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2015 (7) TMI 235 - ITAT HYDERABAD

2015 (7) TMI 235 - ITAT HYDERABAD - [2015] 41 ITR (Trib) 176 (ITAT [Hyd]) - Expenses claimed by the assessee as application of income u/s. 11 - CIT(A) allowed claim - assessee is a company registered u/s 25 of the Companies Act and is also registered u/s 12A - Held that:- With respect to the defects pointed out by the AO that the company was not able to submit any details of the work undertaken or the amounts spent in places affected by natural calamities the assessee is unable to give a reason .....

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all decide the issue in accordance with law.

The AO also had come out with a point that the assessee company was granted registration u/s 12A of the Act, based on MOA approved by the Registrar of Companies and any change in the objects of the MOA as per the Companies Act became operative from the date of such approval given by the concerned authorities for Corporate Affairs and approval is given prospectively and therefore it is only when modified objects are intimated and approved by .....

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the objects of MOA as per the Companies Act and the date of approval by the DIT (E) of the modified objects as this fact is relevant for the implementation in pursuance of the objects and also in deciding whether expenditure is allowable when it is not in accordance with the objects mentioned in the MOA as on that date. - Decided in favour of revenue for statistical purposes. - ITA No. 1442/Hyd/2014 - Dated:- 3-7-2015 - Shri P. M. Jagtap And Smt. Asha Vijayaraghavan,JJ. For the Petitioner : Shr .....

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me Tax Act, 1961. 3. On the facts and circumstances of the case, and when the assessee has not been able to produce the bills and vouchers of expenses claimed on Medical Camps and rehabilitation consequent to floods and documentary evidences for expenditure incurred with respect to relief of poor, the Ld. CIT(A) is not justified in directing the AO to allow the expenses claimed by the assessee as application of income ujs. 11 of the Act . 2. Briefly stated, assessee is a company registered u/s 2 .....

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e, the rejection for this reason was unjustified, that the assessee had filed a fresh form No.24A to the Registrar of Companies on 26.02.2014 for amendment to the objects of the company and that the amended objects were approved on 05.03.2014. 4. Assessee also submitted that its main object was to carry on charitable activity for relief of the poor and the disabled and also carry out relief work in respect of other persons affected by natural calamities and that there was no case for undertaking .....

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he date of such approval by the authorities concerned, and it was only when the modified objects were intimated and approved by the DIT (Exemptions) and that these modified objects can be implemented or works undertaken in pursuance of such modified objects for availing exemption u/s 11. The Assessing Officer also observed that the assessee had not submitted the details or evidence for expenditure on activities undertaken in places affected by natural calamities and since the expenditure was not .....

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ork where such persons were affected by natural calamities. The AR also submitted that the activities of the assessee and the objects had been examined by the DIT(Exemptions) on two occasions in the context of the Renewal of Exemption uls 80G. The AR also submitted that it had been granted exemption u/s 11 for all preceding years from A Y 2000-01 to 2010-11 under similar facts and circumstances and the principle of consistency, as propounded in the case of Radhasoami Satsang vs. CIT [1992) 193 I .....

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ld that since there is no material change in the activities of the assessee since its inception in A.Y 2000-01 and the assessee s claim of exemption u/s 11 had been allowed under identical circumstances, directed the AO to allow the expenses as application of income in accordance with section 11. Aggrieved, the Department is in appeal before us. 9. The ld DR pointed out that the assessee has not been able to produce the bills and vouchers of expenses claimed on medical camps and rehabilitation c .....

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pect of others i.e. persons not poor or disabled it would carry out relief work where such persons are affected by natural calamities. The ld Counsel further submitted that since there was no change in facts and circumstances from August 1988-89 till 1997-98, the Revenue must follow a consistent pattern and when the Department has granted the benefit of section 10(22)A and 11 of the Act earlier, it cannot be permitted to change its opinion without any change in the circumstances. The ld Counsel .....

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ntific, commercial, engineering be imparted to the students orally or through post for advancement and propagation of education and learning. 2. Establishment, maintenance and support of libraries,' museums and reading rooms and distribution of books etc., for advancement of education and knowledge in general and for this purpose hold, arrange and organize meetings, lectures, talks, discussions, seminars, symposia, conferences, competitions, research and study visits, tours, excursions, exhi .....

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self or in co-operation with any other organizations. 5. To attain the main objects, the company shall raise funds by undertaking printing and publishing of books and other literature, through production and telecast of message oriented Audio Video cassettes, by making feature' films, documentary films, Television serials and Episodes for advancement of culture and knowledge and shall undertake export of the same to other interested institutions abroad. 12. In response to the show cause noti .....

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nse on the Application. On 6th January, 2011 the application was rejected. The application was rejected on the grounds of non-remittance of fees . 13. AO observed from the reply dated 6.3.14 that it can be inferred that the assessee company had come to know of the benefit of the object with respect to the activities in MOA in the month of May, 2009 and submitted proposal for addition of objects to the MOA through the concerned authority of Ministry of Corporate Affairs wherein the assessee compa .....

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of the AO that the assessee was not confident of the activities in relation to the objects existing and therefore had made efforts for addition of new objects. Further the AO in the course of assessment proceedings vide order sheet entry dated 08-012014, the Authorised Representative of the assessee was asked to submit the details of the places, where the activities are conducted, affected by natural calamities as per the objects. The case was adjourned to 17-01-2014. However, the AR has appeare .....

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s no other option/ reply to the said query, the assessee company had filed a fresh Form No.24A to the Registrar of the Companies on 26-02-2014 requesting for approval of amendment to the objects of the Company and the same was approved on 05-03- 2014 as per the certificate filed by the AR obtained from R& A Associates Companies Secretaries. In the show-cause letter issued, the assessee company was asked to submit all the copies relevant documents for expenditure incurred with respect to reli .....

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