Raj Rani Bansal Charitable Trust,, ... vs Assessee

Smt. Raj Rani Bansal Charitable Trust vs. Commissioner of Income Tax, 730/Shyam Kunj, Street No.1-B, Bathinda. nd 2 Chowk, Abohar-152 116. (Appellant) (Respondent)

Appellant by:Sh.P.N.Arora, Advocate Respondent by:Sh.Tarsem Lal, DR

Date of hearing:05/02/2015 Date of pronouncement:19/02/2015

ORDER

PER B.P.JAIN,AM:

This appeal of the assessee arises from the order of the Commissioner

of Income Tax, Bathinda, dated 24.06.2014, passed under section

12AA(1)(b) of the Income Tax Act, 1961 ( In short, 'the Act').

2. The brief facts of the case are that the original order rejecting the

request of assessee for grant of registration was passed by the Ld. CIT on

05.09.2012. Within five days of the said order, the assessee filed fresh 2

application for registration u/s 12AA of the Act, dated 10.09.2012. The

earlier request was rejected by the Ld. CIT, was challenged before the

ITAT, Amritsar Bench, who has set aside the order of the Ld. CIT, Bathinda

vide order dated 13.02.2014 and the Ld. CIT was directed to pass a speaking

order after affording opportunity of being heard. Accordingly, the assessee

was provided opportunity. On perusal of Income & Expenditure accounts for

the period 01.04.2012 to 31.03.2013 and 01.04.2013 to 31.03.2014, the Ld.

CIT observed that the assessee has debited nominal expenses for the period

01.04.2012 to 31.03.2013 towards Gaushala at Rs.1800/- & towards PSEB

books purchased at Rs.5,995/-. No other worthwhile charitable activities

mentioned in the aims and objectives have been carried out by the Trust

during the period. Perusal of the Income & Expenditure account shows that

there have been no receipts during the financial year 2012-13. As regards,

the balance sheet, the assessee has shown an amount of Rs.1,16,205/- under

the head 'Corpus Account' and that too remains deposited with ICICI Bank.

It revealed that no part of the Corpus Fund had been utilized for any

construction/renovation/advancement of Trust/Charitable activity during this

period. Further, perusal of the Income & Expenditure account for the

financial year 2013-14 also revealed that no worthwhile charitable activity

was carried out except the payment of Rs.51,000/- to Gaushala Committee 3

for construction of building and nominal expenses of Rs.502/- on Cow Feed

and Rs.2,100/- paid to Bharat Vikas Panrishad for eye camp. During this

period also, no receipt has been shown except FDR interest of Rs.8,319/-.

Adequate opportunity has been provided to the assessee at various stages

but the assessee has not been able to explain the genuineness of charitable

activities mentioned in the Trust Deed for the purpose of registration u/s

12AA of the Act. It is pertinent to mention here that there are 11 objects of

the Trust and as per the Income & Expenditure accounts, the assessee-trust

has incurred nominal expenses towards one or two objects only. From the

above facts, it is very clear that there were negligible activities and most of

the expenses alleged to have been incurred are neither in accordance with

the objects of the Trust nor these activities are of the nature of advancement

of any other object of general public utility. Therefore, no reasonable

satisfaction can be recorded about the genuineness of the activities of the

Trust which is a pre-requisite u/s 12AA(1)(a) of the Act, for grant of

registration u/s 12AA of the Act.

3. The Ld. CIT(A) following the decision of the ITAT, Amritsar Bench

in the case of M/s. Sidana Educational and Welfare Society, Amritsar vs.

CIT-II, Amritsar in ITA No.431(Asr)/20009 dated 18.12.2009 rejected the

application of the assessee for grant of registration u/s 12AA of the Act. 4

4. The Ld. Counsel for the assessee, Mr. P.N.Arora, Advocate pointed

out the various objects of the Trust at page 4 & 5 of Ld. CIT's order and

stated that the expenses have been incurred on the aims and main objects of

the Trust i.e. the assessee, especially the aims and objects No. 6 to 11.

Moreover, the ld. CIT himself in his order at para 7 has accepted that the

assessee Trust has incurred nominal expenses for one or two objects only.

Therefore, it cannot be presumed that the assessee has not carried out any

charitable activities for the purpose of aims and objects for which the Trust

has been registered. Therefore, the assessee has fulfilled the conditions

mentioned in section 12AA(1) with regard to the genuineness of the

activities and that of the aims and objects.

5. The Ld. DR, on the other hand, relied upon the order of the Ld. CIT.

6. We have heard the rival contentions and perused the facts of the case.

On perusal of balance sheet and Income & expenditure account for the year

ending 31.03.2013 and 31.03.2014 available at PB 22 to 28 and 36 to 40

alongwith copies of vouchers of expenditure, we find that the assessee has

incurred expenses for purchase of books amounting to Rs.5,995/- during the

year ending 31.03.2013 and books stated to have been purchased for the

poor students of S.D.Girls High School, which is a object No. v & vi of the

aims and objects reproduced at para 5 and page 4 of Ld. CIT's order. Further 5

expenses have been incurred on green fodder for the cows which is object

no. vi of the aims and objects. Further, the amount of Rs.1400/- has been

given to Gaushalla for cow-feed is an object no.vi of the main aims and

objects. The vouchers for the said expenditure are placed on record and were

produced before the ld. CIT. As regards the Income and Expenditure account

for the year ending 31.03.2014, the assessee has incurred an expenditure for

cow-feed which is object No.vi and object No. vii is the payments to

Gaushalla Managing Committee for cow fee and object No.9 is for

construction of building for the purpose of trust is the aims and objects of

the Trust. No amount of expenditure has been incurred for non-charitable

purposes. The findings of the ld. CIT that these are negligible activities and

most of the expenses have neither been incurred with the objects of the Trust

nor these activities are of the nature of advancement of any other object of

general public utility, cannot be accepted in view of our findings

hereinabove. As per the findings hereinabove, the assessee has incurred

though nominal expenses for aims and objects of the Trust certainly carried

out activities for the advancement of the objects of the Trust. The Ld. CIT

in paras 7 & 8 does not deny of incurring expenditure on the objects of the

Trust on one hand whereas, on the other hand in para 8 has given the finding

that the assessee has not incurred expenditure for advancement of the objects 6

of the Trust. The controversial findings by the ld. CIT, are against the facts

of the present case. In fact, the assessee has carried out charitable activities

for the aims and objects of the Trust. Therefore, the Ld. CIT, Bathinda is

not justified in rejecting grant of registration under section 12AA of the

Act, to the assessee-trust and is therefore, directed to grant the said

registration u/s 12AA of the Act. Accordingly, the appeal of the assessee is

allowed.

7. In the result, the appeal filed by the assessee in ITA

No.473(Asr)/2014. is allowed.

Order pronounced in the open court on 19th February, 2015.

Sd/- Sd/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19th February, 2015 /SKR/ Copy of the order forwarded to:

1. The Assessee:Smt.Raj Rani Bansal Charitable Trust, Abohar.

2. The CIT

3. The SR DR, ITAT, Amritsar.

True copy By order

(Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.