Appeal Details
Counselvise Citation
144621714 RSA 2011
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-08-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
misc
Appeal Filed On
16-08-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI B E F O R E DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.1446(MDS)/2011 & S.P. NO.58(MDS)/2011 IN ITA NO.1446(MDS)/2011 M/S. KATIE WILCOX EDUCATION ASSOCIATION, LADY DOAK COLLEGE CAMPUS, MADURAI-625002. PAN AAAAK0221A. VS. THE COMMISSIONER OF INCOME-TAX I, MADURAI. (APPELLANT/PETITIONER) (RESPONDENT) APPELLANT BY : SMT. PUSHYA SITARA MAN, SR.COUNSEL FOR MS. J.SRE E VIDYA & MS. G.VARDINI RESPONDENT BY: SHRI T.N.BETGIRI, JCIT . DATE OF HEARING : 19 TH AUGUST, 2011 DATE OF PRONOUNCEMENT : 19 TH AUGUST, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX -I AT - - ITA 1446 OF 2011 & SP 58 OF 2011 2 MADURAI, CANCELLING THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961. HE HAS PASSED THE ORDER IN EXERCISE OF THE POWERS CONFERRED ON HI M UNDER SECTION 293C OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE WAS INCORPORATED UNDER SECTION 25 OF THE COMPANIES ACT, 1956 IN 1991. THE ASSESSEE WAS IN FACT INCORPORATED MAINLY TO TAKE OVER THE MANAGEMENT, AF FAIRS, ASSETS AND LIABILITIES OF LADY DOAK COLLEGE. THE ONLY ACT IVITY THAT HAS BEEN CARRIED OUT BY THE ASSESSEE WAS TO RUN THE LAD Y DOAK COLLEGE FOR WOMEN. THE SAID COLLEGE IS A GOVERNMEN T AIDED COLLEGE. THE ASSESSEE WAS GRANTED REGISTRATION UND ER SECTION 12A ON 7-3-1994. 3. THE COMMISSIONER OF INCOME-TAX HAS CANCELLED TH E REGISTRATION MAINLY ON THE GROUND THAT THE OBJECTS OF THE ASSESSEE ARE MAINLY RELIGIOUS IN NATURE. HE HAS RE LIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F UPPER GANGES SUGAR MILLS LTD. VS. CIT, 227 ITR 578 AND EX PLANATION 3 TO SECTION 80G(5) TO CONCLUDE THAT IF THE OBJECTS A RE RELIGIOUS IN NATURE AND THE TRUST IS NOT FOR CHARITABLE PURPOSE, THE ASSESSEE WILL NOT BE ELIGIBLE FOR APPROVAL UNDER SECTION 80G (5)(VI). - - ITA 1446 OF 2011 & SP 58 OF 2011 3 4. ON HEARING BOTH SIDES, WE FIND THAT THE RELIANC E PLACED BY THE COMMISSIONER OF INCOME-TAX ON THE JUD GMENT OF THE HONBLE SUPREME COURT IN THE CASE OF UPPER GANG ES SUGAR MILLS LTD. VS CIT, 227 ITR 578, SEEMS TO BE A LITTL E MISPLACED. THAT DECISION WAS RENDERED IN THE LIMITED CONTEXT O F SECTION 80G WHERE THE RULES PRESCRIBED FOR THE EXEMPTION ARE DI FFERENT FROM THE LAW STATED IN SECTION 11 OF THE INCOME-TAX ACT, 1961. THE LAW PROVIDES FOR CANCELLATION OF REGISTRATION GRANT ED UNDER SECTION 12A, IF THE ACTIVITIES CARRIED ON BY THE AS SESSEE ARE NOT GENUINE OR THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. 5. IN THE PRESENT CASE, THE ASSESSEE IS CARRYING O N A SINGULAR ACTIVITY OF RUNNING LADY DOAK COLLEGE. IT IS A GOVERNMENT AIDED INSTITUTION. THE ASSESSEE IS ADMI TTING STUDENTS FROM ALL WALKS OF LIFE. THERE IS NO MATER IAL AVAILABLE ON RECORD TO SHOW THAT THE ASSESSEE IS REFUSING ADMISS ION TO STUDENTS ON THE GROUND OF RELIGION, CASTE, CREED, E TC. THEREFORE, IT IS NOT POSSIBLE TO HOLD A VIEW THAT THE ASSESSEE IS CARRYING ON RELIGIOUS ACTIVITIES ALONE. - - ITA 1446 OF 2011 & SP 58 OF 2011 4 6. IT IS WELL ESTABLISHED THAT EDUCATIONAL ACTIVIT IES ARE ESSENTIALLY CHARITABLE ACTIVITIES IN NATURE. THE D EFINITION OF CHARITABLE ACTIVITY ITSELF PROVIDES MORE PROMINENCE TO ACTIVITIES OF CARRYING ON EDUCATION AND PROVIDING MEDICAL RELIEF. 7. IT IS TO BE SEEN THAT SECTION 11 ITSELF PROVIDE S THAT INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIO US PURPOSE IS EXEMPT FROM TAX. IT IS PROVIDED THEREIN THAT INCOM E DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APP LIED TO SUCH PURPOSES IN INDIA, AND WHERE ANY SUCH INCOME IS ACC UMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA , TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERT Y, SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR. 8. THE EXPRESSION CHARITABLE OR RELIGIOUS PURPOSE S HAS BEEN CONSIDERED BY THE THIRD MEMBER IN THE CASE OF THE SOCIETY OF PRESENTATION SISTERS VS ITO, 318 ITR(AT) 287 (T.M.) (COCHIN) AND IT WAS HELD THAT CHARITABLE OR RELIGIO US PURPOSES MEAN CHARITABLE PURPOSES OR RELIGIOUS PURPOSES OR B OTH CHARITABLE AND RELIGIOUS PURPOSES. IN VIEW OF THE ABOVE THIRD - - ITA 1446 OF 2011 & SP 58 OF 2011 5 MEMBER DECISION, THE STRESS GIVEN BY THE COMMISSION ER OF INCOME-TAX ON THE ALLEGED RELIGIOUS ACTIVITIES OF T HE ASSESSEE IS NOT RELEVANT IN LAW. 9. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE COMMISSIONER OF INCOME-TAX HAS ERRED IN CA NCELLING THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12A. ACCORDINGLY, WE SET ASIDE HIS ORDER AND RESTORE THE REGISTRATION TO THE ASSESSEE UNDER SECTION 12A. 10. IN RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 11. AS THE APPEAL ITSELF HAS BEEN DECIDED, THE STA Y PETITION NO.58(MDS)/2011 FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND IS LIABLE TO BE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON FRIDAY, THE 19 TH OF AUGUST, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 19 TH AUGUST, 2011. V.A.P. COPY TO: ASSESSEE/CIT/DR/GF.
