M/s. Prayer for India, Tuticorin V. CIT, Madurai

ITA 195/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5250 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 09-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80G; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO. 195/MDS/2011 ASSESSMENT YEAR : 2008-09 M/S PRAYER FOR INDIA 6/519, 5 TH STREET ST. MARYS COLONY TUTICORIN 628 002 VS THE CIT I MADRUAI [PAN AABTP3604Q ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.DEVANATHAN RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE-TRUST IS DIRECTED A GAINST THE ORDER OF THE LD. CIT, MADURAI, DATED 10.1.2011, BY WHICH HE HAS REJECTED THE APPLICATION FOR EXEMPTION U/S 80G(5)(VI) OF THE IN COME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT). 2. IN FACT, THE ASSESSEE-TRUST FILED APPLICATION FO R EXEMPTION U/S 50G(5) OF THE ACT ON 26.12.2008 ALONGWITH APPLICATI ON FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. THE APPLICATION FOR REGISTRATION WAS DISMISSED. THE LD. CIT NOW REFUSED TO RECOGNIZE THE TRUST U/S 80G(5) BECAUSE HE HAD ALREADY REFUSED TO REGISTER THE TRUS T U/S 12AA OF THE ITA 195/11 :- 2 -: ACT. AGGRIEVED THE ASSESSEE WENT IN APPEAL AGAINS T REJECTION OF REGISTRATION. THE TRIBUNAL HAS ALLOWED REGISTRATI ON TO THE TRUST. 3. THE CASE OF THE LD.AR APPEARING FOR THE ASSESSEE-TR UST IS THAT THE TRIBUNAL, VIDE ITS ORDER DATED 3.3.2011, HAS AL READY GRANTED REGISTRATION TO THE TRUST U/S 12AA OF THE ACT, HENC E, THE REASON GIVEN FOR DENIAL OF RECOGNITION U/S 80G(5) DOES NOT SURV IVE NOW. ON THE OTHER HAND, THE LD.DR ARGUED THAT EVEN IF THE TRUST HAS BEEN REGISTERED U/S 12AA OF THE ACT, IT IS NOT A CERTIFICATE FOR GR ANT OF RECOGNITION U/S 80G(5). ACCORDING TO HIM, A TRUST CAN BE REGISTERE D U/S 12AA OF THE ACT EVEN IF ITS OBJECTS ARE CHARITABLE AS WELL AS RELIGIOUS IN NATURE BUT FOR RECOGNITION U/S 80G(5), A TRUST WHICH IS ALSO R ELIGIOUS, CANNOT BE RECOGNIZED. TO CONTRADICT THIS CONTENTION OF THE L D.DR, THE LD.AR SUBMITTED THAT THERE IS NO SUCH PROVISION UNDER SEC TION 80G AS ON DATE AND HENCE, RECOGNITION HAS TO BE ALLOWED TO THE ASS ESSEE-TRUST. 4. AFTER HEARING BOTH SIDES, WE FIND THAT THE REASON F OR REJECTION OF APPLICATION FILED U/S 80G(5)(VI) IS ONLY BECAUSE T HE LD. CIT HAD REFUSED TO REGISTER THE TRUST U/S 12AA OF THE ACT. THE REL EVANT PORTION OF THE ORDER CONTAINED IN PARA 2, IS BEING EXTRACTED HERE IN-BELOW, FOR READY REFERENCE: VIDE SEPARATE ORDER OF EVEN DATE, THE APPLICATION F OR REGISTRATION U/S 12AA OF THE I.T.ACT OF THIS TRUST HAS BEEN REJECTED BY THE UNDERSIGNED. SINCE CLAUSE(1) OF SE CTION 80G(5) NECESSITATES ELIGIBILITY OF EXEMPTION OF THE TRUSTS INCOME U/S 11 AND 12, WHICH IN TURN REQUIRES REGIST RATION U/S 12AA OF THE I.T.ACT, THE TRUST MAKES ITSELF INE LIGIBLE FOR GRANT OF INITIAL EXEMPTION U/S 80G(5) OF THE I.T.AC T. ITA 195/11 :- 3 -: 5. FROM THE ABOVE, IT BECOMES CRYSTAL CLEAR THAT THE R EASON FOR REFUSAL TO GRANT EXEMPTION U/S 80G(5) IS GIVEN AS R EFUSAL TO REGISTER THE TRUST U/S 12AA OF THE ACT. ADMITTEDLY, NOW TH E TRUST STANDS REGISTERED U/S 12AA WITH THE DATE OF APPLICATION I. E 26.12.2008. ACCORDINGLY, FROM THE ORDER OF THE LD. CIT, WE DO N OT FIND ANY OTHER REASON FOR DENIAL OF EXEMPTION. THEREFORE, THE ARG UMENTS TAKEN BY THE LD.DR WOULD NOT HELP IN CONFIRMING THE IMPUGNED ORDER OF THE LD. CIT. THE DECISIONS RELIED ON BY THE LD.DR ARE NOT RELEVANT FOR THE SIMPLE REASON THAT IN THAT CASE THE REASONS TO REFU SE EXEMPTION U/S 80G(5) ARE DIFFERENT FROM THE REASONS IN THE GIVEN CASE. CONSEQUENTLY, WE DIRECT THE LD. CIT TO GRANT RECOG NITION TO THE ASSESSEE U/S 80G(5)(VI) OF THE ACT FROM THE DATE OF APPLICATION I.E 26.12.2008. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE-TRUST STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.4.2011 SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 12 TH APRIL, 2011 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR