M/s. Vallal M D Seshadri Trust, CHENNAI V. ADIT, CHENNAI

ITA 508/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4853 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 18-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR I VIJAYAKUMAR
• Assessee Lawyers: S SRIDHAR
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A.NOS. 508 & 509/MDS/2011 M/S. VALLAL M D SESHADRI TRUST, B4, CEEBROS RANGAM APARTMENTS, OLD NO.11/ NEW NO.32, CENOTAPH ROAD, TEYNAMPET, CHENNAI-600 018. PAN AABTV 2252 J VS. THE ASSISTANT DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI 34. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR RESPONDENT BY : DR. I. VIJAYAKUMAR, CIT-DR O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THESE TWO APPEALS ARE FILED BY THE ASSESSEE. THESE APPEALS ARE DIRECTED AGAINST THE ORDERS OF THE DIRE CTOR OF INCOME- TAX (EXEMPTIONS) AT CHENNAI DATED 26.11.2010. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) HAS REJECTED THE APPLICATIO NS PUT IN BY THE ASSESSEE FOR REGISTRATION UNDER SEC.12AA AND AP PROVAL UNDER SEC.80G. ITA 508 & 509/11 :- 2 -: 2. ONE OF THE OBJECTS STATED IN THE MEMORANDUM OF A SSESSEE- TRUST IS PRINTING AND PUBLISHING OF NEWSPAPERS. TH E DIRECTOR OF INCOME-TAX (EXEMPTIONS) HELD THAT THOSE ACTIVITIES ARE COMMERCIAL AND NOT CHARITABLE IN NATURE WITHIN THE MEANING OF SEC.2(15) OF THE INCOME-TAX ACT, 1961. HE HAS ALSO OBSERVED THAT TH E ASSESSEE- TRUST HAS AMENDED ONE OF ITS OBJECT CLAUSE WHICH IS NOT PERMISSIBLE. THE APPLICATIONS WERE REJECTED ON THE ABOVE GROUNDS. 3. IN OUR VIEW, PUBLISHING OF NEWSPAPERS AND PERIOD ICALS DOES NOT IPSO FACTO BECOME COMMERCIAL ACTIVITIES. IT IS ALSO POSSIBLE THAT PUBLISHING OF NEWSPAPERS AND PERIODICALS ARE C HARITABLE ACTIVITIES IF THOSE ACTIVITIES ARE COMMITTED TO PUB LIC CAUSE. THAT PUBLIC CAUSE MAY INCLUDE DISSEMINATION OF LITERACY, CULTURAL, SCIENTIFIC AND TECHNICAL KNOWLEDGE FOR THE BETTERME NT OF THE SOCIETY AND FOR THE PURPOSE OF EDUCATING THE SOCIET Y. WE FIND THAT PUBLISHING OF NEWSPAPERS CAN BE EITHER COMMERCIAL O R CHARITABLE ACTIVITY, BUT DEPENDING ON THE FACTS AND CIRCUMSTAN CES OF EACH CASE. 4. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) IN HIS O RDER HAS NOT STATED AS TO WHY HE HAS COME TO A FINDING THAT THE OBJECTS OF ITA 508 & 509/11 :- 3 -: THE ASSESSEE IN THE MATTER OF PRINTING AND PUBLISHI NG OF NEWSPAPERS ARE COMMERCIAL IN NATURE. THE GROUNDS L EADING TO THE ABOVE DECISION HAVE NOT BEEN DISCUSSED BY THE D IRECTOR OF INCOME-TAX (EXEMPTIONS) IN HIS ORDER. 5. LIKEWISE, TRUST DEED CAN BE AMENDED BY THE TRUST EES TO IMPROVE THE DELIVERANCE OF THE TRUST PROVIDED THE F OUNDERS ARE THE TRUSTEES AND THEY ARE ALIVE. IT IS ONLY WHERE THE FOUNDERS OF THE TRUST WERE NO MORE, THAT AMENDMENT IN THE TRUST DEE D CALLS FOR INTERFERENCE OF A CIVIL COURT. THEREFORE, THE SECO ND REASON POINTED OUT BY THE DIRECTOR OF INCOME-TAX (EXEMPTIO NS) ALSO DOES NOT SOUND GOOD TO REJECT THE APPLICATION FILED BY T HE ASSESSEE. 6. EVEN IF REGISTRATION WAS GRANTED UNDER SEC.12AA, THE APPLICABILITY OF SECTIONS 11 AND 12 HAS TO BE EXAMI NED BY THE ASSESSING AUTHORITY FROM ASSESSMENT YEAR TO ASSESSM ENT YEAR ON THE BASIS OF FACTS AND CIRCUMSTANCES RELATING TO EV ERY ASSESSMENT YEAR. 7. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) I S NOT JUSTIFIED IN REJECTING THE APPLICATIONS OF THE ASSESSEE FOR REGI STRATION UNDER SEC.12AA AND APPROVAL UNDER SEC. 80G. ITA 508 & 509/11 :- 4 -: 8. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) IS, THER EFORE, DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE-TRUS T UNDER SEC.12AA AND ALSO TO GRANT APPROVAL UNDER SEC.80G. 9. IN RESULT, THESE TWO APPEALS FILED BY THE ASSESS EE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING, ON THURSDAY, THE 16 TH DAY OF JUNE, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR.O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 16 TH JUNE, 2011 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR