M/s.Christian Revival Fellowship Trust, Ernakulam V. The CIT (Exemptions), Cochin

ITA 540/COCH/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7811 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 28-07-2016
• Assessment Year: misc
• Appeal Filed On: 07-12-2015
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: P J JOHNEY
• Keywords: Gift; Charitable institution; Opportunity of being heard
• Section: 80G; 12AA

Judgement Text

ITA NO.540/COCH/2015 1 , IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN . . , ., ! ! ! ! BEFORE S/SHRI B. P. JAIN, AM & GEORGE GEORGE K., JM ' ' ' ' ./ I.TA NO.540/COCH/2015 ( #$ % /ASSESSMENT YEAR : 2015-16) CHRISTIAN REVIVAL FELLOWSHIP TRUST, MANJAMKUZHY BUILDINGS, P.B. NO.17, KOLENCHERY, ERNAKULAM-682 311. VS THE COMMISSIONER OF INCOME- TAX(EXEMPTIONS), KOCHI. ( &' &' &' &' /ASSESSEE APPELLANT) ( ( (( ( ) ) ) ) &' &'&' &' /REVENUE -RESPONDENT) & . . ' ./PAN NO. AAATC 1927C &' * + /ASSESSEE BY SHRI P.J. JOHNEY, CA ( ) &' * + /REVENUE BY SHRI A. DHANARAJ, SR. DR ,- * ./ / DATE OF HEARING 28/07/2016 0 % * ./ /DATE OF PRONOUNCEMENT 01/08/2016 1 1 1 1 /ORDER PER B.P. JAIN, AM: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. CIT(EXEMPTIONS), KOCHI VIDE ORDER DATED 30-09-2015 PASSED U/S. 80G(5 )(VI) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO.540/COCH/2015 2 1. IT IS SUBMITTED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX(EXEMPTION), KOCHI IS AGAINST FACTS AND EVIDENCE AND OPPOSED TO LAW AND LIABLE TO BE QUASHED. 2. IT IS SUBMITTED THAT THE CIT(EXEMPTION) OUGHT TO HA VE HELD THAT THE CONTENTIONS OF THE APPELLANT IS BONA-FIDE AND GENUI NE. 3. IT IS SUBMITTED THAT CHRISTIAN REVIVAL FELLOWSHIP I S AN INTER-DENOMINATIONAL CHARITABLE TRUST AND IT IS REGISTERED U/S. 12AA OF THE INCOME TAX ACT, 1961. CHRISTIAN REVIVAL FELLOWSHIP (CRF) EXTENDS ITS HELP ING HANDS TO THE NEEDY AND DOWNTRODDEN IN THE SOCIETY IRRESPECTIVE OF CAST E, CREED, RELIGION & SEX. TO BE MORE SPECIFIC, CRF HAS BEEN HELPING THE POOR WITH FUNDS FOR FINANCIAL ASSISTANCE TO NEEDY, MARRIAGE OF POOR GIR LS, BUILDING HOUSE, EDUCATION, MEDICAL FACILITIES ETC. TO NAME A FEW. THE BENEFICIARIES OF THIS TRUST SHALL BE THE GENERAL PUBLIC IRRESPECTIVE OF C ASTE, CREED OR RELIGION. 4. IT IS FURTHER SUBMITTED THAT THE TRUST HAS STARTED RECEIVING AND DISTRIBUTING DONATIONS FROM WELL-WISHERS. THE DONATIONS HAVE BE EN SPENT FOR THE ATTAINMENT OF ITS OBJECTIVES IRRESPECTIVE OF CASTE, CREED OR RELIGION. 5. IT IS FURTHER SUBMITTED THAT THE SUMMARY OF THE SCO PE AND OBJECTIVES OF CHRISTIAN REVIVAL FELLOWSHIP TRUST ARE AS FOLLOWS: I) TO HELP THE INDIGENT WITH LOANS AND GIFTS FOR IMPLE MENTING THEIR HOUSE BUILDING PROGRAMMES. II) TO CONDUCT VARIOUS ACTIVITIES SPIRITUAL, SOCIAL, ED UCATIONAL, CHARITABLE AND MEDICAL BY COLLECTING GIFTS AND FREE OFFERINGS FORM WELL WISHERS. III) TO GIVEN FINANCIAL ASSISTANCE TO THE CHURCH WORKERS AND EVANGELISTS, TO GIVE FREE FOOD AND MEDICAL HELP TO THE NEEDY. IV) TO RUN DESTITUTE HOMES, TO OFFER MARRIAGE HELP TO T HE NEEDY AND TO HELP THE INDIGENT WIDOWS WHEREVER NECESSARY. V) TO PROPAGATE THE GOSPEL OF LORD JESUS CHRIST. ITA NO.540/COCH/2015 3 VI) TO CONDUCT REVIVAL MEETINGS, CONVENTIONS, PRAYER ME ETINGS, BIBLE CLASSES, CONFERENCES, PERSONAL EVANGELIZATION ALL O VER THE WORLD. TO CONDUCT RADIO OR TV PROGRAMME AND AUDIO AND VIDEO M INISTRIES AND TO CONDUCT MOBILE GOSPEL MINISTRIES. VII) TO CONSTRUCT PRAYER HALLS, AND OFFICE ROOMS ANYWHER E IN INDIA. VIII) TO WRITE AND PUBLISH BOOKS ON SPIRITUAL MATTERS. 6. IT IS FURTHER SUBMITTED THAT AS PER THE ORDER OF T HE ITAT, NAGPUR IN THE CASE OF SHIV MANDIR DEVSTTANPANCH COMMITTEE SANSTAN NAGP UR VS. CIT-I, NAGPUR VIDE ORDER NO. I.T.A. 223/NAGPUR/2009 DATED 11.10.2012 IT IS STATED THAT EXPENSE ON WORSHIP OF HINDU GODS AND TEMPLE MA INTENANCE CANNOT BE REGARDED TO BE FOR RELIGIOUS PURPOSE. THE SAME SHALL BE CONSIDERED IN OUR CASE THAT THE EXPENSES INCURRED BY US ARE NOT F OR RELIGIOUS PURPOSE. 7. IT IS SUBMITTED THAT EACH OBJECTIVE IS EXAMINED IND IVIDUALLY STATING THAT ULTIMATE OBJECT OF THE SAME IN ANNEXURE A WITH RESP ECTIVE EXPLANATION/CASE LAW, AND THE FUNDS ARE ALSO USED F OR THE ABOVE SAID PURPOSES. HENCE IT IS UNDERSTOOD THAT EACH EXPENSES IN QUESTION WHICH WERE SHOWN AS RELIGIOUS EXPENSES WERE GIVEN PURELY OUT OF SOCIAL OBLIGATIONS. (COPIES OF ACCOUNTS OF THE INSTITUTIO N DURING THE LAST 3 YEARS ATTACHED AS ANNEXURE B). 8. IT IS FURTHER SUBMITTED THAT THE TERM RELIGION IS N OT DEFINED UNDER THE INCOME-TAX ACT, 1961. THE POINT FOR CONSIDERATION, THEREFORE, IS WHAT ARE THE MATTERS OF RELIGION AND WHAT ARE NOT. WHAT ARE THE MATTER OF RELIGIOUS OR NON-RELIGIOUS NATURE. THE CONSTITUTION OF INDIA ALSO MAKES NO ATTEMPT TO DEFINE RELIGION. THE ACTIVITIES OF THE TRUST ARE NO T RESTRICTED TO ANY PARTICULAR GROUP IN THE SOCIETY AND IT ENSURES SOCIAL WELL BEI NG OF PUBLIC AS A WHOLE. HENCE THE PORTION OF RELIGIOUS EXPENSES INCURRED BY THE TRUST ASCERTAINED BY CIT(EXEMPTION)IS TOTALLY ILLEGAL IS LIABLE TO BE RECONSIDERED. 9. WE ARE RELYING ON THE FOLLOWING DECISIONS OF VARIO US COURTS: 1. IT IS FURTHER SUBMITTED THAT AS PER THE ORDER OF TH E ITAT, CHANDIGARH IN THE CASE OF YOGRAJ CHARITY TRUST V CI T (1976) 103 ITR 777 (SC). WHERE THE PRIMARY OBJECTS ARE, CHARITABLE , EXEMPTION CANNOT BE DENIED IF A SUBSIDIARY OBJECT IS FOUND TO BE NON- CHARITABLE BUT WHICH IS INTENDED TO SUB SERVE THE R ELIGIOUS AND CHARITABLE OBJECTS. ITA NO.540/COCH/2015 4 2. THE ADVANCEMENT OF ANY OBJECT OF BENEFIT TO THE PUB LIC OR A SECTION OF THE PUBLIC AS DISTINGUISHED FROM AN INDI VIDUAL OR A GROUP OF INDIVIDUALS WOULD BE OF CHARITABLE PURPOSE (CIT V AHMEDABAD RANA CASTE ASSOCIATION (1973) 88 ITR 354 (GUJ). 3. THE COURT HELD THE FOLLOWING HAS TO BE OF GENERAL P UBLIC UTILITY- COMPLETE DEVELOPMENT OF ALL ASPECTS OF LIFE COMPRIS ING ECONOMIC, PHYSICAL AND INTELLECTUAL AS WELL AS SPIR ITUAL WELL BEING. (1977) 106 ITR 709(BOM); (1985) 155 ITR 358 (KER) FOR THESE AND OTHER GROUNDS TO BE FURTHER ADDED AT THE TIME OF HEARING, BEFORE THE HEARING AND AFTER HEARING, IT I S HUMBLY PRAYED THAT THE HONBLE INCOME TAX APPELLATE TRIBUNAL MAY BE KIND ENOUGH TO SET ASIDE THE ORDER OF THE CIT(EXEMPTION) KOCHI AND APPROPRIATE DIRECTION MAY BE ISSUED TO CIT(EXEMPTIO N) TO GRANT US APPROVAL U/S. 80G(5)(VI) OF THE INCOME TAX ACT, 196 1. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED AN APPLICATION IN FORM NO. 10G ON 02/03/2015 REQUESTING FOR APPROVAL U/S. 80G(5)(VI) OF THE INCOME TAX ACT, 1961. THE ASSESS EE FILED THE REQUIRED DETAILS. THE LD. CIT(EXEMPTIONS) NOTED THAT THE ASSESSEE-TRUST HAS I NCURRED RELIGIOUS EXPENDITURE ALSO AND THE OBJECTS OF THE TRUST ARE RELIGIOUS IN NATURE AS SPECIFIED. IT WAS NOTICED BY THE LD. CIT(EXEMPTION S) THAT AS PER THE INCOME & EXPENDITURE FOR THE ASSESSMENT YEARS 2012-13 TO 201 4-15, THE TRUST HAS EXCEEDED 5% LIMIT IN RESPECT OF RELIGIOUS EXPENSES AS UNDER: AY GROSS RECEIPTS RELIGIOUS EXPENDITURE 2012-13 99,17,932 67,28,255 ITA NO.540/COCH/2015 5 2013-14 1,13,88,894 95,14,813 2014-15 1,39,19,232 1,01,86,173 . A SHOW CAUSE NOTICE WAS GIVEN TO THE ASSESSEE WHY T HE APPROVAL U/S. 80G(5)(VI) MAY NOT BE REJECTED. THE ASSESSEE FILE D WRITTEN SUBMISSION DATED 14-09-2015 THAT IT IS AN INTER-DENOMINATIONAL CHARI TABLE TRUST WHICH EXTENDS ITS HELPING HANDS TO THE NEEDY AND DOWNTRODDEN IN THE S OCIETY IRRESPECTIVE OF RELIGION, CASTE OR SECT AND THE BENEFICIARIES OF TH IS TRUST SHALL BE THE GENERAL PUBLIC. THE ASSESSEE FURTHER SUBMITTED THAT THE TRU ST RECEIVED AND DISTRIBUTED DONATIONS FROM WELL-WISHERS. THE DONATIONS HAVE BE EN SPENT FOR THE ATTAINMENT OF ITS OBJECTIVES. THE DONATION IS SPEN T TO CONDUCT VARIOUS SOCIAL, EDUCATIONAL, CHARITABLE AND MEDICAL ACTIVITIES. THE ASSESSEE ALSO PLACED RELIANCE ON THE ORDER OF THE ITAT, NAGPUR BENCH IN THE CASE OF SHIV MANDIR DEVSTTAN PANCH COMMITTEE SANSTAN, NAGPUR VS. CIT-I, NAGPUR IN I.T.A. NO.223/NAGPUR/2009 DATED 11-10-2012 WHEREIN IT IS O BSERVED THAT EXPENSES ON WORSHIP OF HINDU GODS & TEMPLE MAINTENANCE CANNO T BE REGARDED TO BE OR RELIGIOUS PURPOSES. 4. THE CIT(EXEMPTIONS) WAS NOT SATISFIED WITH TH E SUBMISSIONS OF THE ASSESSEE AND HE OBSERVED THAT THE AMOUNT SPENT ON RELIGIOUS PURPOSES FOR ALL THE THREE ASSESSMENT YEARS ARE MORE THAN THE PRESCRIBED LIMIT S AND AS PER EXPLANATION 3 TO SECTION 80G OF THE INCOME TAX ACT, 1961, CHARI TABLE PURPOSE DOES NOT INCLUDE ANY PURPOSE THE WHOLE OR SUBSTANTIALLY THE WHOLE OF WHICH IS OF A ITA NO.540/COCH/2015 6 RELIGIOUS NATURE AND THEREFORE, HE DENIED THE APPRO VAL U/S. 80G(5)(VI) OF THE ACT AND REJECTED THE APPLICATION FILED BY THE ASSES SEE IN FROM NO. 10G. 5. THE LD. COUNSEL FOR THE ASSESSEE, SHRI P.J. JO HNEY ARGUED THAT THE TRUST IS MEANT FOR THE GENERAL PUBLIC AND THE DONATIONS HAVE BEEN SPENT FOR THE ATTAINMENT OF ITS OBJECTS, I.E., TO CONDUCT VARIOUS SPIRITUAL, SOCIAL, EDUCATIONAL, CHARITABLE AND MEDICAL ACTIVITIES IRRESPECTIVE OF C ASTE, CREED, RELIGION OR SECT, TO EXTEND ITS HELPING HANDS TO THE NEEDY AND DOWNT RODDEN IN THE SOCIETY AND TO THE GENERAL PUBLIC IRRESPECTIVE OF CASTE, CR EED, RELIGION OR SECT. THE LD. CIT(EXEMPTIONS) HAS NOT SPECIFIED THE STAND THA T THE EXPENSES WERE INCURRED FOR ONE COMMUNITY OR FOR RELIGIOUS PURPOSE S WHEREAS ALL THE BOOKS OF ACCOUNT AND THE VOUCHERS WERE SUBMITTED. THE TRUST IS RELAYING TV PROGRAMMES WHICH IS MEANT FOR GENERAL PUBLIC UTILIT Y FOR THE DEVELOPMENT OF ALL ASPECTS OF LIFE COMPRISING ECONOMIC, PHYSICAL A ND INTELLECTUAL AS WELL AS SPIRITUAL WELL BEING. THE VIEWS ARE SUPPORTED BY V ARIOUS COURTS OF LAW IN THE CASE OF (1977) 106 ITR 709 (BOM), (1985) 155 ITR 35 8(KER). IT WAS HELD BY THE ITAT, NAGPUR BENCH IN THE CASE OF SHIV MANDIR DEVST TAN PANCH COMMITTEE SANSTAN NAGPUR VS. CIT VIDE ORDER DATED 11/10/2012 IN I.T.A. NO.223/NAGPUR/2009 THAT THE EXPENSE ON WORSHIP OF H INDU GODS AND TEMPLE MAINTENANCE CANNOT BE REGARDED TO BE FOR RELIGIOUS PURPOSE. THE SAME SHALL BE CONSIDERED IN THE PRESENT CASE THAT THE EX PENSES INCURRED BY THE TRUST ARE NOT FOR RELIGIOUS PURPOSE. IT WAS SUBMI TTED THAT REVIVAL MEETINGS, ITA NO.540/COCH/2015 7 CONVENTIONS, PRAYER MEETINGS, BIBLE CLASSES, CONFER ENCES, PERSONAL EVANGELIZATION ALL OVER THE WORLD, CONDUCTING RADIO AND TV PROGRAMMES AND AUDIO AND VIDEO MINISTRIES AND MOBILE GOSPEL MINIST RIES IS A MAJOR SOURCE FOR PHYSICAL AND MENTAL HEALTH AND SPIRITUAL ATTAINMENT IRRESPECTIVE OF CASTE, RACE, CREED, LANGUAGE AND REGION AND THUS THE DONAT IONS RECEIVED FOR THE SAME IS FOR ADVANCEMENT OF GENERAL PUBLIC UTILITY. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(EXEMPTION S) HAS NOT EXAMINED THE VOUCHERS AND BOOKS OF ACCOUNT AND THE STATEMENTS IN THE RIGHT PERSPECTIVE AND HAS NOT POINTED OUT EVEN A SINGLE EXPENDITURE S PECIFICALLY FOR ONE COMMUNITY OR RELIGIOUS PURPOSE. IN FACT ALL THE EXP ENSES HAVE BEEN INCURRED FOR CHARITABLE PURPOSE AS IS EVIDENT FROM THE VOUCH ERS AND BOOKS OF ACCOUNT AND THE STATEMENTS PLACED ON RECORD. 6. THE LD. DR ON THE OTHER HAND RELIED UPON THE O RDER OF LD. CIT(EXEMPTIONS) 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. AS PER SECTION 80G(1)IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, THERE SHALL BE DEDUCTED IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION WHERE THE SUM REFERRED TO IN SECTION 80(G)2 OF THE ACT SUBJECT TO CERTAIN PRESCRIBED LIMITS WITH REFERENCE TO GROSS T OTAL INCOME AS PER SECTION 80G(4) OF THE ACT. SECTION 80G APPLIES TO DONATIO NS TO ANY INSTITUTION OR FUND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB -SECTION (2, ONLY IF IT IS ITA NO.540/COCH/2015 8 ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE AND I F IT FULFILS THE CONDITIONS AS REFERRED TO IN SECTION 80G(5) OF THE ACT. AS PER S ECTION 80G (5B) OF THE ACT, ANY EXPENDITURE OF RELIGIOUS NATURE SHOULD NOT EXCE ED 5% OF THE TOTAL INCOME. THE SAID SECTION IS REPRODUCED HEREINBELO W. EXPLANATION 3 IS ALSO REPRODUCED HEREINBELOW: (5B) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( II) OF SUB-SECTION (5) AND EXPLANATION 3, AN INSTITUTION OR FUND WHICH INCURS EXPENDITURE, DURING ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE FOR A N AMOUNT NOT EXCEEDING FIVE PER CENT OF ITS TOTAL INCOME IN THAT PREVIOUS YEAR SHALL BE DEEMED TO BE AN INSTITUTION OR FUND TO WHICH THE PROVISIONS OF T HIS SECTION APPLY. EXPLANATION 3 IN THIS SECTION CHARITABLE PURPOSE DOES NOT INCLUDE ANY PURPOSE THE WHOLE OR SUBSTANTIALLY THE WHOLE OF WHI CH IS OF A RELIGIOUS NATURE. 8. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE MR. P.J. JOHNEY QUESTIONED THE INCURRING OF THE EXPENDITURE FOR RELIGIOUS PURP OSE. IN FACT ACTUAL EXPENDITURE HAS BEEN INCURRED AND THE DOCUMENTARY E VIDENCE HAS BEEN FILED IN THE FORM OF VOUCHERS AND BOOKS OF ACCOUNT PRODUCED BEFORE THE LD. CIT(EXEMPTIONS). NO BASIS OF WHATSOEVER KIND HAS B EEN GIVEN BY THE LD. CIT(EXEMPTIONS) IN HIS ORDER AT PAGE 2 REPRODUCED H EREINABOVE WHILE COMPUTING THE RELIGIOUS EXPENDITURE FOR THE ASSESSM ENT YEARS 2012-13 TO 2014- 15. WHEREAS THE LD. COUNSEL FOR THE ASSESSEE ARGUE D THAT ALL THE EXPENDITURE ARE FOR CHARITABLE PURPOSE AND THE BENEFICIARIES OF THE TRUST IS THE GENERAL PUBLIC. THE DONATIONS HAVE BEEN SPENT TO CONDUCT V ARIOUS SOCIAL, EDUCATIONAL, CHARITABLE AND MEDICAL ACTIVITIES. TH E LD. CIT(EXEMPTIONS) HAS ITA NO.540/COCH/2015 9 NOT EXAMINED THIS ASPECT IN THE RIGHT PERSPECTIVE A S PER THE PROVISIONS OF SECTION 80(5B) READ WITH EXPLANATION (3) TO THE SAI D SECTION. THE LD. CIT(E) HAS NOT PASSED A SPEAKING ORDER AND THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE TO THE FILE OF THE LD. CIT(E) T O CONSIDER THE EXPENSES ACTUALLY INCURRED VIS--VIS THE OBJECTS FOR WHICH T HE EXPENSES HAVE BEEN INCURRED AND DECIDE THE ISSUE DE NOVO BUT AFTER AFF ORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORD INGLY ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUN CED IN THE OPEN COURT ON 01-08-2016. SD/- SD/- ( . ) (GEORGE GEORGE K.) ( . . ) (B. P. JAIN) /ACCOUNTANT MEMBER /JUDICIAL MEMBER & /PLACE: /COCHIN 2 /DATED: 1ST JULY, 2016 GJ/ 1 * (.3 43%. /COPY TO: 1. &' /CHRISTIAN REVIVAL FELLOWSHIP TRUST, MANJAMKUZHY BU ILDINGS, P.B. NO.17, KOLENCHERY, ERNAKULAM-682 311. 2. () &' /THE INCOME TAX OFFICER (EXEMPTIONS), KOCHI. 3. ,5 . ( )/THE COMMISSIONER OF INCOME-TAX(EXEMPTIONS), KOCHI ITA NO.540/COCH/2015 10 4. ,5 . /THE COMMISSIONER OF INCOME-TAX,KOCHI. 5. 367 (. , /THE DR/ITAT, COCHIN BENCH. 6. 79 :- /GUARD FILE. 1, /BY ORDER ; /ASSISTANT REGISTRAR - .