The Dy.Director of Income tax(Exemp.), Ahmedabad V. Gujarat Sahitya Prakash Society, Ahmedabad

ITA 4080/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5663 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-07-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 07-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: P B DOSHI
• Keywords: Charitable institution
• Section: 143(3); 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.4080/AHD/2007 A. Y.: 1995-96 THE DEPUTY DIRECTOR INCOME-TAX (EXEMPTIONS), 2 ND FLOOR, NATURE VIEW BUILDING, NR. H. K. HOUSE, ASHRAM ROAD, AHMEDABAD 380 009 VS GUJARAT SAHITYA PRAKASH SOCIETY, PREM JYOT, OPP. ST. XAVIERS COLLEGE, NAVRANGPURA, AHMEDABAD PA NO. AAATG 1344 H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. M. MAHESH, DR RESPONDENT BY SHRI P. B. DOSHI, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XX, AHMEDABAD DATED 13-08-2007 FOR ASSESSMENT YEAR 1995-96 ON THE FOLLOWING GROUND 1. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.11,10,680/- WHICH WAS MADE BY THE ASSESSING OFFICER AND DISALLOWED THE CLAIM OF EXEMPTION U/S. 11 OF THE ACT. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE P ARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERE D THE MATERIAL ON RECORD POINTED OUT BY THE PARTIES. 3. THE BRIEF FACTS HAVE BEEN NOTED BY THE LEARNED C IT(A) IN THE IMPUGNED ORDER THAT THE AO HAS DISCUSSED THE ISSUE IN DETAIL IN THE ASSESSMENT ORDER AT PAGES 2 TO 4. THE ASSESSEE IS A PUBLIC TRUST REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 HAVING REGISTRATION NO.F/1003/AHMEDABAD DATED 29-08-1984. THE ASSESSEE HAS FILED ITS RETURN DECLARING NIL INCOME AND ASSESSMENT WAS FINA LIZED U/S 143(3) OF THE IT ACT AT AN INCOME OF RS.13,34,941/-. THE ASSE SSEE PREFERRED APPEAL ITA NO.4080/AHD/2007 DDIT (EXEMPT), AHMEDABADD VS GUAJRAT SAHITYA PRAKAS H SOCIETY, AHMEDABAD 2 BEFORE THE LEARNED CIT(A)-XIII, AHMEDABAD AND THE L EARNED CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE VIDE HIS ORDER D ATED 14-02-1998. HOWEVER, AGAINST THIS ORDER, THE DEPARTMENT PREFERR ED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL RESTORED THE MATTER TO TH E AO AND IN ACCORDANCE WITH THE DIRECTION OF THE TRIBUNAL THE A O PASSED THE ASSESSMENT ORDER DETERMINING TOTAL INCOME OF THE AS SESSEE AT RS.11,10,620/-. 4. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED C IT(A). IN THE WRITTEN SUBMISSION FILED THE ASSESSEE CONTENDED THA T THE ASSESSEE SOCIETY IS A PUBLIC TRUST REGISTERED UNDER THE BOMB AY PUBLIC TRUST ACT, 1950 VIDE REGISTRATION NO.F/2003 AHMEDABAD DATED 29 -08-1984. THE ASSESSEE TRUST IS ALSO REGISTERED U/S 12AA OF THE I T ACT VIDE REGISTRATION NO.HQ.III/32/G-3/85-86.IV DATED 10-12-1995. THE OBJ ECT OF THE ASSESSEE TRUST IS FOR PROMOTION OF PUBLIC RELIGIOUS PURPOSES AND IT MAY CARRY ON PRINTING AND PUBLICATION OF BOOKS. THE ASS ESSEE HAS SUBMITTED ALL THE DETAILS WHICH WERE PRODUCED BEFORE THE CIT( A)-XIII AS PER DIRECTION OF THE TRIBUNAL AND THAT ASSESSEE SOCIETY IS CARRYI NG ON PRINTING AND PUBLICATION OF BOOKS FOR GENERAL PUBLIC UTILITY AND IT IS NOT A PRIVATE RELIGIOUS TRUST OR FOR THE BENEFIT OF ANY INDIVIDUA L OR PARTICULAR GROUP OF PEOPLE. IT IS A PUBLIC TRUST. THE ASSESSEE RELIED T HE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE A SSOCIATION VS CIT 82 ITR 704 WHEREIN IT WAS HELD THAT OBJECT OF GENERAL PUBLIC UTILITY NEED NOT BE TO THE BENEFIT OF WHOLE MANKIND. IT IS SUFFICIENT IF INTENTION IS TO BENEFIT A WELL DEFINED SECTION OF P UBLIC AS DISTINGUISHED FROM AN INDIVIDUAL. IT WAS FURTHER CONTENDED THAT AS HAS BEEN MENTIONED BY THE AO THAT THE TRUST IS FALL ING UNDER RELIGIOUS PURPOSE AND THEREFORE, PROVISIONS OF SECTION 13 OF THE IT ACT ARE APPLICABLE, IS NOT CORRECT AND THE CASE LAW APPLIED BY THE AO IN THE CASE OF STATE BANK OF KERALA VS SHYANTI VERMA JAIN (MP) 231 ITR 787 HAS NO RELEVANCE IN THE PRESENT CASE IN WHICH CASE THE TRU ST IS MEANT FOR BENEFIT ITA NO.4080/AHD/2007 DDIT (EXEMPT), AHMEDABADD VS GUAJRAT SAHITYA PRAKAS H SOCIETY, AHMEDABAD 3 OF FOLLOWERS WITH PARTICULAR REFERENCE TO FAMILIES WHO CREATED THE TRUST. BUT IN THE CASE OF THE ASSESSEE, THE TRUST IS CREAT ED FOR THE BENEFIT OF PUBLIC AT LARGE. IN SUPPORT OF THIS CONTENTION, THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS CHANDRA CHARITABLE TRUST 206 CTR 418. 5. THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND THE MATERIAL ON RECORD DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE AND HELD THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE CARRIED OUT FOR BENEFIT OF PUBLIC AT LARGE, THEREFORE, THE CLAIM OF THE ASSESSEE U/S 11 OF THE IT ACT SHALL HAVE TO BE ALLOWED. THE FINDINGS O F THE LEARNED CIT(A) IN PARA 4. AND 4.1 ARE REPRODUCED AS UNDER: 4. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LEARNED AUTHORISED REPRESENTATIVE OF THE APPELL ANT ALONG WITH CASE LAW QUOTED BY HIM AND ALSO CAREFULL Y GONE THROUGH THE ORDER OF THE ASSESSING OFFICER AND HIS FINDINGS. IT IS VERY CLEAR IN THIS CASE THAT THE AP PELLANT TRUST CARRIED ON ACTIVITY OF PROVIDING AND PUBLISHI NG OF BOOKS MEANT FOR PUBLIC AT LARGE. A DETAILED LIST OF THE SAME HAS BEEN FILED BEFORE ME CLARIFYING THE CONTENTIONS OF BOOKS WHICH REVEAL THAT THE BOOKS AR E PUBLISHED TO IMPROVE THE QUALITY OF PEOPLE OF THE S OCIETY AND TO PROMOTE THE SPIRITUALITY AMONG THEM. IT ALSO INTENDS TO IMPROVE GENERAL ENVIRONMENT AMONG THE VARIOUS SECTIONS OF THE PEOPLE BY WAY OF CIRCULATIO N OF SPIRITUAL BOOKS. THE CONTENTS OF BOOKS ARE ALSO MEA NT TO CHANGE THE MIND AND HABITS OF THE PEOPLE FOR THE BETTERMENT OF THE SOCIETY AS A WHOLE. AS SUCH, THE ASSESSING OFFICERS FINDING THAT THE TRUST IS A PRI VATE RELIGIOUS TRUST WHICH DOES NOT ENSURE FOR THE BENEF IT OF THE PUBLIC IS NOT CORRECT. IT SEEMS FROM THE ENTIRE TY OF THE FACTS THAT THE TRUST IS NOT MEANT FOR THE MEMBE RS OF A PARTICULAR RELIGION OR PARTICULAR INDIVIDUALS ONL Y. THEREFORE, THE CLAIM OF EXEMPTION MADE BY THE TRUST UNDER SECTION 11 OF THE ACT CANNOT BE DISALLOWED, I N VIEW OF PROVISIONS OF SECTION 13(1) (B) OF THE IT A CT. 4.1 FROM THE ABOVE FACTS AND LOOKING TO THE ACTIVITIES OF THE TRUST, I FIND THAT THE ACTIVITIES OF THE ITA NO.4080/AHD/2007 DDIT (EXEMPT), AHMEDABADD VS GUAJRAT SAHITYA PRAKAS H SOCIETY, AHMEDABAD 4 TRUST ARE CARRIED OUT FOR THE BENEFIT OF PUBLIC AT LARGE. THEREFORE, THE CLAIM OF THE APPELLANT UNDER SECTION 11 OF RS.11,10,620/- IS HEREBY ALLOWED. 6. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND SUBMITTED THAT THE ASSESSEE HAS ADMITTED THAT IT HAS NOT DONE ANY CHARITABLE ACTIVITIES BUT ONLY DONE RELIGIOUS ACTIVITIES. THE ASSESSEE HA S PRINTED THE BOOKS FOR A PARTICULAR COMMUNITY I.E. CHRISTIAN. THEREFORE, T HE TRUST IS FALLING UNDER RELIGIOUS PURPOSES. THEREFORE, SECTION 13 OF THE IT ACT IS APPLICABLE IN THE CASE OF THE ASSESSEE. THE LEARNED DR SUBMITT ED THAT SINCE THE ASSESSEE TRUST WAS CREATED FOR THE BENEFIT OF ANY P ARTICULAR RELIGIOUS COMMUNITY, THEREFORE, THE AO WAS JUSTIFIED IN DENYI NG THE BENEFIT U/S 11 OF THE IT ACT. ON THE OTHER HAND, THE LEARNED COUNS EL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. SECTION 13(1) (A) AND (B) OF THE IT ACT PROVIDES - 13. (1) NOTHING CONTAINED IN SECTION 11 [OR SECTION 12 ] SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF T HE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF (A) ANY PART OF THE INCOME FROM THE PROPERTY HELD UNDER A TRUST FOR PRIVATE RELIGIOUS PURPOSES WHICH DOES NOT ENSURE FO R THE BENEFIT OF THE PUBLIC; (B) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSE S OR A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER THE COMMEN CEMENT OF THIS ACT, ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIG IOUS COMMUNITY OR CASTE; THE ACTIVITIES OF THE ASSESSEE TRUST ARE CARRIED OU T FOR THE BENEFIT OF PUBLIC AT LARGE BY PROVIDING THE BOOKS FOR GENERAL PUBLIC UTILITY. IT IS NOT DISPUTED THAT THE ASSESSEE IS A PUBLIC TRUST REGIST ERED UNDER THE BOMBAY PUBLIC TRUST ACT AND IS ALSO REGISTERED U/S 12AA OF THE IT ACT. THE OBJECT ITA NO.4080/AHD/2007 DDIT (EXEMPT), AHMEDABADD VS GUAJRAT SAHITYA PRAKAS H SOCIETY, AHMEDABAD 5 OF THE TRUST IS FOR PROMOTION OF PUBLIC RELIGIOUS P URPOSES AND IT MAY CARRY ON PRINTING AND PUBLICATION OF BOOKS. ACCORDING TO THE ASSESSEE, IT IS CARRYING ON PRINTING AND PUBLICATION OF BOOKS FOR G ENERAL PUBLIC UTILITY. IT IS, THEREFORE, NOT A PRIVATE RELIGIOUS TRUST FOR TH E BENEFIT OF ANY INDIVIDUAL OR FOR BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNIT Y BEING A PUBLIC TRUST. THE ASSESSEE TRUST CARRIED ON ACTIVITIES OF PROVIDI NG AND PUBLISHING OF BOOKS MEANT FOR PUBLIC AT LARGE. THE DETAILED LIST OF THE SAME HAS BEEN FILED IN THE PAPER BOOK FROM PAGES 4 TO 7 TO SHOW T HAT THE BOOKS ARE PUBLISHED TO IMPROVE QUALITY OF THE PEOPLE OF THE S OCIETY AND TO PROMOTE THE SPIRITUALITY AMONGST THEM. THE LIST SO MENTIONE D PROVIDES ABOUT ENGLISH BOOKS AND GUJARATI BOOKS WHICH ARE NOT MEAN T FOR A PARTICULAR RELIGIOUS COMMUNITY. THE LEARNED CIT(A) WAS, THEREF ORE, JUSTIFIED IN HOLDING THAT THE CONTENTS OF THE BOOKS ARE MEANT FO R THE BETTERMENT OF THE SOCIETY AS A WHOLE. THE AO WAS, THEREFORE, NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE TRUST IS A PRIVATE RELIGIOUS TRUS T AND WAS ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY. HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS CHANDRA CHARITABLE TRUS T (SUPRA) HAS HELD AS UNDER: CONCLUSION: IF THE OBJECTS OF T4HE ASSESSEE TRUST ARE NOT ONLY TO PROPAGATE JAINISM OR HELP AND ASSIST MAINTENANCE OF TEMPLE, SADHUS, SADHVIS, SHRAVIKAS AND SHRAVAKS, AND OTHER GOALS ARE ALSO SET OUT IN T HE TRUST DEED, THE TRUST IS A CHARITABLE AS WELL AS A RELIGIOUS TRUST, AND S. 13(1) (B) WOULD NOT BE APPL ICABLE. 8. IN THE CASE OF STATE OF KERALA VS M. P. SHANTI V ERMA JAIN (SUPRA) IT WAS NOTICED THAT THE DOMINANT PURPOSE OF THE TRUST WAS PROPAGATION OF THE JAIN RELIGION AND TO SERVE ITS F OLLOWERS AND ANY PART OF AGRICULTURAL INCOME OF THE TRUST SPENT IN T HE STATE OF KERALA ALSO COULD NOT BE TREATED AS ALLOWABLE ITEM OF EXPE NSE . 9. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE FINDINGS OF THE LEARNED CIT(A), WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS JUSTIFIED IN ITA NO.4080/AHD/2007 DDIT (EXEMPT), AHMEDABADD VS GUAJRAT SAHITYA PRAKAS H SOCIETY, AHMEDABAD 6 HOLDING THAT CLAIM OF EXEMPTION MADE BY THE ASSESSE E U/S 11 OF THE IT ACT CANNOT BE DENIED TO THE ASSESSEE BECAUSE THE PR OVISIONS OF SECTION 13(1) (A) AND 13 (1) (B) OF THE IT ACT WOULD NOT AP PLY TO THE CASE OF THE ASSESSEE. WE ACCORDINGLY, CONFIRM THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE DEPARTMENTAL APPEAL. 10. AS A RESULT, THE DEPARTMENTAL APPEAL IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 9-07-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 9-07-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD