Support Foundation, Lucknow V. Commissioner of Income Tax-II, Lucknow

ITA 785/LKW/2013

• Counselvise Citation: 78523714 RSA 2013
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-06-2014
• Assessment Year: misc
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 785/LKW/2013 SUPPORT FOUNDATION 24E, SAMAR VIHAR COLONY ALAMBAGH, LUCKNOW V. CIT - II LUCKNOW PAN: AALTS0495 (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY: SHRI. MANOJ KUMAR GUPTA, CIT (DR) DATE OF HEARING: 09 0 6 2014 DATE OF PRONOUNCEMENT: 18 0 6 2014 O R D E R PER SUNIL KUMAR YADAV: T HIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX DENYING GRANT OF RECOGNITION SOUGHT UNDER SECTION 80G(5)((VI) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 2 . THE FACTS IN BRIEF CULLED OUT FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX IS THAT THE ASSESSEE - TRUST WAS CONSTITUTED THROUGH A DEED OF TRUST ON 25.11.2011 AND HAD APPLIED FOR RECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT VIDE APPLICATION DATED 30.4.2013. HAVING OBTAINED RE PORT FROM THE JCIT, THE LD. COMMISSIONER OF INCOME - TAX OBSERVED FROM THE RECORD OF THE ASSESSEE THAT THE TRUST IS NOT CARRYING OUT ANY CHARITABLE ACTIVITY. BESIDES, HE HAS ALSO OBSERVED THAT IN THE TRUST MEMORANDUM , THERE ARE MORE THAN 100 OBJECTS UNDER 1 6 MAJOR HEADS AND PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : THE PROFIT AND LOSS ACCOUNT SHOWS THAT THE TRUST IS NOT INCURRING EXPENDITURE FOR ACHIEVING ITS DECLARED OBJECTS. SINCE THE ASSESSEE - TRUST WAS NOT ENGAGED IN THE CHARITABLE ACTIVITIES, THE LD. COMMISSIONER OF INCOME - TAX DENIED GRAN T OF R ECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT. 3 . AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE ASSESSEE WAS ENGAGED IN CHARITABLE ACTIVITIES AND THE AIMS AND OBJECTS ARE DEFINED IN PARA 7 OF THE TRUST DEED . THE NUMBER OF OBJECTS, FOR WHICH THE TRUST WAS CREATED, ARE ONLY 60 WHEREAS THE LD. COMMISSIONER OF INCOME - TAX HAS OBSERVED THAT IN THE MEMORANDUM , THE OBJECTS WERE MORE THAN 100 UNDER 16 MAJOR HEADS. THIS FINDING OF THE LD. COMMISSIONER OF INCOME - TAX I S CONTRARY TO THE TRUST DEED. COPY OF THE TRUST DEED IS PLACED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE RECEIPT & PAYMENT ACCOUNT FOR THE YEAR ENDING ON 31.3.2013, WITH THE SUBMISSION THAT FROM WHATEVER AMOUNTS WE RE RECEIVED , IT H AS INCURRED CERTAIN EXPENSES TOWARDS THERAPY AND SALARY & WAGES. HE HAS ALSO FILED PHOTOGRAPHS OF THE PROGRAMMES LAUNCHED BY IT AND THE DETAILS OF THERAPY PROVIDED TO THE DESIRED PERSONS. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONT ENDED THAT FOR GRANTING RECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT, THE NATURE OF THE OBJECTS ARE TO BE EXAMINED AND NOT THE ACTUAL ACTIVITIES BEING UNDERTAKEN BY THE ASSESSEE. IT WAS ALSO BROUGHT TO OUR NOTICE DURING THE COURSE OF HEARING THAT THE A SSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT BY THE LD. COMMISSIONER OF INCOME - TAX. COPY OF THE REGISTRATION CERTIFICATE IS PLACED ON RECORD AT PAGE 1 OF THE COMPILATION OF THE ASSESSEE. IN THE LIGHT OF GRANT OF REGISTRATION UNDER S ECTION 12A OF THE ACT, THERE IS NO JUSTIFICATION IN DENIAL OF RECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT. 4 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX , BESIDES CONTENDING THAT THE ASSESSEE W AS NOT ENGAGED IN THE CHARITABLE ACTIVITIES. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : 5 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD , WE FIND FROM THE MEMORANDUM OF THE TRUST DEED THAT THE ASSESSEE - TRUSTS PRELIMINARY OBJECT WAS TO WORK IN TH E FIELD OF MENTAL HEALTH FOR BENEFIT OF CHILDREN, WOMEN, ADULTS AND PERSON SUFFERING FROM ANY MENTAL ILLNESS BY USING MEDICAL TREATMENT, PSYCHOTHERAPY , COUNSELING AND REHABILITATION FACILITIES, ETC. AND ALSO TO HOLD TRAINING WOR K SHOPS, SEMINARS AND AWARENE SS PROGRAMS FOR THE COMMUNITY WORKERS, TEACHERS, THERAPISTS, ETC. IN THE AIMS, OBJECTS AND FUNCTION OF THE TRUST, THE NATURE OF ACTIVITIES ARE SPELLED OUT AND FROM ITS PERUSAL WE FIND THAT THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE - TRUST ARE IN THE NATURE OF CHARITABLE AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE - TRUST WAS NOT CREATED FOR CHARITABLE PURPOSES. 6 . WE HAVE ALSO CAREFULLY EXAMINED THE RECEIPTS & PAYMENT ACCOUNT AND WE FIND THAT THE RECEIPTS ARE VERY NOMINAL AND OUT OF WHICH THE ASSESSEE - TRU ST HAS INCURRED CERTAIN AMOUNT ON SALARY AND THERAPY EXPENSES. AS PER RECEIPTS & PAYMENT ACCOUNT, THE TOTAL RECEIPT WAS SHOWN AT RS.1,36,812.26, OUT OF WHICH ASSESSEE HAS INCURRED CERTAIN EXPENSES INCLUDING THERAPY EXPENSES. BESIDES, THE ASSESSEE - TRUST H AS ALSO FILED PHOTOGRAPHS OF THE ACTIVITIES UNDERTAKEN BY IT AND ALSO VARIOUS PROGRAMMES LAUNCHED BY IT. FROM A CAREFUL PERUSAL OF THESE DOCUMENTS, IT APPEARS THAT THE ASSESSEE IN FACT IS ENGAGED IN CHARITABLE ACTIVITIES , THOUGH THE VOLUME OF ACTIVITIES M AY NOT BE THAT MUCH ON ACCOUNT OF SHORTAGE OF DONATION, ETC. BUT THESE ASPECTS SHOULD NOT BE GIVEN THAT MUCH WEIGHTAGE WHILE GRANTING RECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT , AS GRANT OF REGISTRATION IS NOT BLANKET AND DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER IS QUITE COMPETENT TO EXAMINE THE NATURE OF ACTIVITIES UNDERTAKEN BY THE ASSESSEE WHILE COMPLETING THE ASSESSMENT. THE LD. COMMISSIONER OF INCOME - TAX HAS ALSO IGNORED THE FACT THAT THE ASSESSEE - TRUST HAS BEEN GRANTE D REGISTRATION UNDER SECTION 12A OF THE ACT. ONCE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : CREATION OF THE ASSESSEE - TRUST FOR CHARITABLE PURPOSES HAS BEEN ACCEPTED BY THE DEPARTMENT WHILE GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT, RECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT SHOULD N OT HAVE BEEN DENIED BY HOLDING THAT THE ASSESSEE HAS NOT BEEN CREATED FOR THE CHARITABLE PURPOSES. THEREFORE, KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT IT IS A FIT CASE WHERE RECOGNITION UNDER SECTION 80G(5)(VI) OF THE ACT SHOULD BE GRANTED TO THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX AND DIRECT HIM TO GRANT APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE STANDS ALLOW ED. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.6.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH JUNE , 2014 JJ: 0906 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )