Sai Subramanya Charitable Trust, Madurai V. CIT, Madurai

ITA 982/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58151 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 15-03-2012
• Assessment Year: misc
• Appeal Filed On: 06-06-2011
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Assessee Lawyers: S SATHIYANAR AYANAN
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 982/MDS/2011 M/S SAI SUBRAMANYA CHARITABLE TRUST, 473, PALLIVASAL STREET, ANNA NAGAR, MADURAI-625 020. PAN : AAJTS6978G (APPELLANT) V. COMMISSIONER OF INCOME TAX-I, #2, V.P. RATHNASAMY NADAR RD., BIBIKULAM, MADURAI 625 002. (RESPONDENT) APPELLANT BY : SHRI S. SATHIYANARAYANAN RESPONDENT BY : SHRI E.S. NAGE NDRA PRASAD, CIT-DR DATE OF HEARING : 15.03.2012 DATE OF PRONOUNCEMENT : 15.03.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT COMMISSIONER OF INCOME TAX-I, MADURAI, DENIED REGIS TRATION SOUGHT UNDER SECTION 12AA OF INCOME-TAX ACT, 1961 (IN SHOR T 'THE ACT'). AS PER THE ASSESSEE, IT WAS ESTABLISHED FOR PURSUING C HARITABLE OBJECTS, FUNDS WERE UTILIZED ONLY FOR SUCH OBJECTS, AND BENE FICIARIES WERE SELECTED FOLLOWING A PROPER AND WELL DOCUMENTED PRO CEDURE. I.T.A. NO. 982/MDS/11 2 2. ASSESSEE HAD APPLIED FOR REGISTRATION UNDER SECT ION 12AA OF THE ACT WITH LD. CIT ON 20.9.2010. LD. CIT CALLED FOR RECORDS FROM LOWER AUTHORITIES AND REQUIRED THE ASSESSEE TO PRES ENT ITSELF BEFORE HIM. ASSESSEE APPEARED THROUGH ITS CHARTERED ACCOU NTANT SHRI YAGNA SUBRAMANIAN. LD. CIT WAS OF THE OPINION THAT THE ASSESSEE HAD NOT STARTED FULL-FLEDGED ACTIVITIES AND ITS SEL ECTION OF BENEFICIARIES NOT DONE WITH ANY LAID DOWN PROCEDURE. ACCORDING T O LD. CIT, OBJECTS OF THE ASSESSEE WERE GENERAL, BENEFICIARIES WERE NO T PUBLIC AT LARGE AND GENUINENESS OF ITS CHARITABLE ACTIVITIES WAS NO T ESTABLISHED. HE, THEREFORE, DENIED THE REGISTRATION SOUGHT. 3. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT THE R ECORDS PRODUCED BY THE ASSESSEE WERE NOT PROPERLY VERIFIED AND LD. CIT, WITHOUT FINDING ANY DEFECTS THEREIN, REFUSED REGIST RATION FOR VAGUE REASONS. 4. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDER OF LD. CIT. 5. WE HAVE PERUSED THE ORDER OF LD. CIT AND HEARD THE RIVAL SUBMISSIONS. THE REASON WHY REGISTRATION WAS DENIE D IS REPRODUCED HEREUNDER:- I.T.A. NO. 982/MDS/11 3 THE APPLICANT TRUST WAS CREATED BY ONE SMT. SUDHA SUNDARESSAN, WHO WAS DECLARED AS THE AUTHOR OF THE TRUST. THE TRUST WAS CREATED ONLY ON 22.08.2010. FULL-FLEDGED ACTIVITIES ARE NOT CARRIED ON BY THE TRUST. IT IS NOT KNOWN HOW T HE BENEFICIARIES WERE SELECTED FOR ASSISTANCE. THE OB JECTS ARE ALSO GENERAL IN NATURE. MARRIAGE EXPENSES OF RS.10,000/ - WERE PAID TO A SINGLE PERSON. SIMILARLY THE BENEFICIARIES AR E NOT PUBLIC AT LARGE. THEREFORE, THE GENUINENESS OF THE EXISTENCE OR ITS CHARITABLE ACTIVITIES, IF ANY, CLAIMED TO HAVE BEEN CARRIED OUT IS NOT ESTABLISHED. THEREFORE, THE APPLICANT TRUST DI D NOT FULFILL THE CONDITIONS FOR GRANT OF REGISTRATION U/S. 12AA OF THE ACT. IN OUR OPINION, THE REASONS CITED BY LD. CIT WERE Q UITE VAGUE. LD. CIT DID NOT STATE HOW HE ARRIVED AT THE VARIOUS CONCLUS IONS REACHED BY HIM. NOR HAS HE SHOWN HOW ASSESSEES ACTIVITIES WE RE NOT CHARITABLE. ASSESSEE-TRUST WAS CREATED ONLY ON 22. 8.2010, HENCE, IT COULD NOT BE EXPECTED TO HAVE FULL-FLEDGED ACTIVITI ES FROM THE VERY INCEPTION. IT IS ALSO NOT CLEAR FROM THE ORDER OF LD. CIT AS TO WHAT DEFECTS WERE FOUND IN STATEMENT OF ACCOUNTS, ETC. P RODUCED BY THE ASSESSEE BEFORE HIM. WE ARE OF THE OPINION THAT TH E MATTER REQUIRES A LOOK BY LD. CIT IN THE CIRCUMSTANCES OF THE CASE. WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT AND REMIT THE ISSUE OF R EGISTRATION BACK TO HIM FOR CONSIDERATION DE NOVO. LD. CIT SHALL PROCE ED IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY TO THE ASSESSEE F OR PRESENTING ITS CASE. I.T.A. NO. 982/MDS/11 4 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 15 TH MARCH, 2012. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 15 TH MARCH, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-I, MADURAI (4) D.R. (5) GUARD FILE