Renugadevi Amman Trust, Dindigul V. CIT(Exemption), Dindigul

ITA 631/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6533 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 12-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SUNDARARAJAN
• Assessee Lawyers: B K GOPILAL
• Keywords: Charitable institution
• Section: 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.631/CHNY/2019 M/S. SRI RENUGADEVI AMMAN TRUST, 39, EAST CAR STREET, DINDIGUL 624 001. VS THE COMMISSIONER OF INCOME TAX(EXEMPTION), CHENNAI 34. PAN: AAVTS5409E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI B.K. GOPILAL, ADVOCATE / RESPONDENT BY : SHRI A. SUNDARARAJAN, JCIT /DATE OF HEARING : 23.09.2019 /DATE OF PRONOUNCEMENT : 16.10.2019 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTION), CHENNAI PASSED UNDER SECTION 12AA(1)(B)(II) IN ORDER NO. ITBA/EXM/S/EXM1/2018-19/ 1014643713(1) DATED 28.12.2018 2 ITA NO.631/CHNY/2019 2. THE APPEAL IS DELAYED FOR 14 DAYS. THE MANAGING DIRECTOR FILED AN AFFIDAVIT PLEADING THAT HE FELL ILL IN THE MONTH OF JANUARY AND FEBRUARY AND WAS BED-RIDDEN AND AFTER RECOVERY FROM THE ILLNESS FILED THE APPEAL WHICH CAUSED DELAY OF 14 DAYS. THEREFORE, IT WAS PRAYED THAT THE DELAY IS NEITHER WANTON NOR WILLFUL AND HENCE IT MAY BE CONDONED. WE HEARD THE RIVAL SUBMISSIONS AND CONDONE THE DELAY IN FILING THE APPEAL. 3. SRI RENUGADEVI AMMAN TRUST, THE ASSESSEE, CONSTITUTED BY A TRUST DEED DATED 11.04.2018, SOUGHT REGISTRATION U/S.12AA ON 08.06.2013. THE CIT(EXEMPTION) CONDUCTED ENQUIRY AND FOUND THAT THE ASSESSEE HAS TAKEN THE PROPERTY BELONGING TO DINDIGUL TOWN SOWRASTRA MAHAJANA SABHA ON LEASE AND THEREAFTER LET OUT ON RENT ESPECIALLY FOR MARRIAGE FUNCTIONS CHARGING RS.15,000/- PER DAY WHICH IS IN TUNE WITH THE CHARGES COLLECTED BY OTHER SIMILAR KALYANA MANDAPAMS, COMMERCIALLY IN DINDIGUL. THE CIT(EXEMPTION), CHENNAI HAS HELD THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SUBSTANTIATE THE ASSESSEES CLAIM THAT THE TRUST IS ENGAGED IN MAINTAINING COMMUNITY HALL, SHOPS, TEMPLES BELONGING TO DINDIGUL TOWN SOWRASTRA MAHAJANA SABHA, IT IS RECEIVING VERY SMALL AMOUNT AS AMENITIES FROM CUSTOMERS AND UTILIZE THE AMOUNT FOR CHARITABLE 3 ITA NO.631/CHNY/2019 PURPOSE, ETC. THEREFORE, HE HELD THAT THE OBJECT OF MAINTAINING THE MARRIAGE HALL IS COMMERCIAL IN NATURE AND THE ASSESSEE DID NOT FURNISH ANY EVIDENCE THAT IT MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR THE BUSINESS ACTIVITY OF SUB-LETTING AND THE SUB-LETTING ACTIVITY IS NOT CONNECTED TO OTHER CHARITABLE ACTIVITIES, ETC., AND HENCE DENIED REGISTRATION U/S.12AA. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 4. THE AR SUBMITTED THAT THE LD.CIT(EXEMPTION) ERRED IN DECIDING THE ACTIVITY OF MAINTAINING DINDIGUL TOWN SOURASHTRA MAHAJANA SABHA AS KALYANA MANADAPAM, AND SHOPS, ETC., AS COMMERCIAL ACTIVITY, REJECTED ITS APPLICATION AND DENYING THE REGISTRATION U/S.12AA. THE TRUST HAS NOT TAKEN THE PROPERTY ON LEASE AND SUBLETTING THE SAME TO GENERATE REVENUE BUT SIMPLY MAINTAINS THE COMMUNITY HALL BELONGING TO DINDIGUL TOWN SOURASHTRA MAHAJANA SABHA AND UTILIZE THE RECEIPTS FULLY FOR CHARITABLE ACTIVITIES. THEREFORE, HE PLEADED THAT THE REGISTRATION SOUGHT BE GRANTED. WHILE GOING THROUGH THE TRUST DEED COPY, WHICH IS IN TAMIL, IT IS NOTICED VIZ., CLAUSE 3 OF THE DEED IN PAGE 2, THE MEMBERS OF THE TRUST COULD BE FROM THE SAURASHTRA COMMUNITY OF DINDIGUL ONLY AND IT IS A SOCIAL ORGANIZATION ENGAGED IN THE PROMOTION AND UNITY OF SAURASHTRA 4 ITA NO.631/CHNY/2019 PEOPLE. THEREFORE, THE BENCH SOUGHT LD.AR, WHETHER THIS CONDITION IS NOT FALLING UNDER THE SCOPE OF SECTION 13(1)(B) OF THE IT ACT. THE LD.AR PLEADED THAT THE APPEAL BE DECIDED ON MERITS. PER CONTRA, THE LD.DR SUPPORTED THE ORDER OF THE CIT(EXEMPTION). 5. WE HEARD THE RIVAL SUBMISSIONS. THE TRUST DEED ITSELF IS INDICATING THAT IT IS A SOCIAL ORGANIZATION FOR THE PROGRESS AND UNITY OF SAURASHTRA COMMUNITY AND ITS MEMBERS ARE FROM THE SAURASHTRA COMMUNITY PEOPLE LIVING IN DINDIGUL TOWN ONLY. CONSIDERING THE FACTS THAT THE TRUST IS MAINTAINING THE DTS KALYANA MANDAPAM BELONGING TO DINDIGUL TOWN SOURASHTRA MAHAJANA SABHA ON LEASE AND CHARGING THE PRICE AT MARKET RATE AS COLLECTED BY OTHER SIMILAR COMMERCIAL KALYANA MANDAPAMS IN DINDIGUL, ETC., THIS CASE FALLS WITHIN THE SCOPE OF SECTION 13(1)(B) OF THE ACT, AS PER WHICH IF ANY INCOME OF A TRUST OR CHARITABLE INSTITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE, AFTER THE COMMENCEMENT OF THE INCOME TAX ACT, 1961, THEN NOTHING CONTAINED IN SECTION 11 OR SECTION 12 SHALL OPERATE SO AS TO EXCLUDE THE RECEIPT THERE OF FROM THE TOTAL INCOME. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(EXEMPTION) FOR REFUSING TO GRANT REGISTRATION U/S.12AA. 5 ITA NO.631/CHNY/2019 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THE 16 TH OCTOBER, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 16 TH OCTOBER, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. [ /GF ( . . . ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER