M/s. Arulmigu DhruvapadamurthiThirukovil, Madurai V. CIT-I, Madurai

ITA 1286/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0944 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-01-2013
• Assessment Year: misc
• Appeal Filed On: 11-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: K GOPAL RAO
• Keywords: Charitable institution
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NOS. 1285/MDS/2012 M/S ARULMIGU SRI VAIKRANDAM THIRUKOVIL, NO.41, WEST PERUMAL MAISTRY STREET, MADURAI 625 001. PAN : AADTA 3348 Q (APPELLANT) V. THE COMMISSIONER OF INCOME TAX-I, NO.2, V.P. RATHINASAMY NADAR RD., BIBIKULAM, MADURAI 625 002. (RESPONDENT) I.T.A. NOS. 1286/MDS/2012 M/S ARULMIGU DHRUVAPADAMURTHI THIRUKOVIL, NO.41, WEST PERUMAL MAISTRY STREET, MADURAI 625 001. PAN : AADTA 3348 Q (APPELLANT) V. THE COMMISSIONER OF INCOME TAX-I, NO.2, V.P. RATHINASAMY NADAR RD., BIBIKULAM, MADURAI 625 002. (RESPONDENT) APPELLANT BY : SHRI K. GOPAL RAO, FCA RESPONDENT BY : SHRI T.N. BETGIRI , JCIT DATE OF HEARING : 22.01.2013 DATE OF PRONOUNCEMENT : 22.01.2013 I.T.A. NOS. 1285 & 1286/MDS/12 2 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : SINCE THESE TWO APPEALS THOUGH OF DIFFERENT ASSESS EES, ARISE OUT OF A SIMILAR FACT SITUATION AND SIMILAR ORDERS OF CIT, THESE ARE DISPOSED OF THROUGH THIS CONSOLIDATED ORDER. 2. ASSESSEES IN BOTH THESE CASES HAD FILED APPLICAT IONS BEFORE CIT-I, MADURAI, FOR REGISTRATION UNDER SECTION 12AA OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ALONG WITH APPLICATION, COPIES OF TRUST DEEDS WERE ALSO FILED BY BOTH THE ASSESSEES. CIT OBTAINE D REPORTS FROM LOWER AUTHORITIES AND REQUIRED THE ASSESSEES TO PRO DUCE BOOKS OF ACCOUNTS, BILLS/VOUCHERS, DONATION RECEIPTS, ETC. THESE WERE DULY PRODUCED BY THE ASSESSEES. CIT WAS OF THE OPINION THAT THE TRUSTS HAD NOT DONE ANY WORTHWHILE CHARITABLE ACTIVITIES. ACCORDING TO CIT, THE TRUSTS HAD OBJECTS, WHICH WERE ADMIXTURE OF BOT H RELIGION AND CHARITY, HENCE EXEMPTION UNDER SECTIONS 11 AND 12 C OULD NOT BE GIVEN IN SUCH CASES. HE REJECTED THE APPLICATIONS OF THE ASSESSEES. I.T.A. NOS. 1285 & 1286/MDS/12 3 3. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT TO GE T EXEMPTION UNDER SECTIONS 11 AND 12, AN ASSESSEE-TRUST COULD B E BOTH RELIGIOUS AS WELL AS CHARITABLE TRUST AND JUST BECAUSE OBJECT S WERE BOTH RELIGIOUS AND CHARITABLE, REGISTRATION UNDER SECTIO N 12AA COULD NOT BE DENIED. FURTHER, ACCORDING TO HIM, THE TRUSTS WERE ESTABLISHED BY TRUST-DEEDS DATED 20.10.2011 AND APPLICATIONS FOR R EGISTRATION WERE FILED ON 28.11.2011. IN SUCH A SHORT PERIOD OF TIM E, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO CARRY OUT ANY SUBSTANT IAL ACTIVITY. ACCORDING TO HIM, THIS ALSO COULD NOT BE A REASON F OR DENYING REGISTRATION UNDER SECTION 12AA OF THE ACT. 4. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS OF LD. CIT. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. VIEW OF THE CIT THAT REGISTRATION UNDER SECTION 12A A COULD NOT BE GRANTED WHERE A TRUSTS OBJECTS WERE ADMIXTURE OF B OTH CHARITY AND RELIGION, IS NOT IN TUNE WITH THE JUDGMENT OF HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF DY. IT(E) V. ANJUMAN-E-KHYKHAH -E-AAM [(2011) 49 DTR 262] AND IN THE CASE OF CIT V. MISPTA PENTAC OSTAL MISSION [TCA NO.648 OF 2011 DATED 6.2.2012]. IN THESE DECI SIONS, IT HAS BEEN HELD BY HON'BLE JURISDICTIONAL HIGH COURT THAT A CIT, WHILE I.T.A. NOS. 1285 & 1286/MDS/12 4 CONSIDERING AN APPLICATION UNDER SECTION 12AA OF TH E ACT, WAS NOT CORRECT IN APPLYING THE SCOPE OF THE PROVISIONS OF SECTION 11 OF THE ACT, AND APPLICATION THEREOF HAD TO BE CONSIDERED B Y THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT. MERELY BECAUSE OBJECTS OF THE TRUSTS WERE ADMIXTURE OF BOTH RELIGION AND CHARITY, IT COULD NOT BE A GROUND FOR DENYING REGISTRATION UNDER SECTION 12AA OF THE ACT. 6. INSOFAR AS FINDING OF THE CIT THAT NO WORTHWHILE ACTIVITY WAS CARRIED ON BY BOTH THE TRUSTS, AS ALREADY MENTIONED BY US, THE TRUSTS WERE CREATED BY A DEED DATED 20.10.2011 AND APPLICA TIONS FOR REGISTRATION WERE FILED ON 28.11.2011. IN THE CASE OF DIT(E) V. MEENAKSHI AMMA ENDOWMENT TRUST (50 DTR 243), IT HAS BEEN HELD BY HONBLE KARNATAKA HIGH COURT, THAT ACTIVITY OF A TRUST HAD TO BE CONSIDERED ONLY IF REGISTRATION WAS SOUGHT LONG AFT ER FORMATION OF THE TRUST. THEIR LORDSHIPS HELD THAT ONE COULD NOT EXP ECT A TRUST TO CARRY OUT CHARITABLE ACTIVITIES IMMEDIATELY AND FOR THIS REASON, CONCERNED AUTHORITY SHOULD NOT COME TO A CONCLUSION THAT THE TRUST WAS NOT INTENDING TO ANY CHARITABLE ACTIVITY. IN OUR OPINI ON, DECISION OF HONBLE KARNATAKA HIGH COURT WOULD APPLY SQUARELY W HETHER ASSESSEE IS A CHARITABLE TRUST OR A RELIGIOUS TRUST OR A TRUST FORMED WITH ADMIXTURE OF BOTH RELIGION AND CHARITY. WE AR E, THEREFORE, OF THE I.T.A. NOS. 1285 & 1286/MDS/12 5 OPINION THAT THE ASSESSEES ARE ENTITLED FOR REGISTR ATION UNDER SECTION 12AA OF THE ACT. CIT IS DIRECTED TO GRANT SUCH REG ISTRATION TO BOTH THE ASSESSEES. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEES ARE ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 22 ND OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND JANUARY, 2013. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-I, MADURAI (4) D.R. (5) GUARD FILE