M/s Indian Society of the Church Jesus Christ of Latter Saints, New Delhi V. DCIT (E), New Delhi

CO 81/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3711 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEETA SINGH
• Assessee Lawyers: C S AGGARWAL
• Keywords: Charitable institution; Benefit of exemption
• Section: 12AA; 6; 12; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH A NEW DELHI BEFORE SRI R.K.PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO.1387/DEL/2015 A.Y. 2010-11 DY.CIT (E) VS. INDIAN SOCIETY OF THE CHURCH JESUS CHRIST CIRCLE 2(1) OF LATTER SAINTS NEW DELHI C 37, CONNAUGHT PLACE NEW DELHI 110 001 PAN: AAATT0672R & CROSS OBJECTION NO. 297/DEL/2015 (IN ITA 1387/DEL/15) ASSESSMENT YEAR 2010-11 INDIAN SOCIETY OF THE CHURCH JESUS VS. DY.CIT(E) CHRIST OF LATTER SAINTS CIRCLE 2(1) NEW DELHI NEW DELHI AND ITA NO.6628/DEL/2015 A.Y. 2011-12 DY.CIT (E) VS. INDIAN SOCIETY OF THE CHURCH JESUS CHRIST CIRCLE 2(1) OF LATTER SAINTS NEW DELHI C 37, CONNAUGHT PLACE NEW DELHI 110 001 PAN: AAATT0672R & CROSS OBJECTION NO. 81/DEL/2016 (IN ITA 6628/DEL/15) ASSESSMENT YEAR 2011-12 INDIAN SOCIETY OF THE CHURCH JESUS VS. DY.CIT(E) CHRIST OF LATTER SAINTS CIRCLE 2(1) NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) REVENUE BY : SMT. MEETA SINGH, CIT, DR ASSESSEE BY: SH. C.S.AGGARWAL, SR.ADV. DATE OF HEARING: 05.04 . 2018 DATE OF PRONOUNCEMENT : 10.04.2018 2 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER THE PRESENT CROSS APPEALS HAVE BEEN FILED BY REVEN UE AS WELL AS ASSESSEE AGAINST ORDER DATED 22/12/14 AND 14/09/15 PASSED BY LD.CIT(A)-40 FOR ASSESSMENT YEAR 2010-11 AND 2011-12 ON THE FOLL OWING GROUNDS OF APPEAL: ASSESSMENT YEAR 2010-11 ITA NO. 1387/DEL/2015 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPTION TO THE ASSESSEE GIVEN THE ACTIVITIES OF THE ASSESSEE ARE PRIMARILY OF RELIGIO US NATURE AND IN CLEAR VIOLATION OF SECTION 3(1)(B) OF THE I.T.ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE EXPENDITURE OF RS.13,86,3 9,904/- TO THE ASSESSEE, WHICH WAS ASSESSED AS THE INCOME OF ASSESSEE. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. CO NO. 297/DEL/2015 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN NOT HOLDING THAT THE OBJECTS AND THE ACTIVITIES OF INDI AN SOCIETY OF THE CHURCH OF JESUS CHRIST OF LATTER -DAY SAINTS ('THE SOCIETY') ARE FOR THE BENEFIT OF THE GENERAL PUBLIC AT LARGE, AND THAT IT HAS NOT BEEN CREATED O R ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN FAILING TO APPRECIATE THAT THE HON'BLE TRIBUNAL HAS HELD IN ITA O. 2240 / DEL/2013 FOR THE ASSESSMENT YEAR 2009-10 THAT THE O BJECTS OF THE SOCIETY ARE BOTH RELIGIOUS AND CHARITABLE AND THAT ITS ACTIVITI ES ARE NOT FOR THE BENEFIT FOR ANY PARTICULAR RELIGIOUS COMMUNITY AND CASTE, BUT FOR T HE BENEFIT OF THE GENERAL PUBLIC. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN NOT HOLDING THAT THE ADI (E) WAS NOT JUSTIFIED IN DENYI NG DEDUCTION OF THE AGGREGATE 3 EXPENDITURE OF RS.11,99,39,107 INCURRED BY THE SOCI ETY FOR PURPOSES OF ITS OBJECTS AND ACTIVITIES. ASSESSMENT YEAR 2011-12 ITA NO. 6625/DEL/2015 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPTION TO THE ASSESSEE GIVEN THE ACTIVITIES OF THE ASSESSEE ARE PRIMARILY OF RELIGIO US NATURE AND IN CLEAR VIOLATION OF SECTION 3(1)(B) OF THE I.T.ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE EXPENDITURE OF RS.15,88,2 0,462/- TO THE ASSESSEE, WHICH WAS ASSESSED AS THE INCOME OF ASSESSEE. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. CO NO. 81/DEL/2016 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED IN NOT HOLDING THAT THE OBJECTS AND THE ACTIVITIES OF INDI AN SOCIETY OF THE CHURCH OF JESUS CHRIST OF LATTER -DAY SAINTS ('THE SOCIETY') ARE FOR THE BENEFIT OF THE GENERAL PUBLIC AT LARGE, AND THAT IT HAS NOT BEEN CREATED O R ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN FAILING TO APPRECIATE THAT THE HON'BLE TRIBUNAL HAS HELD IN ITA O. 2240/ DEL/2013 FOR THE ASSESSMENT YEAR 2009-10 THAT THE O BJECTS OF THE SOCIETY ARE BOTH RELIGIOUS AND CHARITABLE AND THAT ITS ACTIVITI ES ARE NOT FOR THE BENEFIT FOR ANY PARTICULAR RELIGIOUS COMMUNITY AND CASTE, BUT FOR T HE BENEFIT OF THE GENERAL PUBLIC. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN NOT HOLDING THAT THE ADI (E) WAS NOT JUSTIFIED IN DENYI NG DEDUCTION OF THE AGGREGATE EXPENDITURE OF RS.15,88,20,462/- INCURRED BY THE S OCIETY FOR PURPOSES OF ITS OBJECTS AND ACTIVITIES. 4 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE WAS REGISTERED IN 1982 UNDER THE SOCIETIES REGISTRATION ACT AND WAS GRANTED A CERTIFICATE OF REGISTRATION BY LD.CIT, UN DER SECTION 12 A OF THE INCOME TAX ACT, 1961(FOR SHORT THE ACT, UNLESS OT HERWISE SPECIFIED). THE ASSESSEE WAS ALSO GRANTED BENEFIT OF EXEMPTION UNDE R SECTION 11 OF THE ACT FOR ALL ASSESSMENT YEARS, PRECEDING TO ASSESSMENT YEAR 2009-10. FOR YEARS UNDER CONSIDERATION, SOCIETY WAS DENIED EXEMPTION ON THE GROUND THAT IT IS A CHARITABLE ORGANIZATION, AND ITS ACTIVITIES ARE NOT FOR BENEFIT OF GENERAL PUBLIC AT LARGE, BUT FOR THE BENEFIT OF A PARTICULAR RELIGIOU S COMMUNITY, AND THEREFORE LD.AO WAS OF THE OPINION THAT ASSESSEE IS NOT ENTIT LED TO CLAIM EXEMPTION UNDER SECTION 13 (1) (B) OF THE ACT. 3. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A), AND ORDER PASSED BY LD. AO WAS REVERSED. 4. AGGRIEVED BY ORDER OF LD.CIT (A), REVENUE IS IN APPEAL BEFORE US FOR BOTH THE ASSESSMENT YEARS. IN CROSS OBJECTION, ASSESSEE SUPPORTS ORDER OF LD. CIT (A). 5. LD. DR SUPPORTED THE OBSERVATIONS OF LD. AO. 6. LD. COUNSEL SUBMITTED THAT ASSESSING OFFICER DI SALLOWED THE CLAIM OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 AND THIS ISSUE TRAVELLED TILL THIS TRIBUNAL. IT HAS BEEN SUBMITTED THAT THIS TRIBUNAL VIDE ORDER DATED 21/02/14 PASSED IN ITA NO. 2240/DEL/2013 DEALT WITH THIS ISS UE AS UNDER: 14. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH T HE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE APPEA L WAS EARLIER HEARD ON 21.10.2013 BUT CERTAIN CLARIFICATIONS WERE REQUIRED , THEREFORE, IT WAS FIXED FOR CLARIFICATIONS AND FINALLY IT WAS HEARD ON 27.1.201 4. THE FIRST QUESTION TO BE DECIDED BY US IS AS TO WHETHER THE SOCIETY WAS ELI GIBLE FOR EXEMPTION U/S 11 OF ACT OR NOT. WE FIND THAT ASSESSEE IS A CHARITABLE SOCIETY REGISTERED U/S 12AA OF THE ACT AND BENEFIT OF SECTION 12AA HAS NOT BEEN W ITHDRAWN. THE SOCIETY HAS BEEN CONTINUOUSLY ENJOYING EXEMPTION U/S 11 OF THE ACT AND THERE IS NO CHANGE IN THE MAIN OBJECTS OF THE SOCIETY. THE ONLY CHANG E IS IN THE ARTICLE OF ASSOCIATION WHICH CANNOT BE SAID TO BE OBJECTS OF THE SOCIETY A S ARTICLE OF ASSOCIATION CONTAINS THE INTERNAL PROCEDURE AND POWERS AND FUNCTIONS OF VARIOUS FUNCTIONARIES OF SOCIETY TO ACHIEVE THE MAIN OBJECT OF THE SOCIETY. WE FURTHER OBSERVE THAT THE PROVISIONS OF SECTION 13(1)(B) READS AS UNDER:- 5 3(1) NOTHING CONTAINED IN SECTION 11 OR SECTION 12 SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE P ERSON IN RECEIPT THEREOF: (A) XXX (B) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSES OR A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER THE COMMENCEMENT OF TH IS ACT, ANY INCOME THEREOF, IF THE TRUST OR INSTITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. 15. FROM THE ABOVE PROVISIONS OF CLAUSE 13(1)(B) , IT IS APPARENT THAT SECTION 13(1)(B) IS APPLICABLE ONLY IN THE CASE OF A TRUST FOR CHARITABLE PURPOSES OR CHARITABLE INSTITUTION AND THERE IS NO MENTION OF W ORD RELIGIOUS IN THIS SECTION. HAD THE LEGISLATURE INTENDED TO INCLUDE RELIGIOUS SOCIETY ALSO IN THE MISCHIEF OF SECTION 13(1 )(B) THE WORDING WOULD HAVE BEEN DIFFE RENT AS IN THE NEXT CLAUSE I.E. 13(1 )(C) WHICH IS APPLICABLE FOR RELIGIOUS AND CHA RITABLE SOCIETIES. 13(1)( C) READS AS UNDER: 'IN THE CASE OF A TRUST FOR CHARITABLE OR RELIGIOUS PURPOSES OR CHARITABLE OR RELIGIOUS INSTITUTION ANY INCOME THEREOF. XXXXXXXXXXX XXXXXXXXXXX THEREFORE, THERE IS A CLEAR DISTINCTION OF WORDS AS CONTAINED IN CLAUSE 13(1 )(B) AND 13(1)( C), CLAUSE 13(1)( B) APPLIES T O SOCIETIES ENGAGED IN CHARITABLE PURPOSES WHEREAS CLAUSE 13(1)( C) APPLIE S TO SOCIETIES ENGAGED IN CHARITABLE AS WELL AS RELIGIOUS ACTIVITI ES, ' THE CASE LAWS RELIED UPON BY LD AR WITH THE PROPOSI TION THAT CLAUSE 13(1)(B) IS APPLICABLE ONLY TO CHARITABLE INSTITUT ION ALSO HELP THE ASSESSEE. FOR EXAMPLE THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V. CHANDRA CHARITABLE TRUST REPORTED AT 294 ITR 86 HELD AS UNDER:- 'THE QUESTION THAT SHOULD BE THE PRINCIPLE ADOPTED AND WHETHER JAINISM IS A LIFE STYLE OR RELIGION WOULD LOOSE MUCH OF ITS IMPORTANC E IN VIEW OF THE JUDGMENT OF THIS COURT IN THE MATTER OF CIT V. BARKATE SAIFIYAH SOCIETY (1995) 213 ITR 492. IF JAINISM IS ACCEPTED TO BE A RELIGION AND FROM- THE CONVENTS OF THE TRUST DEED IT CAN BE SPELT OUT THAT NOT ONLY TO PROPAGATE JAINISM , OR HELP AND ASSIST MAINTENANCE OF THE TEMPLE, SADHUS, SADHVIS, SHRAVIK S AND SHRAVKS YET OTHER GOALS ARE SET IN THE TRUST DEED, THEN THE TRUST WOU LD BECOME A CHARITABLE TRUST SO 6 ALSO A RELIGIOUS TRUST OR IT CAN BE ADDRESSED AS A CHARITABLE RELIGIOUS TRUST AND IF THAT BE SO SECTION 13(1 )(B) WOULD NOT BE APPLICAB LE,' 17. MOREOVER WE OBSERVE THAT IN THE A.Y. 2007-08 T HE ISSUE OF EXEMPTION U/S 11 ALONG WITH VIOLATION OF SECTION 13(1)(B) WAS EXAMIN ED BY THE ASSESSING OFFICER AND AFTER DETAILED EXAMINATION THE EXEMPTION WAS AL LOWED TO THE ASSESSEE SOCIETY. WE FIND THAT DURING ASSESSMENT PROCEEDINGS IN ASSESSMENT YEAR 2007- 08 THE ISSUE OF VIOLATION OF PROVISIONS OF SECTION 13(1)(B) WAS EXAMINED BY ASSESSING OFFICER AS IS APPARENT FROM PAGE 85 TO 10 4 OF PAPER BOOK WHERE A COPY OF NOTICE FOR VIOLATION OF PROVISIONS OF SECTI ON 13( 1 )(B) ALONG WITH REPLY OF ASSESSEE AS WELL AS CONSEQUENT ASSESSMENT ORDER IS PLACED. IN THIS YEAR, THE ASSESSING OFFICER HAS NOT DENIED EXEMPTION U/S 11 A ND HAD ACCEPTED THE CONTENTIONS OF ASSESSEE. WE FURTHER OBSERVE THAT AS SESSEE HAS BEEN AVAILING THIS EXEMPTION FOR THE LAST SO MANY YEARS AND THE JUDGME NT OF HON'BLE APEX COURT IN THE CASE OF CIT V. EXCEL INDUSTRIES LTD., REPORTED IN 358 ITR 295 IS SQUARELY APPLICABLE TO THE ASSESSEE AND THEREFORE AFTER HAVI NG ALLOWED THE , EXEMPTION SINCE INCEPTION AND MORE PARTICULARLY AFTER HAVING ACCEPTED THE CONTENTIONS OF ASSESSEE WITH RESPECT TO VIOLATION OF PROVISIONS OF SECTION 13(1)(B) IN THE ASSESSMENT YEAR 2007-08 YEAR, THE REVENUE IS NOT JU STIFIED IN TAKING CONTRARY STAND WHEN THE FACTS AND CIRCUMSTANCES REMAINED SAM E. IN VIEW OF THE ABOVE, ON THE BASIS OF CONSISTENCY A LSO, THE STAND OF REVENUE IS NOT JUSTIFIED. 18. AS REGARDS RELIANCE LAID DOWN BY THE ASSESSING OFFICER ON THE CASE LAW OF MP SHANTI VERMA JAIN (SUPRA) AND GHULAM MOHIDIN TRUST THESE ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THE CASE LAW OF MP SHANTI VERMA JAIN, THE HON'BLE SUPREME COURT HAD HELD THAT THE OBJECTS OF ASSESSEE TRUST WERE MEANT FOR. PROPAGATION OF THE JAIN RELIG ION AND RENDERING HELP TO THE FOLLOWERS OF JAIN RELIGION. IN THAT CASE EVEN THE M EDICAL AID AND SIMILAR FACILITIES WERE TO BE RENDERED TO PERSONS DEVOTED TO JAIN RELI GION AND THE MEDICAL AID COULD BE GIVEN TO NON JAINS ONLY IF ANY MEMBER OF THE FAM ILIES MANAGING THE TRUST SHOWED SYMPATHY AND WAS INTERESTED IN HIS TREATMENT . THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE DIFFERENT AS THE MAIN OBJECTS OF THE SOCIETY 7 AS CONTAINED IN MEMORANDUM OF ASSOCIATION PLACED AT PAPER BOOK PAGES ,14 & 15 DO NOT CONTAIN ANY RESTRICTION OF THIS NATURE. 19. IN THE OTHER CASE LAW OF GHULAM MOHIDIN TRUST, THE TRUSTEES WERE GIVEN UNCONTROLLED DISCRETION TO SPEND THE WHOLE OF THE T RUST FUNDS FOR ANY OF THE NON- CHARITABLE PURPOSES OF THE TRUST WHEREAS IN THE PRE SENT CASE NO SUCH UN- CONTROLLED DISCRETION TO SPEND FOR NON CHARITABLE P URPOSES IS AVAILABLE AND AS PER ARTICLE 10 OF MOA THE INCOME OF THE SOCIETY IS TO B E APPLIED SOLELY TOWARDS THE PROMOTION OF OBJECTS OF SOCIETY. THE COPY OF ARTICL E 10 IS PLACED AT PAPER BOOK PAGE 15. THEREFORE, KEEPING IN VIEW ALL THE FACTS A ND CIRCUMSTANCES, WE FIND THAT THE PROVISIONS OF SEC. 13(1 )(B) ARE NOT APPLICABLE TO THE ASSESSEE. AS REGARDS DISALLOWANCE OF EXPENDITURE OF ~.8,74,33 ,077/- WE FIND THAT ACTION OF LD CIT(A) IN CONFIRMING THE ACTION OF ASSESSING OFF ICER IS NOT JUSTIFIED AT ALL AS THE EXPENSES WERE INCURRED FOR THE FULFILLMENT OF T HE OBJECTS OF THE SOCIETY AND MOREOVER FOR THE PURPOSE OF DISALLOWING CLAIM U/S 1 1 THE INCOME AS UNDERSTOOD IN THE COMMERCIAL SENSE HAS TO BE CONSIDERED AND NO T THE GROSS RECEIPTS. THE CASE LAW REPORTED AT 201 ITR 564 RELATES TO THE HIN DUSTAN WELFARE TRUST V. DIRECTOR OF INCOME TAX EXEMPTION AND IN THAT CASE T HE HON'BLE CALCUTTA HIGH COURT HELD-AS UNDER: 'THE INCOME FROM PROPERTY HELD FOR TRUST HAS TO BE ARRIVED AT IN NORMAL COMMERCIAL MANNER AND THERE IS NO SCOPE FOR COMPLYI NG WITH THE PROVISIONS OF SECTION 14 OF INCOME TAX ACT, 1961. IN OTHER WORDS, THE REAL INCOME HAS TO BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF CONSIDERING T HE EXEMPTION. IF THERE BE ANY LOSS THAT CANNOT FORM PART OF THE REAL INCOME OF TR UST AND NECESSARILY IT HAS TO BE EXCLUDED FROM CONSIDERATION. SIMILAR VIEWS WERE HELD BY THE CALCUTTA HIGH COURT IN THE CASE LAW OF CIT V., BIRLA JANHIT TRUST REPORTED AT 208 ITR 372. THEREFO RE, FOLLOWING THE ABOVE JUDGMENTS THE INCOME OF ASSESSEE WAS TO BE COMPUTED IN A COMMERCIAL SENSE AND THAT CAN ONLY BE CALCULATED AFTER ALLOWING EXPE NSES INCURRED BY THE ASSESSEE. THEREFORE, THE DISALLOWANCE OF EXPENSES IS NOT WARRANTED. 8 6. LD.COUNSEL SUBMITTED THAT FOR ASSESSMENT YEAR 2 012-13 ALSO DECISION OF THIS TRIBUNAL IS PLACED IN THE PAPER BOOK AT PAGES 36-52, WHEREIN THIS ISSUE HAS BEEN SETTLED IN FAVOUR OF ASSESSEE BY CONSIDERI NG OBJECTS OF MEMORANDUM OF ASSOCIATION OF SOCIETY. LD. COUNSEL SUBMITTED TH AT THIS SOCIETY WAS THROUGHOUT GRANTED EXEMPTION SINCE ITS INCEPTION AN D THIS TRIBUNAL ALLOWED APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 AND 2012-13. HE SUBMITTED THAT ORDER OF THIS TRIBUNAL FOR ASSESSMENT YEAR 201 2-13 IN ITA NO. 2239/DEL/2016 HAS ANALYSED THIS ISSUE FROM THE PERS PECTIVE OF OBJECTS OF SOCIETY IN MEMORANDUM OF ASSOCIATION. HE SUBMITTED THAT FROM VARIOUS ARTICLES OF MEMORANDUM OF ASSOCIATION, IT IS VERY CLEAR THAT SOCIETY HAS BEEN ESTABLISHED FOR RELIGIOUS PURPOSES BUT WITHOUT ANY RESTRICTION TO THE PUBLIC AT LARGE. HE PLACED RELIANCE UPON PARA 11 OF TRIBUNAL S ORDER, WHICH IS REPRODUCED HEREUNDER: 11. HAVING GONE THROUGH THE DECISIONS RELIED UPO N BY THE LD.AR, WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF DHARMAPOSH AMAN AND CO. VS. CIT (SUPRA) HAS BEEN PLEASED TO HOLD THAT WHETHER A TRU ST IS FOR CHARITABLE PURPOSES FALLS TO BE DETERMINED BY REFERENCE TO ALL THE OBJE CTS FOR WHICH THE TRUST HAS BEEN BROUGHT INTO EXISTENCE. AGAIN IN THE CASE OF CIT V S. DAWOODI BOHARA JAMAT (SUPRA), THE HONBLE SUPREME COURT HAS BEEN PLEASE D TO HOLD THAT THE TRUST HAVING MIXED OBJECTS WHICH DOES NOT BENEFIT ANY SP ECIFIC RELIGIOUS COMMUNITY IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. SUCH TRUS T WITH COMPOSITE OBJECTS WOULD NOT BE EXPELLED OUT OF THE PURVIEW OF THE SEC. 13(1 )(B) OF THE ACT PER SE. THE SECTION REQUIRES IT TO BE ESTABLISHED THAT SUCH CHA RITABLE PURPOSES IS NOT FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY OR CAST E. THE RELEVANT PARA NOS. 38, 39, 40, 49 AND 50 OF THE SAID DECISION OF HONBLE S UPREME COURT IN THE CASE OF C1T VS DAWOODI BOHARMA JAMAT (2014) 4 ITR 31 ARE BE ING REPRODUCED HEREIN: '38. UNQUESTIONABLY, OBJECTS (C) AND (F) WHICH PROV IDE FOR THE ACTIVITIES COMPLETELY RELIGIOUS IN NATURE AND RESTR ICTED TO THE SPECIFIC COMMUNITY> OF THE RESPONDENT-TRUST ARE OBJ ECTS WITH RELIGIONS PURPOSE ONLY. HOWEVER, IN RESPECT TO THE OTHER OBJECTS, IN OUR VIEW THE FACT THAT THE SAID OBJECTS TRACE THEIR SOURCE TO THE HOLY QURAN AND RESOLVE TO ABIDE BY TH E PATH 9 OF GODLINESS SHOWN BY ALLAH WOULD NOT BE SUFFICIENT TO CONCLUDE THAT THE ENTIRE PURPOSE AND ACTIVITIES OF THE TRUST WOULD BE PURELY RELIGIOUS IN COLOR. THE OBJECTS REF LECT THE INTENT OF THE TRUST AS OBSERVANCE OF THE TENETS OF ISLAM, BUT DO NOT RESTRICT THE ACTIVITIES OF THE TRUST TO REL IGIOUS OBLIGATIONS ONLY AND FOR THE BENEFIT OF THE MEMBERS OF THE COMMUNITY. THE PRIVY COUNCIL TRUSTEES OF THE TRIBUN E IN RE [1939] 71TR 415 HAS HELD THAT IN JUDGING WHETHER A CERTAIN PURPOSE IS OF PUBLIC BENEFIT OR NOT, THE COURTS MU ST IN GENERAL APPLY THE STANDARDS OF CUSTOMARY LAW AND COMMON OPINION AMONGST THE COMMUNITY TO WHICH THE PARTIES INTERESTED BELONG TO. THEREFORE, IT IS PERT INENT TO ANALYSE WHETHER THE CUSTOMARY LAW AID RESTRICT THE CHARITABLE DISPOSITION OF THE INTENDED ACTIVITIES I N THE OBJECTS. 5 THE PROVISION OF FOOD TO THE PUBLIC ON RELIGIOUS DAYS OF THE COMMUNITY AS PER OBJECT (A) AND (B), THE ESTABLISHMENT OF MAD ARSA AND ORGANIZATIONS FOR DISSEMINATION OF RELIGIOUS EDUCATION UNDER OBJE CT (D) AND RENDERING ASSISTANCE TO THE NEEDY AND POOR FOR RELIGIOUS ACT IVITIES UNDER OBJECT (E) WOULD REFLECT THE ESSENCE OF CHARITY. THE OBJECTS ( A) AND (B) PROVIDE ARRANGEMENT FOR NYAZ AND 'MAJLIS (LUNCH AND DINNER) ON THE RELIGIOUS OCCASION OF THE BIRTH ANNIVERSARY AND URS MUBARAK OF AWLIYA-E-QUIRAM ( SA ) AND THE SAINTS OF THE DAWOODJI BOHRA COMMUNITY AN D FOR 'ARRANGEMENT OF LUNCH AND DINNER ON RELIGIOUS OCCAS IONS AND AUSPICIOUS DAYS OF THE DAWOODI BOHRA COMMUNITY, RESPECTIVELY. NYAZ REFERS TO THE FOOD A PERSON MAKES AND OFFERS TO OTHERS ON ANY P ARTICULAR OCCASION ON THE OCCASION OF THE DEATH OF A SAINT AND MAJHLIS IM PLIES A DACE OF GATHERING OR MEETING. THE ACTIVITY OF PROVIDING FOR FOOD ON CERTAIN SPECIFIC OCCASIONS AND OTHER RELIGIOUS AND AUSPICIOUS EVENTS OF THE DAWOODI BOHRA COMMUNITY DO NOT RESTRICT THE BENEFIT TO THE MEMBERS OF THE COMMUNITY. NEITHER THE RELIGIOUS TENETS NOR THE OBJECTS AS EXPRESSED LIMIT THE SERVICE OF FOOD ON THE SAID OCCASIONS ONLY TO THE MEMBERS OF IN SPECIFIC COMMUNITY. THUS, THE ACTIVITY OF NYAZ PERF ORMED BY THE RESPONDENT-TRUST DOES NOT DELINEATE A SEPARATE CLAS S BUT EXTENDS THE BENEFIT OF FREE SERVICE OF FOOD TO PUBLIC AT LARGE IRRESPECTIVE OF THEIR RELIGION, CASTE OR SECT AND THEREBY NULLIFIES AS A CHARITABLE PURPOSE WHICH WOULD ENTAIL GENERAL PUBLIC UTILITY. 40. FURTHER, ESTABLISHMENT OF MADARSA OR INSTITUTIO NS TO IMPART RELIGIOUS EDUCATION TO THE MASSES WOULD QUALIFY AS A CHARITAB LE PURPOSE QUALIFYING UNDER THE HEAD OF EDUCATION UNDER THE PROVISIONS OF SECTION 2(15) OF THE 10 ACT. THE INSTITUTIONS ESTABLISHED TO SPREAD RELIGIO US AWARENESS BY MEANS OF EDUCATION THOUGH ESTABLISHED TO PROMOTE AND FURT HER RELIGIOUS THOUGHT COULD NOT BE RESTRICTED TO RELIGIOUS PURPO SES. THE HOUSE OF LORDS IN BARRALET V IR 54 TC 446, HAS OBSERVED THAT THE STUDY AND DISSEMINATION OF ETHICAL PRINCIPLES AND THE CULTIVA TION OF RATIONAL RELIGIOUS SENTIMENT WOULD FALL IN THE CATEGORY OF EDUCATIONA L PURPOSES. THE MADARSA AS A MOHAMMEDAN INSTITUTION OF TEACHING DOE S NOT CONFINE INSTRUCTION TO ONLY DISSIPATION OF RELIGIOUS TEACHI NGS BUT ALSO DISTRIBUTES TO THE HOLISTIC EDUCATION OF AN INDIVIDUAL. THEREFO RE, IT CANNOT BE SAID THAT THE OBJECT (D) WOULD EMBODY A RESTRICTIVE PURPOSE O F RELIGIOUS ACTIVITIES ONLY. SIMILARLY, ASSISTANCE BY THE RESPONDENT-TRUST TO THE NEEDY AND POOR FOR RELIGIOUS ACTIVITIES WOULD NOT DIVEST THE TRUST OF ITS ALTRUIST CHARACTER. 49. IN THE PRESENT CASE, THE OBJECTS OF THE RESPONDENT -TRUST ARE BASED ON RELIGIOUS TENETS UNDER QURAN ACCORDING TO RELIGI OUS FAITH OF ISLAM. WE HAVE ALREADY NOTICED THAT THE PERUSAL OF THE OBJ ECTS AND PURPOSES OF THE RESPONDENT-TRUST WOULD CLEARLY DEMONSTRATE T HAT THE ACTIVITIES OF THE TRUST THOUGH BOTH CHARITABLE AND RELIGIOUS ARE NOT EXCLUSIVELY MEANT FOR A PARTICULAR RELIGIOUS COMMUNITY. THE OBJ ECTS, AS EXPLAINED IN THE PRECEDING PARAGRAPHS, DO NOT CHANNEL THE BEN EFITS TO ANY COMMUNITY IF NOT. THE DAWOODI BOHRA COMMUNITY AND T HUS, WOULD NOT FALL UNDER THE PROVISIONS OF SECTION 13(L)(B) OF TH E ACT. 50. IN THAT VIEW OF THE MATTER, WE ARE OF THE CONSIDER ED OPINION THAT THE RESPONDENT-TRUST IS D CHARITABLE AND RELIGIOUS TRUST WHICH DOES NOT BENEFIT ANY SPECIFIC RELIGIOUS COMMUNITY AND THEREF ORE, IT CANNOT BE HELD THAT SECTION 13(L)(B) OF THE ACT WOULD BE ATTR ACTED TO THE RESPONDENT-TRUST AND THEREBY, IT WOULD BE ELIGIBLE TO CLAIM EXEMPTION UNDER SECTION 11 OF THE ACT. 11.1. WHEN WE EXAMINE THE FACTS OF THE PRESENT CA SE BEFORE US, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE ABOVE CITED TWO DECISIONS, WE COME TO THE CONCLUSION THAT ALTHO UGH THE APPELLANT SOCIETY BEFORE US HAS BOTH CHARITABLE AND RELIGIOU S PURPOSES, IT IS NOT BEEN CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY ONLY AND ITS ACTIVITIES ARE FOR THE BENEF IT OF THE PUBLIC AT LARGE. HEREINABOVE, IN THE PRECEDING PARAGRAPH WHILE DISCU SSING THE RELEVANT 11 FACTS OF THE PRESENT CASE, WE HAVE ALREADY REPRODUC ED THE OBJECTS OF THE ASSESSEE SOCIETY AS STATED IN ARTICLE 3 OF THE MEMO RANDUM OF ASSOCIATION OF IT. THERE IS NO DISPUTE THAT THE AFO RESAID OBJECTS OF THE SOCIETY HAVE REMAINED UNCHANGED SINCE THE INCEPTION /REGISTRATION IN THE YEAR 1982. ON PAGE NO. 6 OF THE LETTER DATED 18.02. 2015 BY THE SOCIETY ADDRESSED TO THE AO, THE ACTIVITIES CARRIED ON BY THE SOCIETY HAVE BEEN SET OUT AS UNDER: I) DAILY MEETINGS ON ESSENTIALS OF LIFE. (II) CONFERENCE AND SEMINARS. (III) HEALTH CAMPS. (IV) ADULT EDUCATION PROGRAMMES. (V )PROGRAMMES ON VALUES OF LIFE FOR YOUNG ADULTS. (VI) PROGRAMMES ON GOOD CITIZENSHIP. (VII) PROGRAMMES ON FAMILY VALUES AND SELF RELIANC E. (VIII) CONDUCT DISTRICT AND BRANCH AFFAIRS. (IX) TEACH COMMUNITY WELFARE. (X) DEVELOP TALENT FOR CULTURAL ARTS. (XI) HOLD PROGRAMMES FOR VOCATION TRAINING. (XII) DEVELOPING LEADERSHIP SKILLS. 11.2. IT IS CLEAR THAT THE ABOVE ACTIVITIES ARE FO R THE BENEFIT OF THE PUBLIC AT LARGE AND NOT FOR THE BENEFIT OF ANY PARTICULAR REL IGIOUS COMMUNITY OR CASTE. 11.3. WE ALSO NOTE THAT NEITHER HAS THE AO NOR TH E LD.CIT(A) GIVEN ANY BASIS TO HOLD THAT THE ACTIVITIES OF ASSESSEE CAN B E CONSIDERED TO BE FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY AND ABO VE ALL THE CENTRAL GOVERNMENT HAD DULY NOTIFIED VIDE NOTIFICATION NO.1 0215 DT. 25.10.1996 U/S 10(23C)(V) OF THE ACT AFTER BEING SATISFIED THA T THE OBJECTS AND ACTIVITIES OF THE ASSESSEE SOCIETY ARE WHOLLY FOR P UBLIC, RELIGIOUS AND CHARITABLE PURPOSES. IT IS ALSO PERTINENT TO MENTI ON OVER HERE THAT ASSESSEE SOCIETY WAS THROUGHOUT GRANTED EXEMPTION S INCE ITS INCEPTION TILL ASSESSMENT YEAR 2008-09 AND FOR THE FIRST TIME IN T HE ASSESSMENT YEAR 12 2009-10, THE AO HELD THAT IN VIEW OF SECTION 13(1)( B) OF THE ACT, ASSESSEE IS NOT ELIGIBLE FOR GRANT OF EXEMPTION. HE HELD TH AT THE ASSESSEE IS A TRUST CREATED FOR CHARITABLE PURPOSES BUT HAS BEEN ESTABL ISHED FOR BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. 11.4. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY HONBLE SUPREME COURT IN THE ABOVE DISCUSSED CASES, HOLD THAT THE AUTHORITIES BELOW WERE NOT JUS TIFIED IN HOLDING AND UPHOLDING THE ASSESSEE SOCIETY AS NOT ELIGIBLE FOR THE CLAIMED EXEMPTION U/S 11 OF THE ACT. WHILE SETTING ASIDE THE ORDERS OF AUTHORITIES BELOW IN THIS REGARD, WE DIRECT THE AO TO GRANT THE CLAIMED EXEMPTION TO ASSESSEE SOCIETY. THE ISSUE RAISED IN THE ABOVE GROUNDS IS THUS DECIDED IN FAVOUR OF ASSESSEE SOCIETY AND IN RESULT GROUNDS ARE ALLOW ED. 6.1. LD.COUNSEL SUBMITTED THAT HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE IN ITA NO. 319/2017 VIDE ORDER DATED 07/09/17 HAS UPHELD THE ORDER OF THIS TRIBUNAL FOR ASSESSMENT YE AR 2012-13. HONBLE HIGH COURT COMMENTING UPON THE ORDER OF THIS TRIBUNAL OB SERVED AS UNDER: 15. IN THE PRESENT CASE, THE FACTUAL DETERMINATIO N BY THE ITAT THAT (I) THE PROGRAMMES CONDUCTED BY THE SOCIETY ARE OPEN FOR P UBLIC AT LARGE WITHOUT ANY DISTINCTION OF CASTE, CREED OR RELIGION AND THE BEN EFITS OF THESE PROGRAMMES HELD AT THE MEETING HOUSE ARE AVAILABLE TO THE GENERAL P UBLIC AT LARGE AND (II) PRIESTS ARE NOT MANAGING THE AFFAIRS OF THE SOCIETY, HAVE N OT BEEN SHOWN BY THE REVENUE TO BE PERVERSE. IT IS NOT THE PERCENTAGE OF EXPENDI TURE ON PERSONS NOT BELONGING TO THE RELIGIOUS COMMUNITY THAT MATTERED. WHAT WAS SIG NIFICANT WAS THAT THERE WERE DONATIONS MADE BY THE SOCIETY FOR THE GENERAL PUBLI C UTILITY. THIS SHOWED THAT IT WAS NOT EXCLUSIVELY FOR THE BENEFIT OF ONE PARTICUL AR RELIGIOUS COMMUNITY. 16. THE CIT (A) HAD PROCEEDED ON THE BASIS THAT ALT HOUGH THE ASSESSEE SOCIETY WAS FOR BOTH RELIGIOUS AND CHARITABLE PURPOSES, SIN CE IT WAS FOR THE BENEFIT OF ONLY ONE RELIGIOUS COMMUNITY THE PROVISION OF SECTI ON 13 (1) (B) WOULD APPLY TO DENY IT EXEMPTION UNDER SECTION 11 OF THE ACT. THE ABOVE CONCLUSION WAS LEGALLY FLAWED. IT WAS CONTRARY TO THE DECISION OF THE SUPR EME COURT IN DAWOODI BOHRA JAMAL (SUPRA) WHICH HELD THAT EVEN WHERE THE TRUST OR SOCIETY HAS BOTH RELIGIOUS 13 AND CHARITABLE OBJECTS, 'IT NEEDS TO BE EXAMINED WH ETHER SUCH RELIGIOUS- CHARITABLE ACTIVITY CARRIED ON BY THE TRUST ONLY BE NEFITS A CERTAIN PARTICULAR RELIGIOUS COMMUNITY OR CLASS OR SERVES ACROSS THE C OMMUNITY AND FOR SOCIETY AT LARGE'. IN THAT CASE IT WAS FACTUALLY FOUND THAT TH E ACTIVITIES OF THE TRUST THOUGH BOTH CHARITABLE AND RELIGIOUS ARE NOT EXCLUSIVELY MEANT FOR A PARTICULAR RELIGIOUSCOMMUNITY' AND, THEREFORE SECTION 13(1)(B) WAS NOT ATTRACTED. IN THE PRESENT CASE TOO, THE FACTUAL FINDING OF THE ITAT IS LIKEWISE. IT HAS BEEN FOUND THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY, THOUGH BOTH RELIGIOUS AND CHARITABLE, WERE NOT EXCLUSIVELY MEANT FOR ONE PARTICULAR RELIG IOUS COMMUNITY. IT WAS, THEREFORE, RIGHTLY NOT DENIED EXEMPTION U/S 11 OF T HE ACT. 7. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN THE LIGHT OF RECORDS PLACED BEFORE US AND ORDERS RELIED UPON BY LD.COUNSEL PASSED BY THIS TRIBUNAL, AS WELL AS HONBLE HIGH COURT IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2009-10 AND 2012-13. ON TOTALITY OF FACTS, IT IS OBSERVED THAT THIS ISSUE IS SETTLED IN FAVOUR OF ASSESSEE BY ORDER OF HONBLE DELHI HIGH COURT . 8. RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY INFIRMITY IN ORDER PASSED BY LD.CIT (A), AND ACCORDINGLY THE SAME IS U PHELD. 9. IN THE RESULT APPEAL FILED BY REVENUE STANDS DIS MISSED AND CROSS OBJECTIONS FILED BY ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.04.2018 SD/- SD/- (R.K.PANDA) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 10 TH APRIL, 2018 *MV 14 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES 15 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON 0 9 .04.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 10 .04.2018 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 10.04.2018 SR. PS/PS 7 FIL E SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER