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TMI Blog2012 (11) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... are not entitled any income of right to any property of the society on its dissolution. This being so the other societies are no different from the assessee society and the Department has not made a case as to how the common management members would derive benefit from the monies spent by the Assessee society for maintenance of the forest lands of the other societies - individual members of the William Frederick Durr family, who are Executive Committee members of the charitable society, are not the beneficiaries of this valid application of monies by the assessee (DVA) society - application of income by the assessee (DVA) did not violate the provisions of S.13(1)(c) and hence the assessee’s claim u/S. 11 is upheld - In the result, the appeal of the Department is dismissed. - ITA No. 1512/HYD/2011 - - - Dated:- 27-7-2012 - SMT. ASHA VIJAYARAGHAVAN AND SHRI D. KARUNAKARA RAO, JJ. Appellant by : Shri V. Srinivas Respondent by : Shri K.C. Devdas ORDER PER ASHA VIJAYARAGHAVAN, J.M.: This appeal filed by the Revenue is directed against the order of CIT(A), Guntur, dated 15/03/2011 for the assessment 2007-08. 2. Briefly the facts of the case are tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the primary objective of developing world class Arboretum and all the 9 societies have similar objects. ii) A donation of $5,00,000 equivalent to Rs. 2,24,07,392/- was received with a specific direction to spend on the infrastructural development of land measuring 450 acres. iii) The donation was received with prior permission of Ministry of Home Affairs and is regulated under Foreign Contribution (Registration) Act and its utilization is also monitored by Ministry of Home Affairs. iv) The assessee submitted that no part of the income enures to the assessee or any part of property of the trust is used/applied directly or indirectly for the benefit of any person referred to in sub-section 13(3) in order to hold that there is violation of provisions of section 13(1)(c) of the Act. v) In all the 9 societies, every society s executive committee comprises of seven members out of which only two family members of William Federick Durr or part of the executive committee. Hence, there is no family control as majority of votes cannot be exercised by the family members in any of the executive committees. Charitable societies are managed by common members, in order to facilitate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the purpose of section 11 and 12 of the Act. 4. The CIT(A) failed to appreciate the spirit of the section 13(1)(c) despite the facts that the control of the societies vests with one family which has substantial interest in the non-registered arboretums. 7. The learned counsel for the assessee Shri K.C. Devdas reiterated the contentions as made before the CIT(A). To put his contentions in a nutshell, the funds of the assessee society were not utilized in a manner to attract the provisions of section 13(1)(c) i.e. no benefit has been enjoyed by any member. The funds were utilized only for the use of JCP Machine for developing the 450 acres. The learned counsel for the assessee took us through the relevant pages of paper book and pointed out the revised return of income filed at page 318 read with 320 page. The learned counsel for the assessee highlighted the reply to the remand report at pages 233, 235 238. 8. The gist of the submissions made by the learned DR are as under:- i) the assessee society has spent monies on other societies which do not have 12A registration. ii) As per the objects at page 279 does not contain to carry on the activity of spending on other so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutions committed to the betterment of society. m) To contribute for environmental welfare activities. n) To bring about social awareness of various social issues amongst general public and donate to social welfare activities and programmes. o) To create employment opportunities to the rural poor people. p) To promote rural construction, relief and rehabilitation programme. q) To promote the welfare of women and children. r) To promote educational tours for students and delegates from different universities of India and abroad. s) To obtain grants, donations, funds, and loans from the sate central government, non-governmental donors, other financial institutions and individuals. t) To work for advancement and propagation of education in rural and underdeveloped areas. u) To start to make rural people self-sufficient in economic conditions, sanitation, watersheds, and wasteland developments. v) To perform all other acts which are incidental or conducive to the attainment of the objects of the society. 11. This has been accepted as charitable objects by the Commissioner and the Assessee was granted registration as a Charitable Institution under the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of any income of the trust for any direct or indirect benefit of the any specified persons. The provisions of S.13(1)(c) read as follows: Section 13(1) ..... (c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof (i) if such trust or institution has been created or established after the commencement of this Act and under the terms of the trust or the rules governing the institution, any part of such income enures, or (ii) if any part of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub-section (3) : ..... ..... (3) The persons referred to in clause (c) of subsection (1) and sub-section (2) are the following, namely : (a) the author of the trust or the founder of the institution; (b) any person who has made a substantial contribution to the trust or institution, [that is to say, any person whose total contribution up to the end of the relevant previous year exceeds [fifty] thousand rupees]; (c) where such author, founder o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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