M/s. Snekalaya for Animals, CHENNAI V. ITO, Coimbatore

ITA 687/CHNY/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7762 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 03-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 687/MDS/2012 M/S SNEKALAYA FOR ANIMALS, NO.1, MAHALAKSHMI AVENUE, K.T.V.R. COLLEGE ROAD, PERIYAMATHAMPALAYAM, MTP ROAD, COIMBATORE 641 020. PAN : AALTS2379D (APPELLANT) V. THE INCOME TAX OFFICER, COMPANY WARD I, COIMBATORE. (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : SHRI SANJAY PUNGLIA, J CIT DATE OF HEARING : 29.05.2012 DATE OF PRONOUNCEMENT : 29.05.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, IT IS GRIEVA NCE IS THAT COMMISSIONER OF INCOME TAX-I, COIMBATORE REFUSED TO GRANT REGISTRATION SOUGHT BY IT UNDER SECTION 12A OF INCOME-TAX ACT, 1 961 (IN SHORT 'THE ACT'). 2 I.T.A. NO. 687/MDS/12 2. SHORT FACTS APROPOS ARE THAT ASSESSEE-TRUST WAS FORMED ON 24 TH JUNE, 2011 AND THE TRUST DEED WAS REGISTERED AS DOC UMENT NO.1413 OF 2011. THE OBJECTS AND AIMS OF THE TRUST WERE AS UN DER:- THE MAIN OBJECTS OF THE TRUST IS TO HELP THE ORPHAN CHILDREN, TO PROVIDE FREE FOOD TO THE HUNGRY AND POOR PEOPLE AND O GIVE MEDICAL TREATMENT AND FOOD TO THE ANIMALS LEFT IN THE STREE TS, FOOD FOR ALL COMBINES, CONDUCTING ANIMAL BIRTH CONTROL PROGRAM AN D ANTI RABIES VACCINATION AND TO CARRYOUT ANIMAL ADOPTIONS RESCUE OPERATIONS, HUMANE EDUCATION PROGRAMMES ETC., A) TO HELP FOR THE ORPHAN CHILDREN. B) TO GIVE MEDICAL TREATMENT AND FOOD TO THE ANIMALS L EFT IN THE STREETS. C) FOOD FOR ALL COMBINES AND PROVIDES FREE FOOD TO THE HUNGRY AND POOR PEOPLE. D) TO PREVENT THE CRUELTY AGAINST ANIMALS. E) TO CARRY OUT TREE PLANTATION. F) TO MAINTAIN AND FEED PET ANIMALS. G) TO MAINTAIN ABUNDANT PET DOGS, CATS, ETC. H) CONDUCTING ANIMALS BIRTH CONTROL PROGRAM & ANTI RABI ES VACCINATION AND TO CARRY OUT ANIMAL ADOPTIONS, RESC UE OPERATIONS HUMANE EDUCATION PROGRAMMES, ETC., I) TO ESTABLISH, PROMOTE, SETUP, RUN, MAINTAIN, ASSIST , FINANCE AND TO HELP THE SETTING UP, MAINTAINING AND RUNNING ORPHAN AGES, WIDOW HOMES, POOR HOMES AND OTHER ESTABLISHMENT FOR THE R ELIEF AND HELP FOR THE POOR OLD AND DESTITUTE AND TRAINING PR OGRAMMES FOR YOUTH SOCIAL DEVELOPMENT, COMMUNITY DEVELOPMENT. J) TO ESTABLISH RUN AND MAINTAIN TRAINING CENTRES. K) TO GIVE, PROVIDE, RENDER HELP AND ASSISTANCE IN CAS H OR KIND TO POOR DESTITUTE WIDOWS, ETC. L) TO ESTABLISH PROMOTE SET UP RUN MAINTAIN ASSIST FIN ANCE AND TO HELP THE SETTING UP MAINTAINING AND RUNNING OF OLD AGE HOMES. M) TO ESTABLISH CONTRIBUTE TO EDUCATIONAL AND CULTURAL INSTITUTIONS, COLLEGES, SCHOOLS, LIBRARIES AND READING ROOMS ETC. N) TO ASSIST IN THE ESTABLISHMENT FOR MAINTENANCE OR R UNNING OR IMPROVING AND EXTENDING OF GENERAL COMMERCIAL AND TE CHNICAL EDUCATIONAL INSTITUTIONS, ELEMENTARY SCHOOLS AND SE CONDARY 3 I.T.A. NO. 687/MDS/12 SCHOOLS COLLEGES WORKSHOP INDUSTRIAL AND VOCATIONAL SCHOOLS AND OTHER ART-CRAFT AND TECHNICAL AND TRAINING INSTITUT IONS, FOR THE ASSISTANCE TO THE PEOPLE AFFECTED BY NATURAL AND OT HER CALAMITIES SUCH AS FLOOD, FIRE, FAMINE, CYCLONE EARTHQUAKE, ST ORM, ACCIDENT, PESTILENCE, DROUGHT, EPIDEMIC AND TSUNAMI. O) TO MAINTAIN AND RUN HOSPITALS, NURSING COLLEGES FOR TRAINING THE NURSES BOARDING HOUSES, LIBRARIES, READING ROOMS AN D OTHER TRAINING AND VOCATIONAL INSTITUTIONS. P) TO APPLY FOR ALL KINDS OF GRANTS THROUGH TAMIL NADU STATE SOCIAL WELFARE BOARD AND CENTRAL SOCIAL WELFARE BOARD. Q) TO ACQUIRE IMMOVABLE PROPERTIES BY PURCHASE LEASE, HIRE EXCHANGE OR OTHERWISE AND TO BUILD, ERECT, ALTER AND MAINTAI N BUILDINGS FOR CARRYING OUT THE ACTIVITIES OF THE TRUST. R) TO ESTABLISH, MAINTAIN, RUN, IMPROVE DEVELOP SCHOOL S, POLYTECHNICS MEDICAL AND ENGINEERING COLLEGES AND PRIVATE UNIVER SITIES INCLUDING HOSTELS, RESEARCH ASSOCIATION AND INSTITU TIONS WITHOUT ANY MOTIVE FOR PROFIT. S) TO SEEK AFFILIATION OF THE VARIOUS INSTITUTIONS RUN BY THE TRUST. T) TO PROVIDE FOOD, MEDICINE AND OTHER HELP AND ASSIST ANCE OF ANY SHAPE OR FORM TO THE POOR DESERVING AND NEEDY PERSO NS. U) TO START MAINTAIN AND ASSIST ANY RELIEF MEASURES IN THOSE PARTS WHICH HAVE SUBJECTED TO NATURAL CALAMITIES SUCH AS FLOOD, FIRE, DROUGHT FAMINE, CYCLONE, EARTHQUAKE, EPIDEMIC STORM ACCIDENT PESTILENCE, TSUNAMI ETC. V) TO UNDERTAKE ANY SUCH OTHER ACTIVITIES AS MAY BE NE CESSARY FOR THE PROMOTION OF THE OBJECTS OF THE TRUST. FOR THE REMOVAL OF DOUBTS IT IS HEREBY DECLARED THAT THE OBJECTS OF TH E TRUST WILL BE CARRIED OUT WITHOUT ANY MOTIVE OF PROFIT. W) TO OPEN MATERNITY HOMES FOR THE BENEFIT OF POOR WOM EN AND TO DO FREE OF COST MATERNITY SERVICES TO WOMEN IRRESPECTI VE OF CASTE, COLOUR, CREED AND RELIGION. X) TO PROVIDE SUPPORTIVE GUIDANCE AND HELP TO THOSE WH O SUFFER. Y) THERE IS NO MOVABLE OR IMMOVABLE PROPERTY IN THIS T RUST. Z) TO SUPPORT THE TRIBAL BY PROVIDING THEM EDUCATION, FOOD, CLOTHING SHELTER, ETC. AA) TO ESTABLISH AND / OR MAINTAIN AND / OR SUPPORT HOM ES WHICH SERVICES FOR YOUTH WELFARE AND/OR HIV/AIDS AWARENES S. BB) TO ESTABLISH AND / OR MAINTAIN AND / OR SUPPORT CEN TERS FOR THE PREVENTION OF ALCOHOL AND DRUG ADDICTION. 4 I.T.A. NO. 687/MDS/12 ASSESSEE MOVED AN APPLICATION BEFORE CIT FOR REGIST RATION UNDER SECTION 12A OF THE ACT. THE CIT REFUSED TO GRANT REGISTRAT ION VIDE HIS ORDER DATED 28.2.2012 CITING THE FOLLOWING REASON: 2.1 THE MAIN OBJECT OF THE TRUST IS THE WELFARE OF D OGS AND TAKING CARE OF SICK ANIMALS. CHARITABLE PURPOSE AS DEFINE D IN SECTION 2(15) OF THE ACT READS AS FOLLOWS: CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, ED UCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLU DING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTO RIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY OTHER ACTIVITY OF RENDERING ANY SE RVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NAT URE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SU CH ACTIVITY;] [PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS [ TEN LAKH RUPEES ] OR LESS IN THE PREVIOUS YEAR;] THE TRUSTS OBJECTS OF WELFARE OF DOGS AND TAKING C ARE OF SICK ANIMALS DO NOT COME UNDER THE PURVIEW OF SECTION 2(1 5) OF THE ACT. 3. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT, SUBMITTED THAT THE CIT HAD TAKEN A VERY NARROW INTE RPRETATION OF THE TERM CHARITABLE PURPOSE DEFINED IN SECTION 2(15) OF TH E ACT. THE ONLY REASON CITED BY THE CIT FOR DENYING REGISTRATION WA S THAT WELFARE OF DOGS AND TAKING CARE OF SICK ANIMALS DID NOT FALL UNDER THE PURVIEW OF SAID 5 I.T.A. NO. 687/MDS/12 SECTION. ACCORDING TO HIM, DOGS WERE BEST FRIENDS OF MAN AND TAKING CARE OF DOGS AND SICK ANIMALS WAS DEFINITELY CHARIT ABLE AND CIT FELL IN GROSS ERROR IN DENYING REGISTRATION. 4. PER CONTRA, LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF CIT. 5. WE HAVE PERUSED THE ORDER OF CIT AND HEARD THE RIVAL SUBMISSIONS. THE ONLY REASON WHY CIT DENIED REGIST RATION TO THE ASSESSEE UNDER SECTION 12A OF THE ACT IS THAT THE O BJECT OF THE ASSESSEE INCLUDED WELFARE OF DOGS AND TAKING CARE OF SICK AN IMALS. THE QUESTION HERE IS WHETHER DEFINITION OF CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE ACT CAN INCLUDE SUCH AN OBJECT. CHARITABLE PU RPOSE HAS BEEN GIVEN AN INCLUSIVE DEFINITION UNDER SECTION 2(15) OF THE ACT. HENCE APART FROM THE ITEMS MENTIONED THEREIN WHICH ARE TO BE INVARIA BLY CONSIDERED CHARITABLE, THERE COULD BE OTHER ITEMS OF CHARITY A LSO, AS PER THE NORMAL CONNOTATION THAT WORD CAN HAVE. CHARITIES ARE MORE THAN A GOOD THING AND, AS THEIR SUPPORTERS RECOGNIZE, ARE SPECIAL. N OT ALL ORGANISATIONS CAN BE CHARITIES. TO BE A CHARITY IS A MIXTURE OF WHAT YOU ARE, WHAT YOU DO AND HOW YOU DO IT. THE CORE CHARACTERISTIC IS P UBLIC BENEFIT. THIS WHAT IS ALSO MEANT BY THE WORDS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE ACT . WHILST THE CHARITABLE SECTOR IS ENORMOUS AND VERY DIVERSE, THE AIMS OF EA CH AND EVERY CHARITY, WHATEVER THEIR SIZE, MUST BE FOR PUBLIC BENEFIT. P UBLIC BENEFIT IS THEREFORE 6 I.T.A. NO. 687/MDS/12 CENTRAL TO THE WORK OF ALL CHARITIES. ALTHOUGH THE TERM PUBLIC BENEFIT HAS NEVER BEEN DEFINED AS SUCH, IT HAS GATHERED A PARTI CULAR MEANING IN LAW. THERE IS A KIND OF COVENANT THAT CHARITIES HAVE WIT H SOCIETY: CHARITIES BRING PUBLIC BENEFIT AND, IN THEIR TURN, ARE ACCORD ED HIGH LEVELS OF TRUST AND CONFIDENCE AND THE BENEFITS OF CHARITABLE STATU S. THESE MUTUAL BENEFITS ARE CONSIDERABLE: CHARITIES RECEIVE SIGNIF ICANT TAX ADVANTAGES; THEY CAN ACCESS FUNDS WHICH OTHERS EVEN OTHER VOL UNTARY ORGANISATIONS CANNOT; VOLUNTEERS AND DONORS GIVING THEM RESPECT , TIME AND MONEY. SOCIETY IS ENRICHED IMMEASURABLY BY THE ACTIVITIES OF CHARITIES. BEING A CHARITY IS NOT THE SAME AS BEING AN ORGANIZATION TH AT DOES GOOD THINGS. CHARITY HAS AN OUTWARD, INCLUSIVE NATURE: IT IS NOT INWARD-LOOKING, FOR PRIVATE BENEFIT. ONLY ORGANISATIONS WITH AIMS THAT ARE CHARITABLE FOR PUBLIC BENEFIT ARE ACCORDED THE CHARITY LABEL. THI S GUIDANCE IS A GREEN LIGHT FOR CHARITIES TO CONTINUE THEIR INNOVATIVE AN D UNIQUE ROLE AT THE HEART OF OUR SOCIETY WHILE ENSURING THAT THE PUBLIC CAN S EE WHAT CHARITIES ARE DOING UNDER THAT BANNER AND WITH THEIR SUPPORT. IN THE LIGHT OF THIS, WE HAVE TO ANSWER TO THE QUESTION WHETHER CHARITY WILL INCLUDE WELFARE OF ANIMALS. IT WILL BE DESIRABLE TO HAVE A LOOK AT CH ARITIES ACT, 2006 OF UNITED KINGDOM. DESCRIPTIONS OF CHARITABLE PURPOS E IN THE CHARITIES ACT, 2006 ARE AS UNDER:- (A) THE PREVENTION OF RELIEF OF POVERTY; (B) THE ADVANCEMENT OF EDUCATION; 7 I.T.A. NO. 687/MDS/12 (C) THE ADVANCEMENT OF RELIGION. (D) THE ADVANCEMENT OF HEALTH OR THE SAVING OF LIVES; (E) THE ADVANCEMENT OF CITIZENSHIP OR COMMUNITY DEVELOPMENT; (F) THE ADVANCEMENT OF THE ARTS, CULTURE, HERITAGE OR SCIENCE; (G) THE ADVANCEMENT OF AMATEUR SPORT; (H) THE ADVANCEMENT OF HUMAN RIGHTS, CONFLICT RESOLUTIO N OR RECONCILIATION OR THE PROMOTION OF RELIGIOUS OR RAC IAL HARMONY OR EQUALITY AND DIVERSITY; (I) THE ADVANCEMENT OF ENVIRONMENTAL PROTECTION OR IMPROVEMENT; (J) THE RELIEF OF THOSE IN NEED, BY REASON OF YOUTH, AG E, ILL- HEALTH, DISABILITY, FINANCIAL HARDSHIP OR OTHER DISADVANTAGE; (K) THE ADVANCEMENT OF ANIMAL WELFARE; (L) THE PROMOTION OF THE EFFICIENCY OF THE ARMED FORCES OF THE CROWN OR OF THE POLICE, FIRE AND RESCUE SERVICE S OR AMBULANCE SERVICES; (M) OTHER PURPOSES CURRENTLY RECOGNIZED AS CHARITABLE A ND ANY NEW CHARITABLE PURPOSES WHICH ARE SIMILAR TO ANOTHER CHARITABLE PURPOSE. THUS, ADVANCEMENT OF ANIMAL WELFARE DIRECTED TOWARD S PREVENTION OR SUPPRESSION OF CRUELTY TO ANIMALS OR PREVENTION OR RELIEF OF SUFFERING BY ANIMALS ARE NOTHING BUT CHARITY. ASSOCIATIONS PROM OTING KINDNESS AND PREVENTING OR SUPPRESSING CRUELTY TO ANIMALS, ASSOC IATIONS PROVIDING VETERINARY CARE AND TREATMENT, ASSOCIATIONS CONCERN ED WITH CARE AND RE- HOMING OF ANIMALS THAT ARE ABANDONED OR MISTREATED OR LOST, ASSOCIATIONS DOING FERINE ANIMAL CONTROL, ARE EXTEN SION OF CHARITIES. THIS WOULD DEFINITELY, IN OUR OPINION, FALL WITHIN THE O BJECT OF GENERAL PUBLIC UTILITY. THE CIT FELL IN ERROR IN REFUSING REGIST RATION UNDER SECTION 12A OF 8 I.T.A. NO. 687/MDS/12 THE ACT. ORDER OF THE CIT IS QUASHED AND HE IS DIR ECTED TO GRANT ASSESSEE REGISTRATION SOUGHT UNDER SECTION 12A OF T HE ACT. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 29 TH OF MAY, 2012, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 29 TH MAY, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-I, COIMBATORE (4) D.R. (5) GUARD FILE