Shia Dawoodi Bohra Jamat Dessa, Deesa V. The Director of Income tax(Exemption), Ahmedabad

ITA 2502/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1860 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-12-2009
• Assessment Year: misc
• Appeal Filed On: 28-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MATHIRAMAN
• Assessee Lawyers: M G PATEL
• Keywords: Charitable institution; Set aside
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.2502/AHD/2009 SHIA DAWOODI BOHRA JAMAT DEESA, JOHAR MULLA, TAHERBHAI DEESAWALA, SADAR BAZAR, DEESA PA NO. AAHTS 1323B VS DIRECTOR OF INCOME TAX(EXEMPTION), AHMEDABAD (APPELLANT) (RESPONDENT) ITA NO.2503/AHD/2009 SHIA DAWOODI MASJID & QABRASTAN, DEESA, JOHAR MULLA, TAHERBHAI DEESAWALA, SADAR BAZAR, DEESA PA NO. AABTD 2856 J VS DIRECTOR OF INCOME TAX(EXEMPTION), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. G. PATEL, AR RESPONDENT BY SHRI N. MATHIRAMAN, DR O R D E R PER BHAVNESH SAINI: BOTH THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE DIRECT OR OF INCOME TAX (EXEMPTION), AHMEDABAD DATED 30-06-2008 CHALLENGING THE ORDERS U/S 12AA OF THE INCOME TAX ACT WHEREBY THE LEARNED DIR ECTOR OF INCOME TAX (EXEMPTION) REJECTED THE REGISTRATION APPLICATION U /S 12AA OF THE INCOME TAX ACT. 2. THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) V IDE IMPUGNED ORDERS REJECTED THE REGISTRATION APPLICATION U/S 12 AA OF THE INCOME TAX ACT ON THE REASONS THAT THE CASES OF THE ASSESSEES ARE HIT BY PROVISIONS OF SECTION13(1) (B) OF THE INCOME TAX ACT. ITA NO.2502 & 2503/AHD/2009 SHIA DAWOODI BOHRA JAMAT DEESA AND DEESA DAWOODI MASJID & QABRASTAN 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF BOTH THE ASSE SSEES BY THE ORDER OF THE ITAT, INDORE BENCH IN THE CASE OF DAWOODI BOHRA JAMAT AND OTHERS VS CIT 317 ITR (AT) 133 (INDORE) IN WHICH IT WAS HE LD AS UNDER: HELD, ALLOWING THE APPEALS, THAT IN THE ABSENCE OF ANY SPECIFIC FINDING WITH REGARD TO THE AMOUNT SPENT BY A FOR THE TRUST THERE WAS NO JUSTIFICATION FOR INVOKING THE P ROVISIONS OF SECTION 13(1)( C ) OF THE ACT AGAINST THE TRUST. TH E ASSESSEE WAS A PUBLIC RELIGIOUS TRUST WITH ITS OBJECTS BEING SOLELY RELIGIOUS IN NATURE, AND THE REFUSAL TO GRANT REGIS TRATION ON THE GROUND THAT SECTION 13(1) (B) AND 13(1) ( C ) OF TH E ACT WERE VIOLAT4ED, WAS NOT JUSTIFIED WHEN THE COMMISSIONER HAD NOT DOUBTED EITHER THE NATURE OF ITS OBJECTS OR GENUINE NESS OF ITS ACTIVITIES. 4. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMIT TED THAT THE ABOVE VIEW OF THE TRIBUNAL IS CONFIRMED BY THE HONBLE MA DHYA PRADESH HIGH COURT IN THE CASE OF CIT VS DAWOODI BOHRA JAMAT 317 ITR 342 (MP) IN WHICH THE HONBLE MADHYA PRADESH HIGH COURT HAS HEL D AS UNDER: HELD, DISMISSING THE APPEAL, (I) THAT THE TRIBUNAL AFTER ANALYZING THE OBJECTS OF THE TRUST HAD HELD THAT TH E ASSESSEE WAS A PUBLIC RELIGIOUS TRUST AND ITS OBJECTS WERE S OLELY RELIGIOUS IN NATURE. THE REVENUE HAD NEITHER ASSAIL ED THE FINDING AS PERVERSE NOR HAD THE REVENUE BEEN ABLE T O POINT OUT ANY PERVERSITY IN THE FINDING. THEREFORE, THERE WAS NO GOOD REASON TO INTERFERE WITH SUCH FINDING OF FACT. (II) THAT SECTION 13(1) (B) IS ATTRACTED IN THE CAS E OF INCOME OF THE TRUST FOR CHARITABLE PURPOSE OF A COMMUNITY OR CASTE, WHICH WAS NOT THE CASE HERE. THUS, THE TRIBUNAL RIG HTLY DECIDED THE ISSUE OF APPLICABILITY OF SECTION 13(1) (B) HOLDING THAT SINCE THE ASSESSEE WAS A RELIGIOUS TRUST, THE PROVISIONS OF SECTION 13(1)(B) WREN TO APPLICABLE BECAUSE THEY WE RE APPLICABLE IN THE CASE OF THE TRUST ESTABLISHED FOR CHARITABLE PURPOSES. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION). ITA NO.2502 & 2503/AHD/2009 SHIA DAWOODI BOHRA JAMAT DEESA AND DEESA DAWOODI MASJID & QABRASTAN 3 6. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT, INDORE BENCH IN THE CASE OF DAWOODI BOHRA JAM AT AND OTHERS VS. CIT (SUPRA) WHICH IS CONFIRMED BY THE HONBLE MADHY A PRADESH HIGH COURT IN THE CASE OF CIT(A) VS DAWOODI BOHRA JAMAT (SUPRA). BY FOLLOWING THE SAME REASON FOR DECISION, WE SET ASIDE THE IMPU GNED ORDERS AND DIRECT THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIO N) TO GRANT REGISTRATION TO THE ASSESSES U/S 12AA OF THE INCOME TAX ACT IN ACCORDANCE WITH LAW WITHIN ONE MONTH FROM THE DATE OF RECEIPT OF THIS ORDER. 7. AS A RESULT, BOTH THE APPEALS OF THE ASSESSEES A RE ALLOWED. ORDER PRONOUNCED ON 22 ND DECEMBER 2009 SD/- SD/- (A. N. PAHUJA) ACOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 22-12-2009 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD