JSK CHARITABLE TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 5104/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4446 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 01-12-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 09-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Keywords: Gift; Charitable institution; Benefit of exemption
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. 5104/MUM/2013 JSK CHARITABLE TRUST, C/O. D.C.BOTHRA & CO.,(CA), 297, TARDEO ROAD, WILLE MANSION, 1 ST FLOOR, OPP. BANK OF INDIA, NANA CHOWK, MUMBAI 400007 PAN: AABTJ 5988R ... APPELLANT VS. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400012 .... RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI ALOK JO HRI DATE OF HEARING : 04/01/2016 DATE OF PRONOUNCEMENT : 06/01/2016 ORDER PER JASON P. BOAZ, A.M: THIS APPEAL BY THE ASSESSEE TRUST IS DIRECTED AGA INST THE ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS), MUMBAI ( I N SHORT DIT(E)) PASSED UNDER SECTION 12AA(1)(B)(II) R.W.S. 12A OF T HE INCOME TAX ACT, 1961 (IN SHORT THE ACT), REJECTING THE ASSESSEES APPLICATION OR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. 2. IN THE INSTANT APPEAL, THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS:- 2 ITA NO. 5104/MUM/2013 1. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. DIRECTOR OF INCOME TAX (EXEMPTIONS) HAS ERR ED IN REJECTING THE APPLICATION FOR REGISTRATION OF THE APPELLANT T RUEST U/S.12A OF THE I.T. ACT, 1961. 2. THAT THE REGISTRATION APPLICATION HAS BEEN REJEC TED BY THE LD. DIRECTOR OF INCOME TAX (EXEMPTIONS) FOR THE WRONG R EASONS AND DUE TO ERRONEOUS INTERPRETATION & APPLICATION OF T ERM RELIGIOUS & CHARITABLE PURPOSES AND IS CONTRARY TO THE PROVISIO NS OF SECTION 12A. 3. THAT APPELLANT CRAVES THE LEAVE TO AMEND, ALTER, SUBSTITUTE AND OR TO RAISE NEW OR ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. THIS APPEAL WAS EARLIER FIXED FOR HEARING ON VAR IOUS DATES AND NONE APPEARED ON BEHALF OF THE ASSESSEE. ON CERTAI N DATES WHEN THE BENCH DID NOT FUNCTION, THE MATTER WAS ADJOURNED TH ROUGH NOTICE BOARD. WHEN THE CASE WAS FINALLY FIXED FOR HEARING TODAY I.E. ON 04/01/2016, NONE WAS PRESENT ON BEHALF OF THE ASESS EE, BUT THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVE NUE WAS PRESENT. 4.1 THE CASE WAS HEARD WITH THE ASSISTANCE OF THE L D. DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVENUE AND IS DI SPOSED OFF ON THE BASIS OF THE MATERIAL ON RECORD. THE LD. CI(A) WHI LE REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTI ON 12AA(1)(B)(II) OF THE ACT, HAS HELD AS UNDER:- 3. AS PER THE PROVISIONS OF SECTION 12AA(1)(B), A TRUST IS TO BE GRANTED REGISTRATION IF THE COMMISSIONER IS SATISFIED ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. BOTH THESE REQUI REMENTS ARE CUMULATIVE AND NOT ALTERNATIVE. IT IS SEEN FROM PERUSAL OF TRUST D EED THAT THE APPLICANT TRUST HAS MIXED CHARITABLE AND RELIGIOUS OBJECTS SUCH AS BUILDING AND MANAGEMENT OF PLACES' OF WORSHIP, TEMPLES, RENOVATION OF TEMPL ES, SERVICE OF IDOLS FOR INSTALLATION, CONSECRATION AND WORSHIP, GIFTS TO ID OLS ALREADY INSTALLED, ERECTION AND MANAGEMENT OF UPASRAYS, BHOJANSHALAS, AMBILSHALAS, SADUVRAT ETC. IT IS NOW WELL SETTLED THAT WHERE THERE IS AN ADMIXTURE OF CHARITABLE AND 3 ITA NO. 5104/MUM/2013 RELIGIOUS OBJECTS, A TRUST MAY GET DISQUALIFIED ON THE GROUND THAT IT IS FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. RELIAN CE IS PLACED IN THIS REGARD ON THE JUDICIAL PRECEDENTS IN THE CASES OF STATE OF KERALA V. M.P. SHANTI VERMA JAIN 231 ITR 787 (SC) AND GULAM MOHIDIN TRUST V. CIT 248 ITR 587 (J&K). IT IS NOTABLE THAT BOTH SECTIONS 11 AND 12 U SE THE EXPRESSION 'CHARITABLE OR RELIGIOUS PURPOSES' WHICH CANNOT BE READ OR INTERPRETED TO MEAN 'CHARITABLE AND RELIGIOUS PURPOSES'. THE PURPO SE OF SEEKING REGISTRATION IS TO AVAIL OF EXEMPTION UNDER SECTION S 11 AND 12. GIVEN ITS MIXED OBJECTS, THE APPLICANT WILL NOT BE ABLE TO HA VE THE BENEFIT OF EXEMPTION UNDER SECTION 11 AND 12. IN OTHER WORDS, IN VIEW OF THE MIXING UP OF CHARITABLE AND RELIGIOUS OBJECTS, THE GRANT OF REGI STRATION UNDER SECTION 12A WOULD BE NOTHING MORE THAN AN EXERCISE IN FUTILITY BECAUSE THE APPLICANT WILL BE HIT BY SECTION 13(1)(B) AND THEREBY LOSE EXEMPTI ON. 4. IT IS IMPORTANT TO POINT OUT THAT HON'BLE MADHY A PRADESH HIGH COURT IN THE CASE OF SHRI DHAKAD SAMAJ DHARAMSLUTLA BHAWA N TRUST V. CIT, 302 ITR 321 (MP) HAS HELD THAT SINCE SECTION 11 OF THE LT. ACT, 1961 PROVIDES FOR EXEMPTION TO THE TRUST REGISTERED UNDER THE ACT, IT IS PRIMARILY THE PURPOSE OF SECTION 11 THAT WILL DOMINATE OR PREVAIL OVER OTHER CONSIDERATIONS. IT CLEARLY SHOWS THAT IN THE COURSE OF REGISTRATION PROCEEDING U/S. 12AA OF THE ACT, WHAT IS TO BE ANALYZED IN RESPECT OF THE OBJECTS OF THE TRUST IS THAT THESE SHOULD BE SUCH THAT EXEMPTION UNDER SECTION 11 IS A LLOWABLE. IN THE PRESENT CASE, SINCE EXEMPTION UNDER SECTION 11 WOULD NOT BE PERMISSIBLE TO THE APPLICANT TRUST IN VIEW OF ITS MIXED CHARITABLE AND RELIGIOUS OBJECTS, ITS APPLICATION FOR REGISTRATION IS LIABLE TO BE REJECT ED. IN THIS CONNECTION, THE APPLICANT HAS SUBMITTED THAT THE OBJECT CLAUSES REF ERRED TO ABOVE CAN IN NO WAY BE SAID TO BE RELIGIOUS IN NATURE AND ARE PUREL Y OF CHARITABLE NATURE. IN SUPPORT OF ITS CONTENTION, THE APPLICANT HAS PLACED RELIANCE ON AN UNREPORTED DECISION OF THE HON'BLE ITAT , NAGPUR BENCH DATED 1 1.10.2012 IN ITA NO.223/NAGPUR/2009 IN THE CASE OF SHIV MANDIR DEVST TAN PANCH COMMITTEE SANSTAN NAGPUR V. CIT-1. NAGPUR WHEREIN WHILE ALLOW ING THE APPEAL OF THE ASSESSEE AND DIRECTING THE CIT TO GRANT APPROVAL TO IT UNDER SECTION 80G(5)(VI) OF THE ACT, IT WAS HELD THAT HINDUISM IS NOT A RELIGION BUT A WAY OF LIFE OF A CIVILIZED SOCIETY AND THAT EXPENSES INCUR RED FOR WORSHIPPING OF LORD SHIVA, HANUMAN, GODDESS DURGA AND FOR MAINTENANCE O F TEMPLE CANNOT BE REGARDED TO BE FOR RELIGIOUS PURPOSE. THE SUBMISSIO NS OF THE APPLICANT HAVE BEEN CONSIDERED BUT THE SAME ARE NOT ACCEPTABLE. IN THE FIRST PLACE, THE WORD 'HINDU' OR 'HINDUISM' IS NOWHERE USED IN THE TRUST DEED OF THE APPLICANT. IN VIEW OF THIS VITAL DISTINGUISHING FEATURE, THE DECI SION RELIED UPON BY THE APPLICANT DEALING WITH OBJECT OF WORSHIP OF HINDU G ODS AND GODDESSES WILL 4 ITA NO. 5104/MUM/2013 NOT COME THE RESCUE OF THE APPLICANT. SECONDLY, THE TRUST DEED OF THE APPLICANT MAKES SPECIFIC MENTION OF BUILDING AND MA NAGEMENT OF UPASRAYS, AMBILSHALAS, SADUVRAT ETC. WHICH ARE WELL RECOGNIZE D AS LAIN RELIGIOUS INSTITUTIONS. IT IS IMPORTANT TO NOTE THAT JAINISM IS RECOGNIZED AS ONE OF WELL KNOWN RELIGIONS IN INDIA VIDE PARA 11 OF THE AFORES AID DECISION OF THE HON'BLE TRIBUNAL RELIED UPON BY THE APPLICANT. FINALLY, THE DECISION CITED BY THE APPLICANT ABOVE WAS RENDERED IN THE CONTEXT OF GRAN T OF APPROVAL U/S.80G(5)(VI) WHEREAS THE PRESENT APPLICATION HAS BEEN FILED FOR REGISTRATION AS A PUBLIC CHARITABLE TRUST U/S. 12A. THUS, IN VIE W OF THE ABOVE DISCUSSION IN REGARD TO ITS MIXED CHARITABLE AND RELIGIOUS OBJECT S, I AM UNABLE TO SATISFY MYSELF ABOUT THE CHARITABLE CHARACTER OF OBJECTS OF THE APPLICANT TRUST WHICH IS A CONDITION PRECEDENT FOR GRANT OF REGISTRATION. AS THE APPLICANT TRUST HAS FAILED TO COMPLY WITH THE- MANDATORY REQUIREMENTS P RESCRIBED ULS.12AA READ WITH RULE 17 A, ITS APPLICATION FOR GRANT OF REGIST RATION IS REJECTED. 4.2 TAKING INTO ACCOUNT THE SUBMISSIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVENUE IN SUPPORT OF THE IMPUGNED ORDER OF THE LD. DIT(E) AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT BEEN ABLE TO REBUT OR CONTROVERT T HE FINDINGS OF THE LD. DIT(E) IN THE IMPUGNED ORDER REJECTING ITS APPLICAT ION FOR REGISTRATION. IN THIS VIEW OF THE MATTER, WE FIND NO REASON TO INTER FERE WITH THE FINDINGS RENDERED BY THE LD. DIT(E) IN HIS ORDER U/S. 12AA(1 )(B)(II) R.W.S. 12A OF THE ACT DATED 18/01/2013. CONSEQUENTLY, THE GROUND S RAISED AT S.NOS. 1 TO 3 ARE REJECTED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 06/01/2016 SD/- SD/- (RAMLAL NEGI) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 06/01/2016 5 ITA NO. 5104/MUM/2013 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS