Jesus Christ of Nazareth Ministries International Church, Hyderabad V. Commissioner of Income Tax, (Exemptions), Hyderabad

ITA 423/Hyd/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7160 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-03-2019
• Assessment Year: misc
• Appeal Filed On: 28-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 423/HYD/2018 JESUS CHRIST OF NAZARETH MINISTRIES INTERNATIONAL CHURCH, HYDERABAD [PAN: AACTJ6867C] VS COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI Y.V.S.T. SAI, DR DATE OF HEARING : 26-03-2019 DATE OF PRONOUNCEMENT : 05-04-2019 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS)-HYDERABAD, D ATED 29-12-2017, REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION U/S. 12AA OF THE INCOME TAX ACT [ACT]. 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE IS A T RUST FORMED ON 10-05-2016 BY TRUST DEED DT. 10-05-2016. IT FILED APPLICATION IN FORM 10A ON 15-06-2017 BEFORE THE CIT(EXEMPTIONS), SEEKING REGISTRATION U/S. 12AA OF THE ACT. THE ASSESSEE WAS ASKED TO PRODUCE COPY OF THE ORIGIN AL TRUST DEED ALONG WITH DETAILS MENTIONED IN THE NOTICE DT. 06-07-2017. THE ASSESSEE THROUGH ITS FOUNDER TRUS TEE, ITA. NO. 423/HYD/2018 :- 2 -: APPEARED BEFORE THE CIT(EXEMPTIONS), BUT FAILED TO PROD UCE THE DETAILS CALLED EXCEPT FOR THE TRUST DEED. THE CIT(EXEMPTI ONS) OBSERVED THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMEN T TO ESTABLISH THE GENUINENESS OF THE ACTIVITIES CARRIED ON BY THE ASSESSEE. HE OBSERVED THAT AS PER THE TRUST-DEED, ONLY TWO PEOPLE ARE THE TRUSTEES, WHO ARE BOTH HUSBAND AND WIFE AND THAT THOUGH THE TRUST DEED ALLOWED FIVE TRUSTEES TO BE APPOINTED, ONLY TWO TRUSTEES WERE THERE. THEREFORE, HE WAS OF THE OPINION THAT THE TRUST IS NOTHING BUT A FAMILY TRUST. HE ALSO OBSERVED THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUI NENESS OF ANY ACTIVITY CARRIED ON BY IT. THEREFORE, HE TRE ATED IT AS A FAMILY TRUST AND DENIED REGISTRATION U/S. 12AA OF THE AC T. 2.1. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT WHILE CONSIDERING THE APPLICATION U/S. 12AA OF THE AC T, CIT(EXEMPTIONS) IS REQUIRED TO CONSIDER ONLY THE OBJE CTS OF THE TRUST AND IF THEY ARE CHARITABLE IN NATURE, THE REGISTRATIO N CANNOT BE DENIED. HE SUBMITTED THAT THE TRUST DEED PROVIDES FOR FIVE TRUSTEES BUT SINCE THE ASSESSEE-TRUST HAS NOT S TARTED ITS ACTIVITIES, ONLY TWO TRUSTEES WERE APPOINTED, AND IT CAN NOT BE CONSIDERED AS A DISCREPANCY TO DENY THE REGISTRATION. HE ALSO FILED AMENDED TRUST DEED DT. 28-11-2017 TO SUBMIT THAT THE Y WERE IN ACCORDANCE WITH LAW U/S. 13(1)(C) R.W.S. 11( 5) OF THE ACT. 4. LD.DR, ON THE OTHER HAND, FILED WRITTEN SUBMISSIONS AND SUBMITTED THAT THE TRUST APPEARS TO BE A RELIGIOUS TRUST AND THEREFORE, CANNOT BE GRANTED REGISTRATION U/S. 12AA OF THE ACT. ITA. NO. 423/HYD/2018 :- 3 -: HE PLACED RELIANCE UPON VARIOUS CASE LAW AND HAS AL SO FILED COPIES OF THE SAME BEFORE US. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS FILED AN APPLIC ATION UNDER FORM 10A, IMMEDIATELY ON ITS FORMATION AND THER EFORE, IT COULD NOT HAVE CARRIED ON ANY ACTIVITIES TO FILE DOCUME NTS IN SUPPORT OF SUCH ACTIVITIES. U/S. 12AA OF THE ACT, WHEN A N ASSESSEE HAS MADE AN APPLICATION FOR REGISTRATION, THE CIT(EXEMPTIONS) IS REQUIRED TO EXAMINE WHETHER THE OBJE CTIVES OF ASSESSEE ARE CHARITABLE IN NATURE OR NOT. AS HELD BY VARIOUS HON'BLE COURTS, THE GENUINENESS OF ACTIVITIES AND THE ALLOWABILITY OF EXEMPTION U/S. 11 WOULD ONLY BE AT THE TIME OF ASSESSMENTS AND NOT AT THE TIME OF REGISTRATION. THE CIT(EXEMPTIONS) HAS NOT COMMENTED UPON THE OBJECTIVES OF THE ASSESSEE-TRUST AT ALL. THEREFORE, WE ARE OF THE OPINI ON THAT THE APPLICATION OF THE ASSESSEE NEEDS RE-CONSIDERATION BY THE CIT(EXEMPTIONS) AND ACCORDINGLY THE ISSUE IS SET ASID E TO THE FILE OF CIT(EXEMPTIONS) WITH A DIRECTION TO LOOK IN TO THE OBJECTIVES OF ASSESSEE-COMPANY FOR GRANT OF REGISTRATIO N U/S. 12AA OF THE ACT. NEEDLESS TO MENTION THAT ASSESSEE SHAL L BE GIVEN A FAIR OPPORTUNITY OF HEARING. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED A S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2019 SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED 5 TH APRIL, 2019 TNMM ITA. NO. 423/HYD/2018 :- 4 -: COPY TO : 1. JESUS CHRIST OF NAZARETH MINISTRIES INTERNATION AL CHURCH, FLAT NO. 202, H.NO. 6-3-562/10, ERRAMANZIL COLONY, HYDERABAD. 2. THE COMMISSIONER OF INCOME TAX(EXEMPTIONS), HYDERABAD. 3. ADDL.CIT(EXEMPTIONS)-HYDERABAD. 4. D.R. ITAT, HYDERABAD. 5. GUARD FILE.