THE DY. CIT (EXEMPTIONS),, AHMEDABAD vs. FRIENDS OF WWB INDIA,, AHMEDABAD

The assessee has also filed cross objection in the Revenue’s appeal as captioned above.

The grounds of appeal raised by the Revenue reads as under:-

Briefly stated, the assessee is a trust registered under Bombay trust Act, 1950 and a society registered the Societies Registration Act, 1860. The assessee is stated to be registered as charitable trust under s.12A of the Act. During year under consideration, the AO in the course of assessment under s.143(3) r.w.s. 147 of the Act denied the benefit of exemption under s.11 & 12 of the Act on the ground that registration of the Trust was withdrawn from AY 2009-10 onwards. The income of the Trust was accordingly computed as per the normal provisions of the Act in the year under consideration. The AO inter alia disallowed corpus donation given by the assessee to Indian Foundation for Inclusion Growth (IFIG) pegged at Rs.5Crore. It was observed by the AO that the donation was given to a related person covered under s.40A(2)(a) of the Act and also alleged that this money was siphoned off from the Trust. The AO finally assessed the taxable income of the assessee at Rs.9,35,24,850/-.

Aggrieved, the assessee preferred the appeal before the CIT(A).

On reappraisal of the submissions and evidences placed on record, the CIT(A) found that the registration granted to the assessee Trust under s.12A of the Act cannot be dislodged. The CIT(A) also found merit in the eligibility of claim of deduction towards corpus donation by the assessee to IFIG. The cancellation of registration under s.12AA(3) of the Act was accordingly modified and restored and the benefit of exemption under s.11 & 12 of the Act was granted to the assessee holding that the activities of the Trust are charitable activities for the purposes of Section 2(15) of the Act. The corpus donation was also considered as application of income as being given as donation to another charitable trust.

The Revenue has agitated the aforesaid reliefs granted by the CIT(A) before the Tribunal.

The learned AR for the assessee in the Revenue’s appeal submitted that the challenge of the Revenue are two fold; firstly, the cancellation of registration of the assessee as charitable trust has been wrongly revoked and secondly, the CIT(A) has wrongly granted relief to the assessee towards corpus donation to IFIG as application of income for the purposes of Section 11 of the Act. The learned AR submitted that as regards first contention of the Revenue, the issue has already been adjudicated in favour of the assessee by the co-ordinate bench of the ITAT in ITA No.2076/Ahd/2014 order dated 14.08.2015 concerning AY 2009-10. As per the aforesaid order, the co-ordinate bench has restored the certificate granted under s.12A by holding that activities are being carried out as per objects of the Trust and therefore, the reason to deny the benefit of exemption under s.11 of the Act as no longer valid and do not survive any more. Adverting to

The learned AR thereafter referred to its grounds of cross objection and fairly submitted that he does not seek to press Ground Nos. 1 & 2 of its cross objection concerning the validity re-assessment under s.147 of the Act. The learned AR further pointed out that Ground No.3 is also rendered infructuous as the deduction claimed is available on merits in view of the decision of the co-ordinate bench in other assessment years and consequently, the cross objection of the assessee does not call for any substantive adjudication.

The learned DR relied upon the order of the AO and offered no comment in elaboration.

We have carefully considered the rival submissions. As narrated on behalf of the assessee noted above, the grievances of the Revenue have been addressed in negative by the co-ordinate bench of Tribunal in other assessment years on similar facts. Therefore, we do not see any reason to interfere with the order of the CIT(A) which in conformity with the subsisting order of the ITAT.

In the result, appeal of the Revenue is dismissed.

In view of the submissions made on behalf the assessee, cross objection of the assessee is also dismissed.

In the combined result, appeal of the Revenue as well as cross objection of the assessee, both are dismissed.