LANGAR COMMITTEE HANUMAN MANDIR, MALERKOTLA V. INCOME TAX OFFICER, (EXAMPTION), JALANDHAR

ITA 516/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5713 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 07-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S NEGI
• Assessee Lawyers: KARTIK J AIN C AS
• Keywords: Business income; Charitable institution; Source of fund; Benefit of exemption; Onus to prove
• Section: 143(3); 37(1); 12A; 12AA; 12; 28; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO. 516/(ASR)/2017 ASSESSMENT YEAR: 2014-15 LANGAR COMMITTEE HANUMAN MANDIR, MALERKOTLA. [PAN:AAAAL 2080Q] VS. INCOME TAX OFFICER, (EXEMPTIONS) WARD, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUBHASH JAIN & KARTIK J AIN (C AS) RESPONDENT BY: SH. S.S. NEGI (DR) DATE OF HEARING: 21.12.2017 DATE OF PRONOUNCEMENT: 15 .03.2018 ORDER PER SANJAY ARORA, AM THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA ( CIT(A) FOR SHORT) DATED 31.05.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS' ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) FOR THE ASSESSMENT YEAR (AY) 2014-15 VIDE ORDER DATED 30.11.2016. 2. THE ISSUE ARISING IN THE INSTANT APPEAL IS THE DETERMINATION OF THE CORRECT INCOME FOR THE CURRENT YEAR CHARGEABLE TO TAX UNDER THE ACT. WHILE THE ASSESSEE CLAIMS THE SAME TO BE NIL, THE REVENUE HAS ASSESSED ITS INCOME AT RS. 23,84,731/- THE SURPLUS, I.E., THE EXCESS OF RECEIPT OVER PAY MENT AS PER THE ASSESSEES ACCOUNTS, WITH THE ASSESSEE. THE ASSESSEE IS A SOCI ETY CONSTITUTED AND REGISTERED UNDER THE SOCIETY REGISTRATION ACT, 1860 ON 11.08.1 992 (COPY OF REGISTRATION CERTIFICATE ON RECORD), WITH THE FOLLOWING AIMS AND OBJECTS: ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 2 MNS'; %& 1- BL LALFKK DK MNS; JH GUWEKU EFUNJ ESA LQCG DK U K'KRK] NWIGJ VKSJ JKF++= DKS HKKSTU VKSJ 'KKE DKS PK; DK IZCU/K DJRK GS A 2- CKGJ LS VK;S RHFKZ ;KF++=;KSA DS FY, [KKUS DK IZ CU/K VKSJ JKF= DKS FOJKE DJUS DK IZCU/K DJUK A 3- LE; VUQLKJ YKSD HKYKBZ DS DK;Z DJUK A 4- O'KZ ESA DE LS DE ,D CKJ FO'KKY HKXORH TKXJ.K DJ OKUK] /KKFEZD MINS'K VFKOK DFKK DHRZU VKFN DK IZCU/K DJUK A S ON BEING CALLED UPON TO FURNISH A CERTIFIED ENGLISH TRANSLATION THEREOF, THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUN SEL, WOULD DRAW OUR ATTENTION TO PAGE 5 OF THE IMPUGNED ORDER WHEREAT THE SAME ST ANDS TRANSCRIBED IN ENGLISH AS UNDER, FURTHER STATING THAT THE SAME REPRESENTS A F AIRLY ACCURATE TRANSLATION THEREOF; THAT THE PARTIES HAVE PROCEEDED ON THAT BASIS, SO T HAT THERE IS NO CONFLICT OR DISAGREEMENT QUA THE SAME: 1. THE OBJECTIVE OF THIS TRUST IS TO MANA GE THE BREAKFAST, LUNCH & DINNER AND ALSO TEA IN EVENING AT HANUMAN M ANDIR. 2. TO MANAGE THE EATING AND HALTING ARRANGEMENTS FOR PILGRIMS FROM OUTSIDE . 3. TO DO PUBLIC WELFARE PROGRAMS FROM TIME TO TIM E. 4. TO MANAGE A VISHAL BHAGWATI JAGRAN, RELIGIOUS SPEECHES AND KIRTAN AT LEAST ONCE IN A YEAR. WE OBSERVE NO ISSUE QUA THE SAME AND, THEREFORE, THE BRINGING ON RECORD OF A CERTIFIED ENGLISH TRANSLATION WAS DISPENSED WITH, A ND THE HEARING IN THE MATTER PROCEEDED WITH, AFTER OBTAINING CONCURRENCE OF THE LD. DEPARTMENTAL REPRESENTATIVE (DR). THERE ARE THREE SECTIONS UNDER WHICH THE DONATIONS TO THE ASSESSEE-TRUST COULD POSSIBLY BE CONSIDERED FOR TAX PURPOSES, NONE OF WHICH IS APPLICABLE IN THE INSTANT CASE, AS SHALL BE PRESENTLY SHOWN, THE LD. AR WOULD CONTINUE, ADVERTING FIRST TO SECTION 2(24)(IIA), THE FIRST OF THESE SECTIONS, THE OTHER TWO BEING SECTIONS 28 AND 56: ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 3 2. DEFINITIONS IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES , (1) ................... (24) INCOME INCLUDES (I) PROFITS AND GAINS; (II) DIVIDEND; (IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST C REATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTITUTION ESTABLIS HED WHOLLY OR PARTLY FOR SUCH PURPOSES OR BY AN ASSOCIATION OR INSTITUTION REFERR ED TO IN CLAUSE (21) OR CLAUSE (23), OR BY A FUND OR TRUST OR INSTITUTION REFERRED TO IN SU B-CLAUSE (IV) OR SUB CLAUSE (V) OR BY AN UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION REFERRE D TO IN SUB-CLAUSE (IIIAD) OR SUB CLAUSE (VI) OR BY ANY HOSPITAL OR OTHER INSTITUTION REFERRED TO IN SUB-CLAUSE (IIIAE) OR SUB-CLAUSE (VIA) OF CLAUSE (23C) OF SECTION 10 OR B Y AN ELECTORAL TRUST. EXPLANATION.- FOR THE PURPOSE OF THUS SUB-CLAUSE, TRUST INCLUDES ANY OTHER LEGAL OBLIGATION; THE ASSESSING OFFICER (AO) HAS REGARDED THE ASSESSE E AS NOT A CHARITABLE TRUST, FOR WHICH HE TOOK US TO PAGE 3 OF THE ASSESSMENT ORDER. ON A QUERY, HOWEVER, BY THE BENCH, AS TO HOW COULD THE ASSESSEE, INDEPENDENT OF THE AOS OBSERVATION, NOT REGARD ITSELF AS THE CHARITABLE AND /OR RELIGIOUS T RUST IN VIEW OF ITS CLEAR OBJECTS, THE LD. AR WOULD SUBMIT THAT THE ASSESSEE IS INDEED A C HARITABLE TRUST. THE LD. DR WOULD AT THIS STAGE, ON BEING QUERIED BY THE BENCH, CLARIFY THAT WHEN THE AO SAYS THAT THE ASSESSEE IS NOT A CHARITA BLE TRUST, ALL HE MEANS IS THAT IT IS NOT RECOGNIZED AS SUCH FOR THE PURPOSE OF THE BENEF ICIARY PROVISION OF THE ACT, I.E., IS NOT ENTITLED TO AN EXEMPTION OF ITS INCOME ON IT S APPLICATION UNDER SECTIONS 11 AND 12 OF THE ACT. FURTHER, HE WOULD CONTINUE, AS A CONJOINT READING OF THE ASSESSMENT AND THE IMPUGNED ORDER, IN WHICH THE FOR MER ORDER MERGES, WOULD SHOW, THE ASSESSEE HAS BEEN DENIED THE BENEFIT OF E XEMPTION U/S. 11 OF THE ACT IN THE ABSENCE OF REGISTRATION U/S. 12A/12AA OF THE AC T, OR EVEN APPROVAL U/S. 10(23C). AND IT IS THIS DENIAL WHICH THE BONE OF CO NTENTION BETWEEN THE PARTIES. THE ASSESSEE RECEIVING RS.94.32 LACS DURING THE YEA R, APPARENTLY APPLIED RS. 70.47 LACS FOR ITS VARIOUS OBJECTS, SO THAT ITS FINANCIA L ACCOUNTS REFLECT A SURPLUS OF ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 4 RS.23.85 LACS, WHICH WAS CLAIMED EXEMPT U/S. 11 OF THE ACT, AND WHICH COULD NOT BE IN VIEW OF ITS NON-REGISTRATION U/S. 12AA OF THE ACT. IN FACT, EVEN IF THE ASSESSEE WAS TO APPLY FOR THE SAID REGISTRATION NOW, I.E., A T ANY TIME AFTER THE EXPIRY OF THE RELEVANT PREVIOUS YEAR, IT COULD ONLY BE GRANTED RE GISTRATION PROSPECTIVELY. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. THE PURPOSES FOR WHICH THE ASSESSEE SOCIETY, AN INC ORPORATED ENTITY, IS FORMED, ARE CLEARLY CHARITABLE AND RELIGIOUS IN NAT URE. CHARITY THE SELFLESS AND UNCONDITIONAL EXPENDITURE OF RESOURCES, INCLUDING T IME AND MONEY, IN SERVICE OF ANOTHER, IS THE CORNERSTONE, AN ESSENTIAL INGREDIEN T OF ALL DHARMA, THE CORE OF ALL ORGANIZED RELIGIONS. CHARITY, INCLUSIVELY DEFINED U /S. 2(15) OF THE ACT, IS COMMONLY UNDERSTOOD AS ALTRUISTIC THOUGHT AND ACTION, WITH A VIEW TO BENEFIT OTHERS SELFLESSLY. IT MAY ASSUME DIFFERENT FORMS, AS, FOR EXAMPLE, PHI LANTHROPY. IF PROVIDING FOOD TO PEOPLE OR GIVING SHELTER TO TRAVELERS IS NOT CHARIT Y, AS OBSERVED BY THE BENCH DURING HEARING, WHAT, WE WONDER, IS? THIS, IN EFFECT, STAN DS ALSO OBSERVED BY THE AMRITSAR BENCH OF THE TRIBUNAL RECENTLY PER ITS ORDER IN VISHWAYATAN YOGASHRAM V. CIT(E) (IN ITA NO. 428/ASR/2016, DATED 13.12.2017), DIRECT ING REGISTRATION, SIMILARLY, TO AN INSTITUTION PROVIDING LANGAR (COMMUNITY KITCHE N, WHERE PEOPLE, IRRESPECTIVE OF CASTE, CREED AND RELIGION PREPARE AND PARTAKE FO OD TOGETHER, PROMOTING THE IDEALS OF SERVICE OF HUMANITY AND BROTHERHOOD); THE COST O F THE SAME BEING MET FROM VOLUNTARY CONTRIBUTIONS BY PEOPLE AT LARGE. FURTHER , IF ORGANIZING RELIGIOUS FESTIVALS, INCLUDING ARRANGING VISIT/S TO A HOLY SHRINE, IS NO T RELIGIOUS, WHAT, WE WONDER, AGAIN, IS? THE ASSESSEES RECEIPT OF RS.90.41 LACS BY WAY OF V OLUNTARY CONTRIBUTIONS - THE BALANCE RS. 3.91 LACS BEING INTEREST INCOME, FO R THE PURPOSE OF ITS OBJECTS, IS THUS INCOME WITHIN THE MEANING OF SEC.2(24)(IIA). TRUE, THE REVENUE HAS ALLOWED A DEDUCTION FOR RS.70.47 LACS OSTENSIBL Y SPENT BY THE ASSESSEE ON ITS ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 5 OBJECTS. THE SAME, HOWEVER, IS ONLY THE APPLICATION OF THAT INCOME, AND NOTHING MORE, EVEN AS OBSERVED BY THE BENCH DURING HEARING. IT IS THOUGH ONLY THE REAL INCOME, I.E., NET OF ALL EXPENSES INCURRED IN EARNI NG THE SAME, FOR WHICH EXEMPTION COULD VALIDLY BE CLAIMED AND ALLOWED. APPLICATION O F INCOME IS ALLOWED AS AN EXEMPTION FOR THE PURPOSE OF DETERMINATION OF TOTAL INCOME ONLY IN CASE OF A CHARITABLE OR RELIGIOUS TRUST/INSTITUTION, FOR WHIC H THE LAW PROVIDES A SPECIAL/DEFINED PROCEDURE, BEGINNING WITH THE REGISTRATION OF SUCH TRUST WITH THE REVENUE U/S. 12A R/W S.12AA OF THE ACT, WHICH THE ASSESSEE-TRUST IN THE INSTANT CASE HAS NOT OBSERVED. HOW COULD, THEN, ITS ACT IN BRINGING THE RETURNED SURPLUS OF RS.23.85 LACS TO TAX AS INCOME BE IMPUGNED ? RATHER, THE REVENUE, BY DOING SO, IMPLICITLY ALLOWS THE ASSESSEE EXEMPTION U/S. 11 AT RS.70.47 L ACS OSTENSIBLY APPLIED BY THE TRUST ON ITS OBJECTS, WHILE DENYING SAME ON THE AM OUNT NOT SIMILARLY SPENT / APPLIED. THE AMOUNT BEING UNSPENT (UNAPPLIED) COULD BE NO BASIS FOR TAXING THE SAME IN-AS-MUCH AS THE SAME IS ONLY CARRY FORWARD F OR BEING SO APPLIED SUBSEQUENTLY. IT MAY NOT BE FEASIBLE OR NECESSARY T HAT THE FUNDS RECEIVED DURING A PARTICULAR YEAR (PERIOD OF TIME) ARE APPLIED DURING THE SAME YEAR (PERIOD) ITSELF. THE OPERATIONS OF ANY ENTITY BEING CONTINUOUS, IT W OULD ALWAYS HAVE SOME FUNDS WITH IT AT ANY POINT OF TIME, WHICH INCIDENT WOULD NOT MAKE IT TAXABLE ON THAT COUNT. THEN, THE INSTITUTION MAY BE IN THE PROCESS OF ACCUMULATING FUNDS FOR APPLICATION ON A PARTICULAR PROJECT/PROGRAM WHICH I T INTENDS TO EXECUTE/IMPLEMENT. THE FUNDS OF ANY TRUST/INSTITUTION ARE TO BE, AFTER ALL, APPLIED ONLY FOR ITS PURPOSES, WHICH IN THE INSTANT CASE, WE HAVE FOUND AS BOTH CH ARITABLE AND RELIGIOUS IN NATURE. WHY, THE LAW, PER SECTION 11, CLEARLY PROVIDES FOR ACCUMULATION OF INCOME FOR ITS APPLICATION IN FUTURE (FOR CHARITABLE OR RELIGIOUS PURPOSES). THE QUESTION OF OBSERVANCE OF THAT PROCEDURE - WHICH REQUIRES A NOT ICE BY THE ASSESSEE TO THE AO TO THAT EFFECT (SECTION 11) (REFER: CIT V. NAGPUR HOTEL OWNERS ASSOCIATION [2001] ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 6 247 ITR 201 (SC)), IN THE PRESENT CASE DOES NOT ARI SE AS SEC.11 ITSELF IS NOT APPLICABLE IN VIEW OF THE NON-REGISTRATION OF THE A SSESSEE-TRUST U/S. 12AA (REFER SECTION 12A(1)). THE REVENUE, THUS, BY ALLOWING CR EDIT / EXEMPTION TO THE ASSESSEE QUA THE SUM APPLIED BY IT FOR ITS PURPOSES DURING THE YEAR HAS ACTED INCONSISTENTLY AND, MORE IMPORTANTLY, NOT IN ACCORD ANCE WITH THE LAW; RATHER, CONTRARY THERETO. WE USE THE WORD IMPLICITLY IN-A S-MUCH AS THERE IS NO FINDING OR SPECIFIC ALLOWANCE OF SUCH EXEMPTION TO THE ASSESSE E QUA THE SUM APPLIED BY IT FOR ITS PURPOSES DURING THE YEAR; WITH THE REVENUE RATH ER CLEARLY DENYING EXEMPTION U/S. 11 FOR WANT OF REGISTRATION U/S. 12AA. THE ASSESSEES CASE IS EQUALLY UNTENABLE. TRUE, TH E AMOUNT RECEIVED BY THE ASSESSEE-SOCIETY IS HELD BY IT UNDER TRUST, A LEGAL OBLIGATION BY DEFINITION, SO THAT THE SAME CANNOT ORDINARILY, I.E., GOING BY THE COMM ON CONCEPTION OF THE WORD, BE REGARDED AS INCOME OF THE RECIPIENT TRUST. HOWEVE R, THE SAME HAS BEEN REGARDED AS SO BY THE ACT PER THE DEFINING PROVISION ITSELF - S.2(24)(IIA), REPRODUCED ABOVE. BUT FOR THE SAME, EVEN AS OBSERVED BY THE BENCH DUR ING HEARING, THE SAME MAY NOT FALL TO BE CONSIDERED AS INCOME, BEING AN AMOUNT RECEIVED BY ONE FROM ANOTHER UNDER AN OBLIGATION TO BE APPLIED FOR A SPECIFIC PU RPOSE/S. RATHER, EVEN PRIOR TO THE INSERTION OF SECTION 2(24)(IIA)(INSERTED BY FINANCE ACT, 1972, W.E.F. 01.04.1973) ON THE STATUTE-BOOK, THE APEX COURT (IN R.B. SHREERAM RELIGIOUS & CHARITABLE TRUST V. CIT [1998] 233 ITR 53 (SC)), WITH REFERENCE TO SECTION 12 OF THE ACT, WHICH IT EXPLAINED IS TO BE READ AS A WHOLE, CLARIFIED THAT THE WORD INCOME IS NOT EXHAUSTIVELY DEFINED UNDER THE ACT, AND THAT VOLUNT ARY CONTRIBUTIONS RECEIVED BY A PUBLIC CHARITABLE OR RELIGIOUS TRUST, EXCEPT WHERE RECEIVED TOWARD ITS CORPUS, IS INCOME AND, FURTHER, DEEMED AS DERIVED FROM PROPERT Y HELD UNDER TRUST. SECTION 2(24)(IIA), IT MAY BE NOTED, MAKES NO EXCEPTION FOR A VOLUNTARY CONTRIBUTION RECEIVED TOWARDS ITS CORPUS, SO THAT IT IS INCOME BY DEFINITION, THOUGH EXEMPT U/S. ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 7 11 (S. 11(1)(D)). THE RELIANCE BY THE ASSESSEE, THE REFORE, ON DECISIONS IN CIT V. S.R.M.T. STAFF ASSOCIATION [1996] 221 ITR 234 (AP) AND SHAH NANJI NAGSI EMPLOYEES WELFARE TRUST V. ITO [1986] 19 ITD 535 (NAG), IS OF NO CONSEQUENCE. IN THESE CASES, THE ASSESSEE WAS NOT A CHARITABLE ( OR RELIGIOUS) TRUST, AND IT WAS ON THAT BASIS THAT THE HONBLE COURT AND THE TRIBUNAL RESPECTIVELY HELD ITS RECEIPT AS NOT LIABLE TO BE REGARDED AS INCOME. THE AIMS AND O BJECTS OF THE ASSESSEE SOCIETY, WHICH DEFINE THE PURPOSE/S OF ITS FORMATION AND EX ISTENCE, ARE BOTH CHARITABLE AS WELL AS RELIGIOUS IN NATURE, SO THAT IT IS A CHARIT ABLE AND RELIGIOUS TRUST. VOLUNTARY CONTRIBUTIONS, WHICH IS WHAT THE DONATIONS ARE, REC EIVED BY IT FOR BEING APPLIED FOR THE SAID OBJECTS, AND WHICH IT IN FACT HAS IN A SIG NIFICANT PART DURING THE RELEVANT YEAR, IS ONLY INCOME BY DEFINITION U/S. 2(24)(IIA) AND, FURTHER, DEEMED AS DERIVED FROM PROPERTY HELD UNDER TRUST, A FORM DEFINED U/S. 11(4). THE SAME COULD ONLY BE EXEMPT U/S. 11, WHICH HOWEVER WOULD NOT APPLY IN TH E INSTANT CASE IN VIEW OF SECTION 12A(1), WHICH PROVIDES FOR REGISTRATION U/S . 12AA AS A PRECONDITION FOR THE APPLICATION OF SECTIONS 11 AND 12. THE LAW, PER SEC TION 11, AS AFORE-REFERRED, PROVIDES A SAVING FOR THE AMOUNT APPLIED BY A CHARI TABLE (OR RELIGIOUS) TRUST OR INSTITUTION FOR ITS PURPOSES. FURTHER, AS AFORE-NOT ED, THE LAW ALSO PROVIDES FOR SUBSEQUENT SUCH APPLICATION, UPON NOTICE TO THE AO, STATING THE PURPOSE/S OF ACCUMULATION, WHERE THE RETENTION EXCEEDS 15% OF TH E RECEIPT - REGARDED THUS AS A NORMATIVE CARRY OVER. NO LEVY OF TAX IS ATTRACTED U NDER SUCH CIRCUMSTANCES, AS WELL AS WHERE THE INCOME COULD NOT BE APPLIED ON ACCOUNT OF NON RECEIPT OF ANY INCOME. THE ASSESSEES FURTHER STAND AS TO THE APPLICABILIT Y OF THE PRINCIPLE OF MUTUALITY, ALSO ARGUED BEFORE US, AGAIN, ONLY NEEDS TO BE STATED TO BE REJECTED. THE ASSESSEE IS A SEPARATE LEGAL ENTITY, I.E., DISTINCT AND APART FROM BOTH ITS MANAGEMENT - MANAGING IT UNDER A CLEAR SET OF RULES AND REGULATIONS (COPY OF WHICH WAS SHOWN TO US DURING HEARING), AS WELL AS I TS TRUSTEES, AS WELL AS THOSE ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 8 PATRONIZING IT, CONTRIBUTING THEIR TIME AND RESOURC ES FOR ITS VARIOUS ACTIVITIES. THE DONATIONS ARE ONLY THE VOLUNTARILY CONTRIBUTIONS RE FERRED TO IN SEC. 2(24)(IIA) AS WELL AS IN S.11(1)(A), AND FORM THE TRUST PROPERTY, TO B E APPLIED FOR ITS PURPOSES IN THE MANNER IT DEEMS FIT AND PROPER. LIKEWISE, IS THE IN TEREST INCOME ARISING TO IT. NO ARGUMENT/S QUA SS. 28 AND 56 WAS RAISED, WHICH PROVISIONS COME IN TO PLAY WHERE THE INCOME BECOMES ASSESSABLE AS BUSINESS INCOME OR FROM OTHER SOURCES, WHILE THE INCOME IN THE INSTANT CASE IS DERIVED BY A CHAR ITABLE/RELIGIOUS INSTITUTIONS FROM PROPERTY HELD UNDER TRUST AND, FURTHER, STANDS BROU GHT TO TAX ON ACCOUNT OF THE BENEFIT OF SECTION 11 BEING NOT APPLICABLE. CONCLUSION 4. THE ASSESSEE, A SOCIETY WITH CHARITABLE AND RELI GIOUS OBJECTS, IS IN RECEIPT OF VOLUNTARY CONTRIBUTIONS AS WELL AS INTEREST INCOME DURING THE YEAR, BOTH INCOME BY DEFINITION. CHAPTER III OF THE ACT (CONTAINING S ECTIONS 10 TO 13B), TITLED INCOMES WHICH DO NOT FORM PART OF THE TOTAL INCOME , EXEMPTS ALL INCOME DERIVED FROM A PROPERTY HELD UNDER TRUST ARISING TO A CHARI TABLE AND RELIGIOUS TRUST/ INSTITUTION U/S. 11, I.E., ON APPLICATION OF ITS IN COME FOR ITS OBJECTS. THE SAME IS SUBJECT TO A SATISFACTION OF THE CONDITIONS LAID DO WN THEREIN, AS WELL AS OTHER PROVISIONS OF THE SAID CHAPTER. SECTION 12A(1) STIP ULATES THE CONDITION OF REGISTRATION OF THE TRUST/INSTITUTION IN RECEIPT OF INCOME BEING REGISTERED U/S. 12AA. THE ASSESSEE IS ADMITTEDLY NOT REGISTERED EVEN SUBS EQUENT TO THE COMPLETION OF ASSESSMENT, SO THAT THE BENEFIT OF EXEMPTION U/S. 1 1 SHALL NOT APPLY THERETO. ITS CLAIM FOR EXEMPTION U/S. 11 ON THE SURPLUS REFLEC TED BY ITS ACCOUNTS ITS RECEIPT BEING BY WAY OF VOLUNTARY CONTRIBUTIONS (RS.90.41 L ACS) AND INTEREST (RS.3.91 LACS), I.E., INCOMES DERIVED FROM PROPERTY HELD UNDER TRUS T, WAS ACCORDINGLY DENIED BY THE REVENUE. ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 9 THE ISSUE AT LARGE IS THE SUSTAINABILITY IN LAW OF THE IMPUGNED ORDER OR THE ASSESSMENT IT UPHOLDS. WE HAVE, FOR THE REASONS AFO RE-STATED, EXPLAINED THE INFIRMITY ATTENDING THE ASSESSMENT, I.E., AS TO WHY THE ASSESSEES AS WELL AS THE REVENUES CASE CANNOT BE ACCEPTED. WE ARE CONSCIOUS THAT THE REVENUE IS NOT IN APPEAL, AND THAT THE ASSESSEE STANDS ALLOWED RELIEF , OSTENSIBLY U/S. 11, CONTRARY TO LAW, IN RESPECT OF THE AMOUNT SPENT (APPLIED) BY IT FOR ITS OBJECTS. THERE IS NO BASIS FOR ALLOWING EXEMPTION TO THE ASSESSEE ON ITS INCO ME U/S. 11 TO WHATEVER EXTENT. WE MAY ACCORDINGLY ANSWER THE TWO ASPECTS OF THE IM PUGNED ASSESSMENT THAT WE DISCERN AS ARISING FOR OUR CONSIDERATION/ADJUDICATI ON. THE VOLUNTARY CONTRIBUTIONS TO THE ASSESSEE-SOCIETY QUALIFY AS INCOME U/S. 2(24 )(IIA) OF THE ACT, AND IS THEREFORE, SUBJECT TO THE PROVISIONS OF THE ACT, ELIGIBLE FOR EXEMPTION U/S. 11 ON APPLICATION. TWO, THE ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S. 11 IN-AS-MUCH AS IT IS ADMITTEDLY NOT REGISTERED U/S. 12AA OF THE ACT, WHICH ISSUE ST ANDS SETTLED BY THE DECISION BY THE APEX COURT IN U.P. FOREST CORPORATION V. DY. CIT [2008] 297 ITR 1 (SC). IN THIS REGARD, IT MAY RELEVANT TO STATE THAT IT IS THE CORRECT LEGAL POSITION THAT IS RELEVANT , AND NOT THE VIEW THAT THE PARTIES MAY TAKE OF THE IR RIGHTS IN THE MATTER ( CIT V. C. PARAKH & CO. (INDIA) LTD . [1956] 29 ITR 661 (SC))(ALSO REFER KEDARNATH JUTE MFG. CO. LTD. V. CIT [1971] 82 ITR 363 (SC)). THAT APART, IT MAY BE APPRECIATED THAT NOT SO HOLDING, I.E., THAT THE ASSESSEE IS NOT ENTITLED TO ANY EXEMPTION U/S. 11 ON ACCOUNT OF NON-REGISTRATION U/ S. 12AA, ON WHICH ASPECT THERE IS NO AMBIVALENCE IN LAW (REFER SECTION 12A(1)), WO ULD RENDER OUR OWN ORDER AS INTERNALLY INCONSISTENT, I.E., THE SAME MALADY THAT INFLICTS THE ORDERS BY THE REVENUE AUTHORITIES, BESIDES LAYING DOWN A WHOLLY UNACCEPTA BLE LEGAL PROPOSITION/JUDICIAL PRECEDENT, INCONSISTENT WITH THE DECISION IN U.P. FOREST CORPORATION V. DY. CIT (SUPRA). WE ARE ALSO, WE MAY ADD, CONSCIOUS OF THE PROVISION OF S. 12A(2), WHICH ESSENTIALLY SEEKS TO EXTEND THE BENEFIT OF SECTIONS 11 AND 12 TO YEARS FOR WHICH ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 10 REGISTRATION U/S. 12AA IS NOT AVAILABLE SUBJECT TO THE NON-CHANGE OF THE OBJECTS OF THE TRUST DURING THE INTERVENING PERIOD, I.E., AT T HE TIME OF GRANT OF REGISTRATION AND THAT OBTAINING DURING THE RELEVANT PREVIOUS YEAR. T HE SAME, HOWEVER, WOULD GET TRIGGERED ONLY UPON GRANT OF REGISTRATION U/S. 12AA , WHICH HAS ADMITTEDLY NOT EVEN BEEN APPLIED FOR BY THE ASSESSEE. WE MAY AT THIS STAGE ALSO DWELL ON THE POWERS OF T HE TRIBUNAL, WHICH HAVE, BEGINNING WITH THE DECISIONS BY THE APEX COURT IN HUKUMCHAND MILLS LTD. V. CIT [1967] 63 ITR 232 (SC) AND CIT V. MAHALAKSHMI TEXTILE MILLS LTD . [1967] 66 ITR 710 (SC), BEEN EXAMINED, DILATED AND EXPLAINED BY THE HONBLE COURTS OF LAW IN CONSIDERABLE DETAIL, WITH THE HONBLE APEX COURT IN THE CITED CASES STATING THAT RULES 11 & 27 OF THE INCOME TAX (APPELLATE TRIBUNAL ) RULES, 1963 ARE NOT EXHAUSTIVE OF THE POWERS OF THE TRIBUNAL. IN KAPURCHAND SHRIMAL V. CIT [1981] 131 ITR 451 (SC), THE APEX COURT CLARIFIED THAT AN APPELLATE AUTHORITY IS DUTY BOUND TO CORRECT ALL ERRORS IN THE PROCEEDINGS AND ISSUE APPROPRIATE DIRECTIONS. IN AHMEDABAD ELECTRICITY CO. LTD. V. CIT [1993] 199 ITR 351 (BOM)(FB), THE HONBLE COURT, AFTER AN EXHAUSTIVE REVIEW OF CASE L AW IN THE MATTER, EXPLAINED THAT THE BASIC PURPOSE OF AN APPEAL IN AN INCOME-TAX MAT TER IS TO ASCERTAIN THE CORRECT TAX LIABILITY OF THE ASSESSEE IN ACCORDANCE WITH LA W. BOTH THE APPELLATE COMMISSIONER AS WELL AS THE APPELLATE TRIBUNAL CAN, AS AN APPELLATE AUTHORITY, CONSIDER THE PROCEEDINGS AND THE MATERIAL ON RECORD BEFORE IT FOR THE PURPOSE OF DETERMINING THE CORRECT TAX LIABILITY OF THE ASSESS EE. THIS, IT FURTHER EXPLAINED, IS SUBJECT TO THE APPELLATE AUTHORITIES NOT TRAVELLING TO OR EXAMINING NEW SOURCES OF INCOME. EARLIER, IN CIT V. INDIAN EXPRESS (MADURAI) (P.) LTD . [1983] 140 ITR 705 (MAD), THE HONBLE COURT, AGAIN AFTER A REVIEW OF T HE CASE LAW, CLARIFIED THAT THE PROCEEDINGS UNDER THE ACT ARE NOT ADVERSARIAL IN NA TURE, AND THAT THE AUTHORITIES SITTING IN APPEAL CANNOT BE CONSIDERED AS DECIDING A LIS ; THEIR PURVIEW BEING THE ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 11 CORRECT DETERMINATION OF THE ASSESSEES TAX LIABILI TY. THE CASE LAW IN THE MATTER IS LEGION, AND TOWARD WHICH WE MAY REFER SOME OTHER DE CISIONS, AS FOLLOWS: CIT V. ASSAM TRAVELS SHIPPING SERVICE [1993] 199 ITR 1 (SC); CIT V. C.C.C. HOLDINGS [2003] 260 ITR 433 (MAD); THANTHI TRUST V. ASST. CIT [1999] 238 ITR 117 (MAD); CONTROLLER OF ESTATE DUTY V. R.BRAHADEESWARAN [1987] 163 ITR 680 (MAD); CIT V. CELLULOSE PRODUCTS OF INDIA LTD . [1985] 151 ITR 499 (GUJ-FB). THE MATTER ACCORDINGLY SHALL TRAVEL BACK TO THE FIL E OF THE AO FOR ADJUDICATION AFRESH IN ACCORDANCE WITH LAW, IN LIGH T OF THE FOREGOING FINDINGS/ OBSERVATIONS. THE ASSESSEE SHALL BE ALLOWED DEDUCTI ON QUA ANY EXPENDITURE INCURRED, IF ANY, INCLUDING ADMINISTRATIVE EXPENDIT URE, FOR THE PURPOSES OF THE RUNNING THE INSTITUTION OR ORGANIZING ITS ACTIVITI ES. WE SAY SO, WITHOUT ANYTHING ON RECORD TO SUGGEST THAT ANY SUCH EXPENDITURE STANDS INCURRED; THE ASSESSEE ACCEPTING AND IN FACT RETURNING A SURPLUS OF RS. 23.85 LACS, I.E., AFTER APPARENTLY APPLYING RS. 70.47 LACS TOWARD THE OBJECTS OF THE TRUST, ONLY IN THE INTEREST OF JUSTICE INASMUCH AS SOME EXPENDITURE WOULD NECESSARILY HAVE BEEN INCURR ED IN ORGANIZING AND EXECUTION OF ITS VARIOUS ACTIVITIES BY THE ASSESSE E; OUR PURVIEW, AS AFORE-STATED, EXTENDS TO THE CORRECTNESS OF THE INCOME CHARGEABLE UNDER THE ACT. THE BURDEN OF PROOF OR THE ONUS TO PROVE THE SAID EXPENDITURE WOU LD BE ON THE ASSESSEE, WHOSE ACCOUNTS ARE PRESUMABLY AUDITED, I.E., UNDER THE PR OVISIONS OF ITS CHARTER READ WITH ITS GOVERNING LAW, I.E., SOCIETY REGISTRATION ACT, 1860. A CHARITABLE TRUST, WE MAY THOUGH CLARIFY, IS TO APPLY ITS ACCOUNTING INCOME, SO THAT THE EXPENDITURE NEED NOT NECESSARILY SATISFY THE MANDATE OF SEC. 37(1) OR SE C. 57. WE DECIDE ACCORDINGLY. ITA NO.516 (ASR)/2017( A.Y.2014-15) LANGAR COMMITTEE HANUMAN MANDIR VS. ITO(E) 12 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISPOSED ON THE AFORESAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 15, 201 8 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15.03.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: LANGAR COMMITTEE HANUMAN MAN DIR, MALERKOTLA. (2) THE RESPONDENT: ITO(E), JALANDHAR (3) THE CIT(A)-4, LUDHIANA (4) THE CIT, CONCERNED. (5) THE SR DR, I.T.A.T. TRUE COPY BY ORDER