M/s. Alexandra School, Amritsar. V. The Commissioner of Income-tax-II, Amritsar.

ITA 329/ASR/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5348 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2014
• Assessment Year: 2012-2013
• Appeal Filed On: 14-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution; Benefit of exemption
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 PAN: AAAAA3053C M/S ALEXANDRA SCHOOL, VS. COMMISSIONER OF INCOM E AMRITSAR TAX-II, AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SATISH BANSAL, CA RESPONDENT BY: SH. MAHAVIR SINGH, SR.DR DATE OF HEARING: 23.01.2014 DATE OF PRONOUNCEMENT: 26.02.2014 ORDER PER BENCH 1. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINS T THE IMPUGNED ORDER DATED 26.04.2013 PASSED BY LEARNED COMMISSION ER OF INCOME TAX- II, AMRITSAR, ON THE FOLLOWING GROUNDS: I. THAT THE ORDER OF HONOURABLE CIT IS ILLEGAL AND ARB ITRARY AND CONTRARY TO FACTS AND THE LEGAL PROPOSITION OF LAW. II. THAT THE WORTHY CIT HAS COMMITTED A GRIEVOUS ERROR OF LAW BY STATING THAT THIS SCHOOL IS BEING RUN TO CATER THE CHRISTIAN COMMUNITY AND SUCH IS ITS OBJECTS DO NOT QUALIFY U/ S 12A/12AA BECAUSE IT IS NOT RUN FOR THE BENEFIT OF THE PUBLIC AT LARGE. III. THAT THE WORTHY CIT WHILE MAKING THE ABOVE OBSERVAT IONS HAS LOST SIGHT OF THE FACT THAT UNDER ARTICLE 30(1) OF THE C ONSTITUTION OF THE INDIA, THE MINORITIES ARE CONFERRED A FUNDAMENTAL R IGHT TO RUN THEIR 2 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 EDUCATIONAL INSTITUTIONS TO PREACH THEIR RELIGIOUS TENETS WHILE IMPARTING EDUCATION TO THE STUDENTS AND ALSO TO ENG AGE IN ACTIVITIES FOR MANAGEMENT AND CONSOLIDATION OF THEIR RELIGIOUS CHARACTER. IV. THAT THIS RIGHT OF MINORITIES HAS BEEN UPHELD REPEA TEDLY BY THE HONOURABLE SUPREME COURT IN CASES CONTEXTUAL TO THI S ISSUE. V. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR WI THDRAW A GROUND OR A NEW GROUND OF APPEAL. 2. THE ASSESSEE-TRUST FILED AN APPLICATION UNDER SE CTION 12A(A) OF THE INCOME-TAX ACT (IN SHORT THE ACT) IN FORM NO. 10A FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT ON 30.10 .2012 IN THE OFFICE OF COMMISSIONER OF INCOME TAX-II, AMRITSAR. THE TRUST WAS REGISTERED WITH THE REGISTRAR OF FIRMS AND SOCIETIES PUNJAB, CHANDI GARH ON 15 TH MARCH, 1976. LEARNED CIT-II, AMRITSAR, FIXED THE HEARING O F THE ASSESSEES CASE ON 20.03.2013 AND ASKED THE ASSESSEE-TRUST TO SHOW WHY REGISTRATION UNDER SECTION 12AA BE GRANTED WHEN THE MAIN PURPOSE OF THE ASSOCIATION IS RUN SCHOOL FOR PRIMARY PURPOSE TO CATER TO CHRIS TIAN COMMUNITY AS PER ITS PURPOSE DECLARED IN MOA AND ITS OBJECTIVES. THE ASSESSEE-TRUST FILED ITS REPLY DATED 25.04.2013 AND THE MAIN POINT RAISE D BY THE ASSESSEE-TRUST IS THAT ALTHOUGH THE SCHOOL IS RUN BY MEMBERS OF TH E CHRISTIAN SOCIETY, IT IS TOTALLY SECULAR AND DEALS WITH ONLY EDUCATION WI THOUT ANY RESERVATION OF RELIGION, CASTE AND CREED. LEARNED CIT-II, AMRITSAR , HAS CONSIDERED THE REPLY OF THE ASSESSEE-TRUST AS WELL AS THE AIMS AND OBJECTIVES OF THE 3 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 ASSESSEE-TRUST WHICH THE LEARNED CIT-II, AMRITSAR, HAS REPRODUCED IN THE IMPUGNED ORDER AT PAGE NOS. 1 AND 2. AFTER PERUSING THE AIMS AND OBJECTIVES OF THE ASSESSEE-TRUST, THE LEARNED CIT-I I, AMRITSAR, HELD THAT THE TRUST FALLS UNDER CLAUSES (A) AND (B) OF SECTIO N 13(1) OF THE ACT, AND ALSO HELD THAT IT IS CLEAR FROM THE PURPOSE AND OBJ ECTIVES OF THE TRUST THAT IT IS CREATED AND ESTABLISHED FOR THE BENEFIT OF A PAR TICULAR RELIGIOUS COMMUNITY OR CASTE. THEREFORE, THE ASSESSEE TRUST I S NOT ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT AND HE R EJECTED THE APPLICATION DATED 30.10.2012 FILED BY THE ASSESSEE- TRUST VIDE IMPUGNED ORDER DATED 26.04.2013 PASSED UNDER SECTION 12AA OF THE ACT. 3. AGGRIEVE BY THE IMPUGNED ORDER DATED 26.04.2013 PASSED BY LEARNED CIT-II, AMRITSAR, UNDER SECTION 12AA OF THE ACT, THE ASSESSEE FILED THE PRESENT APPEAL. 4. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE FILED A SMALL PAPER BOOK CONTAINING PAGES FROM 1 TO 16, IN WHICH HE HAS ATTACHED THE LETTER DATED 25/4/13 FILED BEFORE CIT-II, AMRIT SAR; AND MEMORANDUM OF ASSOCIATION, AND CERTIFIED THAT HE HAS ALREADY F ILED THESE DOCUMENTS BEFORE THE CIT-II, AMRITSAR. HE ALSO DREW OUT ATTEN TION TOWARDS THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF 4 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 COMMISSIONER OF INCOME TAX-II, CHANDIGARH VS. SURYA EDUCATIONAL & CHARITABLE TRUST REPORTED IN [2011] 15 TAXMANN.COM 123 (PUNJ. & HAR) AND THE ORDER OF THIS BENCH PASSED IN THE CASE OF M /S DIVINE HEALTH SERVICES VS. THE COMMISSIONER OF INCOME TAX-II, FOU NDATION, AMRITSAR, PASSED IN ITA NO. 417(ASR)/2010 FOR A.Y. 2010-11, D ATED 07.06.2012. HE ARGUED THAT LEARNED CIT-II, AMRITSAR, HAS WRONGL Y REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR THE REGISTRAT ION OF THE ASSESSEE-TRUST ON THE GROUND THAT THE ASSESSEE-TRUST HAS BEEN ESTA BLISHED FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY, WHICH IS TOTAL LY WRONG. HE FURTHER STATED THAT THE SCHOOL IS RUN BY THE MEMBERS OF THE CHRISTIAN SOCIETY; IT IS TOTALLY SECULAR AND DEALS ONLY WITH EDUCATION, WITH OUT ANY RESERVATION OF RELIGION CASTE AND CREED. NO SPECIAL EMPHASIS IS GI VEN TO THE STUDENTS OF CHRISTIAN FAMILIES OR CHRISTIAN STAFF EMPLOYED. FIN ALLY, HE ARGUED ALMOST NINETY PERCENT OF GOOD EDUCATIONAL INSTITUTIONS ARE RUN BY SOME OR THE OTHER RELIGION AND THE BIGGEST EXAMPLE IS THAT DAV INSTITUTIONS IN FACT, TEACH AND PREACH HINDU RELIGION, THE CHIEF KHALSA D EWAN RUN SCHOOLS ALSO PREACH TEACHINGS OF SIKH RELIGION BUT THE REG ISTRATION HAS GRANTED TO THEM IGNORING THE ASSESSEE. HE REQUESTED THAT THE I MPUGNED ORDER PASSED BY LEARNED CIT-II, AMRITSAR, MAY BE CANCELLED BY AC CEPTING THE APPEAL 5 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 FILED BY THE ASSESSEE WITH DIRECTION TO CIT-II, AMR ITSAR, TO GRANT REGISTRATION TO THE ASSESSEE-TRUST UNDER SECTION 12 AA OF THE ACT. 5. LEARNED DR RELIED UPON THE ORDER PASSED BY LEARN ED CIT-II, AMRITSAR. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US AND IN ORDER TO DECIDE THE ISSUE IN DISPUTE, IT IS VERY MUCH RELEVANT TO REPRODUCE THE PURPOSE AND OBJECTIV ES OF THE ASSESSEE- TRUST I.E. M/S ALEXANDRA SCHOOL, AMRITSAR, THE SAME ARE REPRODUCED AS UNDER: PURPOSE THE PURPOSE OF THIS ASSOCIATION IS TO RUN AND MANAG E THE SCHOOLS CALLED ALEXANDRA SCHOOLS, AMRITSAR. FOR THE PURPOSE OF IMPARTING EDUCATION PRIMARY TO CHILDREN OF CHRISTIA N MINORITY COMMUNITY, FOR WHICH IT WAS FOUNDED THAT IS TO PROV IDE A SOUND EDUCATION ON A CHRISTIAN BASIS TO EVERY GIRL/BOY WHO VOLUNTARILY JOINS THE SCHOOLS, IN CHRISTINA ATMOSPHERE OF LOVE AND SERVICE TO ALL, REGARDLESS OF CASTE, CREED, COLOUR, OR DISTINCTION OF ANY KIND IN ORDER TO PRODUCE ENLIGHTENED AND RESPONSIBLE CITIZENS FOR INDIA. OBJECTIVES: IN ORDER TO FULFILL THE ABOVE PURPOSE OF PROVIDING QUALITY EDUCATION IN A CHRISTIAN ENVIRONMENT, THE SOCIETY OF THE ALEXAND RA SCHOOLS, SHALL HAVE THE FOLLOWING OBJECTIVES: I. TO MANAGE AND CONTROL, THROUGH A MANAGEMENT COMMIT TEE, THE ALEXANDRA SCHOOLS, AMRITSAR AS A DIOCESAN INSTITUTI ON OF THE DIOCESE OF AMRITSAR IN THE CHURCH OF NORTH INDIA AN D THEREBY 6 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 AS A MINORITY INSTITUTION FALLING UNDER ARTICLE 30( I) OF CONSTITUTION OF INDIA. II. TO PRESENT AL ALL THE TRUTH OF GOD AND HIS/HER WORK AS REVEALED IN JESUS CHRIST. III. TO SHARE THIS TRUTH AND UNDERSTANDING THROUGH INSTR UCTION PERSONAL RELATIONSHIP AND THE TOTAL PROGRAMME OF TH E SCHOOLS. IV. TO HELP EACH CHILD DISCOVER AND DEVELOP HIS/HER POT ENTIAL AS AN INDIVIDUAL BY ENCOURAGING ENQUIRY AND CREATIVITY. V. TO PROVIDE A WELL-ROUNDED EDUCATION AND HIGH ACADEM IC STANDARD AND TO DEVELOP RESPONSIBLE CITIZENSHIP IN OUR STUDENTS. VI. TO ENCOURAGE APPRECIATION OF OUR NATIONAL AND CULTU RAL HERITAGE AND TO PROMOTE NATIONAL INTEGRATION VII. TO PROMOTE GLOBAL UNDERSTANDING AND EARTH CONSCIOUS NESS. VIII. TO BROADEN THE SCOPE OF EDUCATION BY INTEGRATING WO RK EXPERIENCE IN TO THE ACADEMIC PROGRAMMES. IX. TO DEVELOP LEADERSHIP THROUGH CO-CURRICULAR ACTIVIT IES. X. TO PROVIDE CLEAN, ATTRACTIVE WELL MAINTAINED PHYSIC AL FACILITIES WHICH REFLECT THE ABOVE MENTIONED OBJECTIVES AND CO NCERNS. 7. LEARNED CIT-II, AMRITSAR, HAS GIVEN ADEQUATE OPP ORTUNITY TO THE ASSESSEE-TRUST FOR ESTABLISHING ITS CASE FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT BUT THE ASSESSEE-TRUST, IN ITS REPLY DATED 25.04.2013, MAINLY CONTENDED THAT THE SCHOOL IS RUN BY MEMBERS OF THE CHRISTIAN SOCIETY, AND IT IS TOTALLY SECULAR AND DE ALS WITH ONLY EDUCATION WITHOUT ANY RESERVATION OF RELIGION, CASTE AND CREE D. ON PERUSAL OF THE PURPOSE OF THIS ASSOCIATION, IT IS CLEAR THAT THE PURPOSE OF THIS ASSOCIATION IS TO RUN AND MANAGE THE SCHOOLS CALLED ALEXANDRA SCHOOLS, AMRITSAR, FOR THE PURPOSE OF IMPARTING EDU CATION PRIMARY 7 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 TO CHILDREN OF CHRISTIAN MINORITY COMMUNITY, FOR WH ICH IT WAS FOUNDED THAT IS TO PROVIDE A SOUND EDUCATION ON A CHRISTIA N BASIS TO EVERY GIRL/BOY WHO VOLUNTARILY JOINS THE SCHOOLS, IN CHRI STINA ATMOSPHERE OF LOVE AND SERVICE TO ALL, REGARDLESS OF CASTE, CREED , COLOUR, OR DISTINCTION OF ANY KIND IN ORDER TO PRODUCE ENLIGHTENED AND RESPON SIBLE CITIZENS FOR INDIA. 8.1 KEEPING IN VIEW THE AFORESAID PURPOSE FOR WHICH THE ASSESSEE-TRUST HAS BEEN CREATED ONLY FOR THE BENEFI T OF ONE PARTICULAR RELIGIOUS COMMUNITY I.E. CHRISTIAN, WE ARE OF THE V IEW THAT MOST OF THE SOCIETIES AFTER GETTING REGISTERED WITH THE REGISTR AR OF FIRMS AND SOCIETY PUNJAB, CHANDGARH FILE AN APPLICATION UNDER SECTION 12A(A) OF THE ACT IN FORM NO. 10A FOR GRANT OF REGISTRATION UNDER SECTIO N 12AA OF THE ACT IN ORDER TO GET THE BENEFIT OF EXEMPTION OF ITS INCOME IN A ROUTINE MANNER BUT THEY DO NOT PRACTICALLY RENDER THEIR SERVICES T O PUBLIC AT LARGE. IN VIEW OF THE REQUIREMENT OF SECTION 12AA OF THE ACT, IT I S THE DUTY OF THE ASSESSING OFFICER TO MAKE INQUIRY AS PER DIRECTI ON OF CIT AND IT IS ALSO THE DUTY OF THE LEARNED CIT THAT BEFORE GRA NTING REGISTRATION TO ANY TRUST/SOCIETY/INSTITUTION, HE SHOULD GO THRO UGH ALL RELEVANT PROVISIONS OF LAW FOR WHICH THE ASSESSEE WILL GET THE BENEFIT AFTER 8 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 GRANTING THE REGISTRATION. IF THE ASSESSEE HAS VIOL ATED ANY CONDITIONS MENTIONED IN ANY RELEVANT PROVISIONS OF LAW RELATIN G TO THE REGISTRATION OF TRUST/SOCIETY/INSTITUTION, THEN THE REGISTRATION SH OULD NOT BE GRANTED TO ANY TRUST/SOCIETY/INSTITUTION. THE COMMISSIONER SHOULD FULLY SATISFIED HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUS T OR INSTITUTION BEFORE GRANTING REGISTRATION TO ANY SOCIETY/INSTITUTION. I F THERE IS ANY DOUBT IN THE AIMS AND OBJECTIVES OF THE SOCIETY/INSTITUTION WHO APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, THEN THE COMMISSIONE R CAN MAKE AN INQUIRY THROUGH CONCERNED ASSESSING OFFICER ABOUT G ENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION. AFTER COMPL ETION OF ALL FORMALITIES, WHICH ARE REQUIRED UNDER SECTION 12AA OF THE ACT, T HE COMMISSIONER IS DUTY-BOUND TO PASS A SPEAKING ORDER FOR ACCEPTING O R REJECTING THE REQUEST OF THE SOCIETY/INSTITUTION. 8. IN THE PRESENT CASE, IT IS VERY MUCH CLEAR FROM THE PURPOSE OF THE ASSESSEE-TRUST THAT THE ASSESSEE-TRUST HAS BEEN FOR MED TO IMPART EDUCATION PRIMARY TO CHILDREN OF CHRISTIAN MINORITY COMMUNITY , WHICH IS CONTRARY TO LAW. SECONDLY, THE MAIN OBJECTIVE OF THE SOCIETY -TRUST IS TO PROVIDE QUALITY EDUCATION IN THE CHRISTIAN ENVIRONMENT, WHI CH IS ALSO CONTRARY TO THE LAW. 9 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 9. WE HAVE ALSO SEEN THAT THE ENTIRE ADMINISTRATION OF THE ASSESSEE- TRUST IS CONTROLLED BY CHRISTIAN PEOPLE. NO OUTSIDE R HAS BEEN ENGAGED IN THE ADMINISTRATION OF THE ASSESSEE-SCHOOL, MEANING THEREBY, THE ASSESSEE- SCHOOL HAS BEEN CREATED ONLY FOR THE BENEFIT OF PAR TICULAR RELIGIOUS COMMUNITY. THEREFORE, IN OUR CONSIDERED VIEW, LEARN ED CIT-II, AMRITSAR, VIDE IMPUGNED ORDER DATED 26.04.2012 HAS RIGHTLY RE JECTED THE APPLICATION DATED 30.10.2012 FILED BY THE ASSESSEE FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. 10. AS REGARDS TO THE CASE-LAWS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE ISSUE IN DISPUTE, IN OUR CONSIDERED VIEW THESE ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. LEARNE D COUNSEL FOR THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY OTHER CASE-L AW, WHICH FACTS AND CIRCUMSTANCES ARE SIMILAR TO THE ASSESSEES CASE, A ND WHERE THE TRUST/SOCIETY/INSTITUTION HAS BEEN ESTABLISHED FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY AND LEARNED CIT OR ANY BENCH OF I.T.A.T. HAS GRANTED REGISTRATION TO THE SOCIETY UNDER SECTION 1 2AA OF THE ACT, . 11. WITH THE FOREGOING DISCUSSION, WE DO NOT FIND AN Y INFIRMITY IN THE IMPUGNED ORDER AND ACCORDINGLY WE UPHOLD THE IM PUGNED ORDER DATED 10 I.T.A. NO. 329(ASR)/2013 ASSESSMENT YEAR: 2012-13 26.04.2013 PASSED BY LEARNED CIT-II, AMRITSAR, AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH FEBRUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S ALEXANDRA SCHOOL, AMRITSAR 2. COMMISSIONER OF INCOME TAX-II, AMRITSAR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.