Christian Seva Sangam Trust, Madurai V. CIT, Madurai

ITA 1155/CHNY/2011

• Counselvise Citation: 115521714 RSA 2011
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: N DEVANATHAN
• Keywords: Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A.NO. 1155/MDS/2011 CHRISTIAN SEVA SANGAM TRUST NO.6-B, KENNET GARDEN, ALAGAPPAN NAGAR, MADURAI 625 003. PAN AAATC 5392 B VS. THE COMMISSIONER OF INCOME-TAX-I, MADURAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. DEVANATHAN, ADVOCA TE RESPONDENT BY : SHRI K.E.B.RENGARAJAN, JR. STANDING COUNSEL DATE OF HEARING : 11 TH AUGUST, 2011 DATE OF PRONOUNCEMENT : 11 TH AUGUST, 2011 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL I S DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX -I, AT MADURAI DATED 21.4.2011 REJECTING THE PETITION FILED BY THE ASSESSEE FOR RENEWAL OF APPROVAL UNDER SEC.80G(5) OF THE INCOME- TAX ACT, 1961. ITA 1155/11 :- 2 -: 2. THE ASSESSEE-TRUST WAS CREATED ON 24.8.2000 BY S HRI D. YOVAN VEDAKKAN. HE IS THE FOUNDER AND AUTHOR OF TH E TRUST. THE ASSESSEE-TRUST HAS BEEN GRANTED REGISTRATION UNDER SEC.12AA ON 31.8.2004 FOR THE ASSESSMENT YEAR 2005-06 ONWARDS. SEC.80G EXEMPTION WAS ALSO GIVEN TO THE ASSESSEE IN THE EAR LIER OCCASION THROUGH ORDER DATED 23.3.2009. 3. BUT THIS TIME WHEN THE APPLICATION WAS SUBMITTED BY THE ASSESSEE-TRUST, THE COMMISSIONER OF INCOME-TAX HELD THAT THE RELIGIOUS EXPENDITURE OF THE ASSESSEE-TRUST EXCEEDE D 5% OF ITS TOTAL INCOME SO ALSO THE ASSESSEE-TRUST HAS NOT MAI NTAINED ANY BOOKS OF ACCOUNT. THE COMMISSIONER OF INCOME-TAX, THEREFORE, HELD THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SEC.80G(5)(VI) AND NOT ENTITLED FOR EXEMPTION UNDER SEC.80G. 4. WE HEARD SHRI N.DEVANATHAN, THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE AND SHRI K.E.B.RENGARAJA N, THE LEARNED JUNIOR STANDING COUNSEL APPEARING FOR THE R EVENUE. 5. ON A PERUSAL OF THE ORDER OF THE COMMISSIONER OF INCOME- TAX, WE FIND THAT THE SINGLE MOST IMPORTANT REASON STATED BY HIM TO REJECT THE APPLICATION OF THE ASSESSEE IS THAT IN T HEIR REPORTS, THE LOWER AUTHORITIES HAVE NOT RECOMMENDED RENEWAL OF C ERTIFICATE OF ITA 1155/11 :- 3 -: EXEMPTION UNDER SEC.80G. THE COMMISSIONER OF INCOM E-TAX HAS NOT DISCUSSED ON WHAT GROUNDS, THE LOWER AUTHORITIE S HAVE RECOMMENDED SO AND HOW THOSE RECOMMENDATIONS HAVE B EEN CONSIDERED BY HIM. THEREFORE, WE FIND THAT THIS RE ASON POINTED BY THE COMMISSIONER OF INCOME-TAX IS NOT SUSTAINABLE I N LAW. 6. SECONDLY, THE MAIN ACTIVITY OF THE ASSESSEE IS T O CARRY ON AN OLD AGE HOME. IT IS NOT POSSIBLE TO SAY THAT CARRY ING ON OF AN OLD- AGE HOME IS A RELIGIOUS ACTIVITY. IT IS ESSENTIALL Y A CHARITABLE ACTIVITY, EVEN THOUGH THE ACTIVITY MAY BE CARRIED O N AS PART OF RELIGIOUS AND PIOUS ACTS. THEREFORE, THE FINDING O F THE COMMISSIONER OF INCOME-TAX IS BOTH FACTUALLY AND LE GALLY UNSUSTAINABLE. ANOTHER OBJECTION RAISED BY THE COM MISSIONER OF INCOME-TAX IS THAT THE ASSESSEE-TRUST HAS NOT OBTAI NED PERMISSION FROM THE COMPETENT AUTHORITY TO RUN THE OLD-AGE HOM E. IF AT ALL SUCH A DRAWBACK IS THERE, IT IS ONLY A TECHNICAL LA PSE. SUCH A TECHNICAL LAPSE SHOULD NOT BE ALLOWED TO DECIDE THE BASIC CHARACTER OF THE ACTIVITY CARRIED ON BY THE ASSESSE E-TRUST. THEREFORE, WE FIND THAT THERE IS NO REASON ON RECOR D TO HOLD THAT THE ASSESSEE HAS NOT CARRIED ON ANY CHARITABLE ACTI VITY. THIS IS TO BE SEEN IN THE LIGHT OF THE FACT THAT THE ASSESSEE HAS ALREADY BEEN GRANTED REGISTRATION UNDER SEC.12AA. ITA 1155/11 :- 4 -: 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE S ET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX AND DIRECT HIM TO GRANT ASSESSEE THE RENEWAL CERTIFICATE OF EXEMPTION UNDER SEC.80G OF THE INCOME-TAX ACT, 1961. 8. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING, ON THURSDAY, THE 11 TH DAY OF AUGUST, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR.O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 11 TH AUGUST, 2011 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR