Udita Owners Association, Kolkata V. DIT, Exemption, Kolkata, Kolkata

ITA 762/KOL/2011

• Counselvise Citation: 76223514 RSA 2011
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 18-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: H V BHARDWAJ
• Keywords: Charitable institution; Cancellation of registration
• Section: 12A; 12AA

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [ . . . . . . . . , ,, , , ,, , . . . . . .. . !'# !'# !'# !'# , !$ !$ !$ !$ ] [BEFORE HONBLE SHRI B. R. MITTAL, JM & HONBLE SHRI S.V. MEHROTRA, AM] % % % % / I.T.A NO. 762/KOL/2011 UDITA OWNERS ASSOCIATION -VS.- DIRECTOR OF INCOME TAX (EXEMPTION) KOLKATA [PAN : AAATU 1440 Q] KOLKATA. [ &' &' &' &' /APPELLANT ] ]] ] [ )*&' )*&' )*&' )*&'/ // / RESPONDENT ] ]] ] &' &' &' &' / FOR THE APPELLANT : SHRI H. V. BHARDWAJ )*&' )*&' )*&' )*&' / FOR THE RESPONDENT : SHRI S. K. ROY ,-. / 0$ ,-. / 0$ ,-. / 0$ ,-. / 0$ /DATE OF HEARING : 06.09.2011 12 / 0$ 12 / 0$ 12 / 0$ 12 / 0$ /DATE OF PRONOUNCEMENT : 06.09.2011 !3 /ORDER . . . . . .. .!' !' !' !'# ## # , !$ !$ !$ !$ PER S. V. MEHROTRA, A. M. THE ASSESSEE HAS PREFERRED THIS APPEAL AGAINST ORDE R OF DIT (EXEMPTION), KOLKATA DATED 23.03.2011. 2. THE ASSESSEE HAD FILED AN APPLICATION FOR REGIST RATION OF TRUST UNDER SECTION 12AA OF THE ACT. LD. DIT(E) EXAMINED THE RECORDS OF THE ASSESSE E-TRUST AND NOTED THAT ASSESSEE WAS A TRUST OF FLAT OWNERS CREATED FOR THE UPKEEP AND MAINTENANCE OF THE COMPLEX (UDITA COMPLEX). HE ALSO RECEIVED A PROPOSAL FROM THE ASSESSING OFFICER FOR CANCELLATION OF REGISTRATION UNDER SECTION 12A OF THE ACT. ON FURTHER EXAMINATION OF THE RECORDS, HE NOTICED THAT ASSESSEE-TRUST WAS AN ASSOCIATION OF ALL THE FLAT OWNERS WHO WERE JOINTLY ACTIVE FOR THE UPKEEP AND MAINTENANCE OF THE COMPLEX. HE NOTED THAT THE COMPLEX WAS SPREAD OVER AN AREA OF 18 ACRES OF LAND. THERE WERE 9 MOBILE TOWERS AND 718 FLATS. INSIDE THE COMPLEX, TH ERE WERE ROADS, CLUB, COMMUNITY HALL, SWIMMING POOL, GARDEN, CANTEEN AND PLAY GROUND FOR CHILDREN FOR WHICH HUGE MONEY WAS REQUIRED FOR UPKEEP. KEEPING IN VIEW THE FACT THAT HUGE EXPENSES WERE TO BE INCURRED ON THE MAINTENANCE, THE TRUST WAS BEING CREATED BY ALL THE FLAT OWNERS FOR WHICH THEY WERE GIVING ITA NO. 762/KOL/2011 2 MONTHLY SUBSCRIPTION. HE NOTED THAT BENGAL AMBUJA H OUSING DEVELOPMENT LIMITED HAD CONSTRUCTED UDITA COMPLEX AND A TRUST WAS CREATED I N 2000 FOR UPKEEP AND MAINTENANCE OF COMPLEX. LD. DIT(E), THEREFORE, ISSUED SHOW CAUSE N OTICE TO THE TRUST FOR CANCELLATION OF REGISTRATION UNDER SECTION 12A OF THE ACT. AFTER EX AMINING THE RECEIPTS & PAYMENT AND THE OBJECT OF THE ASSESSEE-TRUST, LD. DIT(E) CONCLUDED THAT NO NE OF THE OBJECTS WERE CHARITABLE. HE CONCLUDED THAT IT WAS A MUTUAL TRUST AND THIS WAS M EANT WHOLLY AND EXCLUSIVELY FOR THE UPKEEP AND MAINTENANCE OF THE COMPLEX. THEREFORE, IT WAS N OT A CHARITABLE TRUST AND DOES NOT HAVE ANY CHARITABLE ACTIVITY. THEREFORE, HE CANCELLED THE RE GISTRATION UNDER SECTION 12A OF THE INCOME TAX ACT WITH EFFECT FROM 01.06.2010. 3. BEING AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US . 4. LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE REFERRED TO DEED OF TRUST CONTAINED IN THE PAPER BOOK. HE FURTHER REFERRED TO THE OBJECTS OF THE TRUST AND SUBMITTED THAT TRUST HAD BEEN CREATED FOR UPLIFTMENT OF ALLOTTEES AS WELL AS PUBL IC AT LARGE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. THE TRUST WAS CREATED ON 13.09.2000 BY 6 SETTLORS WHO WERE TRUSTEES ALSO AS UNDER :- (1) SHRI SMIRITI KR. BHJATTACHARJEE S/O. LATE DR. A.K. BHATTACHARYA (2) SHRI NARESH KR. JAIN, S/O. LATE N. L. JAIN (3) SHRI SACHINDRA NATH BANERJEE, S/O. LATE SUREND RA NATH BANERJEE (4) SHRI PRADIP KR. AGARWAL, S/O. LATE RA, KISHORE AGARWALLA (5) SHRI CHANDRA PRAKASH KAKARANIA, S/O. LATE PURU SOTTAM LAL KAKARANIA (6) SHRI RANA GUPTA, S/O. LATE ASHOKE GUPTA. AS PER THE RECITALS IN THE TRUST DEED, TRUST HAD BE EN SET UP FOR PUBLIC CHARITABLE PURPOSE IN GENERAL INCLUDING FOR THE CHARITABLE PURPOSE OF THE ALLOTTEES OF UDITA COMPLEX. THE OBJECTS OF THE TRUST WERE AS UNDER :- (I) KEEP THE ENVIRONMENT CLEAN FOR THE ALLOTTEES AS WELL AS THE PUBLIC IN GENERAL. (II) INCREASE PEACE AND HAPPINESS AMONG THE ALLOTTE ES AND THEREBY PUBLIC IN GENERAL. (III) IMPROVE CO-OPERATION, CO-EXISTENCE AMONG THE ALLOTT EES AS WELL AS PUBLIC IN GENERAL. (IV) INCREASE THE FELLOW FEELING AMONG THE ALLOTTEES AND PUBLIC IN GENERAL. ITA NO. 762/KOL/2011 3 (V) TO CREATE SELF RELIANCE AMONG THE ALLOTTEES AS WELL AS PUBLIC IN GENERAL. (VI) REDUCE THE RESIDENTIAL PROBLEMS FOR THE BENEFIT OF THE ALLOTTEES AS WELL AS FOR THE BENEFIT OF PUBLIC IN GENERAL. CHARITABLE PURPOSE AS DEFINED UNDER SECTION 2, SUB- SECTION (15) READS AS UNDER :- CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC. PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY A CTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY; A BARE PERUSAL OF THE ABOVE OBJECTS WOULD REVEAL TH AT THE ENTIRE THRUST WAS DIRECTED TOWARDS COMFORT AND BENEFIT OF ALLOTTEES OF UDITA COMPLEX. THESE OBJECTS WHICH WERE CLASS SPECIFIC, DO NOT AT ALL COME WITHIN THE TERM CHARITABLE PURPOSE AS NOTED ABOVE. SUBSCRIPTION IS RECEIVED FROM THE ALLOTTEES AND UTILIZED FOR THEIR BENEFIT B Y MAINTAINING THE COMPLEX . LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE-TRUST HAS AN AUDITORIUM AND FUNDS WERE INVESTED IN MUTUAL FUND AND ON THE ROOF TOP OF THE COMPLEX, THE TELECOMMUNICATION LIKE BHARTI AURTEL, TATA TELESERVICES, VODAFONE AND BSNL HAVE INSTALLED THEIR TOWERS FOR WHICH THEY WERE PAYING RENT. IN OUR OPINION, THESE ACTIVI TIES CARRIED ON BY THE TRUST WERE SOLELY FOR THE BENEFIT OF ALLOTTEES AND NOT FOR ADVANCEMENT OF ANY GENERAL PUBLIC UTILITY. IT WAS PURE AND SIMPLE EXPLOITATION OF COMPLEX SPACE BY LETTING OUT THE SA ME ON RENT FOR THE BENEFIT OF ALLOTTEES. BY NO STRETCH OF REASONING THIS COULD COME WITHIN THE AMB IT OF CHARITABLE PURPOSE. LD. DIT(E) AFTER CONSIDERING THE SUBMISSIONS OF LD. COUNSEL APPEARIN G ON BEHALF OF THE ASSESSEE IN REGARD TO THE UTILIZATION OF AUDITORIUM BY OUTSIDERS, INTER ALIA, OBSERVED AS UNDER :- REGARDING CHARITY, HE SAID THAT AUDITORIUM HAS GIV EN FROM TIME TO TIME TO OTHERS FOR USE WHICH HE COULD NOT CONFIRM BECAUS E THE SECURITYMEN DID NOT ALLOW THE OUTSIDER TO PASS THROUGH THE GATES AN D THAT AUDITORIUM IS USED BY THE FLAT OWNERS ONLY. THE ABOVE FACTS HAVE NOT BEEN CONTROVERTED BY LD. C OUNSEL APPEARING ON BEHALF OF THE ASSESSEE. LD. CIT(A) HAS ALSO INCORPORATED IN HIS ORDER, THE INCOME AND EXPENDITURE FOR FOUR FINANCIAL YEARS FROM WHICH IT IS EVIDENT THAT NO CHARITABLE A CTIVITY HAD BEEN CARRIED OUT BY THE ASSESSEE. ITA NO. 762/KOL/2011 4 WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. DIT(E). 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. !3 !3 !3 !3 $,! $,! $,! $,! 4 ,- 4 ,- 4 ,- 4 ,- 5 '6 5 '6 5 '6 5 '6 0$ 0$ 0$ 0$ ORDER PRONOUNCED IN THE COURT ON 06. 09. 2011. SD/- SD/- [ . . . . . . . . , ,, , ] [ . . . . . .. .!'# !'# !'# !'# , !$ !$ !$ !$ ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (0$ 0$ 0$ 0$) )) ) DATED : 06 TH SEPTEMBER, 2011. !3 / )9 :!92/ COPY OF THE ORDER FORWARDED TO: 1. &' /APPELLANT : UDITA OWNERS ASSOCIATION, C/O. ARSK & ASSOCIATES, CHARTERED ACCOUNTANT, 22, R. N. MUKHERJE E ROAD, 3 RD FLOOR, KOLKATA-700 001. 2 )*&' / RESPONDENT : DIRECTOR OF INCOME TAX (EXEMPTION), 10B, MIDDLETON ROW, 6 TH FLOOR, KOLKATA-700 071. 3. 3 - - / CIT, 4. 3- ()/ CIT(A), KOLKATA. 5. 5 )-/ DR, KOLKATA BENCHES, KOLKATA [*9 )/ TRUE COPY] !3-,/ BY ORDER, A /ASSTT REGISTRAR [KKC BC -DA E /SR.PS]