Sri Premananda Trust, CHENNAI V. CIT, Trichy

ITA 2091/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4672 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-08-2013
• Assessment Year: misc
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: DR MRS ANITA SUMANTH
• Keywords: Charitable institution
• Section: 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.2091 & 2092/MDS/2011 SRI PREMANANDA TRUST, MELAPACHAKUDI VILLAGE, FATHIMA NAGAR POST, VIRALIMALAI (VIA), PUDUKOTTAI DIST-621316. PAN : AAFTS0833C. (APPELLANT ) V. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE I(2), TIRUCHIRAPALLI. (RESPONDENT) ASSESSEE BY : DR. (MRS.) ANITA SUMANTH, ADV OCATE DEPARTMENT BY : SHRI P.B. SEKARAN, CIT DATE OF HEARING : 27 AUG 2013 DATE OF PRONOUNCEMENT : 29 AUG 2013 O R D E R PER S.S. GODARA, JUDICIAL MEMBER : THESE TWO ARE ASSESSEES APPEALS. THEY ARISE FRO M DIFFERENT ORDERS OF CIT-I, TIRUCHIRAPALLI BOTH DATE D 31.11.2011, IN SAME CASE NO.6162E/CIT-1/TRY/2011-12, REJECTING THE ITA 2091&2092/MDS/2011 2 ASSESSEES APPLICATION FOR REGISTRATION UNDER SEC.1 2A AND 80G OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THE COURSE OF HEARING, THE ASSESSEE VEHEMENT LY ARGUED THAT THE CIT HAS WRONGLY REJECTED ITS ABOVE SAID APPLICATIONS SEEKING REGISTRATION UNDER SEC.12A AND 80G OF THE ACT. ITS CONTENTION IS THAT IT HAS BEEN PERFORMING CHARITABLE ACTIVITIES SINCE ITS COMING INTO BEING IE. 08.7.199 4 TILL DATE BY RUNNING A SCHOOL AND BY TAKING NOTICE OF THE CRIMIN AL ACT AND CONDUCT OF ITS FOUNDER TRUSTEE NAMELY, SWAMI PREMAN ANDA, THE CIT HAS WRONGLY IMPLICATED ITS NAME. TO BUTTRESS I TS SUBMISSIONS, THE ASSESSEE HAS CHOSEN TO PLACE ON RE CORD A PAPER BOOK COMPRISING OF THE FOLLOWING :- SL.NO DATE DESCRIPTION 01 8.7.1994 TRUST DEED 02 27.07.1994 PROCEEDINGS OF THE JOINT DIRECTOR GRA NTING PERMISSION TO PREMANADA HIGH SCHOOL 03 23.02.2006 SUPPLEMENTARY DEED OF TRUST 04 18.11.2011 LETTER FROM THE RESPONDENT TO APPELLA NT 05 23.11.2011 REPLY BY APPELLANT TO THE RESPONDENT ITA 2091&2092/MDS/2011 3 06 25.11.2011 LETTER FROM THE RESPONDENT TO APPELLA NT 07 30.11.2011 REPLY BY APPELLANT TO THE RESPONDENT. DETAILS OF MERITORIOUS PERFORMANCE, BY THE STUDENTS OF PREMANDA HIGH SCHOOL 08 STATEMENTS SHOWING TOTAL NUMBER OF STUDENTS AND LIST OF BENEFICIARIES FOR THE YEARS 1994-95, 1995- 96, 2000-01, 2010-11 AND 2011-12 09 PROJECT REPORTS OF THE SCHOOL RUN BY THE APPELL ANT TRUST 09(A) PREMANANDA HIGH SECONDARY SCHOOL 09(B) PARENTS BUILDING 09 PREMANANDA BOYS HOSTEL TOILETS 09(D) PREMANANDA STUDENTS HOSTEL IN VIEW THEREOF ACCEPTANCE OF BOTH APPEALS HAS B EEN PRAYED FOR AT THE INSTANCE OF THE ASSESSEE. 3. IN REPLY, THE REVENUE HAS CHOSEN TO SUPPORT THE ORDERS UNDER CHALLENGE. THE LD. CIT DR IN THE COU RSE OF HEARING HAS EXPLAINED AS TO HOW THE ASSESSEES FOUN DER TRUSTEE WAS INVOLVED IN THE CRIMINAL ACTS OF MOST HEINOUS N ATURE IE. SEXUAL ABUSE OF THE ASHRAMS CHILD INMATES WHICH WO ULD CAST A SHADOW ON THE ACTIVITIES PERFORMED BY THE ASSESSEE. IT HAS BEEN VERY STRONGLY ARGUED THAT KEEPING IN MIND THE PAST HISTORY OF THE ASSESSEES TRUST AND ITS FOUNDER TRUSTEE, IT DOES N OT DESERVE ANY ITA 2091&2092/MDS/2011 4 CONSIDERATION FOR REGISTRATION UNDER SEC.12A AS WEL L AS 80G OF THE ACT. 4. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CAS E FILE. THE ASSESSEES ARGUMENTS ARE CONFINED TO PUR ELY LEGAL ASPECTS OF REGISTRATION OF THE TRUST CLAIMING ITSEL F TO BE INVOLVED IN CHARITABLE ACTIVITIES. WHEREAS THE REVENUE INVO KES THE PRINCIPLES OF MORALITY TO BAR THE RELIEF OF REGIST RATION UNDER BOTH THE AFORESAID PROVISIONS TO THE ASSESSEE ON THE GRO UND OF PAST ACT AND CONDUCT OF ASSESSEES TRUSTEES. 6. THE CONCISE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A PUBLIC RELIGIOUS TRUST. IT WAS FORMED ON 8.7.1 994 VIDE A TRUST DEED. ITS FOUNDER TRUSTEE WAS ONE SWAMI PREMANANDA . THERE WERE SEVEN OTHER TRUSTEES ON BOARD. THE OBJECTS OF THE TRUST READ AS UNDER :- 5. OBJECTS OF THE TRUST:- A. TO ESTABLISH, MAINTAIN, RUN, DEVELOP, IMPROVE, EXTEND GRANT DONATIONS FOR AND TO AID AND ASSIST IN THE ES TABLISHMENTS, MAINTENANCE, RUNNING DEVELOPMENT, IMPROVEMENT AND E XTENSION OF NURSERY, PRIMARY, SECONDARY AND HIGHER SECONDARY SC HOOLS, COLLEGES, INDUSTRIAL, TECHNICAL, VOCATIONAL, MEDICA L, OTHER ARTS, CRAFT AND SCIENCE SCHOOLS AND COLLEGES AND INSTITUT IONS OF LEARNING ITA 2091&2092/MDS/2011 5 HOSTELS FOR THE BENEFIT OF STUDENTS, AND GENERALLY ALL KINDS OF EDUCATIONAL INSTITUTIONS WHETHER GENERAL, TECHNICAL , VOCATIONAL, PROFESSIONAL OR OF OTHER DESCRIPTION WHATSOEVER FOR THE WELFARE AND UPLIFT OF THE GENERAL PUBLIC WITHOUT DISCRIMINATION OF CASE OR CREED AND TO INSTITUTE AND AWARD SCHOLARSHIPS IN INDIA FO R STUDY, RESEARCH AND APPRENTICESHIP FOR ALL OR ANY OF THE SAID PURPO SES. B. TO ESTABLISH, MAINTAIN, RUN DEVELOP, IMPROVE, EXTEND, GRANT DONATIONS FOR AND TO AID AND ASSIST IN THE ES TABLISHMENT, MAINTENANCE, RUNNING DEVELOPMENT, IMPROVEMENT AND E XTENSION OF LIBRARIES, READING ROOMS, RECREATION CENTRES AND AL L OTHER FACILITIES AS ARE CALCULATED TO BE OF USE IN IMPARTING EDUCATI ON TO THE PUBLIC WITHOUT DISCRIMINATION OF CASTE, CREED, COLOUR, RAC E OR RELIGION. C. TO ESTABLISH, MAINTAIN, RUN, DEVELOP, IMPROVE, EXTEND, GRANT DONATINS FOR AND TO AID AND ASSIST IN THE EST ABLISHMENT, MAINTANCE, RUNNING, DEVELOPMENT, IMPROVEMENT AND E XTENSION OF HOSPITALS, CLINICS, DISPENSARIES, HEALTH HOMES, MATERNITY HOMES, CHILDRENS NUTRITION AND ALLOTHER SIMILAR INSTITITU TIONS AS WELL AND AFFORD TREATMENTS , CURE, RECUPERATION, REST AND OT HER ALLIED ADVANTAGES IN THE WAY OF ALLEVIATING THE SUFFERINGS OF HUMANITY WITHOUT DISCRIMINATION OF CASTE, CREED, COLOUR, RAC E OR RELIGION. D. TO BUILD, ERECT AND CONSTRUCT AND TO AID AND ASSIST IN THE BUILDING, ERECTION AND CONSTRUCTION OF HOUSES, TENEMENTS AND PLACES OF RESIDENCE FOR THE POOR, NEEDY AND DEFECTI VES AND TO AFFORD THEM ALL COMFORTS AND CONVENIENCES. LOW COST AS POSSIBLE OR EVEN FREE OF COST WITHOUT DISCRIMINATION OF CASE , CREED, COLOUR, RACE OR RELIGION. E. TO CONDUCT POOR FEEDING AND GENERALLY TO GIVE F OOD AND CLOTHING AND MONETARY AID TO THE POOR, NEEDY AND DE FECTIVES AND TO AFFORD RELIEF TO THE PEOPLE IN DISTRESS AND AFFECTE D BY EARTH-QUAKES, FIRES, FLOODS, FAMINES, PESTILENCE AND OTHER ACCIDE NTS, NATURAL CALAMITIES WITHOUT DISCRIMINATION OF CASTE, CREED, COLOUR, RACE OR RELIGION OR GRANT DONATIONS FOR AND TO AID AND ASIS T IN THE SUPPORT OF THE INMATES OF OTHER ORGPHANGES. F. TO ESTABLISH, MAINTAIN, RUN , DEVELOP, EXTEND, GRANT DONATIONS FOR AND TO AID AND ASSIST IN THE ESTABLIS HMENTS, MAINTENANCE, RUNNING, DEVELOPMENT, IMPROVEMENT AND EXTENSION OF ORGPHANGES, HOME FOR THE ELDERS AND HOME FOR THE DEPRIVED IN SOCIETY WITHOUT DISCRIMINATIONS OF CASTE, CREED, CO LOUR, RACE OR RELIGION. G. TO INSTAL AND CONDUCT CLASSES FOR THE SPREAD OF VEDANTHA AND PHILOSOPHY, AND TO MAKE KNOWN TO THE PEOPLE IN GENERAL, THE ITA 2091&2092/MDS/2011 6 AIMS, IDEALS AND SYSTEM OF YOGA AND KNOWLEDGE AND T O WORK FOR ITS FULFILMENT IN ALL POSSIBLE WAYS AND TO ATTAINMENT O F A SPIRITUALISED SOCIETY AND TO ARRANGE FOR AND CONDUCT LECTURES FOR THIS. H. TO PROPAGATE THROUGH ALL ACCEPTED MEANS OR BE LIEFS, DEVOTION AND MEDITATION BESIDES YOGA AND KNOWLEDGE AS MEANS TO ATTAIN SPIRITUAL PERFECTION AND FOR THIS TO ARRANGE FOR AND CONDUCT LECTURES. I. TO ORGANISE, ENCOURAGE, PROMOTE AND ASSIST IN TH E STUDY, RESEARCH AND PURSUIT OF SCIENCE, LITERATURE, FINE ARTS, PHILOSOPHY AND YOGA. J. TO PRINT, PUBLISH, SELL AND DISTRIBUTE EITHER FR EE OR FOR PRICES, BOOKS, PERIODICALS, BULLETINS JOURNALS, AND OTHER LITERATURES FOR THE PROMOTION OF THE OBJECTS OF THE TRUST AND IN FURTHERANCE TO PRODUCE, DISTRIBUTE AND EXHIBIT FILM S. K. TO SPREAD, PROPAGATE AND ENFORCE THE STUDY OF TR UTH NON-VIOLENCE, LOVE AND NON POSSESSION AND TO IMPART , ENCOURAGE AND PROMOTE NATIONAL UNITY AND INTERNATIONAL PEACE AND AMITY. L. TO PRACTICE AND PROPAGATE THE THEORY OF EQUALITY AMONG ALL HUMAN BEINGS. M. TO PROVIDE ACCOMMODATION, FOOD, AMENITIES AND AL L OTHER FACILITIES TO THE DEVOTEES WHO HAVE INTERESTS IN THE OBJECTS OF THE TRUST. N. TO HOLD MEETINGS OF SCHOLARS AND TO CONDUCT EXAMINATIONS FOR ALL STUDENTS STUDYING IN CLASSES C ONDUCTED BY THE TRUST, AND TO AWARD PRIZES AND CERTIFICATES IN ORDE R OF MERITS AND ALSO TO CREATE SCHOLARSHIPS FOR THE POOR AND DESERV ING STUDENTS. TO CREATE AND MANAGE ENDOWMENTS FOR THE ATTAINMENT OF THE OBJECTS OF THE TRUST. O. TO PRINT, PUBLISH, EDIT, ISSUE AND EXHIBIT ANY B OOKS JOURNALS, MAGAZINES, PERIODICALS, PAPER PAMPHLETS, ADVERTISEMENTS REPORTS AND LECTURES AND OTHER READING MATTER FOR T HE DIFFUSION OF USEFUL KNOWLEDGE AND FOR THE PROMOTION BENEFIT AND ADVANCEMENT OF THE EDUCATIONAL, CULTURAL, SOCIAL, SCIENTIFIC, T ECHNICAL, NON- TECHNICAL AND CHARITABLE IDEALS OF THE TRUST. P. TO IMPART, ENCOURAGE AND PROMOTE COMMUNAL AND SOCIAL HARMONY AND BROTHERHOOD AMONG PUBLIC IRRESPE CTIVE OF CASTE AND CREED AND TO ORGANISE AND CONDUCT CONFERE NCE FOR THIS. ITA 2091&2092/MDS/2011 7 Q. TO ESTABLISH, MAINTAIN AND CO-ORDINATE BETWEEN INSTITUTIONS AND PERSONS IN UNIVERSE WORKING ON THE BASIS OF SATHYA (TRUTH) AND AHIMSA (NON-VIOLENCE). THE ABOVE OBJECTS SHALLBE INDEPENDENT OF EACH OTHER AND THE FOUNDER TRUSTEE SHALL APPLY THE FUNDS OF THE TR UST IN CARRYING OUT ALL OR ANY OF THE AFORESAID OBJECTS OF THE TRUS T AS HE MAY THINK FIT. 6. A. THIS TRUST IS A PUBLIC CHARITABLE TRUST, THE BENEFITS OF WHICH SHALL ENSURE TO THE PUBLIC WITHOUT DISTINCTIO N OF CASTE, CREED, RELIGION, SEX ETC., B. NO ACTIVITIES OF THE TRUST WILL BE CARRIED OU TSIDE INDIA AND THE TRUST SHALL NOT OPERATE WITH PROFIT M OTIVE AT ANY POINT OF TIME. C. THE TRUST SHALL NOT CARRY OUT ANY ACTIVITY WH ICH IS IN THE NATURE OF BUSINESS AND/OR NOT CONSISTENT WIT H THE OBJECTS OF THE TRUST AS DESCRIBED IN THE DEED. 7. THE TRUST SHALL BE IRREVOCABLE AND IT SHALL BE COMMENCED FROM THE DATE OF ITS INCORPORATION. 8. THE FUNDS AND INCOME OF THE TRUST SHALL BE SOLE Y UTILISED TOWARDS THE ACHIEVEMENTS OF THE OBJECTS AND NO PORT ION OF ITS SHALL BE UTILISED FOR PAYMENT TO TRUSTEES BY WAY OF PROFI T, INTEREST, DIVIDENDS ETC., 9. IN FURTHERANCE OF THE OBJECTS STATED IN PARA NO .5 OF THIS DEED THE BOARD OF TRUSTEES ARE EMPOWERED TO THE FOLLOWIN G. I. TO APPLY FOR AND OBTAIN ASSISTANCE FROM THE GOVERNMENT AND OTHER ORGANISATION OF NATIONAL AND INTERNATIONAL, FINANCIAL INSTITUTIONS, COMPANIES, I NDIVIDUALS, CHARITABLE TRUSTS OR SOCIETIES OR SOCIAL WELFARE BO ARDS FOR DEVELOPING ALL OR ANY OF THE OBJECTS OF THE TRUST. II. TO ESTABLISH OWN, RUN, ERECT, CONSTRUCT, MANAGE , TAKE OR LEASE OR OTHERWISE ACQUIRE BUILDINGS, STRUC TURES, APARTMENTS AND OTHER PREMISES AND TO SELL, MORTGAGE , LEASE OR LET ON HIRE SUCH PROPERTIES ACQUIRED AS AFORESAI D. ITA 2091&2092/MDS/2011 8 III. TO APPLY AND USE THE FUNDS FOR ALL OR ANY OF T HE OBJECTS OF THE TRUST AN/OR TO ACCUMULATE THE SURPLU S UNAPPLIED PORTION OF INCOME AND INVEST THE SAME, SU BJECT TO THE PROVISIONS OF THE INCOME-TAX ACT 1961 AS AME NDED FROM TIME TO TIME, RELATING TO ACCUMULATION OF INCO ME AND INVESTMENT THEREOF. THE FUNDS OF THE TRUST SHALL BE INVESTED IN THE MODES SPECIFIED UNDER THE PROVISION S OF THE INCOME-TAX ACT, 1961 GOVERNING CHARITABLE TRUST. IV. TO EXPAND THE PROGRAMMES OF THE TRUST BY PURCHASING/ACQUIRING ACTIVITIES, RIGHTS AND PROPERT IES OF CHARITABLE SOCIETIES, TRUSTS WHOSE OBJECTS ARE SIMI LAR TO THAT OF THIS TRUST BEING REGISTERED. V. TO CONDUCT MUSICAL PROGRAMMES, DRAMAS AND OTHER ENTERTAINMENT PROGRAMMES FOR AUGMENTING FUNDS TO TH E TRUST. 10. THE FOLLOWING PERSONS SHALL CONSTITUTE THE BOAR D OF TRUSTEES AND THEY SHALL BE DESIGNATED AS FOLLOWS:- 01. SWAMY PREMANANDA :MANAGING TRUSTEE 02. DIVYA DEVI MATHAJI : PRESIDENT. 03. SWAMY KAMALANANDA : SECRETARY 04. RUKMANI DEVI MATHAJI : TREASURER. 05. DHAMA YANTHI MATHAJI : BOARD EMBER 06. T. VIVEKANANDAN :BOARD MEMBER 07 P.M. MYLVAGANAM :BOARD MEMBER 08 SWAMY SATCHIDANDA :BOARD MEMBER. THE AFORESAID PERSONS SHALL BE THE LIFE TRUSTEES. 7. AS IT EMANATES FROM RECORD, THE ASSESSEE GOT APPROVAL FOR RUNNING A HIGH SCHOOL AT VILLAGE MELAP ACHAKUDI, DISTRICT PUDUKOTTAI FROM THE JOINT DIRECTOR, SECOND ARY SCHOOL EDUCATION, GOVT. OF TAMILNADU WHICH CAME ON 27.7.19 94. SINCE ITA 2091&2092/MDS/2011 9 THEN TILL DATE, THE SCHOOL IN QUESTION IS BEING RUN BY THE ASSESSEE. IT IS CLAIMED THAT THE SCHOOL IS PROVIDI NG FREE EDUCATION, FOOD AND ACCOMMODATION TO THE CHILDREN B ELONGING TO PREDOMINANTLY RURAL BELT WITH THE HELP OF DONATIONS ONLY. 8. COMING TO THE IMPUGNED REGISTRATION, WE NOTICE THAT THE ASSESSEE HAD FILED THE APPLICATION UNDER SEC.12 A OF THE ACT BEFORE THE CIT ON 7.10,1994. DURING THE PENDENCY T HEREOF, THE ASSESSEES FOUNDER TRUSTEE ALONG WITH OTHER TRUSTEE S WAS ARRESTED ON 19.11.1994 AND PROSECUTED FOR HAVING SU BJECTED THE GIRL INMATES OF THE ASHRAM RUN BY HIM TO SEXUAL ABU SE AND OTHER HEINOUS ACTIVITIES. THE PARTIES ARE UNANIMOUS IN I NFORMING US THAT AFTER THE ARREST, THE FOUNDER TRUSTEE ALONG WI TH THE OTHER TAINTED TRUSTEES WAS AWARDED LIFE IMPRISONMENT WHIC H HAS BEEN MAINTAINED UPTO THE HONBLE APEX COURT. IT IS TO B E SEEN FROM THE CASE FILE AT PAGE 68 THAT THEIR LORDSHIPS CAME DOWN HEAVILY ON THE HEINOUS CONDUCT OF THE TRUSTEES IN THE JUDGM ENT DATED 05.4.2005 AS UNDER :- ITA 2091&2092/MDS/2011 10 THE FACTS OF THIS CASE, AS REVEALED BY THE PROSECU TION, SHOCKED THE JUDICIAL CONSCIENCE. IT ILLUSTRATE A C LASSIS EXAMPLE AS TO HOW THE THE ASHRAM WHICHIS SUPPOSE D TO B GOD ABODE TURNED OUT TO BE DEVILS WORKSHOP. A-1 TO WHOM THE INMATES OF THE ASHRAM REGARDED AS GOD HAVI NG THE DIVINE POWER TURNED OUT TO BE A MONSTER. IT IS A CLASSIC CASE OF BETRAYAL OF FATHERLY AND DIVINELY TRUST OF THE INMATES OF THE ASHRAM GIRLS WHO WERE MOSTLY ORPHANS AND DESTITUTES, BROUGHT FROM SRILANKA.. THE FACTS OF THE CASE ALSO ILLUSTRATE A CLASSIS EXAMPLE AS TO HOW A GAMEKEEPER HAS BECOME A POACHER OR A TREASURY GUARD HAS BECOME A ROBBER. 9. THE ASSESSEE HAS ALSO STATED AT THE BAR THAT TH E FOUNDER TRUSTEE ACCUSED DIED IN THE YEAR 2007 WHILE SERVING THE SENTENCE. 10. SINCE THERE WAS HUGE UPROAR IN MEDIA AFTER THE ARREST AND PROSECUTION OF THE TRUSTEES ABOVE SAID, AS PER CITS ORDER UNDER CHALLENGE, HE ORDERED THE REGISTRATION ISSUE TO BE KEPT IN ABEYANCE. THIS POSITION CONTINUED UPTO THE YEAR 2 011 IE. ON THE ONE HAND THE ASSESSEES SCHOOL IN QUESTION CONTINUE D FUNCTIONING WHOSE RECORD IS AVAILABLE IN THE PAPER BOOK BEFORE US BY THE NAME OF PREMANANDA HIGH SCHOOL. ON THE OTHER HAND , THE REGISTRATION MATTER DID NOT ATTAIN FINALITY. IN TH E YEAR 2011, THE ITA 2091&2092/MDS/2011 11 ASSESSEE APPROACHED THE HON'BLE JURISDICTIONAL HIGH COURT (MADURAI BENCH) FOR APPROPRIATE DIRECTIONS TO THE C IT. THE PAPER BOOK INDICATES THAT THE WRIT PETITION FILED B Y THE ASSESSEE WAS DISPOSED OF BY THEIR LORDSHIPS AFTER DIRECTING THE CIT TO PROCEED WITH THE REGISTRATION ISSUE AS PER LAW. 11. IN COMPLIANCE THEREOF, THE CIT TOOK UP THE MA TTER AND SOUGHT ALL THE DETAILS FROM THE ASSESSEE INCLUD ING THOSE PERTAINING TO SWAMY PREMANANDA. IT IS NOT IN DISPU TE THAT THE ASSESSEE PROVIDED ALL THE INFORMATION SOUGHT FOR. EVEN THE HISTORY OF LITIGATION AS WELL AS THE LATEST UPDATE OF CRIMINAL PROCEEDINGS WERE SUBMITTED BEFORE THE CIT. WHAT WE NOTICE FROM THE IMPUGNED ORDER IS THAT FIRSTLY THE CIT IS OF THE VIEW THAT THE ASSESSEE TRUST HAD GOT CAUGHT IN CRIMINAL PROC EEDINGS (PARA 4.4), THOUGH THAT IS NOT THE CASE. THERE IS NO F INDING BY THE CIT NOR IS THERE ANY ALLEGATION EVEN IN THE COURSE OF ARGUMENTS THAT ANY SCHOOL STUDENT RUN BY THE ASSESSEE HAS EVE R BEEN SUBJECTED TO THE HEINOUS OFFENCE OF CHILD ABUSE. T HEREAFTER, IN THE ORDER UNDER CHALLENGE, PREDOMINANTLY BEING SWAY ED BY THE ITA 2091&2092/MDS/2011 12 CRIMINAL PROCEEDINGS RESULTING INTO LIFE SENTENCE T O THE ASSESSEES TRUSTEES, THE APPLICATIONS IN QUESTION STAND REJECT ED. THE RELEVANT FINDINGS READ AS UNDER :- 6. I AM OF THE OPINION THAT NO FURTHER DETAILS AR E NEEDED AND ALSO THAT NO PRIOR HEARING BEFORE CONCLUSION OF PROCEEDINGS IS AGAIN REQUIRED. THE ISSUE, AS WELL AS THE MATRIX O F THE ARGUMENT IS NOT GOING TO CHANGE MUCH. THE PETITIONER TRUSTS CO RE ARGUMENT IS THAT THE ACTIVITIES OF THE TRUSTEE(S) ARE IN HIS (T HEIR) INDIVIDUAL CAPACITY AND THAT SHOULD NOT INFLUENCE THE DECISION REGARDING THE TRUSTS CLAIM FOR RECOGNITION. NOTHING NEW CAN BE SAID OTHER THAN REPRESENTING THE SAME IN DIFFERENT WAYS. I THEREFO RE PROCEED TO DISPOSE OF THE CLAIM FOR RECOGNITION CONSIDERING TH E ARGUMENTS MADE BOTH IN WRITING (DETAILED ABOVE) AND ORALLY DU RING THE DISCUSSIONS. 7. ONE OF THE OBJECTIVES OF THE TRUST WAS RUNNING OF AN ORPHANAGE. IN FACT THE TRUST CAME WITH ORPHANS FRO M SRILANKA AND EXPANDED ON THAT ACTIVITY. UNFORTUNATELY IT IS THE INMATES OF THE VERY ORPHANAGE WHO WERE SUBJECTED TO GROSS ABUSE AN D WHAT THE SUPREME COURT HAD CALLED SOMETHING WHICH SHOCKS THE JUDICIAL CONSCIENCE. 8. IT WAS STATED THAT WHILE THE ACTIVITIES OF THE TRUST WOULD BE IMPACTED OR INFLUENCED BY THE ROLE PLAYED BY THE TRUSTEE IN HIS CAPACITY AS A TRUSTEE, HIS PERSONAL AFFAIRS AND CON DUCT ARE WHOLLY IRRELEVANT TO DETERMINE THE NATURE AND GENUINENESS OF THE ACTIVITIES OF THE TRUST ITSELF. UNFORTUNATELY, IN THE INSTANT CASE, THE CONDUCT OF THE INDIVIDUAL TRUSTEES HAD A BEARING ON THE TRUST AS THEIR CONDUCT (ABUSE) DIRECTLY IMPINGED ON THE SO CALLED BENEFIC IARIES OF THE TRUST. UNFORTUNATELY, THE VERY SO CALLED CHARITA BLE ACTIVITY OF THE TRUST PROVIDED THE VICTIMS/ THE SAME CONSIDERE D AND WAS PUT TO THE TRUST IN PARA 5 AND 6 OF THE SHOW CAUSE LETT ER. 9. A TRUST BY DEFINITION IS CREATED WITH NOBLE OBJ ECTIVES AND WITH THE INTENTION OF DOING PUBLIC GOOD. AS THE VERY NAME INDICATES THE ELEMENT OF TRUSTIS AN ESSENTIAL I NGREDIENT FOR YOU BELIEVE THAT SOMEONE/SOMEBODY WOULD DO GOOD. W HEN THAT ITA 2091&2092/MDS/2011 13 TRUST IS BETRAYED, THE SOUL IS LOST IN THE ORGANIZA TION. IT WAS THIS BETRAYAL WHICH WAS AFFIRMED REPEATEDLY AT EVERY JUD ICIAL FOR A STARTING FROM CIRCLE COURT TO THE HONBLE SUPREME C OURT. 10. AS MENTIONED IN THE SHOW CAUSE NOTICE, CONDUCT ING OF CERTAIN CHARITABLE ACTIVITIES MEET THE REQUIREMENT OF FORM BUT NOT THE SPIRIT. FORM AN A MECHANICAL TICKING OF VARIOUS ACTIVITIES IS NOT THE ONLY THING WHILE CONSIDERING GRANTING REGISTRAT ION OF THE TRUST. A GRANT OF REGISTRATION BY THE INCOME TAX DEPARTMEN T U/S 12A AND U/S 80G PUTS A STAMP OF APPROVAL BY THE GOVERNMENT ON THE TRUST AS IT TELLS THE WHOLE COMMUNITY AND SOCIETY AT LARG E THAT DONATIONS GIVEN TO THIS TRUST ARE EXEMPT AND THAT ITS INCOME IS ALSO EXEMPT AS IT IS DOING GOOD FOR THE SOCIETY. IT IS HERE THAT THE CRIMINAL PROCEEDINGS AGAINST THE TRUSTEES CONNECT THEM AND VITIATE THE VERY TRUST THAT THEY CREATED. ON THE SAME ANALOGY, THE APPLICATION UNDER SEC.80 G OF THE ACT HAS ALSO BEEN DECLINED. IT IS IN THIS BACK DROP OF FACTS, THE ASSESSEE HA S PREFERRED THE INSTANT APPEALS. 12. AFTER HAVING HEARD BOTH PARTIES, IN OUR VIEW, THE QUESTION WHICH ARISES FOR OUR ADJUDICATION IS AS TO WHETHER BECAUSE OF HEINOUS INHUMAN CRIMES COMMITTED BY THE FOUNDER AND OTHER TRUSTEES, THE ASSESSEE CAN BE DECLINED RE GISTRATION OR NOT UNDER SEC.12A AND SEC.80G OF THE ACT. AT THE C OST OF REPETITION WE DEEM IT APPROPRIATE TO AGAIN RE-NARRA TE THE FACTS. ITA 2091&2092/MDS/2011 14 THE ASSESSEE TRUST HAS BEEN CREATED BY A TRUST DEED ON 8.7.1994. IN JULY, I GOT APPROVAL FOR RUNNING THE SCHOOL. ON 7.10.1994 THE APPLICATION SEEKING REGISTRATION UNDE R SEC.12A OF THE ACT WAS FILED. ON 19.11.1994, THE TRUSTEES WER E ARRESTED, PROSECUTED AND IN DUE COURSE AWARDED LIFE IMPRISONM ENT FOR HAVING ABUSED SEXUALLY SOME OF THE INMATES OF THE A SHRAM (SUPRA). THE CIT NOWHERE EVEN ALLEGES THAT THE SCH OOL IN QUESTION AND ASHRAM ARE THE SAME INSTITUTIONS. THE RE IS NO IOTA OF EVIDENCE IN THE ORDER UNDER CHALLENGE THAT THE A CTIVITIES OF THE ASSESSEE OF PROVIDING FREE EDUCATION, FOOD AND ACCO MMODATION TO THE SCHOOL CHILDREN FROM 27.7.1994 TILL DATE HAS BEEN DISCONTINUED OR NO CHARITABLE ACTIVITY IS PERFORMED . THE RECORD OF THE CASE SUGGESTS THAT THE FOUNDER TRUSTEE ALONG WITH OTHER TAINTED TRUSTEES CEASED TO BE THE MEMBERS OF THE ASSESSEES TRUST WITH EFFECT FROM THE YEAR 1997 (PARA 52 OF TH E PAPER BOOK). IN OTHER WORDS, THE SCHOOL IS BEING RUN BY THE NAME OF PREMANANDA HIGH SCHOOL FOR THE NAME SAKE ONLY. IN THESE PECULIAR CIRCUMSTANCES, WE ARE OF THE CONSIDERED OP INION THAT ITA 2091&2092/MDS/2011 15 SINCE THE SCHOOL IS BEING RUN IN THE NAME OF ITS FO UNDER TRUSTEE DOES NOT IPSO FACTO CONVERT IT INTO AN INSTITUTION EXPLOITING INNOCENCE OF THE CHILDREN GETTING EDUCATION THEREIN . IN THIS REGARD, WE RELY ON THE EVIDENCE PRODUCED BY THE AS SESSEE IN THE PAPER BOOK AT PAGES 74 TO 191 QUA THE SERVICES OFFERED BY THE SCHOOL TO ITS STUDENTS FOR THE PAST 19 YEARS. WE DEEM IT APPROPRIATE TO MENTION HERE THAT IN OUR OPINION, IT IS IN THE INTEREST OF PROVIDING EDUCATION TO THE SCHOOL CHILD REN WHICH HAS INFLUENCED THE MIND OF THE BENCH. HENCE, TAKING E XCEPTION TO THE WISHFUL APPROACH OF THE CIT IN THE ORDER UNDER CHALLENGE, WE HOLD THAT AN INSTITUTION WHICH IS OTHERWISE ENGAGED IN CHARITABLE ACTIVITIES DULY PROVED FROM THE EVIDENCE ON RECORD WHICH HAS REMAINED UNREBUTTED, DESERVES TO GET BENEFITS OF RE GISTRATION UNDER SEC.12A AND 80G. THE SAME CANNOT BE DECLINED MERELY BECAUSE ONCE UPON A TIME, ITS FOUNDER TRUSTEE ETC H AD BEEN ACCUSED OF HEINOUS CRIMES AND THAT TOO, NOT RELATED TO THE SCHOOL IN QUESTION. WE REITERATE THAT A REGISTRATION EI THER UNDER SEC.12A OR 80G OF THE ACT DOES NOT ITSELF GIVE RISE TO HEINOUS ITA 2091&2092/MDS/2011 16 CRIME AS THESE ARE THE BENEFITS CONFERRED BY THE S OVEREIGN TO ENCOURAGE CHARITABLE ACTIVITIES FOR THE BENEFIT OF THE SOCIETY AT LARGE. 13. FURTHER, EVEN A PERUSAL OF THE CHARITABLE PURP OSE DEFINED UNDER SEC.2(15) OF THE ACT DOES NOT ENVISAG E THE TERMS AND CONDITIONS SOUGHT TO BE IMPOSED BY THE LD.CIT. BY MAKING REFERENCE TO THE SAID PROVISION AS WELL AS 1 ST PROVISO INTRODUCED BY THE LEGISLATURE IN THE ACT, WE HOLD THAT THERE C ANNOT BE ANY OTHER CONDITION EXCEPT THOSE EXPRESSLY STATED IN TH E STATUTE ITSELF. IN OTHER WORDS, ONCE THE LEGISLATURE HAS ITSELF RES TRICTED THE NATURE OF CHARITABLE PURPOSES, OUR AGREEMENT WITH T HE REASONS ADOPTED BY THE LEARNED CIT WOULD AMOUNT TO ENLARGIN G THE SCOPE OF THE PROVISO INSERTED IN THE STATUTE WITH EFFECT FROM 01.4.2009. WHILST HOLDING SO, WE FORM OUR OPINION ON THE SETTL ED LAW THAT A TAXING STATUTE HAS TO BE INTERPRETED LITERALLY INST EAD OF LIBERALLY. ON THE SIMILAR LINES, A PROVISO RESTRICTING THE SCO PE OF CHARITABLE PURPOSES DEFINED UNDER SEC.2(15) OF THE ACT ALSO DESERVES TO BE INTERPRETED STRICTLY. PROCEEDING ON THIS REASON ING, WE HOLD ITA 2091&2092/MDS/2011 17 THAT THE LEARNED CIT HAS ERRED IN REJECTING THE IMP UGNED APPLICATION SEEKING REGISTRATION UNDER SEC.12A OF T HE ACT FILED BY THE ASSESSEE. 14. COMING TO THE ASSESSEES APPLICATION UNDER SEC .80G SUBJECT MATTER IN ITA NO.2092/MDS/2011, WE HOLD THA T THIS IS ALSO ACCEPTED IN VIEW OF OUR FINDINGS HEREIN ABOVE IN SEC.12A PROCEEDINGS. 14. CONSEQUENTLY, THE APPEALS ARE ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 29 TH DAY OF AUGUST 2013 AT CHENNAI. SD/- SD/- ( DR. O.K. NARAYANAN ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED : 29 TH AUGUST 2013 JLS. ITA 2091&2092/MDS/2011 18 COPY TO:- (1) APPELLANT (2) RESPONDENT (3) CIT(A) CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE.