SVM Educational & Charitable Trust, Kottayam V. CIT, Kottayam

ITA 644/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61540 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 25-06-2012
• Assessment Year: misc
• Appeal Filed On: 29-11-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: T K MATHEW
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.644/COCH/2010 ASSESSMENT YEAR : S.V.M. EDUCATIONAL & CHARITABLE TRUST, VISITATION GENERALATE, NATASSERY, S.H. MOUNT P.O., KOTTAYAM-686 006. [PAN: AAJTS 1392Q] VS. THE COMMISSIONER OF INCOME TAX, KOTTAYAM. (ASSESSEE-APPLICANT (REVENUE- RESPONDENT) ASSESSEE BY SHRI T.K. MATHEW, FCA REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 25/06/2012 DATE OF PRONOUNCEMENT 25 /06/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS PREFERRED THIS APPEAL CHALLE NGING THE ORDER DATED 27-09-2010 PASSED BY THE LD. CIT, KOTTAYAM, REJECTING THE APPLICATION FILED BY IT SEEKING REGISTRATION U/S. 12A OF THE ACT. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE APPLICANT-TRUST WAS CREATED ON 13-08-2009 BY SISTERS OF THE VISITATION OF THE B LESSED VIRGIN MARY OF THE ARCH DIOCESE OF KOTTAYAM. THE APPLICANT-TRUST FILED AN A PPLICATION DATED 22-03-2010 BEFORE LD CIT SEEKING REGISTRATION U/S. 12A OF THE ACT. H OWEVER, THE LD. CIT REJECTED THE APPLICATION FOR THE FOLLOWING REASONS:- I.T.A.NO.644 /COCH/2010 2 A) THE TRUST HAS BEEN FORMED FOR THE PURPOSE OF MA NAGING TWO SCHOOLS WHICH WERE ORIGINALLY STARTED BY ANOTHER TRUST NAMED VIS ITATION CONGREGATION, WHICH WAS A RELIGIOUS TRUST. UNDER THE INCOME TAX ACT, THE RELIGIOUS TRUSTS ARE NOT ENTITLED TO GET RECOGNITION U/S. 80G OF THE ACT. HENCE, THE P RESENT TRUST HAS BEEN CREATED SPECIFICALLY FOR THE PURPOSE OF SEEKING RECOGNITI ON U/S. 80G WHICH IS UNLAWFUL. B) THE TRUST HAS TO BE REGARDED AS VOID I N TERMS OF S. 4(B) OF THE TRUST ACT, 1882. C) THE PRESENT TRUST HAS NOT ENTERED INTO A LEASE DEED OR AGREEMENT WITH THE ORIGINAL OWNER OF THE SCHOOLS. D) THIS IS A COLOURABLE EXERCISE IN TERMS OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MCDOWELL, 154 ITR 14 8 (SC). E) THE PROPERTY IN THE SCHOOL IS OWNED BY THE RELIGIOUS TRUST AND IS NOT HELD BY THE PRESENT TRUST. AGGRIEVED BY THE DECISION OF THE LD. CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THE APPLICATION FILED BY THE ASSESSEE SEEKING REGISTRAT ION U/S. 12A OF THE ACT IS REQUIRED TO BE PROCESSED IN ACCORDANCE WITH THE PROCEDURES PRESCRI BED U/S. 12AA OF THE ACT. ACCORDING TO CLAUSE (B) SUB-SECTION (1) TO SECTION 12AA, THE LD. CIT HAS TO SATISFY HIMSELF ABOUT THE OBJECTIVES OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. THOUGH THE PRESENT ASSESSEE HAS BEEN FORMED AND REGISTERED WITH SPECIF IC OBJECTIVES, WE NOTICE THAT THE LD CIT(A) DID NOT LOOK INTO THE OBJECTS AND HAS ALSO N OT EXAMINED THE GENUINENESS OF THE ACTIVITIES CARRIED ON BY THE ASSESSEE. ACCORDING TO LD A.R, THE TRUST HAS BEEN FORMED WITH THE SPECIFIC OBJECTIVES AND IT IS CARRYING ON GENUINE ACTIVITIES OF MANAGING TWO SCHOOLS. WE NOTICE FURTHER THAT LD. CIT(A) HAS BEE N CARRIED AWAY MORE BY THE INTENTION AND PURPOSE OF CREATING THE PRESENT TRUST. THOUGH THE LD. CIT HAS FOUND FAULT WITH THE I.T.A.NO.644 /COCH/2010 3 PURPOSE AND INTENTION, YET HE COULD NOT POINT OUT A NY STATUTORY LAW OR THE ACT UNDER WHICH SUCH PURPOSE OR INTENTION ARE PROHIBITED. T HOUGH, WE NOTICE THAT THE LD. CIT HAS TAKEN SUPPORT FROM SECTION 4 OF THE TRUST ACT, 1882 , ACCORDING TO LD A.R, THE INDIAN TRUSTS ACT SHALL NOT APPLY TO PUBLIC CHARITABLE TRU STS. WE ALSO NOTICE THAT THE LD. CIT HAS TAKEN A NARROW MEANING OF THE TERM PROPERTY. SO, IN OUR VIEW, THE LD. CIT HAS NOT ACTED IN ACCORDANCE WITH MANDATE OF LAW IN PROCESSI NG THE APPLICATION FILED BY THE ASSESSEE. WE ARE OF THE VIEW THAT THE MATTER REQUI RES RE-EXAMINATION AT THE END OF THE LD. CIT. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD . CIT AND RESTORE THE MATTER TO HIS FILE FOR A FRESH CONSIDERATION OF THE APPLICATION FILED BY THE ASSESSEE IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE APPEAL FILE BY THE ASSESSEE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY O N 25-06-2012 (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: JUNE, 2012 GJ COPY TO: 1. S.V.M. EDUCATIONAL & CHARITABLE TRUST, VISITATIO N GENERALATE, NATASSERY, S.H. MOUNT P.O., KOTTAYAM-686 006. 2.THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 3. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 4. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN