IN THE ITAT AMRITSAR BENCH
Sukhmani Society For Citizen Services
Versus
Commissioner of Income-tax, Bathinda
IT APPEAL NO. 551 (ASR.) OF 2011
SEPTEMBER 26, 2012
ORDER
1. The Sukhmani Society for Citizen Services (Suwidha Centre) D.C. Office, Distt. Administrative Complex Mansa (hereinafter called the ‘Society’) filed an application for registration under section 12AA of the Income-tax Act, 1961 (In short the ‘Act’), on 30.03.2011 in the prescribed form to the Ld. Commissioner of Income Tax, Bathinda. In order to verify the genuineness of the activities of the assessee-society, the ld. CIT, Bathinda called the Society along with complete set of books of account and other relevant documents for the last three years for 21.04.2011. In compliance of the same, the authorised representative of the Society attended the proceedings and furnished the requisite information. The application of the Society was referred to the ITO Ward 1(4), Mansa, to verify the genuineness of the activities of the Society, in compliance of the same, the Assessing Office vide his report dated 05.09.2011 stated that the Society has failed to produce the books of account in absence of which, it is not possible to verify the genuineness of activities of the Society and keeping in view all these facts, the AO did not recommend the case of the assessee for registration under section 12AA of the Act. The Jt. C.I.T. Range-1, also endorsed the findings of the A.O. The Ld. CIT Bathinda fixed the case for hearing in his office on 27.03.2011 and authorised representative of the Society attended the proceedings and also filed the requisite information alongwith the details of activities and other documents.
2. The Society is registered with the Additional Registrar of Societies, Mansa vide No.44 of 22.03.2004. The aims and objects of the Societies are contained in Memorandum of Association of the Society. After perusing the objects and functions of the Society, the Ld. CIT Bathinda is of the view that the activities of the Society are in commercial nature rather than charitable in nature. The Ld. CIT, Bathinda has also perused the income and expenditure of the society which reveals that the Society has been earning huge profit and, therefore, he was of the view that the activities of the Society are of commercial in nature and aimed at deriving profit and not for charitable purpose.
3. The Ld. CIT, Bathinda confronted the above said facts to the Society and the Society contended that the main object of the Society is to provide citizen’s services to the common people for their convenience and the Society also explained that the Society receives application from the common citizen for various services on behalf of the departments of State Govt, forwards the same to the concerned department and deliver back the same to the citizen within a specified time frame. The Society is charging prescribed fee from the citizen for providing services. The Ld. CIT, Bathinda perused the chart produced by the Society showing charges received by the Society and he is of the view that the Society charges as much as Rs.1000/- for issuing NOC for petrol pump, Rs.500 for registration of marriage, Rs.500 for NOC on building plan and so on. He is also of the view that these charges are in addition to the statutory fees charged by the State Govt. Departments. These charges/fees are charged by the Society for providing alleged citizen services. The Ld. CIT, Bathinda finally held that the activity of the Society is in the nature of trading, commerce or business and activity of rendering service in relation to the trade, commerce or business for a fee. The Society provides certain services to the common man and charges fee for the same and this act of the Society hardly go to establish any charitable purpose. Finally, the Ld. CIT also held that the Society is doing all work and rendering services to the citizens which the State Govt. was supposed to perform without charging any such additional fees. Therefore, he is satisfied that the activities of the Society/Institutions not charitable in nature within the meaning of proviso to section 2(15) of the Act and it does not qualify to be treated as a charitable institution. Hence, he rejected the request of the assessee for grant of registration under section 12AA of the Act, vide impugned order dated 26.09.2011.
4. The assessee is aggrieved by the impugned order dated 26.09.2011 passed by the ld. CIT, Bathinda and filed the present appeal.
5. The Ld. counsel for the assessee stated that the Society was registered on 22.0.30004 with the Additional Registrar Office, Mansa and formation of the Society was on initiation and instructions of Government of Punjab to implement ‘Suwidha’ (Single User’s Friendly Window Disposal helpline for Applicants) and is a project of the State Government. The State Govt. had instructed all the District Offices to form Societies on a similar pattern, with official website SUWIDHA.nic.in. The main object of the Society is to provide Single Window Services to the Citizens against a minimum fees for their services and to provide services within scheduled time. He further stated that the organisation of the Society was framed and Deputy Commissioner, Mansa is an Ex-officio member along with various other Additional Commissioners as well as Sub-Divisional Magistrates and other Officers of the District Mansa, as the office bearers for the completion of the Society. He further stated that the D.C. Mansa is the Chairman of the present Society and the Additional Deputy Commissioner (General) is a Member/Secretary, Additional Deputy Commissioner (Development) Member, SDM, Mansa and Executive Engineer, PWD, B&R, Mansa, are the Members of the Society. He stated that the motive of the society is to provide services from a single window, taking up minimum possible charges as per chart of facilitation charges, which are fixed by the State Government. He has also produced copy of chart showing service-wise charges taken by the Society from the Citizens for rendering its services. He has also drew our attention towards the object of the Society which are mentioned in the Memorandum of Association i.e. about 29 objects. He has also drew our attention towards present Board of Governors and stated that almost all the Board Members are high officials of the Punjab Government. Finally, he stated that the Society is working for charitable purposes as well as for public utility purposes and he requested that the Society deserves registration under section 12AA of the Act. But the Ld. CIT, Bhatinda has wrongly rejected the request of the assessee vide impugned order dated 26.09.2011. In support of his contention he has placed reliance on the following decisions:
(i) CIT v. Haryana Warehousing Corpn. [2011] 196 Taxman 260.
(ii) CIT v. Haryana Building & Other Construction Works Welfare Board [2011] 196 Taxman 255
(iii) CIT v. Gujarat Maritime Board [2007] 289 ITR 139 (Guj.)
(iv) CIT v. Aggarwal Sabha Maharaja Aggarsain Bhawan [2011] 198 Taxmann 172
(v) Sanjeevamma Hanuman the Gowda Charitable Trust v. DIT (Exemptions) [2006] 285 ITR 327
(vi) Bar Council of Maharashtra v. CIT [1980] 126 ITR 27 (Bom.)
(vii) CIT v. Dredging Corpn. of India [1988] 174 ITR 682
6. On the contrary, the Ld. DR, Sh. Amrik Chand, relied upon the order passed by the Ld. CIT, Bathinda and stated that the Society has not done any charitable as well as public utility work till date. The Ld. DR further stated that the assessee is charging a very huge fees from the public for rendering its services to the Society, which is in addition to the charges levied by the Punjab Government and is additional burden upon the common man. Lastly, he stated that the activities of the Society are not charitable in nature within the meaning of proviso to section 2(15) of the Act, because the assessee is doing its business and gaining a huge profit by doing the work of public and has not done any single charitable work till date. Therefore, the request of the assessee for registration of the Society u/s 12AA of the Act, has rightly been rejected by the Ld. CIT, Bathinda.
7. We have heard both the parties and perused the relevant records available with us. The Ld. counsel for the assessee filed a chart of services and charges against the services rendered by the Society that are about 36 in number. For the sake of convenience, we reproduce the 17 services rendered by the Society and the charges taken by the Society, which are as under:
