St.Philip Neri Charitable Trust, Calicut V. CIT, Calicut

ITA 214/COCH/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7464 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: T P PAUL
• Keywords: Charitable institution
• Section: 12A; 12; 11

Judgement Text

1 ITA NO.214/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S.GANESAN (JM) & SHRI SANJAY ARORA (AM) I.T.A.NO.214/COCH/2010 ST. PHILIP NERI CHARITABLE TRUST, DOOR NO.4/203A, KAITHAPOIL P.O., KOZHIKODE VS. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE (APPELLANT) (RESPONDENT) APPELLANT BY SHRI T.P. PAUL RESPONDENT BY MS VIJAYAPRABHA DATE OF HEARING 12-12-2011 DATE OF PRONOUNCEMENT 25-02-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER, CALICUT DATED 09-09-20 09 REJECTING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12 A OF THE ACT. 2. SHRI T.P. PAUL, THE LD.REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE ASSESSEE FILED THE APPLICATION FOR REGISTRATION U/S 12A OF THE ACT. 2 ITA NO.214/COCH/2010 HOWEVER, THE ADMINISTRATIVE COMMISSIONER REJECTED T HE APPLICATION OF THE ASSESSEE ON THE GROUND THAT THE TRUST WAS SET UP FO R THE BENEFIT OF MINORITY COMMUNITIES, THEREFORE, U/S 13(1)(B) THE ASSESSEE I S NOT ENTITLED FOR REGISTRATION. ACCORDING TO THE LD.REPRESENTATIVE, SECTION 13(1)(B) IS FOR THE PURPOSE OF ASSESSMENT OF INCOME WHEN THE ASSESSEE C LAIM THE EXEMPTION U/S 11. THEREFORE, SECTION 13 CANNOT BE APPLIED AT THE STAGE OF REGISTRATION U/S 12A OF THE ACT. REFERRING TO THE OBJECT OF TH E ASSESSEE TRUST, THE LD.REPRESENTATIVE SUBMITTED THAT THERE IS NO CLAUSE RESTRICTING THE BENEFITS TO A PARTICULAR COMMUNITY OR RELIGION. ACCORDING TO THE LD.REPRESENTATIVE, THE BENEFIT IS TO THE MINORITY COMMUNITIES OF THE LOCAL ITY. THEREFORE, THE ADMINISTRATIVE COMMISSIONER IS NOT CORRECT IN REJEC TING THE REGISTRATION OF THE TRUST U/S 12A OF THE ACT. 3. ON THE CONTRARY, MS. VIJAYAPRABHA, THE LD.DR SUB MITTED THAT VIDE CLAUSE 12 OF THE TRUST DEED THE ASSESSEE RESTRICTED THE BENEFIT TO THE MINORITY COMMUNITY. ACCORDING TO THE LD.REPRESENTA TIVE, THE ADMINISTRATIVE COMMISSIONER IS ENTITLED TO EXAMINE THE BENEFICIARIES TO WHOM THE BENEFITS WERE GIVEN AND IF THE BENEFITS WE RE GIVEN ONLY TO A PARTICULAR RELIGIOUS COMMUNITY, THE ASSESSEE IS NOT ENTITLED FOR REGISTRATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ADMI NISTRATIVE COMMISSIONER REJECTED THE APPLICATION OF THE ASSESS EE ON TWO GROUNDS (1) THE TRUST WAS SET UP FOR THE BENEFIT OF MINORITY CO MMUNITY VIDE CLAUSES 12 & 14 OF THE TRUST DEED; AND (2) UNDER SECTION 13(1) (B) OF THE I.T. ACT, A CHARITABLE TRUST IS NOT ELIGIBLE FOR REGISTRATION IF IT IS ESTABLISHED FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY OR CAS TE. 3 ITA NO.214/COCH/2010 5. WE HAVE CAREFULLY GONE THROUGH THE OBJECT OF THE TRUST. CLAUSES 12 & 14 OF THE TRUST DEED READS AS FOLLOWS : 12. TO ORGANIZE AND CARRY ON PROGRAMMES FOR THE OVERALL EDUCATION, EMPLOYMENT, FAMILY WELFARE, WOMEN EMPOWERMENT ETC WITH SPECIAL EMPHASIS ON THE PROTECTION OF THE GIRL-CHILD AND GUIDANCE T O YOUNG GIRLS TO FACE JUVENILE AND ADOLESCENT PROBLEMS. 14. TO COLLABORATE WITH THE GOVERNMENT IN THE SUSTAINABLE DEVELOPMENT OF THE MINORITY COMMUNITIES. CLAUSES 12 AND 14 DO NOT IN ANY WAY SAY THAT THE OB JECT OF THE TRUST IS ONLY FOR THE BENEFIT OF ANY PARTICULAR COMMUNITY OR CAST E. IT SIMPLY SAYS MINORITY COMMUNITIES. MINORITY COMMUNITY DOES NO T MEAN ONLY A PARTICULAR RELIGIOUS COMMUNITY OR CASTE. MINORITY COMMUNITY MAY BE A LINGUISTIC MINORITY, MAY BE A RELIGIOUS MINORITY. SO, MERELY BECAUSE THE TRUST DEED EMPLOYED THE WORD MINORITY COMMUNITY D OES NOT IN ANY WAY MEAN THAT THE BENEFIT WAS CONFINED TO A PARTICULAR RELIGIOUS COMMUNITY OR CASTE. THIS TRIBUNAL IS OF THE OPINION THAT MINORI TY COMMUNITY WOULD DEPEND UPON THE LOCAL POPULATION OF THAT PARTICULAR LOCALITY. THEREFORE, IT IS OPEN TO ALL THE MINORITIES TO GET THE BENEFIT FROM THE TRUST INCLUDING THE RELIGIOUS MINORITIES. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT CLAUSES 12 & 14 DO NOT IN ANY WAY RESTRICT THE BENEFITS ONLY TO ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. THEREFORE , CLAUSES 12 AND 14 OF THE OBJECT OF THE TRUST CANNOT BE A REASON TO REJEC T THE CLAIM OF THE ASSESSEE FOR REGISTRATION U/S 12A OF THE ACT. 6. NOW COMING TO SECTION 13(1)(B) OF THE ACT, THIS SECTION HAS TO BE CONSIDERED AT THE TIME OF ASSESSMENT. FOR THE PURP OSE OF GRANTING 4 ITA NO.214/COCH/2010 EXEMPTION U/S 11 OF THE INCOME-TAX ACT, THE ASSESSI NG OFFICER HAS TO NECESSARILY EXAMINE WHETHER THE INCOME OF THE CHARI TABLE TRUST WAS UTILIZED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNI TY OR CASTE. IF THE ASSESSEE UTILIZES THE INCOME OF THE TRUST ONLY TO A PARTICULAR RELIGIOUS COMMUNITY OR CASTE, THEN THE ASSESSEE IS NOT ENTITL ED FOR EXEMPTION UNDER THE INCOME-TAX ACT. HOWEVER, SECTION 13(1)(B) IN N O WAY COMES INTO OPERATION AT THE TIME OF REGISTRATION OF THE TRUST U/S 12A OF THE ACT. IN OTHER WORDS, THE UTILITY OF THE INCOME TO A PARTICULAR RE LIGIOUS COMMUNITY HAS TO BE EXAMINED AT THE TIME OF ASSESSMENT. 7. IT IS ALSO TO BE KEPT IN MIND THAT REGISTRATION OF THE TRUST U/S 12A DOES NOT AUTOMATICALLY EXEMPT THE INCOME OF THE TRUST U/ S 11 OF THE INCOME-TAX ACT. REGISTRATION U/S 12A IS ONLY TO IDENTIFY THE CHARACTER OF THE TRUST AS CHARITABLE ONE. HOWEVER, THE EXEMPTION U/S 11 WOUL D DEPEND UPON THE ACTUAL ACTIVITY AND UTILIZATION OF THE INCOME FOR T HE OBJECT OF THE TRUST. IF THE ASSESSEE UTILIZED THE INCOME OF THE TRUST TO A PART ICULAR RELIGIOUS COMMUNITY OR CASTE, THEN NATURALLY, THE ASSESSEE IS NOT ENTIT LED FOR EXEMPTION U/S 11 OF THE ACT. HOWEVER, THIS ASPECT CAN BE EXAMINED ONLY AT THE TIME OF ASSESSMENT. APART FROM THAT THE ASSESSING OFFICER HAS TO EXAMINE THE OTHER CONDITIONS PROVIDED IN SECTION 13 AT THE TIME OF AS SESSMENT. IF THERE WAS ANY VIOLATION OF CONDITIONS PROVIDED U/S 13, THE AS SESSEE IS NOT ENTITLED FOR EXEMPTION U/S 11 EVEN IT IS REGISTERED U/S 12A OF T HE ACT. 8. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE IMPUGNED ORD ER OF THE ADMINISTRATIVE COMMISSIONER DATED 09-09-2009 IS HER EBY SET ASIDE. THE COMMISSIONER IS DIRECTED TO GRANT REGISTRATION U/S 12A SUBJECT TO CONDITION THAT THE COMMISSIONER MAY CANCEL THE REGISTRATION G RANTED IF HE IS SATISFIED THAT THE ACTIVITY OF THE TRUST OR INSTITUTION ARE N OT GENUINE OR NOT BEING 5 ITA NO.214/COCH/2010 CARRIED OUT WITH THE OBJECT OF THE TRUST OR INSTITU TION, AS THE CASE MAY BE. IN OTHER WORDS, EVEN THOUGH REGISTRATION WAS DIRECTED BY THIS TRIBUNAL U/S 12A OF THE ACT, THE COMMISSIONER IS AT LIBERTY TO CANCE L THE REGISTRATION PROVIDED THE CONDITIONS PRESCRIBED IN SECTION 12A(A )(3) ARE SATISFIED. 9. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2012 SD/- SD (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER ERNAKULAM, DT : 25 TH JANUARY, 2012 PK/ COPY FORWARDED TO: 1. ST. PHILIP NERI CHARITABLE TRUST, DOOR NO.4/203A, K AITHAPOIL PO, KOZHIKODE 2. THE ITO, WD.2(3), KOZHIKODE 3. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE 4. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN