M/s. Glorious Evangelical Ministries, Tuticorin V. CIT, Madurai

ITA 616/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4717 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-06-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DEVANATHAN
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO. 616/MDS/2011 ASSESSMENT YEAR : 2010-11 M/S GLORIOUS EVANGELICAL MINISTRIES NO.63, TELEGRAPH OFFICE ROAD TUTICORIN 628 002 VS THE CIT I MADURAI [PAN - AABTG2392L] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEVANATHAN, ADVOCATE RESPONDENT BY : SHRI SHAJI P. JACOB, SR.DR O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE-TRUST IS DIRECTED AGAINST THE ORDER OF THE LD. CIT-I, MADURAI, DATED 1.2.2011, BY WHICH HE HAS REJECTED THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 2. THE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER: 1. ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT ERRED IN DENYING REGISTRATIO N U/S 12AA/80G OF THE INCOME-TAX ACT. ITA 616/11 :- 2 -: 3. THE LEARNED CIT FUNDAMENTALLY FAILED TO APPRECIATE THAT THE PHILOSOPHY BEHIND THE BENEVOLENT PROVISIONS LIKE SECTION 11 OF THE I.T.AC T IS TO CONFER BENEFIT SINCE THE TRUST/INSTITUTION IS TAKING CARE OF WELFARE/CHARITABLE ACTIVITIES AKIN T O GOVERNMENTAL ACTIVITIES, HENCE THE ADMINISTRATIVE AUTHORITIES SHOULD NOT WHITTLE DOWN THE PLENITUDE O F EXEMPTION/RELIEF GRANTED BY THE PARLIAMENT AND FAIR PROCEDURE SHOULD AND MUST BE FOLLOWED. 4. THE LEARNED CIT FUNDAMENTALLY FAILED TO APPRECIATE THAT THE TRUST IN QUESTION SATISFIED THE CONDITIONS, VIZ' TRUST IS A GENUINE ONE AND ITS ACTIVITIES ARE CHARITABLE AND THE CONTRARY FINDING OF THE LEARNED CIT IS PERVERSE. 5. THE LEARNED CIT GROSSLY ERRED IN HOLDING THAT THE APPELLANT TRUST DID NOT PRODUCE DONATION RECEIPTS WHICH IS NOT ONLY INCORRECT BUT BORDERING ON FALSE HOOD SINCE THE APPELLANT FILED MASS OF DETAILS INCLUDING THE RECEIPTS. 6. THE LEARNED CIT GROSSLY ERRED IN HOLDING THAT THE TRUST HAS TWIN OBJECTS BOTH CHARITABLE AND HENCE THE TRUST CANNOT BE ALLOWED THE BENEFIT OF REGISTRATION. THE ACTIVITIES CARRIED OUT BY THE TRU ST ARE ADMIXTURE OF BOTH RELIGIOUS AND CHARITABLE 7. THE LEARNED CIT ERRED IN REJECTING THE CLAIM FOR EXEMPTION U/S 80G WITHOUT PASSING A SPEAKING ORDER AND HENCE THE ORDER IS NULLITY IN LAW. AS DECIDED IN THE CASE OF THE SOCIETY OF PRESENTATION SISTERS & ANOTHER, 318 ITR (AT)287(COCHIN) BY THE COCHIN BENCH OF THE !TAT THAT OVERLAPPING OF RELIGIOUS AND CHARITABLE ACTIVI TY CANNOT RENDER THE OBJECT OF THE TRUST AS NOT CHARITABLE IN NATURE AND CANNOT BE REASON FOR DENYING EXEMPTION U/S 11(1)(A) OF THE ACT OR DENY REGISTRATION TO THE ASSESSEE TRUST U/S 12AA OF THE ACT. ALLAHABAD HIGH COURT FIFTH GENERATION EDUCATION SOCIETY VS CIT(1990)185 ITR 634 AND OF THE MADRAS HIGH COURT IN NEW LIFE IN CHRIST EVANGELIST ASSOCIATION VS CIT 2000 246 ITR 532. CARRYING OUT CHARITABLE ACTIVITIES IS NOT A RELEVAN T FACTOR AT THE TIME OF GRANT OF REGISTRATION AND THE SAME WILL BE RELEVANT ONLY AT THE TIME OF ITA 616/11 :- 3 -: CONSIDERING THE ELIGIBILITY OF THE TRUST TO ENJOY T HE BENEFIT OF SECTION 11 &12 THE APPELLANT BEGS LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT W AS NOTICED FROM THE TRUST DEED APPENDED TO THE APPLICATION IN FORM NO.10A FOR REGISTRATION U/S 12AA, THAT THE ASSESSEE-TRUST WAS CREATED ON 28.9.2010 BY SHRI L.NAVARATNAM, WHO HAS DECLARED AS THE FOUNDER OF THE TRUST. FROM THE TRUST-DEED THE LD. CIT FOUND THAT THE ACTIVITIES CARRIED OUT BY THE TRUST WERE ADMIXTURE OF RELIGIO US AS WELL AS CHARITABLE ONES. THE TRUST WAS ALSO RUNNING A CHUR CH AT TUTICORIN WHEREIN AROUND 50 PERSONS WERE ATTENDING THE SERVIC ES. MAINLY ON THAT BASIS, THE LD. CIT HAS DENIED REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE-TRUST. FROM THE RECORDS AND IN THE LI GHT OF THE ORAL SUBMISSIONS, IT WAS CLEARLY FOUND THAT THE TRUST WA S CARRYING ON BOTH RELIGIOUS AS WELL AS CHARITABLE ACTIVITIES. THERE IS NO DISPUTE BETWEEN THE PARTIES ABOUT THIS FACTUAL MATRIX. NOW, THE SI MPLE QUESTION BEFORE IS THAT AS TO WHETHER SUCH ADMIXTURE ACTIVITIES CAN BE TREATED AS ELIGIBLE FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT OR NOT. IT WAS FOUND THAT THIS ISSUE STANDS COVERED BY NUMEROUS DE CISIONS TAKEN BY THE CHENNAI BENCHES. WE MAY REFER TO ONE SUCH DECI SION TAKEN BY THIS BENCH VIDE ORDER DATED 3.3.2011 IN THE CASE OF PRAYER FOR INDIA IN ITA 616/11 :- 4 -: I.T.A.NO. 196/MDS/2011. PARAGRAPH 2 OF THIS ORDER IS RELEVANT AND IS BEING EXTRACTED HERE IN BELOW: 2. WE HAVE HEARD BOTH PARTIES. IN SO FAR AS THE REQUISITE REGISTRATION U/S 12AA OF THE ACT BY THE L D. CIT IS CONCERNED, THE LD.AR ARGUED THAT DESPITE THE FACT T HAT THE ASSESSEE-TRUST IS CREATED FOR DONG CHARITABLE ACTIV ITIES, ON IRRELEVANT REASONS, THE LD. CIT HAS REFUSED TO GRAN T REGISTRATION U/S 12AA OF THE ACT. ON THE OTHER HAN D, THE LD.DR SUPPORTED THE ORDER OF THE LD. CIT. WE HAVE FOUND THAT THE TRUST WAS CREATED ON 12.7.2007. A COPY OF THE TRUST DEED WAS ALSO FILED. THE OBJECTS OF THE TRUS T ARE FOUND TO BE CHARITABLE IN NATURE. THE LD. CIT HAS OBSERVED THAT THE OBJECTS OF THE TRUST ARE MIXTURE OF BOTH RELIGIOUS AND CHARITABLE. THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF THE SOCIETY OF PRESENTATION SISTERS & ANOTHER, 318 ITR (AT) 287(COCHIN), WHI LE DEALING WITH AN IDENTICAL ISSUE, HAS HELD THAT OVER LAPPING OF RELIGIOUS AND CHARITABLE ACTIVITY CANNOT BE TAKE N AS A REASON TO DENY EXEMPTION U/S 11(1)(A) OF THE ACT, A S IT CANNOT RENDER THE OBJECTS OF THE TRUST AS NOT CHARI TABLE IN NATURE. CONSEQUENTLY, WE DIRECT THE LD. CIT TO GRA NT REGISTRATION TO THE ASSESSEE-TRUST U/S 12AA OF THE ACT. 4. THEREFORE, IN VIEW OF THE ABOVE CONSISTENT VIEW OF THIS BENCH, WE DIRECT THE LD. CIT TO GRANT REGISTRATION U/S 12A A TO THE ASSESSEE- TRUST. 5. DURING HEARING, IT WAS BROUGHT TO OUR NOTICE AND IT WAS ALSO FOUND FROM THE GROUNDS RAISED BEFORE US THAT RECOGN ITION U/S 80G WAS ALSO DENIED TO THE ASSESSEE-TRUST CONSEQUENT UPON R EJECTION OF REGISTRATION U/S 12AA OF THE ACT. THE ASSESSEE-TR UST HAS NOT FILED ANY SEPARATE APPEAL IN THIS REGARD. THE LD.DR, SHRI SH AJI P. JACOB HAS OBJECTED TO THE GRANT OF RECOGNITION U/S 80G BECAUS E THE ASSESSEE HAS ITA 616/11 :- 5 -: NOT FILE ANY SEPARATE APPEAL IN THIS REGARD. WE A RE ALSO OF THE SIMILAR VIEW THAT IN RELATION TO THE DENIAL OF RECOGNITION U/S 80G, THE ASSESSEE- TRUST IS REQUIRED TO FILE A SEPARATE APPEAL, MORE PARTICULARLY, WHEN THE LD. CIT HAS PASSED A SEPARATE ORDER IN THIS REGARD. THE ASSESSEE IS AT LIBERTY TO FILE A SEPARATE APPEAL IN THIS REGARD, I F SO ADVISED. THEREFORE, IN VIEW OF OUR FOREGOING OBSERVATION, THIS APPEAL I N I.T.A.NO. 616/MDS/2011 STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 .7.2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 11 TH JULY, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR