Pendurthy Venkata Subbaiah Chowdary and Saradamba Memorial Trust, Hyderabad V. DIT, Hyderabad

ITA 998/HYD/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5874 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-03-2010
• Assessment Year: 2009-2010
• Appeal Filed On: 10-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: K VASANT KUMAR
• Keywords: Charitable institution
• Section: 80G; 12A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ,A ' HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.998/HYD/2009 ASST. YEAR : 2009-2010 M/S PENDURTHY V.S. CHOWDARY & SARADAMBA MEMORIAL TRUST, HYDERABAD (PAN AEHPP 6537 Q) VS THE DIT (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K. VASANT KUMAR RESPONDENT BY: SHRI K.V.N. CHARYA (D R) O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT-HYDERABAD DATED 6/5/2009 WHEREIN THE CIT REJECTED THE APPLICATIONS OF THE ASSESSEE FOR GRANT APPROVAL U/S 12 A AND 80G OF THE ACT. 2. IN THIS CASE, THE ASSESSEES APPLICATION FOR APPRO VAL UNDER SEC.12A & 80G OF THE ACT WERE REJECTED ON THE REASON THA T THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT ALONG WITH VOUCHER S AND INFORMATION CALLED BY THE DIRECTOR OF INCOME TAX, THOU GH THE ASSESSEE EXPLAINED TO THE DIT THE ASSESSEE HAS NOT MAINTAINED BOO KS OF ACCOUNT ON THE REASON THAT THE ACTIVITIES OF THE TRUST NOT YET COMMENCED. 2 2 3. IN OUR OPINION, IF THE OBJECTS OF THE TR UST ARE SATISFIED OR CHARITABLE ACTIVITIES, THE REGISTRATION CANNOT BE DENIED TO THE ASSESSEE ON THE REASON THAT IT IS NOT CARRYING ON CHARITABLE ACTI VITIES. THE LAW IS WELL SETTLED THAT WHILE GRANTING REGISTRATION TO THE CHARITABLE INSTITUTION OR TRUST, IF IT IS AT THE COMMENCEMENT STAGE, THE POWER OF DIT WITH WHOM THE APPLICATION IS FILED, BY SUCH TRUST ARE LIMITE D TO THE REFERENCE EXAMINING TO THAT WHETHER OR NOT, THE OBJECTS OF TH E TRUST OR CHARITABLE IN NATURE. THE CARRYING ON CHARITABLE ACTIVITY AT THE STAGE OF COMMENCEMENT OF INSTITUTION IS NOT RELEVANT TO DECIDE TH AT WHETHER SUCH TRUST IS ENTITLED FOR REGISTRATION. SO LONG AS THE OBJ ECT OF THE TRUST IS CHARITABLE IN NATURE, REGISTRATION CANNOT BE REFUSED IF THE TRUST IS GENUINE. THEREFORE, THERE IS NO MATERIAL ON RECORD T O JUSTIFY THE ACTION OF THE DIT BY WHICH THE ASSESSEE TRUST HAS BEEN REFUSED TO GRANT THE REGISTRATION. THEREFORE THE DIT IS DIRECTED TO EXAMIN E THE FACTS OF THE CASE AFRESH AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. TH E COMMENCEMENT OF THE BUSINESS BY THE TRUST IS NOT THE PRERE QUISITE TO GRANT THE APPROVAL U/S 12A AND 80G OF THE ACT. THE O NLY REQUIREMENT IS THAT THE DIRECTOR, IT (EXEMPTIONS) SHALL SATISFY ABOUT T HE GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE ASSESSEE. HENCE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ENTIRE ISSUE TO THE FILE OF DIT WITH A DIRECTION TO THE ASSESSEE TO PROVE ITS GENUINENESS OF THE ACTIVITIES WITH REFERENCE TO THE OBJECTS. 4. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT : 26.3.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 26TH MARCH, 2010 3 3 COPY FORWARDED TO: 1. M/S K. VASANT KUMAR, ADVOCATE, F.NO.403, MANISH TOWE RS, DN NO.10/1/18/31, SHYAM NAGAR, HYDERABAD.500 004. 2. DIT(E), BASHEERBAGH, HYDERABAD 3. DIT(E), HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. NP