Kankubia Manganlal Ji Charitable Trust, Eluru V. THE CIT, Rajahmundry

ITA 433/VIZ/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2110 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 30-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Assessee Lawyers: SIVA PRASAD
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

ITA NO.433/VIZAG/2014 KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , ' BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.433/VIZAG/2014 ( / ASSESSMENT YEAR : 2014-15) KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU VS. CIT RAJAHMUNDRY [ PAN: AAVTK3269J ] ( ) / APPELLANT) ( *+) / RESPONDENT ) ! / APPELLANT BY : SHRI SIVA PRASAD, AR $% ! / RESPONDENT BY : SHRI G. GURUSWAMY, DR ! ) / DATE OF HEARING : 18.12.2015 ! ) / DATE OF PRONOUNCEMENT : 28.01.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) VISAKHAPATNAM DATED 29.4.2014 FOR THE ASSESS MENT YEAR 2014-15. ITA NO.433/VIZAG/2014 KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE TRUST NAMEL Y SMT. KANKUBAI MAGANLALJI CHARITABLE TRUST, FILED AN APPLICATION I N FORM NO.10A FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER CALLED AS THE ACT) ON 23.10.2013 WITH THE FOLLOWING OBJECTS : 1. TO FEED, PROTECT AND TAKE CARE OF COWS, CALVES, BUL LS ETC., SHOW JEEVADAYA TOWARDS ALL BEING, EXTEND ALL KINDS OF SUPPORT BY E ITHER BY WAY OF FINANCE OR OTHER WISE TO THE INSTITUTIONS PROTECTING COWS AND ALSO TO EXTEND THE BEST POSSIBLE SUPPORT ON NEED BASIS TO SATYAM SHIVAM SUN DARAM GONIWAS WHICH IS ENGAGED IN THE ACTIVITY OF TAKING CARE OF COWS. 2. TO IMPROVE, CONSTRUCT, RUN AND MAINTAIN A TEMPLE BY NAME SRI NEMISHWAR AMBAJIDHAM AT HYDERABAD. 3. TO ESTABLISH, MAINTAIN AND RUN INSTITUTIONS FOR DIS ABLED, TO PROVIDE BASIC AMENITIES SUCH AS FOOD, CLOTHING AND EDUCATION TO T HEM. 4. TO ESTABLISH MAINTAIN AND RUN HOSPITALS, SCHOOLS ET C. 5. TO DONATE TO SIMILAR INSTITUTIONS HAVING SIMILAR OB JECTS. 6. THE BENEFITS OF THE TRUST ARE OPEN TO ALL IRRESPECT IVE OF CASTE, RELIGION AND SEX ETC. 7. GENERALLY TO DO SUCH ACTS, DEEDS AND OTHER THINGS W HICH ARE INCIDENTAL UNDER CONDUCTS TO THE ATTAINMENT OF ALL OR ANY OF THE ABO VE OBJECTS. 3. THE LD. CIT AFTER CONSIDERING THE ABOVE OBJECTS HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT ON THE GROUND THAT THE ASSESSEE TRUST IS HAVING MIXED OBJE CTS I.E. THE RELIGIOUS AS WELL AS CHARITABLE ACTIVITIES. HE ALSO OBSERVED THAT ASSESSEE HAS ADVANCED CERTAIN AMOUNTS AND NO INTEREST WAS RECEIV ED. WITH THE ABOVE OBSERVATIONS THE CLAIM OF THE ASSESSEES REGI STRATION U/S 12AA OF THE ACT IS REJECTED. ITA NO.433/VIZAG/2014 KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU 3 4. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE ASSESSEE IS A CHARITABLE TRUST CREATED FOR THE PURPOSE TO CARRY OUT RELIGIOUS ACTIVITIES AS WELL AS CHARITABLE ACTI VITIES PARTICULARLY TO CONSTRUCT AND MAINTAIN A TEMPLE, FEEDING, PROTECTIN G AND TAKING CARE OF THE CALVES, COWS, BULLS AND SHOWING JEEVADAYA TOWAR DS ALL BEING AND CHARITABLE AND OTHER OBJECTS. 5. HE HAS SUBMITTED THAT ASSESSEE IS ENTITLED FOR T HE REGISTRATION U/S 12AA OF THE ACT. 6. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE IS MA INTAINING THE TEMPLE BY RECEIVING HUNDI COLLECTIONS AND SOME INTE REST INCOME AND THE SAME WAS INCURRED FOR THE PURPOSE OF MAINTENANCE OF TEMPLE AS WELL AS COW FEEDING EXPENSES. THE ASSESSEE IS IN THE BEGIN NING STAGE OF ITS OPERATIONS AND THEREFORE NOT ABLE TO EXPAND FULLY T O CARRY OUT THE CHARITABLE ACTIVITY. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE KARNAKATA HIGH COURT JUDGEMENT IN THE CASE OF SANJEEVAMMA HAN UMANTHE GOWDA CHARITABLE TRUST VS. DIRECTOR OF INCOME-TAX (EXEMPT IONS) 285 ITR 327 AND ALSO RELIED ON THE JUDGEMENT OF DIRECTOR OF INC OME TAX (EXEMPTIONS) VS. SEERVI SAMAJ TAMBARAM TRUST 362 IT R 199 (MADRAS). ITA NO.433/VIZAG/2014 KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU 4 7. ON THE OTHER HAND, THE LD. D.R. HAS STRONGLY SUP PORTED THE ORDER PASSED BY THE LD. COMMISSIONER. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS A RELIGIOUS AND CHARITABLE TRUST. THE OBJECTS AS ALREADY MENTI ONED ABOVE ARE RELIGIOUS AS WELL AS CHARITABLE IN NATURE. THE ASS ESSEE IS ALREADY RUNNING A TEMPLE AND INCURRING EXPENDITURE FOR COW FEEDING. THEREFORE, THE ASSESSEE IS CARRYING ITS ACTIVITIES AS PER THE OBJE CTS OF THE TRUST DEED. THE MAIN OBJECTION RAISED BY THE CIT IS THAT THE AC TIVITIES OF THE ASSESSEE ARE RELIGIOUS AS WELL AS CHARITABLE, THERE FORE IS NOT ELIGIBLE. WE FIND THE OBJECTION RAISED BY THE LD. COMMISSIONER I S NOT SUSTAINABLE IN THE EYES OF LAW. IN THIS CONTEXT, THE HONBLE MADR AS HIGH COURT IN THE CASE OF SEERVI SAMAJ TAMBARAM TRUST (SUPRA) HAS HE LD THAT SECTION 12AA OF THE ACT DOES NOT MAKE ANY DIFFERENCE BETWEE N TRUST CREATED WITH CHARITABLE OBJECTS AND THOSE WITH RELIGIOUS PU RPOSE AND EVEN IF THE TRUST WAS CREATED WITH BOTH THE OBJECTS, LAW DOES N OT MAKE ANY DISQUALIFICATION FOR TRUST TO MAKE AN APPLICATION F OR REGISTRATION. IN THE CASE OF SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRU ST (SUPRA) THE HONBLE KARNATAKA HIGH COURT HAS CONSIDERED THE SCO PE OF SECTION 12AA OF THE ACT AND OBSERVED THAT FOR THE PURPOSE OF REG ISTRATION U/S 12AA OF ITA NO.433/VIZAG/2014 KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU 5 THE ACT, THE AUTHORITIES HAVE TO SATISFY IS THE GEN UINENESS OF THE ACTIVITIES OF TRUST OR INSTITUTION THAT HOW THE INC OME DERIVED FROM THE TRUST PROPERTY IS APPLIED TO CHARITABLE OR RELIGIOU S PURPOSE AND NOT THE NATURE OF THE ACTIVITY BY WHICH THE INCOME IS DERIV ED BY THE TRUST. 9. IN THE PRESENT CASE, THE ASSESSEE TRUST WAS CREA TED WITH CHARITABLE AS WELL AS RELIGIOUS OBJECTS AND IT IS CARRYING BOT H THE ACTIVITIES. THIS WAS NOT DOUBTED BY THE COMMISSIONER. IN SO FAR AS CERTAIN FUNDS ADVANCED TO OTHER PARTIES, HE HAS DOUBTED THAT INTE REST HAS NOT BEEN RECEIVED. HOWEVER, THE LD. COUNSEL ALREADY SUBMITT ED BEFORE THE CIT THAT INTEREST INCOME IS RECEIVED IN SUBSEQUENT YEAR . THE CIT WITHOUT CONSIDERING THE SAME, SIMPLY DOUBTED THE TRANSACTIO N. IN ANY CASE, THIS DOUBT OF THE COMMISSIONER DOES NOT TAKE AWAY FOR GR ANTING REGISTRATION U/S 12AA OF THE ACT. WE FIND THAT THE ASSESSEE IS CARRYING CHARITABLE AS WELL AS RELIGIOUS ACTIVITIES. THE SOURCE OF INCOME IS DONATIONS, HUNDI COLLECTIONS, SOME INTEREST INCOME. THE SAME INCOME RECEIVED BY THE TRUST IS SPENT FOR THE PURPOSE OF MAINTAINING TEMPL E AS WELL AS COW FEEDING. THUS, THE ASSESSEE IS DESERVED FOR REGIST RATION U/S 12AA OF THE ACT. ACCORDINGLY, KEEPING IN VIEW OF THE JUDGEMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF SEERVI SAMAJ TAMBA RAM TRUST (SUPRA) AND ALSO HONBLE KARNATAKA HIGH COURT IN THE CASE O F SANJEEVAMMA ITA NO.433/VIZAG/2014 KANKUBAI MAGANLALJI CHARITABLE TRUST, ELURU 6 HANUMANTHE GOWDA CHARITABLE TRUST (SUPRA), WE QUASH THE ORDER PASSED BY THE LD. COMMISSIONER AND GRANT THE REGIST RATION U/S 12AA OF THE ACT AND ORDERED ACCORDINGLY. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH JAN16. SD/- SD/- ( . ) (. ) ( G. MANJUNATHA) ( V. DURGA RAO ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER - /VISAKHAPATNAM: 1 / DATED : 28.01.2016 VG/SPS ! $ 3- 4-/ COPY OF THE ORDER FORWARDED TO :- 1. / THE APPELLANT SMT. KANKUBAI MAGANLALJI CHARITABLE TRUST, D.NO.3A- 16-6, OPP. KANYAKA PARAMESWARI CHOWLTRY, NEAR PERUG U CHETTU, ONE TOWN, ELURU- 534 001. 2. $% / THE RESPONDENT THE CIT, RAJAHMUNDRY 3. 7 () / THE CIT(A), RAJAHMUNDRY 4. - $ :, ) : , - / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // >? : ( SR.PRIVATE SECRETARY ) ) : , - / ITAT, VISAKHAPATNAM