Anjuman E Najmi Dawoodi Bohra Jamat, Pune V. CIT-V, Pune

ITA 1495/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84853 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 24-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Assessee Lawyers: S S KARACHIWALA; MANUB HAI G PATEL
• Keywords: Charitable institution
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1495/PN/2013 ANJUMAN E NAJMI DAWOODI BOHRA JAMAT BOHRA MASJID, M.G. ROAD, CASH BAZAR, LONAWALA, DIST. PUNE. PAN: AADTA6113D APPELLANT VS. CIT-V, PUNE RESPONDENT APPELLANT BY : S/SHRI MANUB HAI G. PATEL & S.S. KARACHIWALA RESPONDENT BY : SMT. M.S. VERMA, CIT DATE OF HEARING: 13.08.2014 DATE OF ORDER : 21.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX-V, PUNE, DATED 30.06. 2013 ON THE FOLLOWING GROUNDS. 1. THE COMMISSIONER OF INCOME TAX-V, PUNE HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN NOT GRANTING REGISTRATION TO THE APPELLANT TRUST U/S 12AA OF THE INCOME TAX ACT, 1961. 2. THE COMMISSIONER OF INCOME TAX-V, PUNE HAS ERRED IN HOLDING THAT THE TRUST WAS PURELY FOR THE BENEFIT O F A PARTICULAR RELIGIOUS COMMUNITY OR CASTE. 3. THE COMMISSIONER OF INCOME TAX-V, PUNE HAS ERRED I N HOLDING THAT THE TRUST WAS NO ACTIVITIES HAVE BEEN CARRIED OUT FOR THE LAST 3 YEARS AND IN ABSENCE OF ANY ACTIVITY, THE CHARITABLE PURPOSE OF THE TRUST AS WE LL AS GENUINENESS OF THE TRUST CANNOT BE VERIFIED AND PRO VED. 2 ITA NO.1495 OF 13 ANJUMAN E NAJMI DAWOODI BOHRA JAMAT 4. YOUR APPELLANT PRAYS THAT TRUST BE GRANTED REGISTRA TION U/S 12AA OF THE I.T.ACT, 1961. 5. YOUR APPELLANT PRAYS TO RESERVE THE RIGHT TO ADD, A LTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL 2. ACCORDING TO CIT, THE ASSESSEE TRUST IS PURELY FOR THE BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY OR CASTE. HE OBS ERVED THAT NO ACTIVITIES THERE HAVE BEEN CARRIED OUT BY THE TRUST TILL DATE. IN THE ABSENCE OF ANY ACTIVITY THE CHARITABLE PURPOSE OF T HE TRUST AS WELL AS GENUINENESS OF THE TRUST COULD NOT BE VERIFIED. SO, BEING NOT SATISFIED ABOUT THE OBJECT OF THE TRUST AND GENUINE NESS OF THE ACTIVITIES, THE CIT DECLINED TO GRANT REGISTRATION U/S.12AA OF THE ACT. 3. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE CIT WAS NOT JUSTIFIED IN NOT GRA NTING REGISTRATION TO THE ASSESSEE TRUST U/S.12AA OF THE ACT. THE CIT WAS NOT JUSTIFIED IN HOLDING THAT THE TRUST WAS PUR ELY FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY OR CAST E. HE HAS ALSO ERRED IN HOLDING THAT THE TRUST WAS NO ACTIVITIES H AVE BEEN CARRIED OUT FOR THE LAST 3 YEARS AND IN ABSENCE OF ANY ACTI VITY, THE CHARITABLE PURPOSE OF THE TRUST AS WELL AS GENUINEN ESS OF THE TRUST COULD NOT BE VERIFIED AND PROVED. ACCORDINGL Y, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE CI T WAS NOT JUSTIFIED IN REJECTING THE REGISTRATION AS SOUGHT F OR. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS S UPPORTED THE ORDER OF CIT. 4. WE FIND THAT IN THE CASE OF CIT VS. DAWOODI BOHR A JAMAT (2014) 364 ITR 31 (SC), THE HONBLE SUPREME COURT H AS HELD AS UNDER: (I) THAT DETERMINATION OF THE NATURE OF THE TRUST AS WHOLLY RELIGIOUS OR WHOLLY CHARITABLE OR BOTH CHARITABLE A ND 3 ITA NO.1495 OF 13 ANJUMAN E NAJMI DAWOODI BOHRA JAMAT RELIGIOUS UNDER THE ACT IS NOT A QUESTION OF FACT. IT IS A QUESTION WHICH REQUIRES EXAMINATION OF THE LEGAL EF FECTS OF THE PROVEN FACTS AND DOCUMENTS, THAT IS, THE LEGAL IMPLICATION OF THE OBJECTS OF THE ASSESSEE-TRUST AS CONTAINED IN THE TRUST DEED. IT IS ONLY THE OBJECTS OF A TRUS T AS DECLARED IN THE TRUST DEED WHICH WOULD GOVERN ITS RIGHT OF E XEMPTION UNDER SECTION 11 OR 12. IT IS THE ANALYSIS OF THESE OBJECTS IN THE BACKDROP OF FISCAL JURISPRUDENCE WHICH WOULD IL LUMINATE THE PURPOSE BEHIND CREATION OR ESTABLISHMENT OF THE TRUST FOR EITHER RELIGIOUS OR CHARITABLE OR BOTH RELIGIOU S AND CHARITABLE PURPOSE. THEREFORE, THE HIGH COURT HAD E RRED IN REFUSING TO INTERFERE WITH THE OBSERVATIONS OF THE TRIBUNAL IN RESPECT OF THE CHARACTER OF THE TRUST ON THE GROUND S THAT THEY WERE PURE FINDINGS OF FACT. (II) THAT THE OBJECTS OF THE ASSESSEE-TRUST WERE NO T INDICATIVE OF A WHOLLY RELIGIOUS PURPOSE BUT WERE COLLECTIVELY INDICATIVE OF BOTH CHARITABLE AND RELIGIOUS PURPOSES. ALTHOUGH OBJECTS (C) AND (F) WHICH PROVIDED FOR ACTIVITIES COMPLETEL Y RELIGIOUS IN NATURE AND RESTRICTED TO THE SPECIFIC COMMUNITY OF THE ASSESSEE-TRUST WERE OBJECTS WITH RELIGIOUS PURPOSE ONLY, THE FACT THAT THE OTHER OBJECTS TRACED THEIR SOURCE TO THE HOLY QURAN AND RESOLVED TO ABIDE BY THE PATH OF GODLINES S SHOWN BY ALLAH WOULD NOT BE SUFFICIENT TO CONCLUDE THAT T HE ENTIRE PURPOSE AND ACTIVITIES OF THE TRUST WERE PURELY REL IGIOUS IN COLOUR. THE OBJECTS REFLECTED THE INTENT OF THE TRU ST AS OBSERVANCE OF THE TENETS OF ISLAM, BUT DID NOT REST RICT THE ACTIVITIES OF THE TRUST TO RELIGIOUS OBLIGATIONS ON LY AND FOR THE BENEFIT OF THE MEMBERS OF THE COMMUNITY. THE PROVIS ION OF FOOD TO THE PUBLIC ON RELIGIOUS DAYS OF THE COMMUNI TY, THE ESTABLISHMENT OF MADARSAS AND ORGANISATIONS FOR DISSEMINATION OF RELIGIOUS EDUCATION AND RENDERING ASSIST- ANCE TO THE NEEDY AND POOR FOR RELIGIOUS ACTIVITIES WOULD REFLECT THE ESSENCE OF CHARITY. THE ACTIVITY OF PRO VIDING FOR FOOD ON CERTAIN SPECIFIC OCCASIONS AND OTHER RELIGI OUS AND AUSPICIOUS EVENTS OF THE DAWOODI BOHRA COMMUNITY DI D NOT RESTRICT THE BENEFIT TO THE MEMBERS OF THE COMMUNIT Y. NEITHER THE RELIGIOUS TENETS NOR THE OBJECTS AS EXP RESSED LIMITED THE SERVICE OF FOOD ON THESE OCCASIONS TO M EMBERS OF THE SPECIFIC COMMUNITY. THE ESTABLISHMENT OF MADARS AS OR INSTITUTIONS TO IMPART RELIGIOUS EDUCATION TO THE M ASSES WOULD QUALIFY AS A CHARITABLE PURPOSE QUALIFYING UN DER THE HEAD OF EDUCATION UNDER THE PROVISIONS OF SECTION 2 (15) OF THE ACT. SIMILARLY, ASSISTANCE BY THE ASSESSEE-TRUS T TO THE NEEDY AND POOR FOR RELIGIOUS ACTIVITIES WOULD NOT D IVEST THE TRUST OF ITS ALTRUIST CHARACTER. THEREFORE, THE OBJ ECTS OF THE TRUST EXHIBITED THE DUAL TENOR OF RELIGIOUS AND CHA RITABLE PURPOSES AND ACTIVITIES. SECTION 11 OF THE ACT ALLO WED SUCH TRUST WITH COMPOSITE OBJECTS TO CLAIM EXEMPTION FRO M TAX AS 4 ITA NO.1495 OF 13 ANJUMAN E NAJMI DAWOODI BOHRA JAMAT A RELIGIOUS AND CHARITABLE TRUST SUBJECT TO THE PRO VISIONS OF SECTION 13. THE ACTIVITIES OF THE TRUST UNDER SUCH OBJECTS WOULD, THEREFORE, BE ENTITLED TO EXEMPTION ACCORDIN GLY. IN RE : TRUSTEES OF THE TRIBUNE [1939] 7 ITR 415 (P C) AND IN RE : SOUTH PLACE ETHICAL SOCIETY; BARRALET V. ATTORNEY GENERAL [1980] 3 ALL ER 918; [1980] 1 W LR 1565; 54 TAX CAS 446 APPLIED. (III) THAT THE OBJECTS OF THE ASSESSEE-TRUST WERE B ASED ON RELIGIOUS TENETS UNDER THE QURAN ACCORDING TO THE R ELIGIOUS FAITH OF ISLAM. THE ACTIVITIES OF THE TRUST THOUGH BOTH CHARITABLE AND RELIGIOUS WERE NOT EXCLUSIVELY MEANT FOR A PARTICULAR RELIGIOUS COMMUNITY. THE OBJECTS DID NOT CHANNEL THE BENEFITS TO ANY COMMUNITY IF NOT THE DAWOODI BO HRA COMMUNITY AND THUS, WOULD NOT FALL UNDER THE PROVIS IONS OF SECTION 13(1)(B) OF THE ACT. THE ASSESSEE-TRUST WAS A CHARITABLE AND RELIGIOUS TRUST WHICH DID NOT BENEFI T ANY SPECIFIC RELIGIOUS COMMUNITY AND, THEREFORE, IT COU LD NOT BE HELD THAT SECTION 13(1)(B) OF THE ACT WOULD BE ATTR ACTED TO THE ASSESSEE-TRUST AND THEREBY, IT WOULD BE ELIGIBL E TO CLAIM EXEMPTION UNDER SECTION 11 OF THE ACT. 5. IN VIEW OF ABOVE, WE FIND THAT THE TRUST IS NOT CREATED FOR THE BENEFIT OF PARTICULAR COMMUNITY OR CASTE. THE OBJE CT OF THE ASSESSEE TRUST IS BASED ON ACTIVITY OF BOTH CHARITA BLE AND RELIGIOUS. IN SUCH A SITUATION, THE BENEFITS ARE N OT MEANT FOR EXCLUSIVELY FOR A PARTICULAR RELIGIOUS COMMUNITY. THE TRUST WILL NOT BE DISQUALIFIED TO CLAIM THE EXEMPTION U/S.12AA OF THE ACT. 6. THE SECOND OBJECTION OF CIT IS THAT NO ACTIVITY HAS BEEN CARRIED OUT BY THE ASSESSEE AT A PARTICULAR POINT O F TIME. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO THE ORDER OF THE HONBLE HIGH COURT OF GUJARAT I N THE CASE OF CIT VS. KUTCHI DASA OSWAL MOTO PARIWAR AMBAMA TRUST (TAX APPEAL NO.918 OF 2011), WHEREIN THE ACTIVITIES OF T RUST HAVE NOT COMMENCED, THE COMMISSIONER WAS PERSUADED TO REJECT ITS APPLICATION FOR REGISTRATION. MATTER WAS TRAVELLED BEFORE THE HONBLE GUJARAT HIGH COURT WHEREIN IT WAS HELD THAT THE TRIBUNAL WAS RIGHT IN GRANTING RELIEF TO THE ASSESSEE IN SIM ILAR SET OF FACTS. 5 ITA NO.1495 OF 13 ANJUMAN E NAJMI DAWOODI BOHRA JAMAT AS STATED ABOVE, THIS VIEW IS FORTIFIED BY THE RATI O OF HONBLE SUPREME COURT IN THE CASE OF DAWOODI BOHRA JAMAT (S UPRA). IN VIEW OF ABOVE, THE ASSESSEE IS ENTITLED FOR REGISTR ATION U/S.12AA OF THE ACT FOR BOTH ACCOUNTS AS DISCUSSED ABOVE. THE CIT IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE AS PRAY ED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 21 ST DAY OF AUGUST, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 21 ST AUGUST, 2014 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT-V, PUNE 4) THE DR, A BENCH, I.T.A.T., PUNE. 5) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE