Gowri Ashram, CHENNAI V. DIT, CHENNAI

ITA 1504/CHNY/2012

• Counselvise Citation: 150421714 RSA 2012
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-10-2012
• Assessment Year: 2012-2013
• Appeal Filed On: 27-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: K RAGHUC A
• Keywords: Charitable institution; Competent authority
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D B ENCH C HENN AI BEFORE SHRI ABARAHAM P GEORGE ACCOUNTANT MEMBER AND SHRI S.S.GODARA , JUDICIAL MEMBER .. ITA NO. 1504 /MDS./ 20 12 GOWRI ASHRAM, 256 - 259, THIRUVOTTIYUR HIGH ROAD, (OLD NO.85 NORTH MADA ST) ,THIRUVOTTIYUR, CHENNAI 600 019. VS. DIRECTOR OF INCO M E TAX,(EXEMPTIONS), AAYKAR BHAWAN, ANNEX III FLOOR, NO.121, MG ROAD, CHENNAI. 600 034 PAN AABTG 3613 I (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. RAGHU,C.A. RESP ONDENT BY : SHRI K E B RENGARAJAN JR. STANDING COUNSEL DATE OF HEARING : 09 . 1 0.12 DATE OF PRONOUNCEMENT : 09 . 1 0.12 O R D E R PER S.S.GODARA JUDICIAL MEMBER : IN THIS APPEAL, ASSESS EE HAS CHALLENGED THE ORDER DATED 27 .06.2012 PASSED BY THE DIRECTOR OF INCOME TAX(EXEMPTIONS), CHENNAI IN DIT(E) NO.2(707)/11 - 12 UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT ). ITA . 1504 /MDS/ 12 2 2. BRIEF FACTS ARE THAT THE ASSESSEE A SOCIETY REGI STERED UNDER TAMIL NADU SOCIETIES REGISTRATION ACT, 1975 , FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. IN THE PROCEEDINGS CONSEQUENCE THERETO, T HE COMPETENT AUTHORITY NOTICED FROM ASSESSEE S INCOME AND EXPENDITURE ACCOUNT THAT IT HAD OFFERED INCOME UNDER THE HEAD RENTAL INCOME FROM SHOPS LET OUT AS WELL AS IT ALSO GOT CERTAIN COLLECTIONS FROM THE KALYA NA MANDAPAM OWNED BY IT. IN THE OPINION OF DIT(EXEMPTIONS) , THE ASSESSEE S ACTIVITY OF MAINT AINING KALYANA MANDAPAM WAS OF A COM MERCIAL NATURE. THEREFORE, HE ISSUED NOTICE TO THE ASSESSEE, WHO PRODUCED ALL THE DETAILS AND SUBMITTED THAT ALL INCOMES AND EXPENSES RELATED TO MAINTENANCE OF ASSESSEE S KALYANA MANDAPAM AS WELL AS SHOPS. THE ASSESSEE ALSO SUBMITTED THAT IT WAS PROVIDI NG ASSISTANCE IN THE MARRIAGE OF POOR PEOPLE. HOWEVER, THE COMPETENT AUTH ORITY DID NOT AGREE TO THE SAME; I N WHOSE OPINION, THE TYPES OF EXPENSES AS INCURRED BY THE ASSESSEE WERE IN NATURE OF DISCOUNT OR PROMOTION EXPENSES FOR THE COMMERCIAL ACTIVITIES OF ASSESSEE S KALYANA MANDAPAM. THEREAFTER, BY REFERRING TO SECTION 2(15) OF THE ACT, THE COMPETENT AUTHORITY HAS DECLINED REGISTRATION TO THE ASSESSEE BY HOLDING THAT ASSESSEE S OBJECTS AND ACTIVITIES DID NOT COME UNDER ITA . 1504 /MDS/ 12 3 THE PURVIEW OF CHARITABLE OBJECTS UNDER SECTION 2(15) OF TH E ACT . THEREFORE, THE ASSESSEE IS IN APPEAL. 3. THE A.R. REPRESENTING THE ASSESSEE HAS VEHEMENTLY REITERATED THE SUBMISSIONS MADE IN THE GROUNDS AND ALSO DRA WN OUR ATTENTION TOWARDS SCHEME AWARD DATED 25.03.1958 PASSED BY DIST RICT JUDGE MADRAS STAT ING THE OBJECTS OF THE ASSESSEE , ITS INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED ON 31 ST MARCH, 2011 AS WELL AS BALANCE SHEET AS ON 31 ST MARCH, 2011. IT IS THE SUBMISSION OF THE ASSESSEE S REPRESENTATIVE THAT IN ORDER TO FULFI LL THE OBJECTS UNDER WHICH THE ASSESSEE - TRUST HAS BEEN CREATED, THE ASSESSEE HAS BEEN EARNING INCOME. TO BUTTRESS HIS PLEA, LD. A.R. HAS ALSO REFERRED TO THE CASE LAW OF THE HON BLE JURISDICTIONAL HIGH COURT REPORTED IN [2000] 245 ITR 242(MDS.) IN THE CASE OF CIT VS. SAMYUKTHA GOWDA SARASWATHA SABHA AND PRAYED FOR ACCEPTANCE OF THE APPEAL. 4. ON BEHALF OF RE VENUE, D.R. HAS CHOSEN TO DRAW SUPPORT FROM THE IMPUGNED ORDER AS WELL AS REASONS CONTAINED THEREIN AND PRAYED FOR UPHOLDING THE SAME. ITA . 1504 /MDS/ 12 4 5. WE HAVE CO NSIDERED THE RIVAL CONTENTIONS AT LENGTH AND ALSO GONE THROUGH THE RELEVANT FINDINGS, RECOR D REFERRED TO BY A.R AS WELL AS CASE LAW CITED (SUPRA) . THERE IS HARDLY ANY DISPUTE THAT THE ASSESSEE - SOCIETY WAS CREATED BY A SCHEME AWARD PASSED BY LEARNED DISTRI CT JUDGE, MADRAS. IT IS NOTICED THAT THE OBJECTS AND USE OF THE ASSESSEE - SOCIETY AS MENTIONED IN THE SAME ARE STATED AS UNDER: - THE OBJECTS AND USE OF THE CHOULTRY IS TO PROVIDE ACCOMMODATION AND FACILITIES FOR THE PERFORMANCE OF MARRIAGES AND ALL OTHE R AUSPICIOUS FUNCTIONS OF THE MEMBERS OF TELUNGU BERI VYAYSIA COMMUNITY PRIMARILY AND ALSO FOR THE PERFORMANCE OF SIMILAR AUSPICIOUS FUNCTIONS BY OTHER HINUDS. FROM A BARE GLANCE OF T HE ABOVE SAID OBJECTS, IT IS CLEAR THAT THE ASSESSEE - SOCIETY HAS TO PROVIDE ACCOMMODATION AND FACILITY FOR PERFORMANCE OF MARRIAGES AND ALL OTHER AUSPICIOUS FUNCTIONS OF THE MEMBERS OF A PARTICULAR CO MMUNITY PRIMARILY AND ALSO FOR PERFORM ANCE OF SIMILAR FUNCTIONS BY A RELIGIOUS GROUP . IN OUR OPINION, THIS DOES NOT COME UN DER THE PURVIEW OF SECTION 2(15) OF THE ACT, WHICH IS REPRODUCED AS UNDER: - CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ITA . 1504 /MDS/ 12 5 ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY; PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE C ARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION , OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TEN LAKH RUPEES OR LESS IN THE PREVIOUS YEAR. A PERUSAL OF THE A BOVE PROVISION MAKES IT ABUNDANTLY CLEAR THAT MERELY BECAUSE THE OBJECTS OF A PARTICULAR APPLICANT IS TO PROVIDE SOME FACILITY TO A PARTICULAR CASTE OR COMMUNITY IS NOT COVERED BY THE DEFINITI ON OF A CHARITABLE PURPOSE . WE REITERATE THAT THE ABOVE PROVIS ION IS VERY MUCH UNAMBIGUOUS IN NATURE IN DEFINING THE CHARITABLE PURPOSE WHICH INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT . WHICH ARE NOT FORTHCOMING FROM THE APPELLANT S OBJECTS. 5.1 . COMING TO THE OTHER DOCUM ENTS REFERRED TO BY THE ASSESSEE I.E. INCOME AND EXPENDITURE ACCOUNT AS WELL AS BALANCE SHEET (SUPRA), WE FIND THAT NOWHERE THERE IS ANY EXPENDITURE INCURRED FOR PROVIDING ANY RELIEF TO POOR ETC. WE HAVE ALSO CONSIDERED THE CASE LAW CITED BY THE ASSESSEE. S INCE WE HAVE ALREADY HELD ITA . 1504 /MDS/ 12 6 THAT NEITHER THE ASSESSEE S OBJECTS INCLUDE ANY RELIEF O F THE POOR NOR THERE IS ANY ACTIVITY CARRIED OUT BY THE ASSESSEE IN THIS DIRECTION, WE HOLD THA T THE SAME IS NOT APPLICABLE QUA FACTS OF THE CASE. IN THE SAID CASE, THE ISSUE INVOLVED BEFORE THE HON BLE JURISDICTIONAL HIGH COURT WAS THAT THOUGH THE OBJECTS OF ASSESSEE WERE OF EDUCATION AND OTHER GENERA L UTILITY, ITS INCOME EARNED FROM LETTING OUT THE MANDAPAM WAS HELD TO BE THAT FULFILLING THE OBJECTS OF THE CONCERNED TRUST. THE SAME IS NOT THE CASE IN HAND. IN VIEW OF OUR ABOVE DISCUSSION, WE ARE OF THE OPINION THAT THE DIT(EXEMPTION) HAS RIGHTLY REJECTED THE ASSESSEE S APPLICATION SEEKING REGISTRATION UNDER SECTION 12AA OF THE ACT. HENCE, WE UPHOLD THE IMPUGNED OR DER . 6 . IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER P R ONOUNCED ON TUESDAY THE 9 TH OCTOBER, 2012 AT CHENNAI SD/ - SD/ - (ABARAHAM P GEORGE ) ( S.S.GODARA ) ACCOUNT NT MEMBER JUDICIAL MEMBER CHENNAI, DATED 9 TH OCTOBER , 2012 . K S SUNDARAM COPY TO: ASSESSEE / AO / CIT (A) / CIT / D.R. / GUARD FILE ITA . 1504 /MDS/ 12 7