Income Tax Appellate Tribunal - Raipur
Swayam Siddha Foundation Society, ... vs Commissioner Of Income Tax (E), Bhopal, ... on 22 January, 2024
आयकर अपील य अ धकरण, रायपरु यायपीठ, रायपरु
IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR
ी र वश सद
ू , या यक सद य एवं ी अ ण खोड़ पया, लेखा सद य के सम ।
BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM
(ITA No. 93 & 312/RPR/2023)
(Assessment Year: NA)
Swayam Sidhha Foundation Society V The Commissioner of Income Tax,
HN-A-502 Ward No. 68, s [Exemption] Room No. 201, II floor,
BMT Anupama Tripathi, Near Brahmavid Metro Walk Building, REAC, Bhopal
School,Gokul Dham Residency Mahadev (M.P.)
Ghat, Raipur, (C.G.)
PAN:
(अपीलाथ /Appellant) . ( यथ / Respondent)
.
नधा रती क ओर से /Assessee by : Shri S.R. Rao, Adv.
राज व क ओर से /Revenue by : Smt. Ila M. Parmar, CIT- DR
सुनवाई क तार ख/ Date of Hearing : 10.01.2 024
घोषणा क तार ख/Date of : 22.01.2 024
Pronouncement
आदे श / O R D E R
Per Arun Khodpia, AM:
The captioned appeals are filed by the assessee against two orders passed by Commissioner of Income Tax (Exemption) (in short CIT(E)), Bhopal (M.P.) both dated 21.02.2023, in disposing off the applications of the assessee society regarding registration u/s 12AB and approval u/s 80G(5) of the Act.
2. Grounds of Appeal raised by the assessee in ITA No. 93/RPR/2023
1) In the facts and circumstances of the case and in law the Id. Commissioner of Income-tax (Exemption) has erred in rejecting the application for registration u/ s 12AB of the of the Income-tax Act, 1961 and also erred in cancelling the provisional registration granted by CPC u/s 12AB of the Act.
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ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society
2) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Exemption) has erred in rejecting the application for grant of approval u/ s 80G(5) of the Income-tax Act, 1991 and also erred in cancelling the provisional approval granted by CPC u/s 80G(5) of the Act.
3) The impugned order is bad in law and on facts.
4) The appellant reserves the right to add, alter or omit all or any of the grounds of appeal in the interest of justice.
Grounds of Appeal raised by the assessee in ITA No. 312/RPR/2023
1) In the facts and circumstances of the case and in law the Id. Commissioner of Income-tax (Exemption) has erred in rejecting the application for registration u/ s 12AB of the of the Income-tax Act, 1961 and also erred in cancelling the provisional registration granted by CPC u/ s 12AB of the Act.
2) The impugned order is bad in law and on facts.
3) The appellant reserves the right to add, alter or omit all or any of the grounds of appeal in the interest of justice.
3. At the outset, Ld. AR of the assessee has requested to withdraw appeal in ITA no. 93/RPR/2023, wherein the assessee has challenged the order of registration/ approval/ rejection or cancellation by Ld. CIT(E), Bhopal while dealing with the application of the assessee seeking approval u/s 80G(5) of the Act. The request of the Ld. AR regarding withdrawal of the appeal has been confronted with Ld. CIT DR, on which she has not 3 ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society advanced any objection. Accordingly, permission is granted to withdraw the appeal. Consequently, the appeal in ITA No. 93/RPR/2023 of the assessee stands dismissed.
4. Now, we shall be taking the second appeal of the assessee in ITA No. 312/RPR/2023, which at the outset has been observed to be filed with a delay of 173 days. In order to remove the deficiency regarding delay in filing the appeal, the assessee has applied for condonation of delay. The same is extracted as under:
BEFORE THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR, CHHATTISGARH Name of the Appellant Swayam Siddha Foundation Society PAN / Status ABEAS7454A/AOP ITA No. 312/RPR/2023 APPLICATION FOR CONDONATION OF DELAY IN FILING APPEAL Hon'ble Sir, In connection with the above matter, the applicant humbly submits as under:-
1. That the society was established in the year 2019 with various aims and objects inter alia establishment of educational institutions, organizing health camp for spreading health awareness, spreading awareness among women about their right, etc. along-with other objects mentioned in the bye-laws.
2. That the applicant has applied for registration u/ s 80G(5) of the Income-tax Act, 1961 in Form- IOAB under the new provision of the Act.
3. Subsequently the applicant submitted reply to the queries issued time to time. But the Id. Commissioner of Income-tax (Exemption)rejected the registration u/ s 12A and 80G of the Income-tax Act, 1961 along with provisional registration through common order.4
ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society
4. Though combined order in Form No. IOAD for rejection of registration u/ s 12A and 80G of the Act was passed with same contents, two different DIN numbers were allotted.
5. Aggrieved by the order the applicant filed the appeal before Hon 'ble Income Tax Appellate Tribunal, Raipur for rejection of registration u/s 12A and 80G of the Act assuming there is a single order for both the sections. Both the grounds of appeal viz. assailing rejection of registration u/ s. 12A and Rejection of registration 80G are incorporated in appeal memo in Form No.36.
6. The applicant was unaware of separate cancellation order of registration u/ s. 12A of the Act with DINNo.1TBA/EXM/F/EXM45/2022-23/ 1049976056(1)dated 21/02/2023.
7. However, while preparing paper book for submission before the Hon'ble Income Tax Appellate Tribunal fixed for hearing on 12/09/2023, the applicant got to know about the common order having separate DIN numbers.
8. Applicant, on being so advised, filing the present separate appeal against order rejecting registration u/ s. 12A with prayer for condonation of delay considering the peculiar facts and circumstances of the case. The mistake was bona fide and unintentional. The Appellant sincerely desired to challenge both the orders.
9. That as per applicant's humble understanding there are fair chances of substantial relief in its case and the balance of convenience is in its favour.
10. That in view of above facts and circumstances it is humbly prayed that the Hon'ble Tribunal may be pleased to condone the delay of 173 days and admit the appeal for adjudication in the interest of justice.
11. An affidavit in support of application is being filed.
5. According to the aforesaid application along affidavit, the contention of the assessee is that it was unaware of the separate cancellation order of registration u/s 12A of the Act with DIN NO. ITBA/EXM/F/EXM45/2022- 23/1049976056(1) dated 21.02.2023. Ld. AR drew our attention to the order 5 ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society of Ld. CIT(E) regarding the cancellation / rejection order passed vide DIN NO. ITBA/EXM/F/EXM45/2022-23/1049976284(1) dated 21.02.2023 against the assessee's application for approval u/s 80G(5). Since both orders of Ld. CIT(E) issued on same day, found to be identically worded, therefore the assessee understood that they have received two copies of the same order, without adverting to the fact that both the orders have separate DIN Nos, therefore, has escaped to file the appeal for one of the said orders. The bona fide of the assessee is found to be worth consideration, and accordingly, in view of the request for condonation of delay on account of unintentional reasons, we are of the considered view that the appeal filed by the assessee merits to be permitted for adjudication by allowing the condonation of delay.
6. At the outset, Ld. AR of the assessee has submitted a written synopsis of the same extracted as under:
BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH: RAIPUR (C.G) Name of the Respondent Swayam Siddha Foundation Society Assessment Year ABEAS7454A/Society/-
Appeal No. ITA-312/RPR/2023
SYNOPSIS
1. The appellant is a charitable institution set up for advancement of general public utility through various charitable activities as per bye laws, which include social welfare and social development through various dimensions touching key issues such as health, education, livelihood, agriculture, youth development, women empowerment, tribal welfare, etc. 6 ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society
2. In this process it had conducted Chhattisgarh Ratna Award Function in 201920, Rising Star Award during F.Y. 2020-21 and a Motivational program in F.Y. 2021-22 besides advancing aid for medical treatment to Covid-19 patients.
3. It is registered with the Registrar of Societies; Chhattisgarh vide Registration Certificate dated 11/07/2019.
4. It was also registered with Niti Aayog on Darpan Portal on 11/02/2022.
5. The appellant has applied for registration u/s.12(1) of the Income-tax Act, 1961 on 19/02/2022 and it was granted provisional registration for AY 2022-23 to 2024-25.
6. The Id. CIT(E), Bhopal after requiring several details and conducting enquiry passed common order for registration u/s.12A and approval u/s.80G(5) of the Act.
7. The application for registration u/s.12AA was rejected on the ground that no charitable activities were conducted and merely some events were organized. According to him the activities conducted are not as per objects of the trust. Income from motivation program participation fee received is commercial in nature and receipts are more than 20% of total income.
8. Action of Id. CIT(E) is not justified and contrary to provisions of sec.
12AA of the Act, which prescribes only three conditions for registration.
a) Satisfaction about objects of the trust or institution,
b) Satisfaction genuineness of the activities of the trust or institution
c) Satisfaction about compliance of requirements under any other law.
9. The Id. CIT(E) did not dispute genuineness of the society nor did he dispute any deviation in compliance of requirements of any other law. There is no averment of violation of provisions of sec. 13.
10. The only objection is that the activities carried out are not as per various objectives and not fall under the category of charitable activities.
11. The activities carried out during the preceding three years are strictly as per objectives especially clause-5 and clause-IO of the objectives.
12. The motivational program was not commercial basis. It was intended to provide response for the people, as there was large scale coping issues and mental pressure amongst people specifically students and working women, housewives during Covid pandemic. It was aimed at strengthening mental courage and coping skills to resume normal lives.
13. It is a mental health intervention and comes under purview of IC health. The contribution sought was for participation and ensuring ownership of the program and to meet basic expenses. It was not 7 ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society absolutely commercial activity. The meager surplus fund was used for objectives of the organization.
Appellant relies on
a) CIT vs. Gujarat Maritime Board reported [2007 (12) TMI 7 - SUPREME COURT] has held that if the primary purpose and the predominant object is for welfare of general public then the purpose would be charitable in nature.
b) CIT vs. Chhattisgarh Urology Society- [2018 (2) TMI 1156 - CHHATTISGARH HIGH COURT]- "Even otherwise, it is not to be seen at this stage as to whether the fulfilment of the charitable trust would eventually benefit the members of the society. If the constituent of the trust engages in some genuine charitable activity which may benefit them in some other aspect of their personality which may include their vocation in life, it would not affect the genuineness of the objects of the trust. "
c) CIT vs Vijay Vargiya Vani Charitable Trust (2014) 271 CTR 0698 (Raj) and Fifth Generation Education vs CIT (1990) 185 1TR 634 (All), it is held that at the stage of Section 12A, the Commissioner is not to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of Section 12A read with Rule 17A and whether Form No. IOA has been properly filled up. He may also see whether the objects of the trust are charitable or not. At this State, it is not proper to examine the application of income.
d) Chhattisgarh State Cricket Sangh vs. The DCIT (E) -1, Raipur-2019 (5) TMI 1134 - ITAT Raipur-
e) Fragrance and Flavours Association of India vs DDIT(E)-Mumbai-
2018(4) TMI 1293 ITAT- Mumbai.
Accordingly, it is humbly prayed that the appeal may kindly be allowed in the interest of justice.
7. Backed by aforesaid submissions Ld. AR requested that the rejection of registration u/s 12AB of the Income Tax Act, 1961 was uncalled for on the basis of activities of the assessee society which are not on commercial basis but for charitable purposes.
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ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society
8. Ld. CIT DR on the other hand vehemently supported the orders of CIT(E), Bhopal, has submitted that since the assessee society was involved in commercial activities, who had unable to substantiate that they have conducted or carried out any charitable activities. It is, therefore, the prayer that the order of LD. CIT(E) wherein she has categorically explained the reasons for rejection of the application of the assessee should be sustained.
9. We have considered the rival submissions, perused the material available on record and the case laws submitted by the assessee society in support of their contentions. The issue in the present case regarding rejection of the application of the assessee for registration u/s 12AB, as have been dealt with by the coordinate bench of the ITAT, Raipur in the case of Shri Agrasen Jan Kalyan Trust v. Commissioner of Income-tax (Exemption) In ITA no. IT APPEAL NO. 334 (RPR) OF 2016 vide order dated July, 4, 2023 wherein the issue has been discussed and principle of law as laid down by Hon'ble Supreme Court in the case of Ananda Social & Educational Trust v. CIT [2020] 114 taxmann.com 693/272 Taxman 7/426 ITR 340 (SC) [19-02-2020], wherein Hon'ble Apex Court has held as under :
12. Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the 9 ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust.
10. On perusal of the objects of the society it is apparent that the society has charitable objects and, therefore, the request of the society for grant of registration u/s 12AB cannot be denied on the basis of assessment of the activities, which has actually been carried out by the assessee society. Hon'ble Apex Court has even held that the "activities" in the provision includes 'proposed activities'. Accordingly, the view taken by the tribunal in the case of Shri Agrasen Jan Kalyan Trust, for the sake of clarity is extracted as under:
10. We have heard the rival contentions, perused the material available on records and case laws relied upon. In view of the aforesaid decision in the case of Ananda (supra), since the actual activities of the trust cannot be the deciding factor while granting the registration u/s 12A but the object of the trust should have been looked into, the activities have to be looked into by the Assessing 10 ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society Officer at the time of assessment proceedings. It is also a fact that the trust was formed with charitable objects eligible for approval u/s.12AA of the Act, which is substantiated by the department itself by granting registration u/s 12AA on 25-3-2021 vide order ITBA/EXM/S/12AA/2020-21/1031751676(1). In such circumstances, respectfully following the judgment in the case of Ananda (supra), we are of the considered opinion that the rejection of application for registration u/s 12AA of the Act by Ld CIT(E) was an erroneous application of law, thus, cannot sustain, accordingly we quash the same and direct to grant registration to the assessee as per law.
11. In terms of the aforesaid observations respectfully following the judgment in the case of Ananda (supra), in absence of any contrary decision, fact, or submission by the revenue, we are of the considered view that the rejection of the request of registration u/s 12AB of the Act in the present case was unjustified, uncalled for, and against the settled principle of law. Consequently, we are inclined to set aside the order of Ld. CIT(E), Bhopal, vide DIN No. ITBA/EXM/F/EXM45/2022-23/1049976056(1) dated 21.02.2023 and direct to grant registration u/s 12AB in accordance with law.
12. In the result, the present appeal of the assessee is allowed, in terms of our observations hereinabove.11
ITA 93 & 312/RPR/2023 Swayam Siddha Foundation Society Order pronounced in the open court on 22/01/2024.
Sd/- Sd/-
(RAVISH SOOD) (ARUN KHODPIA)
या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
रायपरु /Raipur; दनांक Dated 22/01/2024
Vaibhav
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant-
2. यथ / The Respondent-
3. आयकर आयु (अपील) / The CIT(A),
4. आयकर आयु त / CIT
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, रायपरु / DR, ITAT, Raipur
6. गाड फाईल / Guard file.
// स या पत त True Copy // आदे शानुसार/ BY ORDER,
(Assistant Registrar)
आयकर अपील य अ धकरण, रायपुर/ITAT, Raipur