Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed against the order of ld.Commissioner of Income Tax, Exemption, Pune under section 12A r.w.s 12AB of the Act, 1961 dated 28.02.2023. The assessee has raised the following grounds of appeal :
1. On the facts and in the circumstances of the case and in law, the Learned Hon’ble Commissioner of Income Tax (Exemption) Pune is failed to appreciate the fact that the Appellant INSTITUTION has been granted certificate of INCORPORATION under section 8 of Shri Dakshinamoorthy Education Foundation [A] the Companies Act 2013 and appellant INSTITUTION has been granted the provisional Certificate of registration u/s 12A(l)(ac)(vi) for the period from AY 2021-22 to AY 2023- 24.
Hon’able Ld. CIT (Exemp) Pune is wrong in rejecting/cancelling the provisional registration u/s 12A(l)(ac)(vi) stating that the ACTIVITIES are general in nature and institution is not having movable and immovable properties and compliances are vague.
Hon’able Ld. CIT (Exemp) Pune is wrong in not giving the due consideration to the reply submitted on 29/12/2022 and 27/02/2023.
Hon’able Ld. CIT (Exemp) Pune ought to have considered that the object of the institution is “To promote Education to the children belonging to the Lower Income Group and to those who cannot afford proper education in school.” Which is charitable activity.
5. The appellant craves leave to add, amend, alter, or withdraw any aforesaid grounds of appeal
. Submission of ld.AR :
2. The ld.Authorised Representative(ld.AR) of the Assessee filed a paper book. The ld.AR claimed that assessee has carried out charitable activities like distribution of school bags to poor students The ld.AR invited our attention to page no.36 of the paper book which an elaborate note on activities carried out by the assessee. The ld.AR also invited our attention to objects of the assessee which were at page no.115 of the paper book. The ld.AR submitted that ld.CIT(E) has rejected assessee’s application on frivolous ground like no infrastructure is available and financial statements do not synchronise with activities. However, the ld.AR explained that the Trust was recently Shri Dakshinamoorthy Education Foundation [A] formed and it has meagre resources, therefore it has carried out limited activities as per the objects of the Trust. It does not need infrastructure.
Submission of ld.DR : 3. The ld.Departmental Representative (ld.DR) of the Revenue relied on the order of ld.CIT(E).
Findings & Analysis : 4. We have heard both the parties and perused the records. The ld.CIT(E) has rejected the application of the assessee for registration under section 12AB of the Act. The relevant paragraph 4 and 5 of the ld.CIT(E)’s order is reproduced here as under : “4. The note on activities submitted by the assessee is very general in nature. The specific details as to which Municipal Schools were benefited from the teachers recruited by the assessee, who were the teachers, how they were trained, how many teachers trained etc. are not furnished. The remaining two activities of education to girl children and conduct of various competitions are also very vague. Further, the supporting evidence like confirmation from the municipal school etc. has also not been furnished. It is also seen that there is no infrastructure in the nature of furniture and fixtures, immovable properties etc. appearing in your balance sheet as on 31/03/2022. Giving training to teachers to make them Shri Dakshinamoorthy Education Foundation [A] teach in Municipal Schools definitely require a substantial infrastructure of such nature. Thus, the activities claimed to have carried out are not synchronizing with the financial statements. The assessee has not furnished any explanation in this regard.
5. In view of the above, the undersigned is not satisfied about the genuineness of activities of the assessee and compliance to requirements of any other law for the time being in force by the trust / institution as are material for the purpose of achieving its objects. The application filed by the assessee is hereby rejected and the provisional registration granted on 12/02/2022 under section 12AB read with section 12A(1)(ac)(vi) of the Income Tax Act, 1961 is hereby cancelled.”
On perusal of the ld.CIT(E)’s order, it is observed that he has rejected the application mainly on the ground that assessee has not submitted details of municipal schools which are benefited. However, ld.CIT(E) has not discussed anything about the other activities claimed to have been carried out by assessee which are on page no.36 of the paper book. These details were submitted before the ld.CIT(E) vide letter dated28.12.2022 by the assessee and forms part of paper book. The assessee has claimed to have carried out following activities : Priyanka Revankar - Fees paid for B.Sc in Karwar as she is 1. from backward class both socially and economically. Ayush Dahiwal - Location - Pune 2. Full tuition fees and bus fee paid for two years. He lost his father and hence the foundation has adapted him to support his education Shri Dakshinamoorthy Education Foundation [A] till college Dharshini and Rekha : Loaction - Pondicherry 3. These girls from economically/socially backward society lost theirt father and the education including full school fees and bus fees are supported by the foundation. This will be done till their college level. R.Balaji - Xllth standard Location - Gnvindapuram, a remote 4. village in Tamil nadu - School fees paid by the foundation as they could not afford tire same. Bavithra - Location - Tiruvannamalai, a small town in Tamil 5. Nadu. She is from socially and economically backward society. The tuition fee for B.Sc Nursing has been paid by the foundation. Bhavisri - A girl child in Kindergarten in Tiruvannamalai 6. from backward class Tire foundation has taken responsibility of her education from school to college. Pooja Nivrutti Pawar - School fees at Karwar (Economically 7. backward) Sheetal Nivrutti Pawar - School fees at Karwar 8. (Economically backward) Ratika Revankar - College Fees and Books (Economically 9. backward) Suji Sushmitha- Fees for Nursing college (Economically and 10. socially backward) In addition to the above, we have distributed School bags, books and rain coat to 50 students in Karwar public school through tie up with corporates.
We have perused the Financial Statements of the assessee. The relevant part of the expenditure mentioned in the Audited Financial Statements is reproduced here as under :
Shri Dakshinamoorthy Education Foundation [A]
Thus, on perusal of the Financial Statements, it is observed that assessee has shown expenditure towards uniform and college fees. Assessee has also shown expenditure towards salary of the teachers. Assessee has claimed that assessee had appointed following teachers : i. Shalini Harishchandra Raiker : Address : 3030/A, Kalaswada, Karwar – 581304. ii. Sweta Nagesh Kudharkar Address : Phandegali, Hutkhanda gram, Upaleshwar, Yellapur, Karwar – 581359. iii. Mrs. M Bharathi : Address: 28-B, Berreca Nagar, First Main Road, Durga Colony, Sembbakam, Chennai – 600073 Shri Dakshinamoorthy Education Foundation [A]
Assessee claimed that these persons were teaching the local students. The ld.CIT(E) has not doubted the activity of uniform distribution and paying of college fees by the assessee of the needy students mentioned in the list. These are the activities which are charitable in nature as per definition given in section 2(15) of the Act.
The objects of the assessee are as under : Shri Dakshinamoorthy Education Foundation [A] Shri Dakshinamoorthy Education Foundation [A]
On perusal of the objects of the assessee, it is seen that objects are charitable as defined in section 2(15) of the Act.
Thus, objects of the assessee are charitable in nature and the activities carried out are as per objects of the assessee and are also charitable in nature. Nowhere in the note submitted by the assessee, assessee has claimed the it has asked its teachers to visit municipal schools. Therefore, the ld.CIT(E)’s statement that assessee has not provided details of municipal schools which were benefited by the activities of the assessee is irrelevant for the respective financial year. The ld.CIT(E) has vaguely mentioned in the para 5 that compliance to requirement of any other law by the Trust is material for the purpose of achieving its objects. However, the ld.CIT(E) has not pointed out specifically that assessee has violated any law by any of its actions. Therefore, the ld.CIT(E)’s impugned observation is of no significance in this case.
Assessee is a section 8 Company duly registered under Companies Act. Assessee had filed copies of balance sheet, income expenditure account before the ld.CIT(E) which forms Shri Dakshinamoorthy Education Foundation [A] part of paper book submitted before this Tribunal. On perusal of the Income & Expenditure Account, Balance Sheet, we have not observed prima-facia any violation of any Law.
Therefore, in these facts and circumstances of the case, we are convinced that objects of the assessee are charitable in nature. We are also convinced that activities, which are mentioned in earlier paragraphs are charitable as defined in section 2(15) of the Act. Therefore, we are of the opinion that assessee is eligible for registration under section 12A r.w.s 12AB of the Income Tax. Therefore, we direct the ld.CIT(E) to grant registration to the assessee.
Accordingly, the appeal of the assessee is allowed.
Order pronounced in the open Court on 31st October, 2023.