The Christia Literature Society, CHENNAI V. JCIT (OSD), CHENNAI

ITA 2818/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4819 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN IRS
• Assessee Lawyers: B JAISHEILA
• Keywords: Gift; Depreciation; Charitable institution
• Section: 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NO.2818/MDS/2016 / ASSESSMENT YEAR : 2009-2010 THE CHRISTIAN LITERATURE SOCIETY, NO.68, EVENING BAZAR ROAD, PARK TOWN, CHENNAI 600 003. [PAN AAACT 2862J] VS. THE JOINT COMMISSIONER OF INCOME TAX, OSD (EXEMPTIONS)-II, CHENNAI. ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SMT. B. JAISHEILA, C.A. /RESPONDENT BY : SHRI. B. SAHADEVAN, IRS, JCIT. /DATE OF HEARING : 04-04-2017 ! /DATE OF PRONOUNCEMENT : 21-04-2017 % / O R D E R IN THIS APPEAL FILED BY THE ASSESSEE, IT IS AGGRIE VED THAT IT WAS DENIED EXEMPTION CLAIMED U/S.11 OF THE INCOME T AX ACT, 1961 (IN SHORT THE ACT). ONE OTHER GROUND RAISED BY THE ASSESSEE IS ON DISALLOWANCE OF CLAIM OF DEPRECIATION OF B2,00,167 /-. DEPRECIATION WAS DISALLOWED FOR A REASON THAT COST OF THE ASSE TS ON WHICH SUCH ITA NO. 2818/MDS/2016 :- 2 -: DEPRECIATION WAS CHARGED WAS CLAIMED AS APPLICATIO N OF INCOME IN EARLIER YEARS. 2. APPEAL HAS BEEN FILED WITH A DELAY OF 212 DAYS. AS SESSEE HAS FILED A PETITION SEEKING CONDONATION OF DELAY. WHAT HAS BEEN STATED IN THE APPLICATION IS REPRODUCED HEREUNDER:- THE SAID ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WAS RECEIVED BY THE OFFICE OF THE PETITIO NER ON 13.11.2014. IT IS PERTINENT TO CONSIDER THE FACT THAT THE PETIT IONER TRUST BEING A RELIGIOUS ORGANIZATION MANAGED BY THE BOARD MEMBERS COMPRISING OF PASTORS, CHRISTIAN PRIE STS AND RETIRED BIBLE COLLEGE TEACHERS(THEOLOGIANS) WIT H LIMITED EXPOSURE TO THE PROVISIONS OF INCOME TAX OR COMPANY LAW AFFAIRS. FURTHER DURING THE PERIOD UNDER QUESTION THERE WAS A CHANGE IN THE OFFICE OF THE GENERAL SECRETARY OF TH E PETITIONER. REV. M. BENJAMIN INBARAJ TOOK CHARGE A S THE NEW GENERAL SECRETARY ON 01.06.2014. WITH THE CHANGE IN THE GENERAL SECRETARY, THE NEWLY APPOINTED GENERAL SECRETARY AND OTHER BOARD MEMBERS WERE COMPLETELY ENGROSSED IN THE RELIGIOUS ACTIVITIES OF THE PETITIONER TRUST AND ITS ADMINIST RATION PROCEEDINGS. THE PRESIDENT OF THE PETITIONER TRUST IS BY WAY OF TRADITIONAL PRACTICE THE BISHOP OF MADRAS. THE PRESIDENT DURING THE SAID YEAR, REV OR V DEVASAHAYAM WHO WAS THE BISHOP IN MADRAS ALSO RETIRED IN AUGUST 2014 AND THE NEW BISHOP WAS ELECTED AND CONSECRATED ONLY IN MARCH 2016. ALTHOUG H REV OR V DEVASAHAYAM CONTINUED AS THE PRESIDENT OF THE PETITIONER TRUST DURING THE INTERIM PERIOD NO M AJOR DECISIONS OR ACTION WAS INITIATED UNTIL THE NEW BIS HOP TOOK CHARGE. DURING THE YEAR 2014-15 THERE WAS ALSO A CHANGE IN THE AUDITOR OF THE PETITIONER TRUST WHEN CA JOHN RAVINDRAN WAS APPOINTED AS THE AUDITOR OF THE PETITIONER TRUST FOR FINANCIAL YEAR 2013-14. ITA NO. 2818/MDS/2016 :- 3 -: AS MENTIONED EARLIER SINCE THE GENERAL SECRETARY AN D THE OTHER BOARD MEMBERS HAD NO EXPOSURE TO FACING INCOME TAX APPEAL PROCEEDINGS OR THE PROCEDURE INVOLVED THEREIN, THE FACT OF PENDING APPEAL PROCEEDINGS IN RESPECT OF EARLIER YEARS AND THE STA TUS THEREOF WAS NOT BROUGHT TO THE NOTICE OF THE NEWLY APPOINTED AUDITOR, CA JOHN RAVINDRAN UNTIL IN MARCH 2016 DURING THE ASSESSMENT PROCEEDINGS FOR AY 2013- 14. THEREAFTER CA JOHN RAVINDRAN WITH GREAT EFFORTS CUL LED OUT THE DETAILS OF THE PENDING APPEAL PROCEEDINGS O F THE EARLIER YEARS AND THE STATUS THEREOF. THE ENTIR E PROCESS INVOLVED COMMUNICATING WITH THE PREVIOUS AUDITOR AND THE PREVIOUS GENERAL SECRETARY AND CULL ING OUT THE NECESSARY CORRESPONDENCES IN THIS REGARD. FINALLY IN JULY 2016 CA JOHN RAVINDRAN CONVENED THE MEETING OF THE GENERAL SECRETARY AND THE BOARD MEMBERS TO FORMULATE THE FUTURE COURSE OF ACTION IN RESPECT OF THE PENDING APPEALS FOR THE EARLIER YEAR S. CA JOHN RAVINDRAN ALSO ADVISED THAT THEY WOULD TAKE THE COUNSEL OF CA T.BANUSEKAR IN THIS REGARD. THEREAFTER IN THE SECOND WEEK OF AUGUST, 2016 THE BOARD MEMBERSD ALONGWITH CA JOHN RAVINDRAN MET CA T. BANUSEKAR. DURING THE MEETING, CA T.BANUSEKAR HAD SOUGHT FOR DETAILS FROM THE PETITIONER WHICH COULD NOT BE COLL ATED BY THE PETITIONER IMMEDIATELY. WITH GREAT EFFORTS CA JOHN RAVINDRAN COLLATED ALL T HE DETAILS SOUGHT FOR BY CA T.BANUSEKAR AND APPROACHED HIM DURING THE SECOND WEEK OF SEPTEMBER, 2016. THEREAFTER CA T.BANUSEKAR DRAFTED THE APPEAL AND SENT THEM TO THE PETITIONER TRUST FOR OBTAINING SIG NATURE OF THE TRUSTEE ON 26.09.2016. THE PAPERS WERE SIGNED AND SENT TO THE OFFICE OF CA T.BANUSEKAR ON 27.09.2016 AND THE APPEAL WAS FINALLY FILED ON 28.09.2016 WITH A DELAY OF 626DAYS. THERE WAS HENCE A DELAY IN FILING THE APPEAL BY THE PETITIONER. THE PETITIONER MOST HUMBLY SUBMITS BEFO RE THIS HON'BLE INCOME TAX APPELLATE TRIBUNAL THAT THE DELAY WAS PURELY INADVERTENT. THERE WAS NO INTENTIO N TO DELAY THE FILING OF APPEAL. NO BENEFIT WAS SOUGH T TO ITA NO. 2818/MDS/2016 :- 4 -: BE DERIVED BY THE DELAY IN FILING. LD. DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY SERIOUS OBJECTION ON THE CONDONATION PETITION. I ALSO FIND THAT THE D ELAY WAS CAUSED DUE TO JUSTIFIABLE REASONS. DELAY IS CONDONED. APPEAL IS ADMITTED. 3. FACTS APROPOS ARE THAT ASSESSEE A COMPANY REGISTERE D U/S.25 OF THE COMPANIES ACT, 1956 WAS CLAIMING EXEMPTION U /S.11 OF THE ACT BY VIRTUE OF A REGISTRATION U/S.12A(A) OF THE ACT, GRANTED BY LD. COMMISSIONER OF INCOME TAX VIDE HIS ORDER GRANTED I N C.NO.212(431)/73, DATED 21.09.1973. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR, LD. A SSESSING OFFICER AFTER CONSIDERING THE OBJECTS OF THE ASSESSEE, CAME TO A CONCLUSION THAT MAJORITY OF THEM WERE IN THE NATURE OF GENERA L PUBLIC UTILITY. AS PER LD. ASSESSING OFFICER INTENTION OF THE ASSESSE E WAS TO PUBLISH AND SELL LITERATURE, RELIGIOUS, BOOKS, TREATISE ETC AND TO DO ALLIED WORK LIKE PRINTING, BOOK BINDING, SELLING OF STATIONERY AND A KIN ACTIVITIES. ACCORDING TO THE LD. ASSESSING OFFICER, OBJECTS OF THE ASSESSEE DID NOT PROHIBIT IT FROM CARRYING ON AN EXCLUSIVE BUSINESS IN PRINTING, PUBLISHING AND SALE OF BOOKS. FURTHER, AS PER LD. A SSESSING OFFICER MAJOR SOURCE OF ITS INCOME WERE FROM SALE OF BOOKS. LD. ASSESSING OFFICER PUT THE ASSESSEE ON NOTICE AS WHY IT SHOULD NOT BE DENIED ITA NO. 2818/MDS/2016 :- 5 -: EXEMPTION CLAIMED BY IT U/S.11A OF THE ACT. THOUGH THE ASSESSEE SUBMITTED BEFORE LD. ASSESSING OFFICER THAT IT WAS A CHRISTIAN RELIGIOUS SOCIETY PUBLISHING AND SELLING CHRISTIAN LITERATURE TO THE PUBLIC, AND OTHER ACTIVITIES WERE ONLY ANCILLARY AND INCIDENTAL TO THIS, IT WAS NOT ACCEPTED BY THE LD. ASSESSING OFFICER. ACCORDING T O THE LD. ASSESSING OFFICER, ASSESSEE WAS NOT ONLY SELLING RELIGIOUS BO OKS, BUT ALSO OTHER BOOKS LIKE DICTIONARIES, BOOKS ON SOCIAL SCIENCE, B OOKS ON HISTORY ETC. FURTHER, AS PER LD. ASSESSING OFFICER THERE WAS NO PARTICULAR RELIGIOUS ACTIVITY CARRIED ON BY THE ASSESSEE EXCEPT SELLING OF RELIGIOUS BOOKS. ACCORDING TO HIM, ASSESSEE COULD NOT BE CLASSIFIED AS A RELIGIOUS SOCIETY BUT ONLY AS AN ENTITY CARRYING ON OBJECTS OF GENERAL PUBLIC UTILITY. AS PER THE LD. ASSESSING OFFICER, RECEIPT S OF THE ASSESSEE FROM ITS BUSINESS ACTIVITIES WHILE PURSUING THE OBJECTS OF GENERAL PUBLIC UTILITY EXCEEDED THE LIMITS SPECIFIED IN SECOND PROVISO TO SEC. 2(15) OF THE ACT. 4. LD. ASSESSING OFFICER ALSO TOOK CUE FROM AN EXEMPT ION APPLICATION FILED BY THE ASSESSEE BEFORE THE CHIEF COMMISSIONER OF INCOME TAX SEEKING EXEMPTION U/S.10(23C) ( V) OF TH E ACT. AS PER LD. ASSESSING OFFICER ASSESSEE HAD MADE AMENDMENTS TO I TS OBJECT CLAUSE, WITHOUT SEEKING PRIOR APPROVAL OF THE AUTHORITY WHI CH HAD GRANTED IT REGISTRATION U/S. 12A(A) OF THE ACT. RELYING ON T HE JUDGMENT OF ITA NO. 2818/MDS/2016 :- 6 -: HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SAKTHI CHARITIES VS. CIT 182 ITR 483 , LD. ASSESSING OFFICER HELD THAT NO MODIFICATION COULD BE MADE IN THE OBJECTS CLAUSE OF A TRUST AND HENCE ASS ESSEES ENDEAVOUR TO MODIFY ITS OBJECTS FELL FOUL OF LAW. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HIGH COURT IN THE CASE OF SAKTHI CHARITIES VS. CIT 149 ITR 624 FOR TAKING A VIEW THAT OBJECT CLAUSE OF A TRUST COU LD NOT BE AMENDED. AS PER LD. ASSESSING OFFICER, JUDGMENT OF HONBLE APEX COURT IN THE CASE OF CIT VS. PALGHAT SHADI MAHAL TRUST (2002) 254 ITR 212 TAXMAN 889 AND YOGIRAJ CHARITY TRUST VS. CI T 103 ITR 777, FORTIFIED HIS VIEW THAT OBJECTS OF A TRUST COULD N OT BE CHANGED. 5. LD. ASSESSING OFFICER ALSO NOTED THAT AUDITED ACCOU NTS OF THE ASSESSEE CARRIED A QUALIFICATION REGARDING ACCOU NT OF COCHIN AND TRIVANDRUM BRANCHES OF THE ASSESSEE BEING NOT INC ORPORATED IN ITS FINAL ACCOUNTS. ACCORDING TO LD. ASSESSING OFFICER PROFITS OF COCHIN AND TRIVANDRUM BRANCHES HAVING NOT BEEN INCLUDED IN THE ACCOUNTING RESULTS, ASSETS AND LIABILITIES OF THE ASSESSEE WE RE NOT FULLY AND TRULY DISCLOSED. FOR ALL THESE REASONS, LD. ASSESSING O FFICER DECLINED TO GIVE THE ASSESSEE THE EXEMPTION CLAIMED BY IT UNDER SECT ION 11 OF THE ACT. 6. WHILE COMPLETING ASSESSMENT LD. ASSESSING OFFICER A LSO NOTED THAT DEPRECIATION OF B2,00,167/- CLAIMED BY THE AS SESSEE WERE ON ITA NO. 2818/MDS/2016 :- 7 -: ASSETS, COST OF WHICH WAS ALREADY ALLOWED AS APPLIC ATION OF INCOME. RELYING ON THE JUDGMENT OF APEX COURT IN THE CASE OF ESCORTS LTD AND ANOTHER VS. UNION OF INDIA AND OTHERS 199 ITR 43, HE DENIED CLAIM OF SUCH DEPRECIATION. 7. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). ARGUMENT OF THE ASSESSEE WAS THAT PUBLISHING AND SELLING OF RELIGIOUS BOOKS WAS A PUBLIC RELIGIOUS ACTIVITY, AND FOR THIS IT RELIED ON THE JUDGMENT OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF ARSHA VIJINANNA TRUST VS. DIT (EXEMPTIONS) 295 ITR 437. AS PER THE ASSESSEE SELLING RELIGIOUS BOOKS COULD NOT BE CONSTRUED AS AN ACTIVITY IN TH E NATURE OF TRADE, COMMERCE OR BUSINESS. FURTHER, AS PER THE ASSESSEE ITS MAIN ACTIVITY WAS DISTRIBUTION OF RELIGIOUS BOOKS AND TRACTS AND ONLY A SMALL PART OF THE BOOKS SOLD, DEALT WITH SUBJECTS OF HISTORY, S OCIAL SCIENCE AND LITERATURE. CONTENTION OF THE ASSESSEE WAS THAT SU CH SECULAR BOOKS WERE DISPLAYED TO ATTRACT ATTENTION OF THE PUBIC TO THE CHRISTIAN LITERATURE. AS PER THE ASSESSEE ITS ACTIVITIES W ERE NOT IN THE NATURE OF PUBLIC UTILITY, BUT WERE PURELY RELIGIOUS. CONTENT ION OF THE ASSESSEE WAS THAT EVEN IF SOME OF THE OBJECTS IN ITS MEMORAN DUM ENABLED IT TO DO ACTIVITIES THAT COULD BENEFIT GENERAL PUBLIC, IT S ACTUAL ACTIVITIES WERE CONFINED TO PRINTING AND DISTRIBUTING RELIGIOUS BOO KS. ACCORDING TO THE ITA NO. 2818/MDS/2016 :- 8 -: ASSESSEE IT WAS NOT HIT BY SUBSTITUTED SEC. 2(15) WHICH CAME INTO EFFECT ON 01.04.2009. 8. IN SO FAR AS NON INCORPORATION OF RESULTS OF ITS CO CHIN AND TRIVANDRUM BRANCHES WERE CONCERNED, SUBMISSION OF T HE ASSESSEE WAS THAT ITS TRIVANDRUM BRANCH WAS INCURRING LOSS CONTI NUOUSLY AND CSI DIOCESE OF SOUTH KERALA HAD UNDERTOOK TO RUN THE TR IVANDRUM SHOP FOR A SMALL PROFIT SHARE OF 25%. FURTHER, AS PER THE ASSESSEE THERE WERE NO PROFIT WHATSOEVER EARNED BY THE TRIVANDRUM BRANC H. AS FOR THE COCHIN BRANCH, EXPLANATION OF THE ASSESSEE BEFORE L D. COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT ONE MRS. RACHEL PAUL WHO WAS THE MANAGER OF THE SAID BRANCH, CLAIMED OWNERSHIP, TO SAID BRANCH. AS PER THE ASSESSEE, IT HAD FILED A SUIT IN SUB COURT ERNAKULAM NUMBERED AS O.S.NO.612 OF 2009 AGAINST MRS. RACHEL PAUL. AS SESSEE ALSO PRODUCED A BRIEF NOTE ON THE SAID CASE FROM ITS AD VOCATES M/S. JOSEPH & KURIYAN, COCHIN. 9. AS FOR THE AMENDMENT TO THE OBJECT CLAUSE WAS CONC ERNED, SUBMISSION OF THE ASSESSEE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT THERE WERE NO NEW CLAUSE ADDED T O ITS OBJECTS. AS PER THE ASSESSEE, THE AMENDMENTS WERE CARRIED OUT O N 16 TH SEPTEMBER, 1954 MUCH EARLIER TO THE REGISTRATION U/ S.12A(A) OF THE ACT WHICH WAS GRANTED ON 21.09.1973. ITA NO. 2818/MDS/2016 :- 9 -: 10. IN SO FAR AS DISALLOWANCE OF DEPRECIATION WAS CONCE RNED, ASSESSEE SUBMITTED THAT INCOME FOR THE PURPOSE OF A PPLICATION OF SECTION 11(1)(A) OF THE ACT HAD TO BE COMPUTED IN A CCORDANCE WITH GENERAL COMMERCIAL PRINCIPLES. 11. LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER GO ING THROUGH THE SUBMISSIONS OF THE ASSESSEE HELD THAT S ALE OF CHRISTIAN LITERATURE DID NOT AMOUNT TO ANY CHARITABLE OR RELI GIOUS ACTIVITY. ACCORDING TO HIM, IT COULD AT BEST BE CONSIDERED ON LY AS AN AID TO RELIGIOUS ACTIVITY. FURTHER, ACCORDING TO HIM, AFT ER SUBSTITUTION OF SEC. 2(15) OF THE ACT BY FINANCE ACT, 2008 WHICH CAME I NTO EFFECT ON 01.04.2009, DEFINITION OF CHARITABLE ACTIVITY UNDER WENT A SEA CHANGE AND ACTIVITIES OF THE ASSESSEE WOULD BE COVERED BY THE RESIDUAL CLAUSE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. FURTHER, ACCORDING TO HIM, OBSERVATIONS OF THE LD. ASSESSING OFFICER WITH REGARD TO AMENDMENT TO THE OBJECTS WITHOUT PRIOR APPROVAL OF THE CIT AND NON INCORPORATION OF ACCOUNTS OF TRIVANDRUM AND COC HIN BRANCHES WERE ALSO JUSTIFIED. HE THUS HELD THAT ASSESSEE WA S RIGHTLY DENIED THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT. ON THE ASPECT OF DISALLOWANCE OF DEPRECIATION ALSO LD. CIT(A) UPHEL D THE VIEW OF THE LD. ASSESSING OFFICER. ACCORDING TO HIM, HONBLE DELHI HIGH COURT IN THE CASE OF DIT (E) VS. CHARANJIV CHARITABLE TRUST , (2014) 102 DTR 0001 ITA NO. 2818/MDS/2016 :- 10 -: HAD HELD THAT DEPRECIATION COULD NOT BE GRANTED WHE RE VALUE OF THE CONCERNED ASSET WAS TREATED AS APPLICATION OF INCOM E. 12. NOW BEFORE ME, THE LD. AUTHORISED REPRESENTATIVE S TRONGLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES REIT ERATED THE CONTENTIONS TAKEN BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. ACCORDING TO HER, ASSESSEE WAS A COMPANY REGISTERED U/S.25 OF THE ACT AND NOT A TRUST. FURTHER, ACCORDING TO LD. AUTHORISED REPRESENTATIVE ASSESSEES ACTIVITIES SQUARELY FELL WITHIN THE MEANING OF REL IGION. IT WAS NOT A CASE OF GENERAL PUBLIC UTILITY. RELYING ON THE JUD GMENT OF HONBLE ANDHRA PRADESH IN THE CASE OF ARSHA VIJINANNA TRUST (SUPRA), LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT SELLING B OOKS RELATING TO RAMAYANA AND MAHABHARATA WERE CONSIDERED AS A RELIG IOUS ACTIVITY. ACCORDING TO HER, PUBLICATION AND SALE OF BIBLICAL BOOKS COULD NOT BE CONSIDERED AS TRADE, COMMERCE OR BUSINESS. 13. IN SO FAR AS NON INCORPORATION OF TRIVANDRUM AND CO CHIN ACCOUNTS WERE CONCERNED, LD. AUTHORISED REPRESENTAT IVE SUBMITTED THAT SUCH NON INCLUSION WAS NOT WILLFUL. ACCORDING TO HER, THIS DID NOT AFFECT THE SURPLUS OF THE ASSESSEE SINCE BOTH THE SE BRANCHES WERE CONTINUOUSLY INCURRING LOSS. LD. AUTHORISED REPRES ENTATIVE ALSO POINTED OUT THAT ACCOUNTS OF BOTH TRIVANDRUM AND COCHIN BRA NCHES WERE NOT BEING INCORPORATED SINCE LAST VERY MANY YEARS DUE TO INTERNAL ITA NO. 2818/MDS/2016 :- 11 -: PROBLEMS IN SUCH BRANCHES. ACCORDING TO HER, IN THE EARLIER YEARS THIS POSITION WAS ACCEPTED BY THE REVENUE IN SCRUTINY AS SESSMENTS. 14. IN SO FAR AS CLAIM OF DEPRECIATION WAS CONCERNED, LD. AUTHORISED REPRESENTATIVE RELYING ON SUB SECTION (6 ) TO SECTION 11 OF THE ACT INSERTED THROUGH FINANCE NO.2 ACT 2014, SUB MITTED THAT PRIOR TO THE INSERTION OF THIS CLAUSE WHICH CAME INTO EFF ECT ON 01.04.2015, SUCH CLAIM HAD TO BE ALLOWED, EVEN WHEN COST OF THE ASSETS WERE ALLOWED AS APPLICATION OF INCOME. 15. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTING THE ORDERS OF THE AUTHORITIES BELOW SUBM ITTED THAT SELLING OF RELIGIOUS BOOKS CANNOT BE TREATED AS AN ACTIVITY WHICH WAS RELIGIOUS IN NATURE. ACCORDING TO HIM, IT WAS ONLY A BUSINESS ACTIVITY. THE OBJECTS OF THE ASSESSEES AS PER LD. DEPARTMENTAL R EPRESENTATIVE WERE MORE IN THE NATURE OF GENERAL PUBLIC UTILITY THAN R ELIGIOUS. THUS, ACCORDING TO HIM, LOWER AUTHORITIES WERE JUSTIFIED IN GOING BY SEC. 2(15) OF THE ACT AND DENYING EXEMPTION CLAIMED BY T HE ASSESSEE U/S.11 OF THE ACT, RELYING ON FIRST PROVISO TO SEC. 2(15) OF THE ACT. LD. DEPARTMENTAL REPRESENTATIVE ALSO POINTED OUT THAT A SSESSEE HAD MADE AMENDMENTS TO ITS OBJECTS WITHOUT GETTING PRIO R SANCTION OF THE LD. CIT AND HAD ALSO FAILED TO INCORPORATE THE RESU LTS OF ITS COCHIN AND TRIVANDRUM BRANCHES, THEREBY VITIATING THE RELIABI LITY OF ITS FINAL ITA NO. 2818/MDS/2016 :- 12 -: ACCOUNTS STATEMENTS. THUS, ACCORDING TO HIM, ASSES SEE WAS NOT ELIGIBLE TO CLAIM EXEMPTION U/S.11 OF THE ACT. 16. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. FIRST QUESTION IS WHETHER ACTIVITIES OF THE ASSESSEE SOCIETY COULD BE CLASSIFIED AS ONE OF GENERAL PUBLIC UTILITY OR AS RELIGIOUS. OBJECTS CLAUSE OF THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE HAS BEEN REPRODUCED BY THE LD. ASSESS ING OFFICER AT PAGE 1 & 2 OF THE ASSESSMENT ORDER. THIS IS REPRODUCED HEREUNDER ONCE AGAIN FOR BETTER UNDERSTANDING THE NATURE OF SUCH OBJECTS. A. TO TAKE OVER THE WHOLE OR ANY PART EITHER ABSOLUTELY OR IN TRUST OR AS LESSESS OF THE IMMOVABLE AND MOVABLE PR OPERTY IN INDIA BELONGING TO THE UNITED SOCIETY FOR CHRIST IAN LITERATURE WHOSE HEAD OFFICERS ARE SITUATED AT 4 B OUVERIES STREET IN THE CITY OF LONDON, ENGLAND. B. TO PROMOTE THE CIRCULATION, GRATUITOUSLY AND OTHERW ISE OF RELIGIOUS TRACTS, BOOKS AND TREATISES. C.TO MAKE GRANTS OF MONEY, PAPER AND LITERATURE TO PROTESTANT CHRISTIAN CHURCHES, MISSIONS, MISSIONARI ES AND OTHER THROUGHOUT INDIA D.TO CARRY ON BUSINESS AS PROPRIETORS AND PUBLISHER S OF NEWSPAPERS, JOURNALS, MAGAZINES, BOOKS AND OTHER LI TERARY WORKS AND UNDERTAKING OF A RELIGIOUS. EDUCATIONAL O R USEFUL CHARACTER. E.TO CARRY ON BUSINESS AS PRINTERS, BOOKSELLERS, BOOKBINDERS, PAPER MAKERS, STATIONERS; ENGRAVERS, PHOTOGRAPHERS, PHOTOGRAPHIC PRINTERS, STEREOTYPERS, ELECTROTYPERS, LITHOGRAPHERS. MECHANISTS OR MECHANI CAL ENGINEERS, INK MANUFACTURERS, AND ANY OTHER BUSINES S OR MANUFACTURE THAT MAY SEEM FOR OR CONDUCIVE TO THE O BJECTS OF THE ASSOCIATION. ITA NO. 2818/MDS/2016 :- 13 -: I.TO SUBSCRIBE OR GUARANTEE MONEY FOR CHARITABLE OR BENEVOLENT OBJECTS OR FOR ANY EXHIBITION FOR ANY PU BLIC, GENERAL OR USEFUL OBJECT IN INDIA. M.TO BORROW OR RAISE MONEY AT INTEREST ON THE ISSUE OF OR UPON BONDS, DEBENTURES, DEBENTURE STOCK, BILLS OF EXCHANGE, PROMISSORY NOTES, OR OTHER OBLIGATIONS OR SECURITIES OF THE ASSOCIATION OR UPON MORTGAGE OR C HARGE OF THE PROPERTY OF THE ASSOCIATION OR OTHERWISE IN SUC H MANNER AS MAY SEEM EXPEDIENT. N.TO UNDERTAKE AND EXECUTE ANY TRUST OR ANY AGENCY BUSINESS WHICH MAY SEEM DIRECTLY OR INDIRECTLY COND UCIVE TO ANY OF THE OBJECTS OF THE ASSOCIATION. O. TO INVEST AND DEAL WITH ANY MONEY OF THE ASSOCIA TION NOT IMMEDIATELY REQUIRED FOR ANY OF THE OBJECTS AFORESA ID IN SUCH NAMES AND IN SUCH MANNER AS THE ASSOCIATION MA Y DEEM FIT. THE CRUX OF THE DISPUTE BETWEEN ASSESSEE AND THE RE VENUE IS REGARDING THE NATURE OF THE OBJECTS AND ACTIVITIES CARRIED ON BY THE ASSESSEE. AS PER REVENUE, OBJECTS OF THE ASSESSEE WERE MORE IN THE NATURE OF GENERAL PUBLIC UTILITY THAN RELIGIOUS. A S AGAINST THIS, SUBMISSION OF THE ASSESSEE IS THAT ITS OBJECTS WERE RELIGIOUS IN NATURE. IT IS NOT DISPUTED BY THE REVENUE THAT ASSESSEE WAS PUBLISHING AND DISTRIBUTING CHRISTIAN RELIGIOUS BOOKS AND TRACTS. IT IS ALSO AN ADMITTED POSITION THAT ALONGWITH SUCH RELIGIOUS BOOKS, ASSE SSEE WAS ALSO DISTRIBUTING DICTIONARIES, BOOKS ON HISTORY AND SOC IAL SCIENCE AND LITERATURE, THOUGH AS PER THE ASSESSEE, REALIZATION S FROM THE LATTER, WERE SIGNIFICANTLY LOWER THAN THE FORMER. AT THIS J UNCTURE, IT IS INTERESTING TO NOTE THE ARGUMENT ADVANCED BY THE ASSESSEE AS TO WHY ITA NO. 2818/MDS/2016 :- 14 -: IT WAS DISTRIBUTING BOOKS OTHER THAN RELIGIOUS ONES . AS PER THE ASSESSEE SUCH BOOKS WERE DISPLAYED SO AS TO ATTRACT GENERAL PUBLIC TO THE CHRISTIAN RELIGIOUS BOOKS. IT IS NOT DISPUTED BY EITHER PARTY THAT MAJOR RECEIPTS OF THE ASSESSEE CAME FROM DISTRIBUT ION OF CHRISTIAN RELIGIOUS BOOKS, THOUGH THIS WAS SUPPLEMENTED BY RE ALIZATIONS FROM SALE OF OTHER BOOKS. IN MY OPINION SALE OF OTHER B OOKS IN THE NATURE OF DICTIONARIES, HISTORY, SOCIAL SCIENCE, LITERATURE E TC CAN ONLY BE CONSIDERED AS INCIDENTAL TO ITS MAJOR ACTIVITY WHIC H WAS PUBLISHING AND DISTRIBUTING RELIGIOUS BOOKS AND TRACTS. SUCH INCI DENTAL ACTIVITY ALONE, IN MY OPINION CANNOT JACKET THE ASSESSEE AS ONE PUR SUING AN OBJECT, DIFFERENT FROM DISTRIBUTION OF RELIGIOUS BOOKS. T HUS, THE CLAIM OF THE ASSESSEE THAT ITS MAIN ACTIVITY WAS CONFINED TO OB JECT CLAUSES (B) AND (C), IN MY OPINION CARRIES MUCH STRENGTH. OBJECT CLAUSE (D) ONWARDS CAN BE CONSIDERED ONLY AS INCIDENTAL TO CLAUSE (B) AND (C). 17. NOW THE QUESTION IS WHETHER CIRCULATION AND GRANT OF RELIGIOUS BOOKS AND TRACTS, OR IN OTHER WORDS, PUB LICATION AND DISTRIBUTION OF RELIGIOUS BOOKS CAN BE CONSIDERED A RELIGIOUS ACTIVITY. IT IS HERE THE JUDGMENT OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF ARSHA VIJINANNA TRUST (SUPRA) COMES TO THE AID OF THE ASSESSEE. THERE THE QUESTION WAS WHETHER AN ASSESSEE WHICH WAS SELLING TEXTS OF ALL VEDAS, VEDANGAS, UPANGAS AND LEADING DARSHAN AS, ITHIHASAAS ITA NO. 2818/MDS/2016 :- 15 -: AND BOOKS LIKE RAMAYANA, MAHABHARATHA AND BHAGAVATH AM, AND WORKS ON INDIAN PHILOSOPHY, LECTURES, ART AND ALL W ORKS ON INDIAN CULTURE, WOULD BE ELIGIBLE FOR RECOGNITION UNDER SE CTION 80G(5) OF THE ACT. ASSESSEE WHILE SEEKING RECOGNITION U/S.80G OF THE ACT HAD CLAIMED THAT IT WAS NOT A RELIGIOUS TRUST. HOWEVER , HONBLE ANDHRA PRADESH HIGH COURT HELD THAT PUBLICATION OF SUCH BO OKS WAS ONLY A RELIGIOUS ACTIVITY. THEIR LORDSHIP HELD THAT CONCER NED ASSESSEE WAS A RELIGIOUS TRUST. IN THE SAME VEIN, IN MY OPINION, P RINTING AND PUBLISHING OF CHRISTIAN BOOKS CAN ONLY BE CONSIDERED AS A RELI GIOUS ACTIVITY. THAT THE ACTIVITY PURSUED BY THE ASSESSEE WAS INTENDED TO PROMOTE CHRISTIAN RELIGION HAS NOT BEEN DISPUTED. REQUIREM ENTS THAT ARE TO BE SATISFIED FOR AN ORGANIZATION TO BE CONSIDERED AS RELIGIOUS HAVE BEEN SET OUT BY HONBLE APEX COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT 193 ITR 321 . THEIR LORDSHIPS AFTER CONSIDERING THE JUDGMENT IN THE CASE OF ACHARYA JAGDISHWARANAND AVADHUTA & ORS. VS. CIT (19 83) 4 SCC 522 HAD HELD AS UNDER; THE WORDS RELIGIOUS DENOMINATION IN ART. 26 OF T HE CONSTITUTION MUST TAKE THEIR COLOUR FROM THE WORD RELIGION AND IF THIS BE SO, THE EXPRESSION RELIGIOUS DENOMINATI ON MUST ALSO SATISFY THREE CONDITIONS: (I) IT MUST BE A COLLECTION OF INDIVIDUALS WHO HAVE A SYSTEM OF BELIEFS OR DOCTRINES WHICH THEY REGARD AS CONDUCIVE TO THEIR SPIRITUAL WELL-BEING, THAT IS , A COMMON FAITH; (II) COMMON ORGANIZATION; AND ITA NO. 2818/MDS/2016 :- 16 -: (III) DESIGNATION BY A DISTINCTIVE NAME. THUS THE PUBLISHING AND DISTRIBUTIONS CHRISTIAN BOO KS BY AN ORGANIZATION WHICH SATISFY THE CRITERIA OF A RELIGI OUS DENOMINATION, WILL BE A RELIGIOUS ACTIVITY. 18. A READING OF SECTION 11 OF THE ACT, CLEARLY INDICAT E THAT EXEMPTION IS AVAILABLE TO BOTH PUBLIC RELIGIOUS A ND PUBLIC CHARITABLE INSTITUTIONS. ONCE AN ORGANIZATION IS CLASSIFIED A S A RELIGIOUS ONE, IN MY OPINION THE QUESTION WHETHER ITS ACTIVITIES COME WI THIN THE PURVIEW OF DEFINITION OF CHARITABLE PURPOSE U/S.2(15) OF THE A CT BECOMES IRRELEVANT. THOUGH ACT HAS DEFINED CHARITY IT HAS LEFT THE TERM RELIGION UNDEFINED, PROBABLY CONSIDERING THE CO NTOURS GIVEN TO IT BY THE CONSTITUTION. ONLY REASONABLE CONCLUSION THAT CAN BE DRAWN IS THAT ANY INSTITUTION FORMED TO ENCOURAGE RELIGIOUS ACTIV ITY HAS TO BE UNDERSTOOD AS A RELIGIOUS ONE. TITLE TO SEC.11 OF THE ACT ITSELF READS 'INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGI OUS PURPOSES'. SEC. 11(1)(A) OF THE IT ACT EXEMPTS INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES. SINCE THE CONNECTING WORD IS OR, THE RE CAN BE NO OBJECTION TO GRANT OF SUCH EXEMPTION TO A PUBLIC RE LIGIOUS INSTITUTION SEC. 13(1)(B), DOES, PROVIDE THAT IN THE CASE OF A TRUST FOR CHARITABLE PURPOSE OR A CHARITABLE INSTITUTIO N ESTABLISHED ITA NO. 2818/MDS/2016 :- 17 -: AFTER THE COMMENCEMENT OF THE 1961 ACT, ITS INCOME, IF IT IS FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY O R CASTE WILL BE INELIGIBLE FROM CLAIMING THE EXEMPTION. BUT IT IS PERTINENT TO NOTE THAT SECTION 13(1)(B) TALKS ABOUT 'TRUST FOR CHARIT ABLE PURPOSES OR CHARITABLE INSTITUTION WHICH IS FOR THE BENEFIT OF A NY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. A PUBLIC RELIGIOUS INSTITUTION CANNOT BE TREATED ON PAR WITH A CHARITABLE INSTITUTION OR T RUST WHICH CONFINES ITS CHARITY ONLY FOR THE BENEFIT OF ANY P ARTICULAR RELIGIOUS COMMUNITY OR CASTE. IN OTHER WORDS, SECTION 13(1)( B) COVERS ONLY SUCH CHARITABLE INSTITUTIONS WHERE THE BENEFI T IS CONFINED TO PEOPLE OF A PARTICULAR RELIGION OR CASTE. THIS INTE RPRETATION IS QUITE POSSIBLE BECAUSE THE WORDS USED IN S. 13(1)(B) REFER S TO 'TRUSTS FOR CHARITABLE PURPOSES' WHILE A DISTINCTION IS NOT ED IN OTHER PROVISIONS LIKE S. 13(1)(C), WHICH REFERS TO A 'TRU ST FOR CHARITABLE OR RELIGIOUS PURPOSES'. THERE IS SIMILAR REFERENCE UNDER S. 13(1)(D) AS WELL. HENCE THE PROHIBITION UNDER CL. ( B) CANNOT POSSIBLY COVER RELIGIOUS INSTITUTIONS. IT STANDS TO REASON THAT A RELIGIOUS INSTITUTION, EVEN IF PUBLIC, MAY NOT BE A BLE TO AVOID THE BRAND OF A PARTICULAR RELIGION. IN OTHER WORDS, WHEN PUBLIC RELIGIOUS INSTITUTIONS ARE EXEMPT, IT CANNOT POSSIB LY MEAN THAT THEY SHOULD NOT BE OF ANY PARTICULAR RELIGION. AS S AID EARLIER, THERE IS NO DEFINITION OF THE TERM 'RELIGION' OR 'RELIGIOUS PURPOSE' UNDER ITA NO. 2818/MDS/2016 :- 18 -: THE ACT. A RELIGION GENERALLY HAS ITS BASIS IN A SYSTE M OF BELIEFS AND DOCTRINES, WHICH ARE REGARDED BY THOSE WHO PROFESS THA T RELIGION TO BE CONDUCIVE TO THEIR SPIRITUAL WELL-BEING. IN A S ENSE, 'RELIGIOUS PURPOSE' CAN BE SAID TO BE WIDER IN ITS MEANING THAN TH E WORDS 'CHARITABLE PURPOSE'. WHEN IT IS USED IN THE CONTEXT O F GIFTS OF PROPERTY, IT MEANS ALL ACTS OF PIETY AND BENEVOLENCE . UNDER THE HINDU LAW, 'CHARITY' WHETHER SECULAR OR RELIGIOUS, IS A PART OF THE 'DHARMA'. IN CHRISTIANITY ALSO CHARITY HAS NO OUTER P ARAMETERS, FOR THE GOOD SAMARITAN, IN THE MOST QUOTED PARABLE OF BIB LE WAS NOT A CHRISTIAN. 19. IT MAY BE TRUE THAT MANY ACTIVITIES PROMPTED BY RELI GIOUS FAITH AND BELIEFS CAN COME UNDER THE PHRASE 'ANY OTHE R OBJECT OF GENERAL PUBLIC UTILITY' IN THE DEFINITION OF 'CHARITA BLE PURPOSE' IN SECTION 2(15) OF THE ACT. EXAMPLES COULD BE ESTABLISHMENT OF GAUSHALAS AND PUNJRAPOLES [VALLABHDAS KARSONDAS NATHA VS. CIT (1947) 15 ITR 32 (BOM) AND CIT VS. SWASTIK TEXTILE TRADING CO. (P) LTD. 1977 CTR (GUJ) (1978) 113 ITR 852 (GUJ)]; REPAIRS AND MAINTENANCE OF SAMADHIS OF GURUS HELD IN REVERENCE BY PEOPLE AT LARGE WHO PAY HOMAGE AND WORSHIP AT SUCH SA MADHIS AND HOLDING OF FAIRS [CIT VS. GURYANI BRIJ BALABH KAUR TRUST ( : (1980) 125 ITR 381 (P&H)]; PROMOTION OF UNITY AND BROTHERHOOD ITA NO. 2818/MDS/2016 :- 19 -: AMONGST MEMBERS OF A COMMUNITY [CIT VS. AHMEDABAD RANA CASTE ASSOCIATION (1983) 140 ITR 1 (SC)]. SUCH ACTIVITIES PROMPTED BY RELIGIOUS SENTIMENTS HAVE BEEN HELD TO BE PURSUANCE OF A CHARITABLE PURPOSE. BUT OVERLAPPING OF CHARIT Y IN A RELIGION WILL NOT CONVERT A RELIGIOUS ACTIVITY TO ONE OF GE NERAL PUBLIC UTILITY. 20. IN THE INDIAN CONSTITUTION, THE WORD 'RELIGION' HAS BEEN USED IN MANY PLACES. TERMS LIKE 'RELIGION', 'RELIGIOU S DENOMINATION', 'MATTERS OF RELIGION', 'RELIGIOUS', APPEAR IN VARIOUS ARTICLES. ARTICLE 25(1) OF THE CONSTITUTION CONFERS FREEDOM OF CONSCIENC E AND THE RIGHT FREELY TO PROFESS, PRACTICE AND PROPAGATE REL IGION, SUBJECT TO PUBLIC ORDER, MORALITY, HEALTH, ETC. ARTICLES 26, 27 AND 28 ALSO COVER OTHER ASPECTS RELATING TO RELIGION. A FUNDAME NTAL CHANGE CONCERNING RELIGION WAS BROUGHT ABOUT IN THE CONSTITUTIO N BY THE 42ND AMENDMENT ACT, 1976, WHICH INSERTED IN THE PREAMB LE THE WORDS 'SOCIALIST SECULAR' BEFORE THE WORDS 'DEMOCRAT IC REPUBLIC'. THIS AMENDMENT SERVES NO OTHER PURPOSE THAN MAKING EX PLICIT WHAT WAS ALREADY PROVIDED IN THE CONSTITUTION. THE TR ADITIONAL WORD 'SECULAR' IS INTENDED ONLY TO RECONFIRM THE POS ITION IN REGARD TO THE SECULAR CHARACTER OF THE STATE, I.E., THE STA TE WILL HAVE NO RELIGION OF ITS OWN. IN KESHAVANAND BHARTI VS. STATE OF KERALA AIR ITA NO. 2818/MDS/2016 :- 20 -: 1973 SC 1461, KHANNA, J. SAID (IN PARA 1437) THAT THE WORD 'SECULAR' IMPLIES THAT, 'THE STATE SHALL NOT DISCRIM INATE AGAINST ANY CITIZEN ON THE GROUND OF RELIGION ONLY'. IN INDIRA NEHRU GANDHI VS. RAJ NARAIN AIR 1975 SC 2299, CHANDRACHUD, J. EXPLAINED THE BASIC FEATURE OF SECULARISM SAYING THAT 'THE STATE S HALL HAVE NO RELIGION OF ITS OWN' AND ALL PERSONS SHALL BE EQUALLY ENTITLED TO THE FREEDOM OF CONSCIENCE AND THE RIGHT TO FREELY PROFES S, PRACTICE AND PROPAGATE RELIGION. THUS PURSUING A RELIGIOUS PURPOSE THROUGH PRINTING AND DISTRIBUTION OF RELIGIOUS BOOKS, OF A RE LIGION OF CHOICE, CAN IN NO WAY BE CONSIDERED AS A TABOO OR AGAINST PUBL IC POLICY. 21. THIS RAISES THE ISSUE WHETHER A PUBLIC RELIGIOUS INSTITUTION, WHICH IS PRINTING AND DISTRIBUTING RE LIGIOUS BOOKS CAN BE DISCRIMINATED AGAINST, ON THE GROUND OF RELIGION. AS ALREADY MENTIONED, 'RELIGION' IN ITS BROADEST SENSE INCLUDES A LL FORMS OF BELIEF IN THE EXISTENCE OF SUPERIOR BEINGS CAPABLE OF EXERCISING POWER OVER THE HUMAN RACE. AS COMMONLY ACCEPTED, IT M EANS THE FORMAL RECOGNITION OF A UNIVERSAL GOD. IT DOES NOT M EAN MERE FUNDAMENTALISM. THE SUPREME COURT IN THE CASE OF COMMISSIONER, HINDU REGLIOUS ENDOWMENTS VS. SRI LAKSHMINDRA THIRTHA S WAMIAR OF SHIRUR MATH AIR 1954 SC 282, HAS DISCUSSED THE MEANING AND CONCEPT OF 'RELIGION' SAYING THAT RELIGION IS A MATTE R OF FAITH WITH ITA NO. 2818/MDS/2016 :- 21 -: INDIVIDUALS OR COMMUNITIES AND IT IS NOT NECESSARILY THEISTIC. A RELIGION UNDOUBTEDLY HAS ITS BASIS IN A SYSTEM OF BELI EFS OR DOCTRINES, WHICH ARE REGARDED BY THOSE, WHO PROFESS TH AT RELIGION AS CONDUCIVE TO THEIR SPIRITUAL WELL-BEING. A RELIG ION MAY NOT ONLY LAY DOWN A CODE OF ETHICAL RULES FOR ITS FOLLOWERS T O ACCEPT, IT MIGHT PRESCRIBE RITUALS AND OBSERVANCES, CEREMONIES AND MO DES OF WORSHIP, WHICH ARE REGARDED AS INTEGRAL PARTS OF RELIG ION, AND THESE FORMS AND OBSERVANCES MIGHT EXTEND EVEN TO MATT ERS OF FOOD AND DRESS. THEIR LORDSHIP IN THIS CASE MADE THE FOLLOWING PERTINENT OBSERVATION. ' FREEDOM OF RELIGION IN OUR CONSTITUTION IS NOT CONFINED TO RELIGIOUS BELIEFS ONLY; IT EXTENDS TO RELIGIOUS PRACTICES AS WELL SUBJECT TO THE RESTRICTIONS, WHICH THE CONSTITUTION ITSELF HAS LAID DOWN. UNDER ARTICLE 26(B), THEREFORE, A RELIGIOUS DENOMINATION OR ORGANIZATION ENJOYS COMPLETE AUTONOMY IN THE MATTER OF DECIDING AS TO WHAT RITES AND CEREMONIES ARE ESSENTIAL ACCORDING TO THE RELIGION THEY HOLD AND NO OUTSIDE AUTHORITY HAS ANY JURISDICTION TO INTERFERE WITH THEIR DECISION IN SUCH MATTERS'. THUS, IN MY OPINION ASSESSEE WHICH WAS PURSUING PRINTI NG, PUBLISHING AND DISTRIBUTION OF CHRISTIAN LITERATURE A ND TRACTS AS ITS MAIN ACTIVITY, COULD BE CONSIDERED ONLY AS A RELI GIOUS ONE. IN MY OPINION LOWER AUTHORITIES FELL IN ERROR BY APPLYING SECTION 2(15) ITA NO. 2818/MDS/2016 :- 22 -: TO IT, WHEN SAID SECTION HAS NO APPLICABILITY ON REL IGIOUS INSTITUTIONS. 22. COMING TO THE QUESTION REGARDING AMENDMENTS TO THE OBJECTS, ADMITTEDLY, ASSESSEE WAS A COMPANY INCORPO RATED U/S.25 OF THE COMPANIES ACT, 1956. WHEN AN ASSOCIATION IS IN CORPORATED AS A COMPANY UNDER COMPANIES ACT, 1956, IT IS GOVERNED BY THE SAID ACT AND CANNOT BE EQUATED TO A TRUST AS SUCH. AMENDMEN TS TO OBJECTS CLAUSE OF A COMPANY REGISTERED IN ACCORDANCE TO SEC . 25 OF THE COMPANIES ACT, 1956, NECESSARILY HAS TO FOLLOW THE REQUIREMENTS UNDER THE SAID LAW. ASSESSEE NEVER CLAIMED ITSELF AS A TRUST. IT WAS GRANTED REGISTRATION U/S.12A(A) OF THE ACT IN ITS S TATUS AS A COMPANY REGISTERED UNDER SECTION 25 OF THE COMPANIES ACT. SEC. 11(1) OF THE ACT DOES NOT SAY THAT ONLY A TRUST IS BE ELIGIBLE F OR CLAIMING EXEMPTION MENTIONED THEREIN. IT ONLY SAY THAT INCOME SHOULD BE DERIVED FROM PROPERTY HELD UNDER TRUST. THERE IS NO CASE FOR THE REVENUE THAT THE PROPERTY HELD BY ASSESSEE IN THE STATUS OF THE COM PANY U/S.25 OF THE ACT WAS NOT UNDER TRUST. THEREFORE THE CASE LAWS R ELIED ON BY THE LOWER AUTHORITIES FOR COMING TO A CONCLUSION THAT NO AMENDMENTS COULD HAVE BEEN MADE TO THE OBJECTS OF THE ASSESSEE HAVE NO APPLICABILITY. THESE CASE LAWS ARE RELEVANT ONLY FOR A TRUST. ASSESSEE BEING A COMPANY U/S.25 OF THE ACT, IT COULD CHANGE ITS OBJECTS AS PER ITA NO. 2818/MDS/2016 :- 23 -: THE PRESCRIPTION UNDER THE COMPANIES ACT. EVEN OT HERWISE LETTER DATED 21.09.1973 ISSUED BY CIT, INTIMATING ACCEPTAN CE OF ASSESSEES APPLICATION FOR REGISTRATION U/S.12A(A) OF THE ACT DOES NOT CONTAIN IN IT ANY CONDITION REQUIRING THE ASSESSEE TO OBTAIN A PR IOR PERMISSION BEFORE AMENDING ITS OBJECTS. 23. COMING TO THE QUESTION, WHETHER THE FAILURE OF THE ASSESSEE TO INCORPORATE THE RESULTS OF ITS TWO BRANCHES IN C OCHIN AND TRIVANDRUM WOULD BE FATAL TO ITS CLAIM FOR EXEMPTIO N, WHAT I FIND IS THAT IN RESPECT OF COCHIN BRANCH, THERE WAS A SUIT FILED BY THE ASSESSEE AGAINST ITS MANAGER WHO CLAIMED OWNERSHIP TO THE SAID BRANCH. AS FOR THE TRIVANDRUM BRANCH, ASSESSEE HAD ENTRUSTED ITS OPERATION TO CSI DIOCESE OF SOUTH KERALA THROUGH AN MOU DATED 01.04.2004. IT HAS ALSO NOT BEEN DISPUTED BY THE RE VENUE THAT THE SAID BRANCH WAS RUNNING IN A LOSS. IN ANY CASE ACCO UNTS OF THESE BRANCHES WERE NOT INCORPORATED SINCE 31.03.2005 AN D THE POSITION CONTINUED SO SINCE MANY YEARS. IN OTHER WORDS, REV ENUE HAD ACCEPTED THE FACTUAL POSITION WITH REGARD TO THESE BRANCHES IN THE EARLIER YEARS AND THE CLAIM FOR EXEMPTION U/S.11 OF THE ACT WAS GRANTED TO THE ASSESSEE IN SUCH EARLIER DESPITE SI MILAR COMMENTS IN THE AUDIT REPORT. IN ANY CASE NON INCORPORATION OF THE ACCOUNTS OF THE ITA NO. 2818/MDS/2016 :- 24 -: BRANCHES WAS NOT DUE TO ANY FAULT OF THE ASSESSEE B UT DUE TO FACTORS BEYOND ITS CONTROL. 24. COMING TO THE ASPECT OF CLAIM OF DEPRECIATION, WHA T I FIND IS THAT THERE ARE JUDGMENTS OF VARIOUS HIGH COURT IN FAVOUR OF THE ASSESSEE AS WELL AS AGAINST ASSESSEE. HONBLE KERA LA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS. CIT (2012) 348 ITR 344 AS WELL AS HONBLE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST (SUPRA) HAD TAKEN A VIEW CLAIM OF DEPRECIATION O N ASSETS, VALUE OF WHICH WAS ALLOWED AS APPLICATION OF INCOME COULD NOT BE ALLOWED. AS AGAINST THIS HONBLE HIGH COURTS OF MADHYA PRADESH, KARNAKATA, PUNJAB & HARYANA AND BOMBAY IN CIT VS. RAIPUR PALLATTINE SOCIETY 180 ITR 579, CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE 146 ITR 28, CIT VS. MARKET COMMITTEE, PIPLI 330 ITR 16 AND CIT VS. INSTITUTE OF BANKING 264 ITR 110, RESPECTIVELY, HAD HELD THAT SUCH A CLAIM WAS ALLOWABLE. HONBLE P & H HIGH COURT HAD HELD SO, A FTER CONSIDERING THE APEX COURT JUDGMENT IN THE CASE OF ESCORTS LTD AND ANOTHER VS. UNION OF INDIA AND OTHERS 199 ITR 43 RELIED ON BY THE LD. DEPARTMENTAL REPRESENTATIVE. FURTHER, I FIND THAT HONBLE APEX C OURT HAS GRANTED LEAVE OF APPEAL TO THE ASSESSEE, AGAINST THE JUDGME NT OF HONBLE DELHI HIGH COURT IN THE CASE OF C HARANJIV CHARITABLE TRUST (SUPRA) (2015) 228 TAXMANN 58 . NEITHER REVENUE OR ASSESSEE WAS ABLE TO POINT OUT ITA NO. 2818/MDS/2016 :- 25 -: BEFORE ME, ANY JUDGMENT OF HONBLE JURISDICTIONAL H IGH COURT DIRECTLY ON THIS ASPECT. I AM THEREFORE OF THE OPINION THA T ASSESSEE CAN TAKE ADVANTAGE OF JUDGMENTS WHICH WENT IN ITS FAVOUR. C LAIM OF DEPRECIATION HAS TO BE ALLOWED. 25. IN THE RESULT, I SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DIRECT THAT THE ASSESSEE BE GRANTED EXEMPTION CLAIMED BY IT U/S.11 OF THE ACT AND ALSO ALLOWED DEPRECIATION. 26. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWE D. ORDER PRONOUNCED ON FRIDAY, THE 21ST DAY OF APRIL , 2017, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:21ST APRIL, 2017 KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF