T.Abdul Wahid Educational Society, CHENNAI V. DDIT, CHENNAI

ITA 1174/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68883 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 28-11-2013
• Assessment Year: misc
• Appeal Filed On: 28-05-2013
• Court: TRIBUNAL
• Department Lawyers: M SRINIVASA RAO
• Assessee Lawyers: G BASKAR
• Keywords: Gift
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1174/MDS/2013 T. ABDUL WAHID EDUCATIONAL SOCIETY, NO.53, VEPERY HIGH ROAD, PERIAMET, CHENNAI 3 [PAN: AADAT 1523 B] VS THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS)-III, CHENNAI . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. BASKAR, ADVOCATE RESPONDENT BY : SHRI M. SRINIVASA RAO, CIT DATE OF HEARING : 28-11-2013 DATE OF PRONOUNCEMENT : 05-12-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE DIRECTOR OF INCOME TAX(EXEMPTIONS), CH ENNAI, DATED 28-03-2013 REJECTING THE APPLICATION OF THE ASSESSE E FOR GRANT OF I.T.A. NO. 1174/MDS/2013 :- 2 -: REGISTRATION U/S. 12AA OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE IS A TRUST CONSTITUTED BY THE TRUST DEED DATED 19-07-2012. AN APPLICATION SEEKING REGISTRAT ION U/S.12AA OF THE ACT WAS FILED BY THE ASSESSEE ON 05-09-2012 BEFORE DIRECTOR OF INCOME TAX(EXEMPTIONS). THE APPLICATIO N OF THE ASSESSEE WAS REJECTED FOR THE REASONS THAT IN THE A IMS AND OBJECTS AS MENTIONED IN THE MEMORANDUM OF ASSOCIATI ON (MOA) AND ITS BYE-LAWS IT IS MENTIONED THAT WHILE GIVING ADMISSION IN THE INSTITUTIONS OF THE SOCIETY, PRIORITY WILL BE GIVEN TO MUSLIM STUDENTS. MOREOVER IN THE GIFT DEED DATED 02-08-2012, THE DON OR SHRI T. RAFEEQ AHMED, WHILE MAKING GIFT OF LAND MEASURING 1 1.59 ACRES IN VILLAGE VENGILI NEAR AMBUR HAS LAID DOWN CONDITI ON THAT THE COLLEGE WOULD BE FOR MUSLIM WOMEN, THUS RESTRICTING THE BENEFIT OF THE SOCIETY TO A PARTICULAR COMMUNITY OR RELIGION. 3. SHRI G. BASKAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE APPELLANT-SOCIETY INTEN DS TO SET UP A WOMENS ARTS COLLEGE AT VENGILI. THE LAND HAS BEEN GIFTED BY THE I.T.A. NO. 1174/MDS/2013 :- 3 -: PRESIDENT OF THE SOCIETY SHRI T. RAFEEQ AHMED. IN THE GIFT DEED, THE DONOR HAS STATED THAT THE LAND IS BEING GIFTED FOR NOBLE CAUSE OF ESTABLISHING A COLLEGE FOR WOMEN AND UPLIFTMENT OF WOMEN IN SOCIETY AT LARGE AND SPECIALLY PROVIDING QUALITY CO LLEGIATE EDUCATION TO THOSE MUSLIM WOMEN WHO COME OUT SUCCES SFUL IN HIGHER SECONDARY EDUCATION. THE INTENTION OF THE A SSESSEE IS TO PROVIDE QUALITY EDUCATION TO THE GIRL STUDENTS AT L ARGE AND MUSLIM WOMEN IN PARTICULAR WHO PERFORM WELL IN THEIR HIGHE R SECONDARY EXAMINATION. THE INTENTION OF THE DONOR IS NOT TO RESTRICT THE BENEFIT TO A PARTICULAR COMMUNITY. THE LD. COUNSEL SUBMITTED THAT THE ACTIVITIES OF THE ASSESSEE-TRUST ARE NOT CONFIN ED TO PROVIDE QUALITY EDUCATION TO THE WOMEN OF A PARTICULAR RELI GION. THE LD. COUNSEL FURTHER SUBMITTED THAT NECESSARY AMENDMENTS HAVE BEEN MADE TO CLAUSE-3(C) OF THE MOA OF THE SOCIETY AND T HE WORDS PRIORITY TO MUSLIM STUDENTS HAVE BEEN DELETED. S IMILARLY, AMENDMENTS HAVE BEEN CARRIED OUT IN THE PARA NO.6(C ) AND 12(D) OF THE BYE-LAWS TO REMOVE THE OBJECTIONABLE WORDS A ND PHRASES. THESE AMENDMENTS HAVE BEEN CARRIED OUT IN THE EXTRA ORDINARY GENERAL MEETING OF THE SOCIETY HELD ON 2 ND MAY 2012 AND THE SAME HAVE BEEN REGISTERED WITH THE REGISTRAR OF SOC IETIES, I.T.A. NO. 1174/MDS/2013 :- 4 -: CHENNAI. THE COPIES OF AMENDMENTS CARRIED OUT ARE PLACED ON RECORD AT PAGE NO. 34 TO 46 OF THE PAPER BOOK. 4. ON THE OTHER HAND, SHRI M. SRINIVASA RAO, APPEAR ING ON BEHALF OF THE REVENUE SUPPORTED THE ORDER OF THE DI RECTOR OF INCOME TAX(EXEMPTIONS) AND PRAYED FOR THE DISMISSAL OF THE APPEAL OF THE ASSESSEE. THE LD.DR SUBMITTED THAT T HE SOCIETY HAS BEEN FORMED FOR THE BENEFIT OF A PARTICULAR RELIGIO N AND IS NOT ELIGIBLE FOR REGISTRATION U/S.12AA OF THE ACT. 5. BOTH SIDES HEARD. THE APPLICATION FOR REGISTRAT ION U/S.12AA HAS BEEN REJECTED BY THE DIRECTOR OF INCOME TAX(EXE MPTIONS) ON THE GROUND THAT IN CLAUSE3(C) OF THE MOA OF THE SOC IETY AND 6(C) OF THE BYE-LAWS OF THE SOCIETY, IT IS STATED THAT T HE PRIORITY WOULD BE GIVEN TO MUSLIM STUDENTS. THE DIRECTOR OF INCOM E TAX(EXEMPTIONS) HAS FURTHER OBSERVED THAT IN PARA 1 2(D) OF THE BYE-LAWS IT IS MENTIONED THAT THE SOCIETY HAS BEEN AUTHORIZED TO TAKE UP HOUSING PROJECTS WHICH IS COMMERCIAL IN N ATURE AND IN THE GIFT DEED DATED 02-08-2012 THE DONOR SHRI T. R AFEEQ AHMED HAS STATED THAT THE LAND IS GIFTED FOR ESTABLISHING A COLLEGE I.T.A. NO. 1174/MDS/2013 :- 5 -: FOR PROVIDING EDUCATION TO MUSLIM WOMEN. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT NECESSARY AMENDMENT S HAVE BEEN MADE IN THE MOA AND BYE-LAWS OF THE SOCIETY TO REMOVE THE OBJECTIONABLE WORDS AND PHRASES IN THE EXTRAORD INARY GENERAL MEETING OF THE SOCIETY. THE NECESSARY AMENDMENTS C ARRIED OUT IN THE MOA AND BYE-LAWS ARE PLACED AT PAGE NOS.34 T O 46 OF THE PAPER BOOK. 6. WE FIND THAT THE ASSESSEE HAS REMOVED THE OBJECT IONABLE WORDS IN THE MOA AND BYE-LAWS OF THE SOCIETY IN ITS EXTRAORDINARY GENERAL MEETING HELD ON 02-05-2013. AS PER THE ST ATEMENT MADE BY THE LD. COUNSEL FOR THE ASSESSEE, AMENDMENT S HAVE BEEN REGISTERED WITH THE REGISTRAR OF SOCIETIES, CH ENNAI AS WELL. AS REGARDS THE OBJECTION OF THE DIRECTOR OF INCOME TAX(EXEMPTIONS) IN RESPECT OF GIFT DEED, WE ARE OF THE OPINION THAT THE DONOR SHRI T. RAFEEQ AHMED, IS ALSO THE PR ESIDENT OF THE SOCIETY. IT IS A WELL SETTLED LAW THAT THE GIFT TO BE VALID HAS TO BE UNCONDITIONAL. BE THAT AS IT MAY, IT IS EVIDENT FR OM RECORDS THAT THE PRESIDENT OF THE SOCIETY HAS APPROVED AND ACCEPTED THE I.T.A. NO. 1174/MDS/2013 :- 6 -: NECESSARY AMENDMENTS MADE TO CLAUSE-3(C) OF THE MOA AND CLAUSE 6(C) AND 12(D) OF THE BYE-LAWS. THEREFORE, THE DONOR CANNOT RAISE ANY OBJECTION TO THE AMENDMENTS, CARRI ED OUT IN MOA AND BYE-LAWS TO MAKE THEM IN LINE WITH THE PROV ISIONS OF INCOME TAX ACT FOR GRANT OF REGISTRATION U/S.12AA O F THE ACT. 7. THE DIRECTOR OF INCOME TAX(EXEMPTIONS) IS DIRECT ED TO GRANT REGISTRATION TO THE SOCIETY U/S.12AA AS ALL THE OBJ ECTIONS RAISED IN THE IMPUGNED ORDER HAVE BEEN REMOVED. THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON THURSDAY, THE 05 TH DECEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 05 TH DECEMBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR