M/s. Alpha India Foundation, CHENNAI V. DIT (Exemptions), CHENNAI

ITA 1213/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64526 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 07-11-2012
• Assessment Year: misc
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: V D GOPAL
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 1213/MDS/2012 M/S ALPHA INDIA FOUNDATION, 1/123, METTU STREET, SALAMANGALAM, PADAPPAI, CHENNAI 601 301. PAN : AACTA5638A (APPELLANT) V. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : SHRI V.D. GOPAL, ADVOCATE RESPONDENT BY : SHRI K.E.B. RENGA RAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 07.11.2012 DATE OF PRONOUNCEMENT : 07.11.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIEVAN CE IS THAT IT WAS DENIED REGISTRATION SOUGHT UNDER SECTION 12AA OF IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). I.T.A. NO. 1213/MDS/12 2 2. FACTS APROPOS ARE THAT ASSESSEE, A TRUST CONSTIT UTED BY A DEED DATED 25.2.2008, HAD FILED AN APPLICATION FOR REGIS TRATION UNDER SECTION 12AA IN FORM NO.10A. DIT(E) WHILE PROCESSI NG APPLICATION, NOTED THAT NATURE OF THE TRUST WAS MENTIONED TO BE RELIGIOUS, CHARITABLE AND NON-PROFITABLE. AS PER THE DIT(E), CLAUSE 4 OF THE TRUST DEED ALSO MENTIONED THAT ITS OBJECTS WERE BAS ED ON CHRISTIAN PRINCIPLES. HE WAS OF THE OPINION THAT THE TRUST H AVING RELIGIOUS OBJECTS AND CARRYING OUT RELIGIOUS ACTIVITIES WERE NOT ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. IN THI S VIEW OF THE MATTER, HE DENIED THE REGISTRATION TO THE ASSESSEE. 3. NOW BEFORE US, LEARNED A.R., ASSAILING THE ORDER OF DIT(E), SUBMITTED THAT REGISTRATION UNDER SECTION 12AA OF T HE ACT WAS AVAILABLE BOTH FOR PUBLIC RELIGIOUS AS WELL AS PUBL IC CHARITABLE TRUST. ACCORDING TO HIM, DIT(E) FELL IN ERROR IN DENYING S UCH REGISTRATION TO THE ASSESSEE. 4. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDER OF DIT(E). 5. WE HAVE PERUSED THE ORDER OF DIT AND HEARD THE RIVAL SUBMISSIONS. SECTION 11(1)(A) OF THE ACT, DEALING INCOME OF PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSE, IS REPRO DUCED HEREUNDER:- I.T.A. NO. 1213/MDS/12 3 11 (1) SUBJECT TO THE PROVISIONS OF SECTIONS 60 TO 63, THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOM E - (A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST W HOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, W HERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOM E SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEE N PER CENT OF THE INCOME FROM SUCH PROPERTY. A READING OF THE ABOVE WOULD SHOW THAT THE TRUST, E VEN IF IT WAS ONLY RELIGIOUS IN NATURE, WOULD STILL BE ENTITLED FOR RE GISTRATION UNDER SECTION 12AA OF THE ACT. HERE, THERE IS NO FINDING BY THE DIT(E) THAT THE RELIGIOUS PURPOSE MENTIONED IN THE TRUST DEED WAS P RIVATE IN NATURE AND NOT ENSUING PUBLIC AT LARGE. HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT V. MISPTA PENTACOSTAL MISSION [TC(A ) NO.648 OF 2011 DATED 6.2.2012] HAS HELD THAT REGISTRATION UND ER SECTION 12AA WOULD BE AVAILABLE EVEN IF THE OBJECTIVES OF THE TR UST ARE AN AD- MIXTURE OF BOTH CHARITY AS WELL AS RELIGION. THEIR LORDSHIP HELD THAT MERELY BECAUSE THE OBJECTIVES OF THE TRUST ARE BOTH RELIGION AND CHARITY, WOULD NOT BE A GROUND FOR DENYING REGISTRA TION. THERE IS NO FINDING BY THE DIT(E) THAT THE TRUST WAS NOT GENUIN E OR ITS ACTIVITIES WERE NOT GENUINE. IN OUR OPINION, THE REGISTRATION WAS UNJUSTLY I.T.A. NO. 1213/MDS/12 4 DENIED. ORDER OF DIT(E) IS QUASHED AND HE IS DIREC TED TO GRANT ASSESSEE THE REGISTRATION UNDER SECTION 12AA OF THE ACT. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON WEDNESDAY, THE 7 TH OF NOVEMBER, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 7 TH NOVEMBER, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) DIT(EXEMPTIONS) (4) D.R. (5) GUARD FILE