Income Tax Appellate Tribunal - Delhi
Safe Blood Organisation, New Delhi vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'I' NEW DELHI)
BEFORE SMT DIVA SINGH, JUDICIAL MEMBER
AND
SHRI B.K. HALDAR, ACCOUNTANT MEMBER
I.T.A. No.3111/Del/2010
Safe Blood Organization, ITO,
617-Hemkunt Chambers, Plot No.15, 3rd Floor,
89-Nehru Place, New Delhi. V. Laxmi Nagar, Distt. Centre,
New Delhi.
(Appellant) (Respondent)
PAN /GIR/No.AABTS
/GIR/No.AABTS-
AABTS-4538-
4538-C
Appellant by : Shri Upendra Bhat, C.A.
Respondent by : Shri S. Mohanty, Sr. DR
ORDER
PER B.K. HALDAR, AM:
This is an appeal filed by the assessee against the order of Ld DIT (Exemption), Delhi dated 26.5.2010 refusing registration u/s 80G(5)(vi) of the Act. The assessee has taken the following grounds of appeals:-
1. On the facts and circumstances of the case, the Ld DIT was not justified in refusing to renew the registration granted to Safe Blood Organization, a charitable organization.
2. That the Organization is existing on charitable activities and there is no contravention of conditions for approval u/s 80G(5) of the Act.
3. That with the amendment of the Act w.e.f. 1.4.2009 there is no need for renewal of 90G exemption once granted.,
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4. There is no application of income outside India as considered by the Ld DIT.
5. That the institution is being under bona fide belief and has not done any default.
6. That is prayed order of cancellation may be set aside and on such other relief granted.
7. That the appellant reserves the right to add, amend or delete any of the grounds.
2. The assessee was formed in April, 1998 under the Societies Registration Act. The objective was to create awareness and knowledge amongst the masses for voluntary blood donation. The society was granted registration u/s 80G(5)(vi) of the Act by the DIT (E), New Delhi for the period 1.4.2003 to 31.3.2006 on 4.11.2003 and for the period 1.4.2006 to 31.3.2009 vide order dated 25.6.2007. The assessee filed an application for renewal of registration u/s 80G(5)(vi) of the Act on 23.12.2009. The Ld DIT (E) required the assessee to furnish following details.
i) Justify with the bills/vouchers of the income applied for charitable activities along with proof of beneficiaries.
ii) Please file the undertaking that there shall be non infringement to the proviso to section 2(15) of the IT Act.
iii) A note on activities of the Trust/Society since its inception/during last three years along with supporting documentary evidence.
iv) Audited accounts for the period ending 31.10.2009 since the inception of the society/trust or last three years whichever is applicable.
3 ITA No3111/Del/10
v) A certificate from the Managing Trustees that there is no change in the objectives activities of the trust. In case there has been any change in objectives/activities that may be pointed out.
vi) Details of expenditure incurred on religious activities.
vii) An affidavit from the Managing Trustee that there has been no infringement of provisions of section 13 of the IT Act since the inception of the society during the last three years Trust, whatever is applicable.
viii) Details of donations received and made during the last three years or since the inception of the trust/society including corpus donations with complete name address & PAN.
ix) Proof of filing returns or income for last two years.
x) Please justify your claim for exemption u/s 80G.
xi) Please furnish contact No. & e-mail address of the applicant & its members.
xii) A certificate from the Auditor that the Trust/Society is maintaining separate books of accounts in respect of profit from business and the donations received by it have not been used directly or indirectly for that business.
xiii) Please explain the change in fact & circumstances of the case since the last rejection order.
The assessee complied with the same.
3. The ld DIT (E) noted that the applicant had written off an amount of `.5.92 lakhs as application of income. The applicant failed to explain how the same was permissible. He also noted that foreign students were sponsored for education and substantial expenses were incurred on this account. The Ld DIT(E) opined that the sponsoring of foreign students who were not citizens of India would amount to application of 4 ITA No3111/Del/10 income outside India. According to him, the same was not permissible. It was also noted by him that the Society collected an amount of `.7.41 lakhs under students support program. The nature of these receipts were also not explained. As the applicant society failed to provide proper explanation with regard to the above issues, the Ld DIT (E) refused to grant exemption u/s 80G(5)(vi) of the Act. Aggrieved, the assessee filed appeal before the Tribunal.
4. The assessee has filed paper book in two parts, Part-II of the paper book containing pages 1-39 were not produced or filed before the ld DIT(E). The same was furnished for the first time before the Tribunal. The assessee has not made any application for admission of additional evidence. It has also not been shown as to why the details were not furnished before the DIT(E). The relevance of the documents for deciding the issue at hand has also not been explained. We, therefore, do not consider Part-II of the paper book as part of the Tribunal's record.
5. Before us, the ld AR for the assessee has made the following submissions:-
"The Society had imported Kits required for Blood transfusion under Emergency circumstances and were in short supply in India due to distribution problems etc. The supplier company had raised invoices of higher values & the same was confronted by the society. Kind attention of the Bench is drawn to page No.18 & 23 of the paper book-I. On page No.18, the amount recoverable is shown at `.7,95,437.79. The basis are explained on page 23 o the paper book -I under Notes on Accounts, also refer page No.44 of the paper book.
5 ITA No3111/Del/10 Kind attention of the Bench is also invited to page No.9 & 12 of the paper book Part-II, giving the details/figures of amounts receivable, Income & Expenditure Account e4xclusive for Kits as on 31.3.2005 & notes on accounts explaining the same. Accordingly, it is clear that purchases/sales amounts recoverable & creditors were duly reflected in previous years financial statements along with proper explanations in Notes on Accounts & the amount of `.5.92 lakhs written off was as final adjustment out of these transactions.
Kind attention of the bench is also invited to Page No.44 of paper book Part-I giving the full details of this amount in Notice to accounts.
The above referred documents were available before Worthy Director & was duly explained to him. However, he did not take cognizance of the same.
Regarding the sponsoring of the Foreign Students:
Safe Blood Organization in collaboration with CHFI undertakes to educate/aware/train volunteers and students in the field of health care in India. Special emphasis is being laid on the awareness and training related HIV/AIDS and voluntary Blood Donation to fulfill its objectives.
In this connection, CFHI sponsors students mostly from USA & contributes fully towards the expenses of these students and volunteers which undergo the awareness and training programs in India.
It is important to note that while imparting to those foreign students and volunteers, we also train our own volunteers along with them thus most of the times without incurring any additional cost. Major part of the training being in the field the
6 ITA No3111/Del/10 Indian Society as a whole is enlightened and benefited & informed HIV/AIDS and are motivated towards Voluntary Blood Donation.
It is clear that neither any foreign student is sponsored by the Society neither any amount is spent outside India. In fact no amount is spent on this activity by the Society and all expenses are born by CHFI. (Kindly refer to page 70 of the paper book regarding the Report of CHFI.
It is accordingly clear that the Ld Director erred on the issue whole discussing the issue.
We confirm that no expenses are being spent out of India & amount spent in India on foreign students is fully contributed by CHFI.
Regarding the Students Support Programme `.7,41,226/- were received by the Society from CFHI regarding the above referred purpose i.e. to meet the expenses of students sponsored as explained above. Out of this the Society spent `.4,94,338/- on the project and saves `.2,50,000/- (Kind attention of the Bench is also invited to page No.44 point 4 of paper book Part-I giving the full details of this amount in notice to Accounts). Kindly refer page 38-40 paper book Part-II. In view of the above submissions it is prayed that the order of the worthy Director Income Tax Exemption obe set aside and worthy director be directed to grant exemption u/s 80G of the IT Act.".
6. It was therefore, contended by him that the Ld DIT (E) was not justified in refusing to register the Society u/s 80G(5)(vi) of the Act. On 7 ITA No3111/Del/10 being asked by the bench as to whether the Society's registration u/s 12A of the Act subject the Ld AR for the assessee has stated that such registration is available to the applicant.
7. The Ld DR in addition to relying on the order of Ld DIT(E) contended that the assessee did not furnish any explanation with reference to queries raised by the Ld DIT (E) as is evidenced from the impugned order of the Ld DIT(E). It was, therefore, contended by her that the explanation furnished by the assessee for the first time before the Tribunal may not be accepted and the order of the ld DIT (E) be confirmed.
8. In the rejoinder, the Ld AR for the assessee submitted that the amount of `.7.41 lakhs was received towards students support program out of which the appellant spent an amount of `.4,94,338/- on sponsored students (foreign).
9. We have heard the parties and perused the record. From the audited account for the period 1.4.2007 to 31.3.2008 which is available in the assessee's paper book pages 36-44, we have noted that the facts mentioned by the ld DIT(E) are true. We also find that in that year, the assessee had written off the whole amount of `.19,48,656/- relating to the opening stock of kits with the remarks "goods expired W/O". However, in the audited account for the financial year 2008-09 the assessee has not shown any receipt or expenditure on account of students support program CFHI. It has also not shown any expenditure on account of sponsored students (foreign). For the period up to 31.3.2009, the assessee already held a valid certificate u/s 80G of the Act. The Ld DIT(E) was to consider renewal of the same for the subsequent period. As the ld AR for the assessee has contended that 8 ITA No3111/Del/10 the applicant holds a valid certificate u/s 12A of the Act and in the facts and circumstances mentioned above, we deem it fit to set aside the impugned order of the Ld DIT(E) and remit the matter back to his file with the direction that the contention of the appellant that it holds a valid registration certificate u/s 12A of the Act should be verified and thereafter a speaking order be passed in accordance with law after giving the appellant adequate opportunity of being heard. Thus, the appeal of the assessee is allowed for statistical purposes
10. In the result, the appeal filed by the assessee is allowed for statistical purposes.
11. Order pronounced in the open court on the 28th day of October, 2011.
Sd/- Sd/- (DIVA SINGH) (B.K. HALDAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dt. 28.10.2011. HMS Copy forwarded to:- 1. The appellant 2. The respondent 3. The CIT 4. The CIT (A)-, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi. True copy.
By Order (ITAT, New Delhi).
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Date of hearing 19.10.2011
Date of Dictation 20.10.2011
Date of order signed by the 28.10.2011
Hon'ble" Member.
Date of order Sent to the 28.10.2011
concerned Bench