Matru Karmadhara Trust, Pondicherry V. ITO, Pondicherry

ITA 2053/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7901 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN
• Assessee Lawyers: R M NARAYANAN
• Section: 12A; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2053/MDS/2016 / ASSESSMENT YEAR : 2010-11 M/S. MATRU KARMADHARA TRUST, 2, RUE SAINT ANGE, PONDICHERRY 605 001. PAN : AAATM0067H V. THE INCOME TAX OFFICER, WARD - I (1), PONDICHERRY ( /APPELLANT) ( !' /RESPONDENT) # /APPELLANT BY : SHRI R.M. NARAYANAN, CA !' # /RESPONDENT BY : SHRI B. SAHADEVAN, JCIT # /DATE OF HEARING : 03.01.2017 # /DATE OF PRONOUNCEMENT : 31.01.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERR Y DATED 29.03.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2010 -11. 2 I.T.A. NO. 2053/MDS/2016 2. SHRI R.M. NARAYANAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES TRUST WAS REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ). THE OBJECT OF THE TRUST WAS TO ESTABLISH PILGRIMS HOME IN PONDICH ERRY AND TO MAINTAIN AND RUN THE SAME. APART FROM THIS, THE AS SESSEE HAS OTHER OBJECT, TO TEACH AND SPREAD THE TEACHING OF SHRI AU ROBINDO AND THE MOTHER. THE LD. REPRESENTATIVE FURTHER CLARIFIED T HAT THE ASSESSEE IS CHARGING ONLY 100/- TO 150/- PER ROOM FOR THE PILGRIMS WHO VISIT THE ASHRAM. ACCORDING TO THE LD. REPRESENTATIVE, THE P REACHING OF TEACHINGS OF SHRI AUROBINDO AND THE MOTHER WOULD AM OUNT TO EDUCATION. THEREFORE, PROVISO TO SECTION 2(15) OF THE ACT IS NOT APPLICABLE. THE ASSESSING OFFICER HOWEVER TREATED THE OBJECT OF THE ASSESSEE AS OBJECT OF GENERAL PUBLIC UTILITY AND FO UND THAT THE TOTAL TURNOVER OF THE RECEIPT EXCEEDED THE PRESCRIBED LIM IT. THE LD. REPRESENTATIVE CLARIFIED THAT THE RECEIPT OF THE AS SESSEES TRUST EXCEEDED THE LIMIT AS PROVIDED UNDER PROVISO TO SEC TION 2(15) OF THE ACT. HOWEVER, THE PROVISO IS NOT APPLICABLE AT ALL . THE ASSESSEE BEING AN EDUCATIONAL TRUST, PROVISO TO SECTION 2(15 ) OF THE ACT CANNOT BE APPLIED FOR DISALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT. 3 I.T.A. NO. 2053/MDS/2016 3. ON THE CONTRARY, SHRI B. SAHADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE CANNOT B E CONSIDERED TO BE AN EDUCATIONAL TRUST. THE ASSESSEE IS NOT RU NNING ANY EDUCATIONAL INSTITUTION. THE ASSESSEE HAS NOT ESTA BLISHED ANY EDUCATIONAL INSTITUTION. THE ASSESSEE IS NOT PROVI DING ANY AID OR ASSISTANCE TO FACILITATE EDUCATION IN THE COUNTRY. THE PREACHING OF IDEOLOGY OF SHRI AUROBINDO AND THE MOTHER CANNOT BE CONSTRUED TO BE AN EDUCATIONAL ACTIVITY. AT THE BEST, IT MAY BE CONSIDERED TO BE A RELIGIOUS TRUST. IN THIS CASE, THE ASSESSEE HAS ES TABLISHED AND RUNNING THREE GUEST HOUSES IN PONDICHERRY. RUNNING OF GUEST HOUSE EVEN AT A SUBSIDIARY RATE, AT THE BEST BE CONSTRUED AS GENERAL PUBLIC UTILITY. THEREFORE, PROVISO TO SECTION 2(15) OF TH E ACT WOULD COME IN TO OPERATION. THEN THE ASSESSING OFFICER HAS RIGHT LY DISALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDL Y, THE ASSESSEE HAS ESTABLISHED THREE GUEST HOUSES IN PONDICHERRY A ND MADE AVAILABLE TO PILGRIMS WHO VISIT AUROBINDO ASHRAM. THE ASSESSEE CLAIMS THAT SINCE, PROMOTING THE PREACHING OF SHRI AUROBINDO, IT HAS TO BE CONSTRUED AS AN EDUCATION. THIS TRIBUNAL IS OF THE CONSIDERED 4 I.T.A. NO. 2053/MDS/2016 OPINION, EDUCATION AS PROVIDED UNDER SECTION 2(15) OF THE ACT, CANNOT BE CONSTRUED ACQUISITION OF KNOWLEDGE BY ANY ONE. AN INDIVIDUAL MAY ACQUIRE KNOWLEDGE EVERY DAY AND EVER Y MINUTE IN PARTICIPATING IN SOME PROGRAMME OR ACTIVITY THAT CA NNOT BE CONSTRUED AS EDUCATION AT ALL. EDUCATION IS A FORM AL SCHOOLING WHICH RESULTS IN CONFIRMATION OF A DEGREE OR DIPLOM A BY A GOVERNMENT OR A GOVERNMENT AGENCY OR A UNIVERSITY E STABLISHED UNDER LAW. ACQUISITION OF ALL KIND OF KNOWLEDGE C ANNOT BE CONSTRUED AS AN EDUCATION AT ALL. THEREFORE, PREAC HING OF IDEOLOGY BY THE TRUST CANNOT BE CONSTRUED AS ENGAGED IN EDUC ATIONAL ACTIVITY. 5. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THE ASSESSEES TRUST CANNOT BE CONSTRUED TO BE AN EDUCA TIONAL TRUST. THE MAIN OBJECT OF THE TRUST IS TO PROVIDE GUEST HO USES FOR THOSE WHO VISIT PONDICHERRY AND ALSO PREACH THE IDEOLOGY OF SHRI AUROBINDO AND THE MOTHER. THEREFORE THIS TRIB UNAL IS OF THE CONSIDERED OPINION THE ACTIVITY OF THE ASSESSEE IS NOTHING BUT GENERAL PUBLIC UTILITY. IT IS NOT IN DISPUTE THAT IF THE ASSESSEES OBJECT IS GENERAL PUBLIC UTILITY, PROVISO TO SECTION 2(15) OF THE ACT, WOULD COME INTO OPERATION. IT IS ALSO NOT IN DISPUTE THA T THE ANNUAL RECEIPT EXCEEDED THE LIMIT PRESCRIBED IN PROVISO TO SECTION 2(15) OF THE ACT. 5 I.T.A. NO. 2053/MDS/2016 THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTI ON UNDER SECTION 11 OF THE ACT. HENCE, THIS TRIBUNAL DO NOT FIND AN Y REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON 31 ST JANUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 31 ST JANUARY, 2017. JR. # ! $ % $ /COPY TO: 1. /APPELLANT 2. !' /RESPONDENT 3. &' ( )/CIT(A)-PUDUCHERRY 4. &' /CIT 5. ! $ /DR 6. () /GF.