M/s. Desperate For Him Ministries, CHENNAI V. DDIT (Exemptions), CHENNAI

ITA 690/CHNY/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7749 (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: 12AA; 12; 11

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. 690/MDS/2012 M/S DESPERATE FOR HIM MINISTRIES, 94/95, AVALKARA STREET, KOSAPET, VELLORE 632 001. PAN : AABTD4793Q (APPELLANT) V. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI - 600 034 . (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, ASSESSEE IS AGGRIEVED THAT DIT(EXE MPTIONS), CHENNAI, DENIED REGISTRATION SOUGHT BY IT UNDER SEC TION 12AA OF INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHORT FACTS APROPOS ARE THAT ASSESSEE-TRUST ESTA BLISHED ON 31 ST DECEMBER, 2008 THROUGH A TRUST DEED EXECUTED AND RE GISTERED ON 2 ND JANUARY, 2009, HAD APPLIED FOR REGISTRATION UNDER S ECTION 12AA OF THE ACT BEFORE THE DIT(EXEMPTIONS), CHENNAI. DIT(E) SO UGHT CERTAIN 2 I.T.A. NO. 690/MDS/12 CLARIFICATIONS ON SUCH APPLICATION. BASED ON THE L ETTER ISSUED BY DIT(E) , ASSESSEE APPEARED BEFORE HIM AND SUBMITTED THE DETA ILS ON 29.12.2011. THE DIT(E) WAS OF THE OPINION THAT THE TRUST DEED CONSISTED OF MIXED OBJECTS, I.E. BOTH RELIGIOUS AND CHARITABLE OBJECTS . ACCORDING TO HIM, WHEN THE OBJECTS WERE MIXTURE OF BOTH CHARITABLE AN D RELIGIOUS, IT COULD NOT BE GIVEN REGISTRATION UNDER SECTION 12AA OF THE ACT. HE, THEREFORE, REFUSED REGISTRATION SOUGHT BY THE ASSESSEE UNDER S ECTION 12AA OF THE ACT. 3. NOW BEFORE US, LEARNED A.R., ASSAILING THE ORDER OF DIT(E), SUBMITTED THAT THE OBJECTS OF THE ASSESSEE-TRUST CO ULD BE EITHER CHARITABLE OR RELIGIOUS AND JUST BECAUSE IT WAS A M IXTURE OF CHARITABLE AND RELIGIOUS OBJECTS, REGISTRATION COULD NOT BE DE NIED. RELIANCE WAS PLACED ON THE DECISION OF THIRD MEMBER OF COCHIN BE NCH OF THE TRIBUNAL IN THE CASE OF SOCIETY OF PRESENTATION SISTERS V. ITO (2009) (121 ITD 422) AND THAT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. ARULMIGU SRI KAMATCHI AMMAN TRUST IN TCA NO.643 OF 2011 DATED 25 TH JANUARY, 2012. 4. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDER OF DIT(E) . 5. WE HAVE PERUSED THE ORDER OF DIT(E) AND HEARD T HE RIVAL SUBMISSIONS. THE ONLY REASON WHY THE DIT(E) DENIE D REGISTRATION 3 I.T.A. NO. 690/MDS/12 SOUGHT BY THE ASSESSEE-TRUST WAS THAT ITS OBJECTS C ONTAINED BOTH RELIGIOUS AND CHARITABLE. THERE WAS NO FINDING THA T ANY OF THE OBJECTS WERE NOT PUBLIC IN NATURE. SECTIONS 11 AND 12 OF T HE ACT FACILITATE REGISTRATION FOR BOTH PUBLIC RELIGIOUS TRUST AND PU BLIC CHARITABLE TRUST. JUST BECAUSE OBJECTS ARE MIXTURE OF CHARITY AND REL IGION, REGISTRATION COULD NOT BE DENIED. EXEMPTION UNDER SECTIONS 11AN D 12 OF THE ACT COULD NOT BE DENIED TO A TRUST SIMPLY BECAUSE IT HA D OBJECTS WHICH COULD BE TERMED AS RELIGIOUS AS WELL AS CHARITABLE OR VIC E VERSA. THIS VIEW TAKEN BY THE THIRD MEMBER DECISION OF THE TRIBUNAL IN THE CASE OF SOCIETY OF PRESENTATION SISTERS (SUPRA), HAS ALSO B EEN ACCEPTED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AR ULMIGU SRI KAMATCHI AMMAN TRUST (SUPRA). PARA 6 OF THE JUDGMENT IS REP RODUCED HEREUNDER:- 6. FROM A READING OF THE ABOVE, IT IS CLEAR THAT THE INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST WHOLLY F OR CHARITABLE OR RELIGIOUS PURPOSES, SHALL NOT BE INCLUDED IN THE TO TAL INCOME OF THE TRUST. THEREFORE, THE SAID PROVISION WOULD BE APPL ICABLE TO BOTH THE TRUSTS ESTABLISHED WITH THE OBJECT OF CHARITABLE AS WELL AS RELIGIOUS PURPOSES. THEREFORE, SECTION 12AA OF THE ACT DOES N OT MAKE ANY DIFFERENCE BETWEEN THE TRUSTS CREATED WITH THE OBJE CT OF CHARITABLE AND RELIGIOUS PURPOSES AND, EVEN IF THE TRUST IS NOT CREATED WITH BOTH THE OBJECTS, LAW DOES NOT MAKE AN Y DISQUALIFICATION FOR THE TRUST TO MAKE AN APPLICATION FOR REGISTRATI ON. THEREFORE, THE TRIBUNAL HAS CORRECTLY APPLIED THE PROVISION OF LAW AND ALLOWED THE APPEAL, WHICH FINDING IS BASED ON VALID MATERIAL EV IDENCE. THE FINDING OF THE TRIBUNAL IS NOT PERVERSE AND IT IS A QUESTIO N OF FACT. THEREFORE, WE FIND NO GROUND TO CAUSE OUR INTERFERE NCE INTO THE ORDER PASSED BY THE TRIBUNAL. ACCORDINGLY, THE ORD ER PASSED BY THE TRIBUNAL IS CONFIRMED AND BOTH THE SUBSTANTIAL QUES TIONS OF LAW RAISED HEREIN ARE ANSWERED AGAINST THE REVENUE. 4 I.T.A. NO. 690/MDS/12 WE ARE, THEREFORE, OF THE OPINION THAT THE REASON C ITED BY THE DIT(E) FOR DENIAL OF REGISTRATION WAS NOT JUSTIFIED. THE ORDE R PASSED BY DIT(E) IS QUASHED AND HE IS DIRECTED TO GRANT THE ASSESSEE RE GISTRATION SOUGHT BY IT UNDER SECTION 12AA OF THE ACT. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 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) DIT(EXEMPTIONS), CHENNAI (4) D.R. (5) GUARD FILE