Hindu Dharmsabha Seva Trust, Ahmedabad V. The DIT( Exemp.), Ahmedabad

ITA 2709/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85582 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-01-2015
• Assessment Year: misc
• Appeal Filed On: 09-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: U S BHATI
• Keywords: Charitable institution
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO . 2709 /AHD/20 1 4 A. Y. BLOCK PERIOD HINDU DHARSABHA SEVA TRUST, A - 404, NEW AVANI APARTMENT, NEAR G HIA NAGAR, NARODA, AHMEDABAD . PAN: AABTH 1998P VS DIRECTOR OF INCOME TAX (EXEMPTION), AHMEDABAD . (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR. D.R. ASSESSEE(S) BY : SHRI U.S. BHATI , A.R. / DATE OF HEARING : 2 2 / 01 /201 5 / DATE OF PRONOUNCEMENT: 30 / 01 /201 5 / O R D E R PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN A PPEAL FILED BY THE ASSESSEE ARISING FROM AN ORDER OF THE DIR ECTOR OF INCOME TAX (EXEMPTION) , AHMEDABAD DATED 22.08.2014 PASSED U/S. 80G(5) OF IT ACT. THE GROUNDS RAISED ARE AS UNDER: 1.0 THE LEARNED DIRECTOR OF INCOME - TAX (EXEMPTION) ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION FOR APPROVAL OF THE A PPELLANT SOCIETY UNDER SECTION 80G OF THE INCOME TAX ACT, 1961. 2.0 THE LEARNED DIRECTOR OF INCOME - TAX (EXEMPTION) ERRED IN LAW AND ON FACTS IN REFUSING THE APPROVAL U/S 80G(5) OF THE INCOME TAX ACT, 1961 TO THE APPELLANT SOCIETY UNDER PROVISIONS OF S ECTION 80G(5)(III) READ WITH EXPLANATION 3 TO THE ABOVE SECTION. 3.0 THE LEARNED DIRECTOR OF INCOME - TAX (EXEMPTION) FURTHER ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT SOCIETY IS EXPRESSED FOR THE BENEFIT OF A PARTICULAR RELIGION I.E. HIND U AND THEREFORE THE ACTIVITIES OF THE SOCIETY ARE NOT GENUINE. ITA NO. 2709 /AHD/201 4 HINDU DHARMSABHA SEVA TRUST VS DIRECTOR OF INCOME TAX (EXEMPTION) AHMEDABAD . A.Y. BLOCK PERIOD - 2 - 4.0 WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED DIRECTOR OF INCOME - TAX (EXEMPTION) FURTHER ERRED IN LAW AND ON FACTS IN REFUSING APPROVAL U/S 80G(5) EVEN IN THE CONTEXT OF MODIFICATION REP ORT SUBMITTED TO THE OFFICE OF THE CHARITY COMMISSIONER INSERTING THE WORD 'EVERY' IN PLACE OF 'HINDU SAMAJ' IN THE OBJECTS OF THE SOCIETY. 2. THE TRUST HAS MOVED AN APPLICATION O N FORM NO.10G(5) SEEKING REGISTRATION OF EXEMPTION U/S.80G(5) OF IT ACT. L EARNED DIRECTOR OF INCOME TAX (EXEMPTION) HAS COMMENTED THAT THE SAID APPLICATION WAS NOT ACCOMPANIED BY THE ACTIVITIES OF THE TRUST AND A DECLARATION U/S.11(5) OF IT ACT. A SHOW CAUSE NOTICE WAS ISSUED. ON VERIFICATION OF TRUST DEED, IT WAS FOUND THAT THE TRUST WAS HAVING THE OBJECTS WHICH WERE FOUND TO BE RELIGIOUS IN NATURE. THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) HAS REPRODUCED THE ENGLISH TRANSLATION OF THOSE OBJECTS. TO OVERCOME OF THIS OBJECTION , THE APPLICANT TRUST HAS SUBMITTED A MODIFIED OB JECT AND INFORMED THAT THE MODIFIED OBJECTS HAVE ALSO BEEN FORWARDED TO CHARITY C OMMISSIONER . IN PLACE OF HINDU SAMAJ, THE TRUST HAS USED THE WORD EVERY AND ON THAT BASIS PLEADED TO GRANT CERTIFICATE OF EXEMPTION. HOWEVER, IT WAS HELD THAT THE ASSESSEE WAS NOT ENTITLED TO ALT E R THE OBJECTS. IT WAS ALSO MENTIONED THAT THE CHARITABLE PURPOSE DO ES NOT INCLUDE THE PURPOSE OF RELIGIOUS NATURE BY REFERRING FEW CASE LAWS . L EARNED DIRECTOR HAS HELD AS UNDER: 3.4 FURTHER, AS PER THE PROVISIONS OF SECTION 80G(5 )(III), THE APPROVAL CANNOT BE GIVEN IF THE INSTITUTION/TRUST IS EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. AS STATED ABOVE, THE TRUST IS EXPRESSED FOR THE BENEFIT OF A PARTICULAR RELIGION I.E HINDU. 3.5 IN VIEW OF THE ABOVE, IT IS HELD THAT EXPLANATION 3 TO SECTION 80G AND' PROVISIONS OF SECTION 80G(5)(III) ARE SQUARELY APPLICABLE IN THIS CASE. THEREFORE, CONSIDERING THIS, SINCE THE TRUST IS HAVING RELIGIOUS OBJECTS AND THE SAME BEING CREATED FOR THE BENEFIT OF A PARTIC ULAR RELIGION I.E HINDU, ITS APPLICATION FOR EXEMPTION U/S. 80G(5) IS HEREBY REJECTED. 4. LOOKING TO THE ABOVE FACTS, I AM UNABLE TO ARRIVE AT THE SATISFACTION OF THE GENUINENESS OF THE ACTIVITIES. HENCE, THE APPLICATION FILED IN FORM NO. 10 G FOR THE APPROV AL U/S. 80G(5) OF THE INCOME - TAX ACT, IS REJECTED. ITA NO. 2709 /AHD/201 4 HINDU DHARMSABHA SEVA TRUST VS DIRECTOR OF INCOME TAX (EXEMPTION) AHMEDABAD . A.Y. BLOCK PERIOD - 3 - 3. WITH THESE FACTUAL BACKGROUND S , WE HAVE HEARD BOTH THE SIDES. A COMPILATION IS PLACED BEFORE US CONTAINING THE CERTIFICATE OF REGISTRATION I SSUED BY REGISTRA R OF SOCIETY AHMEDABAD, CERTIFICATE OF REGIST R ATION U/S.12AA ISSUED BY DIRECTOR OF INCOME TAX (EXEMPTION) AHMEDABAD DATED 228.08.2014 AND M EMORANDUM OF A SSOCIATION. AS PER THE ENGLISH TRANSLATION , THERE WERE SEVERAL OBJECTS OF THE TRUST FOR WHICH IT WAS CREATED. HOWEVER , AN OBJECT OF THE TRUST WAS MEA NT FOR THE BENEFIT OF H INDU S OCIETY/SAMAJ. IN FACT , THIS OBJECT WAS QUESTIONABLE AS PER THE PROVISIONS OF IT ACT. TO OVERCOME THE SAID OBJECTION , THE TRUST H AS AMENDED ITS OBJECT BUT THOSE AMENDED OBJECTS HAVE NOT BEEN LOOKED INTO BY THE DIRECTOR OF INCOME TAX. IT HAS BEEN ARGUED BEFORE US THAT THERE IS A SPECIFIC PROCEDURE THROUGH WHICH THE OBJECT OF A TRUST CAN BE ALTERED AND THAT PROCEDURE WAS FOLLOWED BY THE ASSESSEE . T HEREUPON THE MODIFIED OBJECTS HAVE ALSO BEEN SUBMITTED BEFORE THE C HARITABLE C OMMI SSIONER. WE HAVE ALSO BEEN INFORMED THAT THE ACTIVITY OF THE TRUST WAS NOT PURELY RELIGIOUS THAT TOO FOR A PARTICULAR COMMUNITY. IT IS VEHEMENTLY ARGUED THAT BY EXAMINING THE NATURE OF ACTIVITY THE ASSESSEE TRUST IS IN A POSITION TO ESTABLISH THAT IT WAS N OT CREATED FOR A PARTICULAR COMMUNITY. IN THIS SITUATION, WHEN THE ASSESSEE VEHEMENTLY CONTESTING THAT OBJECTS HAVE BEEN MODIFIED AND THE ACTIVITIES WERE NOT PURELY RELIGIOUS IN NATURE THEREFORE WE DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE STAGE OF DIRECTOR OF INCOME TAX (EXEMPTION) SO THAT HE CAN EXAMINE THE CORRECTNESS OF THE AMENDED OBJECTS AND THE NATURE OF THE ACTIVITIES CARRIED OUT BY THE TRUST . O N BEING SATISFIED THAT THE ASSESSEE HAD FULFILLED THE CONDITIONS PRESCRIBED U/S.80G(5) ; T HE REQUISIT E APPROVAL CAN BE GRANTED. SINCE, THE MATTER HAS BEEN RESTORED BACK FOR DENOVO CONSIDERATION; HENCE THE GROUND RAISED BY THE ASSESSEE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. ITA NO. 2709 /AHD/201 4 HINDU DHARMSABHA SEVA TRUST VS DIRECTOR OF INCOME TAX (EXEMPTION) AHMEDABAD . A.Y. BLOCK PERIOD - 4 - 4. IN THE RESULT, ASSESSEE S APPEAL IS ALLOWED BUT FOR STATIS TICAL PURPOSE ONLY. SD/ - SD/ - (ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30 / 01 / 20 1 5 PRABH AT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD