Jt. CIT(Exeemption)(OSD), Circle-2, Ahmedabad V. Subh Mangal Foundation, Surat

ITA 367/AHD/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4394 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 07-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S. SHUKLA
• Keywords: Charitable institution; Benefit of exemption
• Section: 11; 143(3); 80G; 143(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER JT. COMMISSIONER OF INCOME-TAX (EXEMPTION) (OSD), CIRCLE-2, AHMEDABAD (APPELLANT) VS SUBH MANGAL FOUNDATION 1, OPP. RAMJI MANDIR PAL HAZIRA ROAD, NEAR GARDEN, SURAT-395009 PAN: AAFTS1794L (RESPONDENT) REVENUE BY: SHRI S. S. SHUKLA, SR. D.R. ASSESSEE BY: SHRI RAJESH C. SHAH, A .R. DATE OF HEARING : 09-04-2021 DATE OF PRONOUNCEMENT : 21-05-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS REVENUES APPEAL FOR A.Y. 2015-16, ARISES FROM ORDER OF THE CIT(A)-9, AHMEDABAD DATED 19-12-2018, IN PROCEEDIN GS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE SOLITARY GROUND OF APPEAL OF THE REVENUE IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) IN ALLOWING THE EXEMPTION U/ S. 11 OF THE ACT. ITA NO. 367/AHD/2019 ASSESSMENT YEAR 2015-16 I.T.A NO. 367/AHD/2019 A.Y. 2015-16 PAGE NO JT. CIT VS. SUBH MANGAL FOUNDATION 2 3. THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RE TURN OF INCOME ON 28 TH OCTOBER, 2015 DECLARING ITS INCOME AT RS. NIL AFTER CLAIMING EXEMPTION U/S. 11 OF THE ACT. THE CASE WAS SUBJECT TO SCRUTINY A SSESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 29 TH JULY, 2016. THE ASSESSEE TRUST IS CHARITABLE TRUST REGISTERED UNDER THE BOMBAY CHARIT ABLE TRUST, 1950. THE TRUST WAS REGISTERED U/S. 12A(A) OF THE ACT IT ACT AND ALSO APPROVED U/S. 80G OF THE I.T. ACT. DURING THE COURSE OF ASSESSM ENT ON VERIFICATION OF THE DETAIL FILED, THE ASSESSING OFFICER NOTICED THAT AS SESSEE HAS UTILIZED DONATION INCOME RECEIVED DURING THE YEAR TOWARDS CONSTRUCTIO N OF ROAD AT PALITANA, SHANKHESHWAR AND SURAT. THEREFORE, THE ASSESSEE W AS ASKED TO SPECIFY WHETHER CONSTRUCTION OF ROAD WAS AN OBJECT OF THE T RUST AS PER TRUST DEED. THE ASSESSEE HAS EXPLAINED IT HAD UTILIZED ITS FUND FOR CONSTRUCTION OF ROAD AT PALITANA AND SHANAKHESWAR FOR ADVANCEMENT, SUPPORT OR PROPAGATION OF A RELIGION AND ITS TENETS WHICH WAS A PART OF OBJECT/ AIM OF TRUST. THE ASSESSING OFFICER WAS OF THE VIEW THAT CONSTRUCTION OF ROAD WAS NOT THE OBJECT OF THE TRUST AND THE TRUST HAS CARRIED OUT T HE ACTIVITIES BEYOND THE OBJECTS OF THE TRUST. THE ASSESSEE EXPLAINED THAT POINT NO. 10 IN OBJECT CLAUSE OF TRUST DEED CLEARLY POINTED OUT THAT TRUST CAN DO ANY WORK FOR BENEFIT OF PEOPLE OR SOCIETY. THE ASSESSING OFFICER HAS NO T ACCEPTED THE EXPLANATION OF THE ASSESSEE AND REJECTED THE CLAIM OF EXEMPTION U/S. 11 OF THE ACT. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF LD. CIT(A) IS DISCUSSED AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIO N OF THE APPELLANT AND OBSERVATION OF THE A.O AS WE LL AS THE CASE LAWS RELIED UPON BY THE APPELLANT. THE A.O HA S DENIED THE BENEFIT OF EXEMPTION U/S. 11 OF THE AC T BY HOLDING THAT THE TRUST HAS CONSTRUCTED ROADS DURING THE RELEVANT PERIOD WHICH WAS NOT FOUND TO BE AN O BJECT OF THE TRUST. SHE HELD THAT AS THE CONSTRUCTION OF ROA DS WAS AN ACTIVITY BEYOND THE OBJECTS OF THE TRUST, THEREFORE, I.T.A NO. 367/AHD/2019 A.Y. 2015-16 PAGE NO JT. CIT VS. SUBH MANGAL FOUNDATION 3 THE APPELLANT IS NOT ENTITLED TO AVAIL THE BENEFIT U/S.11 OF THE IT. ACT. DURING THE COURSE OF APPELLA TE PROCEEDINGS, THE APPELLANT HAS SUBMITTED THAT THE A CTIVITY OF ROAD CONSTRUCTION IS ALSO COVERED IN CHARITABLE PURPOSE AS IT IS AN ADVANCEMENT O F OBJECT OF GENERAL PUBLIC UTILITY. DURING THE YEAR UNDER CONSIDERATION, ROAD CONSTRUCTION WORK HAS BEEN DONE AT PALITHANA, SHANKESHWAR AND SURAT WHICH ARE WELL-KNOWN RELIGIOUS CENTERS OF JAINISRN. THE APPELLANT IN ITS SUBMISSION HAS COMMENTED ON ISSUES RAISED BY THE A.O POINT BY POINT. THE APP ELLANT HAS ALSO SUBMITTED CERTAIN DECISIONS IN ITS FAVOUR WHEREIN CONSTRUCTION OF ROAD ACTIVITIES WAS HELD TO BE AN ADVANCEMENT AND BETTERMENT OF PURPOSE OF THA T PARTICULAR ENTITY. IT IS A FACT THAT THE APPELLA NT HAS CONSTRUCTED ROADS ON RELIGIOUS PLACES OF JAI N RELIGION FOR THE PURPOSE OF PROVIDING EASY APPROACH TO THE TEMPL E, POSHADH SHALA AND UPASHRAY ETC, THESE ROADS WERE NOT ONLY BEING USED BY THE FOLLOWERS OF JAINISM, MO NKS BUT BY THE GENERAL PUBLIC AT LARGE ALSO, THE CL AUSE-4, 5. 7 AND 9 OF THE AIMS AND OBJECTS OF THE TRUST SPE CIFY THE ACTIVITIES WHICH COVERS TO CREATE, REPAIR AND TO MAKE, COLOUR, TO BUILD SMALL TEMPLE, TEMPLE MONUMEN T AND TO MAKE ARRANGEMENT FOR BOARDING AND LODGING. IF SUCH STRUCTURES, ARE ERECTED THEN NATURALLY TO APPROACH SUCH STRUCTURES, THE ROADS WILL HAV E TO BE CONSTRUCTED. THEREFORE, THE CONSTRUCTION OF ROADS I S AN INTEGRAL ACTIVITY OF THE AIMS AND OBJECTS OF T HE TRUST. SIMPLY BECAUSE THIS HAS NOT BEEN SPECIFICALLY MENTI ONED IN THE OBJECT CLAUSE, IT CANNOT BE SAID THAT T HE APPELLANT TRUST HAS VIOLATED THE PROVISIONS OF THE ACT. SUCH A MYOPIC VIEW WHILE DEALING WITH SUCH I SSUES IS NOT A HEALTHY STEP. IT IS ALSO SEEN THAT IN THE I MMEDIATELY PRECEDING YEAR I.E. A.Y.2014-15, THE A.O HAS ALLOWED EXEMPTION U/S. 11 WHEREIN ALSO THE CONSTRU CTION OF ROADS WAS THERE AT PALITHANA AND SHANKESHW AR. CONSIDERING THESE FACTS, I AM OF THE CONSIDERED OP INION THAT THE CONSTRUCTION OF ROAD WAS AN ACTIVITY OF CHARITABLE NATURE AND THE ASSESSEE IS ENTITLED TO C LAIM THE BENEFIT U/S. 11 OF THE I. T. ACT. THEREFOR E, THE A.O IS DIRECTED TO ALLOW THE SAME, THUS, THIS GROUND OF AP PEAL IS ALLOWED. 5. THE LAST GROUND OF APPEAL IS RESIDUARY IN NATURE . THE APPELLANT HAS NOT AVAILED IT. ACCORDINGLY, T HE SAME IS TREATED AS DISMISSED . 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSMENT U/S. 143(3) OF THE ACT WAS FINALIZED ON 22 ND DECEMBER, 2016 AND CLAIM OF EXEMPTION U/S. 11 OF THE ACT WAS REJECTED ON THE GROUND THAT CONSTRUCTION OF ROAD IN VILLAGE PALITANA AND SHANKH ESWAR WAS NOT OBJECT OF THE TRUST. THE MAIN OBJECTION OF THE ASSESSING OFF ICER FOR DENYING EXEMPTION U/S. 11 OF THE ACT WAS THAT CONSTRUCTION OF ROAD WAS NOT OBJECT OF THE ASSESSEE TRUST AS PER TRUST DEED. WHILE ALLOWI NG THE APPEAL OF THE ASSESSEE, LD. CIT(A) HAS STATED THAT THESE ROADS WE RE NOT ONLY BEING USED BY THE FOLLOWERS OF JAINISM MONKS BUT BY THE GENERAL P UBLIC AT LARGE ALSO. WE CONSIDER THAT APPROACH ROAD IS AN INTEGRAL PART OF THE TEMPLE STRUCTURE CREATED BY THE ASSESSEE WITHOUT WHICH IT IS DIFFICULT FOR T HE PUBLIC TO ACCESS THE TEMPLE MONUMENT AND THE NATURE OF ROADS CONSTRUCTED BY THE ASSESSEE WAS SPECIFICALLY LINKED TO THE STRUCTURE OF THE TEMPLE WHICH WAS PART OF THE OBJECT OF THE ASSESSEE AS SPECIFIED IN THE CLAUSES 4, 5, 7 AND 9 OF THE OBJECT OF THE TRUST RELATING TO CREATE, REPAIR, COLOUR BUILDING, ETC. ELABORATED AT PAGE 4 TO 14 I.T.A NO. 367/AHD/2019 A.Y. 2015-16 PAGE NO JT. CIT VS. SUBH MANGAL FOUNDATION 4 IN THE ORDER OF THE LD. CIT(A). CONSIDERING THE AFO RESAID FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT(A) IN HOLDING THAT THE CONSTRUCTION OF ROAD WAS AN ACTIVI TY OF CHARITABLE NATURE AND THE ASSESSEE WAS ENTITLED FOR THE BENEFIT U/S. 11 O F THE ACT. THEREFORE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-05-2021 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 21/05/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,