SAHAYOG, CHENNAI V. CIT, Coimbatore

ITA 11/CHNY/2015

• Counselvise Citation: 1121714 RSA 2015
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-04-2015
• Assessment Year: misc
• Appeal Filed On: 05-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: V JAGADISAN
• Keywords: Charitable institution
• Section: 80G; 12A

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 ./ ITA NOS.10 & 11/MDS/2015 ' (' / ASSESSMENT YEAR : N.A. M/S SAHAYOG, NO.3, MANCHESTER ALBATROSS, GOLD CLUB TOAD, CHETTIPALAYAM, COIMBATORE 641 201. PAN : AAOTS 0431 K V. THE COMMISSIONER OF INCOME TAX-III, COIMBATORE. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI V. JAGADISAN, FCA ,-*+ . / / RESPONDENT BY : DR. S. MOHARANA, CIT 0 . 1$ / DATE OF HEARING : 21.04.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 01.05.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE ORDERS OF THE COMMISSIONER OF INCOME TAX-III, COIMB ATORE, DATED 2 I.T.A. NOS.10 & 11/MDS/15 12.11.2014, REJECTING THE REGISTRATION UNDER SECTIO N 12A AND RECOGNITION UNDER SECTION 80G OF THE INCOME-TAX ACT , 1961 (IN SHORT 'THE ACT'). SINCE BOTH THE APPEALS WERE HEARD TOGE THER, THEY ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI V. JAGADISAN, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSEE WAS ESTABLISHED BY A TR UST DEED DATED 28 TH APRIL, 2014. THE ASSESSEE FILED AN APPLICATION FO R REGISTRATION UNDER SECTION 12A AND RECOGNITION UNDER SECTION 80G OF THE ACT ON 20.05.2014. ACCORDING TO THE LD. REPRESENTATIVE, T HE COMMISSIONER REJECTED BOTH THE APPLICATIONS ON THE GROUND THAT T HE ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNT. THEREFORE, IT I S NOT ASCERTAINABLE WHETHER THE TRUST WAS ENGAGED IN CHAR ITABLE ACTIVITIES WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. TH E TRUST FILED ITS APPLICATION BEFORE THE COMMISSIONER WITHIN A MONTH FROM THE DATE OF ITS ESTABLISHMENT. THEREFORE, REJECTION OF THE APPLICATION ON THE GROUND THAT THE ASSESSEE HAS NOT FILED ANY BOOKS OF ACCOUNT IS NOT JUSTIFIED. ON A QUERY FROM THE BENCH, WHAT IS THE OBJECT OF THE TRUST AS PER THE TRUST DEED, THE LD. REPRESENTATIVE SUBMI TTED THAT THIS WAS NOT CONSIDERED BY THE COMMISSIONER. THE COMMISSION ER SIMPLY REJECTED THE APPLICATIONS OF THE ASSESSEE ONLY ON T HE GROUND THAT BOOKS OF ACCOUNT WERE NOT PRODUCED. THE LD. REPRES ENTATIVE PLACED 3 I.T.A. NOS.10 & 11/MDS/15 HIS RELIANCE ON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF DI(EXEMPTIONS) V. FOUNDATION OF OPTHATMIC & OPTOMET RY RESEARCH EDUCATION CENTRE (254 CTR 133) AND THE JUDGMENT OF KARNATAKA HIGH COURT IN THE CASE OF DI V. GARDEN CITY EDUCATI ONAL TRUST (330 ITR 480). THE LD. REPRESENTATIVE HAS ALSO PLACED R ELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF NEWLIF E IN CHRIST EVANGELISTIC ASSOCIATION V. CIT (246 ITR 532) AND A LSO THE JUDGMENT OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF SONEPAT HINDU EDUCATIONAL AND CHARITABLE SOCIETY V. CIT AND ANOTHER (278 ITR 262). 3. ON THE CONTRARY, DR. S. MOHARANA, THE LD. DEPART MENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS NOT DONE ANY CHARITABLE ACTIVITIES. THEREFORE, THE COMMISSIONER HAS RIGHTLY REJECTED THE APPLICATIONS FOR REGISTRATION UNDER SE CTION 12A AND RECOGNITION UNDER SECTION 80G OF THE ACT. AS ONE OF THE OBJECTS OF THE ASSESSEE WAS EDUCATION, ACCORDING TO THE LD. D. R., THE ASSESSEE ENTERED TO ESTABLISH SCHOOL WITH PROFIT MO TIVE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE A LSO GONE THROUGH THE COPY OF THE TRUST DEED FILED BY THE ASS ESSEE. AS PER THE TRUST DEED, THE OBJECTS OF THE TRUST IS AS FOLL OWS:- 4 I.T.A. NOS.10 & 11/MDS/15 (1) THE AUTHORS OF THE TRUST HEREBY DECLARE AND CR EATE THE TRUST CALLED SAHAYOG (HEREINAFTER CALLED THE TRUST) FOR THE PURPOSES AND OBJECTS HEREINAFTER APPEARING: (A) TO ESTABLISH, CONSTITUTE, BUILD, ADMINISTER AND MAINTAIN EDUCATIONAL INSTITUTIONS, OF ALL KINDS NURSERY OF KINDERGARTEN SCHOOLS, PRIMARY SCHOOLS, SECONDARY SCHOOLS, ARTS COLLEGES, SCIENCE COLLEGES AND TECHNOLOGICAL INSTITUTIONS UP TO THE HIGHEST STANDARDS FOR THE IMPARTING OF SCIENTIFIC KNOWLEDGE GENERALLY. (B) TO GIVE PRACTICAL TRAINING IN THE MANUFACTURE O F ALL KINDS OF ARTICLES BY OPENING, ESTABLISHING, CONSTRUCTING, DEVELOPING WORKSHOPS AND FACTORIES AND MANUFACTURING ELECTRICAL AND OTHER GOODS OF COMMERCIAL VALUE AND UTILIZING THE INCOME THEREOF F OR THE FURTHERANCE OF THE CHARITABLE TRUST HEREBY CONSTITUTED. (C) TO ENCOURAGE AND PROVIDE LITERARY, SCIENTIFIC A ND TECHNICAL KNOWLEDGE BY ESTABLISHMENT OF LABORATORIE S, LIBRARIES AND START PUBLICATION OF JOURNALS, PERIOD ICALS AND OTHER BOOKS IN FURTHERANCE OF THIS OBJECT. (D) TO ESTABLISH AND CONDUCT HOSTELS, BOARDING HOUS ES AND RESIDENTIAL RETREAT ACCOMMODATIONS FOR THE BENEFIT OF THE STUDENTS STUDYING IN THE INSTITUTION S, PROGRAM PARTICIPANTS AND OTHERS. (E) TO ESTABLISH, MAINTAIN AND CONDUCT NURSING HOME S. (F) TO ESTABLISH, MAINTAIN AND CONDUCT MEDICAL DISPENSARIES AND CENTRES OFFERING AFFORDABLE MEDICA L AID AND GIVE GRANTS FOR MEDICAL SERVICES TO THOSE REQUIRING SPECIALIZED CARE WHO ARE UNABLE TO AFFORD IT. (G) TO EITHER ESTABLISH BY THE TRUST OR THROUGH OTH ER TRUSTS YOGA AND MEDITATION CENTRES EITHER IN THE PROPERTY OF THE TRUST OR BY DONATING ANY PART OF TH E PROPERTY OF THE TRUST TO ANY OTHER TRUST OR INSTITU TION WHICH CAN ADMINISTER YOGA AND MEDITATION CENTRES. (H) TO PROVIDE ANY OTHER FACILITY OR INFRASTRUCTURE INCIDENTAL TO EDUCATION PROVIDED BY THE TRUST AND T O BENEFIT THOSE BENEFICIARIES WHO ARE INTERESTED IN AVAILING ANY OTHER FACILITIES WHILE SEEKING PURSUIT OF EDUCATION IN THE INSTITUTIONS ESTABLISHED BY THE TR UST. (I) TO ESTABLISH AND PROVIDE SPORTS FACILITIES INCL UDING TRAINING AND COACHING CENTRES FOR SPORTS ACTIVITIES , BUILDING GYMNASIUM OR ANY INDOOR OR REGULAR STADIUM DIRECTLY OR THROUGH ANY OTHER TRUST BY DONATING ANY PART OF THE PROPERTY OF TRUST. (J) TO ESTABLISH WELL EQUIPPED AYURVEDIC AND HOLIST IC HEALTH CENTRES TO PROVIDE TREATMENT AND THERAPIES F OR THE RELIEF OF PERSONS WHO ARE AFFLICTED WITH OR SUF FER 5 I.T.A. NOS.10 & 11/MDS/15 FROM RHEUMATISM, PARALYSIS, NEURALGIA, INSANITY, DIABETES, OBESITY, ANXIETY, DEPRESSION, HYPERTENSIO N, STRESS, BLOOD PRESSURE, DIGESTION ISSUES ETC. AND A LSO TO EDUCATE AND SENSITIZE THE PUBLIC ABOUT THE ADVANTAGE OF AYURVEDIC AND HOLISTIC HEALTH ENHANCIN G METHODS AND THEIR APPLICATION FOR PROPER AND GOOD HEALTH. (K) TO CARRY OUT ANY OTHER PHILANTHROPIC PUBLIC CHA RITABLE PURPOSE WHICH THE CHARITIES IS EMPOWERED AND CAPABLE OF DOING NOT INCONSISTENT WITH THE OBJECTS SET OUT ABOVE. (2) THE OBJECTS SPECIFIED IN CLAUSE (1) SUPRA SHALL BE INDEPENDENT OF EACH OTHER AND THE BOARD OF TRUSTEES HEREINAFTER CONSTITUTED MAY, FROM TIME TO TIME, APP LY THE FUNDS OF THE TRUST IN CARRYING OUT ALL OR ANY OF TH E AFORESAID OBJECTS OF THE TRUST AS IT MAY IN ITS ABSOLUTE DISC RETION THINK FIT. APPARENTLY, THE COMMISSIONER HAS NOT CONSIDERED THE OBJECTS OF THE TRUST. IT IS NOT KNOWN HOW ESTABLISHMENT OF WORKSH OP AND FACTORIES WOULD COME WITHIN THE MEANING OF CHARITABLE ACTIVI TIES UNDER SECTION 2(15) OF THE ACT. SIMILARLY, TO ESTABLISH AND CONDUCT HOSTELS AND BOARDING HOUSES ARE ALSO INCLUDED IN OBJECT CLA USE. ESTABLISHMENT AND ADMINISTRATION OF EDUCATIONAL INS TITUTION WOULD FALL WITHIN THE MEANING OF EDUCATION UNDER SECTION 2(1 5) OF THE ACT. THE INCOME INCIDENTAL TO EDUCATION WOULD BE ELIGIBL E FOR EXEMPTION, PROVIDED THE SAME IS APPLIED FOR EDUCATIONAL ACTIVI TIES. HOWEVER, THE TRUST DEED PROVIDES FOR ESTABLISHMENT OF WORKSH OPS, FACTORIES, HOSTELS, BOARDING HOUSES, ETC. THESE OBJECTS HAVE TO BE EXAMINED BY THE COMMISSIONER AND FIND OUT WHETHER THESE OBJE CTS WOULD FALL WITHIN THE MEANING OF CHARITABLE ACTIVITIES UNDER S ECTION 2(15) OF THE 6 I.T.A. NOS.10 & 11/MDS/15 ACT. MOREOVER, THE ASSESSEE-TRUST WAS ESTABLISHED BY A REGISTERED DEED ON 20 TH APRIL, 2014 AND THE APPLICATION WAS FILED FOR REGI STRATION ON 20.05.2014. THEREFORE, WITHIN A SHORT SPAN OF T IME, THE ASSESSEE COULD NOT HAVE CARRIED OUT SUBSTANTIAL WORK. HOWEV ER, THE CIT HAS TO EXAMINE THE OBJECTS AS PER THE TRUST DEED AND OT HER DETAILS SO AS TO SATISFY HIMSELF THE GENUINENESS OF THE ACTIVITIE S OF THE TRUST. ACCORDINGLY, WITHOUT EXPRESSING ANY OPINION ON MERI T, THE ORDERS OF THE LOWER AUTHORITY ARE SET ASIDE AND THE ISSUE OF REGISTRATION UNDER SECTION 12A AND RECOGNITION UNDER SECTION 80G OF TH E ACT IS SENT BACK TO THE FILE OF THE COMMISSIONER. THE COMMISSI ONER SHALL EXAMINE THE OBJECTS OF THE TRUST AND OTHER DETAILS, REGARDING BENEFICIARIES WHO ARE ENTITLED FOR BENEFIT OF THE T RUST, UTILIZATION OF SURPLUS FUNDS AT THE END OF THE FINANCIAL YEAR AND UTILIZATION OF THE AVAILABLE FUNDS ON THE DISSOLUTION OF THE TRUST. T HEREAFTER, THE COMMISSIONER SHALL DECIDE THE ISSUE IN ACCORDANCE W ITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. WITH THE ABOVE OBSERVATION, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7 I.T.A. NOS.10 & 11/MDS/15 ORDER PRONOUNCED ON 1 ST OF MAY, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !' ) ( . . . ) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 1 ST MAY, 2015. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 /CIT-III, COIMBATORE 5. 69 ,1 /DR 6. :' ; /GF.