M/s Church of Christ and Social Service Society, Amalapuram V. The Commissioner of Income Tax, Rajahmundry

ITA 267/VIZ/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56827 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-03-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Charitable institution; Capital expenditure
• Section: 80G; 12AA

Judgement Text

ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 267 /VIZAG/ 20 10 ASSESSMENT YEAR : 2010 - 11 M/S. CHURCH OF CHR IST SOCIAL SERVICE SOCIETY AMALAPURAM VS. CIT RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAN NO.AAATC 1447M APPELLANT BY: SHRI C. SUBRAHMANYAM, CA RESPONDENT BY: SHRI R.K. SINGH, DR DATE OF HEAR I NG: 13.07.2011 DATE OF PRONOUNCEMENT: 05 .0 9 .2011 ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT REFUSING THE GRANT OF REGISTRATION U/S 80G OF THE I NCOME-TAX ACT (HEREINAFTER CALLED AS AN ACT). THOUGH VARIOUS GROUNDS ARE RA ISED IN THIS APPEAL BUT THEY ALL RELATE TO THE VALIDITY OF THE REJECTION OF GRAN T OF REGISTRATION U/S 80G OF THE ACT. 2. THE FACTS IN NARROW COMPASS BORNE OUT FROM THE O RDER OF THE CIT ARE THAT THE ASSESSEE SOCIETY WAS INITIALLY RECOGNIZED U/S 80G OF THE ACT UP TO 31.3.2007. HOWEVER, THERE AFTER THERE WAS NO REQUE ST FOR RENEWAL W.E.F. 1.4.2007 AND ONLY AFTER A GAP OF MORE THAN 2 YEARS, THE ASSESSEE SOCIETY MOVED A FRESH APPLICATION FOR CERTIFICATE OF EXEMPT ION U/S 80G OF THE ACT. THE FACTS NARRATED IN THE CITS ORDER ARE THAT THE ASSESSEE SOCIETIES CAME INTO EXISTENCE WITH THE OBJECTS OF EVANGELISING AND EDIFYING THE BODY OF LORD JESUS CHRIST SO AS TO SPREAD HIS TEACHINGS TO FAR O FF VILLAGES, TO PUBLISH CHRISTIAN MAGAZINES, JOURNALS, ETC., BESIDES, UNDER TAKING CERTAIN CHARITABLE ACTIVITIES FOR AMELIORATION OF THE POOR, DESTITUTES , ORPHANS, DISABLED, AGED AND ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 2 SICK PERSONS AS ALSO PROVIDE VOCATIONAL TRAINING TO ADULTS AND CHILDREN FOR ENABLING THEM TO EARN LIVELIHOOD. THUS, THE OBJECT S OF THE SOCIETY ARE BOTH RELIGIOUS AND CHARITABLE IN NATURE WHEN IT CAME INT O EXISTENCE. MUCH LATER IN THE YEAR 2004, THE SOCIETY INTRODUCED NEW OBJECTS, BEING ESTABLISHMENT AND RUNNING EDUCATIONAL INSTITUTIONS TO SERVE THE MINOR ITY CHRISTIAN COMMUNITY BY PROVIDING TO THEM TECHNICAL, MEDICAL, ENGINEERING A ND OTHER HUMANITIES RELATED EDUCATION AND MAINTENANCE OF AN ORPHANAGE A ND PROVISION OF RELIEF TO THE LEPERS, AGED AND POOR. THEREFORE, BOTH THE OBJ ECTS AS WELL AS THE ACTIVITIES OF SOCIETY REPRESENT AN ADMIXTURE OF REL IGIOUS AND CHARITABLE PURPOSE AND ACTIVITIES. THE CIT HAS ALSO OBSERVED THAT FROM A CERTIFICATE OF REGISTRATION U/S 12AA OF THE ACT DATED 14.3.2005, I T WAS NOT CLEAR WHETHER THE SOCIETY HAS BEEN REGISTERED AS A WHOLLY CHARITABLE SOCIETY OR AS A WHOLLY RELIGIOUS SOCIETY. BUT SINCE THE RECOGNITION U/S 8 0G OF THE ACT HAS BEEN GRANTED SUBSEQUENTLY, THE STATUS OF THE SOCIETY GIV ES THE IMPRESSION THAT IT IS RECOGNIZED AS A CHARITABLE SOCIETY. 3. THE CIT HAS EXAMINED THE ACCOUNTS OF THE SOCIETY AND NOTICED THAT THE ACTIVITIES OF THE SOCIETY ARE SUBSTANTIALLY OF RELI GIOUS NATURE AND NOT FOR CHARITABLE PURPOSE. FROM THE COPIES OF ACCOUNT FOR THE ASSESSMENT YEAR 2006-07 TO 2008-09 ENCLOSED WITH THE APPLICATION FO RM NO.10G, IT WAS NOTICED BY THE CIT THAT THIS SOCIETY HAS BEEN UNDERTAKING S UBSTANTIALLY HIGHER VOLUME OF RELIGIOUS ACTIVITIES AS COMPARED TO ITS CHARITAB LE ACTIVITIES. RELEVANT DETAILS OF RELIGIOUS AND CHARITABLE ACTIVITIES ARE EXTRACTE D IN A TABULATED FORM IN HIS ORDER. THOUGH THE ASSESSEE TRIED TO JUSTIFY THE EX PENDITURES WITH THE SUBMISSION THAT THE EXPENDITURE TOWARDS THE RELIGIO US ACTIVITIES ARE MINIMAL, BUT CIT WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEES AND HE REJECTED THE REQUEST FOR GRANT OF CERTIFICATE OF RE COGNITION U/S 80G OF THE ACT AFTER HAVING OBSERVED THAT THE ASSESSEES CASE IS H IT BY EXPLANATION (3) TO SECTION 80G OF THE ACT. 4. AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE US WITH THE SUBMISSION THAT CIT HAS NOT PROPERLY APPRECIATED TH E FACTS OF THE CASE AND THE DETAILS OF EXPENDITURES SUBMITTED BY THE ASSESS EES. CIT HIMSELF HAS ACCEPTED THAT THE ASSESSEE IS ALSO ENGAGED IN ESTAB LISHING AND RUNNING ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 3 EDUCATIONAL INSTITUTIONS BY PROVIDING TECHNICAL, ME DICAL, ENGINEERING AND OTHER HUMANITIES RELATED EDUCATION AND ALSO FOR MAINTENAN CE OF AN ORPHANAGE AND PROVIDING RELIEF TO THE LEPERS, AGED AND POORS. WH ATEVER SALARIES WERE PAID TO THE STAFF, IT SHOULD BE CONSIDERED UNDER THE HEA D EXPENDITURE ON CHARITABLE ACTIVITIES BUT CIT HAS CONSIDERED THE SALARIES UNDE R THE HEAD EXPENDITURE FOR RELIGIOUS ACTIVITIES. THE ASSESSEE HAS ALSO FILED A COMPARATIVE TABLE SHOWING DETAILS OF EXPENDITURE INCURRED FOR RELIGIOUS ACTI VITIES AND ALSO FOR CHARITABLE ACTIVITIES. THE LD. COUNSEL FOR THE ASSESSEE FURTH ER CONTENDED THAT ASSESSEE WAS EARLIER GRANTED REGISTRATION U/S 80G OF THE ACT . MEANING THEREBY, THE ASSESSEE WAS ADMITTEDLY ENGAGED IN CHARITABLE ACTIV ITIES. THOUGH THE REGISTRATION WAS NOT SOUGHT TO BE RENEWED AT PROPER TIME, BUT THE ASSESSEE MOVED AN APPLICATION FOR GRANT OF FRESH REGISTRATIO N TO AVOID ALL TECHNICALITIES AND THE PAST CONDUCT OF THE ASSESSEE SHOULD HAVE BE EN TAKEN INTO ACCOUNT WHILE GRANTING REGISTRATION U/S 80G OF THE ACT. HE FURTHER CONTENDED THAT FROM THE DETAILS OF EXPENDITURE, IT IS QUITE EVIDEN T THAT ASSESSEE HAS INCURRED SUBSTANTIAL AMOUNT OF EXPENDITURE TO PROVIDE HELP T O LEPERS, AGED, POOR AND ORPHANAGE MAINTENANCE. THE SALARIES TO PREACHERS S HOULD HAVE BEEN CONSIDERED UNDER THE HEAD CHARITABLE ACTIVITIES B UT THE CIT HAS CONSIDERED IT UNDER THE HEAD RELIGIOUS ACTIVITIES. IF THIS EXP ENDITURE HAS BEEN CONSIDERED UNDER THE CHARITABLE ACTIVITIES, THE EXPENDITURE ON RELIGIOUS ACTIVITIES IS LESS THAN 5% OF THE TOTAL INCOME OF THE ASSESSEE SOCIETY . SINCE THE ASSESSEE HAS FULFILLED ALL THE REQUISITE CONDITIONS, THE REGISTR ATION U/S 80G MAY BE GRANTED. 5. THE LD. D.R. ON THE OTHER HAND HAS INVITED OUR A TTENTION TO THE FACTS THAT THOUGH THE ASSESSEE HAS INTRODUCED THE NEW OBJ ECT OF THE SOCIETY OF ESTABLISHING AND RUNNING EDUCATIONAL INSTITUTIONS T O SERVE THE MINORITY CHRISTIAN COMMUNITY BY PROVIDING THEM TECHNICAL, ME DICAL, ENGINEERING AND OTHER HUMANITY RELATED EDUCATION BUT NO ACTIVITIES IN THIS REGARD WERE UNDERTAKEN BY THE ASSESSEES. FROM THE DETAILS OF E XPENDITURE, IT IS CLEAR THAT THE ASSESSEE SOCIETY HAS INCURRED CERTAIN EXPENDITU RES TO HELP LEPERS, POOR AND AGED PEOPLE AND ALSO ON ORPHANAGE MAINTENANCE. THE ASSESSEE HAS INCURRED A SUBSTANTIAL AMOUNT IN ALL THESE YEARS TO WARDS SALARIES TO PREACHERS. THE MAIN OBJECT OF THE ASSESSEE SOCIETY IS TO SPREA D THE TEACHINGS OF LORD JESUS CHRIST TO FAR OFF VILLAGES AND TO PUBLISH CHR ISTIAN MAGAZINES, JOURNALS, ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 4 ETC. THEREFORE, THE PREACHERS WERE ENGAGED TO SPRE AD TEACHINGS OF THE LORD JESUS CHRIST AND THE SALARIES PAID TO PREACHERS CAN ONLY BE CALLED TO BE THE EXPENDITURE FOR THE RELIGIOUS PURPOSES. IT IS ALSO NOT CLEAR FROM THE DETAILS OF EXPENDITURE SHOWN FOR THE CHARITABLE PURPOSES AS TO WHAT TYPE OF EDUCATION WAS PROVIDED TO THE POOR, THOUGH HE HAS CLAIMED CER TAIN EXPENSES ON ACCOUNT OF HOSTEL STAFF SALARIES AND TEACHERS SALAR IES. THE LD. D.R. FURTHER INVITED OUR ATTENTION TO THE DETAILS OF CAPITAL EXP ENDITURES TO SHOW THAT MOST OF THE EXPENDITURES WERE INCURRED IN THE CONSTRUCTI ON OF CHURCH BUILDINGS AND CHURCH FURNITURE. SINCE THE SOCIETY WAS MAINLY ENG AGED IN RELIGIOUS ACTIVITIES AND ONLY THE MINIMAL AMOUNT WAS SPENT ON CHARITABLE ACTIVITIES, THE CIT HAS RIGHTLY REFUSED THE REGISTRATION U/S 80G OF THE ACT . 6. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE R IVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDER OF THE CIT, WE FIND THAT THE ASSESSEE SOCIETY WAS FORMED WITH THE OBJECTS OF EVANGELIZING AND EDIFYING THE BODY OF LORD JESUS CHRIST SO AS TO SPREAD TEACHINGS TO FAR OFF VILLAGES, TO PUBLISH CHRISTIAN MAGAZINES AND JOURNALS, ETC. THOUGH THE ASSESSEE SOCIETY HAS CLAIMED THAT THEY WERE ENGAGED IN CHARITABLE ACTIVI TIES BESIDES UNDERTAKING RELIGIOUS ACTIVITIES BUT FROM THE DETAILS OF EXPEND ITURES AVAILABLE IN THE ORDER OF THE CIT AS WELL AS THE DETAILS FILED BY THE SOCI ETY, THE ASSESSEE SOCIETY HAS INCURRED THE MAIN EXPENDITURES ON T.V. TELECAST AND SALARIES OF PREACHERS. IT IS ALSO NOT CLEAR FROM THE DETAILS FURNISHED BY THE ASSESSEE THAT WHAT TYPE OF EDUCATION WAS PROVIDED BY THE ASSESSEE SOCIETIES, T HOUGH HE HAS CLAIMED CERTAIN SALARIES TO TEACHERS AND HOSTEL STAFF SALAR IES. THE CIT HAS CONSIDERED THE SALARIES TO PREACHERS UNDER THE HEAD EXPENDITUR E FOR RELIGIOUS ACTIVITIES. BUT THE ASSESSEE CLAIMED THIS EXPENDITURE UNDER THE HEAD EXPENDITURE ON CHARITABLE ACTIVITIES. BUT WE ARE UNABLE TO UNDERS TAND AS TO WHAT CHARITABLE ACTIVITIES WERE UNDERTAKEN BY THE ASSESSEES THROUGH THE PREACHERS. WHEREAS, THE PREACHERS ARE GENERALLY ENGAGED TO SPR EAD THE TEACHINGS OF LORD JESUS CHRIST AND THEREFORE CANNOT BE CONSIDERE D TO BE AN EXPENDITURE INCURRED FOR CHARITABLE ACTIVITIES. IF THE SALARIE S TO PREACHERS IS TAKEN OUT FROM THE CATEGORY OF EXPENDITURE FOR CHARITABLE ACT IVITIES, THE EXPENDITURE ON RELIGIOUS ACTIVITIES WOULD GO MORE THAN 5% OF THE T OTAL INCOME. THOUGH THE ASSESSEE HAS CLAIMED VARIOUS EXPENDITURES UNDER THE HEAD CHARITABLE ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 5 ACTIVITIES, BUT NO EVIDENCE ARE PLACED TO ESTABLISH THE SAME. HE HAS ALSO FURNISHED THE DETAILS OF TOTAL INCOME OF THE ASSESS EES BUT SINCE THE EXPENDITURE ON RELIGIOUS ACTIVITIES IS MORE THAN 5% OF THE TOTAL INCOME OF THE ASSESSEE IT IS HIT BY SUB-SECTION 5(II) READ WITH S UB-SECTION 5B OF SECTION 80G OF THE ACT. 7. THE CIT HAS MADE A DETAILED DISCUSSION OF ALL TH ESE EXPENDITURES IN HIS ORDER AND EXAMINED THE CASE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS. FOR THE SAKE OF REFERENCE, WE EXTRACT THE ORDER OF THE CIT AS UNDER: AFTER HEARING THE AUTHORIZED REPRESENTATIVE, PERUSA L OF THE RECORDS AND DOCUMENTS FURNISHED ON BEHALF OF THE ASSESSEE S OCIETY AND ON A CAREFUL CONSIDERATION OF THE FACTS RELATING TO THE ISSUE, T HE FOLLOWING OBSERVATIONS MADE AND DECISIONS TAKEN:- (A) IT IS AN ADMITTED POSITION ON BEHALF OF THE ASS ESSEE SOCIETY THAT IT IS ENGAGED IN BOTH RELIGIOUS AS WELL AS CHARITABLE ACT IVITIES EVER SINCE ITS INCEPTION, AND IN DUE COURSE OF TIME IT HAS BEEN AC CORDED REGISTRATION U/S 12AA OF THE ACT. HOWEVER, IN ORDER TO ASCERTAIN WH ETHER THE SOCIETY QUALIFIES FOR RECOGNITION U/S 80G OF THE ACT, IT IS NECESSARY TO EXAMINE THAT WHETHER WHILE PURSUING BOTH RELIGIOUS AND CHARITABLE OBJECT S, IT IS ENGAGED IN OBJECTS AND ACTIVITIES THE WHOLE OR SUBSTANTIALLY THE WHOLE OF WHICH IS RELIGIOUS IN NATURE OR NOT IN TERMS OF EXPLANATION (3) TO SECTIO N 80G OF THE ACT, ACCORDING TO WHICH CHARITABLE PURPOSE DOES NOT INCLUDE ANY P URPOSE THE WHOLE OR SUBSTANTIALLY THE WHOLE OF WHICH IS OF RELIGIOUS NA TURE. FOR THE PURPOSE OF ASCERTAINING WHETHER THE PURPOSE AND ACTIVITIES OF THE SOCIETY ARE SUBSTANTIALLY OF RELIGIOUS NATURE OR NOT, THE COPIE S OF ACCOUNTS FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 ENCLOSED WITH A PPLICATION IN FORM NO.10G WERE PERUSED, WHICH REVEALED THAT THE ASSESS EE SOCIETY HAS BEEN UNDERTAKING SUBSTANTIALLY HIGHER VOLUME OF RELIGIOU S ACTIVITIES AS COMPARED TO ITS CHARITABLE ACTIVITIES. RELEVANT DETAILS OF REL IGIOUS AND CHARITABLE ACTIVITIES ARE EXTRACTED IN THE FOLLOWING TABULAR CHART:- CAPITAL EXPENDITURE TOWARDS RELIGIOUS ACTIVITIES:- HEAD UNDER WHICH EXPENDITURE WAS DEBITED AS THE END OF 31.03.2006 CHURCH SITE - I 5,53,357 CHURCH SITE - II 18,57,470 CHURCH BUILDING 27,48,371 CHURCH BUILDING & WATER TANK 12,36,372 CHURCH F URNITURE 1,68,299 CHURCH MUSICAL INSTRUMENTS 1,03,418 CHURCH CEILING 50,000 TOTAL 67,17,287 ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 6 RELIGIOUS ACTIVITIES:- HEAD UNDER WHICH EXPENDITURE WAS DEBITED AS AT THE END OF 31.3.2006 31.3.2007 31.3.2008 31.3.2009 TV TELECAST (GOSPEL PREACHING) 15,17,591 5,28,000 1,06,180 4,14,215 SALARY TO PREACHERS 10,47,200 19,89,000 19,68,000 19,93,850 PREACHINGS & SEMINARS 60,291 81,620 50,810 -- RELIGIOUS FUNCTIONS 55,229 63,036 95,000 1,44,994 CHRISTIAN LITERATURE 31,150 50,000 -- -- OPEN AIR GOSPEL MEETING AND MEDICAL CAMP -- -- 4,52,488 -- BIBLE SCHOOL STIPEND -- -- 1,80,000 -- FOREIGN DELEGATE EXPENSES (VISITING PREACHERS) 16,879 -- 20,327 -- TOTAL 27,28,340 27,11,656 29,68,805 25,53,059 CHARITABLE ACTIVITIES:- HEAD UNDER WHICH EXPENDITURE WAS DEBITED AS AT THE END OF 31.3.2006 31.3.2007 31.3.2008 31.3.2009 LEPERS 54,000 54,000 1,20,000 1,20,000 POOR AGED 80,000 1,20,000 2,16,000 2,16,000 POOR 19,250 22,150 61,800 1,38,232 ORPHANAGE 7,43,968 10,71,046 12,46,896 13,04,531 MEDICINES -- 18,245 44,802 -- NATURAL CALAMITIES 5,500 2,57,351 -- -- TOTAL 9,02,718 15,42,792 16,89,498 17,78,763 ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 7 (B) AS COULD BE OBSERVED FROM THE ABOVE TABULAR CHA RT, CAPITAL EXPENDITURES TOWARDS CHURCH BUILDING, CHURCH LANDS, CHURCH FURNI TURE ETC., AS ON 31.3.2006 WORKS OUT TO A HUGE INVESTMENT OF ` 67,17,287/-. EVEN THE EXPENDITURES TOWARDS RELIGIOUS ACTIVITIES FAR EXCEED THE EXPENDI TURES TOWARDS THE CHARITABLE ACTIVITIES UNDERTAKEN BY THE ASSESSEE SOCIETY. AS SUCH, IT IS HIT BY THE EXPLANATION (3) TO SECTION 80G SO AS TO DISQUALIFY IT FROM OBTAINING A CERTIFICATE OF RECOGNITION U/S 80G(5)(VI) OF THE AC T. IN THE CASE OF AN INSTITUTION WHERE THERE IS ADMIXTURE OF CHARITABLE AND RELIGIOUS OBJECTS, IT IS SURE TO GET DISQUALIFIED U/S 80G ON THE GROUND THAT SOME OF ITS OBJECTS SEEK TO PROPAGATE A PARTICULAR RELIGION OR PROVIDE BENEF IT TO A PARTICULAR RELIGIOUS COMMUNITY. BESIDES, THERE IS A DOUBLE JEOPARDY OF FORFEITURE OF ITS CLAIM AS A PUBLIC RELIGIOUS TRUST BECAUSE OF ITS OTHER CHARITA BLE OBJECTS, IF SUCH INSTITUTION IS ESTABLISHED ON OR AFTER 1961. THIS WAS THE FATE IN THE CASE OF GULAM MOHIDDIN TRUST VS. COMMISSIONER OF INCOME-TAX [2001 ] 248 ITR 587 (J&K) WHICH WAS DECLARED PUBLIC TRUST PARTLY RELIGIOUS AN D PARTLY CHARITABLE, FOLLOWING A NUMBER OF DECISIONS OF THE HONBLE SUPR EME COURT, AS FOR EXAMPLE, STATE OF KERALA VS. P. SHANTI VERMA JAIN [ 1998] 231 ITR 787. EVEN IF ANY ONE OF THE OBJECTS OF THE PUBLIC TRUST/INSTI TUTION IS FOUND TO BE OF RELIGIOUS IN NATURE, IT STANDS DISQUALIFIED FOR OBT AINING EXEMPTION U/S 80G, AS WAS HELD BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. UPPER GANGES SUGAR MILLS LTD., [1985] 154 ITR 308 WHICH W AS SUBSEQUENTLY AFFIRMED BY THE HONBLE SUPREME COURT IN CITATION N UMBER [1997] 227 ITR 578. THE COURT HAD TAKEN THE VIEW THAT PRAYER AND WORSHIP IN COMMON PARLANCE DENOTE RELIGIOUS ACTIVITIES, AND EVEN IF P RAYER HALLS ARE AVAILABLE TO ALL RELIGIONS, YET, ON THAT ACCOUNT, THE OBJECT OF SETTING UP OF PLACES OF WORSHIP AND PRAYER HALLS DO NOT CEASE TO BE A RELIG IOUS OBJECT. (C) SINCE THE ASSESSEE INSTITUTION CANNOT BE TREAT ED AS ONE WHOSE OBJECTIVES ARE WHOLLY CHARITABLE, IT DOES NOT, AT T HE OUTSET, QUALIFY AS A WHOLLY CHARITABLE INSTITUTION FOR THE PURPOSE OF OBTAINING A CERTIFICATE OF EXEMPTION U/S 80G OF THE ACT. REFERENCE IS MADE TO THE CASE LAW OF RELIANCE MOTOR CO. PVT. LTD. VS. COMMISSIONER OF INCOME-TAX 213 ITR 57 8 WHEREIN IT WAS HELD THAT WHERE A DONATION IS MADE TO A TRUST, THE NAME OF WHICH ITSELF INDICATES THAT IT BELONGS TO A PARTICULAR RELIGIOUS COMMUNITY AND ITS OBJECT INCLUDES NOT ONLY CHARITABLE PURPOSES BUT ALSO RELIGIOUS PURPOSE S, SUCH DONATION DOES NOT QUALIFY FOR DEDUCTION UNDER SECTION 80G EVEN THOUGH IN ACTUALITY ONLY A SCHOOL HAS BEEN RUN BY THE TRUST. THIS IS SO BECAUSE IT I S NOT THE ACTUAL USER BUT THE LIKELIHOOD OF ITS BEING USED AND THE CAPACITY OF TH E TRUST TO DO SO, WHICH IS IMPORTANT. (D) THE ASSESSEE SOCIETY ALSO STANDS DISQUALIFIED IN TERMS OF SEC. 80G(5)(III) WHICH ENVISAGES THAT IF THE OBJECTS OF AN INSTITUTION ARE EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS C OMMUNITY OR CASTE, IT IS INELIGIBLE FOR A CERTIFICATE OF RECOGNITION, IN VIE W OF THE NEWLY INTRODUCED OBJECTS NOS.(9) AND (10) ACCORDING TO WHICH IT HAS BEEN CLEARLY EXPRESSED THAT THE SOCIETY WOULD RUN EDUCATIONAL INSTITUTIONS TO S ERVE THE NEEDS OF ONLY MINORITY CHRISTIAN COMMUNITY TO THE EXCLUSION OF OT HERS AND, AS SUCH, IT STANDS DISQUALIFIED ON THIS SECOND COUNT. ITA NO267/VIZ/2010 M/S. CHURCH OF CHRIST SOCIAL SERV ICE SOCIETY, AMALAPURAM. 8 (E) THE RELIANCE PLACED ON BEHALF OF THE ASSESSEE SOCIETY ON THE CITED CASE-LAW OF THE JURISDICTIONAL HIGH COURT CAN BE SA ID TO BE MISPLACED IN AS MUCH AS IN THE SAID CASE THE COMMISSIONER OF INCOME -TAX HAD REJECTED THE PRAYER OF THAT ASSESSEE FOR A CERTIFICATE OF RECOGN ITION U/S 80G OF THE ACT VIDE A CRYPTIC OBSERVATION WHICH DID NOT CONTAIN ANY COG ENT REASONS FOR REJECTION, AND, HENCE, THE HONBLE HIGH COURT REMITTED THE MAT TER BACK TO THE COMMISSIONER FOR DE-NOVO CONSIDERATION OF THE ISSUE ON MERITS. IN VIEW OF THE FOREGOING ANALYSIS AND OBSERVATIONS , ONE CANNOT HELP BUT OBSERVE THAT THE ASSESSEE SOCIETY IS CLEARLY IN ELIGIBLE FOR GRANT OF A CERTIFICATE OF RECOGNITION U/S 80G OF THE ACT, AND, ACCORDINGLY, ITS APPLICATION FOR THE PURPOSE IS, HEREBY, REJECTED AS DEVOID OF M ERIT. 8. SINCE THE CIT HAS ADJUDICATED THE ISSUE IN RIGHT PERSPECTIVE AND WE FIND NO INFIRMITY THEREIN, WE CONFIRM HIS ORDER. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 05.09.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 05 TH SEPTEMBER, 2011 COPY TO 1 M/S. CHURCH OF CHRIST SOCIAL SERVICE ORGANISATION, AMALAPURAM 2 CIT, RAJAHMUNDRY 3 THE CIT (A) , RAJAHMUNDRY 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM