RISHABH FOUNDATION TRUST, RAIPUR (CG) V. CIT, RAIPUR (CG)

ITA 88/BIL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9106 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: R B DOSHI
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.88 /RPR /201 4 RISHABH FOUNDATION TRUST, C/O. BASANT KUMAR JAIN, D - 277/278, TAGORE NAGAR, RAIPUR VS. CIT, CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR PAN/GIR NO. AACTR 1557 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI R.B.DOSHI, AR REVENUE BY : SHRI P.K.MISHRA, CIT DR DATE OF HEARING : 4 /05 / 2017 DATE OF PRONOUNCEMENT : 04 / 05 / 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT, RAIPUR , DATED 29.4.2014. 2. THE SOLE GROUND TAKEN BY THE ASSESSEE SOCIETY IS THAT THE LD CIT ERRED IN REJECTING THE APPLICATION FOR GRANT OF APPROVAL U/S.12A OF THE INCOME TAX, 1961. 2 ITA NO.88/RPR/2014 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED APPLICATION FOR GRANT OF REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961 ON 29 .10.2013. THE COMMISSIONER OF INCOME TAX CALLED FOR A REPORT FROM THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE SOCIETY AND ITS ACTIVITIES. THE DCIT - 1 (1) IN HER REPORT DATED 28.4.2014 HAS STATED THAT THE FOUNDATION HAS NOT SUBMITTED ANY INFORMATION AND, THERE FORE, THE GENUINENESS OF THE ACTIVITIES COULD NOT BE ESTABLISHED. THE ADDL. CIT, RANGE - 1 IN HIS REPORT DATED 29.4.2014 STATED THAT THE APPLICANT HAD FAILED TO ESTABLISH THAT IT IS ENGAGED IN CHARITABLE ACTIVITIES AND HAS NOT RECOMMENDED FOR THE APPROVAL OF GRANT OF REGISTRATION U/S.12A OF THE ACT. ACCORDINGLY, A SHOW CAUSE NOTICE WAS ISSUED ON 13.3.2014 TO PRODUCE THE COPIES OF AUDITED ACCOUNTS AND OTHER DOCUMENTS. ON 25.3.2014, THE ASSESSEE WAS ALSO ASKED TO FILE THE FOLLOWINGS: I) DETAILS OF DONATION RE CEIVED IN F.Y. 12 - 13 & FROM 1.4.13 TILL DATE, SUCH AS NAME, ADDRESS, PAN, AMOUNT, MODE OF RECEIPTS, ETC.. II) DETAILS OF CHARITABLE ACTIVITIES DONE IN F.Y. 12 - 13, SUCH AS NATURE OF ACTIVITY, AMOUNT SPENT, NAME OF THE BENEFICIARIES. III) DETAILS OF ACTIVI TIES DONE FROM 1.4.2013 TILL DATE. THE CIT OBSERVED THAT THE APPLICANT SOCIETY FAILED TO GIVE R EPLY TO THE QUERIES RAISED TO THE ASSESSEE SOCIETY . HE OBSERVED THAT SINCE THE DATE OF INCORPORATION I.E. 12.2.2013 TILL 31.3.2013, THE ONLY CHARITABLE ACTIVI TY CLAIMED TO HAVE BEEN UNDERTAKEN BY THE SOCIETY IS HOLDING OF A FREE HEATH 3 ITA NO.88/RPR/2014 CHECK - UP CAMP DURING FINANCIAL YEAR 2012 - 13 ON WHICH EXPENSES OF RS.35,250/ - WAS INCURRED AS PER THE ACCOUNTS SUBMITTED BY THE ASSESSEE, WHICH WAS SHOWN AS FINANCED BY DONATION OF RS.44,000/ - . THEREFORE, HE REJECTED THE APPLICATION FOR REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE SOCIETY. 4. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE REFERRED TO THE OBJECT CLAUSE OF THE ASSESSEE TRUST, THE ENGLISH TRANSLATION IS AS UNDER: 1. TO OFFER MONETARY ASSISTANCE/ GRANT FOR ITS UTILIZATION FOR THE WELFARE OF GENERAL PUBLIC LIKE PROVIDING EDUCATION TO THE POOR AND DESERVING PEOPLE, SPREADING AWARENESS AMONG PEOPLE FOR THE ADVANCEMENT OF EDUCATION, HEALTH AND HYGIENE. 2. TO ESTABLISH AND PROMOTE SOCIAL, SPIRITUAL, HEALTH AND EDUCATIONAL TENDENCY AMONG PEOPLE. 3. TO PROVIDE HELP AND RELIEF TO THE PEOPLE SUFFERING FROM UNFORESEEN SITUATIONS DURING EMERGENCY. 4. TO ESTABLISH AND PROMOTE THE TENDENCY OF HUMAN WELFARE AMONG PEOPLE. 5. TO WORK FOR PROMOTION AND DEVELOPMENT OF CHILDREN, WOMEN AND YOUTH. 6. TO ESTABLISH, MAINTAIN AND PROMOTE SCHOOL, HOSPITAL, MUSEUM, MEDICAL AND EDUCATION INSTITUTIONS. 7. TO PROVIDE MONETARY ASSISTANCE/GRANT, SUPPORT AND CARE TO AGED, ORPHANS, PHYSICALL Y AND MENTALLY CHALLENGED CHILDREN AND TAKE CARE OF THEIR DAILY NEEDS. 4 ITA NO.88/RPR/2014 8. TO ORGANIZE HEALTH CHECKUP CAMPS FOR ECONOMICALLY UNDERPRIVILEGED AND BACKWARD PEOPLE AND PROVIDING THEM FINANCIAL AND OTHER HELP FOR MEDICAL TREATMENTS. 9. TO ESTABLISH AND RUN ME DICAL INSTITUTION, EDUCATION INSTITUTION OR BUILDING DEVOTED TO RELIGIOUS OR CHARITABLE PURPOSES (DHARAMSHALA). 10. TO PROVIDE FINANCIAL AND OTHER SUPPORT AND TO ORGANIZE WORKSHOPS FOR POVERTY ALLEVIATION, SKILL DEVELOPMENT, EMPLOYMENT OPPORTUNITIES FOR PO OR AND UNDERPRIVILEGED PEOPLE AND TO HELP THEM BY DISTRIBUTING CLOTH, MEDICINE ETC.. 11. TO PROVIDE FINANCIAL SUPPORT TO OTHER TRUSTS, ORGANIZATIONS WHICH ARE RUNNING WITH THE SAME OBJECT AS OF THIS TRUST. 12. TRUSTEES ARE EMPOWERED TO DO ALL KINDS OF WELF ARE WORK AT THEIR OWN DISCRETION, SUBJECT TO THE OBJECT CLAUSE OF THIS TRUST. 13. TO GRANT SCHOLARSHIPS, STIPENDS, PRIZES, REWARDS, ALLOWANCES OR OTHER FINANCIAL SUPPORT TO TALENTED OR POOR STUDENTS. 14. TO PROVIDE DONATION TO TEMPLES AND OTHER RELIGIOUS I NSTITUTIONS, WHICH ARE WORKING WITH THE SAME OBJECT AS OF THIS TRUST BUT TRUST WILL NOT ORGANIZE ANY FUNCTION OF RELIGIOUS NATURE. HE OBSERVED THAT TH E CIT HAS, IN HIS ORDER, NOT FOUND ANY OF THE OBJECTS AS NON - CHARITABLE IN NATURE. HE ARGUED THAT U/S. 12AA, THE SCOPE OF ENQUIRY BY THE CIT IS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE TRUST WITH RESPECT TO THE OBJECTS OF THE TRUST AND THAT THE OBJECTS OF THE TRUST ARE CHARITABLE. HE ARGUED AND SUBMITTED THAT IT IS FOR THE ASSESSING OFFICER DURING T HE COURSE OF REGULAR ASSESSMENT TO SATISFY HIMSELF THAT THE AMOUNTS ARE SPENT BY THE ASSESSEE SOCIETY ARE FOR CHARITABLE OBJECTS OR NOT AND THEREAFTER TO ALLOW EXEMPTION U/S.11 OF THE ACT TO THE ASS ESSEE SOCIETY. HE ALSO REFERRED 5 ITA NO.88/RPR/2014 TO PAGE S 17 TO 32 OF THE PAPER BOOK, WH EREIN VIDE LETTER DATED 2 .4.2014 ADDRES SED TO THE CIT, RAIPUR, WH EREIN, THE ASSESSEE HAS FURNISHED THE REQUIRED DETAILS AS UNDER: I ) DETAILS OF DONATION RECEIVED IN THE FINANCIAL YEAR 2012 - 13. II ) BILL AND STATEMENT SHOWING NAME OF THE DOCTORS GIVEN SERVICES IN FREE MEDICAL CAMP CONDUCTED BY TRUST ON 16.2.2013. III ) LIST OF BENEFICIARIES OF FREE MEDICAL CAMP. IV ) COPY OF PHOTOGRAPHS OF FREE MEDICAL CAMP CONDUCTED ON 16.2.1013. V ) DETAILS OF DONATION RECEIVED IN F.Y. 2013 - 14. VI ) COPY OF BILL TOWARDS S TUDY MATERIALS PURCHASED FOR FREE DISTRIBUTIONS AMONGST NEEDY STUDENT. HE ARGUED THAT THE CIT HAS NOT AFTER EXAMINING THE SAME FOUND THE ABOVE DETAILS AND SUBMISSIONS OF THE ASSESSEE AS NOT CORRECT. THEREFORE, HE ARGUED THAT THE CIT WAS NOT JUSTIFIED IN REJECTING THE GRANT OF REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO GIVE REPLIES TO THE QUERIES RAISED BY THE CIT. HENCE, HE PRAYED THAT THE ORDER OF THE CIT SHOULD BE SET ASIDE AND REGISTRATION U/S.12 A SHOULD BE GRANTED TO THE ASSESSEE. 5. ON THE OTHER HAND, LD D.R. RELIED ON THE ORDER OF THE CIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE SOCI ETY FILED AN APPLICATION FOR GRANT OF REGIS TRATION U/S.12A OF THE ACT ON 29 .10.2013, WHICH WAS REJECTED BY THE CIT ON THE GROUND THAT THE 6 ITA NO.88/RPR/2014 REQUIRES DETAILS WERE NOT FURNISHED BY THE ASSESSEE SOCIETY. LD A.R. OF THE ASSESSEE SUBMITTED THAT AT PAGES 17 - 32 OF THE PAPER BOOK, ARE COPIES OF DETAILS WHICH WERE REQUIRED BY THE CIT AND THE ASSESSEE HAD FILED THE SAME. SO THE OBSERVATIONS OF THE CIT THAT THE REQUIRED DETAILS WERE NOT FILED BY THE ASSESSEE ARE NOT CORRECT. HE FURTHER SUBMITTED THAT AFTER FILING ALL THE DETAILS BY THE ASSESSEE ON 2.4.2014, THE CIT(A) HAS NOT AFTER EXAMINING THE SAME FOUND THE ABOVE DETAILS AND SUBMISSION OF THE ASSESSEE AS NOT CORRECT AND THAT THE ASSESSEE WAS NOT A CHARITABLE SOCIETY. THE CONTENTION OF LD A.R. OF THE ASSESSEE IS THAT THE ASSESSEE FILED BEFORE THE CIT, COPY OF AIMS AND OBJECTS OF THE SOCIETY, WHICH IS REPRODUCED IN THE PRECEDING PARAGRAPH 7. HE SUBMITTED THAT NONE OF THE OBJECTS OF THE SOCIETY HAS BEEN FOUND BY THE CIT TO BE NON - GENUINE OR ARE NOT CHARITABLE IN NATURE. HE SUBMITTED THAT WHILE GRANTING REGISTRATION U/S.12A OF THE ACT, THE CIT HAS TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES. HE IS NOT TO EXAMINE WHETHER THE ASS ESSEE HAS UTILIZED THE AMOUNTS RECEIVED FOR CHARITABLE PURPOSES OF THE TRUST AS THAT FALLS WITHIN THE DOMAIN OF THE ASSESSING OFFICER WHILE ASSESSING THE INCOME OF THE ASSESSEE AND ALLOWING EXEMPTION U/S.11 OF THE ACT. HE SUBMITTED THAT AFTER EXAMINING TH E OBJECTS OF THE TRUST, THE CIT HAS NOT FOUND ANY OF ITS OBJECTS TO BE NON - GENUINE OR NOT CHARITABLE IN NATURE AND, THEREFORE, REFUSAL TO GRANT REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE SOCIETY IS NOT PROPER AND, THEREFORE, THE ORDER OF 7 ITA NO.88/RPR/2014 THE CIT SHOUL D BE REVERSED AND REGISTRATION U/S.12A SHOULD BE GRANTED TO THE ASSESSEE SOCIETY. FOR THIS, HE PLACED RELIANCE ON THE DECISION OF DELHI BENCHES OF THE TRIBUNAL IN THE CASE LORD KRISHNA CHARITABLE TRUST VS CIT, (2016) 48 CCH 0020 (DEL TRIB), WHEREIN, IT WA S HELD THAT SECTION 12AA PRESCRIBED SCOPE AND AMBIT OF ENQUIRY THAT THE COMMISSIONER WAS AUTHORIZED TO CARRY OUT AT THE TIME OF GRANT OF REGISTRATION TO TRUST OR INSTITUTION AND THE SCOPE AND AMBIT OF ENQUIRY REVOLVED AROUND NATURE OF OBJECTS BEING CHARITA BLE OR RELIGIOUS, AND GENUINENESS OF ACTIVITIES OF TRUST OR INSTITUTION AND IF THESE ARE FAULTY, REGISTRATION CANNOT BE GRANTED TO THE ASSESSEE. 8. HE RELIED ON THE DECISION OF JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF JAIPUR RURAL HEALTH & D EVELOPME NT VS CIT, (2016) 47 CCH 0762 (JAIPUR TRIB), WHEREIN, IT WAS HELD THAT THE ASSESSEE SUBMITTED THAT THE OBJECTS OF THE ASSESSEE OF CLAUSE (A) AND (D) ARE FOR ESTABLISHMENT OF HOSPITALS AND COLLEGES. AS PER CLAUSE 16 OF THE TRUST DEED, NO INCOME OR PART OF INCOME OR ASSETS OF THE TRUST FUND CAN BE APPLIED OR TRANSFERRED FOR ANY PURPOSES OTHER THAN CHARITABLE PURPOSES. KEEPING THIS CLAUSE IN VIEW, THE ORDER OF THE CIT IS SET ASIDE AND DIRECT HIM TO CONSIDER THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/ S.12AA OF THE ACT. 9. FURTHER, HE RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF FIFTH GENERATION EDUCATION SOCIETY VS CIT, 185 ITR 634 (ALL), 8 ITA NO.88/RPR/2014 WHEREIN, IT WAS HELD THAT AT THE TIME OF CONSIDERING APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12A, THE CIT IS NOT REQUIRED TO EXAMINE THE APPLICATION O INCOME OR CARRYING ON OF ANY ACTIVITY BY THE ASSESSEE TRUST OR INSTITUTION. 10, FURTHER, HE RELIED ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. V IJAY VARGIYAVANI CHARITABLE TRUST, 369 ITR 360(RAJ), WHEREIN, IT WAS HELD THAT THE REGISTRATION MUST BE GRANTED U/S.12AA OF THE ACT TO THE ASSESSEE WHEN IT IS MEANT FOR CHARITABLE PURPOSES ON THE BASIS OF GENUINENESS OF OBJECTS AND TRUST AND NOT INCOME OF TRUST. 11. WE FIND THAT NONE OF THE OBJECTS OF THE SOCIETY HAS BEEN FOUND AFTER EXAMINATION BY THE CIT AS NOT - GENUINE OR NOT CHARITABLE IN NATURE. IN VIEW OF ABOVE QUOTED DECISIONS OF THE TRIBUNALS AND HONBLE HIGH COURTS, THE CIT AT THE TIME OF GRANT OF REGISTRATION U/S.12A OF THE ACT, HAS TO CONSIDER WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE AND THE ACTIVITIES OF THE TRUST ARE GENUINE. IF HE FINDS THAT THE OBJECTS OF THE TRUST ARE CHARITABLE AND THE ACTIVITIES OF THE TRUST ARE GENUINE, THEN HE SH OULD GRANT REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE SOCIETY. IT HAS BEEN HELD THAT AT THE TIME OF REGISTRATION, THE CIT IS NOT TO EXAMINE THE APPLICATION OF INCOME OR CARRYING ON ANY ACTIVITY BY THE ASSESSEE TRUST OR INSTITUTION. IN VIEW OF FOREGO IN G, WE HOLD THAT THE REJECTION OF REGISTRATION APPLICATION OF THE ASSESSEE SOCIETY U/S.12A BY THE CIT IS NOT JUSTIFIED AND HENCE, WE SET ASIDE HIS ORDER AND 9 ITA NO.88/RPR/2014 DIRECT HIM TO GRANT REGISTRATION U/S.12A OF THE ACT TO THE ASSESSEE AND ACCORDINGLY ALLOW THE GROU ND OF APPEAL OF THE ASSESSEE. 12 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 4 /05 /2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (GEORGE GEORGE K ) ( N.S. SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RAIPUR ; DATED 4 /05 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY 1. THE APPELLANT : RISHABH FOUNDATION TRUST, C/O. BASANT KUMAR JAIN, D - 277/278, TAGORE NAGAR, RAIPUR 2. THE RESPONDENT. CIT, RAIPUR. 3. THE CIT(A), RAIPUR . 4. DR, ITAT, RAIPUR 5. GUARD FILE. //TRUE COPY//