THE JAAMIAH MUEENIYYAH WAKAF COMMITTEE, BHARUCH V. CIT (EXEMPTION), AHMEDABAD, AHMADABAD

ITA 61/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2683 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-04-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 29-01-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . No .6 1/ A h d / 2 02 3 ( A s se ss m e nt Y e a r : 20 22- 2 3 ) The J aa mi a h M u e e n i yya h Wa k a f C o m mi t te e , A - 2 , Sa r d ar P a r k , J a m bu sa r R o a d , B h a r u ch - 3 92 75 0 V s .Co mm i s s i on er of I n c o m e Ta x (Ex e m pt io n ) , Ah me da b ad [ P A N N o . AA D T T2 83 4L ] (Appellant) .. (Respondent) Appellant by : Ms. Kinjal Shah, A.R. Respondent by: Shri Kamlesh Makwana, CIT-DR D a t e of H ea r i ng 17.04.2024 D a t e of P r o no u n ce me nt 30.04.2024 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemptions) (in short “Ld. CIT(E)”), Ahmedabad vide order dated 28.12.2022 passed for A.Y. 2022- 23. 2. The assessee has taken the following grounds of appeal:- “Aggrieved by the order of CIT (Exemption) in not recognizing the trust with the activities religious cum charitable, assessee has preferred this appeal before the Appellate Tribunal. Assessee wishes to rise the below mentioned grounds in support of his claim along with the supporting details & documents as follows. The order of the assessing officer below in so far as it is against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. The learned CIT (Exemption) has not justified as per law in rejecting application of assessee before conducting the inquiry about the actual activities of the trust is necessary in view of the mandatory provisions of the procedure for registration u/s 80G(5) of the I.T. Act, 1961.” ITA No. 61/Ahd/2023 The Jaamiah Mueeniyyah Wakaf Committee vs.CIT(E) Asst.Year –2022-23 - 2– 3. The brief facts of the case are that the assessee/applicant trust filed application for approval of trust under Section 80G(5) of the Act on 23.06.2022 in Form No. 10AB under Rule 11AA of the I.T. Rules, 1962. The CIT (Exemptions) observed that from the details available on record, and the trust deed filed by the applicant trust, various objects of the applicant were found to be religious nature. It was observed that the objects stipulates religious education of holy Koran through Islamic madrasa and also one of the object stipulates advertisement of Islamic religion. Further, some objects are also religious in nature. The CIT (Exemptions) observed that the Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Limited 93 Taxman 645 has held that if any one of the objects of the applicant trust is wholly or substantially wholly of religious character, the institution or fund falls outside the scope of Section 80G and donation to it does not secure the advantage of the deduction that it gives. In this case, the Supreme Court observed that some of the clauses of the trust deed permits the trustees to support prayer halls and places of worship, sets out the purpose the whole or substantially the whole of which is of a religious nature, and therefore, the trust and the donations received by the assessee falls outside the scope of Section 80 G. Further, CIT (Exemptions) observed that the I.T.A.T. in the case of Yug Chetna Parmarth trust 44 Taxman.com 446 held that the benefit of Section 80G(5B) is thus provided to the limited extent to the institution or trust or fund, established for charitable purpose only when it incurs expenditure on religious activities not exceeding 5% of its total income and that previous year. This provision did not say that the assessee trust or fund should not exist / established for charitable purposes. Accordingly, CIT (Exemptions) was of the view ITA No. 61/Ahd/2023 The Jaamiah Mueeniyyah Wakaf Committee vs.CIT(E) Asst.Year –2022-23 - 3– that since the objects of the applicant/assessee are religious in nature, therefore the applicant/assessee has violated the relevant provisions of the Act and hence the applicant/assessee is not entitled to get approval under Section 80G(5) and hence, the application filed by the applicant/assessee trust in Form No. 10 AB is liable to be quashed. 4. The assessee is in appeal before us against the aforesaid order passed by CIT (Exemptions) rejecting the application filed by the assessee for grant of registration under Section 80G of the Act. 5. Before us, the Counsel for the assessee submitted that CIT (Exemptions) has erred in law in not affording reasonable opportunity of being heard to the assessee. The Counsel for the assessee submitted that no adverse remarks regarding the objects/activities of applicant trust have been raised in the notices issued on the assessee dated 07.11.2022 and 30.11.2022. Further, the Counsel for the assessee submitted that the wakaf deed was executed with the first object that the wakf would conduct activities for social, educational, economic, cultural welfare of the people of the society irrespective of their caste, creed, colour and religion. The Counsel for the assessee submitted that the activities of the assessee/applicant trust are not restricted to one religious community alone, and this fact has not been considered by the CIT (Exemptions) while rejecting the application filed by the assessee/applicant trust. It was submitted that the assessee/applicant trust had submitted all the evidences including the objects of the trust and how the expenditure has been incurred by it. There is no allegation by the CIT (Exemptions) that the whole or substantially whole of the expenses of the trust are incurred to propagate or ITA No. 61/Ahd/2023 The Jaamiah Mueeniyyah Wakaf Committee vs.CIT(E) Asst.Year –2022-23 - 4– advance the objects of a particular religious community. Further, the CIT (Exemptions) has not given any finding in the order rejecting the application filed by the assessee trust regarding the genuineness of the activities carried out by the assessee. The Counsel for the assessee submitted that the audited financial statements for the past three assessment years (Assessment Years 2020-21, 2021-22 and 2022-23) clearly shows that the nature of activities carried by the trust are primarily charitable in nature. The Counsel for the assessee relied on the case of Christian Medical College 374 ITR 17 (Punjab and Haryana High Court) wherein it was held that where assessee-society, established by Christian community, had been running medical colleges and its main aim was to train professionals in field of medical and health care and also to provide medical facilities in its hospitals to all persons of any caste, activities carried out by assessee were charitable in nature, it was entitled to exemption under Section 80G of the Act. Further, the Counsel for the assessee placed reliance in the case of Hira Lal Bhagwati 246 ITR 188 (Gujarat High Court), wherein the jurisdictional High Court held that whether object beneficial to a Section of public is an object of "general public utility"; it is not necessary that public at large must get benefit. To serve as a charitable purpose, it is not necessary that the object must be to serve the whole of mankind or all persons living in a country or province. Even if a Section of the public is given benefit, it cannot be said that it is not a trust for charitable purpose in the interest of the public. It is not necessary that the public at large must get the benefit. Further, the Counsel for the assessee submitted that the CIT (exemptions) has not examined whether more than 5% of the total income of the assessee has been utilised for religious purposes, before rejecting the application ITA No. 61/Ahd/2023 The Jaamiah Mueeniyyah Wakaf Committee vs.CIT(E) Asst.Year –2022-23 - 5– filed by the assessee/applicant trust. Accordingly, it was submitted that in the instant case, CIT (exemptions) has erred in facts and in law in rejecting the application for grant of registration under Section 80G of the Act filed by the assessee/applicant trust. 6. In response, Ld. DR placed reliance on the observations made by CIT (exemptions) in the order rejecting the application filed by the assessee for grant of registration under Section 80G of the Act. 7. We have heard the rival contentions and perused the material on record. 8. During the course of arguments, the Counsel for the assessee drew our attention to the fact that out of total income of 18.92 lakhs received by the applicant/assessee trust during the year under consideration, a sum of 15.99 lakhs has been spent on educational purposes. However, it is observed that on perusal of Schedule-1 of the expenditure on objects of the trust for educational purposes, most of the expenses are towards building rent, salaries, plumbing expenses, miscellaneous expenses, food expenses etc. Therefore, on perusal of the breakup of educational expenses, it is not clear whether majority of the expenses has been incurred for educational purposes only. Further we observe that this Bench on earlier occasion had asked the assessee to submit details / break-up of the expenses incurred by the assessee and to give an explanation / break-up of the nature of expenses incurred by the assessee / applicant trust. However, despite such specific request / direction, the assessee / applicant trust has not given any details of the nature of expenses which were incurred by the assessee during the ITA No. 61/Ahd/2023 The Jaamiah Mueeniyyah Wakaf Committee vs.CIT(E) Asst.Year –2022-23 - 6– impugned year under consideration. Further, on perusal of the trust deed, it is observed that most of the objects are apparently religious in nature. Therefore, it is important for us to analyze the precise nature of expenses being incurred by the assessee / applicant trust. Accordingly, looking into the instant facts, we find no infirmity in the order of Ld. CIT(E), so as to call for any interference. 9. In the result, the appeal of the assessee is dismissed. This Order pronounced in Open Court on 30/04/2024 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/04/2024 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/ Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 22.04.2024(Dictated by Hon’ble Member on his Dragon Software) 2. Date on which the typed draft is placed before the Dictating Member 22.04.2024 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 22.04.2024 5. Date on which the fair order is placed before the Dictating Member for pronouncement .04.2024 6. Date on which the fair order comes back to the Sr.P.S./P.S 30.04.2024 7. Date on which the file goes to the Bench Clerk 30.04.2024 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................