Spirit of Life Revival Trust, Tuticorin V. CIT, Madurai

ITA 1310/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52041 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-11-2011
• Assessment Year: 2011-2012
• Appeal Filed On: 14-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C JOSEPH
• Assessee Lawyers: N DEVANATHAN
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER] S.P. NO.66/MDS/2011 (IN I.T.A. NO.1310/MDS/2011) & I.T.A.NOS.1310 & 1316/MDS/2011 ASSESSMENT YEAR : 2011-12 M/S SPIRIT OF LIFE REVIVAL TRUST, NO.164-G, NORTH BEACH ROAD, TUTICORIN 628 001. VS THE INCOME TAX OFFICER, WARD [PAN - AAJTS8067Q] (PETITIONER/APPELLANT) (RESPONDENT) PETITIONER/APPELLANT BY : SHRI N. DEVANATHAN, ADVOCATE RESPONDENT BY : SHRI A.C. JOSEPH, CIT-DR DATE OF HEARING : 09.11.2011 DATE OF PRONOUNCEMENT : 18.11.2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE APPEALS HAVE BEEN FILED BY THE AS SESSEE-TRUST AGAINST SEPARATE ORDERS OF THE LD. CIT, MADURAI, BUT DATED 10.5.2011, WHEREBY HE HAS REFUSED TO REGISTER THE TRUST U/S 12AA AND A LSO DECLINED TO GRANT RECOGNITION U/S 80G OF THE ACT. S.P. NO.66/MDS/11 ITA NOS. 1310 & 1316/MDS/11 :- 2 -: 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE-TRUST FILED ITS APPLICATION FOR REGISTRATION U/S 12AA ON 28.11.2010 IN FORM NO.10A. THE TRUST WAS CREATED ON 4.1.2010 (SIC 18. 10.2010). THE LD. CIT CALLED FOR THE REPORTS OF THE LOWER AUTHORITIES AND ASKED THE ASSESSEE-TRUST TO PRODUCE THE BOOKS OF ACCOUNT, BIL LS/ VOUCHERS/DONATION RECEIPTS ETC. TO PROVE THE GENUIN ENESS OF ITS ACTIVITIES. THE TRUST WAS CREATED BY PASTOR F. RYM OND, WHO HAS DECLARED AS THE FOUNDER AND AUTHOR OF THE TRUST. T HE LD. CIT FOUND THAT THE ACTIVITIES DONE BY THE TRUST ARE ADMIXTURE OF BOTH RELIGIOUS AND CHARITABLE ONES. THE TRUST WAS RUNNING A CHURC H AT D.NO.37, VADI STREET, TUTICORIN, WHEREIN AROUND 100 PEOPLE WERE A TTENDING THE SERVICE. SO, ACCORDING TO THE LD. CIT, THE TRUST W AS ENGAGED IN RELIGIOUS ACTIVITIES. COPIES OF ACCOUNTS FOR THE Y EAR ENDING 31.3.2011 REVEALED THAT MOST OF THE EXPENSES WERE INCURRED BY THE TRUST FOR RELIGIOUS ACTIVITIES AND OTHER EXPENSES WERE ADMINI STRATIVE IN NATURE. WITH REFERENCE TO SECTIONS 11(1)(A) AND 13(1)(B) OF THE ACT WHICH RESTRICTS THEIR BENEFITS WHEN THE OBJECTS OF THE TR UST ARE ADMIXTURE OF BOTH RELIGIOUS AND CHARITABLE. FINALLY, THE LD. C IT HAS FOUND THAT THE GENUINENESS OF THE TRUST AND ITS CHARITABLE ACTIVIT IES BEING CARRIED OUT IN TERMS OF THE TRUST DEED HAVE NOT BEEN FOUND TO B E ESTABLISHED WITH DOCUMENTARY EVIDENCE. INSPITE OF VARIOUS OPPORTUNI TIES GIVEN, HE HAS S.P. NO.66/MDS/11 ITA NOS. 1310 & 1316/MDS/11 :- 3 -: REFUSED TO REGISTER THE TRUST IN TERMS OF THE PROVI SIONS OF SECTION 12AA(1)(B) OF THE ACT. HE HAS ALSO REFUSED TO GRAN T RECOGNITION U/S 80G BECAUSE REGISTRATION U/S 12AA HAS BEEN REFUSED . AGGRIEVED, THE ASSESSEE-TRUST HAS FILED THESE APPEALS. IT HAS FIL ED A STAY PETITION ALSO FOR THE STAYAL OF THE ABOVE ORDERS. 3. AFTER HEARING BOTH SIDES, WE HAVE FOUND THAT EVEN IF THE OBJECTS ARE FOUND TO BE ADMIXTURE OF CHARITABLE AS WELL AS RELIGIOUS IN NATURE, REGISTRATION U/S 12AA CANNOT BE REFUSED. IN THIS R EGARD, WE RELY ON OUR ORDER DATED 3.3.2011 PASSED IN THE CASE OF M/S PRA YER FOR INDIA VS CIT, IN I.T.A.NO. 196/MDS/2011, ASSESSMENT YEAR 200 8-09. A COPY OF THIS ORDER IS PLACED ON RECORD FOR OUR PERUSAL. FO R READY REFERENCE, WE EXTRACT PARAGRAPH 2 OF THIS ORDER VERBATIM HEREIN B ELOW: 2. WE HAVE HEARD BOTH PARTIES. IN SO FAR AS TH E REQUISITE REGISTRATION U/S 12AA OF THE ACT BY THE LD. CIT IS CONCERNED, THE LD.AR ARGUED THAT DESPITE THE FACT THAT THE ASS ESSEE- TRUST IS CREATED FOR DONG CHARITABLE ACTIVITIES, ON IRRELEVANT REASONS, THE LD. CIT HAS REFUSED TO GRANT REGISTRAT ION U/S 12AA OF THE ACT. ON THE OTHER HAND, THE LD.DR SUPP ORTED THE ORDER OF THE LD. CIT. WE HAVE FOUND THAT THE T RUST WAS CREATED ON 12.7.2007. A COPY OF THE TRUST DEED WAS ALSO FILED. THE OBJECTS OF THE TRUST ARE FOUND TO BE CH ARITABLE IN NATURE. THE LD. CIT HAS OBSERVED THAT THE OBJECTS OF THE TRUST ARE MIXTURE OF BOTH RELIGIOUS AND CHARITABLE. THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF THE SOC IETY OF PRESENTATION SISTERS & ANOTHER, 318 ITR (AT) 287(C OCHIN), WHILE DEALING WITH AN IDENTICAL ISSUE, HAS HELD THA T OVERLAPPING OF RELIGIOUS AND CHARITABLE ACTIVITY CA NNOT BE TAKEN AS A REASON TO DENY EXEMPTION U/S 11(1)(A) OF THE ACT, AS IT CANNOT RENDER THE OBJECTS OF THE TRUST A S NOT S.P. NO.66/MDS/11 ITA NOS. 1310 & 1316/MDS/11 :- 4 -: CHARITABLE IN NATURE. CONSEQUENTLY, WE DIRECT THE LD. CIT TO GRANT REGISTRATION TO THE ASSESSEE-TRUST U/S 12AA O F THE ACT. 4. BY RESPECTFULLY FOLLOWING THE ABOVE ORDER, WE DIREC T THE LD. CIT TO GRANT REGISTRATION U/S 12AA TO THE ASSESSEE-TRUS T. HAVING ALLOWED REGISTRATION TO THE TRUST, WE REMIT BACK THE ISSUE REGARDING RECOGNITION U/S 80G(5) TO THE FILE OF THE LD. CIT SO THAT HE C AN DECIDE THE SAME IN THE CHANGED SCENARIO ON THE MERITS OF THE CASE. 5. ACCORDINGLY, APPEAL IN I.T.A.NO.1316/MDS/2011 PERT AINING TO REGISTRATION U/S 12AA STANDS ALLOWED AND I.T.A.NO.1 310/MDS/2011 PERTAINING TO RECOGNITION U/S 80G IS ALLOWED FOR ST ATISTICAL PURPOSES. AS WE HAVE DECIDED THE APPEALS, THE STAY PETITION HAS BECOME INFRUCTUOUS AND HENCE, DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 18 TH NOVEMBER, 2011 RD COPY TO: PETITIONER/APPELLANT/RESPONDENT/CIT-I, M ADURAI/DR