Kovai City Baithulmal Welfare Foundation, CHENNAI V. CIT-I, Coimbatore

ITA 87/CHNY/2014

• Counselvise Citation: 8721714 RSA 2014
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2014
• Assessment Year: misc
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: R K V SUNDAR
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.87/MDS/2014 / ASSESSMENT YEAR : N.A M/S KOVAI CITY BAITHULMAL WELFARE FOUNDATION NO.36, UPPLIPALAYAM AHALAISUNNATH JAMATH BUILDINGS AVINASHI ROAD, UPPLIPALAYAM COIMBATORE 641 018 VS. THE COMMISSIONER OF INCOME- TAX-I COIMBATORE [PAN AABTK 6740 L] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI R.K.V. SUNDAR, ADVOCATE /RESPONDENT BY : DR. S. MOHARANA, CIT / DATE OF HEARING : 17-09-2014 ! / DATE OF PRONOUNCEMENT : 19-09-2014 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCOME-TAX-I COIMBATORE, DATED 29.1 1.2013, PASSED IN C.NO.127(110)/80G/CIT-I:CBE/2013-14 DENYING APPR OVAL U/S 80G OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.87/14 :- 2 -: 2. THE ASSESSEE IS A PUBLIC CHARITABLE TRUST. IT GO T REGISTRATION U/S 12AA WITH EFFECT FROM 16.8.2012. ON 17.5.2013, THE ASSESSEE HAD APPLIED FOR APPROVAL U/S 80G OF THE ACT. THE CIT HAS REJECTED THE SAME AS UNDER: 3.0. THE TRUST HAS FILED DETAILS OF ITS ACTIVITIES AFTER ITS INCEPTION ON 30-12-2009 AND CERTIFIED COPIES OF AUDITED-ACCOUNTS FOR THE PERIOD ENDING 31-3-10; 31-311; 31-3-12 & 31-3-13. PERUSAL OF THE AUDITED-ACCOUNTS SHO W S THAT, THE TRUST HAD CLAIMED TO HAVE EXPENDED/DONATED THE VARIOUS AMOUNTS TO WA RDS , RS - 4966970 (MARRIAGE FOR POOR & ORPHAN GIRLS); RS-74920 (MEDICAL-EXPENSES) ; RS-1000 (EDUCATION), RS-236100 (INTEREST-FREE ADVANCES TO POOR/WEAKER SECTIONS). THE TRUST HAS PRODUCED SAMP LE EVIDENCE IN RESPECT OF DONATIONS TO MARRIAGE AND MEDICAL EXPENS ES, BUT, NOT FOR INTEREST-FREE ADVANCE(S). IT IS PRESUMED THAT THE TRUST IS UTILIZING MONEY(S) FOR THE ACTIVITIES OTHER THAN CHARITABLE O BJECTS IN THE GARB OF CHARITY. MOREOVER, THE FINANCIAL ASSISTANCE IS SEE N TO HAVE HAD EXTENDED THE LOANS, ACCEPTING (BUT NOT ADMITTING) A S FOR CHARITABLE PURPOSES FOR LIMITED PURPOSES, PREDOMINANTLY TO ONE COMMUNITY. 3.1 . AS PER THE LIST PROVIDED THE TRUST HAS DISCLOSED TO HAVE HAD RECEIVED DONATIONS OFRS-1200000 FROM SIXTY DONORS, ALL I N CASH FOR PERIOD ENDING 31-3-10. FOR PERIOD ENDING 31-3-11 TH E TRUST HAS DISCLOSED TO HAVE RECEIVED DONATION-OF RS-2136553 F ROM SEVENTY NINE DONORS - OUT OF WHOM, ONLY NINETEEN ARE IN CHEQUE/INSTRUMENT S. FOR PERIOD ENDING 31312 THE TRUST HAS DISCLOSED T O HAVE RECEIVED DONATIONS OF RS-858500 FROM FORTY DONORS - OUT OF WHOM, ONLY THIRTEEN ARE IN CHEQUE/INSTRUMENTS. FOR PERIOD END ING 31-3-13 THE TRUST HAS DISCLOSED TO HAVE RECEIVED DONATIONS OF R S-1138500 FROM SIXTY SIX DONORS OUT OF WHOM, ONLY NINE ARE IN CH EQUE/ INSTRUMENTS. THE TRUST ALSO HAD DISCLOSED RECEI PTS OF SUBSCRIPTIONS OF , RS-12500; RS-67000 ; RS-91500 & RS-42500 FOR THE PERIODS ENDIN G 31-3-10; 31-3-11; 31-3-12 & 31-3-13, RESPECTIVELY . 4.0 THUS, ON THE BASIS OF THE FOREGOING INFORMATIO N, IT IS OBVIOUS THAT ALL THE DONATIONS RECEIVED BY THE TRUST ARE NOT EVI DENCED IN A VERIFYING MANNER. BESIDES, IT IS PRESUMED THAT ALL THE DONAT IONS ARE NOT APPLIED FOR CHARITABLE PURPOSES. THEREFORE, THE APPROVAL U /S 80G OF THE ACT IS REFUSED. I.T.A.NO.87/14 :- 3 -: THEREFORE, THE ASSESSEE HAS PREFERRED THE INSTANT APPEAL. 3. IN THE COURSE OF HEARING, THE ASSESSEE-APPELLANT FI LES A COPY OF THE TRIBUNAL'S ORDER IN 12AA REGISTRATION PROCE EDINGS HOLDING ITS ACTIVITIES AS CHARITABLE IN NATURE. IT CONTENDS TH AT THE CIT HAS ERRED IN CONCLUDING OTHERWISE FOR REJECTING ITS CASE U/S 80G OF THE ACT. 4. THE REVENUE SUPPORTS THE CITS ORDER UNDER CHALLENG E. 5. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THE CIT HAS REJECTED THE ASSESSEES APPLICATION FOR AP PROVAL U/S 80G INTER ALIA OBSERVING THAT ITS ACTIVITIES ARE OTHE R THAN THOSE CHARITABLE IN NATURE. THE TRIBUNAL'S ORDER IN I.T.A.NO.491/MD S/2012(SUPRA) PRIMA-FACIE DEMONSTRATES THAT SIMILAR NATURE OF ACT IVITIES WERE CONSIDERED AND HELD CHARITABLE. WE ALSO FIND THAT THE CIT HAS NOT TAKEN INTO CONSIDERATION THE SAID OBSERVATIONS. TH EREFORE, WE DEEM IT APPROPRIATE THAT THE LEARNED CIT NEEDS TO PROCEED A FRESH IN ACCORDANCE WITH LAW AFTER ADEQUATE OPPORTUNITY OF H EARING TO THE ASSESSEE. THE ASSESSEE WOULD ALSO BE AT LIBERTY T O LEAD FURTHER EVIDENCE; IF ANY, IN SUPPORT OF ITS CASE. ITS GR OUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. I.T.A.NO.87/14 :- 4 -: 6. THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED ON FRIDAY, THE 19 TH OF SEPTEMBER, 2014, AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 19 TH SEPTEMBER, 2014 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF