NEMNATH JATIA FOUNDATION , MUMBAI V. CIT(E), MUMBAI

ITA 1514/MUM/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6917 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 16-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VISHESH JATIA
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI A. M. ALANKAMONY, AM & Ms. KAVITHA RAJAGOPAL, JM आयकरअपीलसं./ I.T. A. No. 1514 & 1515/Mum/2020 (निर्धारणवर्ा / Assess ment Year: 2019-20) Nemnath Jatia Foundation, 7 th floor, Sudhakar Building, 26 Narayan Dabholkar Road, Mumbai-400 006. बिधम/ Vs. CIT(E), Mumbai 6 th floor, Piramal Chamber, Lal Baug, Parel, Mumbai-400 012 स्थायीलेखासं./जीआइआरसं./PAN N o . AADTN1097M (अपीलाथी/Appellant) : (प्रत्यथी / Respondent) अपीलाथीकीओरसे/ Appellant by : Shri Vishesh Jatia, Ld. AR प्रत्यथीकीओरसे/Respondent by : Shri Mahesh Akhade, Ld. DR सुनवाईकीतारीख/ Date of Hearing : 14.03.2022 घोषणाकीतारीख / Date of Pronouncem ent : 15.03.2022 आदेश / O R D E R Per Kavitha Rajagopal, Judicial Member: The present two appeals have been filed by the appellant institution /trust namely Nemnath Jatia Foundation against the order passed by Ld. CIT(E), Mumbai on 28.02.2020 respectively. 2 I . T . A . N o . 1 5 1 4 & 1 5 1 5/ M u m / 2 0 2 0 Nemnath Jatia Foundation 2. Since the issues involved in both the appeals are inter- connected, therefore these appeals were heard together and are being disposed of by way of this common order. 3. First of all, we are taking ITA No. 1514/Mum/2020 and the grounds raised in this appeal are as follows:- 1. The Ld. CIT(E) has grossly erred in law as well as on facts in rejecting the application for approval u/s. 80G. 2. The Ld. CIT(E) has further erred in law as well as on facts in not considering the submissions made by the Appellant especially judicial decisions on this point. 3. The Ld. CIT(E) has further erred in law as well as on facts in not considering the objects of trust in their entirety, especially the dominate objective and its inclusiveness. 4. The Ld. CIT(E) has acted on presumptions and surmises in passing a very vague Order ignoring the factual position. 5. The Appellant craves leave to amend, alter or delete any of the above grounds of appeal, 4.. The brief facts of the appeal are as follows:- The appellant institution /trust is registered with the office of the Assistant Charity Commissioner, Bombay. The assessee trust had applied for registration u/s 12AA on 26.08.2019 and u/s 80G on 31.08.2019. Ld. CIT(E) was furnished with the copy of trust deed containing Clause 1 to 30 under the head „Objects of the Trust‟. The contention of the assessee trust was that the Trust was of 3 I . T . A . N o . 1 5 1 4 & 1 5 1 5/ M u m / 2 0 2 0 Nemnath Jatia Foundation charitable nature. Ld. CIT(E) specified in his order dated 28.08.2020 that Clause 19 and Clause 26 of the Trust Deed was of religious nature. On this pretext, Ld. CIT(E) rejected the approval under 80G on the view of the provisions of section 80G(5) of the I.T. Act. Ld. CIT(E) had relied on following decisions, which are as under:- i) Commissioner of Hindu Religious and Charitable Edowments Madras Vs. Sri Lakshmindra Thirth Swamiar 1954 SCJ 335 (SC). ii) Shiv Mandir Devsttan Panch Committee Sanstan Vs. CIT (27 taxman.com 100) (Nag-Trib) iii) Upper Ganges Sugar Mills Vs. CIT (227 ITR 578) (SC) iv) Sri Murudhar Kasari Sthanakwasi Jain Yadgar Samiti Trust Vs. Union of India (273 ITR 475) (Raj. HC) 5. Ld. AR submitted that it has not specified any particular religion in its Trust Deed and stated that the Trust was for charitable purpose only. Ld. AR relied on the decision of Hon‟ble Gujarat High Court in the case of CIT, Gujarat I vs. Ahmedabad Rana Caste Association. 6. On the other hand, Ld. DR contended that the Trust was not for the charitable purpose and it relied on the order of Ld. CIT(E) on the basis of Clause 19 & Clause 26 of the Trust Deed. 4 I . T . A . N o . 1 5 1 4 & 1 5 1 5/ M u m / 2 0 2 0 Nemnath Jatia Foundation 7. We have considered the rival submission and perused the material placed on record. We are of the considered opinion that the appeal involves the substantial issue that whether the Ld. CIT(E) has erred in rejecting the application for approval u/s 80G in the light of the section 80G(5) of I.T. Act. It would be appropriate to reproduce the relevant portion of section 80G of the Act to the extent that the same are relevant for the controversy involved in the preset case. Section 80G: (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provision of this section, ..... Section 80G(5): This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :- i) ..... ii) ..... iii) The institution or fund is not expressed to be for the benefit of any particular religious community or case 8. It would be appropriate to consider the decision relied on by both the sides alongwith relevant extract from the same. We find that Hon‟ble Gujarat High Court in the case of CIT, Gujarat vs. Ahmedabad Rana Caste Association, had observed that “a purpose would be charitable if it is for the advancement of any other object of general public utility.” "Public" means the body of people at large including any class of the public and "utility" means usefulness. Therefore, the 5 I . T . A . N o . 1 5 1 4 & 1 5 1 5/ M u m / 2 0 2 0 Nemnath Jatia Foundation advancement of any object beneficial to the public or a section of the public as distinguished from an individual or a group of individuals would be a charitable purpose." This judgment was confirmed by Hon‟ble Supreme Court. 9. It was observed that the purpose of charitable Trust would be for the benefit of not a particular sector of community, but the entire public at large. The Trust Deed has clearly enumerated in Clause 19 that it was for the public at large and not for any particular religion or sect of people. Clause 26, on the other hand specifies that “grant of donation was to any Temple, Mosque, Church, Gurudwara and other places of worship and religious institution” which clearly demonstrates that no particular religion was to be benefitted. 10. On the other hand, Ld. DR relied on the decision of Tribunal in the case of Shiv Mandir Devsttan Panch Committee Sanstan Vs. CIT (supra), which does not hold good for the particular facts of this case as there is no object which is „wholly or substantially‟ of religious nature attributable to the Trust Deed of the assessee trust. 11. We would like to place reliance on the decision in the case of Addl. CIT, Gujrat Vs. Smart Art Silk Cloth Manufacture Association wherein the Hon‟ble Apex Court held that if the primary or dominant purpose of the Trust was charitable, another object which by itself may not be charitable but which was merely ancillary or incidental to the primary or dominant purpose 6 I . T . A . N o . 1 5 1 4 & 1 5 1 5/ M u m / 2 0 2 0 Nemnath Jatia Foundation could not prevent the Trust or the institution from being a valid charity. 12. The aforesaid decisions relied upon by Ld. DR is clearly distinguishable from the facts of the present case as there is no clause in the Trust Deed in the present case which indicates that income of the petitioner trust was to be wholly or substantially for any particular religious. Therefore, the said facts has been wrongly applied by Ld. CIT(E) in the present case. 13. On the other hand, the case laws relied on by Ld. AR fully supports the case of the assessee Trust where the Courts have reiterated that the primary object of the Trust is vital aspect and it has to be viewed in the light of such objects with which a Trust was constituted. 14. Consequently, Ld. CIT(E) is directed to approve the application of the assessee Trust u/s 80G. With these observations, the present appeal filed by the assessee is allowed. 15. With regard to the other appeal filed by the assessee in ITA No. 1515/Mum/2020, the facts and issue are related to the decision in ITA No. 1514/Mum/2020, therefore we are of the considered opinion that since the assessee trust have got relief in ITA No. 1514/Mum/2020, the assessee trust‟s appeal in ITA No. 1515 becomes infructuous. We, therefore, dismiss the same in view of the decision in ITA No. 1514/Mum/2020. 7 I . T . A . N o . 1 5 1 4 & 1 5 1 5/ M u m / 2 0 2 0 Nemnath Jatia Foundation 16. In the result, the appeal filed by the assessee in ITA No. 1514/Mum/2020 is allowed and the appeal filed by the assessee in ITA No. 1515/Mum is dismissed. Orders pronounced in the open court on 15.03.2022. Sd/- Sd/- (AM Alankamony) (Kavitha Rajagopal) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 15.03.2022 Sr.PS. Dhananjay आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. दवभागीयप्रदतदनदध, आयकरअपीलीयअदधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER, .उि/सहधयकिंजीकधर (Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण, मुंबई/ ITAT, Mumbai