Badu Rural Welfare Society, Kolkata V. CIT, (Exemptions), Kolkata, Kolkata

ITA 94/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4521 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 23-09-2016
• Assessment Year: misc
• Appeal Filed On: 22-01-2016
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: UMA KOTHARI
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

1 ITA NO. 94-95/KOL/2016 BADU RURAL WELFARE SOCIETY IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI WASEEM AHMED, AM & SHRI K. NARASIMHA CHARY, JM] I.T.A NOS. 94&95/KOL/2016 ASSESSMENT YEAR: ----- BADU RURAL WELFARE SOCIETY VS. COMMISSIONER OF IN COME-TAX(EXEMPTION), FOUNDATION (PAN: AACAB6365N) KOLKATA. (APPELLANT) (RESPONDENT) DATE OF HEARING: 27.09.2016 DATE OF PRONOUNCEMENT: 30.09.2016 FOR THE APPELLANT: SMT. UMA KOTHARI, CA FOR THE RESPONDENT: N O N E ORDER PER SHRI K. NARASIMHA CHARY, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(EXEMPTIONS), KOLKATA VIDE MEMO NO. CIT(E)/10E/79/15-16/3066 DATED 30.11.2015. 2. THESE ARE THE APPEALS BY THE ASSESSEE CHALLENGI NG THE ORDER DATED 30-11-2015 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIO NS), KOLKATA (HEREINAFTER REFERRED TO AS LEARNED CIT). BOTH THE APPEALS ARE HEARD TOGET HER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRUST FORMED WITH THE OBJECTS OF PROMOTING, ESTABLISHING, EQUIPPING, ERECTING, MAINT AIN AND /OR GRANTING ALL OR OTHER FINANCIAL ASSISTANCE FOR ADVANCEMENT OF EDUCATION, MUSIC, DAN CING, LITERATURE, CULTURE AND OTHER SIMILAR PURSUITS, DISPENSARIES, HOSPITALS, LABORATO RIES, HOSTELS, PUBLIC REST HOUSES, LIBRARIES AND ANY OTHER SIMILAR WORKS FOR FURTHERANCE AND DIS SEMINATION OF KNOWLEDGE IN GENERAL AND ANY OTHER STREAMS. IT CAME INTO EXISTENCE THROUGH A CERTIFICATE OF REGISTRATION OF SOCIETIES, WEST BENGAL ACT XXVI OF 1961 DATED 27.06.2014. THE TRUST FILED AN APPLICATIONS IN FORM 10A AND 10G ON 07.05.2015 BEFORE THE LD. CIT (EXEMP TIONS), KOLKATA SEEKING REGISTRATION UNDER SECTION 12A(1)(AA) AND APPROVAL UNDER SECTIO N 80G(5)(VI) OF THE ACT BUT THOSE WERE REJECTED BY THE LD. CIT VIDE ORDER DATED 30-11-2015 HOLDING THAT NO ACTIVITIES OF THE TRUST WERE STARTED AND THERE IS NO MEANS TO VERIFY THE GE NUINENESS OF THE ACTIVITIES. AGGRIEVED BY THE SAID REJECTION OF REGISTRATION, THE ASSESSEE FI LED AN APPEAL BEFORE THE TRIBUNAL IN ITA NO. 94/KOL/2016 ON THE FOLLOWING GROUNDS:- 2 ITA NO. 94-95/KOL/2016 BADU RURAL WELFARE SOCIETY 1. FOR THAT LEARNED CIT(EXEMPTION) HAS NOT CONSID ERED APPLICATION, FACTS AND CIRCUMSTANCES PROPERLY AND DID NOT PROVIDE FURTHER OPPORTUNITY WHICH HE SHOULD HAVE HAD HE REQUIRED MORE INFORMATION AND EV IDENCES. INSTEAD OF THAT LEARNED CIT (EXEMPTION) REJECTED APPLICATION SUMMAR ILY, WRONGLY AND IN UNJUSTIFIED MANNER, THUS THE ORDER OF LD. CIT (EXEM PTIONS) IS AGAINST THE LAW, FACTS AND DESIRABLE PRACTICES IN ADMINISTRATION. 2. FOR THAT THE ID. CIT (EXEMPTION) HAS ERRED IN RE JECTING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12AA ALTHOUGH HE FOUN D APPLICATION IN ORDER AND ASSESSEE SOCIETY FULFILLS ALL THE CONDITIONS FOR RE GISTRATION AND ALL THE OBJECTS AND ACTIVITIES OF THE SOCIETY ARE ELIGIBLE FOR GRAN T OF REGISTRATION U/S 12AA OF THE ACT INCOME TAX ACT,1961 3. FOR THAT LEARNED CIT (EXEMPTION) WAS WRONG IN RE JECTING THE APPLICATION BY TAKING A VIEW THAT THERE IS NO MEANS TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE APPLICANT, AND THAT THE SOCIETY IS NOT ENGAGED IN ANY CHARITABLE ACTIVITY. 4. FOR THAT THE APPELLANT BE GRANTED REGISTRATION U /S 12AA OR THE CIT(EXEMPTION) MAY BE DIRECTED TO GRANT SUCH CERTIF ICATE AS HONOURABLE TRIBUNAL DEEM FIT AND PROPER. APPROVAL UNDER SECTION 80G(5)(VI) WAS ALSO DENIED O N THE SAME DAY AS A CONSEQUENCE OF REJECTION OF THE APPLICATION IN FORM NO. 10A. AGGRI EVED BY THE REJECTION OF THE APPROVAL UNDER SECTION 80G, THE ASSESSEE CARRIED THE MATTER IN ITA NO. 95/KOL/2016 ON THE FOLLOWING GROUNDS:- 1. FOR THAT LEARNED CIT(EXEMPTION) HAS NOT CONSID ERED APPLICATION, FACTS AND CIRCUMSTANCES PROPERLY AND DID NOT PROVIDE FURTHER OPPORTUNITY WHICH HE SHOULD HAVE HAD HE REQUIRED MORE INFORMATION AND EV IDENCES. INSTEAD OF THAT LEARNED CIT (EXEMPTION) REJECTED APPLICATION SUMMAR ILY, WRONGLY AND IN UNJUSTIFIED MANNER, THUS THE ORDER OF LD. CIT (EXEM PTIONS) IS AGAINST THE LAW, FACTS AND DESIRABLE PRACTICES IN ADMINISTRATION. 2. FOR THAT THE LD. CIT (EXEMPTION) HAS ERRED IN RE JECTING THE APPLICATION OF THE ASSESSEE FOR APPROVAL U/S 80G (5) (VI) ALTHOUGH HE FOUND APPLICATION IN ORDER AND ASSESSEE SOCIETY FULFILS ALL THE CONDITIONS FOR REGISTRATION U/S 12AA AND CONSEQUENTLY APPROVAL U/S 80 G. 3. FOR THAT THE APPELLANT BE GRANTED APPROVAL U/S 8 0G (5) (VI) OR THE CIT (EXEMPTION) MAY BE DIRECTED TO GRANT SUCH CERTIFICA TE AS HONOURABLE TRIBUNAL DEEM FIT AND PROPER. 4. IT IS THE ARGUMENT OF THE LD. A.R. THAT WHILE GR ANTING THE REGISTRATION TO THE ASSESSEE, WHICH IS AT THE COMMENCEMENT STAGE, T HE POWERS OF LD. CIT WITH WHOM THE APPLICATION IS FILED, ARE LIMITED TO THE A SPECT OF EXAMINING THAT WHETHER OR NOT THE OBJECTS OF TRUST ARE CHARITABLE IN NATURE AND SINCE THE TRUST WAS FORMED ON 27.06.2014AND THE APPLICATION FOR REG ISTRATION WAS MADE ON 3 ITA NO. 94-95/KOL/2016 BADU RURAL WELFARE SOCIETY 07.05.2015, THOUGH THE ACTIVITIES COMMENCED TO SOME EXTENT, THERE WERE LESS AS SUCH IT IS NOT OPEN FOR THE LD. CIT TO GO INTO T HE QUANTITATIVE ASPECT OF THE ACTIVITIES OF THE TRUST. 5. CHARITABLE OBJECTS OF THE TRUST ARE NOT DISPUTED BY THE LEARNED CIT. IT IS SUBMITTED THAT SO LONG AS THERE IS NO DISPUTE AS TO THE OBJECTS OF THE TRUST, WHAT IS TO BE SEEN AT THE TIME OF GRANTING REGISTRA TION BY THE LEARNED CIT IS ONLY WHETHER THE OBJECTS OF THE TRUST ARE CHARITABL E AND ACTIVITIES CARRIED OUT ARE GENUINE IN NATURE. RELIANCE IS PLACED ON THE D ECISIONS IN ASANSOL DURGAPUR DEVELOPMENT AUTHORITY VS CIT ITA 756/KOL/2 010, DATED 24.6.2016 AND M/S BROADWAY CHARITABLE TRUST VS CIT ITA NO 647 /KOL/2013 DATED 29.4.2016. IN A DECISION RENDERED BY A COORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF DHARMA SANSTHAPAK SANGH (NIVAS) VS. - CIT (2008) 118 TTJ (DEL.) 823, IT IS HELD AS FOLLOWS: 10. THE LAW IS NOW WELL-SETTLED THAT WHILE GRANTIN G THE REGISTRATION TO THE CHARITABLE INSTITUTION OR TRUST, IF IT IS AT THE CO MMENCEMENT STAGE, THE POWERS OF CIT, WITH WHOM THE APPLICATION IS FILED BY SUCH TRU ST/INSTITUTION, ARE LIMITED TO THE ASPECT OF EXAMINING THAT WHETHER OR NOT THE OBJ ECTS OF TRUST ARE CHARITABLE IN NATURE AND THIS WELL ESTABLISHED LAW IS SUPPORTE D BY THE DECISIONS RELIED UPON THE LEARNED AUTHORISED REPRESENTATIVE AND REFE RRED TO IN THE EARLIER PART OF THE ORDER. IT HAS ALREADY BEEN OBSERVED THAT OBJ ECTS OF TRUST, WHICH ARE RELIGIOUS, ARE CHARITABLE IN NATURE. THUS, ASSESSEE ALSO FULFILS SUCH CONDITION. THE CARRYING OF CHARITABLE ACTIVITY AT THE STAGE OF COMMENCEMENT OF INSTITUTION IS NOT RELEVANT TO DECIDE THAT WHETHER SUCH TRUST/ INSTITUTION IS ENTITLED FOR REGISTRATION. SO LONG THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE, REGISTRATION CANNOT BE REFUSED, IF THE TRUST IS GEN UINE. THEREFORE, WE FIND NO MATERIAL ON RECORD TO JUSTIFY THE ACTION OF THE CIT VIDE WHICH THE ASSESSEE TRUST HAS BEEN REFUSED FOR GRANT OF REGISTRATION. WE DIRE CT CIT TO GRANT REGISTRATION TO THE CIT (SIC-ASSESSEE-TRUST). THE APPEAL FILED B Y THE ASSESSEE IS ALLOWED.'[EMPHASIS SUPPLIED] WHILE DECIDING THE APP EAL IN THE ABOVE CASE, THE TRIBUNAL TOOK INTO CONSIDERATION THE DECISIONS OF TRIBUNAL IN THE CASES OF ACHARYA SEWA NIYAS UTTARANCHAL VS. CIT [(2006) 105 TTJ (DEL) 761] AND MODERN DEFENCE SHIKSHAN SANSTHAN VS. C.I.T . [(2007) 108 TTJ (JD) 732]. 6. IN THE DECISIONS RENDERED BY COORDINATE BENCHS I N THE CASE OF VIVEKANANDA WELFARE TRUST VS.- DIT(E) IN ITA NOS. 2095/KOL/2008 AND 27/KOL/2009, ORDER DATED 23.01.2009, M/S GINIA DEVI TODI CHARITABLE TRUST, KOLKATA VS DIRECTOR OF INCOME TAX ITA 738/KOL/2010, DATED 1.6.2011, BANI MITTRA CHARITABLE TRUST, KOLKATA VS. DIRECTOR OF IN COME TAX ITA 1154&1155/KOL/2009, DATED 25.8.2009 THE SAME CONCLU SION WAS REACHED BY 4 ITA NO. 94-95/KOL/2016 BADU RURAL WELFARE SOCIETY FOLLOWING THE EARLIER DECISION OF ITAT, DELHI IN TH E CASE OF DHARMA SANSTHAPAK SANGH (NIVAS) (SUPRA). THE FACTS OF THIS CASE ARE SQUARELY COVERED BY THE DECISION CITED ABOVE. RESPECTFULLY FOLLOWING THE JUDICIAL REASONING, WE DIRECT THE LD. CIT TO GRANT REGISTRATION TO THE ASSESSEE-TRUST UNDER SECTION 12AA OF THE ACT AND ALSO TO GRANT EXEMPTION CERTIFI ED UNDER SECTION 80G OF THE ACT. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.09.2 016 SD/- SD/- (WASEEM AHMED) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30TH SEPTEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT BADU RURAL WELFARE SOCIETY, VILLAGE & P.O. BADU, BARASAT. 2 RESPONDENT CIT(EXEMPTIONS), KOLKATA. 3. THE CIT (A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA /TRUE COPY, BY ORDER, ASSTT. REGISTRAR .