Srir sri Vyasa Prasanna Raghavendra charitable Trust, Alappuzha V. CIT, Kottayam

ITA 9/COCH/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65057 (ITAT-COCHIN)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: NITHYANANDA KAMATH
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

1 ITA NO. 09/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 09/COCH/2012 (ASSESSMENT YEAR 2009-10) SRI SRI VYASA PRASANNA VS C.I.T., KOTTAYAM RAGHAVENDRA CHARITABLE TRUST NO.37A, KUNDALLATE HOUSE S.L. PURAM, MARARIKULAM NORTH PANCHAYATH, CHERTHALA ALAPUZHA-688 549 PAN : AACTS9689R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NITHYANANDA KAMATH RESPONDENT BY : SHRI M ANIL KUMAR, C.I.T. DATE OF HEARING : 18-12-2012 DATE OF PRONOUNCEMENT : 21-12-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER REJECTING THE APPLICATIO N FOR APPROVAL U/S 80G OF THE ACT. 2 ITA NO. 09/COCH/2012 2. SHRI NITYANANDA KAMATH, THE LD.REPRESENTATIVE FO R THE TAXPAYER SUBMITTED THAT THE TAXPAYER IS A CHARITABLE TRUST G RANTED REGISTRATION U/S 12AA OF THE ACT. THE LD.REPRESENTATIVE FURTHER SUB MITTED THAT APPROVAL U/S 80G WAS ALSO GRANTED UPTO 31-03-2008. HOWEVER, FOR THE YEAR UNDER CONSIDERATION THE ADMINISTRATIVE COMMISSIONER REJECT ED THE APPLICATION ON THE GROUND THAT THE TAXPAYER HAS PURCHASED CLOTH FR OM TEXTILE SHOWROOM. REFERRING TO THE OBJECT OF THE TAXPAYER TRUST WHICH IS AVAILABLE AT PAGE 55 OF THE PAPER BOOK, THE LD.REPRESENTATIVE SUBMITTED THA T PROVIDING CLOTH, EDUCATION, SHELTER, EMPLOYMENT TO THE POOR, DOWN-TR ODDEN AND UNDERPRIVILEGED CITIZEN IS ONE OF THE OBJECTS OF THE TRUST. THEREFORE, PURCHASE OF CLOTH FOR PROVIDING THE SAME TO THE POO R PEOPLE IS AS PER THE OBJECT OF THE TRUST. THEREFORE, IT CANNOT BE SAID T HAT MERELY BECAUSE THE TAXPAYER PURCHASED THE CLOTH FROM TEXTILE SHOWROOM ITS ACTIVITIES ARE NOT TOWARDS ADVANCEMENT OF OBJECT OF GENERAL PUBLIC UTIL ITY. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE ADMINI STRATIVE COMMISSIONER HAS NOT EXAMINED THE ACTIVITY OF THE TRUST WITH REG ARD TO THE SUPPLY OF FREE CLOTH TO THE POOR AND NEEDY PEOPLE. 3 ITA NO. 09/COCH/2012 3. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT THE TAXPAYER HAS PURCHASED CLOTH FROM BIG SHOWROOM. RE FERRING TO THE COPIES OF THE BILLS AVAILABLE IN THE PAPER BOOK FILED BY T HE TAXPAYER, THE LD.DR POINTED OUT THAT THE TAXPAYER HAS PURCHASED DIAPERS , DESIGNER SAREES, ETC. WHICH ARE NOT NORMALLY USED BY THE POOR PEOPLE. TH EREFORE, PURCHASE OF SUCH CASUAL CLOTH CANNOT BE CONSTRUED TO BE FOR CHA RITABLE ACTIVITY. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE IMPUGNED ORDER IT APPEARS THAT THE ADMINISTRATIVE COMMISSIONER FOUND THAT THE ACTIVITY OF THE TRUST WAS NOT TOWARDS ADVANCEMENT OF THE OBJECTS OF GENERAL PUBLIC UTILITY ONLY ON THE GROUND THAT THE TAXPAYER HAS PU RCHASED CLOTH FROM TEXTILE SHOWROOMS. THE CONTENTION BEFORE THIS TRIB UNAL ON BEHALF OF THE DEPARTMENT IS THAT DIAPERS AND DESIGNER SAREES MAY NOT BE USED BY THE POOR PEOPLE, THEREFORE, PURCHASE OF SUCH ARTICLE CA NNOT BE CONSTRUED AS CHARITABLE NATURE. WE ARE UNABLE TO ACCEPT THE CON TENTION OF THE LD.DR. DIAPERS AND DESIGNER SAREES ARE NOT MEANT FOR ANY P ARTICULAR SECTION OF THE SOCIETY. THE VERY OBJECT OF THE TRUST IS TO PROVIDE CLOTHING, EDUCATION, ETC. TO THE POOR SO AS TO UPLIFT THEM AND ALLOW THEM TO LIVE LIKE ANY OTHER CITIZEN 4 ITA NO. 09/COCH/2012 OF THIS COUNTRY. NO LAW PROHIBITS DISTRIBUTING DIA PERS AND DESIGNER SAREES FREE OF COST. NOW A DAYS EVEN THE STATE GOVERNMENT S ARE SUPPLYING NAPKINS FREE OF COST TO PROVIDE FOR BETTER SANITARY CONDITI ONS. THEREFORE, THE ACT OF DISTRIBUTING DIAPERS BY THE TAXPAYER TRUST COULD ON LY BE VIEWED AS THEIR CONTRIBUTION TOWARDS IMPROVEMENT OF SANITARY CONDIT ION BY IMPROVING THE QUALITY OF LIFE OF THE PEOPLE. THE DESIGNER SAREES ARE ALSO DISTRIBUTED AMONGST THE POOR PEOPLE. AT LEAST IN THE PRESENT D AY SITUATION IT IS NOT CORRECT TO SAY THAT THE POOR WILL NOT WEAR DESIGNER SAREES. THAT MIGHT HAVE BEEN A CASE OF LONG PAST BECAUSE OF LACK OF AFFORDA BILITY AND UNAWARENESS. THE DISTRIBUTION OF DESIGNER SAREES TO THE POOR, TO O, WOULD CERTAINLY AMOUNT TO CHARITY FOR ADVANCEMENT OF THE OBJECTS OF GENERAL PUBLIC UTILITY INASMUCH AS THE POOR TOO MEET WITH THEIR EXPECTATIO N TO DRESS LIKE ANY OTHER PEOPLE. THEREFORE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT MERELY BECAUSE DIAPERS AND DESIGNER SAREES ARE PURC HASED FROM THE SHOWROOM THAT ALONE CANNOT BE A REASON FOR REFUSAL TO GRANT APPROVAL U/S 80G OF THE ACT. WHAT IS TO BE SEEN IS THAT WHETHER ALL THOSE DIAPERS AND DESIGNER SAREES WERE IN FACT DISTRIBUTED AMONGST TH E POOR, VIZ. THE BENEFICIARIES. IF THEY WERE SUPPLIED TO THE POOR B EING THE END USER, THEN THE TAXPAYER IS ENTITLED FOR APPROVAL U/S 80G OF TH E ACT. UNFORTUNATELY, THE 5 ITA NO. 09/COCH/2012 ADMINISTRATIVE COMMISSIONER HAS NOT EXAMINED WHETHE R THE PURCHASES MADE BY THE TAXPAYER WERE DISTRIBUTED TO THE POOR A ND NEEDY PEOPLE AS PER THE OBJECTS OF THE TRUST. THEREFORE, THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE EXAMINED BY THE COMMISSIONER AS TO WHETHER THE PURCHASES MADE BY THE TAXPAYER WERE IND EED SUPPLIED TO THE POOR AND NEEDY PEOPLE AS PER THE OBJECT OF THE TRUST . 5. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THE MATTER IS REMITTED BACK TO THE FILE OF THE COMMISSI ONER OF INCOME-TAX, KOTTAYAM. THE COMMISSIONER OF INCOME-TAX SHALL EXA MINE AND FIND OUT WHETHER THE PURCHASES MADE BY THE TAXPAYER TRUST WE RE REALLY DISTRIBUTED AMONGST THE POOR AND NEEDY PEOPLE AS PER THE OBJECT OF THE TRUST AND THEREAFTER DECIDE THE ISSUE OF GRANT OF REGISTRATIO N U/S 80G OF THE ACT IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE TAXPAYER. 5. IN THE RESULT, APPEAL OF THE TAXPAYER IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DECEMBER, 2012. (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : DECEMBER, 2012 PK/- 6 ITA NO. 09/COCH/2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH