M/s Association of Indian Muslim, Bhopal V. THE CIT, Exemption, Bhopal

ITA 374/IND/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9883 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 24-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Keywords: Charitable institution; Corroborative evidences
• Section: 12A; 12AA; 12; 11

Judgement Text

ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.374/IND/2017 ASSESSMENT YEAR: NA / VS. ASSOCIATION OF INDIAN MUSLIM SHIFA MANZIL, NAKKAR KHANA, MALIPURA, BHOPAL-462001 (APPELLANT) CIT (EXEMPTION) BHOPAL (REVENUE ) P.A. NO. AACAA1632P APPELLANT BY WRITTEN SUBMISSION RESPONDENT BY SHRI LALCHAND, DR DATE OF HEARING: 24.09.2018 DATE OF PRONOUNCEMENT: 25.09.2018 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(EXEMPTION), BHOPAL DATED 23.2.2017. IT IS NOTICED THAT THE PRESENT APPEAL IS BARRED BY 22 DAYS. AN ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL 2 AFFIDAVIT HAS BEEN PLACED ON RECORD. KEEPING IN VIEW O F THE FACTS STATED IN THE AFFIDAVIT IN THE INTEREST OF JUSTIC E, DELAY IS CONDONED AND APPEAL IS ADMITTED FOR HEARING. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX ERRED AND WA S NOT JUSTIFIED IN HOLDING THAT THE SOCIETY CANNOT BE CON SIDERED AS CHARITABLE INSTITUTION FOR PUBLIC AT LARGE, HENCE I T IS NOT ENTITLED TO REGISTER UNDER SECTION 12A OF INCOME TAX ACT, 1961. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX ERRED AND WA S NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE HAS NOT FILE D THE LIST AND IDENTITY OF PARTICULARS OF BENEFICIARIES. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE FAIR, PROPER AND MEANINGFUL OPPORTUNITY HAS NOT BEEN ALLOWED TO THE ASSESSEE TO PUT UP THE DEFENSE ON THE ISSUE DISPUTED IN THE APPEAL. 4. THAT THE APPELLANT CRAVES LEAVE TO AMEND, ADD, ALTE R, MODIFY OR WITHDRAW ANY OF THE ABOVE GROUND(S) OF APPEAL AT TH E TIME OF HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE ASSOCIATION SOUGHT REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) IN FORM NO.10A, WHIC H WAS RECEIVED IN THE OFFICE OF THE CIT(EXEMPTION) ON 10. 8.2016. IN ORDER TO VERIFY THE GENUINENESS OF THE ACTIVITY O F THE ASSOCIATION/SOCIETY, THE LD. CIT(EXEMPTION) ISSUED A N OTICE TO THE ASSESSEE TO SHOW CAUSE AS TO WHY THE REGISTRATI ON ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL 3 NOT BE DENIED IN VIEW OF THE FACT THAT THE OBJECTS WE RE SUBSTANTIALLY FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. THE ASSESSEE DID NOT REPLY NOR ATTENDED T HE PROCEEEDINGS. THEREFORE, THE APPLICATION SO FILED WAS REJECTED. AGAINST THIS, THE ASSESSEE HAS FILED PRESEN T APPEAL. ON THE DATE OF HEARING, NO ONE APPEARED. HOWEVER, A WRITTEN SUBMISSION IS PLACED ON RECORD WIT H A REQUEST TO DECIDE THE CASE ON THE BASIS OF THESE WRITT EN SUBMISSIONS. THE SUBMISSIONS OF THE ASSESSEE ARE AS UNDER: ASSESSEE CONTENTION: 2. ON THE BENEFICIARIES ARE EXCLUSIVELY FROM ONLY O NE MINORITY I.E, MUSLIM COMMUNITY: 2.1 HONORABLE SIR, LEARNED CIT EXEMPTION, BHOPAL IN HIS ORDER HELD THAT 'DURING THE COURSE OF HEARING, IT IS REVEALED THAT THE BENEFICI ARIES ARE EXCLUSIVELY FROM ONLY ONE MINORITY I.E. MUSLIM COMMUNITY. DURING THE COURSE O F HEARING, THE ASSESSEE HAS PRODUCED SOME NEWS PAPER CUTTINGS. IT IS REVEALED F ROM THE NEWS PAPER CUTTING THAT THE VARIOUS PROGRAMMES CONDUCTED BY THE SOCIETY ARE FOR THE BENEFITS OF A PARTICULAR RELIGIOUS COMMUNITY ONLY I.E. MUSLIM COMMUNITY'. 2.2 HONORABLE SIR, IT IS TRUE THAT WHATEVER ACTIVIT Y OF SOCIETY PRESENTED BEFORE THE LEARNED CIT EXEMPTION, BHOPAL REVEALS THAT THE BENE FICIARIES ARE EXCLUSIVELY FROM ONLY ONE MINORITY I.E. MUSLIM COMMUNITY BUT AS PER THE O BJECTS OF THE SOCIETY IT IS CREATED FOR CHARITABLE WORK FOR ALL AND WITHOUT ANY DISCRIMINAT ION ON THE BASIS OF CAST, RELIGION & COLOR. SIR, AS PER THE OBJECTS OF THE SOCIETY IT IS CREATED FOR THE UPLIFTMENT OF THE WEAKER SECTION OF THE SOCIETY, WORK FOR POOR, BACKWARD, TR IBAL AND FEMALE OF GENERAL CATEGORY, TO ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL 4 WORK FOR HEALTH, TO PROVIDE SCHOOL AND COLLEGE EDUC ATION TO ILLITERATE CHILDREN, TO PROMOTE MINORITIES IN THEIR SPECILIASE FIELD AND HELP THEM FOR SELF-EMPLOYMENT. HONORABLE SIR, WE ARE ENCLOSING A COPY OF REGISTRATION CERTIFICATE AN D BYE LAWS OF APPELLANT SOCIETY FOR YOUR CONSIDERATION (PAGE NO.3 TO 11). 2.3 HONORABLE SIR, WE HAVE SUBMITTED DETAILS OF CHA RITABLE WORK DONE BY THE SOCIETY BEFORE THE LEARNED CIT EXEMPTION, BHOPAL. HONORABLE SIR, THE LEARNED CIT EXEMPTION, BHOPAL, HAVE NOT OBJECTED ON GENUINENESS OF THE CHARITABLE WORK OF SOCIETY THAT MEANS THEY ARE SATISFIED ABOUT THE CHARITABLE ACTIVITIES OF SOCIETY AND HE HIM-SELF MENTIONED IN HIS ORDER THAT SOCIETY IS WORKING IN CHARITABLE FIE LD BUT AS PER HIS OBJECTION ONLY FOR ONE MINORITY I.E. MUSLIM COMMUNITY. 2.4 HONORABLE SIR, THE LEARNED COMMISSIONER IN HIS ORDER HAS NOT DOUBTED THE OBJECTS OF THE SOCIETY AND ALSO HAS NOT STATED THAT THE SOCIET Y WAS NOT CREATED FOR PUBLIC CHARITY AND ITS INCOME HAD NOT BEEN UTILISED FOR THAT PURPO SE OR THE PROPERTY HELD BY IT WAS USED FOR THE BENEFIT OF THE TRUSTEES OR THEIR FAMILIES B UT THE OBJECTION OF THE COMMISSIONER WAS THAT THE BENEFICIARIES ARE EXCLUSIVELY FROM ONLY ON E MINORITY I.E. MUSLIM COMMUNITY. THAT REASON CANNOT BE A VALID GROUND FOR REFUSING R EGISTRATION TO A SOCIETY WHICH IS CREATED HAVING THE MAIN OBJECT OF CHARITABLE PURPOS E. HONORABLE SIR, REGISTRATION UNDER SECTION 12AA CANNOT BE REFUSED TO A SOCIETY ON THE BASIS THAT PRESENT WORKING OF THE SOCIETY REVEALS THAT THE BENEFICIARIES ARE EXCLUSIV ELY FROM ONLY ONE MINORITY I.E. MUSLIM COMMUNITY. THE COMMISSIONER WAS NOT JUSTIFIED IN RE FUSING REGISTRATION TO THE ASSESSEE ON THE BASIS THAT THE BENEFICIARIES ARE EXCLUSIVELY FROM ONLY ONE MINORITY I.E. MUSLIM COMMUNITY AND AS SUCH THE SOCIETY APPEARS MORE IN T HE NATURE OF A RELIGIOUS THAN A CHARITABLE TRUST. 2.5 HONORABLE SIR, THE LEARNED CIT EXEMPTION, BHOPA L HAS MENTIONED IN HIS ORDER THAT ASSESSEE SOCIETY IS NOT ELIGIBLE FOR REGISTRATION U NDER SECTION 12A OF INCOME TAX ACT, 1961 BECAUSE THE BENEFICIARIES OF ITS WORK ARE EXCL USIVELY FROM ONLY ONE MINORITY I.E. MUSLIM COMMUNITY, THEREFORE, ASSESSEE SOCIETY CASE IS COVERED UNDER SECTION 13 (1) (B) OF INCOME TAX ACT, 1961. SIR, HEREUNDER WE ARE REPRODUCING SECTION 13 (1) (B) OF INCOME TAX ACT, 1961 FOR YOUR CONSIDERATION: 13 (1) NOTHING CONTAIN IN SECTION 11 [OR SECTION 12 J SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF- (B) IN CASE OF A TRUST FOR CHARITABLE PURPOSES OR A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER THE COMMENCEMENT OF TH IS ACT, ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS CREATED OR E STABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE 2.6 SIR, FROM THE ABOVE MENTIONED PROVISION OF UNDE R SECTION 13 (1) (B) OF INCOME TAX ACT, 1961 IS APPLICABLE WHILE CALCULATING THE T OTAL INCOME OF THE CHARITABLE INSTITUTION OR TRUST I.E. THE EXEMPTION AS MENTIONED U/S 11 OF THE INCOME TAX ACT FOR COMPUTING ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL 5 TOTAL INCOME WILL NOT APPLICABLE TO THE TRUST OR CH ARITABLE INSTITUTION WHICH ARE COVERED UNDER THE PROVISION OF SECTION 13 (1) (B) OF INCOME TAX ACT, 1961. THE PROVISIONS OF THE SECTION 13 (1) (B) OF THE INCOME TAX ACT, 1961 ARE HENCE APPLICABLE FOR THE PURPOSE OF CALCULATING THE TOTAL INCOME OF THE TRUST OR CHARIT ABLE INSTITUTION AND HENCE NOT THE VALID GROUND BASED ON WHICH THE REGISTRATION UNDER SECTIO N 12A OF THE ACT CAN BE DENIED TO THE ASSESSEE. 2.7 HONORABLE SIR, IN INCOME-TAX OFFICER V. JESUIT MADURAI PROVINCE IN THE ITAT MADRAS BENCH IN IT APPEAL NOS. 932 AND 933 OF 1981 [ASSESSMENT YEARS 1976-77 AND 978-79J IT WAS HELD THAT WHERE THE ASSESSEE WAS ENG AGED IN TRAINING OF YOUNG EMBERS OF INSTITUTES OF RELIGION AND LOOKING AFTER THEIR S TUDIES AS WELL AS STARTING NE INSTITUTIONS, CHURCHES, ORPHANAGES, MAINTAINING AGED MEMBERS, ETC ., IT WAS ENTITLED TO EXEMPTION BEING A CHARITABLE TRUST AND THE MERE FACTUM OF BAS IC BENEFICIARIES BEING CATHOLIC MEMBERS OF COMMUNITY WOULD NOT MITIGATE AGAINST THE ASSESSEES CLAIM. SIR WE ARE ENCLOSING COMPLETE TEXT OF THE CASE FOR YOUR CONSID ERATION (PAGE NO. 12 TO 14). SIMILARLY, HONORABLE SIR, IN SHRI SHANTINATH JAIN M ANDIR PEDHI BHESWARA V. ITO (2005) 3 (II) ITCL 166 (JOD-TRIB) .' (2004) 85 (JOD- TRIB) 1 042 IT WAS HELD THAT WHERE ALTHOUGH THE TRUST HAD BEEN FORMED FOR THE PURPOSE OF ADVANCEME NT OF JAINISM, A RELIGIOUS COMMUNITY, YET ITS OBJECT WAS 12' I CHARITABLE. THE TRUST COULD NOT BE DEBARRED AND EXCLUDED FROM REGISTRATION UNDER SECTION 12A AS ITS OBJECTS WERE BOTH CHARITABLE AND RELIGIOUS. A TRUST WHICH IS FOR RELIGIOUS PURPOSES ONLY IS EXCLUDED AND DEBARRED FROM REGISTRATION. SIR, WE ARE ENCLOSING COMPLETE TEXT OF THE CASE FOR YOUR CONSIDERATION (PAGE NO.15 TO 16). HONORABLE SIR, IN BOTH THE ABO VE CASES REGISTRATION UNDER 12A GRANTED EVEN THOUGH THEY ARE SERVING TO THE PARTICU LAR COMMUNITY WHEREAS APPELLANT SOCIETY DOING CHARITABLE WORK FOR ALL THE SECTION O F SOCIETY THOUGH AT PRESENT ITS MAIN BENEFICIARIES ARE EXCLUSIVELY FROM ONLY ONE MINORIT Y I.E. MUSLIM COMMUNITY THEREFORE, WE REQUEST YOU TO GRANT THE SAME TO APPELLANT SOCIE TY ALSO. 3. LD. D.R. OPPOSED THESE WRITTEN SUBMISSIONS. 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD T O THE FACT THAT THE LD. CIT(EXEMPTION) IS EMPOWERED TO CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL 6 INSTITUTION AS HE THINKS NECESSARY, IN ORDER TO SATISF Y HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF TH E TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH ENQUIRIES AS HE M AY DEEM NECESSARY IN THIS BEHALF. IN THE PRESENT CASE, LD. CIT(EXEMPTION) HAD ASKED FOR CERTAIN INFORMATION WHICH WERE NOT PROVIDED BY THE ASSESSEE SOCIETY. 5. WE HAVE PERUSED THE OBJECTS OF THE ASSOCIATION. FR OM THE OBJECTS, IT CANNOT BE INFERRED THAT IT IS PURELY FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. WE, THER EFORE, DEEM IT PROPER TO SET ASIDE THE ORDER OF THE LD. CIT(EXEMPTION) AND RESTORE THE APPLICATION FOR RECONSIDERATION. THE ASSESSEE WOULD FURNISH REQUISITE DETAILS ALONG WITH SUPPORTING EVIDENCES IN RESPECT OF ITS ACTIVITIES BEFORE THE LD. CIT(EXEMPTION). ITA 374/IND/2017 ASSOCIATION OF INDIAN MUSLIM, BHOPAL 7 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25.0 9.2018. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 25/ 09/2018 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER SR. PRIVATE SECRETARY, INDORE