTERED TRUST. THE STATUTE DOES NOT PRESCRIBE A WAITING PERIOD, FOR A TRUST TO QUALIFY ITSELF FOR REGISTRATION. WHEN THE SOCIETY/TRUST OF ASSESSEE ITSELF WAS FORMED ON 30.05.2008 WITH THE MONEY AVAILABLE WITH THE TRUST, ONE CANNOT EXPECT THEM TO DO ACTIVITY OF CHARITY IMMEDIATELY AND BECAUSE OF THAT SITUATION THE AUTHORITY CANNOT COME TO A CONCLUSION THAT TRUST WAS NOT INTENDING TO DO ANY ACTIVITY OF CHARITY. IN SUCH A SITUATION THE OBJECTS OF THE TRUST HAVE TO BE TAKEN INTO CONSIDERATION BY THE AUTHORITY AND THE OBJECTS OF THE TRUST COULD BE READ FROM THE TRUST DEED ITSELF - IN FAVOUR OF THE ASSESSEE. 11 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. 3.2. HE HAS SUBMITTED THAT WHILE GRANTING APPROVAL UNDER SECTION 80G, THE COMMISSIONER IS REQUIRED TO SATISFY THE PRESCRIBED CONDITIONS WHICH HE HAS NOT DOUBTED IN THE PRESENT CASE. HE HAS, THEREFORE, SUBMITTED THAT APPROVAL UNDER SECTION 80G MAY BE GRANTED TO THE ASSESSEE. 4. ON THE OTHER HAND, LD. D.R. RELIED UPON THE IMPUGNED ORDER. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT ORDER UNDER SECTION 80G(5) DENYING APPROVAL TO THE ASSESSEE CANNOT BE SUSTAINED IN LAW. IT IS NOT IN DISPUTE THAT ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT, 1961, BY DIT (E) VIDE ORDER DATED 29.09.2018. THE LD. CIT(E) WAS SATISFIED WITH THE OBJECTS AND ACTIVITIES OF THE ASSESSEE THAT IT IS MEANT FOR CHARITABLE PURPOSES, THEREFORE, DIFFERENT VIEW CANNOT BE TAKEN WHILE REFUSING THE GRANT OF APPROVAL UNDER SECTION 80G(5) OF THE I.T. ACT. THE LD. CIT(E) DID NOT DOUBT THE OBJECTS OF THE ASSESSEE AND DID NOT MENTION ANYTHING IF ASSESSEE HAS 12 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. VIOLATED ANY OF THE CONDITIONS OF SECTION 80G(5) OF THE I.T. ACT. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF ABOVE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE, WE ARE OF THE VIEW THAT ASSESSEE IS ENTITLED FOR APPROVAL UNDER SECTION 80G(5) OF THE I.T. ACT, 1961, FROM THE DATE OF APPLICATION. WE, ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER AND DIRECT THE LD. CIT(E), CHANDIGARH, TO GRANT APPROVAL TO THE ASSESSEE UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961, FROM THE DATE OF APPLICATION. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 5.1. IN VIEW OF THE ABOVE FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF BVP (SUPRA), WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE LD. CIT(E), NEW DELHI, TO GRANT APPROVAL/EXEMPTION TO THE ASSESSEE UNDER SECTION 80G(5) OF THE INCOME TAX ACT, 1961, FROM THE DATE OF APPLICATION. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 13 ITA.NO.750/DEL./2018 BHARAT BHUSHAN CHARITABLE TRUST, NEW DELHI. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 12 TH FEBRUARY, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT A BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI