SHRI VARDHMAN STHANAKWASI JAIN SHRAVAK SANGH RATNAGIRI,RATNAGIRI V. INCOME TAX OFFICER, KOLHAPUR

ITA 2151/PUN/2024

AI Insights

The case involves Shri Vardhman Sthnakwasi Jain Shravak Sangh Ratnagiri, a charitable trust, which appealed against the decision of the CIT(Exemption), Pune, denying them registration under section 12A of the Income-tax Act, 1961. The CIT(Exemption) had rejected the application based on the minimal financial activities and expenditures reported in the trust's initial year of operation. The Tribunal examined the documentation and activities reported by the trust and concluded that the CIT(Exemption) had erred in their decision, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315841 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR KESHARI
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Charitable institution

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2151/PUN/2024 Shri Vardhman Sthnakwasi Jain Shravak Sangh Ratnagiri, Jain Shravak Sangh, Ratnagiri ST Stand Gala No.8, K-Complex, Ratnagiri – 415612 Maharashtra PAN : ABHTS2864A Vs. ITO, Kolhapur Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee is directed against the order dated 26.09.2014 framed by CIT(Exemption), Pune denying grant of regular registration u/s.12A of the u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’). 2. Brief facts of the case are that the assessee is a charitable trust constituted under Mumbai Public Trust Act, 1950 vide certificate dated 20.06.2023. Assessee has claimed to have commenced its activities on 20.06.2023. Main objects of the assessee trust include carrying out the activity of Medical Aid, Providing Educational facility, Health Awareness to Mother and Child etc. Assessee applied for Appellant by : Shri Pramod S. Shingte Respondent by : Shri Ajay Kumar Keshari Date of hearing : 03.03.2025 Date of pronouncement : 16.05.2025 ITA No.2151/PUN/2024 Shri Vardhman Sthnakwadi Jain Shravak Sangh Ratnagiri 2 registration u/s.12A of the Act by filing Form 10AB on 29.03.2024. Various details called for by ld.CIT(E) were supplied by the assessee. However, ld.CIT(E) rejected the application solely on the ground that the assessee has only submitted one bill of receipt book of Rs.2,800/-, ledger details of printing & stationary amounting to Rs.2,800/- and medical aid bill of Rs.2,100/-. Ld.CIT(E) also observed that very meager amount has been spent. He also referred to the balance sheet as on 31.03.2024 observing that the amount available with the assessee trust was Rs.4,34,010/- but the expenditure on objects is very meager as compared to the funds available. 3. Aggrieved assessee has now preferred appeal before this Tribunal raising following grounds : “1. On the facts and circumstances of the case and in law the Ld. CIT erred in not granting registration u/s 12AC on the ground of not having been satisfied about the charitable nature of activities of the trust or genuineness of its activities in spite of the fact that: a. The appellant trust is exclusively engaged in charitable activities and b. The appellant having submitted all documents as called for by the Ld. CIT in this respect. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.” 4. Ld. Counsel for the assessee referring to the paper book running into 74 pages as well as balance sheet and profit and loss account submitted that the assessee had commenced its activities during the F.Y. 2023-24 and eventhough the magnitude of the activity is not huge but the conditions ITA No.2151/PUN/2024 Shri Vardhman Sthnakwadi Jain Shravak Sangh Ratnagiri 3 required for obtaining the registration u/s.12A of the Act stands fulfilled. Further ld. CIT(E) has nowhere raised the objection that the activities of the assessee trust are not charitable. He also submitted that during the year donations have been received and duly credited in the bank account, expenditure have been incurred and in subsequent year the activities have also increased. He therefore prayed that registration u/s.12A of the Act may be granted. 5. On the other hand, Ld. Departmental Representative vehemently argued supporting the orders of the authorities below. 6. We have heard the rival submissions and perused the record placed before us. Assessee is aggrieved with the impugned order wherein ld.CIT(E) has rejected the assessee’s application for regular registration u/s.12A of the Act. We observe that the asessee trust was formed and registered during F.Y. 2023-24 and its activities are claimed to have been commenced on 20.06.2023. Assessee made valid application for registration u/s.12A(1)(ac)(vi) and the documents called for by ld.CIT(E) have been supplied which inter alia includes registration certificate, details of membership fees, declaration for compliance of other laws, PAN and Aadhar of the trustees, details of donations received, expenditure ledger and bills for medical aid, note on the activities, details regarding the payment made to Ashadeep Matimand Mulancha Palak Sangh for medical treatment, copies of bank statement and trust deed. Ld.CIT(E) has acknowledged all these details and have not found any discrepancy in these details which clearly proves that the ITA No.2151/PUN/2024 Shri Vardhman Sthnakwadi Jain Shravak Sangh Ratnagiri 4 assessee is carrying out charitable activities and has commenced its activities during the financial year 2023-24 in which the application is filed. All the other conditions stand fulfilled for obtaining valid registration u/s.12A of the Act. Only ground for rejecting the application is that the expenditure incurred during the year is too meagre and very limited activities have been carried out. We fail to find any merit in such observation of the ld.CIT(E) because the assessee has been registered during the year and has also commenced the activity. It is nowhere written in the relevant provisions for registration about any minimum amount which has to be spent in order to become eligible for registration u/s.12A of the Act. Relevant provision only provides that assessee should commence the charitable activity and the same has to be proved with documentary evidence. Ld.CIT(E) has alleged that when the assessee was having funds to the tune of Rs.4.00 lakhs approx, it has incurred very less expenditure. It seems that ld.CIT(E) has not examined the balance sheet properly because the assessee has also purchased the land at Rahataghar for a sum of Rs.4,00,700/- and fixed deposit with Janata Sahakari Bank at Rs.3,36,148/-. Assessee has also received the building funds as part of the corpus donation which shows that the assessee trust is in the process of constructing building in the time to come. So far as the income for the year under consideration is concerned, against the gross receipt of Rs.48,336/- which is inclusive of fixed deposit interest, membership fees and savings bank interest assessee has incurred the expenditure of Rs.22,943/- which includes the expenditure for charitable activities, i.e. medical aid. We therefore are of the considered ITA No.2151/PUN/2024 Shri Vardhman Sthnakwadi Jain Shravak Sangh Ratnagiri 5 view that since the assessee has fulfilled all the conditions required for registration u/s.12A of the Act and has commenced charitable activities, ld.CIT(E) has grossly erred in rejecting the application filed by the assessee u/s.12A(1)(ac)(vi). We accordingly allow the grounds of appeal and direct the ld.CIT(E) to grant registration u/s.12A of the Act to the assessee. 7. In the result, appeal of the assessee is allowed. Order pronounced on this 16th day of May, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 16th May, 2025. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "