M/s. Sthuthi Christian Fellowship and Charitable Trust, CHENNAI V. ITO, Nagercoil

ITA 520/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4973 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 23-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE U.B.S.BEDI, JUDICIAL MEMBER AND SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER .. ITA NO.520/MDS./11 M/S.STHUTHI CHRISTIAN FELLOWSHIP AND CHARITABLE TRUST, KEEZHANNOORKUZHI, CHERUVALLOOR POST, CHERIYANKOLLA VIA, KANAYAKUMARI DISTRICT 629 152 VS. THE INCOME TAX OFFICER, WARD 1(1), NAGERCOIL. PAN AAHTD 0831 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.SRIDHAR DEPARTMENT BY : SHRI P.B.SEKARAN O R D E R PER ABRAHAM P.GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, ITS GRIE VANCE IS THAT THE COMMISSIONER OF INCOME TAX, MADURAI BY HIS ORDE R DT.04.02.2011, REJECTED ITS APPLICATION FOR APPROVA L U/S.80G OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS GRANTED REGISTRATION U/S.12AA OF THE A CT, BUT STILL PAGE OF 5 ITA. 520/MDS/11 2 DENIED APPROVAL U/S.80G OF THE ACT TAKING A VIEW TH AT THE OBJECTS OF THE ASSESSEE TRUST WAS AN ADMIXTURE OF B OTH RELIGIOUS AND CHARITABLE ACTIVITIES. ACCORDING TO A R, THIS CONCLUSION OF THE COMMISSIONER OF INCOME TAX WAS NO T WARRANTED AND ASSESSEES OBJECTS WERE NOT PROPERLY APPRECIATED BY THE COMMISSIONER OF INCOME TAX. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ACTIVIT IES OF THE ASSESSEE TRUST HAD JUST BEGUN WHEN IT HAD MADE THE APPLICATION FOR APPROVAL, AND IF GIVEN A CHANCE TO PROVE CHARITABLE ACTIVITIES, IT COULD PRODUCE RECORDS. 3. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT THE COMMISSIONER OF INCOME TAX WAS JUSTIFIED I N REJECTING THE APPLICATION FOR APPROVAL U/S.80G(5) OF THE ACT, IN THE CIRCUMSTANCES OF THE CASE. 4. WE HAVE PERUSED THE ORDER OF THE COMMISSIONER OF INCOME TAX AND HEARD RIVAL CONTENTIONS. THE COMMIS SIONER OF INCOME TAX REJECTED THE APPLICATION FOR APPROVAL U/ S.80G(5) OF THE ACT STATING THE FOLLOWING REASONS:- 2. PERUSAL OF RECORDS REVEALS THAT THE APPLICANT TRUST WAS CREATED ON 12.07.1996 BY ONE SHRI RAJU THOMAS OF CH ERUVALLOOR POST, KANYAKUMARI DISTRICT, WHO WAS DECLARED AS THE FOUNDER OF THE TRUST. REGISTRATION U/S.12AA OF THE I.T.ACT WA S GRANTED ON 09.05.2008 FOR THE ASSESSMENT YEAR 2008-09 AND SUBS EQUENT YEARS. THE ASSESSING OFFICER WAS ASKED TO CONDUCT PRELIMINARY ENQUIRY REGARDING THE ACTIVITIES OF THE TRUST. THE ASSESSING OFFICER IN HIS REPORT STATED THE TRUST HAS NOT PRO DUCED ANY PAGE OF 5 ITA. 520/MDS/11 3 CONCRETE EVIDENCE FOR CONDUCTING THE CHARITABLE ACT IVITIES OF THE TRUST CLAIMED TO HAVE CARRIED OUT. HENCE, HE DID NO T RECOMMEND FOR APPROVAL OF EXEMPTION U/S.80G. AT THE TIME OF HEARING BEFORE THE UNDERSIGNED ALSO BOOKS OF ACCOUNTS AND SUPPORTI NG DOCUMENTS WERE NOT PRODUCED REGARDING THE ACTIVITIE S OF THE TRUST. ON PERUSAL OF THE TRUST DEED, IT IS SEEN THAT THE A CTIVITIES CARRIED OUT BY THE TRUST ARE ADMIXTURE OF BOTH RELIGIOUS AN D CHARITABLE. THE APPLICANT TRUST DID NOT PROVE THE ACTIVITIES WI TH CORROBORATIVE DOCUMENTARY EVIDENCES. THEREFORE, THE GENUINENESS OF THE CHARITABLE ACTIVITIES IS NOT VERIFIABLE. 3. BEFORE GRANTING RENEWAL OF APPROVAL U/S.80G, THE COMMISSIONER OF INCOME TAX HAS TO SATISFY HIMSELF O F THE PROVISIONS CONTAINED U/S.80G(5C)(I) TO (V) OF THE A CT WITHOUT WHICH THE APPLICATION FOR APPROVAL CANNOT BE CONSID ERED. IN THE INSTANT CASE, THOUGH THE TRUST WAS SPECIFICALLY ASKED TO PRODUCE THE NECESSARY EVIDENCES, IT HAS NOT TAKEN A DEQUATE STEPS TO PRODUCE THESE DOCUMENTS TO THE SATISFACTIO N OF THE UNDERSIGNED. THEREFORE, THE GENUINENESS OF ITS CHA RITABLE ACTIVITIES CLAIMED TO HAVE BEEN CARRIED OUT BY THE APPLICANT TRUST COULD NOT BE VERIFIED. THEREFORE, THE APPLIC ATION FOR INITIAL CERTIFICATE OF APPROVAL U/S.80G IS WITHOUT ANY MERI T AND I AM NOT SATISFIED THAT THE TRUST HAS FULFILLED ALL PRE- CONDITIONS FOR THE GRANT OF RENEWAL OF CERTIFICATE OF APPROVAL U/S.80G OF THE I.T.ACT. 5. WE FIND FROM THE ABOVE THAT COMMISSIONER OF INC OME TAX HAS NOT MADE OUT AS TO WHICH OF THE OBJECTS OF THE ASSESSEE TRUST WAS RELIGIOUS IN NATURE SO AS TO MAK E IT INELIGIBLE FOR APPROVAL U/S.80G OF THE ACT. IT IS ALSO NOTED THAT ASSESSEE COULD NOT, AT THE SAME TIME, PRODUCE SUFFICIENT DOCUMENTS TO PROVE ITS CHARITABLE ACTIVI TIES. NOW, IT IS SUBMITTED BEFORE US THAT ASSESSEE HAD JUST ST ARTED ITS PAGE OF 5 ITA. 520/MDS/11 4 ACTIVITIES AT THE POINT OF TIME WHEN THE COMMISSION ER OF INCOME TAX WAS CONSIDERING ITS APPLICATION AND IF G IVEN A CHANCE, IT COULD PRODUCE RECORDS FOR CARRYING ON CH ARITABLE ACTIVITIES. IN THE CIRCUMSTANCES, WE ARE OF THE OPI NION THAT ASSESSEE HAS TO BE GIVEN ONE MORE CHANCE BY THE COMMISSIONER OF INCOME TAX FOR SUBSTANTIATING ITS APPLICATION. COMMISSIONER OF INCOME TAX HAS TO GIV E A SPEAKING ORDER AS TO WHY HE CONSIDERS THE OBJECTS O F THE ASSESSEE AS AN ADMIXTURE OF RELIGION AND CHARITY, I F HE STILL DEEMS IT TO BE SO. ASSESSEE SHALL PRODUCE NECESSARY RECORDS BEFORE THE COMMISSIONER OF INCOME TAX TO PR OVE ITS CHARITABLE ACTIVITIES. WE THEREFORE, SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX AND REMIT THE ISSUE BACK TO HIM FOR FRESH CONSIDERATION DENOVO. THE APPEAL OF THE ASSESSEE IS THEREFORE, ALLOWED FOR STATISTICAL PURP OSES. 6. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JUNE, 2011. SD/- SD/- ( U.B.S.BEDI ) ( ABRAHAM P. GEORGE ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 2 ND JUNE, 2011. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE PAGE OF 5 ITA. 520/MDS/11 5 DATE INITIALS 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHORITY 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S. 6. KEEP FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE 9. DATE OF DISPATCH OF ORDER