Sri Sai Padhuga Trust, Madurai V. ITO, Madurai

ITA 1008/CHNY/2015

• Counselvise Citation: 100821714 RSA 2015
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 23-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2015
• Court: TRIBUNAL
• Department Lawyers: KOTEESWARA RAO
• Assessee Lawyers: G BASKAR
• Section: 12AA; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1008/MDS/2015 / ASSESSMENT YEAR : 2010-11 M/S SRI SAI PADHUGA TRUST NO.285, EAST MASI STREET MADURAI VS. THE INCOME TAX OFFICER (EXEMPTIONS) MADURAI [PAN AABTS 7419Q ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI G BASKAR, ADVOCATE /RESPONDENT BY : SHRI KOTEESWARA RAO, CIT / DATE OF HEARING : 23 - 1 1 - 20 15 ! / DATE OF PRONOUNCEMENT : 09 - 12 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS), CHENNA I, DATED 27.3.2015 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. SHRI G BASKAR, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE-TRUST WAS NOT REGISTERED U/S 12AA OF THE ACT FOR THE ITA NO. 1008/15 :- 2 -: YEAR UNDER CONSIDERATION. HOWEVER, THE ASSESSEE C LAIMED EXEMPTION ON THE PRINCIPLES OF MUTUALITY. THE ASSESSING OFFI CER, IN FACT, ACCEPTED THE CLAIM OF THE ASSESSEE UNDER THE CONCEPT OF MUT UALITY. HOWEVER, IN RESPECT OF INTEREST INCOME EARNED BY THE ASSESS EE ON FIXED DEPOSITS WAS SUBJECTED TO TAX. THE CIT(EXEMPTIONS) IN EXERC ISING OF POWERS U/S 263 OF THE ACT FOUND THAT THE BENEFICIARIES OF THE TRUST ARE GENERAL PUBLIC WITHOUT ANY RESTRICTION OF CAST, RELIGION, C OLOUR ETC, THEREFORE, HE FOUND THAT THERE IS NO QUESTION OF EXEMPTING THE IN COME UNDER THE CONCEPT OF MUTUALITY. ACCORDING TO THE LD. COUNS EL, THE TRUST ENROLLED MEMBERS FOR CONDUCTING POOJAS AND THE MEMBERS ARE C ONTRIBUTING THEIR RESPECTIVE SHARES, THEREFORE, THE BENEFITS WI LL GO TO THOSE MEMBERS WHO ARE CONTRIBUTING FOR THE POOJAS HENCE, THE PRINCIPLE OF MUTUALITY WOULD BE APPLICABLE. REFERRING TO THE OR DER OF THE CIT(A) FOR ASSESSMENT YEAR 2004-05, THE LD. COUNSEL SUBMITTED THAT THE CIT(A) FOUND THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION ON THE CONCEPT OF MUTUALITY. ON APPEAL BEFORE THIS TRIBUNAL, THIS T RIBUNAL HOWEVER, REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSI NG OFFICER. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ASSES SEE IS ELIGIBLE FOR EXEMPTION ON THE CONCEPT OF MUTUALITY IN RESPECT OF THE INCOME EVEN THOUGH THE TRUST WAS NOT REGISTERED U/S 12AA OF TH E ACT. THE LD. COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE ITA NO. 1008/15 :- 3 -: CASE OF CIT VS BANKIPUR CLUB LTD, [1997]226 ITR 97. ON A QUERY FROM THE BENCH WHETHER THE ASSESSEE BEFORE THE SUPREME COURT IS A TRUST OR SOCIETY, THE LD. COUNSEL CLARIFIED THAT THE ASS ESSEE WAS A SOCIETY. 3. ON THE CONTRARY, SHRI KOTEESWARA RAO, LD. DEPARTMEN TAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS A TR UST. THE MAIN OBJECT OF THE TRUST IS TO SPREAD THE DIVINE MESSAGE OF SRI SATHYA SAI BABA ALL OVER THE WORLD AND MAKE THE HUMAN SOCIETY TRANSFORMED. THE OBJECT OF THE TRUST IS NOT RESTRICTED TO ANY PARTIC ULAR INDIVIDUAL OR GROUP OF INDIVIDUALS, THEREFORE, THE BENEFICIARIES OF THE TRUST CANNOT BE IDENTIFIED. ACCORDING TO THE LD. DR, WHEN THE BENE FICIARIES ARE ENTIRE HUMAN BEINGS AND THE BENEFICIARIES COULD NOT BE IDE NTIFIED INDIVIDUALLY, THE CONCEPT OF MUTUALITY CANNOT BE APPLIED. THE LD . DR CLARIFIED THAT THE PRINCIPLES OF MUTUALITY CAN BE APPLIED WHEN THE TRANSACTION ARE BETWEEN THE IDENTIFIABLE INDIVIDUALS. ONCE A THIRD PARTY CAME INTO PLAY THEN THE PRINCIPLES OF MUTUALITY CANNOT CONTINUE. IN THIS CASE, EVEN THE INDIVIDUALS CANNOT BE IDENTIFIED, THEREFORE, TH ERE IS NO QUESTION OF APPLYING ANY CONCEPT OF MUTUALITY HENCE, THE CIT(EX EMPTIONS) HAS RIGHTLY REVISED THE ORDER OF THE ASSESSING OFFICER IN EXERCISE OF HIS JURISDICTION U/S 263 OF THE ACT. ITA NO. 1008/15 :- 4 -: 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE ASSESSEE IS A TRUST AND IT IS NOT REGISTERED U/S 1 2AA OF THE ACT. THE FOREMOST OBJECT OF THE TRUST IS TO PROPAGATE THE ID EOLOGY OF SRI SATHYA SAI BABA BY INSTALLING 108 PADHUGAS. THE TRUST DEE D ALSO PROVIDES FOR INSTALLATION OF GOLDEN PADHUGA ON 109 TH TIME. A BARE READING OF THE TRUST DEED CLEARLY SAYS THAT IT IS RELIGIOUS IN N ATURE AND FOR THE ENTIRE MANKIND OF THE WORLD. THE BENEFICIARIES OF THE TRU ST CANNOT BE IDENTIFIED INDIVIDUALLY. THE CONTENTION OF THE AS SESSEE IS THAT A GROUP OF PEOPLE ARE CONTRIBUTING FOR POOJAS AND THEREFORE , THE BENEFITS WOULD GO ONLY TO THOSE PERSONS WHO ARE CONTRIBUTING FOR T HE POOJAS. THIS TRIBUNAL IS UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE. TODAY 100 PEOPLE MAY CONTRIBUTE FOR POOJAS AND ANOTHER DA Y 200 PEOPLE MAY CONTRIBUTE FOR THE POOJAS. THERE IS NO RESTRICTION FOR THE GENERAL PUBLIC FOR PARTICIPATING IN THE POOJAS. THERE CANNOT BE AN Y IDENTITY AMONG THE PEOPLE WHO ARE CONTRIBUTING FOR THE POOJAS AND THE PERSONS PARTICIPATING IN POOJAS. THE ASSESSEE IS AT LIBER TY TO RECEIVE DONATION OR CONTRIBUTION FROM ANY INDIVIDUAL ACROSS THE SOCI ETY. IN SUCH A CASE, AS RIGHTLY SUBMITTED BY THE LD. DR, THE INDIVIDUAL BENEFICIARIES OF THE TRUST CANNOT BE IDENTIFIED, THEREFORE, THERE IS NO QUESTION OF APPLYING ITA NO. 1008/15 :- 5 -: THE CONCEPT OF MUTUALITY. IN FACT, THERE IS NO MUT UALITY IN THE TRANSACTION BETWEEN THE ASSESSEE AND THE INDIVIDUA L BENEFICIARIES. 5. WE HAVE GONE THROUGH THE JUDGMENT OF THE APEX COURT IN CIT VS BANKIPUR CLUB LTD (SUPRA). THE ASSESSEE BE FORE THE APEX COPURT CLAIMS THAT IT IS A MUTUAL CONCERN TO CARRY OUT A PARTICULAR BUSINESS. ADMITTEDLY, THE ASSESSEE BEFORE THE APE X COURT IS A CLUB. THE ASSESSEE CLUB HAD TRANSACTION WITH ITS MEMBERS AND ALSO TRANSACTED WITH NON-MEMBERS. THE APEX COURT FOUND THAT IN RESPECT OF TRANSACTION WITH MEMBERS THE CONCEPT OF MUTUALIT Y WILL BE APPLICABLE. HOWEVER, IN RESPECT OF TRANSACTION WIT H NON-MEMBERS, THE CONCEPT OF MUTUALITY MAY NOT BE APPLICABLE. IN THE CASE BEFORE US, IT IS NOT A CLUB. IT IS A TRUST ESTABLISHED BY THREE INDIVIDUALS AND THE TRUST IS ADMINISTERED BY THREE TRUSTEES. THE OBJECT OF T HE TRUST IS TO PERFORM POOJAS BY INSTALLING PADHUGAS OF SRI SATHYA SAI BAB A FOR THE BENEFIT OF ENTIRE MANKIND. IN OTHER WORDS, THE BENEFICIARIES OF THE TRUST ARE THE ENTIRE MANKIND AND THE INDIVIDUAL BENEFICIARIES CAN NOT BE IDENTIFIED. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT THE JUDGMENT OF THE APEX COURT IN THE CASE OF BANKIPUR CLUB LTD (SUPRA) MAY NOT BE APPLICABLE TO THE FACTS OF THIS CASE. SINCE THE BE NEFICIARIES COULD NOT BE IDENTIFIED AND THE TRUST IS ADMINISTERED ONLY BY THREE TRUSTEES, THE CONTRIBUTORS, IF ANY, MAY NOT HAVE ANY ROLE IN THE ADMINISTRATION, ITA NO. 1008/15 :- 6 -: THEREFORE, THERE IS NO QUESTION OF APPLYING THE CON CEPT OF MUTUALITY IN THE CASE OF TRUST. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(EXEMPTIONS). ACCORDINGLY, THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2015, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 9 TH DECEMBER, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF