M/s. Anthrobiometric and Ancient Culture Research and Development Foundation, CHENNAI V. DIT, CHENNAI

ITA 1160/CHNY/2011

• Counselvise Citation: 116021714 RSA 2011
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-12-2011
• Assessment Year: misc
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R B NAIK
• Assessee Lawyers: ANAND DEVKUMAR
• Keywords: Gift; Period of limitation
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NO. 1160/MDS/2011 M/S ANTHROBIOMETRIC AND ANCIENT CULTURE RESEARCH AND DEVELOPMENT FOUNDATION, OLD NO.9, NEW NO.17, FLAT NO.10, 3 RD FLOOR, TOUCHLINE APARTMENTS, MANDAVALI STREET, MADAVELI, CHENNAI 600 028. PAN : AACTA7115L (APPELLANT) V. THE INCOME TAX OFFICER (EXEMPTIONS), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI ANAND DEVKUMAR, CA RESPONDENT BY : SHRI R.B . NAIK, CIT-DR DATE OF HEARING : 21.12.11 DATE OF PRONOUNCEMENT : 06.01.12 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVANC E IS THAT IT WAS DENIED REGISTRATION UNDER SECTION 12AA OF INCOME-TA X ACT, 1961 (IN I.T.A. NO. 1160/MDS/11 2 SHORT THE ACT) DESPITE ITS OBJECT BEING IN CONFOR MITY WITH THE REQUIREMENT OF THE ACT FOR REGISTRATION UNDER THE S AID SECTION. 2. SHORT FACTS APROPOS ARE THAT ASSESSEE FILED IN A PPLICATION IN FORM NO.10A ON 30.12.2009 BEFORE LD. DIT(E), CHENNA I, FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. LD. DI T(E) REQUIRED THE ASSESSEE TO GIVE CERTAIN CLARIFICATIONS AND TO CURE CERTAIN DEFICIENCIES WHICH WERE THERE, IN HIS OPINION, IN THE SAID APPLI CATION. ASSESSEE APPEARED AND FURNISHED ITS EXPLANATION. HOWEVER, L D. DIT(E) DENIED THE REGISTRATION SOUGHT, ON ACCOUNT OF TWO REASONS. FIRST WAS THAT TWO OF THE OBJECT CLAUSES OF THE ASSESSEE-TRUST MENTION ED DEVELOPMENT ON NEW AUTOMOBILE DESIGN BASED ON ANTHRO BIOMETRIC SYSTEM AND DEVELOPMENT OF NEW ARCHITECTURAL DESIGN BASED ON SA CRED RULES (CODES) AND SACRED GEOMETRY. AS PER LD. DIT(E), TH ESE COULD NOT BE CONSIDERED AS CHARITABLE IN NATURE. SECOND REASON WAS THAT CLAUSE 20 OF THE TRUST DEED AUTHORIZED LEVYING OF FEES FRO M APPRENTICES OR OTHERS BENEFITING FROM THE INSTITUTIONS OR ESTABLIS HMENTS RUN BY THE TRUST AND THIS, ACCORDING TO HIM, WAS A COMMERCIAL ACTIVITY. HE THUS DENIED THE ASSESSEE REGISTRATION UNDER SECTION 12AA OF THE ACT. ASSESSEE HAD ALSO FILED AN APPLICATION FOR APPROVAL UNDER SECTION I.T.A. NO. 1160/MDS/11 3 80G OF THE ACT AND THE ORDER OF LD. DIT(E) COVERED THIS ASPECT ALSO. HOWEVER, IN THIS APPEAL FILED BEFORE US, ASSESSEE A SSAILS ONLY DENIAL OF REGISTRATION UNDER SECTION 12AA OF THE ACT AND T HIS ALONE IS THEREFORE DEALT WITH BY US. 3. LEARNED A.R., STRONGLY ASSAILING THE ORDER OF LD . DIT(E), SUBMITTED THAT THE CLAUSES OF THE TRUST COULD NEVER BE CONSIDERED AS RELIGIOUS AND EVEN IF A PART WAS CONSTRUED AS RELIG IOUS IN NATURE, THAT COULD NOT BE A REASON FOR DENYING A REGISTRATION UN DER SECTION 12AA OF THE ACT, SINCE SUCH REGISTRATION IS AVAILABLE BO TH FOR PUBLIC CHARITABLE AS WELL AS PUBLIC RELIGIOUS TRUST. FURT HER, ACCORDING TO HIM, COLLECTION OF FEES FROM APPRENTICES WAS NOT A PART OF THE OBJECTS BUT ONLY AN ENABLING CLAUSE AND THE POWER OF THE TRUSTE ES WERE CIRCUMSCRIBED BY THE OBJECT CLAUSE SINCE THEY COULD ONLY PERFORM ACTIVITIES INCIDENTAL TO THE ATTAINMENT OF THE OBJE CTS. 4. PER CONTRA, LEARNED D.R. SUBMITTED THAT THE LEAR NED DIT(E) WAS WELL JUSTIFIED IN DENYING REGISTRATION SOUGHT UNDER SECTION 12AA OF THE ACT IN VIEW OF THE CLEAR RELIGIOUS NATURE OF THE OB JECTS AND COMMERCIAL NATURE OF COLLECTING FEES FROM STUDENTS. I.T.A. NO. 1160/MDS/11 4 5. WE HAVE PERUSED THE ORDER OF LD. DIT(E) AND HEAR D THE RIVAL SUBMISSIONS CAREFULLY. OBJECTS CLAUSE OF THE TRUST AS MENTIONED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL ARE REPRODUCE D HEREUNDER:- (1) TO CARRY ON ACTIVITIES FOR THE UPLIFTMENT AND DEVEL OPMENT OF TRIBAL EDUCATION, STANDARD OF LIVING HEALTHCARE, HOUSING AND AVAILABILITY OF NUTRITIONAL FOOD IN THE SOCIETY . (2) TO UNDERTAKE AGRICULTURAL RESEARCH AND DEVELOPMENT AND PUBLICATION OF THE RESEARCH CONDUCTED. (3) TO SUPPORT THE ARTISTIC AND CULTURAL DEVELOPMENT IN THE SOCIETY. (4) TO ENSURE BETTER FACILITIES FOR THE NEW BORN CHILDR EN AND THE MOTHER. (5) TO PROTECT THE SPECIES LIKE RARE BIRDS, INSECTS. (6) TO PROTECT THE COWS. (7) TO DEVELOP A NEW AUTOMOBILE DESIGN BASED ON ANTHRO BIOMETRIC SYSTEM. (8) TO DEVELOP NEW ARCHITECTURAL DESIGN TO CONSTRUCT TH E BUILDINGS BASED ON SACRED RULES (CODES) AND SACRED GEOMETRY. (9) TO PROVIDE BOOKS/INSTRUMENTS ETC TO DESERVING STUDE NTS DOING TECHNICAL EDUCATION. (10) TO ESTABLISH COMMITTEES FOR THE FULFILLMENT OF ABOV E OBJECTS. (11) TO DO SUCH ACTS AND DEEDS AS MAY BE NECESSARY FOR T HE PURPOSE OF THE ABOVE OBJECTS. (12) TO ESTABLISH AND RUN SCHOOL WITH THE INTENTION OF P ROVIDING QUALITY EDUCATION AT AFFORDABLE COST FOR THE POOR. (13) TO HELP POOR AND INTELLIGENT STUDENTS WHO HAVE SCOR ED GOOD MARKS BY GIVING INTEREST FREE LOAN FOR HIGHER STU DIES. (14) TO AWARD SCHOLARSHIPS, PRIZES ETC. FOR THE POOR AND DESERVING STUDENTS. I.T.A. NO. 1160/MDS/11 5 (15) TO ESTABLISH, MAINTAIN, RUN, IMPROVE, AND DEVELOP, LIBRARIES AND OTHER FACILITIES FOR THE BENEFIT OF THE STUDENT S. (16) TO ACCEPT DONATIONS, GIFTS, PRESENTS, AIDS, GRANTS IN CASH OR IN KIND AND MOVABLE AND IMMOVABLE PROPERTIES FROM T HE PUBLIC, STATE OR CENTRAL GOVERNMENT WITH EITHER AS CORPUS OR AS CASH ACCORDING TO THE DIRECTIONS OF THE DONOR S FOR THE PURPOSE OF CARRYING OUT THE OBJECTS OF THE TRUS T. (17) TO DO ALL SUCH LAWFUL ACTS AS MAY BE NECESSARY OR I NCIDENTAL AND CONDUCIVE TO THE ATTAINMENT OF THE ABOVE OBJECT S OR ANY ONE OF THEM. (18) TO UNDERTAKE SUCH OTHER ACTIVITIES AS MAY BE NECESS ARY FOR THE PROMOTION OF THE OBJECTS OF THE TRUST. (19) TO BUILD UP CENTRES, AFFORD FREE EDUCATION AND TRAI NING IN ARTS, CRAFTS AND TECHNICAL SUBJECTS TO THE ECONOMIC ALLY POOR AND BACKWARD PEOPLE TO PREPARE THEM FOR EARNIN G THEIR OWN LIVELIHOOD. (20) TO GIVE FUNDS, SPONSORSHIP AND DISTRIBUTION OF AWAR DS AND PH.D RESEARCH AND DEVELOPMENT. (21) ANTHRO BIOMETRIC BASED AND ANCIENT GEOMETRY BASED MATTER OF CHILD HOSPITAL AND MEDICAL COLLEGE. ANCI ENT CULTURE DEVELOPMENT AND ANCIENT GEOMETRY RESEARCH A ND ANCIENT MUSIC INSTRUMENTS. THE TWO CLAUSES CITED BY LD. DIT(E) FOR DENYING REG ISTRATION TO THE ASSESSEE APPEAR AT (7) AND (8). IN OUR OPINION, DE VELOPMENT OF NEW AUTOMOBILE DESIGN BASED ON ANTHRO BIOMETRIC SYSTEM CANNOT BY ITSELF BE CONSIDERED AS AN OBJECT OF RELIGIOUS NATURE. SI MILARLY, DEVELOPMENT OF NEW ARCHITECTURAL DESIGN TO CONSTRUC T THE BUILDINGS BASED ON SACRED RULES (CODES) AND SACRED GEOMETRY A LSO CANNOT BE CONSIDERED AS RELIGIOUS OBJECT. SACRED RULES CAN B E OF ANY RELIGION I.T.A. NO. 1160/MDS/11 6 AND ANY BELIEF AND IF THE ASSESSEE CONSIDERS RULES FOR DEVELOPMENT OF ARCHITECTURAL DESIGN, ACCORDING TO REQUIREMENT OF N ATURE AND IN CONSONANCE AND HARMONY WITH THE NATURE, SO AS TO NO T TO IMPEDE THE NATURAL GREENERY, FAUNA AND FLORA, TO BE SACRED, WE CANNOT SAY THAT IT IS SOMETHING THAT WILL GIVE A RELIGIOUS FLAVOUR TO ITS OBJECTS. WE ARE OF THE OPINION THAT LD. DIT(E) HAD READ SOMETHING MORE INTO THE OBJECT CLAUSES THAN WHAT WAS ACTUALLY THERE TO COME TO A C ONCLUSION THAT IT WAS RELIGIOUS IN NATURE. 6. COMING TO THE SECOND REASON RAISED BY LD. DIT(E) THAT THERE WAS AN ENABLING CLAUSE FOR COLLECTING FEES FROM APP RENTICES, IN THE FIRST PLACE THE SAID CLAUSE, AS STATED BY LEARNED A .R., WAS NOT A PART OF THE OBJECT CLAUSE. THE ACTIVITIES THAT COULD BE CARRIED ON BY THE TRUSTEES WERE CIRCUMSCRIBED BY THE POWERS VESTED ON THE TRUSTEES BY VIRTUE OF THE OBJECT CLAUSE. THEY COULD DO ONLY SU CH ACTIVITIES WHICH WERE CONDUCIVE AND INCIDENTAL TO THE ATTAINMENT OF THE OBJECTS OF THE TRUST. COLLECTION OF FEES FROM APPRENTICES WHO WER E STUDYING IN THE INSTITUTION OR ESTABLISHMENT BY THE TRUST COULD NOT BE PER SE A COMMERCIAL ACTIVITY. ONLY WHEN SUCH ACTIVITY RESUL TED IN SUBSTANTIAL SURPLUS, WHICH COULD QUESTION THE VERY NATURE OF TH E CHARITABLE I.T.A. NO. 1160/MDS/11 7 EXISTENCE OF THE ASSESSEE-TRUST, COULD IT BE CONSID ERED AS A REASON FOR VIEWING ITS CHARITABLE VOWS WITH SUSPICION. BU T THAT IN ANY CASE IS SOMETHING WHICH HAS TO BE SEEN IN FUTURE AS AND WHE N SUCH A CONTINGENCY HAPPENS IF IT ALL IT HAPPENS. IN OUR O PINION, LD. DIT(E) READ INTO THE CLAUSE A FUTURE CONTINGENT HAPPENING WHICH WAS BEST LEFT FOR THE ASSESSING OFFICER TO CONSIDER WHEN HE TOOK UP THE ASSESSMENT PROCEEDINGS IN THE ORDINARY COURSE OF EV ENTS. ACT PROVIDES FOR REVOCATION OF THE 12A REGISTRATION IN SUCH CONTINGENCIES. HOWEVER, WE CANNOT SAY THAT POSSIBILITY OF A FUTURE CONTINGENCY WITH A REMOTE PROBABILITY WILL MAKE THE TRUST ITSELF A COM MERCIAL VENTURE. THE CLAUSE OF LEVYING FEES FROM APPRENTICES WHICH A PPEAR IN CLAUSE 20 OF THE TRUST DEED, IN OUR OPINION, WILL NOT PER SE CONVERT THE ASSESSEE-TRUST TO A COMMERCIAL ESTABLISHMENT. 7. WE ARE THUS OF THE OPINION THAT BOTH THE REASONS RAISED BY LD. DIT(E) FOR DENYING REGISTRATION TO THE ASSESSEE UND ER SECTION 12AA OF THE ACT WERE UNJUSTIFIED AND NOT IN ACCORDANCE W ITH LAW. WE, THEREFORE, QUASH THE ORDER OF LD. DIT(E) AND DIRECT HIM TO GRANT THE ASSESSEE-TRUST REGISTRATION UNDER SECTION 12AA OF T HE ACT. THOUGH THE ASSESSEE HAS RAISED CERTAIN OTHER GROUNDS REGAR DING THE ORDER I.T.A. NO. 1160/MDS/11 8 HAVING BEEN PASSED AFTER THE PERIOD OF LIMITATION, THIS IS NOT CONSIDERED SINCE THE ISSUE HAS BEEN DECIDED IN FAVO UR OF ASSESSEE ON MERITS. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 6 TH JANUARY, 2012. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH JANUARY, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) DIT(E), CHENNAI (4) D.R. (5) GUARD FILE