M/s. Jesus Heals Mission Trust, CHENNAI V. ITO, Coimbatore

ITA 62/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61196 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-06-2012
• Assessment Year: misc
• Appeal Filed On: 12-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution
• Section: 80G; 12A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D B ENCH C HENN AI BEFORE SHRI AB RAHAM P.GEORGE ACCOUNTANT MEMBER AND SHRI V.DURGA RAO , JUDICIAL MEMBER .. ITA NO. 62 /MDS./ 20 12 M/S.JESUS HEALS MISSION TRUST, 18/270,MGR NAGAR - II, PODANUR, COIMBATORE 641 023. VS. THE INCOME TAX OFFICER, COMPANY WARD - I, COIMBATORE. PAN AAATJ 9072 B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.SRI DHAR, ADVOCATE RESPONDENT BY : SHRI K E B RENGARAJAN JR.STANDING COUNSEL DATE OF HEARING : 06 .0 6 .12 DATE OF PRONOUNCEMENT : 06 .0 6 .12 O R D E R PER ABRAHAM P.GEORGE ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY ASSESSEE , ITS GRIEVANCE IS THAT COMMISSIONER OF INCOME TAX DENIED IT THE APPROVAL SOUGHT UNDER SECTION 80G OF THE INCOME TAX ACT ,1961 (IN SHORT THE ACT ). 2. ASSESSEE - TRUST WAS REGISTERED UNDER SECTION 12A OF THE ACT AS PARTLY REL IGIOUS AND PARTLY CHARITABLE HAD APPLIED FOR APPROVAL ITA . 62 /MDS/ 12 2 UNDER SECTION 80G(5) OF THE ACT ON 27.01.2010. THIS WAS REJECTED BY THE COMMISSIONER OF INCOME TAX TAKING A VIEW THAT SUCH APPROVAL COULD NOT BE GRANTED SINCE ASSESSEE WAS HAVING OBJECTS W H ICH WERE PARTLY RELIGIOUS AND PARTLY CHARITA BLE. ASSESSEE MOVED AN APPEAL BEFORE THIS TRIBUNAL AND THIS TRIBUNAL VIDE ITS ORDER DATED 24.08.2011 IN ITA NO.2012/MDS./2010 HAD RESTORED THE ISSUE BACK TO THE FILE OF COMMISSIONER OF INCOME TAX FOR RE - ADJUDICATION AFTER CONSIDERING THE E XPLANATION - 3 T O SECTION 80G OF THE ACT. ACCORDINGLY, COMMISSIONER OF INCOME TAX TOOK UP THE ISSUE ONCE AGAIN AND ASSESSEE WAS GRANTED AN OPPORTUNITY OF HEARING WHICH WAS AVAILED BY THE ASSESSEE . A NOTE ON THE ACTIVITIES OF THE ASSESSEE - TRUST WAS ALSO FILED. ASSESSEE WA S REQUIRED BY COMMISSIONER OF INCOME TAX TO FILE ITS ACCOUNTS FOR EACH OF THE FINANCIAL YEAR SEPARATELY AND SUCH DETAILS WERE GIVEN. FROM THE DETAILS SUBMITTED, COMMISSIONER OF INCOME TAX FOUND THAT PERCENTAGE OF FUNDS UTILIZED BY THE ASSESSEE FOR ITS REL IGIOUS ACTIVITIES WORKED OUT 12.41% FOR F.Y.2007 - 08, NIL FOR F.Y.2008 - 09, 8.05% FOR F.Y.2009 - 10 AND 7.02% FOR F.Y.2010 - 11. THEREFORE, ACCORDING TO HIM, ASSESSEE HAD EXPENDED MONEY ON RELIGIOUS ACTIVITIES IN EXCESS OF 5%, THE MAXIMUM AMOUNT PRESCRIBED UN DER SECTION 80G(5) OF THE ACT. HE, THEREFORE REFUSED THE APPROVAL SOUGHT BY THE ASSESSEE. ITA . 62 /MDS/ 12 3 3. NOW BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE STRONGLY ASSAILING THE ORDER OF THE COMMISSIONER OF INCOME TAX SUBMITTED THAT IN ONE OF THE YEA RS, COMMISSIONER OF INCOME TAX HIMSELF HAD ADMITTED THAT RELIGIOUS EXPENDITURE WERE NIL. ACCORDING TO HIM, ASSESSEE HAD AN ITEM OF EXPENDITURE CALLED MINISTRY EXPENSES, WHICH WAS ALSO CONSIDERED TO BE RELIGIOUS BY COMMISSIONER OF INCOME TAX . IF SUCH MINIS TRY EXPENSES WERE EXCLUDED, RELIGIOUS EXPENDITURE WOULD COME BELOW 5%. THEREFORE, ACCORDING TO HIM, THE APPROVAL SOUGHT WAS UNJUSTLY DENIED. PER CONTRA, DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX. 4. WE HAVE PERUSED THE ORDER OF COMMISSIONER OF INCOME TAX AND HEARD THE RIVAL CONTENTIONS. IT IS NOT DISPUTED THAT ASSESSEE - TRUST WAS HAVING OBJE CTS WHICH WERE PARTLY RELIGIOUS AND PARTLY CHARITABLE. IT IS ALSO NO T DISPUTE D THAT RELIGIOUS EXPENSES , IF MINI STRY EXPENSES WERE ALSO CONSIDERED TO BE RELIGIOUS, EXCEEDED 5% FOR FINANCIAL YEARS 2007 - 08, 2009 - 10 AND 2010 - 11. NO DOUBT , FOR FINANCIAL YEAR 2008 - 09 , SUCH EXPENSES WERE NIL AS PER THE FINDING OF COMMISSIONER OF INCOME TAX HIMSELF. A LOOK AT SECTION 8 0G(5B) SHOW THAT ITA . 62 /MDS/ 12 4 AN INSTITUTION OR FUND WHICH INCURS EXPENDITURE, DURING ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE FOR AN AMOUNT NOT EXCEEDING FIVE PER CENT OF ITS TOTAL INCOME IN THAT PREVIOUS YEAR WOULD STILL BE DEEMED TO BE AN INSTITUTION OR F UND TO WHICH THE PROVISIO NS OF SECTION 80G WOULD APPLY . SUB - SECTION(5) TO SECTION 80G CLEARLY SPECIFY THAT FOR APPLICATION OF SAID SECTION THE INSTITUTION OR FUND H AS TO BE ONE ESTABLISHED IN INDIA FOR CHARITABLE PURPOSES. SUB - CLAUSE (II) OF SEC TION 80G(5) ALSO MENTIONS THAT THE RULES GOVERNING THE INSTITUTION OR FUND SHALL NOT CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME , THE WHOLE OR ANY PART OF THE INCOME FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE. CONJOIN T READING OF THE ABOVE ALONG WITH SECTION 80G(5B) WOULD CLEARLY SHOWS THAT BENEFIT UNDER SECTION.80G CAN NOT BE EXTENDED TO AN INSTITUTION, WHICH WAS DOING RELIGIOUS WORK WHETHER WHOLLY OR ALONG WITH OTHER CHARITABLE WORK, ONCE THE EXPENDITURE ON RELIGIOUS ACTIVITIES EXCEED ED 5% OF THE TOTAL INCOME. IN THE GIVEN CASE BEFORE US, IT IS CLEARLY ESTABLISHED THAT ASSESSEE HAD EXCEEDED 5% LIMITS SPECIFIED UNDER SECTION 80G(5B) OF THE ACT FOR THREE YEARS AT LEAST . THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSEE COULD NOT HAVE BEEN GRANTED THE APPROVAL SOUGHT BY IT UNDER SECTION 80G OF THE ACT. THIS WAS RIGHTLY DENIED. NO INTERFERENCE IS CALLED FOR. ITA . 62 /MDS/ 12 5 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AF TER CONCLUSION OF HEARING ON WEDNESDAY, THE 6 TH JUNE , 2012. SD/ - SD/ - ( V.DURGA RAO ) (ABRAHAM P.GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 6 TH JUNE , 2012 . K S SUNDARAM COPY TO: ASSESSEE / AO / CIT (A) / CIT / D.R. / GUARD FILE ITA . 62 /MDS/ 12 6