M/s.OM SHAKTHI CHARITABLE TRUST, Trivandrum V. The CIT (Exemptions), Cochin

ITA 415/COCH/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7804 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 28-07-2016
• Assessment Year: misc
• Appeal Filed On: 24-07-2015
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: S RAJEEVCA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

ITA NO.4 15 /COCH/2015 1 , IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN . . , ., ! ! ! ! '# '# '# '# BEFORE S/SHRI B. P. JAIN, AM & GEORGE GEORGE K., JM $ $ $ $ ./ I.TA NO.415/COCH/2015 ( %& ' /ASSESSMENT YEAR : -) M/S. OM SHAKTHI CHARITBLE TRUST, POURNAMIKAVU, SISILIPURAM, VENGANOOR P.O., TRIVANDRUM-695 523 VS THE COMMISSIONER OF INCOME- TAX(EXEMPTIONS), KOCHI. ( () () () () /ASSESSEE APPELLANT) ( * ** * + + + + () ()() () /REVENUE -RESPONDENT) ( . . $ ./PAN NO. AAATO 2570O () , - /ASSESSEE BY SHRI S. RAJEEV,CA * + () , - /REVENUE BY SHRI SHANTAM BOSE, CIT(DR) ./ , 01 / DATE OF HEARING 28/07/2016 2' , 01 /DATE OF PRONOUNCEMENT 01/08/2016 3 3 3 3 /ORDER PER GEORGE GEORGE K., JM THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORD ER OF THE LD. CIT(EXEMPTIONS), KOCHI VIDE ORDER DATED 26-06-2015 PASSED U/S. 12AA OF THE INCOME TAX ACT, 1961. ITA NO.4 15 /COCH/2015 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(EXE MPTIONS),KOCHI REJECTING APPLICATION U/S. 12AA OF THE ACT IS AGAINST LAW, FA CTS AND CIRCUMSTANCES OF THE CASE. 2. THE REPLY FILED TO NOTICE DATED 23-2-2005 OF THE INCOME TAX OFFICER (EXEMPTIONS), THIRUVANANTHAPURAM HAS NOT BEEN CONSI DERED JUDICIOUSLY. 3. THE APPELLANT HAD TAKEN OVER THE TEMPLE POURN AMIKAVU, SITUATED AT SISILIPURAM, CHAVADINADA, VENGANOOR (PO) FOR THE DE VELOPMENT OF TEMPLE WHICH IN TURN FOR IN FUTURE IMPLEMENTATION AND ACHI EVEMENT OF THE OBJECTS PROVIDED IN THE TRUST DEED. 4. THE AUTHORITY BELOW HAVE ERRED IN FINDING THAT A PPELLANT TRUST HAD ONLY THE OBJECT OF OVERALL DEVELOPMENT OF POURNAMIKAVU TEMP LE FOR PROMOTION OF THE SPIRITUAL AND MORAL BEING OF THE BELIEVERS WHIC H IS INCORRECT. 5. APPELLANT TRUST, IN ITS INITIAL STAGE THROUGH IT S MG. TRUSTEE SMT. SINHA HAD DONATED WEDDING SREES AND TALEES TO (5) FIVE FINANC IALLY BACKWARD WOMEN EACH DURING THE SAMOOHA KALYAN FUNCTION HELD AT MAN ICKODE SRI MAHADEVER KSHTARAM, VEYYATTE, VENJARAMOODU, MANAGED BY TRAVAN CORE DEVASOM BOARD. THIS IS CHARITABLE ACTIVITY OF TRUST AND IS ONE OF THE OBJECTS LAID DOWN IN THE TRUST DEED AS CAN BE SEEN IN LAST PARA OF PAGE 5. HENCE THE FINDING THAT THE OBJECT OF THE TRUST IS LIMITED TO TEMPLE ONLY I S INCORRECT. 6. APPELLANT HAD ALREADY STARTED CHARITABLE ACTIVIT IES AND THAT EVEN OTHERWISE NON COMMENCEMENT OF CHARITY IS NOT A GROUND FOR DEN YING REGISTRATION U/S. 12AA OF THE ACT AS REPORTED IN 355 ITR 361 (DELHI), 354 ITR 219 (KER) AND BY THE HONBLE HIGH COURT OF KERALA REPORTED IN 247 ITR 18 (KER). HENCE THE REJECTION IS LIABLE TO BE CANCELLED. 7. THE FINDING OF THE AUTHORITY BELOW THAT THE ANN ADANAM IS PROVIDED TO THE DEVOTEES ONLY IS INCORRECT. ANNADANAM IS PROVIDED T O EVERY PERSON IRRESPECTIVE OF CASTE, CREED, SEX, RELIGION, SOUND OR POOR WHICH IS A CHARITABLE SERVICE WHETHER THEY ARE BELIEVERS OR NOT. 8. BEING THE INITIAL STAGE, TEMPLE IS OPENED ONLY ON POURNAMY DAY, AND DEVELOPMENT OF THE TEMPLE IS INEVITABLE TO ACHIEVE THE OBJECTS OF THE TRUST. SO MANY OBJECTS ARE PROVIDED IN THE DEED ARE INTENDED TO CARRY OUT BY TIME TO TIME WHICH ARE PUBLIC UTILITY ENTITLED FOR REGISTRA TION AS REPORTED IN 364 ITR 164 (GUJ) AND 295 ITR 561 (SC). ON A PERUSAL OF OVERALL OBJECTS IT CAN BE SEEN THAT ITA NO.4 15 /COCH/2015 3 OBJECTS ARE FOR THE PUBLIC IN GENERAL AND THAT OF T HE ACTIVITIES ARE SEEN PROPOSED BY GOVERNMENT OF INDIA IN THE INTEREST OF PUBLIC IN GENERAL FROM TIME TO TIME. THE FINDING THAT THE NUMBER OF OBJECTS ARE NOT INTENDED FOR CARRYING OUT IS INCORRECT AND THAT NUMBERS OF OBJECTS PROVID ED IN A DEED MAY NOT BE A GROUND FOR REJECTION OF APPLICATION U/S. 12AA OF TH E ACT. THE AUTHORITY BELOW OUGHT TO HAVE GRANTED REGISTRATION BASED ON OBJECTS OF TRUST. IN VIEW OF THE ABOVE GROUNDS AND OTHERS TO BE SUBMI TTED AT THE TIME OF HEARING IT IS MOST HUMBLY PRAYED THAT THE HON TRIB UNAL MAY KINDLY BE PLEASED TO ALLOW THE APPEAL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE T RUST IS CREATED AS PER THE TRUST DEED REGISTERED WITH THE SUB REGISTRAR, KOLLA M ON 24/11/2014 AND HAS FILED AN APPLICATION IN THE PRESCRIBED FORM NO.10A ON 19/ 12/2014 REQUESTING REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961. THE LD. CIT(EXEMPTIONS) BY READING THE TRUST DEED WAS OF THE VIEW THAT THE MAI N OBJECTIVE OF THE TRUST IS DEVELOPMENT OF A TEMPLE POURNAMIKAVU, SISILIPURAM , VENGANOOR, TRIVANDRUM FOR THE PROMOTION OF THE SPIRITUAL AND MORAL WELL B EING OF THE BELIEVERS AND ACCORDINGLY HELD THAT THE APPLICANT IS NOT ELIGIBLE TO BE REGISTERED AS A CHARITABLE TRUST AS PER THE PROVISIONS OF SECTION 2 (15) OF THE INCOME TAX ACT AND FURTHER HELD THAT THE ACTIVITIES AND THE GENUINENES S OF THE TRUST COULD NOT BE ESTABLISHED AND REFUSED TO REGISTER THE TRUST U/S. 12AA OF THE ACT AND ACCORDINGLY, REJECTED THE APPLICATION OF THE ASSESS EE-TRUST. 4. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESS EE THAT THE LD. CIT(EXEMPTIONS) HAS NOT POINTED OUT EVEN A SINGLE EXPENDITURE INCUR RED SPECIFICALLY FOR RELIGIOUS ITA NO.4 15 /COCH/2015 4 PURPOSE WHICH IS NOT OF CHARITABLE IN NATURE. AS PE R SECTION 80G(5B) AND EXPLANATION 3, RELIGIOUS EXPENDITURE CANNOT EXCEED 5% OF THE TOTAL INCOME. THE RELEVANT SECTION AND EXPLANATION IS REPRODUCED HERE INBELOW: (5B) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( II) OF SUB-SECTION (5) AND EXPLANATION 3, AN INSTITUTION OR FUND WHICH INCURS EXPENDITURE, DURING ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE FOR A N AMOUNT NOT EXCEEDING FIVE PER CENT OF ITS TOTAL INCOME IN THAT PREVIOUS YEAR SHALL BE DEEMED TO BE AN INSTITUTION OR FUND TO WHICH THE PROVISIONS OF T HIS SECTION APPLY. EXPLANATION 3 IN THIS SECTION CHARITABLE PURPOSE DOES NOT INCLUDE ANY PURPOSE THE WHOLE OR SUBSTANTIALLY THE WHOLE OF WHI CH IS OF A RELIGIOUS NATURE. THE LD. CIT(EXEMPTIONS) HAS NOT PASSED A SPEAKING O RDER IN THIS REGARD. THE PROVISIONS OF SECTION 13 HAVE NOT BEEN INVOKED BY T HE LD. CIT(EXEMPTIONS). 5. THE LD. DR ON THE OTHER HAND RELIED UPON THE OR DER OF THE LD. CIT(EXEMPTIONS). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. AS PER SECTION 80G(5B) READ WITH EXPLANATION 3 OF THE ACT, IT IS EVIDENT THAT ANY INSTITUTION OR FUND WHICH HAS INCURRED EXPENDITURE DURING THE PREVIOUS YEAR AND IS RELIGIOUS IN NATURE, SUCH EXPENDITURE SHALL BE DEEM ED TO BE EXPENDITURE TO WHICH PROVISIONS OF SECTION 80G(1) SHALL NOT APPLY. IN THE PRESENT CASE, THE LD. CIT(EXEMPTIONS) HAS NOT POINTED OUT EVEN A SINGLE E XPENDITURE WHICH HAS BEEN INCURRED FOR RELIGIOUS NATURE. HE HAS NOT SPOKEN E VEN A SINGLE WORD ABOUT SECTION 80G(5B) AND EXPLANATION 3 OF THE ACT. THER E IS NO FINDING THAT THE ITA NO.4 15 /COCH/2015 5 ASSESSEE HAS SERVED THE PURPOSE OF A PARTICULAR COM MUNITY AND THE PURPOSE WOULD BE HIT BY THE PROVISIONS OF SECTION 13(1)(B) OF THE ACT. THE REVENUE DID NOT MAKE OUT A CASE FOR SECTION 13(1)(B) OF THE ACT OR ANY OTHER CLAUSE OF THIS SECTION. IN OUR VIEW, ANY INSTITUTION OR FUND IN I NDIA CAN HAVE RELIGIOUS AS WELL AS CHARITABLE PURPOSE. RELIEF AND HELP TO THE POOR, M EDICAL HELP TO THE NEEDY, LOOKING AFTER OF DEITY AND TEMPLES ARE FOR RELIGIOU S PURPOSES BUT THEY ARE ALSO CONSIDERED AS CHARITABLE IN INDIA. THE LD. CIT(E) HAS NOT EXAMINED THESE ASPECTS IN THE RIGHT PERSPECTIVE AND THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE TO THE FILE OF THE LD. CIT(EXEM PTIONS) TO DECIDE THE ISSUE DE NOVO IN ACCORDANCE WITH OUR FINDINGS HEREINABOVE BU T AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . ACCORDINGLY, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01-08-2016. SD/- SD/ - ( . . ) (B. P. JAIN) ( . ) (GEORGE GEORGE K.) /ACCOUNTANT MEMBER ! /JUDICIAL MEMBER ( /PLACE: /COCHIN 5 /DATED: 1 ST JULY, 2016 GJ/ ITA NO.4 15 /COCH/2015 6 3 , * 0 6 76'0 /COPY TO: 1. () / M/S. OM SHAKTHI CHARITBLE TRUST, POURNAMIKAVU, SIS ILIPURAM, VENGANOOR P.O., TRIVANDRUM-695 523 2. .8 0 ( )/THE COMMISSIONER OF INCOME-TAX(EXEMPTIONS), KOCHI 3. .8 0 /THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS), TRIVA NDRUM. 4. 69: * 0 , /THE DR/ITAT, COCHIN BENCH. 5. :< =/ /GUARD FILE. 3. /BY ORDER > /ASSISTANT REGISTRAR / . ?1 . @ . ?1 ., /I.T.A.T., COCHIN