Jamia Islimia Reyazul Uloom, Supaul V. CIT, Bhagalpur

ITA 32/PAT/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9626 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M MISHRA SH
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Charitable institution; Condonation of delay
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PA T N A BENCH , PATNA BEFORE SHRI ABY. T. VARKEY , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ITA NO. 32 / PAT / 2014 JAMIA ISLIMIA REYAZUL ULOOM, SHAKARPUR, P.O. BALBHADRAPR, DIST. SUPAUL [ PAN NO.AABAJ 3913 B ] / V/S . COMMISSIONER OF INCOME TAX, BHAGALPUR /APPELLANT .. /RESPONDENT / BY APPELLANT SHRI K.M. MISHRA, ADVOCATE / BY RESPONDENT SHRI SANJAY SHIVAM, CIT - DR / DATE OF HEARING 1 2 - 04 - 2017 / DATE OF PRONOUNCEMENT 12 - 04 - 2017 /O R D E R PER BENCH : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX, BHAGALPUR PASSED U/S 12AA & 80G(5) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 1 5 .0 5 .2013. SHRI K.M. MISHRA, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE AND SHRI SANJAY SHIVAM, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF RE VENUE. 2. AT THE OUTSET, T HE APPEAL FILED BY THE ASSESSEE IS BARRED BY LIMITATION FOR 231 DAYS AND ASSESSEE HAS MADE AN APPLICATION FOR CONDONATION OF DELAY STATED THE REASONS . THE REASON FOR NON - FILING THE APPEAL IN TIME WAS THE INADVERTENT DELAY IN BEFORE THE PRESCRIBED DATE DUE NON AVAILABLE OF THE CHAIRMAN AND SECRETARY WAS OUT OF STATION TO COLLECT FUND . PRAYER WAS MADE TO CONDONE THE DELAY IN FILING THE APPEAL BELATEDLY. IN THE FACTS AND CIRCUMSTANCES, WE FIND MERIT IN THE PLEA OF THE ASSESSEE AN D WE CONDONE THE DELAY OF 231 DAYS IN FILING THE APPEAL LATE BEFORE US AND PROCEED TO DECIDE THE APPEAL AFTER HEARING BOTH THE PARTIES. ITA NO. 32/PAT /2014 JAMIA ISLIMIA REYAZUL ULOOM VS. CIT BHAGALUR PAGE 2 3. SOLITARY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT ERRED IN REJECTING THE REGISTRATION APPLICATION U/S 12AA OF THE ACT. 4. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A SOCIETY HAS REGISTERED UNDER SOCIETY REGISTRATION ACT, 1860 ON 10.10.200. THE ASSESSEE - TRUST MADE APPLICATION FOR REGISTRATION U/S. 12AA AND SEC. 80G OF THE ACT DATED 09.11.2012. THE LD. CIT D URING THE REGISTRATION PROCEEDINGS FOUND THAT THE ACTIVITIES OF THE ASSESSEE - TRUST ARE PRIMARILY PROVIDING EDUCATION AND OTHER BENEFITS ONLY TO THE MUSLIM STUDENTS / ORPHAN. THUS, THERE IS CLEAR VIOLATION OF PROVISION OF SEC. 13(1)(A) AND (B) OF THE ACT. A CCORDINGLY, LD. CIT REJECTED THE APPLICATION FILED FOR REGISTRATION U/S. 12AA AND 80G OF THE ACT. BEING AGGRIEVED BY THIS ORDER OF LD. CIT ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: - 1. FOR, THAT THE IMPUGNED ORDER IS BAD IN AS WELL AS IN F ACT BECAUSE THE LD. COMMISSIONER HAS NOT CONSIDERED THE EVIDENCE AVAILABLE ON RECORD NOR PROVIDED PROPER OPPORTUNITY TO THE APPELLANT. 2. FOR THAT THE LD CIT HAS FAILED TO APPRECIATE THAT THE APPELLANT IS RELIGIOUS PUBLIC SOCIETY CREATED FOR AND PROVIDING EDUCATION TO THE MUSLIM BOYS AND GIRLS THEREFORE, AS PER EXPLANATION TO SECTION 13 OF THE ACT, THE SOCIETY IS ENTITLED TO GET REGISTERED. 3. FOR THAT, THE LD. CIT ERRED IN HOLDING THAT THE APPELLANT SOCIETY IS PUBLIC CHARITABLE AND IS PROVIDING BENEFIT TO PARTICULAR COMMUNITY AND CAST AS SUCH NOT ENTITLE TO GET REGISTERED IN VIEW OF THE PROVISION OF SECTION 13(1)(B) OF THE ACT. THE APPELLANT SOCIETY IN FACT IS PUBLIC RELIGIOUS SOCIETY AS SUCH PROVISION OF SECTION 13(1)(B) DOES NOT APPLY IN THIS CASE. 4. FO R THAT, AS PER THE MEMORANDUM AND ARTICLE OF THE SOCIETY AND ALSO AS PER EXPENDITURE ACCOUNTED FOR IN THE P&L ACCOUNT AND THE BALANCE SHEET THE SOCIETY IS CARRYING OUT ITS ACTIVITIES AS PER THE DIRECTION GIVEN IS HOLY QUORAN HENCE THE SOCIETY IS PUBLIC REL IGIOUS SOCIETY HENCE IS ENTITLED TO GET REGISTERED. 5. FOR THAT, THE LD. CIT FAILED TO APPRECIATE THAT THE APPELLANT IS NOT ONLY PROVIDING BENEFIT TO THE PARTICULAR COMMUNITY RATHER IT ALSO PROVIDE BENEFIT FREE OF COST TO THE ORPHANED AND GENERAL PEOPLE AS SUCH THE FINDING RECORDED BY CIT THAT THE APPELLANT IS ENGAGED IN PROVIDING SERVICE AND BENEFIT TO PARTICULAR COMMUNITY OR CAST IS FACTUALLY INCORRECT AND AGAINST THE EVIDENCE AVAILABLE ON RECORD. 6. FOR THAT, THE CIT FAILED TO APPRECIATE THAT PROVIDING S ERVICE TO A PARTICULAR COMMUNITY IS ALSO CHARITY WITHIN THE MEANING OF SECTION 2(15) HENCE REGISTRATION CANNOT BE DENIED ON THIS GROUND ALONE. FOR MAKING A SOCIETY CHARITABLE SERVICE TO WHOLE OF THE MANKIND IS NOT NECESSARY. 7. FOR THAT, THE APPELLANT CRAV E THE RIGHT TO ADD/AMEND GROUNDS OR GROUND 8. FOR THAT, THE GROUNDS TAKEN HEREINABOVE IS NOT PREJUDICIAL TO EACH OTHER. ITA NO. 32/PAT /2014 JAMIA ISLIMIA REYAZUL ULOOM VS. CIT BHAGALUR PAGE 3 5. LD. AR FOR THE ASSESSEE BEFORE US SUBMITTED THAT THE ACTIVITIES OF THE ASSESSEE - SOCIETY ARE IN LIMITED TO ANY PARTICULAR COMMUNITY AND CAST AND IT OPEN TO PUBLIC AT LARGE. THEREFORE, THE ALLEGATION OF LD. CIT THAT THE PROVIDING THE BENEFITS TO A PARTICULAR COMMUNITY IS WITHOUT ANY BASE. HE REQUESTED THE BENCH TO DECIDE THE ISSUE ON MERIT. ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF LD. CIT(A). 6. WE HEARD THE ARGUMENT OF THE LD. COUNSEL ON EITHER SIDE AND PERUSED THE MATERIALS ON RECORD. IN THE CASE BEFORE US THE LD. CIT REJECTED THE REGISTRATION APPLICATION UNDER SECTION 12A & 80G OF THE ACT ON THE GROUND THAT THERE IS VIOLATION OF THE PROVISIONS OF PROVISIONS OF SECTION 13(1)(A) & (B) OF THE ACT. AS PER THE PROVISIONS OF SECTION 13(1)(A) AND (B) IF THE SOCIETY IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIONS OR RELIGIOUS COMMUNITY OR CASTE MUSLIMS THEN THE BENEFIT OF THE PROVISIONS OF SECTION 11 AND 12 WILL NOT BE AVAILABLE TO THE ASSESSEE. IN THE INSTANT CASE THE LD. CIT FOUND THAT THE SOCIETY IS WORKING FOR MUSLIMS COMMUNITY SO UNDER SECTION 12A & 80G OF THE ACT CANNOT BE GRANTED. 6 .1 HOWEVER O N PERUSAL OF THE RECORDS , WE FIND THAT THE ASSESSEE - TRUST IS WORKING FOR THE WHOLE OF THE MUSLIMS RELIGIOUS PEOPLE AND NOT FOR THE BENEFIT OF RELIGIOUS COMMUNITY LIKE SHIA, SUNNI, AHMADI OR BHOR ETC. AS SUCH THERE IS NO VIOLATION TO THE PROVISIONS TO SECTI ON 13(1)(A) AND (B) OF THE ACT. AT THIS JUNCTURE , WE WOULD LIKE TO REPRODUCE THE OBJECTS OF THE SOCIETY WHICH READS AS UNDER: - AREA OF OPERATION: THE AIMS & OBJECTIVES OF THE SOCIETY ARE AS FOLLOWS: - A) TO PROMOTE AND UNDERTAKE PROGRAMMES FOR MORAL AND MENTAL DEVELOPMENT OF YOUTH OF ALL COMMUNITIES, CASTE, CREED OR SEX THROUGH YOGA, CREATIVE ART AND OTHER LEGAL APPLICABLE MEANS. B) TO START RESIDENTIAL SCHOOLS, MADR AS SA, COLLEGE FOR MUSLIM BOYS & GIRLS. C) TO START HEALTH EDUCATI O N SCHEMES, HEALTH CENTRES/HOS PITAL DISPENSARIES FOR MUSLIM IN PARTICULAR & OTHER IN GENERAL. D) TO ESTABLISH A ORPHAN HOUSE, COMPUTER CENTRE, FOR MINORITIES. E) TO GENERATE AWARENESS ABOUT DRUG ABUSE, AIDS AND OTHER SUCH EVILS THROUGH SEMINARS, CAMPS AND THROUGH OTHER LEGAL MEANS. F) TO PROVID E VOCATIONAL TRAINING, SMALL SCALE INDUSTRIAL TRAINING, COTTAGE INDUSTRIAL TRAINING, LIKE SEWING, CUTTING, KNITTING, TOY MAKING, APPLIQU TRAINING, CARPENTRY , SOFTWARE AND HARDWARE TRAINING TO THE UNEMPLOYED ITA NO. 32/PAT /2014 JAMIA ISLIMIA REYAZUL ULOOM VS. CIT BHAGALUR PAGE 4 WOMEN, YOUTH AND HANDICAPPED PEOPLE OF ALL COMMU NITIES IN THE RURAL AND URBAN AREA FOR THEIR ECONOMICAL DEVELOPMENT AND SELF - EMPLOY. G) TO ORGANIZE SEMINAR, DEBATES, MEETINGS AND CONFERENCE FOR THE PURPOSE OF EDUCATION, HEALTH AWARENESS, SANITATION, POLLUTION CONTROL, PLANTATION PROGRAMME AND PROTECTION O F ENVIRONMENT AND DEVELOPMENT OF RURAL AREA OF THE SOCIETY. H) TO DEVELOP AGRICULTURE AND TO PROVIDE AGRICULTURAL MATERIALS LIKE HYBRID SEEDS, SMALL MACHINERIES, HAND - TOOLS AND FERTILIZERS TO THE POOR AND MARGINAL FARMERS SUCH TIME TO TIME AND G I VE SCIENTIFIC KNOWLEDGE TO THE FARMERS TO GROW MORE GRAIN OF THE MEMBERS OF THE MANAGING COMMITTEE TO WHOM BY THE RULES OF THE SOCIETY THE MANAGEMENT OF THE AFFAIRS IN ENTRUSTED AND SET OUT. A CAREFUL ANALYSIS OF THE AFORESAID OBJECTS OF THE SOCIETY REVEALS THAT THE A CTIVITIES OF THE S OCIETY ARE NOT LIMITED TO ANY PARTICULAR COMMUNITY. HOWEVER , A DOUBT MAY ARISE WITH REGARD TO THE OBJECT MENTIONED IN CLAUSE B I.E. SPECIFYING THE SCHOOL FOR MUSLIMS BOYS AND GIRLS . IN THIS CONNECTION , WE FIND THAT THE MUSLIMS , AS A W HOLE IS NOT A C OMMUNITY BUT COMPRISES OF SEVERAL COMMUNITIES AS DISCUSSED ABOVE. THEREFORE THE ALLEGATION OF THE LD CIT HAS NO MEANING. THE LD. CIT HAS INVOKED THE PROVISIONS OF SECTION 13(1)(A) & (B) OF THE ACT WHICH READS AS UNDER : SECTION 11 NOT TO APPLY IN CERTAIN CASES. 13. (1) NOTHING CONTAINED IN SECTION 11 OR SECTION 12 SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF ( A ) ANY PART OF THE INCOME FROM THE PROPERTY HELD UNDER A TRUST FOR P RIVATE RELIGIOUS PURPOSES WHICH DOES NOT ENURE FOR THE BENEFIT OF THE PUBLIC; ( B ) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSES OR A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER THE COMMENCEMENT OF THIS ACT, ANY INCOME THEREOF IF THE TRUST OR INST ITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; THE PROVISIONS OF S ECTION 13(1)(A) PROHIBITS THE APPLICATION OF S ECTION 11 & 12 OF THE ACT ONLY IF ITS ACTIVITIES ARE FOR THE BENEFIT OF PRIVATE RELIGIOUS PUR POSES. HOWEVER , ON PERUSAL OF THE OBJECTS OF THE SOCIETY WE FIND THAT NONE OF THE OBJECT SPEAKS ABOUT THE PRIVATE RELIGIOUS PURPOSES. THUS , THE SOCIETY IS CHARITABLE IN NATURE. SIMILARLY WE FIND THAT THERE IS NO VIOLATION TO THE PROVISIONS OF SECTION 13(1) (B) OF THE ACT AS ITS ACTIVITIES ARE NOT FOR THE BENEFIT OF ANY PARTICULAR COMMUNITY. IN THIS CONNECTION WE RELY IN THE CASE OF TAUHEED EDUCATIONAL TRUST MAHADABAD VS. ACIT IN ITA NO. 219/PAT/2013 ORDER DATED 29.11.2016 WHEREIN IT WAS HELD AS UNDER: ITA NO. 32/PAT /2014 JAMIA ISLIMIA REYAZUL ULOOM VS. CIT BHAGALUR PAGE 5 THE ARGUMENT OF THE LD. AR THAT U/S.13 (1) (B) OF THE ACT, ONLY IF THE TRUST IS CREATED OR ESTABLIS H ED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE BUT HERE IN THIS MATTER THE TRUST IS WORKING FOR THE WHOLE OF THE M USLIMS RELIGIOUS PEOPLE BUT NOT FOR THE BENEFIT OF RELIGIOUS COMMUNITY LIKE SHIA, SUNNI, AHMADI OR BHOR, AS SUCH IT HAS NO APPLICATION TO THE FACTS OF THE CASE. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT AND PRECEDENT WE ARE INCLINED TO RESTORE THE ISSUE TO THE FILE OF LEARNED CIT FOR FRESH ADJUDICATION IN THE LIGHT OF ABOVE STATED DISCUSSIONS. IT WAS ALSO OBSERVED THAT THE ASSESSEE HAS FILED A SINGLE APPEAL FOR THE REGISTRATIONS U / S 12A AND 80G OF THE ACT WHICH WAS REQUIRED TO BE FILED SEPARATELY. THIS FACT WAS NOT BROU GHT TO NOTICE NEITHER BY THE COUNSEL OF THE ASSESSEE NOR BY THE L D DR AS WELL AS BY THE RE GISTRY O FFICE. HOWEVER , WE DIRECTED THE LD COUNSEL FOR THE ASSESSEE THAT THE IMPUGNED APPEAL SHALL STAND FOR THE APPEAL AGAINST THE CANCELLATION ORDER U / S 12A OF THE ACT. IT WAS ALSO DIRECTED TO THE LD. AR TO FILE SEPARATE APPLICATION BEFORE THE LEARNED CIT FOR THE REGISTRATION UNDER SECTION 80G OF THE ACT. THUS , THE GROUND OF THE ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF THE ABOVE . 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING I.E. ON WEDNESDAY 12 / 04 /201 7 SD/ - SD/ - ( ABY. T. VARKEY ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP , SR.P.S - 12 / 04 /201 7 PATNA COPY OF ORDER FORWARDED TO: - 1 . APPELLANT - JAMIA ISLIMIA REYAZUL ULOOM, SHAKARPUR, P.O BALBHADRAPUR S - DIST: SUPAUL 2 . RESPONDENT - CIT, BHAGALPUR 3 . CONCERNED CIT 4 . CIT (A) 5 . DR, ITAT, PATNA 6 . GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS/PS, ITAT, PATNA