Indomer Ananthi Chandramohan Charitable Trust, CHENNAI V. DIT, CHENNAI

ITA 1903/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0878 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 26-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K ARUMUGAN
• Assessee Lawyers: T VASUDEVAN
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 1903/MDS/2012 INDOMER ANANTHI C H ANDRAMOHAN CHARITABLE TRUST, PLOT 115, ALWAR THIRUNAGAR ANNEXE, CHENNAI 600 087. PAN : AAAT18654G (APPELLANT) V THE DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI. (RESPONDENT) APPELLANT BY : MR. T. VASUDEVAN, ADV OCATE RESPONDENT BY : MR. K.K. ARUMUGAN, CIT DATE OF HEARING : 01 JAN 2013 DATE OF PRONOUNCEMENT : 21 JAN 20 13 O R D E R PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER OF DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI DATED 06.9.2012 IN REGISTERING THE ASSESSEE TRUST UNDER SEC.12AA OF TH E I.T. ACT AS PUBLIC RELIGIOUS TRUST. ITA 1903/MDS/12 2 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE TRU ST IS FORMED ON 16.3.2011 AS A PUBLIC CHARITABLE TRUST WI TH THE MAIN OBJECT OF IMPARTING EDUCATION TO POOR, MEDICAL RELI EF ETC. THE ASSESSEE TRUST APPLIED FOR REGISTRATION UNDER SEC.1 2AA OF THE ACT TO THE DIRECTOR OF INCOME TAX (EXEMPTIONS). THE DIREC TOR OF INCOME TAX (EXEMPTIONS), BY HIS ORDER DATED 30.11.2011 REJ ECTED THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION UNDER SEC.12AA OF THE ACT. THE REASON FOR REJECTING THE APPLICATION WAS THAT ONE OF THE OBJECTS CLAUSES IN THE TRUST DEED WAS TO PROMOTE GO D CONSCIOUSNESS. THEREFORE, THE DIRECTOR OF INCOME TAX (EXEMPTIONS) HELD THAT THE ASSESSEES TRUST IS NEITHER ELIGIBLE FOR REGISTRATI ON UNDER SEC.12AA OF THE ACT AS A PUBLIC CHARITABLE TRUST NOR AS A PUBL IC RELIGIOUS TRUST. THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL AND THIS TRIBUNAL BY ITS ORDER IN ITA NO.55/MDS/2012 DATED 15.3.2012, DIRECT ED THE DIRECTOR OF INCOME TAX (EXEMPTIONS) TO GRANT REGISTRATION UN DER SEC.12AA OF THE ACT, FOLLOWING THE DECISION OF JURISDICTIONAL H IGH COURT IN THE CASE OF ARULMIGU KAMAKSHI AMMAN TRUST IN TAX APPEAL NO.6 43/11 DATED 25.1.2012. THE TRIBUNAL HELD AS UNDER :- ITA 1903/MDS/12 3 3. IT WAS SUBMITTED BY THE LD. A.R. THAT THE ISSUE IN THIS APPEAL WAS AGAINST THE ACTION OF THE DIT IN HOLDING THAT THE ASSESSEE WAS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT ON THE GROUND THAT ONE OF THE OBJECTS OF THE AS SESSEE SPEAKS ABOUT DEVELOPING AND MAINTENANCE OF PLACES O F WORSHIP AS ALSO PROMOTING GOD CONSCIOUSNESS. IT WAS THE SUBMISSION THAT THE ISSUE WAS SQUARELY COVERED BY T HE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT O F MADRAS IN THE CASE OF ARULMIGU KAMAKSHI AMMAN TRUST IN TAX AP PEAL NO. 643/11 DATED 25.01.2012 WHEREIN THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD AS FOLLOWS: WE HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSION. FOR THE PURPOSE OF MAKING AN APPLICATION U/S 12AA, THE APPL ICANT MUST APPLY IN FORM 10. THE SAID FORM PRESCRIBES THE FORM AT OF THE NOTICE OF ACCUMULATION OF INCOME TO BE GIVEN BY CHARITABLE AND RELIGIOUS TRUSTS U/S 11(2) OF THE ACT. FOR THE PURPOSE OF AVA ILING THE BENEFIT OF SECTION 11, REGISTRATION IS REQUIRED. SECTION 11(1) READS AS UNDER:- 11(1). SUBJECT TO THE PROVISIONS OF SECTIONS 60 TO 63, THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIP T OF THE INCOME: (A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOM E SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEEN PERCENT OF THE INCOME FROM SUCH PROPERTY: 6. FROM A READING OF THE ABOVE, IT IS CLEAR THAT TH E INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES SHALL N OT BE INCLUDED IN THE TOTAL INCOME OF THE TRUST. THEREFOR E, THE SAID PROVISION WOULD BE APPLICABLE TO BOTH THE TRUS TS ESTABLISHED WITH THE OBJECT OF CHARITABLE AS WELL A S RELIGIOUS PURPOSES. THEREFORE, SECTION 12AA OF THE ACT DOES NOT MAKE ANY DIFFERENCE BETWEEN THE TRUSTS ITA 1903/MDS/12 4 CREATED WITH THE OBJECT OF CHARITABLE AND RELIGIOUS PURPOSES AND EVEN IF THE TRUST IS NOT CREATED WITH BOTH THE OBJECTS, LAW DOES NOT MAKE ANY DISQUALIFICATION FOR THE TRUST TO MAKE AN APPLICATION FOR REGISTRATION. THEREFORE, THE TRIBUNAL HAS CORRECTLY APPLIED THE PROVISION OF LAW AND ALLOWED THE APPEAL, WHICH FIND ING IS BASED ON VALID MATERIAL EVIDENCE. THE FINDING OF THE TRIBUNAL IS NOT PERVERSE AND IT IS A QUESTION OF FA CT. THEREFORE, WE FIND NO GROUND TO CAUSE OUR INTERFERE NCE INTO THE ORDER PASSED BY THE TRIBUNAL. ACCORDINGLY , THE ORDER PASSED BY THE TRIBUNAL IS CONFIRMED AND BOTH THE SUBSTANTIAL QUESTIONS OF LAW RAISED HEREIN ARE ANSW ERED AGAINST THE REVENUE. IT WAS THE FURTHER SUBMISSION THAT IN VIEW OF THE D ECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT THE ASSESSEE WAS ENTITLED TO BE REGISTERED U/S 12AA OF THE ACT. 4. IN REPLY, THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE DIT. IT WAS THE SUBMISSION THAT THE ASSESSEE TR UST HAD RELIGIOUS CLAUSES IN ITS OBJECTS AND CONSEQUENTLY W AS NOT ENTITLED TO REGISTRATION U/S 12AA OF THE ACT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. AS IT IS NO TICED THAT THE ISSUE IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF ARULMIGU KAMAKSHI AMMAN TRUST [SUPRA], THE DIT IS DIRECTED TO GRANT REGISTRATION U/S. 12AA OF THE ACT . GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL, THE DI RECTOR OF INCOME TAX (EXEMPTIONS) PASSED ORDER DATED 06.9.2012 GRANTING REGISTRATION UNDER SEC.12AA TO THE ASSESSEE AS A PUBLIC RELIGIO US TRUST. 3. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS TRIBUNAL HAS NOT DIRECTED THE DIRECTOR OF INCOME TAX (EXEMPT IONS) TO REGISTER THE ASSESSEE AS A PUBLIC CHARITABLE TRUST. THE CO UNSEL FOR THE ITA 1903/MDS/12 5 ASSESSEE SUBMITS THAT EVEN THOUGH ONE OF THE CLAUSE S IN THE TRUST DEED CONTAINS PROMOTING GOD CONSCIOUSNESS, IT NEVER ENGAGED IN ANY RELIGIOUS ACTIVITIES. THE COUNSEL FOR THE ASSESSE E SUBMITS THAT THIS TRIBUNAL HAS DIRECTED TO GRANT REGISTRATION ONLY AS A PUBLIC CHARITABLE TRUST AND NOT AS A PUBLIC RELIGIOUS TRUST AND THERE FORE THE ORDER PASSED BY THE DIRECTOR OF INCOME TAX (EXEMPTIONS) G RANTING REGISTRATION TO THE ASSESSEE AS PUBLIC RELIGIOUS TR UST IS NOT PROPER AND JUSTIFIED. 4. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS) AND VEHEMEN TLY ARGUES THAT THE ASSESSEE IS A RELIGIOUS TRUST AND IT HAS NOT MO DIFIED THE CLAUSE IN THE TRUST DEED. THEREFORE, IT STILL CONTINUES TO B E A RELIGIOUS TRUST AND, THEREFORE, THE DIRECTOR OF INCOME TAX (EXEMPTI ONS) IS CORRECT IN GRANTING REGISTRATION TO THE ASSESSEE AS PUBLIC RE LIGIOUS TRUST. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE ORDER OF DIRECTOR OF INCOME TAX (EXEMPTIONS) AND THE ORDER OF THIS TR IBUNAL IN THE CASE OF THE ASSESSEE. CO-ORDINATE BENCH OF THIS TR IBUNAL HAS HELD THAT THIS ISSUE IS SQUARELY COVERED BY THE DECIS ION OF JURISDICTIONAL ITA 1903/MDS/12 6 HIGH COURT IN THE CASE OF ARULMIGU KAMAKSHI AMMAN T RUST IN TAX APPEAL NO.643/11 DATED 25.1.2012 (SUPRA) AND DIRECT ED TO GRANT REGISTRATION UNDER SEC.12AA OF THE ACT, BY ALLOWING THE APPEAL OF THE ASSESSEE, WHICH MEANS THAT THIS TRIBUNAL ALLOWED TH E APPEAL OF THE ASSESSEE ACCEPTING THE CONTENTION OF THE ASSESSEE T HAT THE ASSESSEES TRUST IS A PUBLIC CHARITABLE TRUST AND REGISTRATION UNDER SEC.12AA HAS TO BE GRANTED AS A PUBLIC CHARITABLE TRUST. THEREF ORE, THE DIRECTION GIVEN BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IS THAT THE DIRECTOR OF INCOME TAX (EXEMPTIONS) SHOULD GRANT REGISTRATION U NDER SEC.12AA TO THE ASSESSEE AS A PUBLIC CHARITABLE TRUST. IN V IEW OF THE ABOVE, WE DIRECT THE DIRECTOR OF INCOME TAX (EXEMPTIONS) T O MODIFY HIS ORDER DATED 6.9.2012 AND GRANT REGISTRATION UNDER S EC.12AA OF THE I.T. ACT TO THE ASSESSEE AS A PUBLIC CHARITABLE TRU ST. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ITA 1903/MDS/12 7 7. ORDER PRONOUNCED ON MONDAY, THE 21 ST OF JANUARY 2013 AT CHENNAI. SD/- SD/- ( DR. O.K. NARAYANAN) (CHALLA NAGENDR A PRASAD) VICE PRESIDENT JUDICIAL MEMBE R CHENNAI, DATED : 21 ST JANUARY 2013 JLS. COPY TO:- (1) APPELLANT (2) RESPONDENT (3) CIT-(A), CHENNAI (4) C.I.T., CHENNAI (5) D.R. (6) GUARD FILE