Maruti Dev Trust, Pune V. CIT-I, Pune

ITA 2548/PUN/2012

• Counselvise Citation: 254824514 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SINGH
• Assessee Lawyers: S N DOSHI
• Keywords: Charitable institution
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.2548/PN/2012 MARUTI DEV TRUST, PIMPLI LIMTEK, BARAMATI, DIST. PUNE PAN : AAAAM1332J . APPELLANT VS. COMMISSIONER OF INCOME TAX-1, PUNE. . RESPONDENT ASSESSEE BY : MR. S. N. DOSHI DEPARTMENT BY : MR. N. K. SINGH (CIT) DATE OF HEARING : 28-01-2014 DATE OF PRONOUNCEMENT : 28-02-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED A GAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX-I, PUNE (IN SHORT T HE COMMISSIONER) DATED 29.11.2012 WHEREBY THE REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) HAS BEEN DENIED. 2. IN BRIEF, THE RELEVANT FACTS ARE THAT THE APPELL ANT IS A TRUST REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 VIDE NOTIFI CATION DATED 08.08.1984. THE MAIN OBJECTS OF THE TRUST ARE AS FOLLOWS :- A. TO WORSHIP MARUTI IDOL AND MAINTAIN THE TEMPLE REGULARLY. B. TO CELEBRATE HANUMAN JAYANTI I.E. HANUMAN BIRTHD AY CELEBRATIONS BEING CUSTOMARY AS WELL AS CELEBRATE A NY OTHER RELIGIOUS AND OTHER FESTIVALS, CONFERENCES ETC. C. PROVIDING LUNCH/PRASAD ON CHAITRA PORNIMA. D. ON SPENDING ON THE ABOVE ACTIVITIES THE TRUST TO SPEND ON SOCIAL AS WELL AS RELIGIOUS AND OTHER FUNCTIONS SUCH AS TO SANCTION SCHOLARSHIPS TO POOR STUDENTS OF THE SOCIETY E. TO CONSTRUCT HOMES I.E. DHARMASHALAS, HOSTELS, M ARRIAGE OR CEREMONY HALLS, GYMKHANA ETC. ITA NO.2548/PN/2012 F. TO TAKE UP THE ACTIVITIES RELATING TO SOCIAL AND EDUCATIONAL PURPOSES. G. AND TO TAKE UP ANY OTHER SUCH ACTIVITIES INCIDEN TAL TO THE ABOVE OBJECTS. 3. THE APPELLANT APPROACHED THE COMMISSIONER SEEKIN G REGISTRATION U/S 12A OF THE ACT WHICH HAS BEEN REJECTED FOR THE REAS ON THAT THE OBJECTS OF THE ASSESSEE TRUST WERE MIXED I.E. RELIGIOUS AS WELL AS CHARITABLE. AS PER THE COMMISSIONER, A TRUST HAVING CHARITABLE AS WELL AS RELIGIOUS OBJECTS IS NOT ENTITLED TO RELIEF U/S 11/12 OF THE ACT AND THEREFO RE THE REGISTRATION SOUGHT U/S 12A OF THE ACT HAS BEEN DENIED. AS PER THE COMMISS IONER, THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT APPLIED TO A TRUST WH ICH IS EITHER WHOLLY RELIGIOUS OR WHOLLY CHARITABLE BECAUSE THE PRESE NCE OF THE EXPRESSION WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSE IN SEC TION 11 OF THE ACT. THE COMMISSIONER HAS REFERRED TO THE JUDGEMENT OF THE H ONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF GHULAM MOHIDIN TRUST VS. CIT, (2001) 248 ITR 587 (J&K) FOR THE PROPOSITION THAT SECTIONS 11 AND 12 O F THE ACT WOULD ONLY APPLY TO A TRUST WHICH IS EITHER WHOLLY CHARITABLE OR WHO LLY RELIGIOUS AND NOT TO A TRUST WHICH IS BOTH RELIGIOUS AS WELL AS CHARITABL E. AGAINST SUCH DENIAL OF REGISTRATION, ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE COMMISSIONER HAS ERRED IN DENYING R EGISTRATION ON THE GROUND THAT THE ASSESSEE TRUST WAS HAVING OBJECTS OF RELIG IOUS AS WELL AS CHARITABLE PURPOSES. ACCORDING TO HIM, UNDER SIMILAR CIRCUMST ANCES, THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SHRI 1008 PARSHWANTH DIT (E) DATED 08.02.2012 HAS ALLOWED THE REGISTRATION U/S 12AA OF THE ACT. IT IS ALSO POINTED OUT THAT THE JUDGEMENTS OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ADDL.CIT VS. A.A. BIBIJIWALA TRUST, 100 ITR 516 (GUJ) AND IN THE CASE OF CIT VS. BARKATE SAIFIYAH SOCIETY, 213 ITR 492 (GUJ) SUPPORT THE PROPOSITION THAT THE EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT IS APPLICABLE IN THE CASE OF TRUSTS WHICH ARE PARTLY RELIGIOUS AND PARTLY CHARITABLE SO LONG AS N O PART OF THE INCOME OR CORPUS ITA NO.2548/PN/2012 CAN BE UTILIZED FOR PURPOSE WHICH IS NEITHER CHARIT ABLE AND NOR RELIGIOUS. WITH REGARD TO THE RELIANCE PLACED BY THE COMMISSIONER O N THE DECISION OF THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF G HULAM MOHIDIN TRUST (SUPRA), IT IS SUBMITTED THAT THE SAME WAS DISTINGU ISHABLE ON FACTS. 5. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE ORDER OF THE COMMISSIONER BY POINTING OUT THAT SECTION 11 OF THE ACT IS APPLICABLE TO A TRUST WHOL LY FOR CHARITABLE OR RELIGIOUS PURPOSES AND IN THE PRESENT CASE SINCE THE OBJECTS OF THE ASSESSEE CONTAINED AN ADMIXTURE OF BOTH I.E. CHARITABLE AS WELL AS REL IGIOUS PURPOSES, THEREFORE THE BENEFITS OF SECTIONS 11 AND 12 OF THE ACT ARE NOT A PPLICABLE TO THE ASSESSEE CASE. UNDER THESE CIRCUMSTANCES, ACCORDING TO HIM, THE COMMISSIONER WAS JUSTIFIED IN DENYING REGISTRATION U/S 12AA OF THE A CT. APART THEREFROM, RELIANCE HAS BEEN PLACED ON THE JUDGEMENT OF THE HONBLE JAM MU & KASHMIR HIGH COURT IN THE CASE OF GHULAM MOHIDIN TRUST (SUPRA) W HICH HAS BEEN REFERRED TO BY THE COMMISSIONER IN THE IMPUGNED ORDER. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. AT THE OUTSET, WE MAY OBSERVE THAT SO FAR AS THE NATURE OF THE OBJECT S OF THE ASSESSEE ARE CONCERNED, THE COMMISSIONER HAS NOT FOUND ANY FAULT WITH THE SAME EXCEPT TO THE EXTENT THAT THE SAME ARE AN ADMIXTURE OF RELIGI OUS AS WELL AS CHARITABLE PURPOSES. IN-FACT, THE EXISTENCE OF BOTH TYPES OF OBJECTS IS THE BASIS FOR THE COMMISSIONER TO DENY REGISTRATION U/S 12AA OF THE A CT. THE MAIN REASON ADVANCED IS BECAUSE OF THE EXPRESSION WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES CONTAINED IN SECTION 11(1)(A) OF THE ACT. IN OUR C ONSIDERED OPINION, THE SAID EXPRESSION CANNOT BE INTERPRETED TO MEAN T HAT A TRUST HAVING BOTH CHARITABLE OR RELIGIOUS PURPOSE IS NOT ENTITLED TO CLAIM EXEMPTION U/S 11 OF THE ACT OR FOR GRANT OF REGISTRATION U/S 12AA OF THE AC T. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF A.A. BIBIJIWALA TRUST (SUPRA) AS WELL AS IN THE CASE OF BARKATE SAIFIYAH SOCIETY (SUPRA) HAS HELD THAT A TR UST IS ELIGIBLE TO CLAIM ITA NO.2548/PN/2012 EXEMPTION U/S 11/12 OF THE ACT, IF IT IS EITHER FOR RELIGIOUS PURPOSES OR FOR CHARITABLE PURPOSES OR FOR BOTH RELIGIOUS AS WELL A S CHARITABLE PURPOSES. IN ANY CASE, FOR THE PRESENT WE ARE ONLY CONCERNED WITH GR ANT OF REGISTRATION U/S 12AA OF THE ACT AND AT THIS STAGE, IN OUR CONSIDERED OPI NION, THE COMMISSIONER CAN ONLY LOOK INTO THE OBJECTS OF THE TRUST AND EXAMINE IF THEY ARE OF THE NATURE CONTEMPLATED BY SECTION 11 OF THE ACT I.E. CHARITAB LE OR RELIGIOUS OR FOR BOTH CHARITABLE AS WELL AS RELIGIOUS PURPOSES. 7. THE RELIANCE PLACED BY THE COMMISSIONER ON THE J UDGEMENT OF THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF G HULAM MOHIDIN TRUST (SUPRA) TO SAY THAT THE BENEFITS OF SECTIONS 11 AND 12 WOULD APPLY ONLY TO A TRUST WHICH IS WHOLLY CHARITABLE OR WHOLLY RELIGIOU S AND NOT TO A TRUST WHICH IS BOTH RELIGIOUS AS WELL AS CHARITABLE, IN OUR VIEW I S QUITE MISPLACED. THE JUDGEMENT OF THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF GHULAM MOHIDIN TRUST (SUPRA), IN OUR CONSIDERED OPINION, H AS BEEN RENDERED IN THE BACKGROUND OF ITS PECULIAR FACTS. THE HONBLE HIGH COURT WAS CONSIDERING A SITUATION WHERE THE TRUST WAS FOUND TO HAVE BEEN ES TABLISHED EXCLUSIVELY FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY, NA MELY, MUSLIM COMMUNITY. MOREOVER, IN THE CASE BEFORE THE HONBLE HIGH COURT , THE TRUST DEED GAVE ABSOLUTE DISCRETION ON THE TRUSTEES TO SPEND THE IN COME OF THE TRUST AND NO DEFINITE PART OF THE PROPERTY OR INCOME WAS ALLOCAB LE TOWARDS CHARITABLE PURPOSES. QUITE CLEARLY, THE FACT POSITION IN THE PRESENT CASE IS QUITE DIFFERENT INASMUCH AS THE APPELLANT IS A TRUST WHICH HAS NOT BEEN ESTABLISHED FOR THE BENEFIT OF A PARTICULAR RELIGIOUS SOCIETY AND IT IS A PUBLIC CHARITABLE TRUST REGISTERED UNDER BOMBAY PUBLIC TRUST ACT, 1950. MO REOVER, IN THE CASE BEFORE THE HONBLE JAMMU & KASHMIR HIGH COURT IN TH E CASE OF GHULAM MOHIDIN TRUST (SUPRA) ISSUE RELATED TO ALLOWABILITY OR OTHERWISE OF THE BENEFIT OF SECTIONS 11 AND 12 OF THE ACT WHILE PRESENTLY IN TH E CASE BEFORE US THE ISSUE RELATES TO GRANT OF REGISTRATION U/S 12AA OF THE AC T. IN-FACT, WHEN THE ASSESSEE BEFORE US WOULD SEEK EXEMPTION U/S 11/12 OF THE ACT , THE ASSESSING OFFICER IS ITA NO.2548/PN/2012 COMPETENT TO EXAMINE THE CLAIM AS THERE ARE ADEQUAT E PROVISIONS, NAMELY, SECTION 13(1)(A) & (B) OF THE ACT TO DENY EXEMPTION IN THE EVENT OF THE INCOME NOT BEING SPENT IN THE MANNER CONTEMPLATED BY THE T RUST DEED. AT THE PRESENT STAGE, THE SCOPE OF ENQUIRY BY THE COMMISSIONER IS ONLY TO CONFIRM THAT THE OBJECTS ARE EITHER CHARITABLE OR RELIGIOUS IN NATUR E. THEREFORE, THE RELIANCE PLACED BY THE COMMISSIONER ON CERTAIN OBSERVATIONS BY THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF GHULAM MOHIDIN TR UST (SUPRA) ARE NOT RELEVANT AT THE PRESENT STAGE. 8. APART THEREFROM, EVEN IF WE ARE TO ACCEPT THE PR OPOSITION OF THE COMMISSIONER BASED ON THE JUDGEMENT OF THE HONBLE JAMMU & KASHMIR HIGH COURT THAT THE BENEFITS OF SECTIONS 11 AND 12 OF TH E ACT ARE APPLICABLE ONLY TO A TRUST WHICH IS WHOLLY CHARITABLE OR WHOLLY RELIGIOU S AND NOT TO A TRUST WHOSE OBJECTS ARE AN ADMIXTURE BOTH RELIGIOUS AS WELL AS CHARITABLE; THEN, WE CANNOT LOSE SIGHT OF THE FACT THAT THE JUDGEMENTS OF THE H ONBLE GUJARAT HIGH COURT IN THE CASE OF A.A. BIBIJIWALA TRUST (SUPRA) AND IN TH E CASE OF BARKATE SAIFIYAH SOCIETY (SUPRA) ARE TO THE CONTRARY. AS PER THE HO NBLE GUJARAT HIGH COURT IN THE CASE OF A.A. BIBIJIWALA TRUST (SUPRA) EVEN IF A TRUST IS PARTLY RELIGIOUS AND PARTLY CHARITABLE SO LONG AS NO PART OF THE INCOME OR CORPUS CAN BE UTILIZED FOR A PURPOSE WHICH IS NEITHER RELIGIOUS NOR CHARITABLE , THE EXEMPTION U/S 11 OF THE ACT WILL BE AVAILABLE. THUS, THE PROPOSITION LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IS DIVERGENT TO THAT LAID DOWN BY THE HO NBLE JAMMU & KASHMIR HIGH COURT AND IN SUCH A SITUATION, FOLLOWING THE P ARITY OF REASONING LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC) A VIEW WHICH IS FAVOURABLE TO THE A SSESSEE IS LIABLE TO BE ADOPTED, SO LONG AS THERE IS NO BINDING VIEW OF THE JURISDICTIONAL HIGH COURT. EVEN IN SUCH A SCENARIO, IN OUR VIEW, FOLLOWING THE AFORESAID PROPOSITION, THE ACTION OF THE COMMISSIONER IN DENYING REGISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT IS UNSUSTAINABLE, AS THE VIEW CANVASSED BY THE ASSESSEE IS SUPPORTED BY THE HONBLE GUJARAT HIGH COURT. ITA NO.2548/PN/2012 9. IN VIEW OF THE AFORESAID DISCUSSION, WE SET-ASID E THE ORDER OF THE COMMISSIONER AND DIRECT HIM TO ALLOW REGISTRATION U /S 12AA OF THE ACT IN PURSUANCE TO THE APPLICATION FILED BY THE ASSESSEE IN FORM NO.10A DATED 30.08.2011. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 28 TH FEBRUARY, 2014 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-I, PUNE; 4) THE DR, A BENCH, I.T.A.T., PUNE; 5) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE