ITO (E)-1(1), MUMBAI V. BOMBAY PANJRAPOLE, MUMBAI

ITA 5714/MUM/2010

• Counselvise Citation: 571419914 RSA 2010
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: GIRISH DAVE
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER & SHRI VIVEK VARMA, JUDICIAL MEMBER I.T.A. NO. 5714/M/2010 ASSESSMENT YEAR 2007-2008 ITO (E)-I(1), R.NO.503, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI 400 012. VS. BOMBAY PANJRAPOLE, NEAR MADHAV BAUG POST OFFICE, BHULESHWAR, C.P. TANK, MUMBAI 400 004. PAN: AAATB4289N (APPELLANT) (RESPONDENT) APPELLANT BY : MR. P. C. MAURYA RESPONDENT BY : MR. GIRISH DAVE DATE OF HEARING: 16.07.2012 DATE OF ORDER:25.07. 2012 O R D E R PER VIVEK VARMA, JM: THIS APPEAL IS FILED BY THE DEPARTMENT AGAINST THE ORDER OF CIT (A), MUMBAI DATED, 26.03.2010, WHEREIN THE CIT (A) HAS DELETED THE ADDITION OF RS. 84,36,407/- MADE BY THE AO U/S 115BBC. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST ENGAGED IN MAINTAINING GAUSHALAS AND TENDING TO OTHER ANIMALS AND BIRDS, BY GIVING THEM FOOD, SHELTER AND MEDICAL AID TO DISABLED ANIMALS AND OTH ER ACTIVITIES, ALL CONNECTED WITH THE PROTECTION AND FEEDING OF ANIMALS AND BIRDS, BE SIDES DOING RESEARCH IN ANIMAL HUSBANDRY AND CONDUCTING SCHOOLS AND CLASSES TO EDU CATE THE PEOPLE IN THESE FIELDS. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO C AME ACROSS TWO TYPES OF COLLECTIONS I.E. DHARMAU BOX COLLECTION AND DHARMUN (OTHER COLLECTION) WHICH WERE AT RS. 5,25,716/- AND RS. 1,00,13,978/- RESPECTIVEL Y, ON WHICH THE AO SOUGHT THE 2 I.T.A. NO. 5714/M/2010 ASSESSEES REPLY. THE ASSESSEE GAVE A DETAILED REPL Y AND RELIED ON THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF VALLAB HDAS KARSONDAS NEHATA VS CIT, REPORTED IN 15 ITR 113, WHEREIN THE HONBLE BOMBAY HIGH COURT HELD, THAT SUPPLY OF FODDER TO ANIMALS AND CATTLE IS A CHARITABLE OBJ ECT , AND THE CASE OF CIT VS SWASTHIC TEXTILE TRADING CO. LTD., REPORTED IN 113 ITR 852, WHEREIN THE HONBLE GUJARAT HIGH COURT HELD, THAT THE OBJECT OF ESTABLISHING, MAINTAINING, RUNN ING AND HELPING GAUSHALAS, PANJARPOLES FOR ANIMALS ETC. IS HIGHLY CHARITABLE. 4. THE AO, AFTER CONSIDERING THE DETAILED REPLY ADD ED THE ENTIRE COLLECTIONS OF DHARMAU BOX AMOUNTING TO RS. 5,25,716/- AND IN THE CASE OF DHARMAU, FOR WHICH THE ASSESSEE WAS ABLE TO IDENTIFY THE DONATIONS OF RS. 21,03,286/- REDUCED THIS FROM RS. 1,00,13,978/- AND ADDED RS. 79,10,691/-. THE AG GREGATE ADDITION MADE BY THE AO CAME TO RS. 84,36,407/- (RS. 5,25,716 + RS. 79,1 0,691). WHILE CONSIDERING THE REPLY OF THE ASSESSEE, THE AO CAME ACROSS THE AMOUN TS OF DONATIONS, WHICH RANGED FROM RS. 10/- TO RS. 15/-. IT WAS ALSO BROUGHT TO TH E NOTICE OF THE AO THAT IN THE YEAR ENDED 31.03.1994, THE CHARITY COMMISSIONER HEL D THAT EXPENSES ON COW GRASS, MISCELLANEOUS EXPENSES FOR ANIMALS, MILS UPAJ, COW DUNG WERE NOT IN THE NATURE OF VETERINARY TREATMENT AND THEREFORE THE SAME WERE NO T EXEMPTED FROM THE CONTRIBUTION U/S 52 OF THE BOMBAY PUBLIC TRUST ACT. AGAINST THIS ORDER OF THE CHARITY COMMISSIONER, A WRIT WAS FILED BEFORE THE HONBLE B OMBAY HIGH COURT, WHO PASSED THE INTERIM ORDER IN FAVOUR OF THE ASSESSEE AND CHA RITY COMMISSIONER HAD TO REFUND THE CONTRIBUTION TO THE CHARITY COMMISSION AT RS.1, 04,768/-. THE HONBLE BOMBAY HIGH COURT UPHELD THE INTERIM ORDER, AS PASSED, IN THE FINAL ORDER. THE AO WAS APPRISED THAT EVEN THE INCOME TAX DEPARTMENT HAD BEE N ACCEPTING THE COMPUTATION OF THE ASSESSEE. THE ASSESSEE SUBMITTED THAT, BY VIRTUE OF LAW OF PRECEDENCE ON 3 I.T.A. NO. 5714/M/2010 THE SAME FACTS AND CIRCUMSTANCES THE PRACTICE OUGHT TO BE FOLLOWED AND COULD NOT BE DEVIATED. THE AO, HOWEVER, DID NOT ACCEPT THE SAME AND ADDED THE SUMS, AS MENTIONED, TO THE INCOME OF THE ASSESSEE FOR THE YE AR UNDER CONSIDERATION. 5. THE ASSESSEE, TOOK THE ISSUE BEFORE THE CIT (A), BEFORE WHOM, THE SUBMISSIONS WERE REITERATED, RELEVANT PORTIONS ARE EXTRACTED HERE UNDER: . 1. THE TRUST WAS DECLARED BY SIR JAMSETJEE JEEJEEBHOY , KNIGHT BY A TRUST DEED DATED OCTOBER 18, 1834 FOR THE KEEP OF STRAY C ATTLE AND OTHER ANIMALS WITH A VIEW TO PROTECT THEIR LIVES. THE TRUST CRAV ES LEAVE TO REFER TO AND RELY UPON THE TRUST DEED DATED OCTOBER 18, 1834. 2. THE CHARITY COMMISSIONER APPROVED THE SCHEME FOR M ANAGEMENT AND ADMINISTRATION OF THE TRUST WITH REGISTRATION NO. E -127 UNDER SECTION 50A OF THE BOMBAY PUBLIC TRUSTS ACT, 1950. UNDER THE SAID SCHEME, THE TRUSTEES WERE UNDER AN OBLIGATION TO COLLECT AND RECEIVE REN TS, INTEREST, DIVIDENDS, DONATIONS AND ANY OTHER INCOME OF THE TRUST. TO PAY THERE FROM THE OUTGOINGS PAYABLE IN RESPECT OF THE TRUST ASSETS AN D ANY OTHER COSTS, CHARGES AND EXPENSES INCIDENTAL TO THE MANAGEMENT A ND MAINTENANCE OF THE TRUST ASSETS AND APPLY THE BALANCE FUNDS IN THE FOLLOWING MANNER VIZ., (1) MAINTENANCE AND UP-KEEP OF PANJRAPOLE; (2) KEEP ING OF CATTLE AND OTHER ANIMALS AND BIRDS IN THE PANJRAPOLE AND GIVING THEM FOOD, SHELTER AND MEDICAL AID AND TO LOOK AFTER OLD, INFIRM AND DISAB LE ANIMALS; (3) CARRYING OUT AND IMPLEMENTING OTHER EXISTING OBJECTS OF THE TRUST AS MENTIONED IN THE EARLIER TRUST DEEDS SUCH AS GIVING FINANCIAL AN D OTHER AID AND ASSISTANCE TO OTHER SICK OR WEAK PANJRAPOLE AND OTHER INSTITUT IONS OF THE SAME OR SIMILAR NATURE AND OTHER MISCELLANEOUS OBJECTS. WE ARE ENC LOSING HEREWITH A COPY OF THE SCHEME OF MANAGEMENT AND ADMINISTRATION OF P ETITIONER TRUST AS APPROVED BY THE CHARITY COMMISSIONER UNDER SECTION 50A OF THE BOMBAY PUBLIC TRUSTS, ACT, 1950 3. FOR LAST MORE THAN 176 YEARS, THE TRUST HAS BEEN E NGAGED IN TAKING CARE OF THE OLD, INFIRM AND DISABLED ANIMALS AND BIRDS. F OR THIS PURPOSE, APART FROM THE PANJRAPOLE AT BHULESHWAR IT HAS BRANCHES AT RAI TA, MALA, WALSING, LAKHIVALI, CHEMBUR AND BHILAD. AS OF FEBRUARY 2010 , THE TRUST HAD IN ALL 1800 ANIMALS AND BIRDS IN THE PANJRAPOLE INCLUDING APPROXIMATELY 1100 COWS, 50 BULLOCKS, 50 DOGS, 250 GOATS, 200 PIGEONS AND 150 OTHER BIDS, ETC. THE COURTS, THE POLICE AND THE PUBLIC AT LARGE LEAV E THE ANIMALS AND BIRDS 4 I.T.A. NO. 5714/M/2010 WHO HAVE MET WITH SOME ACCIDENT, OR WHO HAVE BEEN I LL TREATED BY THEIR OWNERS OR WHO HAVE BEEN RESCUED FROM THE SLAUGHTER HOUSES INTO THE TRUST PANJRAPOLE. THE TRUST PROVIDES SUCH ANIMALS AND BIR DS WITH MEDICAL CARE, FOOD AND SHELTER. 4. IT IS A WELL KNOWN FACT THAT TAKING CARE OF OLD, S ICK, WOUNDED AND INFIRM ANIMALS ESPECIALLY COWS AND DOGS PROVIDING THEM WIT H MEDICAL CARE AND FEEDING THEM HAS BEEN ALWAYS CONSIDERED AS A HOLY A ND RELIGIOUS DUTY BY THE HINDUS, JAINS AND PARSEES. SINCE THE TRUST IS CARRYING OUT RELIGIOUS OBLIGATIONS IT SUBMITS THAT IT HAS BEEN CREATED THE ESTABLISHED WHOLLY FOR RELIGIOUS PURPOSES. THE TRUST CRAVES LEAVE TO REFE R TO AND RELY UPON BOOKS ON RELIGION TO SHOW THAT TAKING CARE OF OLD, SICK, WOUNDED, INFIRM AND OTHER SUCH ANIMALS IS RELIGIOUS OBLIGATION. 5. THE TRUST WAS NOTIFIED AS AN INFIRMARY BY THE GOVE RNOR IN COUNCIL VIDE NOTIFICATION NO. 3428 DATED MAY 12, 1915. THIS NOTI FICATION WAS ISSUED UNDER SECTION 6(2) OF THE PREVENTION OF CRUELTY TO ANIMALS ACT, 1890. SUBSEQUENTLY, THE SECRETARY, GOVERNMENT OF MAHARASHT RA, PASSED AN ORDER DATED FEBRUARY 02, 2008, APPOINTING THE TRUST AS AN INFIRMARY UNDER THE PREVENTION OF CRUELTY TO ANIMALS ACT, 1960. IN FAC T THE ASSISTANT CHARITY COMMISSIONERS ORDER DATED AUGUST 18, 1997 HOLDING THAT THE EXPENSES ON GREEN GRASS FOR THE COWS CANNOT BE REGARDED AS TOWA RDS VETERINARY TREATMENT AND HENCE LIABLE TO CONTRIBUTION UNDER SE CTION 58 OF THE BOMBAY PUBLIC TRUSTS ACT, 1950 WAS REVERSED BY THE HONBLE HIGH COURT. 6. THE TRUST SOURCES OF RECEIPTS COMPRISES OF RENT, IN TEREST, DIVIDEND DONATION, BOX COLLECTION ETC. AND AMOUNTS RECEIVED FROM VISIT ORS TO THE PANJRAPOLE TOWARDS EXPENSES OF GREEN GRASS, GOL LADY AND DANA, ETC. FOR FEEDING THE ANIMALS AND BIRDS IN THE PANJRAPOLE. THIS AMOUNT RE CEIVED FROM THE VISITORS THOUGH OF SMALL PETTY INDIVIDUAL AMOUNTS FORMS A SU BSTANTIAL PART OF THE TOTAL RECEIPTS OF THE TRUST. THE GREEN GRASS, GOL LADDU AND DANA TAKEN BY THE VISITORS FROM THE PANJRAPOLE HAVE TO BE USED BY THEM IN FEEDING THE ANIMALS AND BIRDS WITHIN THE PANJRAPOLE AND CANNOT BE REMOVED OUTSIDE THE PANJRAPOLE PREMISES. THE TRUST IS UNDER AN OBLIGATI ON TO FEED THE ANIMALS AND BIRDS IN THE PANJRAPOLE. APART FROM PROVIDING M EDICAL ATTENTION IT IS ALSO ESSENTIAL TO PROVIDE THE ANIMALS AND BIRDS IN THE P ANJRAPOLE WITH GOOD FOOD SO THAT THEY CAN LEAD A HEALTHY LIFE. BY DISTRIBUTI NG THE GREEN GRASS, GOL LADDU AND DANA AMONG THE VISITORS WHO IN TURN USE T HEM TO FEED THE ANIMALS AND BIRDS IN THE PANJRAPOLE, THE TRUST HAS IN EFFECT DEFRAYED ITS EXPENDITURE ON FEEDING THE ANIMALS AND BIRDS IN THE PANJRAPOLE. IT IS GIVEN APPROXIMATELY FOR EXAMPLE THE QUANTITY OF GRASS GIV EN, THE SIZE OF THE LADU, 5 I.T.A. NO. 5714/M/2010 QUANTITY OF DANA, ETC. ARE NOT BY ANY EXACT WEIGHT OR QUANTITY. THE QUALITY OF CARE TAKEN BY THE TRUST OF THE ANIMALS AND BIRDS IN THE PANJRAPOLE IS REFLECTED BY THE GOPAL RATNA AWARD CONFERRED BY THE GOVERNMENT OF INDIA ON THE TRUST WHERE ONE OF THE PANJRAPOLE GAVE THE H IGHEST QUANTITY OF MILK FOR THE YEAR 1983-84. THE TRUST HAS ALSO RECEIVED V ARIOUS SIMILAR AWARDS FROM STATE LEVEL AND NATIONAL LEVEL INSTITUTIONS. P HOTO COPIES OF SOME OF THE OTHER SEVERAL AWARDS RECEIVED OVER THE YEARS ARE AL SO ENCLOSED HEREWITH. 7. THE RECEIPTS FROM VISITORS TO THE PANJRAPOLE TOWARD S THE EXPENSES OF GREEN GRASS, GOL LADDU AND DANA, THE TOTAL RECEIPTS OF TH E TRUST INCLUDING THAT FROM THE VISITORS AND EXPENDITURE INCURRED BY THE TRUST FOR THE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS 2003-2004 TO 2007-2008 ARE AS UNDER: 8. THE GREEN GRASS, GOL LADDU AND DANA IS TAKEN BY THE PEOPLE VISITIING THE PANJRAPOLE FOR WHICH THEY PAY AN AMOUNT RANGING BET WEEN RS. 2 TO MAY BE RS. 150/- PER VISITOR. ON AN AVERAGE, ON A REGULAR DAY THERE ARE APPROXIMATELY 450 TO 600 VISITORS TO THE TRUST RESU LTING IN A DAILY COLLECTION OF RS. 35,000/- APPROXIMATELY. FURTHER, THE FREQUEN CY OF THESE VISITORS IS MORE FOCUSED DURING THE MORNING HOURS AND IS NOT EV ENLY SPREAD OVER THE WHOLE DAY. ON SPECIAL DAYS LIKE HALF MOON, FULL MO ON AND NO MOON DAYS, THE NUMBER OF VISITORS COMING TO THE PANJRAPOLE RAN GE APPROXIMATELY BETWEEN 1200 TO 1600. ON SUCH DAYS, WHICH NUMBER 6 0 DAYS IN A YEAR, THE TRUST HAS COLLECTION OF APPROXIMATELY RS. 50,000/- PER DAY. FURTHER, ON FESTIVAL OCCASIONS LIKE MAKAR SANKRANTI, DIWALI AND NEW YEAR (FOUR DAYS IN A YEAR) THE NUMBER OF VISITORS COMING TO THE PANJARAP OLE GOES UP TO APPROXIMATELY 3000 TO 4000. ON THESE DAYS, THE PANJ ARAPOLE HAS A COLLECTION OF APPROXIMATELY RS. 2 LAKHS TO RS. 3 LA KHS PER DAY. AMOUNTS OF RS. 2 TO RS. 150/- PAID BY THE VISITORS TOWARDS DEF RAYING OF EXPENSES IS NORMALLY OUT OF THEIR PERSONAL SAVINGS AND BY NO ST RETCH OF IMAGINATION CAN BE REGARDED AS ANY UNACCOUNTED MONEY BEING CHANNELI ZED BY THEM INTO THE TRUST. THE TRUST SUBMITS THAT WRITING SUCH NAMES AN D ADDRESSES ON THE RECEIPTS WOULD TAKE AT LEAST 2 TO 2.1/2 MINUTES PER PERSON. AS STATED ABOVE, THESE VISITORS ARE NOT EVENLY SPREAD OVER THE ENTIR E DAY. IN FACT, THE MAXIMUM TRAFFIC IS ONLY FOR A FEW HOURS IN THE MORN ING. IT IS PRACTICALLY IMPOSSIBLE FOR THE TRUST TO TAKE AND MAINTAIN THE D ETAILS IN RESPECT OF THE NAMES AND ADDRESSES OF SUCH PERSONS WITHING THE LIM ITED TIME FRAME. FURTHER, JUST BY MAKING NOTE OF THE NAMES AND ADDRE SSES OF THE PERSONS VISITING THE PANJRAPOLE WOULD NEVER BE SUFFICIENT T O ASCERTAIN THE IDENTITY OF THAT PERSON BECAUSE THE TRUST WILL NEVER BE ABLE TO VERIFY THE CORRECTNESS OF SUCH NAMES AND ADDRESSES. THEREFORE, NOT ONLY IS IT IMPOSSIBLE FOR THE TRUST 6 I.T.A. NO. 5714/M/2010 TO MAINTAIN SUCH DETAILS, BUT THE ENTIRE EXERCISE W OULD ALSO BE MEANINGLESS BECAUSE IT WOULD NOT SERVE ANY PURPOSE. HOWEVER, I N RESPECT OF AMOUNTS RECEIVED IN EXCESS OF RS. 150/- THE TRUST HAS SYSTE M OF MAINTAINING RECORD OF THE IDENTITY OF THE PAYER INDICATING THE NAME AN D ADDRESS OF SUCH PERSON. 9. IN THE PANDRAPOLE THE APPELLANT HAS A COLLECTION BO X WHICH CARRIES A NOTICE THAT NOTICE DONATION IN THIS BOX IS ACCEPTED STRICTLY FOR SHELT ER, MEDICAL AID & TO LOOK AFTER OLD INFIRM & DISABLED ANIMALS LY ING IN BOMBAY PANJRAPOLE AS PROVIDED AS OBJECT OF THIS INST ITUTION THEREFORE THE BOX COLLECTION DONATIONS WERE RECEIVE D WITH A SPECIFIC DIRECTION THAT SUCH DONATION WAS FOR THE INFIRMARY I.E. A HOSPITAL OR A MEDICAL INSTITUTION. PHOTOS OF THE SAID COLLECTION BOX AND THE NOTICE AR E ENCLOSED HEREWITH FOR YOUR READY REFERENCE. THE SAME CAN AL SO BE PHYSICALLY VERIFIED BY A VISIT TO THE PANJRAPOLE PREMISES AT THE HEAD O FFICE AT BHULESHWAR. WHILE INTRODUCING FINANCIAL BILL, 2006 IN THE PARLI AMENT ON FEBRUARY 28, 2006 IN HIS BUDGET SPEECH AT PARAGRAPH 168, THE FINANCE MINISTER OBSERVED: 168. THE STANDING COMMITTEE ON FINANCE HAS EXPRE SSED CONCERN THAT MANY CHARITABLE INSTITUTIONS MISUSE THE PROVIS IONS OF THE INCOME TAX ACT. I PROPOSE TO FOCUS ON THE MISUSE, NAMELY, REC EIVING ANONYMOUS OR PSEUDONYMOUS DONATIONS. ACCORDINGLY, I PROPOSE THAT ANONYMOUS OR PSEUDONYMOUS DONATIONS TO WHOLLY CHARITABLE INSTITU TIONS WILL BE TAXED AT THE HIGHEST MARGINAL RATE. SUCH DONATIONS TO PARTL Y RELIGIOUS AND PARTLY CHARITABLE INSTITUTIONS / TRUSTS WILL BE TAXED ONLY IF THE DONATION IS SPECIFICALLY FOR AN EDUCATIONAL OR MEDICAL PURPOSE. HOWEVER, I MAKE IT CLEAR THAT SUCH DONATIONS TO WHOLLY RELIGIOUS INSTITUTIONS AND RELI GIOUS TRUSTS WILL NOT BE COVERED BY THE NEW PROVISION. IN THE MEMORANDUM EXPLAINING THE PROVISIONS CONTAIN ED IN THE FINANCE BILL, 2006 WHILE DEALING WITH THE PROVISION S RELATING TO SECTION 115BBC IT HAS BEEN STATED THAT: IN ORDER TO TAX UNACCOUNTED MONEY BEING CONTRIBUT ED TO THESE INSTITUTIONS BY WAY OF ANONYMOUS DONATIONS, IT IS P ROPOSED TO INSERT A NEW SECTION 115BBC SO AS TO PROVIDE THAT ANY INCOME BY WAY OF ANONYMOUS DONATIONS OF THE ENTITIES REFERRED TO IN THAT SECTI ON SHALL BE INCLUDED IN THE TOTAL INCOME AND TAXED AT THE RATE OF 30 PER CENT. 7 I.T.A. NO. 5714/M/2010 IN CIRCULAR NO. 14 OF 2006 DATED DECEMBER 28, 2006 EXPLAINING THE PROVISIONS OF THE FINANCE ACT, 2006 THE RESPONDENT NO. 3 HAS CLARIFIED IN PARAGRAPH 25.2 WITH A VIEW TO PREVENT CHANNELIZATI ON OF UNACCOUNTED MONEY TO THESE INSTITUTIONS BY WAY OF ANONYMOUS DON ATIONS, A NEW SECTION 115BBC HAS BEEN INSERTED TO PROVIDE THAT ANY INCOME OF WHOLLY CHARITABLE TRUST OR INSTITUTIONS BY WAY OF ANONYMOUS DONATION SHALL BE INCLUDED IN ITS TOTAL INCOME AND TAXED AT THE RATE OF 30 PER CENT. ANONYMOUS DONATIONS MADE TO WHOLLY CHARITABLE AND RELIGIOUS TRUSTS OR I NSTITUTIONS, I.E., MIXED PURPOSE TRUSTS OR INSTITUTIONS SHALL BE TAXED ONLY IF IT IS FOR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OT HER MEDICAL INSTITUTION RUN BY THEM. ANONYMOUS DONATIONS TO WHOLLY RELIGIOUS TR USTS OR INSTITUTIONS WILL NOT BE TAXED. THEREFORE, THE OBJECT AND PURPOSE BEHIND INSERTION OF SECTION 115BBC IN THE ACT WAS TO PREVENT CHANNELIZATION OF UNACCOUNTED MONEY BY WAY OF ANONYMOUS DONATIONS TO TRUSTS OR INSTITUTION S. THIS TAX IS TO BE LEVIED ONLY ON A CHARITABLE TRUST OR INSTITUTION OR A MIXED PURPOSE TRUST OR INSTITUTION RUNNING A UNIVERSITY OR OTHER EDUCATION AL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION WHERE THE ANO NYMOUS DONATION IS RECEIVED WITH A SPECIFIC DIRECTION THAT IT IS RECEI VED FOR SUCH PURPOSE. THE JAIN RELIGIOUS BELIEF OF JEEVA DAYA I.E. COMP ASSION TOWARDS ALL LIVING CREATURES IN NOT ONLY RECORDED IN ALL JAIN S ACRED TEXTS BUT IS ACTIVELY PRACTICED TO THIS DAY IN THE FORM OF VARIOUS TRUSTS AND INDIVIDUALS PURSUING THIS CONCEPT BY SPENDING CRORES OF RUPEES EVERY YEA R FOR PROTECTING ALL ANIMAL LIFE. A SIMILAR RELIGIOUS AND HUMANITARIAN OUTLOOK PREVA ILS AMONGST THE HINDU, JAIN & PARSI COMMUNITIES. THE APPELLANT TRUSTS A/R HAS SUBMITTED BEFORE ME THAT THE APPELLANT TRUST IS RUNNING GAUSHALAS TO CARE OF COW S, BIRDS AND OTHER ANIMALS IN THE FORM OF FOOD, MEDICINE AND OTHER REL ATED FACILITIES. THEY HAVE ALSO SUBMITTED THAT THE REGULAR VISITORS WHILE VISI TING GAUSHALAS BY THE GREEN GRASS, GOL LADDU AND OTHER EATABLE ITEMS WHICH ARE AVAILABLE IN THE CAMPUS OF THE APPELLANT TRUST. THE SAID VISITORS BUY THESE ITEMS FOR MEAGER SUM OF RS. 10/- TO RS. 150/- ONLY. THIS IS DONE BY REGULAR VISITORS WITH SOLE INTENTION OF GO-SEVA HAVING RELIGIOUS FAITH IN THE MIND. THE APPELLANT TRUST ARRANGED THE SAME IN ITS CAMPUS OF THESE ITEMS WHIC H HELPS IN CARRYING OUT THE OBJECT OF THE TRUST. IN ADDITION TO THIS, THE APPELLANT TRUSTS A/R ALSO SUBMITTED THAT IF ANYBODY PURCHASES THESE ITEMS VAL UE OF EXCEEDING RS. 8 I.T.A. NO. 5714/M/2010 150/-, THEN THE APPELLANT TRUST ISSUE RECEIPT TO SU CH PERSON, WITH DETAILS OF NAME & ADDRESS OF SUCH DONOR / VISITORS. HAVING CONSIDERED THE AOS ORDER AS WELL AS THE AP PELLANT TRUSTS SUBMISSION, I AM OF THE CONSIDERED VIEW THAT THE AO MISUNDERSTOOD THE INTENTION OF THE LAW, WHILE APPLYING THE PROVISIONS OF SECTION 115BBC OF THE IT ACT, 1961. THIS PROVISION HAS NOT BEEN BROUGHT O N STATUTE WITH THE INTENTION TO CHECK THESE TYPE OF DONATION OF MEAGER AMOUNT OF RS. 10/- TO RS. 150/-. I AM OF THE CONSIDERED VIEW THAT THIS WA S NOWHERE INTENT OF THE LAW, BESIDES THIS, EVEN IF, SECTION 115BBC(2) OF TH E IT ACT, 1961 IS TAKEN INTO ACCOUNT. THUS THE AOS ACTION IS CONSIDERED UN JUSTIFIED AND AGAINST THE PROVISION OF LAW, THE SAME IS REPRODUCED AS UNDER: SECTION 115BBC(2) (2) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT AP PLY TO ANY ANONYMOUS DONATION RECEIVED BY- (A) ANY TRUST OR INSTITUTION CREATED OR ESTABLISHED WHO LLY FOR RELIGIOUS PURPOSES. (B) ANY TRUST OR INSTITUTION CREATED OR ESTABLISHED WHOLLY FOR RELIGIOUS AND CHARITABLE PURPOSES OTHER THAN ANY AN ONYMOUS DONATION MADE WITH A SPECIFIC DIRECTION THAT SUCH DONATION IS FOR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION RUN BY SUCH TRUST OR INST ITUTION. EVEN THOUGH, THE APPELLANT TRUST HAS BROUGHT TO MY NOTICE THAT THE MAIN ACTIVITY OF THE APPELLANT TRUST IS TO RUN THE GAUSHALAS, WHICH IS MOTIVATED WITH RELIGIOUS FAITH. HAVING CO NSIDERED THE APPELLANT TRUSTS SUBMISSION AND ALSO AOS ORDER, I HAVE NO HESITATION TO HOLD THAT THE AO WAS NOT JUSTIFIED IN INVOKING THE PROVISION OF SECTION 115BBC OF THE IT ACT, 1961 FOR TAXING SUCH ANONYMOUS DONATIONS, WHICH ITSELF WAS NOT PERMITTED AS PER SECTION 115-BBC(2) OF THE IT ACT, 1961. BESIDES THIS, HAVING CAREFUL CONSIDERATION OF ALL THE SUBMISSIONS BROUGHT BEFORE ME, I HOLD THAT THE AOS ACTION WAS NOT JUSTIFIED. AS THE APPELLANT TRUST HOLDS THE REGISTRATION UNDER SECTIO N 12A OF THE IT ACT, 1961 IN CONTINUATION AND EVEN THE AMOUNT OF RS. 84,36,40 7/- HAS BEEN UTILIZED BY APPELLANT TRUST FOR THE CAUSE OF APPELLANT TRUST ON LY. THE ENTIRE SUCH RECEIPT WAS UTILIZED BY APPELLANT TRUST FOR THE PURPOSE OF OBJECT OF THE TRUST. THUS, ACCORDINGLY ON THE BASIS OF THE AFORESAID DISCUSSIO N & ALSO CONSIDERING THE APPLICATION OF SUCH ANONYMOUS DONATION, I HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING THIS ADDITION OF RS. 84,36,407/ - AND ACCORDINGLY, I 9 I.T.A. NO. 5714/M/2010 CONSIDERED IT PROPER AND APPROPRIATE TO DELETE THE ADDITION OF RS. 84,36,407/-. THE APPELLANT TRUST GETS RELIEF OF RS. 84,36,407/- 6. AGAINST THIS DECISION OF THE CIT(A), DEPARTMENT HAS FILED THE INSTANT APPEAL. 7. THE DR, REPRESENTING THE DEPARTMENT SUPPORT ED AND RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT MAINTAINING OF THE GAUSHA LAS AND BIRDS AND ANIMAL HOSPITAL DOES NOT COME UNDER THE DEFINITION OF CHARITABLE , AS DEFINED IN SECTION 2(15) OF THE ACT, AND IN ANY CASE, MAINTAINING OF GAUSHALAS AND VETERINARY HOSPITALS CANNOT BE CONSIDERED AS CHARITABLE ACTIVITY FOR PU BLIC GOOD . HE, THEREFORE, SUBMITTED THAT UTILIZATION OF FUNDS, COULD NOT BE T AKEN TO BE COMING OUT FROM THE RELEVANT PROVISIONS OF SECTION 115BBC. HE, THEREFOR E, SUBMITTED THAT THE ORDER OF CIT (A) BE SET ASIDE AND THE ORDER OF AO BE RESTORED. 8. THE AR APPEARING ON BEHALF OF THE ASSESSEE RELIE D UPON THE ORDER OF CIT (A) AND IN ADDITION HE SUBMITTED THAT THE AO DID NOT TA KE INTO CONSIDERATION THE TWO IMPORTANT DECISIONS CITED BEFORE HIM. 9. WE HAVE HEARD THE ARGUMENTS FROM BOTH THE SIDES AND ALSO PERUSED THE ORDERS OF BOTH THE REVENUE AUTHORITIES. 10. WE ARE IN AGREEMENT WITH THE CIT(A) THAT THE PU RPORT AND PURPOSE FOR BRINGING IN SECTION 115BBC IS TO CURB THE INFLUX OF UNACCOUNTED MONEY BY WAY OF ANONYMOUS DONATIONS TOWARDS EDUCATIONAL TRUSTS AND OTHER RELIGIOUS TRUSTS AND CERTAINLY NOT TO CURB ANY AND ALL TYPES OF DONATION S / OFFERINGS EITHER IN TEMPLES, MUTHS AND RELIGIOUS TRUSTS, WHERE THE COLLECTIONS A RE COLLECTED IN DONATION BOXES AND THAT TOO RANGING FROM AS LOW AS RS. 10/- TO RS. 150 /-. 11. FROM THE ORDER OF THE CIT (A), WE FIND THAT THE ASSESSEE IS RUNNING VETERINARY HOSPITAL FOR TREATMENT OF WOUNDED AND SICK ANIMALS AND BIRDS. IF WE STRICTLY ACCEPT 10 I.T.A. NO. 5714/M/2010 THE SUBMISSIONS OF THE DR, THEN WE MUST ALSO ACCEPT SITUATIONS WHERE WE WILL FIND WOUNDED AND DEAD ANIMALS ON THE ROADS, IN OPEN, AND AT HOUSES, ROTTING, SPREADING FOUL SMELL AND DISEASES. THEREFORE, ACCORDINGLY, TH E DR WOULD ACCEPT A SITUATION LIKE THIS. WE FIND THAT THIS TRUST HAS BEEN IN EXISTENCE FOR THE LAST 176 YEARS , DOING AND PERFORMING A PUBLIC GOOD AND SERVICE TO HUMANITY WI TH SINCERE AND GOOD INTENTIONS, NOT EVEN ASKING PEOPLE TO MAKE CONTRIBUTIONS. WHATE VER CONTRIBUTIONS BY WAY OF DONATIONS ARE COMING, ARE COMING IN SMALL DONATIONS , WHICH ARE PUT BY PUBLIC AT LARGE IN DONATION BOXES (DHARMAU). WE ALSO FIND THA T APPROXIMATELY RS. 21 LAKHS CAME AS KNOWN DONATIONS, WHICH WERE DULY TAKEN CARE IN THE RETURN AND INFORMED TO THE REVENUE. 12. WE ALSO CANNOT IGNORE THE DECISIONS OF THE HON BLE BOMBAY HIGH COURT AND HONBLE GUJARAT HIGH COURT REFERRED TO EARLIER, BES IDES THE FACT THAT THE DECISION IN THE ASSESSEES OWN CASE, WHEREIN THE HONBLE BOMBAY HIGH COURT HAS ACCEPTED THAT THE ASSESSEE, WAS A PUBLIC TRUST AND DONATIONS WERE EXEMPTED U/S 52 OF BOMBAY TRUST ACT. WE ALSO CANNOT IGNORE THE FACT THAT EVEN THE DEPARTMENT HAS BEEN ACCEPTING THE STATUS AND SERVICE RENDERED TO HUMANI TY AND ASSESSMENT RESULTS OF THE ASSESSEE TILL THE PRECEDING YEAR. 13. KEEPING IN VIEW ALL THE ABOVE CONSIDERATIONS AND KEEPING IN VIEW THE CONSISTENT APPROACH FROM THE DEPARTMENT, WE DO NOT INTEND TO D EVIATE FROM THE ORDER OF CIT (A) AND HOLD THE SAME TO BE CORRECT APPLICATION OF LAW AND FACTS. 14. IN THE RESULT, THE APPEAL FILED BY THE DEPARTM ENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.07.2012. SD/- SD/- (R.S. SYAL) (VIVEK VAR MA) ACCOUNTANT MEMBER JUDICIAL MEMBE R 11 I.T.A. NO. 5714/M/2010 DATE : 25.07.2012 AT :MUMBAI OKK COPY TO : 1. BOMBAY PANJRAPOLE, BOMBAY. 2. ITO-E-1(1), MUMBAI. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR B, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI