M/s. Sri Sudharma Sagar Jain Trust, CHENNAI V. DIT, CHENNAI

ITA 1066/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58040 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-03-2012
• Assessment Year: misc
• Appeal Filed On: 09-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MO HARANA
• Assessee Lawyers: ANAND DEVKUMAR; DEV NARENDRAN
• Section: 80G; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1066/MDS/2011 M/S. SRI SUDHARMA SAGAR JAIN TRUST NO.655A, 48 TH STREET, 9 TH SECTOR, K.K.NAGAR, CHENNAI-600 078. PAN:AAJTS4234M VS. DIRECTOR OF INCOME TAX(EXEMPTIONS) AAYAKAR BHAVAN, ANNEX BUILDING, 3 RD FLOOR, 121, M.G.ROAD, NUNGAMBAKKAM, CHENNAI-600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. ANAND DEVKUMAR, C.A & MR. DEV NARENDRAN, ADVOCATE RESPONDENT BY : MR. S.MO HARANA, CIT DR DATE OF HEARING : 26 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 26 TH MARCH, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF THE DIRECTOR OF INCOME TAX(EXE MPTIONS), CHENNAI DATED 18.4.2011 WHERE THE APPLICATION OF TH E ASSESSEE FOR GRANT OF REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT HAS BEEN REJECTED. 2. THE ASSESSEE CONSTITUTED BY TRUST DEED DATED 20.02.2009 FILED AN APPLICATION IN FORM 10A ON 14. 10.2010. THE ASSESSEE FORMED THE TRUST WITH THE FOLLOWING OB JECTS:- ITA NO.1066/MDS /2011 2 1. ONLY THE INCOME BY AND OUT OF AND NOT THE CORPU S OF THE TRUST FUND SHALL BE SPENT ON THE OBJECTS OF THE TRUST. 2. TO PROVIDE FOOD TO ALL THE DEVOTEES WHO ATTENDED THE LAST DAY OF THE ANNUAL FESTIVAL BEING CONDUCTED BY THE KARANDAI MUNIGIRI JAIN TEMPLE (I.E. MAHAHBISHEKAM DAY) 3. TO CARRY OUT ANNUAL CELEBRATION OF THIRUPPANAMOO R JAIN TEMPLE (I.E.) HOSTING OF 8 TH DAY BRAMMORCHVAM AT KARANDAI MUNIGIRI JAIN TEMPLE AND FIRST DAY THEPPAL URCHVAM AT THIRUPPANAMOOR. 4. TO RAISE AND MAINTAIN THE AUDITORIUM AND PERFORM THE DISCLOSURE & PREACHINGS OF AHIMSA DHARMA. 5. TO PROPAGATE THE PHILOSOPHY OF NON-VIOLENCE (AHIMSA) BY ORGANIZING MEETINGS, SEMINARS, CLASSES, EXHIBITION, RUNNING LIBRARY, PUBLISHING MAGAZINES, BOOKS ETC. 6. TO SERVE DIGAMBER MUNI & MUNI SANGAM. 7. TO RUN FREE MEDICAL AID CENTRE TO THE NEEDY IRRESPECTIVE OF CASTE, CREED AND RELIGION. 8. TO RUN & MAINTAIN OLD AGE HOME, GOSALA, ANNADHANAM, FREE SUPPLY OF DRINKING WATER, SHELTER FOR STUDENTS, DESTITUTE WOMEN AND CHILDREN. 9. TO FINANCIALLY SUPPORT AND PROVIDE FACILITIES FO R EDUCATION FOR ECONOMICALLY POOR PEOPLE. 3. THE DIRECTOR OF INCOME TAX(EXEMPTIONS) REJECTED THE APPLICATION ON THE GROUND THAT THE TRUST HAS BEEN F ORMED WITH RELIGIOUS OBJECTS ONLY. THE DIT (EXEMPTIONS) POINTE D OUT THAT ITA NO.1066/MDS /2011 3 CLAUSES 3 AND 6 OF THE OBJECTS OF THE TRUST ARE PUR ELY RELIGIOUS IN NATURE. 4. SHRI ANAND DEVKUMAR, AUTHORIZED REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT THE LEARNED DIT(EXEMPTIONS) HAS ERRED IN COMING TO THE CONCLUSION THAT OBJECTS OF T HE TRUST ARE PURELY RELIGIOUS IN NATURE AND SUBMITTED THAT HE OU GHT TO HAVE GRANTED REGISTRATION TO THE TRUST UNDER THE PROVISI ONS OF SECTION 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFER RED TO AS THE ACT). HE FURTHER SUBMITTED THAT THE LEARNED DIT HAS FAILED TO TAKE INTO CONSIDERATION THE OTHER OBJECTS OF THE TRUST VIZ. PROVIDING FREE MEDICAL AID TO THE NEEDY IRRESP ECTIVE OF CASTE, CREED AND RELIGION AND RUNNING AND MAINTAIN ING OLD AGE HOME AND PROVIDING FINANCIAL SUPPORT AND FACILI TIES FOR EDUCATION FOR ECONOMICALLY POOR PEOPLE. HE RELIED U PON THE JUDGEMENTS OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF NEW LIFE IN CHRIST EVANGELLISTIC ASSOCIATION VS. CI T REPORTED AS 246 ITR 532 AND THANGASWAMY CHETTIAR (SMN) VS. C IT., REPORTED AS 57 ITR 546. HOWEVER, HE DID NOT PRESS F OR EXEMPTION UNDER SECTION 80G OF THE ACT. ITA NO.1066/MDS /2011 4 5. ON THE OTHER HAND, LEARNED CIT DR VEHEMENTLY SUPPORTED THE ORDER OF THE DIT(EXEMPTIONS) IN REJEC TING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ASSESSEE. 6. AFTER HEARING BOTH THE PARTIES, PERUSING THE MAT ERIAL ON RECORD AND THE CASE LAWS REFERRED TO ABOVE, WE OBS ERVE AS UNDER:- (A) PROVISIONS OF SECTION 11 & 12 ARE APPLICABLE T O TRUSTS WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES. THE GR OUND FOR REJECTION OF THE APPLICATION UNDER SECTION 12AA THA T THE NATURE OF ACTIVITY OF THE TRUST IS RELIGIOUS CANNOT BE SUS TAINED. (B) THE LEARNED DIT(EXEMPTIONS) WHILE REJECTING THE APPLICATION UNDER SECTION 12AA OF THE ACT HAS FAILE D TO TAKE INTO CONSIDERATION CLAUSES 4, 5, 7, 8 & 9 OF THE OB JECT OF TRUST. THE SAID CLAUSES SPECIFY THAT THE OBJECT OF THE TRU ST ARE PREACHING OF AHIMSA DHARMA; PROPAGATE THE PHILOSOPH Y OF NON-VIOLENCE; RUNNING FREE MEDICAL AID CENTRE TO TH E NEEDY IRRESPECTIVE OF CASTE, CREED AND RELIGION; RUNNING AND MAINTAINING OLD AGE HOME, ANNADHANAM, FREE SUPPLY O F DRINKING WATER, SHELTER FOR STUDENTS, DESTITUTE WOM EN AND ITA NO.1066/MDS /2011 5 CHILDREN; FINANCIALLY SUPPORTING AND PROVIDING FAC ILITIES FOR EDUCATION TO ECONOMICALLY POOR PEOPLE. THESE OBJECT S ARE CERTAINLY CHARITABLE IN NATURE FOR UPLIFTMENT OF TH E DEPRIVED AND DESTITUTES. (C) THE LEARNED DIT(EXEMPTIONS) HAS ONLY RELIED ON CLAUSE 3 & 6 OF THE OBJECT OF THE TRUST DISREGARDING THE O THER OBJECTS OF THE TRUST WHICH HE OUGHT TO HAVE TAKEN INTO CONS IDERATION. 7. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED O PINION THAT THE OBJECTS OF THE TRUST ARE RELIGIOUS AS WELL AS CHARITABLE IN NATURE AND THE ASSESSEE TRUST DESERVES TO BE REG ISTERED UNDER THE PROVISIONS OF SECTION 12AA OF THE ACT. WE THEREFORE SET ASIDE THE IMPUGNED ORDER DATED 18.04.2011 AND D IRECT THE DIRECTOR OF INCOME TAX (EXEMPTIONS) TO REGISTER THE ASSESSEE TRUST UNDER THE PROVISIONS OF SECTION 12AA OF THE A CT. 8. THE APPEAL OF THE ASSESSEE IS ALLOWED ON THE ABO VE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2012. SD/- SD/- (ABRAHAM P.GEORGE) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 26 TH MARCH, 2012. SOMU ITA NO.1066/MDS /2011 6 COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .