GOGTE GANPATI MANDIR TRUST, THANE V. CIT III, THANE

ITA 603/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2096 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-11-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJDR
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Charitable institution; Principle of natural justice
• Section: 12AA; 12; 11

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 603 /MUM/2013 ( / ASSESSMENT YEAR : NA) M/S GOGTE GANPATI MANDIR TRUST, C/O GOGTE SALT & CHEMICALS, NALLASOPARA (W), TAL. VASAI, DIST. THANE, PIN. 401 203. / V. COMMISSIONER OF INCOME TAX- III, THANE, 6 TH FLOOR, ASHAR I.T. PARK, ROAD NO. 16Z, WAGLE IND. ESTATE, THANE (W), PIN. 400 604. ./ PAN : AABTG5729P ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI SUBODH RATNAPARKHI RESPONDENT BY : SHRI GULSHAN RAJ,DR / DATE OF HEARING : 17-11-2015 / DATE OF PRONOUNCEMENT : 30-11-2015 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL, FILED BY THE ASSESSEE TRUST, BEING ITA NO. 603/MUM/2013, IS DIRECTED AGAINST THE ORDER DATED 30-11-2012 PASS ED BY THE COMMISSIONER OF INCOME TAX III, THANE (HEREINAFTER CALLED THE CIT), WHEREBY THE CIT DENIED THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961(HEREINAFTER CALLED THE ACT) AND ALSO U/S 80G(5) OF THE ACT. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE TR UST IN THE MEMO ITA 603/M/13 2 OF APPEAL FILED READ AS UNDER:- 1. THE LEARNED CIT-III, THANE HAS ERRED IN REJECTI NG THE APPLICATION U/S 12AA OF INCOME TAX ACT, 1961 ON SUR MISES & CONJECTURES. 2. THE LEARNED CIT-III, THANE HAS ERRED IN REJECTIN G THE APPLICATION U/S 12AA WITHOUT APPRECIATING THAT SEC. 13(1)( A) TALKS ABOUT EXCLUSION FROM BENEFITS UNDER SECTION 11 & 12 AND DOES NOT APPLY TO REGISTRATION U/S 12AA. 3. THE LEARNED CIT -III, THANE HAS ERRED IN LEVYING BASELESS FINDINGS ABOUT THE TRUSTEES IN PARA 4 WITHOUT APPRE CIATING THE FACT THAT THE DONATIONS RECEIVED PRIOR TO APPLICATION OF REGISTRATION U/S 12AA & 8OG ARE NOT ELIGIBLE TO ANY BENEFITS U/S 11 & 12. 4. THE LEARNED CIT-III, THANE HAS ERRED IN CONSIDER ING ALL THE FACTS & PROVISIONS OF LAW AND REJECTED THE APPLICAT ION BASED ON SURMISES & CONJECTURES, THEREFORE A COST BE LEVIED ON CIT-III. 5. THE LEARNED CIT ERRED IN CONCLUDING THAT THE PRI NCIPLE OBJECT OF THE TRUST IS TO MAINTAIN PRIVATE TEMPLE. HE OUGH T TO HAVE CONSIDERED THE FACT THAT THE TRUST HAS TAKEN THE AR EA APPURTENANT TO THE TEMPLE ON LONG LEASE FOR CARRYING OUT ACTIVI TIES FOR THE BENEFIT OF THE GENERAL PUBLIC AND MAINTENANCE OF TEMPLE IS ONE OF THE ACTIVITIES. 6. THE LEARNED CIT OUGHT TO HAVE CONSIDERED THE FAC T THAT ANY MEMBER OF THE PUBLIC CAN TAKE PART IN ACTIVITIES RE LATED TO THE TEMPLE. THE CONCLUSION THEREFORE, TERMING THE TRUST AS PRIVATE TEMPLE IS INAPPROPRIATE. 7. THE LEARNED CIT ERRED IN HOLDING THAT THE TRUST IS A PRIVATE TRUST ALTHOUGH THE TRUST IS A REGISTERED AS A PUBLI C TRUST UNDER THE BOMBAY PUBLIC TRUST ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST HAS MADE AN APPLICATION FOR REGISTRATION U/S 12AA AND EXEMPTION U/S 80G(5) OF THE ACT. THE TRUST HAS BEEN FORMED WITH THE CORPUS OF RS. 1, 00,000/- BY THE SETTLERS MR. ARVIND GOGTE AND MR. MADHAV GOGTE ON 01-02-2011 WITH A DESIRE TO ITA 603/M/13 3 CREATE A PUBLIC CHARITABLE AND RELIGIOUS TRUST. TH E TRUST IS DULY REGISTERED UNDER BOMBAY PUBLIC TRUST ACT,1950 WITH EFFECT FROM 23-01-2012 UNDER THE REGISTRATION NO. A-1337, THANE. THE TRUST HAS THRE E TRUSTEES, ALL BELONGING TO ONE FAMILY. ON PERUSAL OF THE DOCUMENTS FURNISHED BY THE ASSESS EE TRUST, IT WAS NOTICED BY THE CIT THAT THE MAIN OBJECT OF THE TRUST IS MAI NTENANCE AND MANAGEMENT OF A TEMPLE WHICH IS THE PROPERTY OF A PARTNERSHIP FIRM M/S GOGTE SALT AND CHEMICALS. THE ASSESSEE TRUST SUBMITTED THAT THE S AID TEMPLE HAS BEEN TAKEN ON A LONG LEASE BY THE TRUST AND ACCORDINGLY THE TRUST IS CREATED FOR THE OBJECTS AS ENUMERATED IN THE TRUST DEED. THE CIT OB SERVED THAT THE TEMPLE BEING THE PROPERTY OF ANOTHER ENTITY AND THE TRUST HAS BEEN CREATED MAINLY FOR THE MAINTENANCE AND MANAGEMENT OF THE SAID TEMPLE, A SHOW CAUSE NOTICE WAS ISSUED ON 17-10-2012 REQUESTING THE APPLICANT T RUST TO EXPLAIN AS TO WHY THE APPLICATION FOR REGISTRATION U/S 12AA OF THE AC T SHOULD NOT BE REJECTED. THE APPLICANT TRUST FILED ITS REPLY AND CONTENDED T HAT BESIDES THE MAINTENANCE AND MANAGEMENT OF THE TEMPLE THERE ARE OTHER OBJECTS OF CHARITABLE NATURE ALSO. A COPY OF THE LEASE AGREEM ENT DATED 16 TH AUGUST 2011 ENTERED INTO BY THE TRUST WITH THE SAID PARTNERSHIP FIRM WAS ALSO FURNISHED BEFORE THE CIT. THE CIT OBSERVED THAT THE PRINCIPAL OBJECTS OF THE TRUST ARE AS UNDER:- 1. USE AND ALLOW TO USE THE TEMPLE FOR WORSHIP AND PROGRAM OR FUNCTION RELATED TO SUCH WORSHIP AND ANY OTHER SOCI AL, RELIGIOUS PURPOSE. 2. KEEP THE TEMPLE OPEN TO THE PUBLIC, IRRESPECTIVE OF ANY CASTE OR CREED FOR SUCH PERIOD OR PERIODS AS THE TRUSTEES MA Y DECIDE FROM TIME TO TIME. 3. CARRY OUT REPAIRS, RENOVATIONS OR ADDITION TO TH E TEMPLE BUILDING INCLUDING HALL AND AUDITORIUM ETC. FROM TIME TO TIM E AND MEET THE EXPENSES THEREFORE OUT OF THE TRUST FUNDS. ITA 603/M/13 4 4. COLLECT AND POSSESS ALL THE OFFERINGS BEFORE THE DEITY WHETHER IN CASH OR IN KIND AND KEEP IN THE SAFE CUSTODY THE OF FERINGS AND DISPOSE OF THE OFFERINGS IN KIND AS THE TRUSTEES MAY DECIDE FROM TIME TO TIME AND DISTRIBUTE THE PERISHABLE OFFERINGS AMONG SUCH NEEDY PEOPLE AS THE TRUSTEE MAY THINK FIT. THE CIT OBSERVED THAT THERE ARE SOME SOCIAL AND CHA RITABLE OBJECTS ALSO IN THE TRUST DEED BUT THEY COME INTO THE PREFERENCE OF PRI ORITIES LATER TO THE ABOVE MENTIONED OBJECTS. IT WAS SEEN BY THE CIT THAT THE PRIMARY AND DOMINANT OBJECTS ARE RELATED WITH THE MAINTENANCE AND MANAGE MENT OF THE TEMPLE AND PERFORMANCE OF RELIGIOUS RITES AND OTHER INCIDENTAL ACTIVITIES. IT WAS ALSO OBSERVED BY THE CIT THAT THERE IS ALREADY A TEMPLE KNOWN AS GOGTE GANPATI MANDIR WHICH IS ERECTED AND BUILT AT THE PREMISES O F M/S GOGTE SALT AND CHEMICALS, A PARTNERSHIP FIRM. AS PER THE TRUST DE ED, THE MANAGEMENT AND ALL ACTIVITIES RELATING TO THE TEMPLE SUCH AS MAINT ENANCE AND PERFORMANCE OF RELIGIOUS ACTIVITIES TO A TRUST WITH AN INTENTION T O EFFICIENT AND SMOOTH MANAGEMENT. THUS, THE CIT OBSERVED THAT FOR THIS R EASON THE FIRM HAS AGREED TO HAND OVER THE MANAGEMENT OF THE SAID MANDIR ALON G WITH A LAND OF 20 GUNTHAS ADJACENT TO THE MANDIR , BY WAY OF LONG LEA SE WHICH IS EXECUTED ON 16-8-2011. THUS, THE PROPERTY IN THE FORM OF THE TE MPLE AND THE LAND BELONGS TO THE FIRM AND A TRUST IS CREATED ONLY FOR MANAGEM ENT OF THIS PRIVATE MANDIR AND THERE IS NO PUBLIC CAUSE. IN SUPPORT, THE CIT REFERRED TO PROVISIONS OF THE SECTION 13(1)(A) OF THE ACT WHICH MAKES THE PROVISI ON OF SECTION 11 NON- OPERATIVE ARE AS UNDER:- NOTHING CONTAINED IN SECTION 11 OR SECTION 12 SHAL L OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF, (A) ANY PART OF THE INCOME FROM THE PROPERTY HELD UNDER A TRUST FOR PRIVATE RELIGIOUS PURPOSES WHICH DOES NOT ENURE FOR THE BENEFIT OF THE PUBLIC. THE CIT HELD THAT THE ABOVE CLAUSE IS SQUARELY APPL ICABLE TO THE ASSESSEE TRUSTS CASE AND IT IS ONLY A ONE FAMILY AFFAIR AND THE TRUST IS CREATED ONLY FOR ITA 603/M/13 5 THE PURPOSE OF TAKING ADVANTAGE OF PROVISIONS OF SE CTION 11 OF THE ACT, PARTICULARLY FOR THE CORPUS DONATIONS GIVEN BY THE INTERESTED FAMILY MEMBERS. THE CIT HELD THAT MERELY BECAUSE THE TEMPLE SHALL B E KEPT OPEN TO THE GENERAL PUBLIC TO ENTER AND OFFER PRAYER , THE ACTIVITIES D O NOT FORM PUBLIC CHARACTER. THE CIT OBSERVED THAT THE SAID TEMPLE WAS ALREADY T HERE BELONGING TO THE PARTNERSHIP FIRM AND THE SAID FIRM WAS LOOKING AFTE R THE MAINTENANCE AND MANAGEMENT OF THE SAID TEMPLE EARLIER. THE CIT OBSE RVED THAT THERE ARE HUGE DONATIONS BY THE PARTNERS WHICH ARE INTENDED TO BE MADE EXEMPT TAKING ADVANTAGE OF THE PROVISIONS OF LAW BY MAKING EVASIV E PLANNING. THE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31-3-2012 SHOW THA T THE MAINTENANCE PART OF THE EXPENDITURE HAS BEEN MET OUT OF THE ANONYMO US DONATIONS AND SALE OF COCONUTS OFFERED TO THE DEITY. THUS, THE CIT REJE CTED APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT VIDE ORDERS DATED 30.11.2012. SIMILARLY, EXEMPTION U/S 80G(5) OF THE ACT WAS ALSO DENIED TO THE TRUST VIDE ORDERS DATED 30.11.2012 U/S 80G(5) OF THE ACT. 4. AGGRIEVED BY THE AFORE-STATED ORDER(S) DATED 30. 11.2012 , THE ASSESSEE TRUST PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE TRUST SUBMITTED AT THE OUTSET THAT THE CIT REJECTED THE APPLICATION FOR REGISTRATION U/S 1 2AA AND EXEMPTION U/S 80G(5) OF THE ACT BY OBSERVING THAT THE APPLICANT T RUST IS ONLY A PRIVATE TEMPLE AND WHICH IS NOT MEANT FOR THE PUBLIC WHICH FINDING OF THE CIT IS NOT CORRECT AS THE ASSESSEE TRUST IS A PUBLIC CHARITABL E AND RELIGIOUS TRUST. THE LD. COUNSEL SUBMITTED THAT THE TRUST HAS BEEN CREATED FOR CARRYING OUT THE ACTIVITIES FOR THE BENEFIT OF THE GENERAL PUBLIC AN D MAINTENANCE OF TEMPLE IS ONLY ONE OF THE ACTIVITIES. HE ALSO PLACED ON RECO RD THE COPY OF TRUST DEED ENTERED INTO ON 01-02-2011 AND SUBMITTED THAT ALTHO UGH THE TRUST IS CREATED FOR MAINTENANCE AND MANAGEMENT OF GANPATI TEMPLE ER ECTED AT THE PREMISES OF GOGTE SALT AND CHEMICALS AT NALA SOPARA, TAL. VA SAI, DIST THANE-401203 , ITA 603/M/13 6 MAHARASHTRA. THERE ARE SEVERAL OTHER OBJECTS WHICH ARE CHARITABLE AND RELIGIOUS IN NATURE IN THE OBJECT CLAUSE OF THE TRU ST DEED WHICH THE APPLICANT TRUST IS INTENDING TO START AS PER OBJECT CLAUSES I N PARA 2(I)(A) TO (O) IN THE TRUST DEED EXECUTED ON 01-02-2011 AND BY STRETCH OF NO IMAGINATION , THE ASSESSEE TRUST CAN BE CATEGORIZED AS PRIVATE RELIGI OUS TRUST RATHER IT IS A PUBLIC CHARITABLE AND RELIGIOUS TRUST. THE LD. COUNSEL SU BMITTED THAT THERE IS NOTHING IN THE TRUST DEED TO SHOW THAT THERE ARE SO ME RELIGIOUS OBJECTS WHICH ARE PRE-DOMINANT TO OTHER OBJECTS. THE COPY OF THE TRUST DEED DATED 01-02- 2011 OF THE ASSESSEE TRUST IS PLACED AT PAGE 11-17 PAPER BOOK. THE LD. COUNSEL ALSO SHOWED US THE PHOTOGRAPHS PLACED IN TH E PAPER BOOK PAGE 28 TO SHOW THAT THE TRUST IS ALSO INTENDING TO START A ME DICAL DIAGNOSTIC CENTRE AT A PREMISES ADJACENT TO THE TEMPLE ALONG WITH THE TEMP LE ACTIVITIES. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE TE MPLE IS OPEN FOR PUBLIC AND THERE ARE ABOSLUTELY NO RESTRICTION TO ANY MEMB ER OF PUBLIC TO ENTER TEMPLE FOR PERFORMANCE OF RELIGIOUS RITES AND OFFER PRAYERS AND WORSHIP IN THE TEMPLE. THE INCOME GENERATED FROM OFFERINGS AND O THER DONATIONS WILL BE USED FOR PUBLIC RELIGIOUS AND CHARITABLE PURPOSES. THE BENEFICIARIES OF THE INCOME OF THE TRUST ARE MEMBERS OF THE GENERAL PUBL IC AND BY NO STRETCH OF IMAGINATION, THIS TRUST CAN BE TERMED AS A PRIVATE RELIGIOUS TRUST. 6. THE LD. D.R., ON THE OTHER HAND, RELIED UPON THE ORDER OF CIT. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE TRUST H AS BEEN CREATED UNDER THE TRUST DEED DATED 01-02-2011 WHICH CONTAINS VARIOUS OBJECTS UNDER CLAUSE 2(II)(A) TO (O) WHICH RELATES TO MANAGEMENT AND MAI NTENANCE OF TEMPLE SHRI GANPATI TEMPLE ERECTED AND BUILT AT THE PREMISES OF M/S GOGTE SALT AND CHEMICALS AND ALSO THERE ARE OTHER OBJECTS IN THE A FORE-STATED TRUST DEED SUCH AS EDUCATION, MAINTENANCE OF LIBRARIES, ESTABLISHME NT AND MAINTENANCE OF ORPHANAGE OR POOR HOUSES, RELIEF TO POOR STUDENTS , RELIEF TO AGED PEOPLE, MEDICAL , RELIEF DURING CALAMITIES ETC. . WE HAVE A LSO OBSERVED THAT THE ITA 603/M/13 7 ASSESSEE TRUST HAS BEEN GIVEN PROPERTY ON LONG LEAS E OF 30 YEARS WITHOUT ANY RENT BY GOGTE SALTS AND CHEMICALS TO CARRY OUT OBJE CTS OF THE TRUST VIDE LEASE DEED DATED 16 TH AUGUST 2011. THE CIT REJECTED THE APPLICATION FOR REGISTRATION U/S 12AA AND EXEMPTION U/S 80G(5) OF THE ACT ON THE GROUND THAT THE MAIN OBJECT OF THE TRUST IS MAINTENANCE AND MANAGEMENT O F A TEMPLE WHICH IS A PRIVATE TEMPLE AND WHICH WAS A PROPERTY OF A PARTNE RSHIP FIRM KNOWN AS M/S GOGTE SALT AND CHEMICALS AND GIVEN TO THE ASSESSEE TRUST VIDE LEASE AGREEMENT EXECUTED ON 16 TH AUGUST, 2011 WHICH IS PRE-DOMINATE OBJECT AND THE OTHER OBJECTS COME INTO THE PREFERENCE OF PRIOR ITIES LATER TO OBJECTS RELATED TO THE MAINTENANCE AND MANAGEMENT OF TEMPLE. HOWEVE R, THE ASSESSEE ALSO FURNISHED BEFORE US THE PHOTOGRAPHS OF A MEDICAL DI AGNOSTIC CENTRE BEING STARTED AT THE PREMISES ADJACENT TO SHRI GANPATI T EMPLE. THE ASSESSEE TRUST IS CONTENDING THAT THE SAID TEMPLE IS OPEN FOR PUBL IC AND THERE ARE NO RESTRICTION ON ANY MEMBER OF THE PUBLIC TO ENTER TE MPLE AND OFFER PRAYERS AND PERFORM RELIGIOUS RITES IN THE TEMPLE AND THERE ARE OTHER OBJECTS OF CHARITABLE IN NATURE AS PER TRUST DEED DATED 01-02-2011 FOR WH ICH THE ASSESSEE TRUST HAS BEEN FORMED. IN OUR CONSIDERED VIEW THERE IS A NEED FOR CONDUCTING PROPER ENQUIRY INTO THE OBJECTS OF THE ASSESSEE TRUST AND GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE TRUST. IN OUR CONSIDERED VIEW, THE MATTER SHOULD GO BACK TO THE FILE OF CIT FOR MAKING PROPER ENQUIRY ABOUT THE OBJECTS OF THE ASSESSEE TRUST AND GENUINENESS OF THE ACTIVITIES OF THE ASSE SSEE TRUST IN ACCORDANCE WITH MANDATE OF SECTION 12AA AND 80G(5) OF THE ACT BEFORE DECIDING ON THE APPLICATION OF THE ASSESSEE TRUST WHEREBY THE CIT S HOULD MAKE SUCH ENQUIRIES AND CALL FOR SUCH RECORDS AND INFORMATION AS THE CI T MAY DEEM FIT BEFORE GRANTING THE REGISTRATION IN ACCORDANCE WITH LAW U/ S 12AA AND EXEMPTION U/S 80G(5) OF THE ACT. NEEDLESS TO SAY THAT THE ASSESSE E TRUST WILL BE GIVEN PROPER OPPORTUNITY OF HEARING BY THE CIT IN ACCORDANCE WIT H THE PRINCIPLES OF NATURAL JUSTICE AS ENSHRINED IN DOCTRINE OF AUDI ALTERAM PA RTEM BEFORE DECIDING THE APPLICATION FOR REGISTRATION OF THE ASSESSE TRUST U /S 12AA AND EXEMPTION 80G(5) OF THE ACT. THE ASSESSEE TRUST SHALL BE ALLO WED BY THE CIT TO PRODUCE ITA 603/M/13 8 SUCH EVIDENCE AS MAY BE CONSIDERED NECESSARY BY THE ASSESSEE TRUST IN ITS DEFENSE. WE WOULD LIKE TO ADD THAT WE HAVE NOT EXPR ESSED ANY OPINION WHATSOEVER ON THE MERITS RELATED TO THE APPLICATION OF THE ASSESSEE TRUST FOR REGISTRATION U/S 12AA AND EXEMPTION U/S 80G(5) OF T HE ACT WHICH THE CIT SHALL DECIDE PURELY ON MERITS UN-INFLUENCED BY OUR OBSERVATIONS , IF ANY IN THIS ORDER. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015. # $% &' 30-11-2015 ( ) SD/- SD/- - (AMIT SHUKLA) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 30 TH NOV. 2015 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI H BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI