Divyavani Trust, Hyderabad V. Commissioner of Income Tax, (Exemptions), Hyderabad

ITA 50/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6365 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-A
• Assessment Year: misc
• Appeal Filed On: 12-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12AA; 250; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A”, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA No.50/Hyd/2020 Divyavani Trust, Hyderabad. PAN: AADTD 2316 F Vs. Commissioner of Income Tax (Exemptions), Hyderabad. (Appellant) (Respondent) Assessee by: Shri K.C. Devdas Revenue by: Shri B. Balakrishna, DR Date of hearing: 11/10/2021 Date of pronouncement: 15/12/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: This appeal is filed by the assessee against the order of the Ld. CIT (Exemptions), Hyderabad in appeal F.No. CIT(E)/Hyd/48(05)/12A/2019-20, dated 25/11/2019 passed U/s. 12AA(1)(b)(ii) of the Act. 2. The assessee has raised nine grounds in its appeal however, the crux of the issue is that: “The Ld. CIT (Exemptions) has erred by not granting registration to the assessee Trust U/s. 12AA of the Act.” 2 3. The brief facts of the case are that the assessee-Trust filed an application in Form 10A seeking registration U/s. 12AA of the Act. On perusing the case of the assessee, the Ld. CIT (E) held that the applicant Trust is not eligible for grant of registration U/s. 12AA of the Act and therefore, the Form 10A filed by the assessee Trust was rejected. The Ld. CIT (E) had made the following observation while rejecting the application filed by the assessee for granting of registration U/s. 12AA of the Act: (i) The assessee-Trust is engaged in both religious activity as well as charitable activity and therefore the assessee is not eligible for registration under 12AA of the Act. (ii) The assessee-Trust had made payment towards the expenditure relating to the company owned by one of the Trustee. (iii) The assessee-Trust has also paid remuneration to the Film Directors and several other persons like Actors, Musicians and Editors who are not related to the Trust’s activity which is in violation of section 13 of the Act. (iv) The Assessee-Trust are organising channel shows and programmes including family shows for which the services are rendered by the Actors, Musicians and Editors for whom the payments are made by the assessee-Trust. 3 4. At the outset, the Ld. AR submitted before us that the assessee- Trust is engaged in religious activities cum charitable activities and for such mixed activities the assessee Trust is entitled for grant of registration U/s.12AA of the Act. The Ld. AR further referred to the decision rendered by the Hon’ble Andhra Pradesh High Court in the case CIT vs. Social Service Centre reported in 250 ITR 39 (AP) wherein it was held that a Trust engaged in mixed activities such as religious activity and charitable activity is entitled for registration U/s. 12AA of the Act. The Ld. AR further vehemently argued stating that the observation of the Ld. CIT (A) that the assessee had expended money not for the purpose of the assessee Trust is incorrect and therefore, none of the provisions of section 13 of the Act was violated. It was therefore pleaded that the Ld. CIT (E) may be directed to grant registration to the assessee Trust U/s. 12AA of the Act. The Ld. DR on the other hand relied on the order of the Ld. CIT (E) and prayed for confirming the same. 5. We have heard the rival submissions and carefully perused the materials on record. On examining the paper book filed by the assessee we find that the assessee Trust has not produced before us the statement of accounts of the assessee for the AY 2020-21 i.e, during the period when the Ld. CIT (E) has examined the affairs of the assessee. The assessee has filed its receipts and payments account for the period 4 1/4/2018 to 31/3/2019 relating to the AY 2019-20. On examining the receipts and payments for the AY 2019-20, we do not find any expenditure incurred by the assessee which is not for the mixed objects of the assessee-Trust. Further, as held by the Hon’ble Jurisdictional Hon’ble Andhra Pradesh High Court in the case CIT vs. Social Service Centre reported in 250 ITR 39 (AP) the Assessee-Trust’s application in Form 10A cannot be rejected for the sole reason that the assessee Trust is having both religious and charitable objects. On perusing the objects of the assessee-Trust which are extracted in the order of the Ld. CIT (E), We find that the objects of the assessee Trust are both religious activity as well as charitable activity, in the nature of advancement of any other objects of general public utility. However, the scope of the objects in the clauses viz., “(c) to provide clean entertainment that inspires proclamation of good news to all Telugu Speaking people by using all forms of media based on values of justice and morals, and “(g) to produce audio and video productions like films, documentaries, docudramas, short films, Tele-serials, TV Shows and Public Service Announcements”, appears to be have elusive meaning and therefore it requires further explanation. Hence, in the interest of justice, We hereby remit the entire matter back to the file of the Ld. CIT(E) in order to re- examine the issues in detail and also to examine the financials of the assessee Trust for the assessment year 2020-21 & onwards and thereafter decide the matter afresh in accordance with merit and law. 5 6. In the result, appeal of the assessee is allowed for statistical purpose as indicated herein above. Pronounced in the open Court on 15 th December, 2021. Sd/- Sd/- (CHANDRA MOHAN GARG) (A. MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 15 th December, 2021. OKK Copy to:- 1) Divyavani Trust, 3-4-97, St. John’s Regional Seminary Campus, Ramanthapur, Hyderabad – 500 013. 2) Commissioner of Income Tax (Exemptions), 2 nd Floor, Aayakar Bhavan, Hyderabad. 3) The DR, ITAT, Hyderabad 4) Guard File