MSMI St. George Trust, V. THE CIT, Rajahmundry

ITA 607/VIZ/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9688 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-06-2016
• Assessment Year: misc
• Appeal Filed On: 20-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Assessee Lawyers: P A TANKACHAN
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.607/VIZAG/2014 ( / ASSESSMENT YEAR: NA) MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. VS. CIT, RAJAHMUNDRY [PAN: AADTM6473Q ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI P.A. TANKACHAN, AR / RESPONDENT BY : SHRI G. GURUSWAMY, DR / DATE OF HEARING : 19.09.2016 / DATE OF PRONOUNCEMENT : 22.11.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE CIT, RAJAHMUNDRY DATED 17.9.2014, REJECTING REGISTR ATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'TH E ACT'). ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A TRUST NAMELY MSMI ST. GEORGE TRUST IS A REGISTERED TRUST, EVIDEN CED BY A REGISTERED TRUST DEED DATED 6.3.2013 WITH THE MAIN OBJECTS OF RELIGIOUS AS WELL AS CHARITABLE NATURE AS DETAILED IN THE OBJECT CLAUSE OF THE TRUST DEED. THE TRUST FILED AN APPLICATION IN FORM NO.10A FOR REGIS TRATION U/S 12AA OF THE ACT, ALONG WITH DECLARATIONS DATED 3.3.2014, COPY O F DEED OF TRUST, LIST OF NAME AND ADDRESS OF EXECUTIVE COMMITTEE MEMBERS FOR THE YEAR 2013-14 AND NOTES ON ACTIVITIES OF THE TRUST. 3. THE TRUST HAS THE FOLLOWING MAIN OBJECTS. ACCORDING TO THE DEED OF TRUST, THE TRUST HAS THE FOLLOWING OBJECTS: (A) TO GIVE OPPORTUNITY TO WOMEN WHO WISH TO ATTAIN LORD'S KINGDOM, BY DEDICATING THEIR ENTIRE LIFE TO GOD, IN THE SERV ICE OF HUMANITY BY LEADING THEIR LIVES UNDER PERPETUAL VOWS OF CHASTITY, POVER TY AND OBEDIENCE. (B) TO GIVE ALL KINDS OF FACILITIES TO WOMEN WHO JO IN THE CONGREGATION TO FOLLOW THE HUMBLE POOR JESUS BY RENDERING JOYFUL SERVICE TO THE SICK, NEEDY, POOR AND REJECTED OF THE SOCIETY IRRESPECTIV E OF CASTE, CREED AND COMMUNITY. (C) TO RENDER ANY KIND OF RELIGIOUS SERVICES AS FOU ND NECESSARY ACCORDING TO THE NEEDS OF THE CATHOLIC CHURCH AND T HE LAITY TO THE EXTENT PERMITTED IN THE STATUTES AND DIRECTORY OF THE MSMI CONGREGATION. (D) TO ESTABLISH AND MANAGE FORMATION HOUSES, NOVIT IATE HOUSES, CONVENTS, RETREAT CENTRES, PRAYER HOUSES ETC., AND TO PROMOTE VOCATION TO THE CONGREGATION AND GIVE PROPER EDUCATION AND T RAINING TO THE ENTRANTS. (E) TO GIVE CONTINUOUS EDUCATION AND TRAINING AS FO UND NECESSARY TO THE MEMBERS OF THE PROVINCE AND TO MAKE USE OF THEI R SERVICES WHEREVER NECESSARY, FOR THE GOOD OF THE HUMANITY. (F) TO RECRUIT PROMISING YOUNG WOMEN AND TO GIVE AL L KINDS OF TRAINING ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 3 AND OTHER FACILITIES TO GIRLS AND LADIES TO SPREAD THE MESSAGE OF LOVE OF LORD JESUS BY RENDERING JOYFUL SERVICE TO THE PUBLI C, PARTICULARLY THE SICK AND OTHER UNEDUCATED AND UNDEREDUCATED, NEEDY, MARG INALIZED AND REJECTED OF THE SOCIETY, IRRESPECTIVE OF CASTE, CRE ED, COMMUNITY, RELIGION AND LANGUAGE. (G) TO ENGAGE IN SOCIAL ACTIVITIES AS ARE NECESSARY FOR THE GOOD OF THE HUMANITY MOTIVATED BY THE PRINCIPLE, 'WHOEVER IN NE ED, IS OUR NEIGHBOR' BY ENGAGING IN CHILD AND WOMEN WELFARE CENTRES, REH ABILITATION OF PRISONERS, EXTENDING LEGAL AID FOR THE EXPLOITED PE OPLE, WELFARE OF TRIBALS, DALITHS, PLANTATION WORKERS ETC. (H) TO UNDERTAKE OR ENCOURAGE MEDICAL SERVICES TO T HE PUBLIC BY ESTABLISHING AND OR MANAGING DISPENSARIES, HOSPITAL S, TERMINAL CARE CENTERS, REHABILITATION CENTRE FOR MENTALLY ILL WOM EN, LEPER AND STREET CHILDREN, CONVALESCENCE HOMES, HOSPICE FOR HIV/AIDS AND CANCER PATIENTS AND HOME FOR ANY KIND OF PERSONS REJECTED AND UNWAN TED BY THE SOCIETY. (I) TO ESTABLISH AND OR MANAGE EDUCATIONAL INSTITUT IONS SUCH AS SCHOOLS, COLLEGES, PROFESSIONAL INSTITUTIONS, PARAM EDICAL INSTITUTIONS, TUITION CENTRES, COMPUTER & IT TRAINING INSTITUTION S, MANAGEMENT TRAINING INSTITUTIONS ETC., AND VOCATIONAL AND TECHN ICAL TRAINING CENTERS, HOSTELS, BOARDING HOUSES, CRCHES. NURSERY SCHOOLS, GUIDANCE AND COUNSELLING BUREAU, ADULT EDUCATION CENTERS ETC., A ND SUCH OTHER EDUCATIONAL INSTITUTIONS AS AND WHEN FOUND NECESSAR Y. (J) TO ESTABLISH RETREAT AND COUNSELLING CENTERS, D E-ADDICTION CENTRES ETC., AND EDUCATE THE RURAL AND TRIBAL WOMEN ABOUT SOCIAL EVILS AND CONCENTISE THEM TO FIGHT AGAINST THEM BY ORGANIZING AND CONDUCTING MEETING, SEMINARS, CONFERENCES ETC., FOR SPREADING AND PROPAGATING THE SOCIAL NECESSITY OF ANTI-DRUG AND ANTI-ALCOHOLIC WO RKS. (K) TO ESTABLISH AND RUN SPECIAL SCHOOLS FOR DEAF & DUMB, BLIND ETC, SCHOOL AND HOME FOR THE MENTALLY CHALLENGED AND PHY SICALLY HANDICAPPED, ORPHANAGES, GIRLS HOMES, OLD AGE HOMES, FOUNDLING H OME, CENTRE FOR ADOPTION ETC., AND TO HELP FOR THE MARRIAGE OF POOR GIRLS. (L) TO CREATE AND PROVIDE EMPLOYMENT AND CAREER GUI DANCE FOR YOUNG WOMEN AND MEN BY FORMING SELF-HELP GROUPS, SAVING S CHEMES, CO- OPERATIVE PROGRAMMES FOR FINDING OUT SELF EMPLOYMEN T PROGRAMMES AND INCOME GENERATING ACTIVITIES. (M) TO ENGAGE IN ANY OTHER RELIGIOUS OR CHARITABLE ACTIVITIES AS WARRANTED BY CIRCUMSTANCES FOR THE BENEFIT OF THE PEOPLE. ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 4 4. THE ASSESSEE TRUST CAME INTO EXISTENCE BY VIRTUE OF A REGISTERED DEED DATED 6.3.2013. AS PER THE TRUST DEED, THE OB JECTS OF THE TRUST ARE AS MENTIONED IN THE PREAMBLE ARE RELIGIOUS, PHI LOSOPHICAL, SPIRITUAL AND CHARITABLE ACTIVITIES IN THE NATURE OF PROVIDIN G EDUCATION AND MEDICAL FACILITIES TO THE NEEDY AND POOR. IN THE PROCEEDIN GS BEFORE THE CIT, THE ASSESSEE FURNISHED COPY OF TRUST DEED, LIST OF EXEC UTIVE COMMITTEE MEMBERS AND COPY OF BANK STATEMENT. THE CIT CONSID ERED THE OBJECTS OF THE TRUST AND ISSUED A SHOW CAUSE NOTICE AND ASK ED TO JUSTIFY THE CLAIM FOR ELIGIBILITY FOR OBTAINING REGISTRATION U/ S 12AA OF THE ACT. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FIL ED A LETTER DATED 12.9.2014 AND SUBMITTED THAT THE TRUST IS PURELY A RELIGIOUS TRUST ESTABLISHED FOR THE PURPOSE OF PROMOTING RELIGIOUS ACTIVITIES INCLUDING RELIGIOUS FUNCTIONS, RELIGIOUS FORMATIONS AND SOCIA L WORK OF EACH CONGREGATION. IT WAS FURTHER SUBMITTED THAT RELIGI OUS FUNCTIONS INCLUDE CELEBRATION OF MASS PRAYERS, ETC AND ALSO RECRUITIN G PROMISING YOUNG WOMEN AND TRAIN THEM TO LEAD A TRUE CHRISTIAN LIFE BY FOLLOWING THE TEACHINGS OF JESUS CHRIST. IT WAS FURTHER SUBMITTE D THAT MSMI IS A RELIGIOUS CONGREGATION OF NUNS STARTED DURING THE Y EAR 1962 AND AT PRESENT IT IS OPERATING MORE THAN 780 MEMBERS IN TH E CONGREGATION AND THE CONGREGATION HAS GOT ABOVE 136 INSTITUTIONS REN DERING MERITORIOUS SERVICE IN VARIOUS PARTS OF INDIA BY UNDERTAKING RE LIGIOUS SERVICES SUCH AS ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 5 ESTABLISHING AND MAINTAINING CONVENTS, PRAYER HOUSE S, RETREAT CENTRES, ASSISTING IN PARISHES, TEACHING CATECHISM AND ORGAN IZING PIOUS ASSOCIATIONS, ETC. 5. THE CIT AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE REJECTED REGISTRATION U/S 12AA OF THE ACT, FOR THE REASON TH AT THE ASSESSEE IS HAVING MIXED OBJECTS OF RELIGIOUS AND CHARITABLE IN NATURE. THE CIT FURTHER OBSERVED THAT THOUGH THE TRUST HAS MOSTLY C HARITABLE ACTIVITIES, IT HAS MIXED OBJECTS/ACTIVITIES. TO BE ELIGIBLE FOR R EGISTRATION U/S 12AA OF THE ACT, THE ACTIVITIES OF THE TRUST SHOULD BE EITH ER WHOLLY CHARITABLE IN NATURE OR WHOLLY RELIGIOUS IN NATURE. INSTITUTIONS /TRUSTS WITH MIXED OBJECTS ARE VULNERABLE IN AS MUCH AS THEY ARE LIABL E TO BE DISQUALIFIED FOR OBTAINING REGISTRATION U/S 12AA OF THE ACT. THE CI T FURTHER OBSERVED THAT ON PERUSAL OF THE COPY OF TRUST DEED FILED BY THE ASSESSEE, IT WAS NOTICED THAT THE DISSOLUTION CLAUSE WAS NOT PROPERL Y WORDED AS PER THE ACT. IT WAS FURTHER OBSERVED THAT TRUST HAS INCURR ED AN AMOUNT OF ` 29,996/- TOWARDS BUILDING TAX AND NO BUILDINGS ARE SHOWN AT PLACES LIKE PALAKOL, KAMAVARAPUKOTA AND ASIFABAD, ETC. THE CIT FURTHER OBSERVED THAT MSMI REGIONAL HOUSE AT KAMAVARAPUKOTA HAS RECE IVED HUGE AMOUNT OF CORPUS FUND OF ` 10 LAKHS, ` 5 LAKHS AND ` 10 LAKHS ON THREE OCCASIONS DURING THE PERIOD 1.4.2013 TO 31.3.2014 F ROM FRANCIS JACOB, ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 6 THE SOURCE OF WHICH WAS NOT EXPLAINED. WITH THESE O BSERVATIONS, REJECTED APPLICATION FILED BY THE TRUST IN FORM NO. 10A FOR REGISTRATION U/S 12AA OF THE ACT. AGGRIEVED BY THE CIT ORDER, THE A SSESSEE IS IN APPEAL BEFORE US. 6. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT THE CIT ERRED IN REJECTING REGISTRATION U/S 12AA OF THE ACT, DESPITE ASSESSEE TRUST HAS FURNISHED NECESSARY DETAILS TO JUSTIFY ITS OBJECTIV ES AND ACTIVITIES. THE A.R. FURTHER SUBMITTED THAT MSMI ST. GEORGE TRUST I S SOLELY ESTABLISHED FOR THE PURPOSE OF PROPAGATING RELIGIOUS BELIEF BY EMPLOYING PROMISING YOUNG WOMEN AND TRAIN THEM TO LEAD A TRUE CHRISTIAN LIFE BY FOLLOWING THE TEACHINGS OF JESUS CHRIST. THE OBJECTS OF THE TRUST PREDOMINANTLY ARE RELIGIOUS IN NATURE. THOUGH THE TRUST HAS CERT AIN CHARITABLE OBJECTS FOR PROVIDING EDUCATION AND MEDICAL FACILITIES TO T HE POOR AND NEEDY, THE TRUST IS MAINLY INVOLVED IN THE RELIGIOUS ACTIVITIE S FOR THE PURPOSE OF ESTABLISHMENT OF FORMATION HOUSES, NOVITIATE HOUSES , CONVENTS, RETREAT CENTRES, PRAYER HOUSES, ETC. AS PER CLAUSE (F) OF THE OBJECTIVE OF THE TRUST, THE TRUST WILL RECRUIT PROMISING YOUNG WOMEN AND GIVE ALL KINDS OF TRAINING AND OTHER FACILITIES TO GIRLS AND LADIES A S PER THE OBJECTIVES OF THE TRUST. IT WAS FURTHER ARGUED THAT FORMATION OF THE RELIGIOUS SISTERS IS VERY MUCH A RELIGIOUS ACTIVITY AND THE TRUST IS CAR RYING OUT ITS OBJECTIVES ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 7 IN ACCORDANCE WITH THE TRUST DEED, ACCORDINGLY, THE CIT WAS ERRED IN OBSERVING THAT THE TRUST IS HAVING MIXED OBJECTIVES , WHICH IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. THE A.R. FU RTHER SUBMITTED THAT IN SO FAR AS OTHER OBSERVATIONS OF THE CIT, THE CIT HA S OBSERVED THE DISSOLUTION CLAUSE WAS NOT PROPERLY PROVIDED AS PER THE INCOME TAX ACT, 1961. BUT, THE FACT IS THAT AS PER THE TRUST DEED, THE DISSOLUTION CLAUSE READS AS FOLLOWS: WHEN THE BOARD OF TRUST FEELS THAT IN THE BEST INTER EST OF THE PUBLIC, IT IS BETTER TO WIND UP THE TRUST AND THE O BJECTS CAN BE BETTER ACHIEVED IN ANY OTHER MANNER, THEY SHALL SUBMIT THE PROPOSAL TO THE SUPERIOR GENERAL OF THE MSMI CONGREGATION AND WITH HER CONSENT, THE EXCESS ASSETS, IF ANY AFTER DISCHARGING ALL THE LIA BILITIES SHALL BE HANDED OVER TO A SIMILAR REGISTERED INSTITUTION AS DECIDED BY THE PROFESSIONAL COUNSEL OR IT SHALL VEST WITH THE GOVERNMENT. ON PERUSAL OF THE DISSOLUTION CLAUSE, THE TRUST HAS THE OPTION OF EITHER HANDING OVER THE ASSETS OF THE TRUST TO ANOT HER TRUST HAVING SIMILAR OBJECTS OR THE ASSETS VEST WITH THE GOVERNM ENT IN THE EVENT OF THE TRUST GOES FOR DISSOLUTION, WHICH IS IN ACCORDA NCE WITH THE PROVISIONS OF TRUST DEED AS WELL AS INCOME TAX ACT, 1961. AS REGARDS THE BUILDING TAX IS CONCERNED, THE ASSESSEE HAS BROUGHT OUT ALL THE FACTS BEFORE THE CIT AND EXPLAINED THAT TRUST IS OWNED A BUILDING GI FTED BY THE BISHOP OF THE SAID AREA FOR THE USE OF THE RELIGIOUS NUNS. I N SO FAR AS CORPUS DONATION IS CONCERNED, THE TRUST HAS FURNISHED DETA ILS OF DONATIONS ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 8 RECEIVED FROM MR. FRANCIS JACOB, WHO IS AN NRI PRIE ST AND ALSO A WELL WISHER OF THE TRUST WHO IS WORKING IN GERMANY. 7. THE A.R. FURTHER SUBMITTED THAT AS PER THE PROVI SIONS OF SECTION 12AA OF THE ACT, THE CIT ON RECEIPT OF THE APPLICAT ION FOR REGISTRATION OF A TRUST OR INSTITUTION SHALL CALL FOR SUCH DOCUMENT S AND INFORMATION FROM THE TRUST TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND AFTER SATISFYING HIMSELF A BOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF THE ACT IVITIES, HE SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTIT UTION. THEREFORE, WHILE REGISTERING THE TRUST U/S 12AA OF THE ACT, THE COMM ISSIONER IS ONLY TO SEE WHETHER THE OBJECTS OF THE TRUST ARE GENUINE AN D ITS ACTIVITIES ARE CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE T RUST. THAT CIT NEVER DOUBTED THE GENUINENESS OF THE OBJECTS OF THE TRUST AND ITS ACTIVITIES. THE CIT DENIED THE REGISTRATION SOLELY FOR THE REAS ON THAT THE TRUST IS HAVING MIXED OBJECTS. BUT, THE FACT IS THAT EVEN I NSTITUTION OR TRUST HAVING MIXED OBJECTS ARE ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT AND THE ACT DOES NOT MAKE ANY DIFFERENCE BETWEEN THE TR UST CREATED WITH THE OBJECT OF CHARITABLE AND RELIGIOUS PURPOSES AND EVEN IF THE TRUST IS NOT CREATED WITH BOTH THE OBJECTS, LAW DOES NOT MAK E ANY ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 9 DISQUALIFICATION FOR THE TRUST TO MAKE AN APPLICATI ON FOR REGISTRATION. IN SUPPORT OF HIS ARGUMENT, RELIED UPON THE FOLLOWING JUDGEMENTS: 1. DIRECTOR OF INCOME TAX (EXEMPTIONS) VS. RJBV VASUDE VAN EDUCATIONAL & CHARITABLE TRUST (2014) 110 ITR (MAD) 197 2. DIT (EXEMPTIONS) VS. SEERVI SAMAJ TAMBARAM TRUST (2 014) 110 DTR (MAD) 193. 3. CIT VS. ARULMIGHU SRI KAMATCHI AMMAN TRUST (2012) 2 06 TAXMAN 69 (MAD) (MAG). 4. CIT VS. DAWOODI BORA JAMAT (2014) 364 ITR 31 (SC) 5. SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST VS. D IT (EXEMPTIONS) (2006) 285 ITR 327. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CIT DENIED REGISTRATION U/S 12AA OF THE ACT, BY HOLDING THAT THE ASSESSEE OBJECTS ARE MIXED I.E. CHARITABLE AND RELIGIOUS IN NATURE AND ALSO THE ASSESSEE HAS NOT CARRIED OUT ITS OBJECTS IN ACCORDA NCE WITH MAIN OBJECTS. THE CIT FURTHER OBSERVED THAT IT IS WELL SETTLED TH AT IN ORDER TO AVAIL THE BENEFIT OF REGISTRATION U/S 12AA OF THE ACT, BOTH T HE OBJECTS AS WELL AS THE ACTIVITIES OF THIS INSTITUTION/TRUST SHOULD BE EITHER WHOLLY CHARITABLE IN NATURE OR WHOLLY RELIGIOUS IN NATURE. INSTITUTIONS WITH MIXED OBJECTS ARE VULNERABLE IN AS MUCH AS THEY ARE LIABLE TO BE DISQ UALIFIED ON THE GROUND THAT THE PROVISIONS OF SECTION 11 OF THE ACT REQUIR ES THAT A TRUST HAS TO BE EITHER WHOLLY RELIGIOUS IN NATURE OR WHOLLY CHAR ITABLE IN NATURE AND ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 10 THERE IS NO SCOPE FOR ANY CONJUNCTIVE ACTIVITIES. THE CIT FURTHER WAS OF THE OPINION THAT THE ACTIVITIES OF THE TRUST ARE NO T GENUINE. THE CIT LISTED CERTAIN DISCREPANCIES AND STATED THAT THE DI SSOLUTION CLAUSE PROVIDED IN THE TRUST DEED IS NOT PROPERLY WORDED A S PER THE REQUIREMENT OF INCOME TAX ACT. 9. THE CIT FURTHER OBSERVED THAT THE TRUST HAS SPEN T AN AMOUNT OF ` 29,996/- TOWARDS BUILDING TAX, HOWEVER, FAILED TO P ROVE THAT IT HAS OWNED ANY BUILDINGS IN THE PLACE MENTIONED. THE CI T ALSO QUESTIONED THE CORPUS DONATIONS RECEIVED BY THE TRUST BY STATI NG THAT THE TRUST FAILED TO EXPLAIN THE SOURCES OF CORPUS DONATIONS R ECEIVED FROM THE DONOR. THEREFORE, OPINED THAT THE OBJECTS OF THE T RUST ARE MIXED IN NATURE AND THE ACTIVITIES OF THE TRUST ARE NOT GENU INE AND THEREFORE, THE TRUST IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT MSMI ST. GEORGE TRU ST IS A REGISTERED RELIGIOUS TRUST ESTABLISHED FOR THE PURPOSE OF PROP AGATING RELIGIOUS ACTIVITIES BY MISSIONARY SISTERS OF MARY IMMACULATE . THE TRUST RECRUIT PROMISING YOUNG WOMEN, TRAIN THEM AND GIVE FORMATIO N AND EDUCATION TO LEAD A TRUE CHRISTIAN LIFE BY FOLLOWING THE TEAC HINGS OF JESUS CHRIST. THE ASSESSEE FURTHER CONTENDED THAT FOR THIS PURPOS E, THE TRUST IS RUNNING FORMATION HOUSES, NOVITIATE HOUSE, RETREATI NG CENTRE AND PRAYER ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 11 HOUSES. THEREFORE, THE CIT WAS INCORRECT IN HOLDIN G THAT THE TRUST IS HAVING MIXED OBJECTS. 10. THE QUESTION BEFORE US IS WHETHER THE OBJECTS O F THE TRUST ARE MIXED OBJECTS I.E. CHARITABLE AND RELIGIOUS IN NATU RE, WHICH RENDER THE TRUST IN ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. ADMITTEDLY TO BE QUALIFIED FOR EXEMPTION U/S 11 OF THE ACT, THE OBJE CTS OF THE TRUST SHOULD BE EITHER CHARITABLE OR RELIGIOUS IN NATURE AND THE TRUSTS WITH MIXED OBJECTS ARE INELIGIBLE FOR EXEMPTION. HOWEVER, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. DAWOODI BORA JAMAT (SU PRA) (2014), HELD THAT TRUST HAVING MIXED OBJECTS DOES NOT BENEFIT AN Y SPECIFIC RELIGIOUS COMMUNITY ARE ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. SUCH TRUST WITH COMPOSITE OBJECTS WOULD NOT BE EXPELLED OUT OF THE PURVIEW OF SECTION 13(1)(B) PER SE. THE SECTIONS REQUIRE IT TO BE EST ABLISHED WITH SUCH CHARITABLE PURPOSE IS NOT AVAILED BENEFIT OF PARTIC ULAR RELIGIOUS COMMUNITY OR CASTE. THAT IS TO SAY IT NEEDS TO BE EXAMINED WHETHER SUCH RELIGIOUS/CHARITABLE ACTIVITY CARRIED ON BY TH E TRUST ONLY BENEFITS A CERTAIN PARTICULAR COMMUNITY OR CLASS OR SERVES ACR OSS THE COMMUNITIES FOR SOCIETY AT LARGE. THE SECTION OF COMMUNITY SOU GHT TO BE BENEFITED MUST BE EITHER SUFFICIENTLY DEFINED OR IDENTIFIABLE BY A COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE. THEREFORE, A TRUST HAVING MIXED OBJECTS ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 12 BOTH CHARITABLE AS WELL AS RELIGIOUS IN NATURE AND DOING ITS ACTIVITIES TO THE PUBLIC AT LARGE WITHOUT ANY PARTICULAR CLASS OF SOCIETY, THEN SUCH TRUSTS ARE NOT DEBARRED FROM REGISTRATION U/S 12AA OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE CIT IS ERRED IN HOLDING THAT TRUSTS HAVING MIXED OBJECTS ARE INELIGIBLE FOR EXEMPTION U/S 11 O F THE ACT. 11. HAVING SAID, LET US EXAMINE WHETHER ASSESSEE TR UST IS HAVING MIXED OBJECTS, THEREBY NOT ELIGIBLE FOR REGISTRATIO N U/S 12AA OF THE ACT. ON PERUSAL OF THE MAIN OBJECTS OF THE ASSESSE TRUST , THE TRUST IS SOLELY EXISTED FOR RELIGIOUS PURPOSES. THOUGH THE TRUST I S HAVING FEW CHARITABLE OBJECTS, MANY OF THE OBJECTS ARE PREDOMINANTLY IN T HE NATURE OF RELIGIOUS ACTIVITIES MANAGED BY MISSIONARY SISTERS OF MARY IM MACULATE WHICH IS MAINLY INVOLVED IN PRACTICING RELIGIOUS ACTIVITIES IN THE NAME OF LORD JESUS CHRIST. AS CONTENDED BY THE LD. A.R. FOR THE ASSESSEE, THE TRUST IS MAINLY CARRIED OUT ITS ACTIVITIES IN ACCORDANCE WIT H MAIN OBJECTS OF THE TRUST. THE MAIN OBJECTS OF THE TRUST IS TO GIVE OP PORTUNITY TO WOMEN WHO WISH TO ATTAIN LORDS KINGDOM BY DEDICATING THE IR ENTIRE LIFE TO GOD, IN SERVICE TO THE COMMUNITY BY LEADING THEIR LIVES UNDER PERPETUAL VOWS OF CHASTITY, POVERTY AND OBEDIENCE. IN THE PROCESS , THE TRUST RECRUITS PROMISING YOUNG WOMEN, TRAIN THEM AND GIVE FORMATIO N AND EDUCATION TO LEAD A TRUE CHRISTIAN LIFE BY FOLLOWING THE TEAC HINGS OF JESUS CHRIST. ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 13 TO ACHIEVE ITS OBJECTS, THE TRUST ESTABLISHES FORMA TION HOUSES, NOVITIATE HOUSES, CONVENTS, RETREATING CENTRES, PRAYER HOUSES , ETC. THEREFORE, ON PERUSAL OF THE MAIN OBJECTS AND ITS ACTIVITIES OF T HE TRUST, WE FIND THAT THE TRUST IS MAINLY EXISTED FOR THE PURPOSE OF PROP AGATING RELIGIOUS ACTIVITIES AND ALSO THE TRUST IS CARRYING OUT ITS A CTIVITIES IN ACCORDANCE WITH ITS OBJECTS. THEREFORE, WE ARE OF THE VIEW TH AT THE CIT WAS ERRED IN HOLDING THAT THE TRUST IS PURSUING MIXED OBJECTS. 12. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THE OBJECTS OF THE TRUST ARE R ELIGIOUS IN NATURE. FURTHER, THE TRUST IS CARRIED OUT ITS ACTIVITIES IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. THE ACTIVITIES OF THE TRUST ARE GENUINE AND THE CIT HAS NOT POINTED OUT ANY IRREGULARITIES OR VIOLATION S SO AS TO REJECT THE REGISTRATION U/S 12AA OF THE ACT. THOUGH, THE CIT P OINTS OUT CERTAIN DISCREPANCIES, THE ASSESSEE ADDRESSED ALL THE ISSUE S POINTED OUT BY THE CIT WITH NECESSARY EVIDENCES. WHEN THE OBJECTS OF T HE TRUST ARE RELIGIOUS IN NATURE AND ITS ACTIVITIES ARE GENUINE, THE CIT CANNOT DENY REGISTRATION BECAUSE THE TRUST HAS MIXED OBJECTS. WE FURTHER OBSERVED THAT AS PER THE PROVISIONS OF SECTION 12AA OF THE A CT, FOR THE PURPOSE OF REGISTRATION WHAT THE AUTHORITIES HAVE TO SATISFY I S THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND HOW THE INCOME DERI VED FROM THE PROPERTY ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 14 IS APPLIED TO CHARITABLE OR RELIGIOUS PURPOSES AND NOT THE NATURE OF THE ACTIVITY OF WHICH THE INCOME IS DERIVED BY THE TRUS T, AS HELD BY THE HONBLE KARNATAKA HIGH COURT, IN THE CASE OF S.H.G. CHARITABLE TRUST VS. DIT (EXEMPTIONS) (2006) 285 ITR 327. 13. IT IS PERTINENT TO DISCUSS THE CASE LAW RELIED UPON BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE HI GH COURT OF MADRAS, IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTIONS) VS. RJBV VASUDEVAN EDUCATIONAL & CHARITABLE TRUST (2014) 110 DTR 197 ( MAD). THE HONBLE HIGH COURT OF MADRAS, HELD THAT UNDER SUB SECTION ( 3) OF SECTION 12AA OF THE ACT, IF THE OBJECTS ARE GENUINE, THE REGISTRATI ON CAN BE GRANTED. THE COURT FURTHER OBSERVED THAT UNDER SUB SECTION (3) O F SECTION 12AA OF THE ACT, THE CIT IS GIVEN POWER TO CANCEL THE REGISTRAT ION, IF HE IS SATISFIED THAT THE OBJECTS OF THE TRUST ARE NOT GENUINE OR NO T BEING CARRIED ON IN ACCORDANCE WITH THE OBJECTS OF THE TRUST AND ALSO E VEN IF THE TRUST IS HAVING MIXED OBJECTS, REGISTRATION CANNOT BE DENIED AS LONG AS THE TRUST CARRIED OUT ITS OBJECTS IN ACCORDANCE WITH THE OBJE CTS OF THE TRUST AND ITS ACTIVITIES ARE GENUINE. 14. THE ASSESSEE RELIED UPON THE DECISION OF DIREC TOR OF INCOME TAX (EXEMPTIONS) VS. SEERVI SAMAJ TAMBARAM TRUST (2014) 110 DTR (MAD) 193. THE HONBLE HIGH COURT OF MADRAS, HAS NOTED T HAT THE INCOME ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 15 DERIVED FROM THE PROPERTY HELD UNDER TRUST WHOLLY F OR CHARITABLE OR RELIGIOUS PURPOSE SHALL NOT BE INCLUDED IN THE TOTA L INCOME. THEREFORE, THE PROVISIONS OF INCOME TAX ARE APPLICABLE TO BOTH THE TRUST ESTABLISHED WITH THE OBJECT OF CHARITABLE AS WELL AS RELIGIOUS PURPOSE. SECTION 12AA OF THE ACT DOES NOT MAKE ANY DIFFERENCE BETWEEN THE TRUST CREATED WITH THE OBJECT OF CHARITABLE AND RELIGIOUS PURPOSES AND EVEN IF THE TRUST IS NOT CREATED WITH BOTH THE OBJECTS, THE LAW DOES NOT MAKE ANY DISQUALIFICATION FOR THE TRUST TO MAKE AN APPLICATI ON FOR REGISTRATION. 15. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO FOLLOWING THE RATIOS OF THE CASE LAWS DISCUSSED ABO VE, WE ARE OF THE VIEW THAT THE TRUST IS ELIGIBLE FOR REGISTRATION U/S 12A A OF THE ACT. WE FURTHER OBSERVED THAT THE CIT CANNOT DENY REGISTRATION U/S 12AA OF THE ACT, AS LONG AS THE OBJECTS OF THE TRUST ARE GENUINE AND IT S ACTIVITIES ARE CARRIED OUT IN ACCORDANCE WITH THE MAIN OBJECTS OF THE TRUS T/INSTITUTION. IN THE PRESENT CASE, THE OBJECTS OF THE TRUST ARE PREDOMIN ANTLY RELIGIOUS IN NATURE, EVEN THOUGH THE TRUST IS HAVING FEW CHARITA BLE OBJECTS. THE TRUST HAS CARRIED OUT ITS OBJECTS IN ACCORDANCE WITH MAIN OBJECTS. THE CIT HAS NOT POINTED OUT ANY IN-GENUINE ACTIVITIES OR IRREGU LARITIES IN THE ACTIVITIES OF THE TRUST, THEREFORE, WE ARE OF THE CONSIDERED V IEW THAT THE CIT ERRED ITA NO.607/VIZAG/2014 MSMI ST. GEORGE TRUST, KAMAVARAPUKOTA, W.G. DIST. 16 IN REJECTING THE REGISTRATION U/S 12AA OF THE ACT, THEREFORE, WE DIRECT THE CIT TO GRANT REGISTRATION U/S 12AA OF THE ACT. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND NOV16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 22.11.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT MSMI ST. GEORGE TRUST, DR.NO.14-1 59, ST. GEORGE REGIONAL HOUSE, MAMAVARAPUKOTA, WEST GODAVARI DIST. , ANDHRA PRADESH-534449. 2. / THE RESPONDENT THE CIT, RAJAHMUNDRY 3. ) ( ) / THE CIT(A), RAJAHMUNDRY 4. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM