ITO (Exemptions), Dehradun V. Bharat Susamachar Samiti, Dehradun

ITA 235/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2860 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 12-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI KANT GUPTA SENIOR
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.235/DEL./2015 (ASSESSMENT YEAR : 2009-10) ITA NO.236/DEL./2015 (ASSESSMENT YEAR : 2011-12) ITO (EXEMPTION), VS. BHARAT SUSAMACHAR SAMITI, DEHRADUN. KULHAN, PO SAHASTRADHARA ROAD, DEHRADUN. (PAN : AAABB0034D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GEORGE KOSHI, ADVOCATE REVENUE BY : SHRI RAVI KANT GUPTA, SENIOR DR DATE OF HEARING : 28.02.2018 DATE OF ORDER : 16.03.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN BOTH THE AFORESAID APPEALS, THE SAME ARE BEING D ISPOSED OF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DI SCUSSION. 2. THE APPELLANT, INCOME-TAX OFFICER (EXEMPTION), D EHRADUN (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILIN G THE PRESENT APPEALS, SOUGHT TO SET ASIDE THE IMPUGNED ORDERS, B OTH DATED ITA NOS.235 & 236/DEL./2015 2 07.10.2014 PASSED BY LD. CIT(APPEALS)-I, DEHRADUN Q UA THE ASSESSMENT YEARS 2009-10 & 2011-12 RESPECTIVELY ON THE IDENTICAL GROUNDS INTER ALIA THAT :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS O F THE CASE BY ALLOWING RELIEF (OF RS.99,13,305/- IN AY 2009-10 AND RS.2,11,41,720/- IN AY 2011-12) BY HOLDING THE 'MERELY BECAUSE THE SOCIETY OR TRUST DR AWS ITS INSPIRATION FOR CERTAIN CHARITABLE ACTIVITIES F ROM RELIGIOUS TENETS AS LONG AS CHARITABLE ACTIVITIES O F THE SOCIETY ARE NOT CONFINED TO THE BENEFITS OF ANY PAR TICULAR COMMUNITY, IT IS ENTITLED FOR EXEMPTION U/S 11 OF I T ACT, 1961' . 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE BY HOLDING THAT MERELY BECAUSE THE ASSESSE E SOCIETY/ TRUST BASED ITS ACTIVITIES ON THE BASIS OF A RELIGIOUS CALLING, THERE IS NO REASON TO HOLD THAT SECTION 13(L)(B) OF THE I,T. ACT, 1961 WOULD BE ATTRACTED I T.. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSEE TRUST IS A CHARI TABLE SOCIETY REGISTERED UNDER SECTION 12AA OF THE INCOME-TAX ACT , 1961 (FOR SHORT THE ACT) W.E.F. 01.10.1987 WITH OBJECT TO O PEN SCHOOL, COLLEGES, ORPHANAGE AND DESTITUTE HOME IN UTTARA KH AND AND UTTAR PRADESH. HOWEVER, DURING THE COURSE OF ASSESSMENT ASSESSING OFFICER PROCEEDED TO CONCLUDE THAT ACTIVITIES CARRI ED OUT BY THE SOCIETY ARE NOT CHARITABLE AS PER SECTION2(15) OF T HE ACT AS THE ASSESSEE HAD APPLIED ITS INCOME TO A PARTICULAR COM MUNITY AND THEREBY WITHDREW THE EXEMPTION U/S 11 OF THE ACT BY INVOKING THE ITA NOS.235 & 236/DEL./2015 3 PROVISIONS CONTAINED U/S 13(1)(B) OF THE ACT AND AS SESSED THE TOTAL INCOME OF THE ASSESSEE SOCIETY AT RS.99,13,305/- AN D RS.2,11,41,719/- FOR AYS 2009-10 AND 2011-12 RESPEC TIVELY. 3. ASSESSEE SOCIETY CARRIED THE MATTER BEFORE THE L D. CIT (A) BY WAY OF FILING APPEALS WHO HAS ALLOWED THE APPEALS B Y ALLOWING THE CLAIM OF THE ASSESSEE SOCIETY EXEMPTED U/S 11 OF TH E ACT. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEALS. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE ASSESSEE SOCIETY IS A CHARITAB LE SOCIETY REGISTERED U/S 12AA OF THE ACT W.E.F 01.10.1987. I T IS ALSO NOT IN DISPUTE THAT IN THE EARLIER YEARS, THE ASSESSEE SOC IETY HAS BEEN CONTINUOUSLY GETTING EXEMPTION U/S 11 OF THE ACT AN D SINCE THEN IT HAS NOT AMENDED ITS AIMS AND OBJECT. IT IS ALSO NO T IN DISPUTE THAT THE MAIN SOURCE OF INCOME OF THE SOCIETY IS FOREIGN DONATION. 6. WHEN WE EXAMINE PARA 4.0 OF ASSESSMENT ORDER FOR AY 2009-10, AO HAS CATEGORICALLY GIVEN THE DETAIL OF A PPLICATION OF INCOME WHICH IS REPRODUCED FOR READY PERUSAL AS UND ER :- ITA NOS.235 & 236/DEL./2015 4 TOTAL INCOME FIXED ASSETS DURING THE YEAR RUNNING EXPENDIT URE TOT AL APPLICATION SCHOOLS 5 SCHOOLS 40,54,754 16,73,360 55,19,963 71,93,323 COLLEGE NTC 65,45,833 29,36,596 1,54,72,253 1,84,08,849 HOSPITALS NIL ORPHANAGES JJBVK, PATHRI - 1,54,900 14,46,637 16,01,537 ASYLUMS NIL - - - - DESTITUTE HOMES NIL - - - - HANDICRAFT INSTITUTIONS NIL - - - - MECHANICAL INSTITUTIONS NIL - - - - OTHER VOCATIONAL INSTITUTIONS NIL - - - - 7. APPLICATION OF INCOME OF THE ASSESSEE TRUST TABU LATED ABOVE FOR THE YEAR UNDER ASSESSMENT SHOWS THAT THE PRIMAR Y OBJECT OF THE ASSESSEE SOCIETY IS TO RUN THE SCHOOL, COLLEGE AND ORPHANAGE AND HAS APPLIED MAJOR PORTION OF ITS INCOME ON THE SAME. 8. DURING THE ASSESSMENT PROCEEDINGS, THE AO HAS TR ACED OUT THE HISTORY OF ASSESSEE SOCIETY FROM OFFICIAL WEBSI TE OF GOODS NEWS FOR INDIA AND BASED HIS FINDINGS ON THE PREMIS E THAT ASSESSEE SOCIETY RUNS SCHOOLS WITH THE MOTIVE TO EVANGELIZE. HOWEVER, THERE IS NO MATERIAL OR DATA ON RECORD TO PROVE IF THE AS SESSEE SOCIETY UNDER THE GARB OF RUNNING SCHOOL AND COLLEGES APPLI ED FOR AFFILIATION WITH ICSE AND UGC HAS CONVERTED INDIANS INTO CHRISTIANITY, PARTICULARLY, WHEN FROM THE AIMS AND OBJECTS OF THE ITA NOS.235 & 236/DEL./2015 5 ASSESSEE SOCIETY IT IS APPARENTLY CLEAR THAT IT IS IMPARTING EDUCATION AND PROVIDING HELP TO THE ORPHANS WITHOUT ANY DISCR IMINATION ON THE BASIS OF RELIGION, CASTE AND CREED. 9. SO FAR AS QUESTION OF HAVING THEOLOGY AS A SUB JECT IN THE SCHOOL AND COLLEGE CURRICULUM IS CONCERNED, WE ARE CONSTRAINED TO HOLD THAT IMPARTING RELIGIOUS EDUCATION ALONG WITH OUR RECOGNIZED EDUCATION IS PART OF THE INDIAN HERITAGE AND ANY SO CIETY/TRUST CANNOT BE BARRED FROM CLAIMING EXEMPTION U/S 11 OF THE ACT MERELY BECAUSE OF THE FACT THAT IT IS IMPARTING THEOLOGICA L COURSES TO ITS STUDENTS. MANY INSTITUTIONS BEING RUN BY DIFFERENT MINORITIES AND RELIGIOUS TRUST IN INDIA ARE INVARIABLY IMPARTING R ELIGIOUS EDUCATION ALONG WITH RECOGNIZED CURRICULUM TO MAKE THE STUDEN TS BETTER INDIAN. 10. EVEN, DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, AO WAS REQUESTED BY THE ASSESSEE TRUST TO VISIT ANY OF ITS SCHOOL OR COLLEGE OR ORPHANAGE FOR MAKING DISCREET ENQUIRY IF THE ASS ESSEE SOCIETY IS NOT CARRYING OUT ITS AIMS AND OBJECTS AND IS INTO C ONVERSION. BUT INSTEAD OF BASING FINDINGS ON THE FACT, AO PROCEEDE D ON SURMISES THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY ARE NOT GENUINE. DURING THE ASSESSMENT PROCEEDINGS, IT IS CATEGORICALLY BRO UGHT ON RECORD BY THE ASSESSEE TRUST THAT IN PATHRI, A CONNECTING ROA D TO THE SCHOOL WAS CONNECTED BY THE LOCAL MLA FROM THE MLA AREA FUND A ND IN ITA NOS.235 & 236/DEL./2015 6 BHAGWANPUR, A LOCAL LANDLORD HAS BUILT ABOUT 14 ROO MS FOR THE USE OF THE SCHOOL AND THE SAME WAS TAKEN BY THE ASSESSE E TRUST ON MONTHLY RENT. 11. IT IS ALSO BROUGHT ON RECORD THAT AFTER SUCCESS FUL COMPLETION OF THE BUILDING OF NARENDRA NAGAR SCHOOL, THE JOINT DIRECTOR OF EDUCATION VISITED THE SCHOOL ON 07.05.2009 AND THE SCHOOL HAS APPLIED FOR ICSE AFFILIATION. AO ALSO RELIED UPON PRINCIPALS ANNUAL REPORT FOR 2008-09 OF NEW THEOLOGICAL COLLEG E, DEHRADUN BUT WHEN THE REPORT IS READ AS A WHOLE, IT IS MENTI ONED THAT, THE FOCUS OF THEIR TRAINING THEREFORE IS ON THE CHARACT ER, SKILL AND KNOWLEDGE LEVEL OF OUR TRAINEES . NO DOUBT, IT IS MENTIONED THAT THEIR MISSION IS TO TRAIN CHRIST LIKE SERVANT LEADE RS FOR CHURCH AND SOCIETY, BUT IT HAS MERELY GIVEN ANALOGY TO MAKE BE TTER HUMAN BEINGS. 12. THIS ANNUAL REPORT CANNOT CONVERT THE NATURE OF TRUST MERELY BECAUSE OF THE FACT THAT VISION IS TO PRODUCE COMMI TTED LEADERS FOR THE CHURCH AND SOCIETY. EVEN PERUSAL OF THE COURSE S AND METHOD OF LEARNING EXPLAINED BY AO HIMSELF AT PAGE 55 OF HIS ORDER SHOWS THAT APART FROM THEOLOGY, OTHER SUBJECTS ARE ALSO P ART OF THE SCHOOL / COLLEGE CURRICULUM AND ABOVE ALL, SCHOOL AND COLL EGE EDUCATION IS BEING IMPARTED INDISCRIMINATELY. ITA NOS.235 & 236/DEL./2015 7 13. IN PARA 3.18 OF THE ASSESSMENT ORDER, THE AO HA S CATEGORICALLY HELD THAT, IT IS NOT DENIED THAT THE SOCIETY IS TRYING TO HELP THE POOREST SECTIONS OF SOCIETY; BUT IT IS TAK ING ADVANTAGE OF THEIR POVERTY; ASSESSEE SOCIETY IS REACHING THEM WI TH THE MOTIVE TO BRING THEM IN THE VINEYARD OF LORD. THE MOTIVE IS NOT AMELIORATION OF POOREST SECTION OF INDIAN COMMUNITY BUT TO ATTAI N PERSONAL GOALS OF SERVING LORD WHICH IN PRESENT CONTEXT MEANS CONV ERSION OF UNREACHED PEOPLE. THIS GOES TO PROVE THAT WHEN EDUCATION IS BEING IMPARTED TO THE LOWEST STRATA OF THE SOCIETY AT SCHOOL OR COLLEGE LEVEL WITHOUT HAVING ANY SINGLE INSTANCE OF FORCED CONVERSION POINTED OUT BY THE AO, THE ENTIRE FINDIN GS OF THE AO ARE BASED UPON CONJECTURES AND SURMISES. 14. MOREOVER, IN AYS 2006-07, 2007-08 AND 2008-09, ASSESSEE SOCIETY HAS BEEN FOUND ELIGIBLE BY THE REVENUE AUTH ORITIES TO CLAIM EXEMPTION U/S 11 OF THE ACT AND SINCE THEN THERE IS NO CHANGE IN THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY. MORE SO, WHEN THE ASSESSEE SOCIETY IS EXPANDING ITS HORIZON TO IMPART THE SCHOOL AND COLLEGE EDUCATION TO THE NEEDY STUDENTS, IT CANNOT BE DEPRIVED FROM CLAIMING EXEMPTION U/S 11 OF THE ACT. 15. THE LD. CIT (A) WHILE DECIDING THE ISSUE IN CON TROVERSY HAS THRASHED EACH AND EVERY FACTS OF THE CASE IN THE LI GHT OF THE DECISIONS RENDERED BY THE HONBLE SUPREME COURT IN CASES OF SOLE ITA NOS.235 & 236/DEL./2015 8 TRUSTEE, LOK SHIKSHAN TRUST VS. CIT (1975) 101 IT R 235, CIT VS. DAWOODI BOHRA JAMAT (2014) 364 ITR 361 (SC) A ND HONBLE HIGH COURT OF KERALA IN CIT VS. ST. MARYS MALANKARA SEMINARY 348 ITR 69 (KERALA) AND HAS RIGHTLY CAME TO THE CONCLUSION THAT THE DONORS MIGHT HAVE DONATED MONEY TO THE ASSESSEE SOCIETY IN THE BELIEF THAT THEY WERE PROPA GATING AND PROMOTING CHRISTIANITY BUT THE ASSESSEE SOCIETY HAS CONFINED ITS ACTIVITIES TO THE AIMS AND OBJECTS LAID DOWN IN THE MEMORANDUM OF ASSOCIATION AND THE ASSESSEE SOCIETY IS IMPARTING S ECULAR EDUCATION AND AS SUCH, PROVISIONS CONTAINED U/.S 13(1)(B) ARE NOT ATTRACTED AND FOUND THE ASSESSEE SOCIETY ELIGIBLE FOR EXEMPTION U /S 11 OF THE ACT. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FIND INGS RETURNED BY THE LD. CIT (A), HENCE BOTH THE APPEALS FILED BY TH E REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF MARCH, 2018. SD/- SD/- (B.P. JAIN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH DAY OF MARCH, 2018 TS ITA NOS.235 & 236/DEL./2015 9 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT-I, DEHRADUN. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.