MARAA, Bangalore V. ITO (Exemptions)-2, Bangalore

ITA 191/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0577 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-10-2009
• Assessment Year: misc
• Appeal Filed On: 09-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE. K, JUDICIAL MEMBER AND SHRI A MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.191/BANG/2009 (ASSESSMENT YEAR:---) MARAA APARTMENT NO.A003, GARDEN MANSION, AIRPORT ROAD, BANGALORE-560 008. .. APPELLANTS VS. THE INCOME-TAX OFFICER(EXEMPTIONS)-2, FOR DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE. .... RESPONDENT APPELLANT BY : SHRI J SUDHARSHAN RESPONDENT BY : SMT. PREETHI GARG O R D E R PER GEORGE GEORGE K, JUDICIAL MEMBER : THIS APPEAL PREFERRED BY MARAA ASSESSEE TRUS T IS DIRECTED AGAINST THE ORDER OF THE LD. DIT (E), REJE CTING ITS APPLICATION FOR REGISTRATION U/S 12A OF THE ACT. 2. THOUGH THE ASSESSEE-TRUST HAS RAISED ITS G ROUNDS IN AN EXHAUSTIVE AND NARRATIVE MANNER, THE ESSENCE AND SU BSTANCE OF THE ISSUE IS THAT THE DIT (E)S REFUSAL TO GRANT REGISTRATION U/S 12A OF THE ACT. 3. THE ASSESSEE TRUST, REGISTERED UNDER TH E TRUST ACT ON 11/2/2008, HAD FURNISHED AN APPLICATION FOR REGI STRATION U/S 12A OF THE ACT ON 30/6/2008. ON AN EXAMINATION OF T HE DETAILS ITA 191/B/2009 PAGE 2 OF 6 FURNISHED, THE LD. DIT (E) FOUND THAT THE MAIN ACTI VITY OF THE ASSESSEE TRUST WAS TO SET COMMUNITY RADIO STATIONS AS PER THE CONTRACT AGREEMENT BETWEEN THE ASSESSEE-TRUST AND T HE UNESCO AND THAT THE PAYMENT RECEIVED FROM THE UNES CO WAS FOR AN ACTIVITY BEING AN OBJECT OF GENERAL PUBLIC UTILITY AND, HENCE, DOES FALL WITHIN THE PURVIEW OF AMENDED PROVISIONS OF S.2(15) OF THE ACT. THUS, THE DIT (E) HAD REJECTED THE ASSESS EE TRUSTS APPLICATION FOR REGISTRATION U/S 12A OF THE ACT ON THE GROUND THAT IN LIEU OF THE AMENDED PROVISIONS OF S. 2(15), THE ASS ESSEES ACTIVITIES WERE SQUARELY COVERED AS NOT A CHARITAB LE PURPOSE. 4. AGGRIEVED, THE ASSESSEE TRUST HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE LD. A R HAD PUT-FORTH HIS SPIRITED ARGUMENTS, THE ESSENCE OF WH ICH, ARE SUMMARIZED AS UNDER: (I) THE MAIN OBJECTIVE OF THE TRUST WAS TO EDUCATING TH E GENERAL PUBLIC AT LARGE WITH REGARD TO COMMUNITY MEDIA AND ITS POTENTIAL IN INDIAN URBAN AND RURAL AREAS THE CONC EIVED IDEA OF COMMUNITY MEDIA AND THE FOUNDING VALUES OF THE T RUST WAS HORIZONTAL STRUCTURE OF WORKING, RECLAIMING MEDIA S PACE BY GENERATING AND SEEKING ALTERNATIVE MEDIA CONTENT, B UILDING LINKAGES AND GATHER INTER-DISCIPLINARY PERSPECTIVES TO EXPLORE COMMUNITY WORK; (II) IT HAD BUILT BODY OF WORK RANGING FROM MEDIA WORK, ART PRACTICE, PEOPLES CAMPAIGNS, PUBLIC SPACE ENGAGEMEN T AND GENDER INTERACTIONS WITH THE COMMUNITY SPACES, EDUC ATION AND ENVIRONMENT AND GOVERNANCE DEBATES. HAVING ARRI VED AT A SENSE OF FUNCTIONING AS A COLLECTIVE, THE TRUST H AS NOW FIVE MAIN LABS OF WORK WHICH ARE PHYSICAL, VIRTUAL, RU RAL AND URBAN. THESE LABS ARE (I) COMMUNITY MEDIA; (II) PU BLIC SPACE; (III) GENDER, CULTURE AND MEDIA, (IV) EDUCAT ION; AND (V) ENVIRONMENT; (III) THE MAIN CONCEPT OF THE TRUST WAS TO WORK TOWARDS B ENEFITING THE MARGINALIZED COMMUNITIES AND INDIVIDUALS TOWARD S ADDRESSING ISSUES OF SOCIAL JUSTICE, EDUCATION, FRE EDOM OF SPEECH AND EXPRESSION; (IV) THE COMMUNITY MEMBERS WHO WERE EDUCATED THROUGH TH E TRUSTS EFFORTS, PROVIDE CRUCIAL INFORMATION TO THE IR ITA 191/B/2009 PAGE 3 OF 6 BROTHERHOOD IN VILLAGES THUS PROVIDING RELIEF TO TH E POOR IN SHAPES OF (I) MARKET PRICES FOR FARMERS, (II) GOVER NMENT SCHEMES RELATED TO AGRICULTURE, (III) SCHOOL SYLLAB US, (IV) SELF HELP GROUPS; (V) LEGAL LITERACY; (VI) PRIMARY HEAL TH CARE CENTRE; AND (VII) GRAM PANCHAYATH; (V) THROUGH THE USE OF MEDIA, THE TRUST HAD DOCUMENTED AND EDUCATES THE PEOPLE AT LARGE THE CULTURE AND HERITA GE OF INDIA, NOTABLY THE WORLD HERITAGE SITE OF HAMPI AND ANEGUNDI IN KARNATAKA; (VI) THROUGH THE USE OF STREET PLAYS, THE TRUST HAS EDUC ATED THE RURAL MASSES ON INDIAN CULTURE, TO RESPECT WOMEN AN D PREACHES THE NON-VIOLENCE; (VII) THE EDUCATIONAL ACTIVITIES OF THE TRUST ARE MANIFOL D, FROM TEACHING HOW TO OPERATE RADIO STATIONS, EDUCATING T HE CULTURE AND HERITAGE, MAKING DOCUMENTARY FILMS AIMING AT E DUCATING RURAL WOMEN ON CERVICAL CANCER ETC., (VIII) WITH THE PARTNERSHIP OF UNESCO, THE TRUST HAD EDUCA TED MORE THAN 100 PEOPLE AND HAD INDIRECTLY CONTRIBUTED TO PROVIDING RELIEF TO AROUND 12 LAKHS PEOPLE THROUGH 6 COMMUNITY RADIOS EACH REACHING 2 LAKHS PEOPLE APPROXIMATELY; (IX) THE MINISTRY OF INFORMATION & BROADCASTING ITSELF H AD PROCLAIMED THAT THE COMMUNITY RADIO IS A TOOL TO ED UCATE THE MARGINALIZED COMMUNITIES TOWARDS THEIR EMPOWERMENT; (X) DURING THE ONE YEAR OF OPERATION, THE TRUST HAS IND ULGED IN SUCH EDUCATIONAL ACTIVITIES FOR WHICH THE TRUST HAD NOT CHARGED EVEN A PENNY AS A FEE SINCE THE AIM OF THE TRUST WAS NOT TO EARN ANY PROFIT; (XI) THE UNESCO UNDER THE PROGRAMME FOR COMMUNITY RADIO/COMMUNITY MULTIMEDIA CENTRE DEVELOPMENT IN AS IA HAS WITH THE COLLABORATION OF UNRC INDIA UNDERTOOK A PROGRAMME OF TRAINING AND SKILLS BUILDING FOR SUCH PILOT COMMUNITY RADIO STATIONS AS PER WHICH THE TRUST WAS AWARDED WITH A CONTRACT FOR A BASELINE STUDY FOR INTRODUCTI ON OF 1*CR/CMC AT HAMPI IN KARNATAKA. THE LARGER SENSE THE AMOUNT PAID BY UNESCO WAS NOT A FEE, BUT, THE REIMBURSEMENT OF EXPENSES INCURRED BY THE TRUST FOR HAVING UNDERTAKEN TO CONDUCT TRAINING AND EDUCATIONAL ACTI VITIES FOR COMMUNITY MEMBERS; & (XII) TO BUTTRESS ITS ARGUMENT, THE LETTER RECEIVED FROM UNESCO AND ALSO EXPENDITURE STATEMENT FOR 2008-09 WAS FURN ISHED. ITA 191/B/2009 PAGE 4 OF 6 5. ON THE OTHER THE HAND, THE LD. D R CONTENTED TH AT THE AMENDED PROVISIONS OF S.2(15) ARE DIRECTLY APPL ICABLE TO THE FACTS OF THE CASE AND, THUS, THE LD. DIT(E)S JUDIC IOUS FINDING DOESNT REQUIRES ANY INTERFERENCE AT THIS STAGE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, CLOSE LY PERUSED THE RELEVANT RECORDS AND ALSO THE EVIDENCES PRODUCED BY THE LD. A.R TO DRIVE HOME HIS POINT. 6.1. AT THE OUTSET, CONSIDERING THE PLAIN READING OF THE AMENDED PROVISIONS OF S.2 (15) OF THE ACT AND ALSO THE VARIOUS JUDICIAL PRECEDENTS, NOTABLY, THE RULING OF THE HON BLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE, LOKA SHIKKSHANA TRUST V. CIT REPORTED IN (1975) 101 ITR 234, WE ARE OF THE UNANI MOUS VIEW THAT ASSESSEE TRUST FALLS IN THE CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS ENVISAGED IN THE FOURTH LIMB OF S.2 (15) OF THE ACT. EVEN ON A CLOSE SCRUTINY O F THE ACTIVITIES OF THE TRUST, WE HAVE NOT COME ACROSS ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE, BUSINESS OR SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS WHICH ATTRACT THE AMENDED PROV ISIONS AS ATTRIBUTED BY THE LD. DIT (E). THE ACTIVITIES OF T HE ASSESSEE-TRUST WERE RATHER CONDUCIVE TO ITS MAIN OBJECTIVE OF EDUC ATING THE GENERAL PUBLIC AT LARGE REGARDING COMMUNITY MEDIA A ND ITS POTENTIAL IN INDIAS URBAN AND RURAL AREAS. ON A C URSORY PERUSAL OF THE EXPENDITURE STATEMENT FOR THE YEAR 2008-09 ALSO SUBSTANTIATES THE ASSESSEE-TRUSTS CLAIM THAT THE T RUST HAD TO GENERATE FUND BY WAY OF RECEIPT OF A FEE WHICH, ACC ORDING TO THE UNESCOS AFFIRMATION (VIDE ITS COMMUNICATION DATED: 28/7/2009), IS A STANDARD FORM OF DISBURSAL TOWARDS REIMBURSEMENT OF EXPENSES INCURRED BY THE ASSESSEE-TRUST FOR HAVING CONDUCTED TRAINING AND EDUCATION ACTIVITIES FOR COMMUNITY MEMBERS . PERHAPS, THE REIMBURSEMENT FEE RECEIVED FROM THE UNESCO BY THE A SSESSEE ITA 191/B/2009 PAGE 5 OF 6 TRUST COULD HAVE PROMPTED THE LD. DIT (E) TO ARRIVE AT A CONCLUSION THAT THE ACTIVITIES OF THE ASSESSEE TRUS T FALL WITHIN THE AMBIT OF TRADE, COMMERCE AND BUSINESS AND, THUS, IN ELIGIBLE TO CLAIM OF CHARITABLE PURPOSE AS ENVISAGED IN THE A MENDED PROVISIONS OF S.2(15) OF THE ACT. IT IS RATHER A S IMPLE LOGIC THAT TO CONDUCT ANY ACTIVITY FOR THAT MATTER, SOURCE OF FUN D IS UTMOST ESSENTIAL. UNLESS ONE GENERATES SUCH A SOURCE, WIT HOUT INDULGING IN ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, THE APPLICATION OF THE AMENDED PROVISIONS OF S. 2(15) O F THE ACT, IN OUR CONSIDERED VIEW, IS VERY REMOTE POSSIBILITY. 6.2. IN AN OVER ALL CONSIDERATION OF THE FACTS OF THE ISSUE ON HAND, WE ARE OF THE UNANIMOUS VIEW THAT (I) THE ACTIVITIES OF THE ASSESSEE TRUST FALL UNDER THE CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS PROVIDED IN THE FOURTH LIMB OF S.2(15) OF THE ACT; (II) THE ASSESSEE-TRUST HAD IN NO WAY INDULGED IN ANY AC TIVITY WHICH COULD BE CONSTRUED AS IN THE NATURE OF TRADE , COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS; (III) THE MONEY GENERATED BY THE ASSESSEE TRUST, OF COURS E, IN THE NOMENCLATURE OF A FEE WHICH WAS CLARIFIED BY THE UNESCO AS REIMBURSEMENT OF EXPENSES ACTUALLY INCURRED BY MARAA , CANNOT BE CATEGORIZED, BY ANY STRETCH OF IMAGINATION, THAT THE ASSESSEE TRUST HAD INDULGED I N THE ACTIVITY OF TRADE, COMMERCE OR BUSINESS; & (IV) THE SELFLESS SERVICES BEING RENDERED ACROSS THE GLO BE BY THE WORLD ORGANIZATIONS, SUCH AS UNESCO TO THE HUMANITY SHOULD BE ENCOURAGED IN ALL POSSIBLE WAY. EVEN THE MINISTRY OF INFORMATION AND BROADCASTING HAD RECOGNISED THE COMMUNITY RADIO THROUGH ITS COMMUNITY RADIO GUIDELI NES RELEASED IN 2006, STATING THAT COMMUNITY RADIO EMPH ASIS SHOULD BE ON DEVELOPMENTAL, AGRICULTURAL, HEALTH, EDUCATIONAL, ENVIRONMENTAL, SOCIAL WELFARE AND COMM UNITY DEVELOPMENT OF POOR COMMUNITIES. ITA 191/B/2009 PAGE 6 OF 6 6.3 IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE TRUST IS QUALIFIED FOR REGISTRATION U/ S 12A OF THE ACT. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEE-TRUSTS APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 16TH OCT, 2009. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORG K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE: D A T E D : 16TH OCT, 2009. VMS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A), BANGALORE. 5 DR, ITAT, BANGALORE. 6 GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRA R, ITAT, BANGALORE.