DCIT, Circle-1, Nashik V. Shri Ram Ashram Trust, Nashik

ITA 975/PUN/2012

• Counselvise Citation: 97524514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Charitable institution
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 975 / P N/ 20 12 ASSESSMENT YEAR : 2009 - 10 DCIT, CIRCLE - 1, GADKARI CHOWK, OLD A GRA ROAD, NASHIK VS. SHRI RAM ASHRAM TRUST, NEAR KALIKA MANDIR, OLD AGRA ROAD, NASHIK (APPELLANT) (RESPONDENT) PAN NO. AACTS4223K APPELLANT BY: SHRI SANTOSH KUMAR RESPONDENT BY: N O N E DATE OF HEARING : 17 - 07 - 2013 DATE OF PRONOUNCEMENT : 26 - 0 8 - 2013 ORDER P ER R.S. PADVEKAR , JM : - THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - I, NASHIK DATED 13 - 03 - 2013 FOR THE A.Y. 2009 - 10. THE REVENUE HAS TAKEN FOLLOWING GROUNDS IN THE APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - I, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.72,00,000/ - WHICH WAS CONSIDERED AS EXPENSES NOT MADE ON THE OBJECT OF THE TRUST AS THE DONATION WAS MADE IN VIOLATION OF THE TRUST DEED OF THE ASSE SSEE TRUST. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - I, NASHIK IS JUSTIFIED IN HOLDING THAT THE DONATION MADE TO THE OTHER TRUST IS IN ACCORDANCE WITH THE TRUST DEED. 3. THE APPELLANT PRAYS THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 2. THE FACTS REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE IS A TRUST AND HAS FILED A RETURN OF INCOME DECLARING TOTAL DEFICIT OF RS.15,15,172/ - FOR THE A.Y. 2009 - 10. THE ASSESSING OFFICER DISALLOWED THE SUM OF RS.72,00,000/ - WH ICH WAS IN RESPECT OF DONATIONS GIVEN BY THE ASSESSEE TRUST TO OTHER TRUST. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE TRUST HAS EXPENDED AN AMOUNT OF RS.72,33,270/ - ON EDUCATION AND RS.2,03,398/ - ON MEDICAL. THE ASSESSING OFFICER HAS GIVEN BRE AKUP OF THE ABOVE EXPENDITURE IN PARA NO. 6 OF THE ASSESSMENT 2 ITA NO.975/PN/2012, SHRI RAM ASHRAM TRUST, NASHIK ORDER. IT IS NOTED THAT THE ASSESSEE TRUST HAS GIVEN DONATION OF RS.65,00,000/ - TO NEMICHAND JAIN TRUST, CHANDWAD, DISTT. - NASHIK. THE ASSESSING OFFICER EXAMINED THE MAIN OBJECTS OF THE ASSESSE E TRUST AS PER T RUST D EED DATED 14 - 01 - 1972. THE ASSESSING OFFICER HAS REPRODUCED SOME OF THE CLAUSES OF THE TRUST DEED IN PARA NO. 7 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS OBSERVED THAT THE TRUST S MAIN OBJECTS ARE IN THE FIELD OF WELFARE, PR OPAGATION AND PRESERVATION OF THE VEDIC CULTURE F OR ESTABLISHING AND CONDUCTING ONE OF THE VAN PRASTHA ASHRAM. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE ASSESSEE TRUST HAS NOT MADE EXPENDITURE ON ITS OBJECTS. THE ASSESSING OFFICER ALSO REFERR ED TO SEC. 11(2) OF THE INCOME - TAX ACT AND CONCLUDED THAT THE ASSESSEE TRUST HAS NOT APPLIED FOR ACCUMULATION OF FUND AND THEREFORE NOT COMPLIED FOR PROVISIONS OF SEC. 11(1)(A) OF THE INCOME - TAX ACT, 1961. THE ASSESSING OFFICER MADE THE DISALLOWANCE OF RS .72,00,000/ - FOR GIVING THE DONATION OF THE OTHER TRUST (IN THE ASSESSMENT ORDER THE AMOUNT OF DISALLOWANCE IS MENTIONED AT RS.70,00,000/ - IN PARA NO. 11). THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CIT(A). 3. THE LD. CIT(A) CONSIDERED INSTRUCTION NO. 1132, DATED 05 - 01 - 1978 ISSUED BY THE CBDT . THE LD. CIT(A) FURTHER OBSERVED THAT AS PER THE INSTRUCTIONS OF THE BOARD , THE EXEMPTION SHALL NOT LOSE EVEN IF THE DONEE TRUST DID NOT SPEND THE DONATION RECEIPT DURING THE RELEVANT YEAR FOR CHARITABLE PURPOSE . THE LD. CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. T HANTHI TRUST 239 ITR 502 AS WELL AS THE DECISIONS IN THE CASE OF CIT VS. TRUSTEES OF THE JADI TRUST 133 ITR 494 (BOM.) AND CIT VS. SARLADEVI SARABHAI TRUST 1 72 ITR 698. THE LD. CIT(A) ALLOWED THE APPEAL FILED BY THE ASSESSEE. NOW THE REVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE LD. DR FOR THE REVENUE . N ONE WAS PRESENT FOR THE ASSESSEE. 4. THE SHORT ISSUE IN CONTROVERSY IS WHETHER THE DONATIONS GIVE N BY THE ASSESSEE TRUST TO ANOTHER CHARITABLE TRUST IS AN APPLICATION OF INCOME 3 ITA NO.975/PN/2012, SHRI RAM ASHRAM TRUST, NASHIK WITHIN THE MEANING OF SEC. 11 OF THE ACT. SO FAR AS AN APPLICATION OF THE INCOME IS CONCERNED WHICH IS IN RESPECT OF DONATIONS GIVEN BY THE ASSESSEE TRUST TO ANOTHER CHARITABL E TRUST T HE ISSUE STANDS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TRUSTEES OF THE JADI TRUST (SUPRA). MOREOVER, AS PER THE INSTRUCTION NO. 1132, DATED 05 - 01 - 2007 ISSUED BY THE CBDT NOWHERE IT IS MA DE MANDATORY THAT THERE SHOULD BE SPECIFIC OBJECTS IN THE TRUST DEED . I T IS SUFFICIENT THAT THE DONATIONS ARE GIVEN TO THE DONE E TRUST FOR APP LYING THE DONATION FOR THE CHARITABLE PURPOSE FOR WHICH THE DONOR TRUST IS SETTLE D . IN OUR OPINION , NO INTERFERE NCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) . A C CORDINGLY , SAME IS CONFIRMED. 5. IN THE RESULT, THE REVENUE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26 - 0 8 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 26 TH AUGUST, 20 1 3 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - I, NASHIK 4 THE CIT - I, NASHIK 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE