BADU RURAL WELFARE SOCIETY,KOLKATA vs. CIT, (EXEMPTIONS), KOLKATA, KOLKATA

1 ITA No. 94-95/Kol/2016 Badu Rural Welfare Society IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA [Before Shri Waseem Ahmed, AM & Shri K. Narasimha Chary, JM]

I.T.A Nos. 94&95/Kol/2016 Assessment Year: -----

Badu Rural Welfare Society Vs. Commissioner of Income-tax(Exemption), Foundation (PAN: AACAB6365N) Kolkata. (Appellant) (Respondent) Date of hearing: 27.09.2016 Date of pronouncement: 30.09.2016

For the Appellant: Smt. Uma Kothari, CA For the Respondent: N o n e ORDER Per Shri K. Narasimha Chary, JM: This appeal by assessee is arising out of order of CIT(Exemptions), Kolkata vide Memo No. CIT(E)/10E/79/15-16/3066 dated 30.11.2015. 2. These are the appeals by the Assessee challenging the order dated 30-11-2015 passed by the learned Commissioner of Income Tax (Exemptions), Kolkata (hereinafter referred to as “learned CIT”). Both the appeals are heard together and are being disposed of by this common order. 2. Brief facts of the case are that the assessee is a Trust formed with the objects of promoting, establishing, equipping, erecting, maintain and /or granting all or other financial assistance for advancement of education, music, dancing, literature, culture and other similar pursuits, dispensaries, hospitals, laboratories, hostels, public rest houses, libraries and any other similar works for furtherance and dissemination of knowledge in general and any other streams. It came into existence through a Certificate of Registration of Societies, West Bengal Act XXVI OF 1961 dated 27.06.2014. The Trust filed an applications in Form 10A and 10G on 07.05.2015 before the ld. CIT (Exemptions), Kolkata seeking registration under Section 12A(1)(aa) and approval under section 80G(5)(vi) of the Act but those were rejected by the ld. CIT vide order dated 30-11-2015 holding that no activities of the Trust were started and there is no means to verify the genuineness of the activities. Aggrieved by the said rejection of registration, the assessee filed an appeal before the Tribunal in ITA No. 94/KOL/2016 on the following grounds:-

2 ITA No. 94-95/Kol/2016 Badu Rural Welfare Society “1. For that learned CIT(Exemption) has not considered application, facts and circumstances properly and did not provide further opportunity which he should have had he required more information and evidences. Instead of that learned CIT (Exemption) rejected application summarily, wrongly and in unjustified manner, thus the order of Ld. CIT (Exemptions) is against the law, facts and desirable practices in administration. 2. For that the Id. CIT (Exemption) has erred in rejecting the application of the assessee for registration u/s 12AA although he found application in order and assessee Society fulfills all the conditions for registration and all the objects and activities of the Society are eligible for grant of registration u/s 12AA of the Act Income Tax Act,1961 3. For that learned CIT (Exemption) was wrong in rejecting the application by taking a view that there is no means to verify the genuineness of the activities of the applicant, and that the society is not engaged in any charitable activity. 4. For that the appellant be granted Registration u/s 12AA or the CIT(Exemption) may be directed to grant such certificate as honourable Tribunal deem fit and proper.”

Approval under section 80G(5)(vi) was also denied on the same day as a consequence of rejection of the application in Form No. 10A. Aggrieved by the rejection of the approval under section 80G, the assessee carried the matter in ITA No. 95/KOL/2016 on the following grounds:- “1. For that learned CIT(Exemption) has not considered application, facts and circumstances properly and did not provide further opportunity which he should have had he required more information and evidences. Instead of that learned CIT (Exemption) rejected application summarily, wrongly and in unjustified manner, thus the order of Ld. CIT (Exemptions) is against the law, facts and desirable practices in administration. 2. For that the Ld. CIT (Exemption) has erred in rejecting the application of the assessee for approval u/s 80G (5) (vi) although he found application in order and assessee Society fulfils all the conditions for registration u/s 12AA and consequently approval u/s 80 G. 3. For that the appellant be granted approval u/s 80G (5) (vi) or the CIT (Exemption) may be directed to grant such certificate as honourable Tribunal deem fit and proper.”

3 ITA No. 94-95/Kol/2016 Badu Rural Welfare Society 07.05.2015, though the activities commenced to some extent, there were less as such it is not open for the ld. CIT to go into the quantitative aspect of the activities of the Trust. 5. Charitable objects of the trust are not disputed by the Learned CIT. It is submitted that so long as there is no dispute as to the objects of the trust, what is to be seen at the time of granting registration by the learned CIT is only whether the objects of the trust are charitable and activities carried out are genuine in nature. Reliance is placed on the decisions in Asansol Durgapur Development Authority Vs CIT ITA 756/Kol/2010, dated 24.6.2016 and M/s Broadway Charitable Trust Vs Cit ITA No 647/Kol/2013 dated 29.4.2016. In a decision rendered by a Coordinate Bench of Delhi Tribunal in the case of Dharma Sansthapak Sangh (Nivas) –vs.- CIT (2008) 118 TTJ (Del.) 823, it is held as follows: “10. The law is now well-settled that while granting the registration to the charitable institution or trust, if it is at the commencement stage, the powers of CIT, with whom the application is filed by such trust/institution, are limited to the aspect of examining that whether or not the objects of trust are charitable in nature and this well established law is supported by the decisions relied upon the learned Authorised Representative and referred to in the earlier part of the order. It has already been observed that objects of trust, which are religious, are charitable in nature. Thus, assessee also fulfils such condition. The carrying of charitable activity at the stage of commencement of institution is not relevant to decide that whether such trust/ institution is entitled for registration. So long the objects of the trust are charitable in nature, registration cannot be refused, if the trust is genuine. Therefore, we find no material on record to justify the action of the CIT vide which the assessee trust has been refused for grant of registration. We direct CIT to grant registration to the CIT (sic-assessee-trust). The appeal filed by the assessee is allowed."[Emphasis supplied] While deciding the appeal in the above case, the Tribunal took into consideration the decisions of Tribunal in the cases of Acharya Sewa Niyas Uttaranchal vs. CIT [(2006) 105 TTJ (Del) 761] and Modern Defence Shikshan Sansthan vs. C.I.T. [(2007) 108 TTJ (Jd) 732].”

4 ITA No. 94-95/Kol/2016 Badu Rural Welfare Society following the earlier decision of ITAT, Delhi in the case of Dharma Sansthapak Sangh (Nivas) (supra). The facts of this case are squarely covered by the decision cited above. Respectfully following the judicial reasoning, we direct the ld. CIT to grant registration to the assessee-Trust under section 12AA of the Act and also to grant exemption certified under section 80G of the Act. 7. In the result, both the appeals of the assessee are allowed.

Dated : 30th September, 2016

Jd.(Sr.P.S.)

Copy of the order forwarded to: