Anjuman Khadimul Muslimeen (Rifah E Aam), Hyd, Hyderabad V. CIT(Exemptions), Hyd, Hyderabad

ITA 1078/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2631 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 09-02-2017
• Assessment Year: 2015-2016
• Appeal Filed On: 10-08-2016
• Court: TRIBUNAL
• Department Lawyers: U. MINI CHANDRAN
• Section: 11; 80G; 12A; 12AA

Judgement Text

TA NO.1078 OF 2016 ANJUMAN KHADIMUL MUSLIMEEN (RIF AH E AAM) HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1078/HYD/2016 (ASSESSMENT YEAR: 2015-16) ANJUMAN KHADIMUL MUSLIMEEN (RIFAH E AAM) HYDERABAD PAN: AAAAA 0274 F VS COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD FOR ASSESSEE SHRI K.C. DEVDAS FOR REVENUE SMT. U. MINICHANDRAN, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT (EXEMPTIONS) REJECTING THE ASSESSEES APPLICATION F OR REGISTRATION U/S 80G (5)(VI) OF THE INCOME TAX ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRUST WHICH HAS BEEN GRANTED REGISTRATION U/S 12A OF THE ACT ON 9.1.2001. THE ASSESSEE MADE AN APPLICATION FOR REGI STRATION U/S 80G(5)(VI) OF THE ACT IN FORM NO.10G ON 6.11.2015. THE CIT (E) REQUESTED THE ASSESSEE TO FURNISH DETAILED REPLY ON SPECIFIC POINTS SUCH AS BANK ACCOUNT, DETAILS OF THE BENEFICIARIES AND ALSO A NOTE ON ACTIVITIES UNDERTAKEN ALONG WITH A COPY OF REGIS TRATION U/S 12AA OF THE ACT. THE ASSESSEE FURNISHED THE REQUIRE D DETAILS. ON DATE OF HEARING : 09.02.2017 DATE OF PRONOUNCEMENT : 21.04.2017 TA NO.1078 OF 2016 ANJUMAN KHADIMUL MUSLIMEEN (RIF AH E AAM) HYDERABAD. PAGE 2 OF 4 PERUSAL OF THE SAID DETAILS, THE CIT(E) OBSERVED TH AT THE BENEFICIARIES BELONG TO ONLY ONE PARTICULAR COMMUNI TY I.E. MUSLIM COMMUNITY AND THEREFORE, A CLARIFICATION AS TO WHY THE BENEFITS ARE BEING GIVEN TO ONLY ONE COMMUNITY PEOPLE, WAS C ALLED FOR. THE ASSESSEE FILED THE LETTER DATED 17.5.2016 STATING T HAT THE OBJECTS OF THE INSTITUTION ARE FOR THE POOR AND DESTITUTE CHIL DREN IRRESPECTIVE OF THEIR RELIGION OR CASTE BUT SINCE THE ASSESSEES OPERATIONS WERE LOCATED IN THE AREA OF KACHEGUDA, THE PEOPLE RESIDI NG IN THE VICINITY OF KACHEGUDA, GOLNAKA AND AMBERPET WITHIN A RADIUS OF 2 KMS. CONSISTS MOSTLY OF ECONOMICALLY WEAKER SECTION S OF THE MUSLIM COMMUNITY AND HENCE MOST OF THE CHILDREN ARE IN THIS AREA. IT WAS ALSO SUBMITTED THAT THERE IS NO BAR OR RESTRICTION FOR ADMITTING CHILDREN OF OTHER FAITHS AND CASTES TO TH E INSTITUTION. 3. THE CIT (E) OBSERVED THAT THE OBJECTS OF THE INS TITUTION ARE TO ESTABLISH A LITERARY AND INDUSTRIAL SCHOOL F OR THE EDUCATION OF BOTH MUSLIM AND NON-MUSLIM CHILDREN, BUT ONLY MU SLIM CHILDREN ARE BEING GIVEN THE BENEFITS. HE, THEREFOR E, HELD THAT THE ASSESSEE TRUSTS ACTIVITIES ARE BENEFICIAL ONLY TO A PARTICULAR RELIGION AND HAS THEREFORE, VIOLATED THE PROVISIONS OF SECTION 80G (5)(VI) OF THE I.T. ACT. HE THEREFORE, REJECTED THE ASSESSEES APPLICATION FOR REGISTRATION U/S 80G OF THE ACT. AG GRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE REIT ERATING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT (E) HAS DRAWN OUR ATTENTION TO THE DETAILS OF THE STUDENTS STUDYING IN THE ASSESSEES INSTITUTION, WHICH ARE PLACED AT PAGES 5 TO 17 OF THE PAPER BOOK WHEREIN SOME OF THE STUDENTS ARE ALSO FR OM NON- TA NO.1078 OF 2016 ANJUMAN KHADIMUL MUSLIMEEN (RIF AH E AAM) HYDERABAD. PAGE 3 OF 4 MUSLIM COMMUNITY. HE SUBMITTED THAT THE FACT THAT T HE ASSESSEE HAS BEEN GRANTED REGISTRATION U/S 12A OF THE ACT, I TSELF PROVES THAT THE ASSESSEES ACTIVITIES ARE CHARITABLE IN NA TURE AND SINCE THE ASSESSEE IS IMPARTING EDUCATION TO BOTH MUSLIM AND NON- MUSLIM STUDENTS, THE ASSESSEE IS CARRYING ON ACTIVI TIES IN ACCORDANCE WITH ITS OBJECTS. IN SUPPORT OF HIS CONT ENTION THAT WHERE THE REGISTRATION U/S 12A HAS NOT BEEN WITHDRA WN, THE ASSESSEE CANNOT BE DENIED THE REGISTRATION U/S 80G, HE PLACED RELIANCE UPON THE DECISION OF THE HON'BLE BOMBAY HI GH COURT IN THE CASE OF DIT (E) MUMBAI VS. SRI SAI BABA CHARITA BLE TRUST REPORTED IN (2016) TIOL 2583-HIGH COURT-MUM-IT, DAT ED 15.10.2016. IN THE SAID DECISION, THE HON'BLE HIGH COURT HAS HELD THAT WHERE THE REVENUE HAS NOT CANCELLED THE REGIST RATION OF TRUST U/S 12AA OF THE ACT, IT INDICATES THAT THE ACTIVITI ES OF THE TRUST ARE GENUINE AND ARE BEING CARRIED OUT IN ACCORDANCE WIT H LAW AND WHERE ALL THE CONDITIONS SPECIFIED IN SECTION 80G O F THE ACT ARE FULFILLED, APPROVAL U/S 80G OF THE ACT CANNOT BE DE NIED. 5. THE LEARNED DR HOWEVER, SUPPORTED THE ORDER OF T HE CIT (E). 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS BEEN GRANT ED REGISTRATION U/S 12A OF THE ACT ON 9.1.2001 AND THE ASSESSEE CON TINUED TO ENJOY THE EXEMPTION U/S 11 OF THE ACT IN PURSUANT T O THE REGISTRATION U/S 12A OF THE ACT. THE ONLY REASON FO R REJECTING THE APPLICATION FOR REGISTRATION U/S 80G OF THE ACT IS THAT MOST OF THE BENEFICIARIES OF THE ASSESSEES TRUST ARE FROM THE MUSLIM COMMUNITY. AS SEEN FROM THE LIST OF ORPHANS/BENEFIC IARIES (STATED TA NO.1078 OF 2016 ANJUMAN KHADIMUL MUSLIMEEN (RIF AH E AAM) HYDERABAD. PAGE 4 OF 4 SUPRA), THERE ARE ALSO CERTAIN STUDENTS WHO ARE FRO M NON MUSLIM COMMUNITY. THE ASSESSEE HAS ALSO EXPLAINED THAT DUE TO ITS LOCATION IN AN AREA WHICH MOSTLY CONSISTS OF WEAKER SECTIONS OF MUSLIM COMMUNITY, THE BENEFICIARIES ARE ALL FROM TH E SAME RELIGION. THIS EXPLANATION APPEARS TO BE REASONABLE HAVING REGARD TO THE LOCATION OF THE INSTITUTION. AS LONG AS THE ASSESSEE IS NOT RESTRICTING THE BENEFICIARIES TO A PARTICULAR COMMU NITY, IT CANNOT BE STATED THAT THE ASSESSEE IS VIOLATING THE PROVIS IONS OF SECTION 80G(5)(III) OF THE ACT. FURTHER, THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DIT(E) VS. SRI SAI BABA CHARITABLE TRUS T (CITED SUPRA) HAS HELD THAT SECTION 80G APPROVAL SHOULD NOT BE DE NIED WHEN THE REVENUE HAS NOT CANCELLED THE REGISTRATION OF T HE TRUST U/S 12AA OF THE ACT. RESPECTFULLY FOLLOWING THE SAME, W E DIRECT THE CIT (E) TO GRANT REGISTRATION U/S 80G OF THE ACT TO THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL, 2017. SD/- SD/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 21 ST APRIL, 2017. VINODAN/SPS COPY TO: 1 C/O E.SAPTHARUSHI & CO., CA, 3-10-20/9/3 GOKHALEN AGAR, RAMANTHAPUR, HYDERABAD 500013 2 COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD 3 INCOME TAX OFFICER (EXEMPTIONS) WARD-1 HYDERABAD 4 THE DR, ITAT HYDERABAD 5 GUARD FILE BY ORDER