IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `E', NEW DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI O. P. KANT, ACCOUNTANT MEMBER
ITA No.4756 & 4757/Del/2018
Assessment Year: N.A.
National Crime Vs. Commissioner of Income Tax
Investigation Bureau, (Exemption), New Delhi
H.No. K-44, Second Floor,
Kh. No.75/7, Amar Colony,
Nangloi, Delhi 110 041.
PAN : AABTN 6719 N
(Appellant) (Respondent)
Appellant by -None-
Respondent by Shri Manoj Kumar, CIT-D.R.
Date of hearing 22.01.2020
Date of pronouncement 27.02.2020
ORDER
PER O.P. KANT, AM:
These two appeals by the assessee are directed
against a common order dated 27/04/2018 passed by
the Learned Commissioner of Income Tax (Exemptions),
New Delhi, rejecting the registration of the assessee trust
under section 12AA of the Income Tax Act, 1961 (in short
`the Act') and 80G of the Act respectively.
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ITA Nos.4756 & 4757/Del/2018
2. The assessee has raised very detailed and lengthy
grounds of appeal. In ITA No. 4757/Del/2018 grounds
are running in 10 Para of legal size pages, which have
been further summarised in three pages. The
summarised grounds are reproduced as under:
"9. To summarize, the appellant hereby raises the following
grounds of objection:
(i) That on the basis of facts & circumstances of the case,
the erred in holding that the existence of trust in the
state of Delhi is not established.
As the existence of the trust at the address given in
application is clearly established by the fact that all the
letters sent by O/o CIT(E) are duly delivered at the given
address. The O/o CIT(E) accepted the application after
thorough scrutiny of documents submitted. Since, no
procedure for amendment of trust, enumerated by the
Indian Trust Act or the Income Tax Act, the procedure
followed by trustees by way of execution of
supplementary trust deed & board resolution should be
treated as valid. The O/o CIT(E) Lucknow referred the
said application to CIT(E), Delhi & no reply has been
given by latter.
The genuineness of the activities of the appellant trust
cannot be regarded as doubtful merely because of any
procedural lapses in shifting of its registered office.
(ii) That on the basis of facts & circumstances of the case,
the CIT(E) has erred in completely ignoring & overlooking
the submissions made by the Trust.
Most of the grounds of rejection are mere Opinion or
assumptions of Hon'ble CIT(E) or in the form of
allegations that the main purpose of the Trust is to
establish itself as a shadow of crime investigation
agency of Government, the activities undertaken by the
trust are exclusively in the domain of enforcement
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ITA Nos.4756 & 4757/Del/2018
agencies or police, the name of the trust resemble to that
of any legally authorized Govt. Agency, the trust may
create an impression that it is a law enforcing Authority,
the applicant is trying to create an impression in general
public that they are working as Govt. Agency, the logo of
appellant trust resembles with the logo of Police
Authorities, the designations created by trust creates a
false impression that the applicant is authorized by law
to function as a law enforcing authority, the potential of
misuse of registration u/s 12AA, even if the same is not
actually misused is also to be borne in mind.
However, nowhere in the order Hon'ble CIT(E) has stated
any instances where the activities carried on by trust
are found to be inappropriate, fraudulent & against any
law applicable for the time being in force. The Hon'ble
CIT(E) grossly ignored the proofs of activities submitted
by appellant which are in the form of photographs with
various Government officials, appreciation letters from
senior Government officials including the offices of Chief
Minister & Governor, newspaper articles, bills &
vouchers, etc.
With utmost respect we wish to state that the activities
of the trust should not be declared as not genuine,
merely on the basis of assumptions or opinion or
suspicion where no contradictory evidence is available
on records.
(iii) That on the basis of facts & circumstances of the case,
the CIT(E) has erred in stating that the objects of crime
investigation cannot be categorized as charitable act in
the nature of General Public Utility.
The intention of the trust is not to work on commercial
basis which is proved from the fact that the trust has not
received any consideration or reward from the
Government but has actually received donation from a
large number of persons from society who rely on the
activities carried on by the trust. The trust's activities are
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not only limited to crime investigation but also
organizing blood donation camps, distribution of food &
clothes, raising voice against corruption & crime,
organizing peaceful protest & marches, spreading
awareness about the rights & duties among the citizens
& creating an environment for cooperation among police
officials & public to reduce crime, reporting suspicious
activities, etc. All these activities are in the nature of
General Public Utility & for the gross benefit of society &
each and every person living in it irrespective of their
age, caste, religion, color & creed. The activities of the
trust are in the nature of General Public Utility & qualify
for registration u/s 12AA.
(iv) That on the basis of facts & circumstances of the case,
the CIT(E) has erred in stating that the appellant trust
has not given the true & full disclosure of the expenses
incurred by it for carrying on its activities.
The cost of website and other expenses incurred by trust
are au y accounted for & Income & Expenditure Account
& Balance Sheet are duly presented. The contention of
Hon'ble CIT(E) that most of the expenses are made in
cash & don't inspire confidence is not justifiable as the
expenses so incurred in cash were not substantial but
petty in nature & since the expenses were incurred on
activities which are undertaken in different parts of the
country, it is not possible for the appellant to have a
bank account in each & every such state & also having
regard to the amount paid, it was practically not
possible to make payments by way of any mode other
than cash.
All the expenses which were actually incurred are
accounted for & the trust has not accounted any such
expense in respect of which no actual payment has been
made. The basic condition of registration u/s 12AA is
the genuineness of the activities & not the mode of
expenses even when the proofs of actual occurrence of
such activities are available on record.
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ITA Nos.4756 & 4757/Del/2018
(v) That on the basis of facts & circumstances of the case,
the CIT(E) has erred in holding that the information given
by trust in respect of payments made to Ms. Nirmala
Kumari is invalid.
The ground of rejection that Ms. Nirmala Kumari, a
volunteer of trust to whom salary of Rs.76,594/- is paid
by trust is a Director of some other company is not
reasonable as nowhere in the order it is stated that the
salary so paid was unreasonable or excess or there
exists any material on record which contradicts the
claim of the appellant trust that she works for the
activities of the trust & has been paid for her out of
pocket expenses only.
Moreover, no opportunity of being heard was given by
Hon'ble CIT(E) in respect of this ground of rejection to
provide the necessary details & clarifications. Also, it is
not clear as to how appointment of Ms. Nirmala Kumari
as director of a company affects the genuineness of the
activities of the trust.
(vi) That on the basis of facts & circumstances of the case,
the CIT(E) has erred in referring to the provisions of
FCRA Act as grounds of rejection.
The fact that the appellant trust is not registered under
FCRA does not holds any ground as it is impossible for
appellant trust to get money in Foreign Currency in
terms of the provisions laid down by the Reserve Bank
of India & FCRA Act.
(vii) The appellant trust has carried on its activities genuinely
for the benefit of the society & all the activities of the
trust are within the scope of inclusive definition of
"Charitable Purpose" as given in section 2(15) of the
Income Tax Act, 1961 & since all the requirements of
Section 12AA are fulfilled, the trust should be
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ITA Nos.4756 & 4757/Del/2018
considered as eligible for registration u/s 12AA & 80G
of the Income Tax Act, 1961."
3. Similarly, lengthy and argumentative grounds have
been raised in ITA No. 4756/Del/2018, which are
running in four legal size pages. In the grounds, the
assessee is mainly aggrieved with the rejection of grant of
registration under section 80G of the Act.
4. At the outset we may like to mention that on the last
date of hearing i.e. 19/11/2019, the case was adjourned
to 22/01/2020 on the request of the Learned Counsel for
the assessee. Despite notifying the date of the hearing,
neither anyone attended before us on behalf of the
assessee, nor any application for adjournment of the
hearing was filed. In the facts and circumstances, we
were of the opinion that the assessee is not interested in
prosecuting its appeal and therefore, we heard the appeal
ex-parte qua the assessee.
5. The facts in brief of the case are that the assessee
trust filed applications on 17/10/2017 before the
Learned Commissioner of Income Tax (Exemption) (in
short `the Ld. CIT(E)') in Form No. 10A and 10G seeking
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ITA Nos.4756 & 4757/Del/2018
registration under section 12AA and grant of registration
under section 80G of the Act respectively. The Learned
CIT(E) call for the details of the objects of the trust and
the activities carried out by the trust. After verification of
the objects and the activities, the Learned CIT(E) found
that object of the trust are not charitable in nature and
the activities are also found to be not genuine. The
Learned CIT(E) has specifically referred to the first object
of the trust as to collect offerings, gifts or donation of all
kinds from Central Government, Semi government, all
institutions, local bodies or industrial concern, Ltd or
private locally within the Union of India or from abroad.
The Learned CIT(E) has observed that the assessee has
created a facade by way of its appearance to create an
impression in the mind of the general public as if they are
working as government agency. The Learned CIT(E) has
observed various inconsistencies in the accounts
maintained by the assessee trust. For example, not
accounting of the rent and office expenses of various
offices across the India and salary expenses to Ms.
Nirmala Kumari etc.
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ITA Nos.4756 & 4757/Del/2018
6. Finally, the Learned CIT(E) rejected the registration
under section 12AA and under section 80G of the Act
observing as under:
"8. As discussed in detail above, the proposed activities
cannot be termed to be charitable in nature. Here it is also to
be mentioned that the applicant intend to get funds from
abroad but no FCRA permission has been shown. The
existence of applicant on the given address is not
substantiated to the satisfaction. The expenses are not found
duly accounted for and the applicant failed to furnish
explanation in this regard. Most of the expenses are made in
cash and their Bills and Vouchers don't inspire confidence.
The so called employee of the applicant is a director of M/s
NCB, News Network Pvt Ltd, a Pvt Ltd Company along with
the managing Trustee of the applicant, Mr. Suresh Kumar
Shukla. Therefore, neither objects of the Trust nor are
activities of the trust substantiated to be charitable in nature.
Accordingly, the application filed by the applicant for grant of
registration u/s 12A is rejected.
9. Since the applicant is not granted registration u/s
12AA(a) of the Income Tax Act, 1961, its application if Form
No.10G seeking exemption u/s 80G is also hereby rejected as
charitable activities are not established."
7. Before us, the assessee has filed a paper book
containing pages 1 to 37, which consist of copy of
applications in form No. 10A and 10G and other
submissions filed before the Ld CIT(E ). The assessee has
also filed an application for additional evidence having
pages 1-12 consisting of a copy of the Emblems and
Names (Prevention of Improper Use) Act, 1950, list of tax
exempted institution registered under section 12A or 80G
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or both as per Income-tax website, definition of Director
General as per Oxford dictionary, Cambridge English
dictionary and Wikipedia, and the screenshot from
appellant's website.
8. We have heard submission of the Learned DR and
perused the material on record. We find from the pages 3
to 24 of the paper book, which is a copy of the trust deed
of the assessee trust, that it's objects have been
bifurcated in the nature of the education, relief to poors,
medical relief, and object of general public utility. The
first object of the assessee appearing in clause 5(a) is
reproduced as under:
"a. To collect offerings, gift or donations of all kinds,
whether from Government, Central or Semi-Government, all
institutions, local bodies or industrial concern, limited or
private, locally within the Union of India or froma broad,
which will form part of the funds, available to the Trust
whether the bodies are located in the union of India or abroad
and Anti Corruption Help govt. of India & State Govt.,
Electronic Media, Print Media & Social work card. Issue all
Department Crime & corruption Investigation Bearou take
immediately actions, against corruption, and illegal works
under Indian Penal Act."
9. We are agreed with the finding of the Learned CIT(E)
that above object cannot be called as charitable in
nature. From other objects and activities, it appears that
the assessee is running a crime investigating agency
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parallel to the investigative agencies of the state and
central government. The Learned CIT(E) has also pointed
out following inconsistencies or discrepancies in the
accounts and the activities of the assessee. The relevant
finding of the Learned CIT(E) are reproduced as under:
"4. Many of the objects including the above mentioned in the
trust deed indicate that the main purpose of the Trust is to
establish itself as a shadow or parallel of the crime
investigation agencies by Govt and the Police of the country.
These activities which are exclusively in the domain of
enforcement agencies or police by virtue of powers conferred
by the law or constitution of India are claimed to be carried
out by the applicant where no legal authority is displayed. It
is also noted that there is an uncanny resemblance of the
name of the applicant to any legally authorized Govt Agency
to investigate crime. To the minds of unsuspecting general
public the name of the applicant may create an impression
that it is a law enforcing Authority acting on behalf of the
Govt. The applicant has tried its best on its part to create such
a façade by way of its appearance so as to create an
impression in the mind of general public a if they are working
as Govt. Agency. This is apparent from the website
www.ncib.in public as if they are working as Govt. Agency.
This is apparent from the website www.ncib.in
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From the above website, it may be seen that the logo of
the applicant has also clear resemblance with the logo of
a
Police Authorities. The posts created by the applicant as
shown on the website is Director General, Asst. Director
General, Zonal Director, State director etc. This also creates a
false impression that the applicant is authorized by law to
function as a Law Enforcing Authority. It is stated that the
egistration of a charitable institutions is not an idle formality,
registration
it is necessary to come to the conclusion on the basis of
documents information etc whether the institution deserves
registration u/s 12AA of the Act. The potential of misuse, even
ame is not actually misused is also be borne in mind
if the same
while granting registration u/s 12A of the Act. Moreover, the
above objects of the applicant cannot be categorized as
charitable activity within the meaning of general public utility
section
as defined in sectio n 2(15) of the Act. These types of activities
cannot be camouflaged as charitable activity in the nature of
general public utility.
5. The website of the applicant also shows that it has got 8
offices across the country. the name and place of its
registered office and the office which it is presently claimed to
be the registered office is not show in the website. The offices
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ITA Nos.4756 & 4757/Del/2018
are located at Delhi (some other address), Gujarat, Bihar,
Ahmednagar, Bangalore, Rajasthan, Jharkhand & madhya
Pradesh. From photographs of some of the offices shown in
the website it is seen that these are well maintained plush
offices with split air conditions and glass doors baring logo of
the applicant. Further there are video gallery/ photographs of
various events conducted by the applicant claiming to the
police-public partnership program. On 20.04.2018, the AR of
the applicant, Mr Ankit Gupta was shown the website of the
NCIB. It was asked that the cost of website creation, which
appears to be a costly website, does not appear in the
balance sheet. Further there are several plush branch offices
of the applicant located across the country. Their cost, cost of
events, rentals, furniture and fixtures are not found shown in
the balance sheet. The AR of the applicant was asked to
explain the same by 24.04.2018. However, no reply has been
received from the applicant till the date of passing of this
order. As such the applicant has failed to justify the source of
the expenses incurred by it in establishing the offices,
conducting its activities and various events. Thus not only the
genuineness of the accounts submitted by the applicant
during the course of the proceedings but also the genuineness
of the activities of the Trust remains un-established.
6. In a statement of financial assistance given to volunteer
as salary filed by applicant during the course of proceedings,
it is seen that the applicant has made payment of
Rs.76,594/- to Ms. Nirmala Kuamri. In the footnote it is
mentioned that "the above amount is in the nature of financial
assistance given to volunteers who belong to poor and needy
family. All these persons have no source of living but as a
result of atrocities which they or their family members had
faced, they are self-motivated to work towards the upliftment
and betterment of the society. The Trust gives them the
financial assistance to cover their conveyance expenses,
footing and other necessary expenses."
However on inquiry from Internet, it is found that Mr Suresh
Kumar Shukla and Ms Nirmala Kumari are Directors in a Pvt
Ltd company namely NCIB News Network Pvt Ltd. As such
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ITA Nos.4756 & 4757/Del/2018
the statement made by the applicant that the payment is
made to a volunteer as salary to persons who have no source
of living is incorrect."
10. In view of the above facts and circumstances, we do
not find any merit in the grounds raised by the assessee
and accordingly we uphold the rejection of applications
under section 12AA and 80G of the Act.
11. In the result, both appeals of the assessee are
dismissed.
Order pronounced in the open court on 27th February, 2020
Sd/- Sd/-
(BHAVNESH SAINI) (O.P. KANT)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 27th February, 2020
Priti/-(D.T.D.S.)
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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ITA Nos.4756 & 4757/Del/2018
Sl. No. Particulars Date
1. Date of dictation (Order drafted through Dragon software): 26.02.2020
2. Date on which the draft of order is placed before the 26.02.2020
Dictating Member:
3. Date on which the draft of order is placed before the 27.02.2020
other Member:
4. Date on which the approved draft of order comes to 27.02.2020
the Sr. PS/PS:
5. Date of which the fair order is placed before the 27.02.2020
Dictating Member for pronouncement:
6. Date on which the final order received after having 27.02.2020
been singed/pronounced by the Members:
7. Date on which the final order is uploaded on the 27.02.2020
website of ITAT:
8. Date on which the file goes to the Bench Clerk 27.02.2020
9. Date on which files goes to the Head Clerk:
10. Date on which file goes to the Assistant Registrar for
signature on the order:
11. Date of dispatch of order:
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