Karunya Satya Seva Trust, Tirupathi, Tirupathi V. CIT, (Exemptions), Hyd, Hyderabad

ITA 937/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6566 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 10-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R B NAIK
• Assessee Lawyers: B SAI PRASAD
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.937/HYD/2015 ASSESSMENT YEAR 2014-2015 KARUNYA SATYA SEVA TRUST, TIRUPATHI, CHITTOOR DIST., PAN AACTK4688G VS. CIT-(EXEMPTIONS) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. B. SAI PRASAD FOR REVENUE : MR. R.B. NAIK DATE OF HEARING : 03 .0 5 .2016 DATE OF PRONOUNCEMENT : 13 .05.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT(E) DATED 29.05.2015 REJECTING THE ASSESSEE S APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT AND ALSO FOR DENIAL OF GRANT OF APPROVAL UNDER SECT ION 80G(5) OF THE I.T. ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT AND ALSO FOR APPROVAL UNDER SECTION 80G OF THE ACT BY FILING THE REQUISITE FORMS. DURING THE VERIFICATION OF THE SAID FORMS, THE CIT(E) CALLED FOR VARIOUS DETAILS A ND OBSERVED THAT THE OBJECT CLAUSE OF THE TRUST DEED I NDICATES 2 ITA.NO.937/HYD/2015 KARUNYA SATYA SEVA TRUST, TIRUPATHI, THAT THEY ARE FOR MEDICAL RELIEF, EDUCATION, RELIEF TO THE POOR ETC., HE, THEREFORE, ASKED THE ASSESSEE TO SUB MIT OR TO INDICATE CERTAINTY OF THE OBJECTS AND CLASSIFICA TION OF THE SAME UNDER THE DIFFERENT HEADS. THE ASSESSEE SUBMIT TED THAT ALL THEIR OBJECTS FALL UNDER EDUCATION, MEDICA L AND RELIEF TO THE POOR ONLY AND THEREFORE, THE OBJECTS ARE CLEAR AND UNAMBIGUOUS. HOWEVER, THE CIT(E) WAS NOT CONVIN CED WITH THE ASSESSEES CONTENTIONS AND OBSERVED THAT T HE TRUST DEED WHICH WAS EXECUTED IN JULY, 2014 PROVIDE S FOR 11 OBJECTS AND IN OBJECT CLAUSE (F), IT IS MENTIONE D THAT ALL THE ACTIVITIES OF THE TRUST WOULD BE FOR CHARITABLE PURPOSES WITHIN THE MEANING OF SECTION 2(15) OF THE I.T. ACT . HE OBSERVED THAT FROM SUCH SPECIFIC MENTION IN THAT OB JECT CLAUSE, THE APPLICANT INTENDS TO CARRY ON ALL SORTS OF ACTIVITIES, FALLING UNDER ALL THE LIMBS OF CHARITA BLE PURPOSE, WHICH CONTRADICTS THE SUBMISSIONS OF THE ASSESSEE THAT ITS OBJECTS ARE CLEAR AND UNAMBIGUOUS . FURTHER, THE CIT(E) ALSO OBSERVED THAT IN FORM-10A FILED BY THE ASSESSEE, IT HAS NOT FILED PROPER PROFORMA AS APPLICABLE W.E.F. 10.11.2014 AS PER THE I.T. RULES, 2014. HE OBSERVED THAT ASSESSEE IS REQUIRED TO MENTION TH E PAN IN COLUMN-2 OF THE REVISED FORM AND ALSO THAT DATE OF EXECUTION OF THE TRUST DEED IS NOT MENTIONED IN THE DEED. THUS OBSERVING, THE CIT(E) REJECTED THE ASSESSEES APPLICATIONS BOTH UNDER SECTION 12AA AS WELL AS UND ER SECTION 80G OF THE I.T. ACT, 1961. AGGRIEVED, ASSES SEE IS IN APPEAL BEFORE US. 3 ITA.NO.937/HYD/2015 KARUNYA SATYA SEVA TRUST, TIRUPATHI, 3. THE LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE SUBMISSIONS MADE BEFORE THE CIT(E), HAS DRAWN OUR ATTENTION TO THE TRUST DEED DATED JULY, 2 014 WHICH IS PLACED AT PAGE NOS. 3 TO 13 OF THE PAPER B OOK. HE SUBMITTED THAT THE MISTAKE OCCURRED IN THE MENTIONI NG OF THE EXACT DATE IN THE TRUST DEED WHICH HAS SINCE BE EN RECTIFIED AND EVEN IF THE DEED FILED BEFORE THE CIT (E) IS TO BE TAKEN INTO CONSIDERATION, EXCEPT FOR MENTIONING THE DATE, AS THE MONTH AND YEAR ARE CLEARLY MENTIONED I T CANNOT BE CONSIDERED AS FATAL TO THE CASE OF THE AS SESSEE. AS REGARDS THE NON-MENTIONING OF THE PAN IN FORM NO .10, HE SUBMITTED THAT THE ASSESSEE HAS RECTIFIED THIS D EFECT ALSO. AS REGARDS THE OBJECTS OF THE ASSESSEES TRUS T ARE CONCERNED, HE HAS DRAWN OUR ATTENTION TO CLAUSE-7 O F THE TRUST DEED WHEREIN THE ACTIVITIES TO BE CARRIED ON BY THE ASSESSEE ARE CLEARLY SPELT OUT. THUS, ACCORDING TO HIM, THERE IS NO CAUSE FOR REJECTION OF THE ASSESSEES A PPLICATION UNDER SECTION 12AA AND ALSO APPROVAL UNDER SECTION 80G OF THE I.T. ACT, 1961. 4. THE LD. D.R., HOWEVER, SUPPORTED THE ORDERS OF THE CIT(E). 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND ALSO MATERIAL ON RECORD, WE FIND THAT THE OBJECTS OF THE CIT(E) IS ON THREE COUNTS VIZ., (1) THE OBJECTS OF THE ASS ESSEE ARE NOT SPECIFIC (2) THE DATE OF EXECUTION OF THE TRUST DEED IS NOT MENTIONED IN THE TRUST DEED AND (3) IN FORM-10, ASSESSEE HAS NOT MENTIONED THE PAN. WE FIND THAT TH E 4 ITA.NO.937/HYD/2015 KARUNYA SATYA SEVA TRUST, TIRUPATHI, SECOND AND THIRD OBJECTIONS OF THE CIT(E) ARE MEREL Y TECHNICAL IN NATURE AND ARE CURABLE. IN FACT, THE A SSESSEE HAS STATED THAT IT HAS CURED THE SAID DEFECTS. AS R EGARDS THE MAIN OBJECTION THAT THE OBJECTS OF THE ASSESSEE ARE NOT CLEAR, WE FIND THAT THE OBJECTS OF THE TRUST ARE AS UNDER : VII. OBJECTS OF THE TRUST : THE OBJECTS OF THE KARUNYA SATYA SEVA TRUST ARE : A. TO PROVIDE GOOD ATMOSPHERE TO EDUCATE THE POOR MERITORIAL STUDENTS. B. TO BUILD PRAYER HALLS FOR DIFFERENT COMMUNITIES. C. TO ESTABLISH ORPHANAGES TO GIVE SHELTER, CLOTHING AND EDUCATION FOR ORPHAN CHILDRENS, WIDOWS AND HANDICAPPED. D. TO EDUCATE AND TRAIN POOR FARMERS IN CULTIVATION AND PROVIDE FINANCIAL ASSISTANCE. E. TO ASSIST AND ORGANIZE ADULT LITERACY PROGRAMME IN RURAL AND URBAN AREAS. F. ALL THE ACTIVITIES OF THE TRUST WOULD BE FOR CHARITABLE PURPOSES WITHIN THE MEANING OF SECTION 2(15) OF THE INCOME-TAX ACT, 1961. G. THE TRUST SHALL UNDERTAKE TREE PLANTATION IN VILLAGES AND TOWNS TO PRESERVE ECOLOGY OF THE MOTHER EARTH. H. THE TRUST SHALL PROVIDE ASSISTANCE TO OTHER ORGANIZATIONS CARRYING OUT CHARITABLE AND SERVICE ACTIVITIES. I. TO PROVIDE VOCATIONAL TRAINING TO UNEMPLOYED YOUTH. J. TO CONDUCT FREE MEDICAL CAMPS FOR THE BENEFIT OF POOR. 5 ITA.NO.937/HYD/2015 KARUNYA SATYA SEVA TRUST, TIRUPATHI, K. THE DEVELOPMENTAL ACTIVITIES FOR SC/ST/OBC COMMUNITIES OF THEIR SOCIAL AND ECONOMICAL PERSPECTIVE. 5.1. FROM A PLAIN READING OF THE ABOVE OBJECTS, IT IS CLEAR THAT THE ACTIVITIES ARE TOWARDS EDUCATION, ME DICAL AND RELIEF TO THE POOR. THE ASSESSEE HAS RELIED UPO N THE DECISION OF THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF CIT VS. VIJAY VARGIYA VANI CHARITABLE TRUST (2014) 369 ITR 360 (RAJ.). IN THE SAID CASE, THE HONBLE H IGH COURT HAS HELD THAT AT THE TIME OF CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, THE AUTHORITIES HAVE TO ONLY EXAMINE THE GENUINENES S OF THE OBJECTS OF THE TRUST AND WHETHER IT WAS FORMED FOR CHARITABLE PURPOSES BUT NOT WHETHER THE INCOME OF T HE TRUST HAS BEEN APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSE OR NOT. WE FIND THAT THIS DECISION IS SQUARELY APPL ICABLE TO THE CASE OF THE ASSESSEE AND AS OBJECTS OF THE ASSE SSEE- TRUST ARE CLEARLY CHARITABLE IN NATURE, WE DIRECT T HE CIT(E) TO GRANT REGISTRATION UNDER SECTION 12AA OF THE ACT AND ALSO APPROVAL UNDER SECTION 80G OF THE I.T. ACT, 19 61, AFTER VERIFYING THE TECHNICAL DEFECTS POINTED OUT B Y HIM HAVE BEEN RECTIFIED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 13.05.2016. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH MAY, 2016 VBP/- 6 ITA.NO.937/HYD/2015 KARUNYA SATYA SEVA TRUST, TIRUPATHI, COPY TO : 1. KARUNYA SATYA SEVA TRUST, D.NO.85, SRI NAGAR COLONY, S.V. NAGAR, 2 ND STREET, OPP. CELL TOWER, T.N. PALEM, TIRUPATHI, CHITTOOR DIST., ANDHRA PRADESH 2. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD. 3. THE INCOME TAX OFFICER (EXEMPTIONS) WARD, TIRUPATHI. 4. D.R. ITAT A BENCH, HYDERABAD. 5. GUARD FILE