Agarwal Samaj Sahayata Trust, Hyd, Hyderabad V. CIT, (Exemptions), Hyd, Hyderabad

ITA 888/HYD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6216 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-11-2016
• Assessment Year: 2014-2015
• Appeal Filed On: 01-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G. APARNA RAO
• Keywords: Charitable institution
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA.NO.888/HYD/2015 ASSESSMENT YEAR 2014-2015 AGARWAL SAMAJ SAHAYATA TRUST, HYDERABAD. PAN AACTA9763A VS. THE CIT (EXEMPTIONS) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SMT. G. APARNA RAO DATE OF HEARING : 06.02.2017 DATE OF PRONOUNCEMENT : 10.02.2017 ORDER PER INTURI RAMA RAO, A.M. THIS APPEAL FILED BY THE ASSESSEE-TRUST IS DIRECTED AGAINST THE ORDER OF THE CIT(E) DATED 29 TH MAY, 2015 DENYING THE APPROVAL UNDER THE PROVISIONS OF CLAUSE (V) OF SUB-S ECTION (5) OF SECTION 80G OF THE I.T. ACT, 1961. THE APPELLANT RAISE D THE FOLLOWING GROUNDS OF APPEAL. 1. THE ORDER OF THE LEARNED CIT(EXEMPTIONS) IS ERRONE OUS BOTH ON FACTS AND IN LAW TO THE EXTENT IT IS PREJUD ICIAL TO THE ASSESSEE. 2. THE LEARNED COMMISSIONER FAILED TO APPRECIATE THAT DIRECTIONS IN THE ORDER U/S. 12A OF I.T.ACT THAT AMENDMENTS SHOULD BE CARRIED OUT ONLY WITH APPROVAL OF THE DEPARTMENT IS NOT MANDATORY AND THEREBY ERRED I N REFUSING TO GRANT APPROVAL U/S.80-G OF THE ACT ON T HE GROUND THAT AMENDMENTS WERE CARRIED OUT WITHOUT DEPARTMENT'S APPROVAL. 2 ITA.NO.888/HYD/2015 AGARWAL SAMAJ SAHAYATA TRUST, HYDERABAD. 3. THE LEARNED COMMISSIONER FAILED TO APPRECIATE THAT THE TRUST HAS IN FACT APPLIED FOR APPROVAL FOR AMENDMEN TS AND IN THE ABSENCE OF ANY REFUSAL BY THE DEPARTMENT IT AMOUNTS APPROVAL AND THEREBY ERRED IN REFUSING TO G RANT APPROVAL U/S.80-G. 4. THE LEARNED CIT (EXEMPTIONS) ERRED IN STATING THAT THE REGISTRATION GRANTED U/S.12A OF THE ACT NO LONGER S URVIVES THOUGH NO ORDER OF CANCELLATION IS PASSED AND THERE IS NO DEEMING PROVISION IN THE ACT TO HAVE REGISTRATION C ANCELLED AND THEREBY ERRED IN REFUSING APPROVAL U/S.80-G ON THAT COUNT. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. THE APPELLANT-TRUST IS A TRUST DULY INCORPORATED UN DER TRUST ACT. IT WAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT BY THE DIT(E), HYDERABAD VIDE ORDER DATED 30 TH MAY, 2011 AND SUBSEQUENTLY, THE APPELLANT TRUST MADE AN APPLICATION IN FORM NO.10G SEEKING APPROVAL UNDER THE PROVISIONS OF CLAUSE (V) OF SUB-SECTION (5) OF SECTION 80G OF THE I.T. ACT. THE SAID APPLICATION CAME TO BE DISPOSED OF BY THE LD. CIT(E) VIDE ORDER DATED 29 TH MAY, 2015 DENYING THE APPROVAL UNDER THE SAID PROVISION STATING THAT THE APPELLANT-TRUST HAD CARRIED OUT CERTAIN AMENDMENT TO THE TRUST DEED WITHOUT THE PRIOR APPROVAL OF THE DIRECTOR OF EXEMPTIONS THEREBY, INFRINGED THE CONDITIO NS IMPOSED BY THE DIT(E), HYDERABAD WHILE GRANTING REGISTRATION U NDER SECTION 12AA OF THE I.T. ACT. THE CIT(E) FURTHER OBSERV ED THAT THE OBJECTS OF THE TRUST APPEAR TO BE FOR THE BENEFIT OF PAR TICULAR RELIGIOUS COMMUNITY AND THEREFORE, THE ASSESSEE WAS NOT ELIGIBLE FOR APPROVAL UNDER SECTION 80G OF THE I.T. ACT AND FIN ALLY THE LD. CIT(E) NOTED THAT A SUM OF RS.9,50,000 WAS GIVEN TO ONE AGARWAL SAMAJ WHICH IS NOT INCONFIRMITY WITH THE OBJECTS OF TH E TRUST. BEING AGGRIEVED, APPELLANT-TRUST IS IN APPEAL BEFORE US IN THE 3 ITA.NO.888/HYD/2015 AGARWAL SAMAJ SAHAYATA TRUST, HYDERABAD. PRESENT APPEAL. IT IS SUBMITTED THAT THE APPELLANT TRUST HAD APPLIED TO THE LD. CIT(E) FOR APPROVAL TO AMEND THE OBJ ECTS OF THE TRUST WHICH REMAIN UN-DISPOSED OF AND THEREBY, IT IS S UBMITTED THAT THE APPELLANT TRUST HAD NOT INFRINGED ANY CONDITIONS I MPOSED BY THE LD. CIT(E) WHILE GRANTING THE REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT. IT WAS FURTHER CONTENDED THAT THE OTHE R ISSUES RAISED BY THE LD. CIT(E) ARE THE ISSUES WHICH ARE RELEVANT FOR THE ASSESSMENT OF THE TRUST AND HAVE NO BEARING ON THE ISSUE OF APPROVAL UNDER SECTION 80G OF THE I.T. ACT. 3. THE LD. D.R. HAS PLACED RELIANCE ON THE ORDER OF THE CIT(E) DENYING APPROVAL UNDER SUB-SECTION (5) OF SEC TION 80G OF THE I.T. ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE UNDISPUTED THE FACTS ARE THAT THE APPELLANT TRUST CONTINUES TO ENJOY THE REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT. IT IS A TRITE LAW THAT ONCE REGISTRA TION UNDER SECTION 12AA OF THE ACT WAS GRANTED THE CIT(E) WAS NOT JUSTIFIED IN REFUSING THE APPROVAL UNDER SECTION 80G(V) OF THE ACT AND IN THIS CONNECTION IT IS WORTHWHILE TO PLACE RELIANCE ON TH E DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF HIRALAL B HAGWANDAS VS. CIT 246 ITR 188 WHEREIN IT WAS HELD THAT ONCE THE REGISTRATION UNDER SECTION 12A OF THE INCOME TAX ACT WAS GRANTED, THE AUTHORITIES ARE NOT JUSTIFIED IN DENYING THE APPROVAL UNDER SECTION 80G OF THE I.T. ACT. SIMILARLY, THE HONB LE GUJARAT HIGH COURT IN THE CASE OF N.M. DESAI CHARITABLE TRUST VS. CIT 246 ITR 452 HELD THAT THE AUTHORITY EMPOWERED TO GRANT APPR OVAL UNDER SECTION 80G OF THE I.T. ACT CANNOT ACT AS A ASSE SSING AUTHORITY ONCE CONDITIONS SPECIFIED ARE SATISFIED THE APPROVAL 4 ITA.NO.888/HYD/2015 AGARWAL SAMAJ SAHAYATA TRUST, HYDERABAD. UNDER SECTION 80G SHOULD BE GRANTED. THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF SONEPAT HINDU EDUCA TIONAL & CHARITABLE SOCIETY VS. CIT & ANOTHER (2005) 278 ITR 2 62 WHILE REITERATING THE SAME PROPOSITION OF LAW HELD THAT THE SC OPE OF ENQUIRY BY CIT WHILE GRANTING APPROVAL UNDER SECTION 80G SHOULD BE LIMITED TO THE ELIGIBILITY OF EXEMPTION ALONE BUT NO T THE COMPUTATION PROVISIONS OF THE TRUST. RESPECTFULLY FOLLO WING THE RATIO LAID DOWN BY THE HONBLE GUJRAT HIGH COURT IN THE DECISION CITED (SUPRA), WE HOLD THAT THE CIT(E) IS NOT JUSTIFIE D IN DENYING THE APPROVAL UNDER SECTION 80G(V) OF THE ACT ONCE THE R EGISTRATION UNDER SECTION 12AA OF THE ACT IS GRANTED BY THE PRESCR IBED AUTHORITY. WE, THEREFORE, ALLOW THE APPEAL FILED BY THE APPELLANT TRUST. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON10.02.20 17. SD/- SD/- (SMT. P. MADHAVI DEVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTATN MEMBER HYDERABAD, DATED 10 TH FEBRUARY, 2017 VBP/- 5 ITA.NO.888/HYD/2015 AGARWAL SAMAJ SAHAYATA TRUST, HYDERABAD. COPY TO 1. AGARWAL SAMAJ SAHAYATA TRUST, HYDERABAD. C/O. SHRI K. VASANTKUMAR, SHRI A.V. RAGHURAM & SHRI P. VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHERBAGH, HYDERABAD 500 001. 2. THE CIT (EXEMPTIONS), HYDERABAD. 3. ITO EXEMPTIONS, WARD-1, HYDERABAD 4. D.R. ITAT B BENCH, HYDERABAD. 5. GUARD FILE