Sri Kamakoti Punya Bhoomi Trust, Hyderabad V. DIT, Hyderabad

ITA 1059/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9844 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 29-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMLAN TRIPATHI
• Assessee Lawyers: PRAMOD AVADHANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1059/HYD/10 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD ( PAN AADTS 4001 L ) V/S. DIRECTOR OF INCOME TAX- (EXEMPTION), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAMOD AVADHANI RESPONDENT BY : SHRI AMLAN TRIPATHI O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF THE DIRECTOR OF INCOME TAX(EXEMPTION), REFUSING RENEWAL OF REGISTRATION UNDER S.80G OF THE INCOME-TAX ACT, 1961. 2. GROUNDS OF THE ASSESSEE IN THIS APPEAL READ AS FOLLOW S- 1. THE LEARNED DIRECTOR OF INCOME TAX(EXEMPTION) H YDERABAD HAS ERRED IN REJECTING THE CLAIM OF THE TRUST FOR RENEWAL OF EXEMPTION U/S. S.80G(5)(VI) OF THE INCOME TAX ACT, 1961. 2. THE LEARNED DIRECTOR OF INCOME TAX(EXEMPTION) HY DERABAD HAS ERRED IN CITING THE A.P. HIGH COURT DECISION IN THE CASE OF ARSHA VIGNANA TRUST 295 ITR 437 WHICH IS NOT AT ALL APPLICABLE TO THE FACTS OF THE CASE. 3. THE LEARNED DIRECTOR OF INCOME TAX(EXEMPTION) H YDERABAD HAS HELD WITHOUT VERIFICATION OF THE FACT THAT THE OBJECTS O F THE TRUST WAS RELIGIOUS IN NATURE. ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 2 4. THE TRUST HAS NEVER PUBLISHED ANY BOOK ON VEDANT A TILL DATE. 5. THE TRUST HAS NEVER RUN A VEDA PATHASHALA FOR PROPAGATION OF VEDAS AS HELD BY THE DIRECTOR OF INCOME TAX(EXEMPTION), H YDERABAD. 6. THE ONLY ACTIVITY OF TRUST IS TO DO CHARITABLE A CTIVITIES. 7. THE DIRECTOR OF INCOME TAX(EXEMPTION) HYDERABAD, HAS NOT CONSIDERED THE FACTS PLEADED BY THE PETITIONER IN I TS APPLICATION FOR RENEWAL OF EXEMPTION U/S. S.80G(5)(VI) OF THE INCOM E TAX ACT, 1961. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSEE-TRUST WAS REGISTERED UNDER S.12A OF THE ACT BY TH E COMMISSIONER OF INCOME-TAX AND WAS ALSO GRANTED THE BENEFIT OF S.80G O F THE ACT. HOWEVER, THE APPLICATION OF THE ASSESSEE FOR RENEWAL OF APPROVAL UNDER S.80G FILED ON 15.12.2009 WAS REJECTED BY THE DIRECTOR OF INCOME TAX(E XEMPTION). THE ONLY REASON ADVANCED BY THE DIRECTOR OF INCOME TAX(EXEMPTION ) FOR REFUSING APPROVAL UNDER S.80G WAS THAT THE ASSESSEE WAS ENGAGED I N THE SPREAD OF KNOWLEDGE OF VEDANTA AND ADVAITA BY PUBLISHING BOOKS AND PERIODICALS AND ALSO ENGAGED IN PROPAGATION OF VEDAS BY RUNNING A RE SIDENTIAL VEDA PATASALA AND THAT THE ASSESSEE TRUST WAS CREATED WITH THE BLESSINGS OF SHRI SANKARACHARYA OF KANCHI KAMAKOTI PEETHAM, WHICH IS A R ELIGIOUS INSTITUTION. THE DIRECTOR OF INCOME TAX(EXEMPTION) HAS REFERRED TO THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF ARSHA VI GNANA TRUST (295 ITR 437)-AP. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE REASONING OF THE DIRECTOR OF INCOME TAX(EXEMPTION) IS PATENTLY CONTRARY TO FACTS. THE ASSESSEE HAS NOT SPENT EVEN A SINGLE RUPEE ON PU BLICATION OF BOOKS AND PERIODICALS FOR THE SPREAD OF KNOWLEDGE IN VEDANTA AND ADVAITA NOR HAS IT EVER RUN A RESIDENTIAL PATASALA FOR THE P ROPAGATION OF VEDAS. HE SUBMITTED THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN ARSHA VIGNANA TRUST (SUPRA) IS DISTINGUISHABLE ON FACTS SINCE IN THE CASE BEFORE THE HONBLE A.P. HIGH COURT, THE ASSESSEE HAS PUBLISHED BOOKS ON RAMAYANA, ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 3 MAHABHARATHA AND DARSHANAS. HE SUBMITTED THAT THE ONLY ACTIVITY UNDERTAKEN BY THE ASSESSEE TRUST WAS GIVING SCHOLARSHIPS TO THE POOR AND MERITORIOUS STUDENTS STUDYING IN THE AFFILIATED SCHOOLS, AS IS EVIDENT FROM THE STATEMENT OF ACCOUNTS OF THE ASSESSEE FOR THE LAST MANY YEA RS FILED IN THE COMPILATION BY THE ASSESSEE. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSE D THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBM ITTED THAT THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF ARSHA VIGNANA TRUST (SUPRA) SQUARELY APPLIES TO THE FACTS OF T HE CASE OF THE ASSESSEE. THE OBJECTS OF THE ASSESSEE TRUST WAS TO PROPAGATE T HE LEARNING OF VADAS BY RUNNING RESIDENTIAL VEDA PATASALAS AND ALSO TO SPREAD THE KNOWLEDGE OF VEDANTA AND ADVAITHA BY PUBLISHING BOOK S AND PERIODICALS AND BY HOLDING SEMINARS AND LECTURES. HE RELIED ON THE ORD ER OF THE DIRECTOR OF INCOME TAX(EXEMPTION). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY A ND HAVE PERUSED THE ORDERS OF THE DIRECTOR OF INCOME TAX(EXEMPT ION) AND ALSO THE VARIOUS MATERIALS PLACED IN THE COMPILATION BY THE ASSESSEE BEFORE US. WE FIND THAT THE ASSESSEE TRUST WAS GRANTED REGISTRATION UND ER S.12A OF THE ACT AND THE SAME HAS NOT BEEN WITHDRAWN BY THE REVENUE TI LL DATE. WE FIND THAT THE ASSESSEE HAS NOT PUBLISHED ANY BOOK OR PERIODICAL FOR SPREADING VEDANTA AND ADVAITA AS RECORDED BY THE DIRECTOR OF INCOME TAX( EXEMPTION) IN HIS ORDER. THE ASSESSEE WAS NOT RUNNING ANY RESIDENTIAL VEDA PATASALA AT ANY POINT OF TIME. 5. REGARDING THE MENTION OF SOME OBJECTS FOR THE SPR EAD OF VEDAS IN THE OBJECTS OF THE TRUST DEED, WE FIND THAT FIRSTLY V EDAS COULD NOT BE TERMED ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 4 AS RELIGIOUS BOOKS AS IT BELONGS TO THE WHOLE MANKIND. VEDAS MEANS WISDOM, KNOWLEDGE OR VISION. VEDAS INCORPORATE K NOWLEDGE ON AYURVEDA, VASTU SASTRA AND KNOWLEDGE RELATING TO ALL ASPECTS OF LI FE. VEDAS COULD NOT BE TERMED AS FOR PROPAGATION OF HINDUISM. THERE IS NO DEF INITE PERIOD WHEN IN FACT, THE VEDAS CAME INTO EXISTENCE AND WHO WROTE THEM. VEDAS ARE FOR THE BENEFIT OF MANKIND IN GENERAL AND HANDED DOWN FROM GENERATION TO GENERATION FROM THE TIMES IMMEMORIAL AND MAY BE FROM THE PERIOD PRIOR TO EVOLUTION OF CIVILIZATION. IT IS UNDISPUTEDLY THE MOS T COMPREHENSIVE AND UNIVERSAL OF ALL ANCIENT SCRIPTURES. EVEN OTHERWISE, THER E IS NOTHING UNUSUAL IN MENTIONING SOME NOBLE OBJECTS IN THE OBJECTS OF A TRUST, WHICH MAY NOT HAVE BEEN CARRIED OUT BY THE TRUST CONCERNED. THE TEST FOR T HE PURPOSES OF DECIDING WHETHER THE ASSESSEE TRUST IS ENTITLED TO THE APP ROVAL UNDER S.80G OR NOT IS THAT WHETHER ANY OF THE ACTIVITIES UNDERTAK EN BY THE ASSESSEE VIOLATES PROVISION OF S.80G(5) OF THE ACT AND IN CASE TH ERE IS NO VIOLATION OF ANY OF THE PROVISIONS UNDER S.8G(5), THERE IS NO SCOPE F OR REJECTION OF RENEWAL OF REGISTRATION UNDER S.80G OF THE ACT. 6. WE FIND THAT THE ONLY ACTIVITY UNDERTAKEN BY T HE ASSESSEE TRUST WAS TO ACCEPT DONATIONS AND TO GRANT SCHOLARSHIPS OF SMALL A MOUNTS TO POOR AND MERITORIOUS STUDENTS. IN FACT, SCHOLARSHIPS HAVE BE EN TITLED AS MERIT SCHOLARSHIPS BY THE ASSESSEE AND HAVE BEEN AWARDED TO VARIO US STUDENTS STUDYING IN AFFILIATED SCHOOLS IN THE STATE OF ANDHRA P RADESH. THE RECIPIENTS OF MERIT SCHOLARSHIPS ARE NOT CONFINED TO A PARTICULAR SCHOO L AND WERE STUDYING IN DIFFERENT AFFILIATED SCHOOLS. THE ASSESSEE HAS FILED PHO TOCOPIES OF THE RECEIPTS IN RESPECT OF MERIT SCHOLARSHIPS FROM THE YEAR 20 06 TO THE YEAR 2008 BEFORE US AND A TEST CHECK THEREOF SHOWS THAT THE STUDENTS RECEIVING MERIT SCHOLARSHIPS HAVE SECURED MARKS RANGING FROM 77% TO 95% IN THEIR QUALIFYING EXAMINATIONS. THE SCHOLARSHIP WAS GIVEN ON TH E RECOMMENDATION ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 5 OF THE HEAD MASTER OF THE SCHOOL IN WHICH THE RECIPIENT OF THE MERIT SCHOLARSHIP WAS STUDYING AND THE RECEIPT IS DULY SIGNED BY THE HEAD MASTER OF THE SCHOOL AS WELL AS THE PARENT OF THE BENEFICIARY AND THE AUTHORIZED TRUSTEE OF THE ASSESSEE TRUST. DETAILS OF THE SCHOLARSHIPS G RANTED DURING THE YEAR 2009-10, AS FURNISHED BY THE ASSESSEE AT PAGES 50 TO 53 OF THE SECOND COMPILATION, ARE TABULATED AS UNDER- SL. NO. NAME OF THE SCHOOL NO. OF STUDENTS TO WHOM SCHOLAR- SHIP WAS GRANTED RANGE OF CLASS- ES IN WHICH CONCERNED STUDENTS WERE STUDYING RANGE OF PERCENTAGE OF MARKS OBTAINED BY THE CONCERN- ED STUDENTS IN THE QUALIFYING EXAMINATION 1. VIJAYALAKSHMI HIGH SCHOOL, SANTOSH NAGAR COLONY, MEHDIPATNAM, HYDERABAD 12 STUDENTS CLASSES VII TO IX 80 TO 91 2. ST. LAWREATE SCHOOL, SBI COLONY, KOTHAPETA, HYDERABAD 11 STUDENTS VI TO X 81 TO 89 3. Z.P.HIGH SCHOOL, JILLELAGUDA, HYDERABAD 10 STUDENTS VI TO X 75 TO 95 4. SWATHI HIGH SCHOOL, MADHAPUR, HYDERABAD 9 STUDENTS VIII TO X 70 TO 92 5. SARADA HIGH SCHOOL, KOTHAGUDA, RR DISTRICT 12 STUDENTS VII TO X 81 TO 96 6. NGRI SCHOOL, UPPAL ROAD, HYDERABAD 1 STUDENT VI 96 7. SRI SARASWATHI SISHU MANDIR HIGH SCHOOL, BADANGPET, HYDERABAD 16 STUDENTS VI TO X 60 TO 92 8. SRI SARASWATHI SISHU MANDIRAMU, MADHAVA NAAR, SAIDABAD HYDERABAD 58 28 STUDENTS VII TO X 70 TO 92 9. RAMCHAND GIRLS HIGH SCHOOL, ANDHRA MAHILA 4 STUDENTS VII TO X 61 TO 87 ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 6 SABHA, HYDERABAD 10. Z.P. HIGH SCHOOL, BAHADURGUDA, SAROOR NAGARMANDAL, R.R.DSITRICT 8 STUDENTS VII TO X 77 TO 85` 11. GOVT. HIGH SCHOOL, DEVAI JHAM SINGH, GUDIMALKAPUR, HYDERABAD. 1 STUDENT X 70 12. GOVT. HIGH SCHOOL, KULSUMPURA, HYD. 8 STUDENTS VIII TO X 69 TO 83 IT IS CLEAR FROM THE ABOVE TABULATION THAT THE STUDENT S WHO ARE AWARDED SCHOLARSHIPS ARE FROM VARIOUS SCHOOLS, RANGING FROM GOVERNM ENT SCHOOLS TO PUBLIC SCHOOLS. DETAILS FURNISHED BY THE ASSESSEE IN RESPECT O F THE BENEFICIARIES ALSO REVEAL THAT THE SCHOLARSHIPS AWARDED BY THE ASSESSEE ARE NOT CONFINED TO ANY ONE COMMUNITY. 7. ON AN EARLIER DATE OF HEARING, THE TRIBUNAL HAS ASKED THE ASSESSEE TO FILE COPIES OF THE STATEMENT OF ACCOUNTS FOR THE LAST THREE YEARS. A PERUSAL OF THE SAME FILED BY THE ASSESSEE SHOWS THAT THE ASSESSEE TRUST IN THE YEAR 2006-07 HAS RECEIVED TOTAL DONATION OF RS.50 ,000 AND THE SCHOLARSHIPS GRANTED TO THE STUDENTS DURING THAT YEAR AGG REGATED TO RS.50,000 AND NO OTHER ACTIVITY WAS UNDERTAKEN BY THE ASSESSEE. IN THE ACCOUNTING YEAR 2007-08, ASSESSEE RECEIVED DONATION OF RS. 30,503 AND THE TOTAL AMOUNT OF SCHOLARSHIPS GRANTED TO STUDENTS DURING T HAT YEAR WAS RS.50,000, AND THUS THERE WAS IN FACT, DEFICIT IN THAT YEAR, AND NO OTHER ACTIVITY WAS CARRIED OUT BY THE ASSESSEE DURING THAT YEA R AS WELL. IN THE ACCOUNTING YEAR 2008-09, THE TOTAL DONATION RECEIVED B Y THE ASSESSEE WAS RS.48,601, AS AGAINST THE AMOUNT OF TOTAL SCHOLARSHIPS GR ANTED TO THE STUDENTS DURING THAT YEAR OF RS.50,000. IN THIS YEAR A LSO, NO OTHER ACTIVITY WAS UNDERTAKEN BY THE ASSESSEE TRUST. THE LEARNED DEPARTM ENTAL ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 7 REPRESENTATIVE COULD NOT CONTROVERT THE FACT EMERGING FROM THESE STATEMENTS OF ACCOUNT OF THE ASSESSEE FOR THE LAST THREE YEARS THAT TH E ONLY ACTIVITY UNDERTAKEN BY THE ASSESSEE DURING THESE THREE YEARS WAS D ISTRIBUTION OF SCHOLARSHIP AMOUNTS, AND THE ASSESSEE HAS NOT UNDERTAKEN ANY PUBLICATION OF RELIGIOUS BOOKS NOR WAS RUNNING A RESIDENTIAL VEDA PATA SALA AT ANY POINT OF TIME DURING THE LAST THREE YEARS. IN THESE FACTS OF THE CASE, WE FIND THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CA SE OF ARSHA VIGNAN TRUST (SUPRA) WAS DISTINGUISHABLE ON FACTS. IN THE CASE BEF ORE THE HONBLE ANDHRA PRADESH HIGH COURT, THE ASSESSEE TRUST HAS PUBLISHED VARIOUS BOOKS ON RAMAYANA, MAHABHARATA AND DARSHANAN, AND A CLEAR FINDING OF FACT WAS RECORDED THAT THE ASSESSEE HAS CONTRAVENED THE PROVISIONS O F S.80G(5)(III) OF THE ACT. WE FIND THAT THE PLEA OF THE DIRECTOR OF I NCOME TAX (EXEMPTION) BASED ON THE FACT THAT THE ASSESSEE TRUST WAS CREATED WITH T HE BLESSINGS OF SHRI SANKARACHARYA OF KANCHI KAMAKOTI PEETHAM, WHICH I S A RELIGIOUS INSTITUTION, IS NOT SUSTAINABLE IN LAW. MERE FACT THAT A TRUST WAS CREATED WITH THE BLESSINGS OF A PERSON ASSOCIATED WITH SOME RELIGIOUS INSTITUTION, DOES NOT DISQUALIFY THE ASSESSEE TRUST TO CLAIM THE BENEFIT OF S.8 0G OF THE ACT. THE DECIDING FACTOR IS WHETHER THE ASSESSEE HAS UNDERTAKEN ANY ACTIVITY FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE O R WHETHER IT HAS UNDERTAKEN ACTIVITY OF SOME CHARITABLE NATURE. IN THE CASE OF THE ASSESSEE TRUST, THE ASSESSEE HAS GRANTED MERIT SCHOLARSHIPS TO POOR AN D MERITORIOUS STUDENTS OF DIFFERENT AFFILIATED SCHOOLS, WHO HAVE SECUR ED HIGH PERCENTAGE OF MARKS IN THEIR QUALIFYING EXAMINATION ON THE RECOMMEN DATION OF THE HEAD MASTER OF THE CONCERNED SCHOOLS AND SUCH ACTIVITY IN THE AD VANCEMENT OF IMPARTING EDUCATION WAS CLEARLY CHARITABLE IN NATURE. T HE ASSESSEE HAS RECEIVED A VERY SMALL AMOUNT AS DONATION DURING THE LA ST THREE ACCOUNTING YEARS, AND HAS DISTRIBUTED THE ENTIRE AMOUNT OF DONATI ON AND IN TWO OUT OF THREE YEARS MORE THAN THE AMOUNTS OF DONATION RECEIVED BY IT, WAS SPENT FOR ITA NO.1059./HYD/1 0 SRI KAMAKOTI PUNYA BHOOMI TRUST, HYDERABAD 8 THE PURPOSE OF GRANTING SCHOLARSHIPS TO THE NEEDY STUDENT S. AS A MATTER OF FACT, THE ASSESSEE IN THIS CASE HAS UNDERTAKEN ACTIVITIES WHICH ARE CLEARLY OF CHARITABLE NATURE AND AS SUCH THE ASSESSEE IS ENTITLED TO T HE APPROVAL UNDER S.80G OF THE ACT. IN THESE FACTS OF THE CASE, WE HOLD TH AT THE ASSESSEE IS ENTITLED TO THE APPROVAL UNDER S.80G OF THE ACT AND ACCORDINGLY APPROVAL UNDER S.80G OF THE ACT IS GRANTED TO THE ASSESSEE AND GR OUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11.2.2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 11.2.2011 COPY FORWARDED TO: 1. SRI KAMAKOTI PUNYA BHOOMI TRUST, C/O. M/S. MURTHY & KANTH, CHARTERED ACCOUNTANTS, FLAT NO.113,SOVEREIGN SHELTERS, 11-4-650, NILOUFER HOSPITAL ROAD, HYDERABAD 500 064 2. DIRECTOR OF INCOME TAX(EXEMPTION) HYDERABAD 3. DY. DIRECTOR OF INCOME TAX(EXEMPTION), HYDERABAD. 4. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S