Suryodaya science Foundation, Parbhani V. Commissioner of Income-Tax, Exemption, Pune

ITA 791/PUN/2022

AI Insights

The case involves Suryodaya Science Foundation, a charitable organization, appealing against the decision of the Commissioner of Income Tax (Exemption), Pune, which had rejected their application for registration under section 12AB of the Income Tax Act, 1961. The Commissioner had initially rejected the application citing a lack of credible evidence regarding the genuineness of the Trust's activities and the absence of details about the beneficiaries. The Tribunal, however, found that the Trust's activities, such as distributing educational materials to underprivileged students, were indeed charitable and aligned with the objects of the Trust as stated in their Memorandum of Association. The Tribunal criticized the Commissioner for not adequately addressing the charitable nature of the Trust's activities in the rejection order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134344 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-02-2023
• Assessment Year: misc
• Appeal Filed On: 31-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside
• Section: 12AA

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.791/PUN/2022 िनधाᭅरण वषᭅ / Assessment Year :N.A. Suryodaya Science Foundation, A/P. Banws, Tal. Palam, Parbhani – 431536. PAN: ABECS 1217 R V s The Commissioner of Income Tax(Exemption), Pune. Appellant/ Assessee Respondent /Revenue Assessee by Shri M.K.Kulkarani and Mrs. J.R.Chandekar – AR’s Revenue by Shri Sardar Singh Meena – DR Date of hearing 02/02/2023 Date of pronouncement 06/02/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee i.e.Suryodaya Science Foundation is directed against the order ofld.Commissioner of Income Tax(Exemption), Pune under section 12A(1) of the Income Tax Act, 1961 dated 30.09.2022. The assessee has raised the following grounds of appeal : “1. On the facts and in the circumstances of the case and in law the CIT- Exemption was not justified in rejecting the application for registration of the Trust under section 12AB(B) of the Act. It be allowed to the assessee. ITA No.791/PUN/2022 Suryodaya Science Foundation [A] 2 2. On the facts and in the circumstances of the case and in law and it appears that the rejection of application was violating the principles of Natural Justice. Any action taken without following the principles of natural justice is bad in law. The "annexure" rejecting application be quashed and set aside. 3. On the facts and in the circumstances of the case and in law the directions be issued to grant registration to the Trust as per law. 4. The appellant craves to leave, add/amend or alter any of the above grounds of appeal.” 2. The ld.Authorised Representative(ld.AR) for the assessee submitted that the assessee is a charitable institute. The ld.CIT(E) has not mentioned in the order that objects are not charitable, hence, is eligible for registration under section 12AA of the Act. The LD.AR filed paper book containing objects, copy of news paper showing activities of the assessee, which were reported in the newspaper, copy of photographs showing activities, note on activities, P&L a/c and B/s. DR Submissions : 3. The ld.Departmental Representative(ld.DR) for the revenue relied on the order of the ld.CIT(E). The ld.DR specifically pointed out that assessee had not submitted the details of the beneficiaries as called for. ITA No.791/PUN/2022 Suryodaya Science Foundation [A] 3 Discussions and Findings : 4. We have heard both the parties and perused the records. The ld.CIT(E) has rejected the application for registration under section 12AB of the Act. The relevant part of the ld.CIT(E)’s order rejecting the application of the assessee is reproduced here as under: “3. The assessee was specifically requested vide the initial notice to furnish the details of activities carried out during the last 3 years or since inception whichever is later along with supporting credible evidence. In response, the assessee submitted its reply on 28.08.2022. On verification of the same, it is observed that the activity of the assessee trust is general in nature viz., distribution of school bags, notebooks, registers etc. The assessee did not submit the details of the beneficiaries. 3.1 The assessee was given opportunity of being heard vide notice dated 18.09.2022. In response, Shri Nilesh Retwade, CA attended on behalf of the assessee trust. In the absence of any credible evidence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee.” 5. Thus, the ld.CIT(E) in the order has admitted that assessee’s activity consist of distribution of school bags, note books etc. According to the ld.CIT(E) these activities were general in nature. However, ld.CIT(E) has not mentioned that these activities were not charitable activities. The ld.CIT(E) has not uttered a single word in the order about objects of the Trust. The Ld.CIT(E) has not doubted the genuineness of the activities of the assessee. The section 12AA ITA No.791/PUN/2022 Suryodaya Science Foundation [A] 4 which describes the procedure for registration is reproduced here as under: 12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,— (a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years; (b) where the application is made under sub-clause (ii) or sub- clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,— (i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about— (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects; (ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),— (A) pass an order in writing registering the trust or institution for a period of five years; or (B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard; 6. Thus, the Act has given mandate to the ld.CIT(E) to verify objects of the Trust and genuineness of its activities. And the ld.CIT(E) also has to satisfy that the Trust has followed other laws mentioned in the section. In the case under consideration, the ITA No.791/PUN/2022 Suryodaya Science Foundation [A] 5 ld.CIT(E) has not said any adverse thing about the objects of the Assessee. We have perused the objects of the assessee. Assessee is a Section 8 Company, registered under Companies Act, 2013. The main objects mentioned in the MoA are as under: “3. a. The objects for which the company is established are : Undetake, promote or engage in all kinds of rural healthcare activity, vaccination awareness, women health, child health, by starting and engaging with other organization and start own women health, child health, by starting and engaging with other organization and start own institutes, hospitals and centers. Engage with new methods of diagnostic, understanding and prevention and treatment of disease for the peoples. To start up with sports academies, sport centers, cultural centers, for all age peoples for promotion of sports and cultural activity. To establish, run, promote and make investment in, educational institutions, schools, colleges, technical educational institutes for imparting medical and healthcare education and management training including in the fields of science, medicine, nursing, physical medicine and rehabilitative medicine, pharmacy and allied medical administration and management of such medical institutions including Health and Hospital Management Training and Development, Pharmaceutical Management, Hospitality, Programmer for skills and competency development, Training and certification of professionals.” 7. On perusal of these objects, we are of the opinion that these objects are charitable objects as defined in section 2(15) of the Act. The ld.CIT(E) in one line has mentioned about the activities to be ITA No.791/PUN/2022 Suryodaya Science Foundation [A] 6 general in nature. The distribution of school bags and distribution of note books etc, to the poor students is a charitable activity. The ld.CIT(E) has not challenged the genuineness of these activities. We have gone through the note on activities and copies of the newspaper pages showing activities of distribution of school bags, note books, pens etc., to poor students studying in Zilla Parishad Primary School. Assessee has also submitted copy of letter issued by Headmaster of Zilla Parishad Primary School stating that to around 80 students the Trust i.e.Suryodaya Science Foundation has provided school bags, notebooks, pens etc. Therefore, in the facts and circumstances of the case, we are of the opinion that the distribution of school bags, notebooks to the poor students is a charitable activity. We have already mentioned that the objects of the assessee are charitable in nature. Therefore, we direct the ld.CIT(E) to issue the registration under section 12AB of the Act to the Assessee. Accordingly, grounds of appeal raised by the assessee are allowed. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 6 th February, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 6 th Feb, 2023/ SGR* ITA No.791/PUN/2022 Suryodaya Science Foundation [A] 7 आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.