Mangalampally Janardhan Laxmi Bai Seva Trust, Hyderabad V. DIT(Exemptions), Hyderabad

ITA 320/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53682 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: M FAKHRUDDIN
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.320/HYD/2011 MANGALAMPALLY JANARDHAN LAXMI BAI SEVA TRUST, HYDERABAD ( PAN AABTM 2291 C) V/S. DIRECTOR OF INCOME-TAX (EXEMPTION) HYDERABAD (APP E L L ANT) (RESPONDENT) APPELLANT BY : SHRI M.FAKHRUDDIN RESPONDENT BY : SHRI B.V.PRASAD REDDY DATE OF HEARING 5.9.2011 DATE OF PRONOUNCEMENT 4.10.2011 O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION). 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER - 1) THE ORDER OF THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION) IS CONTRARY TO LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. 2) THE LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION) E RRED IN NOT APPRECIATING THE FACT THAT EVEN A TRUST ESTABLISHED TO CARRY OUT PARTLY CHARITABLE PURPOSES AND PARTLY RELIGIOUS PUR POSES WOULD BE ENTITLED TO REGISTRATION U/S. 12A OF THE INCOME- TAX ACT, 1961, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 3) THEY LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION) E RRED IN NOT FOLLOWING THE DECISION OF THE ANDHRA PRADESH HIGH C OURT IN THE CASE OF CIT V/S. SOCIAL SERVICE CENTRE (2001) 250 I TR 39 WHICH WAS BINDING ON HIM, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 4. THE LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION) ER RED IN NOT APPRECIATING THE FACT THAT THE DECISION OF THE ANDH RA PRADESH HIGH COURT HAS CLEARLY STATED IN ITS JUDGMENT THAT WE ARE AWARE THAT MOST OF THE RELIGIOUS AND CHARITABLE ACT IVITIES GO TOGETHER IN THIS COUNTRY, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. ITA NO320/H/2011 MANGALAMPALLY JANADHAN LAXMI BAI SEVA TRUST, HYDERABAD 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPLICATION OF THE ASSESSEE IN FORM NO.10A FOR REGI STRATION OF THE ASSESSEE TRUST UNDER S.12A OF THE INCOME-TAX ACT, 1 961 WAS REJECTED BY THE DIRECTOR OF INCOME-TAX(EXEMPTION) FOR THE O NLY REASON THAT THE OBJECTIVES OF THE ASSESSEE TRUST ARE MIXED OBJ ECTS, VIZ. PARTLY CHARITABLE AND PARTLY RELIGIOUS. HE SUBMITTED THAT THE ISSUE IS SETTLED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN SOCIAL SERVICE CENTRE (250 ITR 39)(AP) AND COCHIN BENCH(THIRD MEMBER) DECISION OF THE TRIB UNAL IN SOCIETY OF PRESENTATION SISTERS V.S ITO (121 ITD 422) (COC HIN)-TM, WHEREIN IT WAS HELD THAT THE TERM CHARITABLE ACTIVITY AL SO INCLUDES RELIGIOUS ACTIVITY. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RE LIED ON THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION). HE SUBMITTED THAT THE TRUST SHOULD BE FOR WHOLLY CHARITABLE PUR POSES IN ORDER TO GET EXEMPTION AND REGISTRATION UNDER S.12A OF THE ACT. HE HAS REFERRED TO RELEVANT PARAS OF THE ORDER OF THE DIRECTOR OF I NCOME- TAX(EXEMPTION) IN SUPPORT OF THE CASE OF THE REVENU E. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION). WE FIND THAT THE ONLY REASON GIVEN BY THE DIRECTOR OF INCOME-TAX (EXEMPTION) FOR REFUSING REGISTRATION UNDER S.12A OF THE ACT TO THE ASSESSEE TRUST WAS THAT THE OBJECTS OF THE ASSESSEE TRUST ARE PARTLY CHARITABLE AND PARTLY RELIGIOUS. HE HAS REPRODUCED OBJECTS AGAINST SL. NOS. 3(II) AND 3(III) OF THE TRUST DEED IN HIS ORDER, WHICH SPECIFY THE O BJECTS OF ESTABLISHING AND MAINTAINING SCHOOLS, INSTITUTIONS , ORPHANAGE, WIDOW HOME, LUNATIC ASYLUM, POOR HOUSES ETC., WHICH ARE C LEARLY CHARITABLE ITA NO320/H/2011 MANGALAMPALLY JANADHAN LAXMI BAI SEVA TRUST, HYDERABAD 3 IN NATURE ALONGWITH THE OBJECT OF ESTABLISHING AND MAINTAINING TEMPLES, PLACES OF WORSHIP AND TO ORGANISE BHAJANS, KEERTANS, ETC., WHICH ARE ACTIVITIES OF RELIGIOUS NATURE. THE ISS UE BEFORE US IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS/. SOCIAL SERVIC E CENTRE (SUPRA), WHEREIN IT WAS HELD THAT DONATION TO A CHURCH OR CO NSTRUCTION OF A CHURCH WAS NOT A PURPOSE WHICH WAS NOT OF GENERAL P UBLIC UTILITY WITHIN THE MEANING OF S.2(15) OF THE ACT. IN SOCIE TY OF PRESENTATION SISTERS V/S. ITO (SUPRA), IT WAS HELD IN THE DECISI ON OF THE THIRD MEMBER OF THE COCHIN BENCH OF THE TRIBUNAL THAT SO FAR AS THE PROVISIONS OF S.11(1)(A) ARE CONCERNED NO DISTINCT ION IS MADE BETWEEN CHARITABLE AND RELIGIOUS PURPOSES. A CHARIT ABLE INSTITUTION CAN HAVE RELIGIOUS PURPOSES, WHEREAS A RELIGIOUS INSTIT UTION MAY BE PARTLY CHARITABLE. IN VIEW OF THE DECISIONS CITED SUPRA, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO REGISTRATION UNDER S.12A OF THE ACT, AND ACCORDINGLY, WE DIRECT THE DIRECTOR OF INCOME-T AX(EXEMPTION) TO GRANT THE ASSESSEE TRUST, REGISTRATION UNDER S.12 A OF THE ACT, AND CONSEQUENTLY, GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 4.10 .2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 4 TH OCTOBER, 2011 ITA NO320/H/2011 MANGALAMPALLY JANADHAN LAXMI BAI SEVA TRUST, HYDERABAD 4 COPY FORWARDED TO: 1. MANGALAMPALLY JANAEDHAN LAXMI BAI SEVA TRUST, C/O. M/S. M.A. MOHAIDDIN & CO., CHARTERED ACCOUNTA NTS, 307, LENAINE ESTATE, 5-9-189, ABID ROAD, HYDERABAD 2. DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD . 3. DY. DIRECTOR OF INCOME-TAX(EXEMPTION) HYDERABAD 4. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. 5. B.V.S