M/s.Mother Theresa Home, Idukki V. The ITO(Exemption), Kochi, Kochi

ITA 163/COCH/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1167 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-03-2019
• Assessment Year: 2018-2019
• Appeal Filed On: 23-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUDHANSHU SHEKHAR JHA
• Keywords: Charitable institution; Set aside
• Section: 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO . 163/COCH/ 2018 ASSESSMENT YEAR : 2018 - 19 MOTHER THERESA HOME, SCHOOL CITY, MANIYARANKUDY P.O., VAZHATHOPE, IDUKKI - 685 602. [PAN: AAFTM 0797H] VS. THE INCOME TA X OFFICER(EXEMPTIONS), KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESS EE BY SHRI ANIL D. NAIR, ADV. REVENUE BY S HRI SUDHANSHU SHEKHAR JHA, CIT(DR) D ATE OF HEARING 20 / 0 3 / 201 9 DATE OF PRONOUNCEMENT 20 / 0 3 /201 9 O R D E R PER CHANDRA P OOJARI, AM: TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(EXEMPTIONS), KOCHI DATED 23/02/2018 AND PERTAIN A TO THE A SSESSMENT YEAR 2018 - 19. I.T.A. NO . 163/COCH/2018 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S : 1. THE ORDER OF T HE COMMISSIONER OF INCOME TAX(EXEMPTIONS) TO THE EXTENT OBJECTED TO HEREIN IS ABSOLUTELY ILLEGAL, ARBITRARY AND UNAUTHORIZED. 2 . THE OBJECT OF THE TRUST IS TO ESTABLISH AND RUN HOMES FOR THE POOR W OMEN AND GIRLS BY GIVING ADEQUATE SHELTER, HOMELY CARE AND EDUCATION OF THE SOCIETY IRRESPECTIVE OF CASTE, CREED AND RELIGION. 3. THE TRUST MADE AN APPLICATION IN THE PRESCRIBED FORM 10A ON 24/08/2017 REQUESTING FOR REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961 AS A CHARITABLE INSTITUTION. 4. SUBSEQUENTLY, THE CIT (EXEMPTIONS) PASSED AN ORDER UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 DATED 23.02.2018, REGISTERING THE TRUST AS RELIGIOUS INSTITUTION EVEN THOUGH THE APPLICATION WAS FOR CHARITABLE INSTITUTION. 5. IT IS HUMBLY SUBMITTED THAT THE INSTITUTIO N WAS ESTABLISHED AS PER A TRUST DEED REGISTERED AT SRO, THODUPUZHA ON 01/03/2017 FOR PROVIDING SELFLESS AND CHARITABLE SERVICES FOR THE AGED LADIES AS WELL AS ABANDONED GIRL CHILDREN OF THE SOCIETY WITHOUT ANY DISCRIMINATION OF CASTE AND CREED. 6. IT IS PERTINENT TO NOTE THAT THE BOARD OF TRUSTEES MANAGES THE INSTITUTION. THE BOARD OF TRUSTEES FUNCTIONS AS PER THE PROVISIONS OF THE RULES AND REGULATIONS OF THE TRUST AS PER THE DEED. THE MAIN OBJECTIVE OF THE TRUST IS TO PROVIDING SELFLESS AND CHARITABLE SERVICES FOR THE AGED AS WELL AS ABANDONED GIRL CHILDREN OF THE SOCIETY WITHOUT ANY DISCRIMINATION OF CASTE AND CREED. 7. THE ORDER GRANTING REGISTRATION AS RELIGIOUS TRUST IS FACTUALLY NOT CORRECT. THERE IS NO RELIGIOUS ACTIVITY UNDERTAKEN BY THE TRUST. THE ACTIVITY UNDERTAKEN BY THE TRUST PARTAKES ALL THE CHARITABLE ACTIVITIES AND THEREFORE THE REGISTRATION OUGHT TO HAVE BEEN GRANTED AS A CHARITABLE INSTITUTION. 8. DURING THE COURSE OF ENQUIRY BY THE OFFICER ALSO, IT WAS DEMONSTRATED THAT THE TRUST IS DOING CHARITABLE SERVICES. THERE ARE NO RELIGIOUS ACTIVITIES UNDERTAKEN BY THE TRUST AND THEREFORE THE ORDER OF THE COMMISSIONER GRANTING REGISTRATION AS RELIGIOUS TRUST IS LIABLE TO BE QUASHED AND SET ASIDE. IT IS PRAYED THAT THE DIRECTION BE GIVEN TO THE COMMISSIONER TO GRANT REGISTRATION OF THE TRUST AS A CHARITABLE TRUST. IF ORDERS AS PRAYED FOR ARE NOT GRANTED, THE APPELLANT WILL BE PUT TO IRREPARABLE LOSS AND HARDSHIP. IT IS THEREFORE ACCORDINGLY PRAYED. I.T.A. NO . 163/COCH/2018 3 9. FOR THESE AND OTHER GROUNDS TO BE SUBMITTED AT THE TIME OF HEARING, IT IS MOST HUMBLY PRAYED THAT THIS HONBLE AUTHORITY BE PLEASED TO ALLOW THIS APPEAL. 3. THE FACTS OF THE CASE ARE THAT THE CIT(EXEMPTIONS) OBSERVED THAT THE ASSESSEE - TRUST, A RELIGIOUS INSTITUTION ESTABLISHED AS PER TRUST DEED DATED 01/03/2017, HAD FILED AN APPLICATION IN THE PRESCRIBED FORM NO. 10A ON 24/08/2017 REQUESTING FOR REGISTRATION U/S. 12A OF THE ACT. THE TRUST/INSTITUTION WA S REGISTERED U/S. 12AA(1)(B)(I) OF THE INCOME TAX ACT W.E.F. THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2018 - 19 AND ITS NAME WAS ENTERED IN THE REGISTER OF APPLICATION U/S. 12AA AS A RELIGIOUS INSTITUTION. THE CIT(EXEMPTIONS) OPINED THAT THAT THE REGISTRATION U/S. 12AA(1)(B)(I) OF THE ACT DOES NOT AUTOMATICALLY EXEMPT THE INCOME OF THE TRU ST/INSTITUTION. ACCORDING TO THE CIT(EXEMPTIONS), THIS CERTIFICATE IS NOT A FINDING REGARDING THE CHARITABLE/RELIGIOUS NATURE OF THE TRUST/INSTITUTION. 4. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR SUBMITTED THAT THE ASSESSEE - TRUS T MADE THE APPLICATION FOR REGISTRATION AS A CHARITABLE TRUST. HOWEVER, IT WAS GRANTED REGISTRATION AS RELIGIOUS INSTITUTION WHICH IS INCORRECT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. AS SEEN FROM THE APPLICATION MADE BY THE ASS ESSEE IN F ORM NO. 10A FOR GRANTING I.T.A. NO . 163/COCH/2018 4 APPROVAL OF REGISTRATION U/S. 12A IN COLUMN 3, THE ASSESSEE MENTIONED AS FOLLOWS: 3. NAMES(S) AND ADDRESSEE(S) OF AUTHOR(S)/FOUNDER(S) REGISTERED CHARITABLE TRUST, NO.27/IV/2017 DATED 1/03/2017 (COPY ENCLOSED) IN SUPPORT OF THIS, THE LD. AR FILED A COPY OF THE TRUST DEED BEFORE US STATING TH AT THE OBJECTS OF THE TRUST ARE AS FOLLOWS: AND WHEREAS THE C ONGREGATION OF S ISTERS OF ST. MARTHA, AS PART OF ITS EFFORTS TO SPREAD THE DIVINE MESSAGE OF LOVE AND PEACE TO THE HUMANITY, IS ENGAGED IN VARIOUS RELIGIOUS AND CHARITABLE ACTIVITIES AND HELPING ALL THE HUMANITY IRRESPECTIVE OF CASTE, CREED OR SEX. THE CONGREGATION IS CONCENTRATING IN ALL KINDS OF RELIGIOUS AND CHARITABLE ACTIVI TIES WITHOUT DISCRIMINATION OF CASTE AND CREED. AND WHEREAS BY IMBIBING THE SPIRIT OF MESSAGE OF THE GOSPELS AND OPERAT ING WITHIN THE FRAME WORK OF CANON LAW O F CATHOLIC CHURCH AND RULES AND REGULATIONS OF C ONGREGATION OF S ISTERS OF ST. MARTHA, HAS BEEN TRANSLATING TH E DIVINE COMMANDMENT S INTO THE SERVICE OF MANKIND. 5.1 IN VIEW OF THIS, WE ARE OF THE OPINION THAT THIS ISSUE IS TO BE REMITTED TO THE FILE OF THE CIT(EXEMPTIONS) TO GRANT APPROVAL U/S. 12AA OF THE ACT IN ACCORDANCE WITH THE APPLICATION READ WITH THE TRUST DEED. THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6 . IN TH E RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH MARCH , 2019 SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A. NO . 163/COCH/2018 5 PLACE: KOCHI DATED: 20 TH MARCH , 2019 GJ COPY TO: 1 . MOTH ER THERESA HOME, SCHOOL CITY, MANIYARANKUDY P.O., VAZHATHOPE, IDUKKI - 685 602. 2. THE INCOME TAX OFFICER(EXEMPTIONS), KOCHI. 3 . THE COMMISSIONER OF INCOME - TAX ( EXEMPTIONS ) , KO CHI . 4. THE PR. COMMISSIONER OF INCOME - TAX, KO CHI. 5 . D. R., I.T.A.T., COCHIN BEN CH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN