Stella Maris Institute of Development Studies, Kanyakumari V. CIT, Madurai

ITA 2014/CHNY/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0941 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-03-2011
• Assessment Year: misc
• Appeal Filed On: 29-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: FRANKLIN FERNANDEZ
• Keywords: Charitable institution
• Section: 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 2014/MDS/2010 ASSESSMENT YEAR : - M/S. STELLA MARIS INSITUTE OF DEVELOPMENT STUDIES, KOVALAM ROAD, KANYAKUMARI POST, PIN : 629 702. V. THE COMMISSIONER OF INCOME TAX-1, MADURAI. (PAN: AADTS5374E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI FRANKLIN FERNANDEZ RESPONDENT BY : SHRI P.B. SEKARAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX-I, MADURAI IN C.NO. 464/ 36/1997-98 DATED 05-08- 2010 REJECTING THE ASSESSEES APPLICATION FOR REGIS TRATION UNDER SECTION 80G OF THE INCOME TAX ACT, 1961. 2. SHRI FRANKLIN FERNANDEZ, CA REPRESENTED ON BEHAL F OF THE ASSESSEE AND SHRI P.B. SEKARAN, LEARNED CIT-DR REPRESENTED ON BE HALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ASSESSEE WAS REGISTERED UNDER SECTION 12A OF THE AC T. IT WAS THE SUBMISSION I.T.A. NO.2014/MDS/2010 2 THAT THE ASSESSEE HAD REGISTRATION UNDER SECTION 80 G TILL 31-03-2010. THE ASSESSEE HAD FILED AN APPLICATION FOR RENEWAL OF RE GISTRATION UNDER SECTION 80G ON 08-02-2010. CLARIFICATIONS HAD BEEN SOUGHT FOR FROM THE ASSESSEE AND SUBSEQUENTLY AN ORDER WAS PASSED BY THE LEARNED CIT ON 05-08-2010 REJECTING THE ASSESSEES APPLICATION FOR RENEWAL OF REGISTRAT ION ON THE GROUND THAT ONE OF THE OBJECTS OF THE TRUST WAS RELIGIOUS IN NATURE AN D ALSO ON THE GROUND THAT DOING MICRO FINANCE WAS A COMMERCIAL ACTIVITY WHICH DISEN TITLE THE ASSESSEE FOR EXEMPTION UNDER SECTION 80G(5) OF THE ACT. IT WAS THE SUBMISSION THAT THE ASSESSEE IS A TRUST WHICH IS ASSISTING PERSONS TO F ORM SELF HELP GROUPS. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS REGISTERED U/S ASSESSEE12A AND THE REGISTRATION HAD TILL DATE NOT BEEN WITHDRAWN. IT WAS THE SUBMISSION THAT THERE WAS NO RELIGIOUS ACTIVITY CONDUCTED BY THE ASSESSEE . IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE WAS RUNNING DISPENSARI ES AS ALSO ORPHANAGES. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS ASSISTING IN THE TREATMENT OF LEPROSY AS ALSO REHABILITATION OF VICTIMS OF NATURAL CALAMI TIES. THE ASSESSEE WAS ALSO PROVIDING STIPEND SCHOLARSHIP/ASSISTANCE IN CASH AN D KIND TO POOR AND DESERVING CHILDREN. THE LEARNED AUTHORISED REPRESENTATIVE DR EW OUR ATTENTION TO THE CONSOLIDATED RECEIPTS AND PAYMENTS ACCOUNT WHICH SH OWED THE ACTIVITIES OF THE ASSESSEE AS CLAIMED. IT WAS THE FURTHER SUBMISSION THAT ON OPENING OF ITS OFFICES IT DID DO RELIGIOUS FUNCTIONS WHICH WERE IN THE NAT URE OF POOJAS ETC. FOR WHICH THE ASSESSEE HAD INCURRED AN EXPENDITURE OF ` 29,349/- AS AGAINST THE TOTAL I.T.A. NO.2014/MDS/2010 3 EXPENDITURE OF ` 1,.32,25,307/-. IT WAS THE SUBMISSION THAT THE AS SESSEE WAS NOT INVOLVED IN ANY RELIGIOUS ACTIVITIES. IT WAS A LSO THE SUBMISSION THAT MICRO FINANCE WAS ALSO NOT UNDERTAKEN BY THE ASSESSEE. 4. IN REPLY, THE LEARNED DR SUBMITTED THE FACT THAT THE ASSESSEE HAS INCURRED EXPENDITURE ON RELIGIOUS FUNCTIONS LED TO THE DENIA L OF THE REGISTRATION UNDER SECTION 80G. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PROVISIONS OF SECTION 80G(5) READ WITH THE EXPLANATION 3 THERETO S HOWS THAT CHARITABLE PURPOSE DOES NOT INCLUDE ANY PURPOSE THE WHOLE OR S UBSTANTIALLY THE WHOLE OF WHICH IS OF A RELIGIOUS NATURE. THE ACTIVITIES OF THE TRUST AS ARE EVIDENT FROM THE INCOME & EXPENDITURE ACCOUNT CLEARLY SHOW THAT THE A CTIVITIES OF THE TRUST ARE NOT RELIGIOUS IN NATURE. IN FACT, THE INCOME & EXPE NDITURE ACCOUNT CLEARLY SHOWS THAT OUT OF A TOTAL EXPENDITURE OF ` 1,32,25,307/- FOR THE YEAR ENDED 31-03-2010 THE RELIGIOUS FUNCTION EXPENDITURE IS ONLY ` 29,349/-, ROUNDED OFF TO ` 29,350/-, WHILE THE BALANCE HAS BEEN USED TOWARDS THE RUNNING OF THE DISPENSARIES/CLINICS, PROVIDING STIPEND, SCHOLARSHIPS AND ASSISTANCE FOR POOR AND DESERVING CHILDREN, WELFARE OF ORPHANS, REHABILITATION AND TREATMENT OF PERSONS SUFFERING FROM LEPROSY ETC. THUS IT IS NOTICED THAT THE PREDOMI NANT ACTIVITY OF THE ASSESSEE IS IN FACT CHARITABLE IN NATURE AND NOT RELIGIOUS IN N ATURE. FURTHER THE INCOME & EXPENDITURE ACCOUNT ALSO DOES NOT SHOW THAT THE ASSE SSEE HAS PROVIDED ANY MICRO FINANCE LOANS TO ANY PERSONS. IN THE CIRCUMS TANCES WE ARE OF THE VIEW I.T.A. NO.2014/MDS/2010 4 THAT THE ASSESSEE HAS NOT VIOLATED ANY OF THE PROVI SIONS OF SECTION 80G(5) OF THE ACT. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE AS SESSEE IS ENTITLED TO REGISTRATION UNDER SECTION 80G. THE LEARNED CIT IS DIRECTED TO REGISTER THE ASSESSEE UNDER SECTION 80G OF THE INCOME TAX ACT, 1 961. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 21/03/2 011. SD/- SD/- (AABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 21 ST MARCH, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE