The Society of Brother's of St.Patrick, Trichy V. CIT, Madurai

ITA 1218/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68673 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 04-06-2013
• Court: TRIBUNAL
• Department Lawyers: JAYANTHI KRISHNAN IRS
• Assessee Lawyers: V ALAGAPPAN
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 1218/MDS/2013 THE SOCIETY OF BROTHERS OF ST.PATRICK, C/O. V. ALAGAPPAN, FCA, C-36, 7 TH CROSS EAST, THILLAINAGAR, TRICHY 620 018. [PAN: AACAT 3630 J] (APPELLANT) VS COMMISSIONER OF INCOME TAX-II, 2 V.P. RATHINASAMY NADAR ROAD, BIBIKULAM, MADURAI 625 002. (RESPONDENT) APPELLANT BY : SHRI V. ALAGAPPAN, FCA., RESPONDENT BY : MS. JAYANTHI KRISHNAN, IRS, CIT DATE OF HEARING : 13-08-2013 DATE OF PRONOUNCEMENT : 26-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-II, MADURAI VIDE WHICH THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATI ON U/S. 12AA OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) HAS BEEN REJECTED. I.T.A. NO. 1218/MDS/2013 2 2. THE SOCIETY WAS FORMED ON 02-09-2009. THE SOCIE TY MADE AN APPLICATION BEFORE THE COMMISSIONER OF INCOME TA X FOR GRANT OF REGISTRATION U/S. 12AA OF THE ACT ON 16-10-2012. T HE COMMISSIONER OF INCOME TAX AFTER PERUSAL OF MEMORAN DUM OF ASSOCIATION (MOA) OF THE SOCIETY, CAME TO THE CONCL USION THAT THE OBJECTS OF THE SOCIETY ARE PURELY RELIGIOUS IN NATU RE IN ADDITION TO OTHER CHARITABLE OBJECTS. THE COMMISSIONER OF INCO ME TAX RE- PRODUCED THE RELEVANT EXTRACT OF THE OBJECTS OF THE SOCIETY. THE COMMISSIONER OF INCOME TAX HAS FURTHER OBSERVED THA T ALTHOUGH, THE SOCIETY IS LOCATED AT DINDIGUL, MOST OF THE MEM BERS ARE IN DIFFERENT PLACES. THEREFORE, IT WOULD BE VERY DIFF ICULT FOR THE MEMBERS OF THE SOCIETY TO CARRY OUT THE AFFAIRS OF THE SOCIETY. THE COMMISSIONER OF INCOME TAX FURTHER OBSERVED THAT TH E ASSESSEE- SOCIETY IS REGISTERED IN DINDIGUL, BUT THE SCHOOL T O BE RUN/MANAGED IS LOCATED AT TRICHY. THE COMMISSIONER OF INCOME T AX RAISED THE OBJECTION THAT AS TO HOW THE SOCIETY REGISTERED IN DISTRICT DINDIGUL CAN TAKE OVER THE SCHOOL BEING RUN IN A DIFFERENT D ISTRICT. 3. SHRI V. ALAGAPPAN, FCA APPEARING ON BEHALF OF TH E APPELLANT SUBMITTED THAT THE OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX THAT THE ACTIVITIES OF THE ASSESSEE ARE PURELY RELIGIOUS IN NATURE IS NOT CORRECT. THE OBJECTS OF THE SOCIETY WHICH H AVE BEEN RE- I.T.A. NO. 1218/MDS/2013 3 PRODUCED BY THE COMMISSIONER OF INCOME TAX IN HIS I MPUGNED ORDER ARE NOT THE ONE WHICH ARE MENTIONED IN THE OB JECT CLAUSE OF THE MOA OF THE SOCIETY. IN THE OBJECTS REPRODUCED IN THE IMPUGNED ORDER, IT IS MENTIONED THAT THE SOCIETY IS FOR THE BENEFIT OF PEOPLE OF THE CHRISTIAN COMMUNITY. WHEREAS, IN THE OBJECTS O F THE SOCIETY, NOWHERE IT HAS BEEN MENTIONED THAT THE ACTIVITIES O F SOCIETY ARE FOR THE BENEFIT OF CHRISTIAN COMMUNITY. IT HAS BEEN SP ECIFICALLY MENTIONED IN THE OBJECTS OF THE SOCIETY THAT THE SO CIETY IS ESTABLISHED TO CARRY ON SUCH OF THE ACTIVITIES TO P ROVIDE FOR RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND THE ADVANCE MENT OF ANY OTHER OBJECT FOR THE BENEFIT OF GENERAL PUBLIC WITH OUT ANY DISTINCTION OF RACE, CASTE, COMMUNITY, RELIGION, SEX OR SOCIAL STATUS. THERE IS NO MENTION OF ANY PARTICULAR RELIGION OR CASTE. AS REGARDS THE OTHER OBJECTIONS WITH RESPECT TO CONDUCT OF AFFAIRS OF TH E SOCIETY AND LOCATION OF THE SCHOOL TAKEN OVER, THE LD. AR SUBMI TTED THAT THE APPREHENSIONS OF THE COMMISSIONER OF INCOME TAX ABO UT THE RUNNING THE AFFAIRS OF THE SOCIETY ARE MIS-CONCEIVE D. SO FAR AS THE REGISTRATION OF THE APPELLANT-SOCIETY IN DISTRICT D INDIGUL AND SCHOOL TAKEN OVER BY THE SOCIETY AT TRICHY IS CONCERNED, T HE OBSERVATION OF THE COMMISSIONER OF INCOME TAX IS WRONG. ST. PATR ICKS ACADEMY MATRICULATION SCHOOL IS LOCATED AT PATRICK NAGAR, K ALANAMPATTY, I.T.A. NO. 1218/MDS/2013 4 DINDIGUL AND THIS FACT HAS BEEN CLEARLY MENTIONED I N CLAUSE-A(I) OF THE OBJECTS OF THE SOCIETY. 4. ON THE OTHER HAND, MS. JAYANTHI KRISHNAN, APPEAR ING ON BEHALF OF THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX AND PRAYED FOR THE DISMI SSAL OF THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRES ENTATIVE OF BOTH THE SIDES AND HAVE PERUSED THE IMPUGNED ORD ER AS WELL AS THE MOA OF THE APPELLANT. A PERUSAL OF THE OBJECT CLAUSE OF THE MOA SHOWS THAT THERE IS NO MENTION OF ANY PARTICULA R RELIGION OR COMMUNITY IN THE OBJECTS. THE RELEVANT EXTRACT OF THE MAIN OBJECTS OF THE SOCIETY ARE RE-PRODUCED HEREIN BELOW: (A)THE OBJECTS FOR WHICH THE SOCIETY IS ESTABLISHED ARE: TO TAKE OVER THE ST. PATRICKS ACADEMY MATRICULATI ON SCHOOL AND ESTABLISHMENT LOCATED AT PATRICK NAGAR, KALANAMPATTY (P.O) DINDUGAL DIST. 624 710 AND ALL OTHER EDUCATIONAL AND CHARITABLE ACTIVITIES WITH ALL MOVA BLE AND IMMOVABLE PROPERTIES CONNECTED WITH THE SAID ST.PAT RICKS ACADEMY, PATRICK NAGAR, KALANAM PATTY POST, DINDUGUL DT. NOW VESTED IN THE SOCIETY OF BROTHERS OF ST. PATRICK TAMIL NADU SOCIETY NO. 5 REGISTERED UNDER I.T.A. NO. 1218/MDS/2013 5 SOCIETIES REGISTRATION ACT XXI OF 1860 ON 02-04-197 3 (REGISTRATION NO. 75 S.NO. 1973) HAVING ITS REGISTE RED OFFICE AT PATRICK NILAYAM, ALUNDUR, KUNNATHUR POST, TRICHY 620 316 TOGETHER WITH ALL SUBSIDING RIGHTS AND SUBJECT TO A LL EXTANT LIABILITIES. TO START, ESTABLISH, EQUIP AND RUN FOR THE BENEFIT OF ALL IRRESPECTIVE OF RACE, CASTE, COMMUNITY, RELIGION OR SOCIAL STATUS, EDUCATIONAL INSTITUTIONS FORMAL/NON-FORMAL, FOR THE DIFFUSION OF USEFUL KNOWLEDGE, CULTURAL, SCIENTIFIC , TECHNICAL OR SOCIAL AND TO APPLY FOR AND TO OBTAIN FOR THEM, WH EREVER NECESSARY, EITHER RECOGNITION FROM THE GOVERNMENT O R UNIVERSITY, EDUCATIONAL OR OTHER AUTHORITIES AS THE CASE MAY BE. TO START ESTABLISH EQUIP AND RUN WITHOUT PROFIT, IN DUSTRIAL TRAINING INSTITUTES BOARDING HOUSES. YOUTH CENTRES, TAILORINING, HANDICRAFTS AND OTHER VOCATIONAL TRAIN ING CENTRES FOR THE BENEFIT OF ALL, IRRESPECTIVE OR RACE, CASTE , COMMUNITY, RELIGION, SEX OR SOCIAL STATUS. TO ESTABLISH AND CARRY ON SUCH OF THE ACTIVITIES TO PROVIDE FOR RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND T HE ADVANCEMENT OF ANY OTHER OBJECT FOR THE BENEFIT OF GENERAL PUBLIC WITHOUT DISTINCTION OF RACE, CASTE, COMMUNIT Y, RELIGION, SEX OR SOCIAL STATUS. TO SUBSCRIBE OR GIVE DONATIONS TO AND FINANCIALLY O R OTHERWISE TO AID ANY OTHER SOCIETIES/INSTITUTION HAVING CHARI TY, EDUCATION OR SOCIAL SERVICE AS ITS PRIMARY OBJECTS. I.T.A. NO. 1218/MDS/2013 6 WE HAVE NOT BEEN ABLE TO COME ACROSS ANY OBJECTS OF THE SOCIETY WHEREIN IT HAS BEEN MENTIONED THAT THE SOCIETY HAS BEEN FORMED FOR THE BENEFIT OF ANY PARTICULAR COMMUNITY OR RELI GION AS HAS BEEN POINTED OUT BY THE COMMISSIONER OF INCOME TAX IN HI S IMPUGNED ORDER. 6. SIMILARLY, THE OBJECTION RAISED BY THE COMMISSIO NER OF INCOME TAX WITH REGARD TO LOCATION OF THE SCHOOL IN TRICHY IS ERRONEOUS. IN CLAUSE-A(I) OF THE OBJECTS, IT HAS B EEN SPECIFICALLY STATED THAT THE SCHOOL IS LOCATED IN DISTRICT DINDI GUL. AS REGARDS OTHER OBJECTION REGARDING CONDUCT OF THE AFFAIRS OF THE SOCIETY BY THE MEMBERS WHO ARE STATIONED AT DIFFERENT PLACES, WE FIND THE APPREHENSION RAISED IS UNFOUNDED. AT THE TIME OF REGISTRATION, THE COMMISSIONER OF INCOME TAX HAS TO SATISFY HIMSELF A BOUT THE GENUINENESS OF THE TRUST AND ITS ACTIVITIES BEING C ARRIED OUT IN ACCORDANCE WITH THE TRUST DEED. 7. IN VIEW OF OUR ABOVE FINDINGS, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE COMMISSIONER OF INCOME TAX TO GRANT REGISTRATION TO THE SOCIETY U/S. 12AA OF THE ACT. NEEDLESS TO SAY THAT THE ACTIVITIES OF THE SOCIETY ARE SUBJECT TO S CRUTINY UNDER THE PROVISIONS OF THE ACT. IN CASE THE ACT AND CONDU CT OF THE SOCIETY I.T.A. NO. 1218/MDS/2013 7 IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT , THE ASSESSING OFFICER CAN ALWAYS REVOKE/RESTRICT THE BENEFITS GRA NTED TO THE SOCIETY UNDER THE INCOME TAX ACT. THE APPEAL OF THE ASSESSEE IS THUS, ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 26 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 26 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR