Divine Touch Educational Trust, Visakhapatnam V. THE CIT - 1, Visakhapatnam

ITA 635/VIZ/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3737 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 22-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S N MURTHY
• Assessee Lawyers: C SUBRAHMANYAMAR
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

ITA NO.635/VIZAG/2013 DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM 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.635/VIZAG/2013 ( / ASSESSMENT YEAR: NA) DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM VS. CIT - 1, VISAKHAPATNAM [PAN: AABTD 6562D ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI C. SUBRAHMANYAM,AR / RESPONDENT BY : SHRI T.S.N. MURTHY, DR / DATE OF HEARING : 21.04.2016 / DATE OF PRONOUNCEMENT : 17.06.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT-1, VISAKHAPATNAM DATED 2.9.2013. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A SOCIET Y, REGISTERED UNDER THE SOCIETIES REGISTRATION ACT ON 15.7.2011. THE A SSESSEE SOCIETY HAS ITA NO.635/VIZAG/2013 DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM 2 APPLIED FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') BY FILING FORM NO .10A ON 25.3.2013 WITH THE FOLLOWING OBJECTIVES: A) TO HELP THE ORPHAN, DESTITUTE CHILDREN BY WAY O F PROVIDING, FOOD SHELTER, CLOTHES, MEDICAL, EDUCATION, RECREATION AND EVENTUA LLY TO MAKE CHILDREN SELF RELIANCE ETC., TO PROVIDE, HELP TO THE ANY SOCIAL S ECTOR OF SERVICES IN THE MENTION TRUST OBJECTS TO THE STATE OR CENTRAL GOVERNMENT WH ERE TRUST MAY FEEL TO DO SO IN SAME LINE OF SERVICE, INPART OR WHOLE, TO HELP A ND ESTABLISH OLD AGE HOME WITH SPIRITUAL AND DESTITUTE WOMEN ALSO MEN THROUGH VOCA TIONAL TRAINING AND MAKE THEM EXPERT IN SOME SEGMENT OF SMALL SCALE COTTAGE INDUSTRY TO MAKE THEM SELF RELIANCE, TO PROVIDE OCCASIONAL HELP INTERMS OF FOO D, SHELTER, MEDICINE/MEDICAL TREATMENT, CLOTHES ETC IN NATURAL CALAMITIES TO TAK E CARE OF COWS. B) TO UPLIFT THE MANKIND HELP AND SUPPORT THEM IN EVERY WAY POSSIBLE. THROUGH ESTABLISHMENT OF SCHOOL, COLLEGES AND IMPART GOOD V ALUE BASE EDUCATION AND MORAL BEHAVIOR, ESTABLISH HOSPITAL WHERE ALL WILL B E TREATED WITH FREE/AFFORDABLE EXPENSES. C) TO BUILD PROPER, FACILITIES AND INFRASTRUCTURE SUCH AS BUILDINGS, PLAYGROUNDS WITH ALL OTHER RECREATION FACILITY FOR THEIR NEEDS. D) THE TRUST WILL HELP IN EDUCATING THEM AND UPLIFTIN G THE NEEDY. E) TO BUILD OR ASSIST IN BUILDING SCHOOLS, COLLEGES, HOSPITALS OR OTHER-BUILDINGS IN CONNECTION WITH AND TAKE OVER LAWFULLY FOR THE ADVA NCEMENT OF THE OBJECTS OF THE TRUST, AND TO MAINTAIN ALTER AND IMPROVE INCLUDING EXISTING BUILDINGS, AND TO FURNISH AND EQUIP THE SAME. F) TO SPREAD, TRANSPORT AND PROPAGATE THE TEACHINGS OF SPIRITUALITY, YOGA, MANTRA MEDITATION, THEOSOPHICAL UNDERSTANDING AMONG ALL HU MAN BEINGS IN ORDER TO MAKE GOOD AND DISCIPLINE HUMAN BEINGS AND TO SPREAD THE SPIRITUAL CONSCIOUSNESS BY TELEVISION, RECORDINGS, BY CINEMAT OGRAPH FILMS, GRAMOPHONE RECORDINGS AND RECITALS AND BY ANY OTHER SYSTEM OF SOUND OR PICTURE REPRODUCTION WHATSOEVER, OR BY PUBLIC MEETINGS, LEC TURES, SERVICES, ADDRESSES, RALLIES, MISSIONS, REVIVAL OR PEACE OR NEEDS. G) TO PRINT, PUBLISH, SEAL OR CAUSE TO BE PRINTED PUBLISH ED, SOLD OR IF THOUGHT FIT, TO DISTRIBUTE GRATUITOUSLY BOOKS BOOKLETS, LEAFLETS, D AILY, WEEKLY, MONTHLY, QUARTERLY OR YEARLY NEWSPAPERS, MAGAZINES, OR OTHER PERIODICA LS FOR THE PURPOSE OF GIVING INFORMATION IN REGARD TO THE WORK OF THE TRUST. H) TO PURCHASE, TAKE ON LEASE OR EXCHANGE, HIRE OR OTHERW ISE ACQUIRE ANY REAL OR PERSONAL PROPERTY AND ANY RIGHTS OR PRIVILEGES WHIC H THE TRUST OBJECTS, AND TO CONSTRUCT, MAINTAIN AND ALTER ANY BUILDINGS OR EREC TIONS NECESSARY FOR THE WORK OF THE TRUST. ITA NO.635/VIZAG/2013 DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM 3 I) TO SELL, LET, MORTGAGE, DISPOSE OF OR TURN TO ACCOUNT ALL OR ANY OF THE PROPERTY OR ASSETS OF THE TRUST WITH THE APPROVAL OF BOARD OF T RUSTEES, FOR THE BENEFIT OF TRUST ONLY. J) TO UNDERTAKE AND EXECUTE ANY BUSINESS, WHICH WILL BE T AKEN UP LAWFULLY AND THE TOTAL PROCEEDS WILL BE SPENT FOR THE OBJECTS OF THE TRUST, THE TRUST FOR WHICH IT IS FORM MAY ENGAGE, LAWFULLY BE UNDERTAKEN BY THE TRUST TO FULFILL THE OBJECT OF THE TRUST K) TO INVEST THE MONEY OF THE TRUST NOT IMMEDIATELY REQUI RED FOR ITS PURPOSES IN OR WON. SUCH INVESTMENTS, SECURITIES OR PROPERTY AS MAY BE THOUGHT FIT, SUBJECT NEVERTHELESS TO SUCH CONDITIONS (IF ANY) AND SUCH C ONSENTS (IF ANY) AS MAY FOR THE TIME BEING BE IMPOSED OR REQUIRED BY LAW AND SU BJECT ALSO AS HEREIN PROVIDED. L) TO ESTABLISH AND SUPPORT OR AID IN THE ESTABLISHMENT A ND SUPPORT OF ANY CHARITABLE ASSOCIATIONS OR INSTITUTIONS AND TO SUBS CRIBE OR GUARANTEE MONEY FOR CHARITABLE PURPOSES IN ANY WAY CONNECTED WITH THE P URPOSE OF THE TRUST. 3. THE LD. COMMISSIONER HAS EXAMINED THE APPLICATIO N FILED BY THE ASSESSEE AND AFTER MAKING ENQUIRY THROUGH THE ASSES SING OFFICER, HE HAS OBSERVED THAT THE ACTIVITIES OF PLAY SCHOOL HAVE NE VER BEEN RECOGNIZED AS A FORMAL EDUCATION AND THE ASSESSEE INCURRED HUG E EXPENSES FOR AN ADVERTISEMENT AND THE ACTIVITY CARRIED BY THE ASSES SEE IS NOT IMPARTING OF EDUCATION IN THE TRUE AND FORMAL SENSE OF THE TE RM AND REJECTED THE REGISTRATION U/S 12AA OF THE ACT. 4. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE SOCIETY IS FORMED FOR IMPARTING EDUCATION BY ESTABL ISHING EDUCATIONAL ITA NO.635/VIZAG/2013 DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM 4 INSTITUTIONS. THE ASSESSEE SOCIETY IS RUNNING A PL AY SCHOOL AND IMPARTING EDUCATION AND THEREFORE SUBMITTED THAT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. 6. HE ALSO SUBMITTED THAT THE LD. COMMISSIONER WITH OUT CONSIDERING THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRAT ION U/S 12AA OF THE ACT SIMPLY REJECTED BY OBSERVING THAT ASSESSEE IS COLLE CTING THE FEE AND RUNNING THE PLAY SCHOOL IN COMMERCIAL LINES. 7. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT RUNNING A PLAY SCHOOL IS NOT AMOUNTING TO IMPARTING FORMAL EDUCATI ON AND THEREFORE THE ASSESSEE IS NOT ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT. HE ALSO STRONGLY SUPPORTED ORDER PASSED BY THE LD. COMMISSI ONER. 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 ASSESSEE IS A SOCIETY REGISTERED UNDER THE REGISTRA TION OF SOCIETIES ACT. THE ASSESSEE FILED AN APPLICATION BEFORE THE COMMIS SIONER FOR REGISTRATION U/S 12AA OF THE ACT. FROM THE TRUST D EED, WE FIND THAT THE MAIN OBJECTS OF THE TRUST ARE IMPARTING EDUCATION. PARTICULARLY TO HELP THE URBAN DESTITUTE CHILDREN BY WAY OF PROVIDING FO OD, SHELTER, CLOTHS, MEDICAL, EDUCATIONAL, RECREATION, ETC. BY CONSIDER ING THE DOCUMENTS FILED BY THE ASSESSEE, THE ASSESSEE EXCEPT RUNNING A PLAY SCHOOL BY ITA NO.635/VIZAG/2013 DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM 5 COLLECTING A FEE, NO CHARITABLE ACTIVITIES HAVE BEE N CARRIED OUT BY THE ASSESSEE. DURING THE COURSE OF HEARING, WHEN WE SP ECIFICALLY POINTED OUT THE LD. COUNSEL FOR THE ASSESSEE THAT ANY ORPHA N OR ANY DESTITUTE HAVE BEEN ADMITTED IN THE SCHOOL OR ANY CHILDREN AR E ADMITTED WITHOUT COLLECTING THE FEE OR ANY CONCESSION HAS BEEN GIVEN ? THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ALL THE STUDENT S ARE ADMITTED BY PAYING FEE AS SPECIFIED BY THE ASSESSEE SOCIETY. F ROM THE MATERIAL PLACED BEFORE US, WE FIND THAT THE ASSESSEE IS NOT CARRYING OUT ANY CHARITABLE ACTIVITY AS PER THE TRUST DEED EXCEPT RU NNING PLAY SCHOOL BY COLLECTING A FEE. EVEN OTHERWISE THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE IS CARRYING OUT CHARITABLE ACTIVITIES AS PER ITS TRUST DEED. THE ASSESSEE TRUST DEED HAS CONTAINED ONE OF THE OB JECT THAT TO HELP THE ORPHAN AND DESTITUTE CHILDREN. WE FIND THAT THE AS SESSEE HAS NOT ADMITTED SINGLE ORPHAN OR DESTITUTE IN ITS PLAY SCH OOL. THE ASSESSEE TRUST HAS NOT ADMITTED ANY STUDENT WITHOUT COLLECTI NG FEE AS PRESCRIBED BY IT. IN VIEW OF THE ABOVE, IN OUR OPINION, IT IS NOT A CHARITABLE ACTIVITY. THAT APART, THE ASSESSEE PLAY SCHOOL NEITHER RECOGN IZED BY THE STATE GOVERNMENT NOR RECOGNIZED BY THE CENTRAL GOVERNMENT OR ANY AUTHORITY. THEREFORE, THE ASSESSEES ACTIVITY OF RUNNING PLAY SCHOOL CANNOT BE SAID THAT IT IS A FORMAL EDUCATION. IN VIEW OF THE ABOV E, WE ARE OF THE OPINION THAT THE ASSESSEE IS NOT ENTITLED FOR REGIS TRATION U/S 12AA OF THE ITA NO.635/VIZAG/2013 DIVINE TOUCH EDUCATIONAL TRUST, VISAKHAPATNAM 6 ACT. WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE COMMISSIONER. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17 TH JUN16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 17.06.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT DIVINE TOUCH EDUCATIONAL TRUST, PLOT NO.9, GANGAPUR LAYOUT, VISAKHAPATNAM-530 003. 2. / THE RESPONDENT THE CIT-1, VISAKHAPATNAM 3. ) ( ) / THE CIT(A), VISAKHAPATNAM 4. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM