MINISTRY OF COMPASSION INDIA, JAIPUR V. COMMISSIONER OF INCOME TAX- EXEMPTIONS, JAIPUR

ITA 713/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2027 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 24-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERINDRA MEHTA
• Keywords: Charitable institution; Reasonable cause; Set aside
• Section: 12; 11; 80G; 12A; 12AA; 43; 13; 153

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.713/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : MINISTRY OF COMPASSION INDIA, D-3/169, CHITRAKOOT, VAISHALI NAGAR, JAIPUR CUKE VS. THE CIT (EXEMPTIONS) , JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AABTM8172C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.714/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : MINISTRY OF COMPASSION INDIA, D-3/169, CHITRAKOOT, VAISHALI NAGAR, JAIPUR. CUKE VS. THE CIT (EXEMPTIONS), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AABTM8172C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRHDH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VERINDRA MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/06/2017 ?KKS'K .KK DH R KJH[K @ DATE OF PRONOUNCEMENT: 15/06/2017. VKNS'K@ ORDER PER: SHRI VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE DIRECTE D AGAINST THE ORDER OF LD. CIT(E), JAIPUR, DENYING REGISTRATION U /S 12AA AS WELL AS UNDER SECTION 80G(5)(VI) OF THE ACT VIDE HIS ORDER DATED 07.09.2015 AND DATED 11.09.2015 RESPECTIVELY. ITA NO. 713 & 714/JP/15 MINISTRY OF COMPASSION INDIA VS. CIT(E), JAIPUR 2 IN ITS APPEALS, THE ASSESSEE HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL AS UNDER:- ITA NO. 713/JP/15 1. THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW IN REFUSING THE REGISTRATION TO THE ASSESSEE U/S 12AA OF INCOME TAX ACT, 1961 BY HOLDING THAT THE OBJECTS OF THE TR UST ARE FOR THE BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY AND THERE FORE PROVISIONS OF SECTION 13(1)(B) ARE ATTRACTED AND IT CANNOT BE HEL D AS A CHARITABLE TRUST. 1.1 THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRE D ON FACTS AND IN LAW IN DRAWING INCORRECT INFERENCE FROM SECTION 12AA(4) AND CERTAIN CLAUSES OF THE TRUST DEED WITHOUT TAKING IN TO CONSIDERATION THE OVERALL OBJECT OF THE TRUST AND THE ACTIVITIES CARR IED OUT BY IT. ITA NO. 714/JP/15 1. THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRE D ON FACTS AND IN LAW IN REJECTING THE APPLICATION OF ASSESSEE SEE KING EXEMPTION U/S 80G(5) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE TRUST WAS CONSTITUTED ON 23.08.2006 AND AN APPLICATION FOR GR ANT OF REGISTRATION U/S 12AA AND APPROVAL U/S 80G(5)(VI) OF THE ACT WAS FIL ED BEFORE THE LD CIT(E) BY THE ASSESSEE TRUST ON 04.03.2015. THE LD CIT(E) REFERRED TO THE PROVISIONS OF SECTION 12AA(4) OF THE ACT AND THE VA RIOUS CLAUSES IN THE OBJECT CLAUSE OF THE TRUST DEED AND HELD THAT THE O BJECTS ARE RELATED TO PROPAGATION OF TEACHING OF LORD CHRIST AND BIBLE, A ND LAYS EMPHASIS ON HELP AND SUPPORT TO CHRISTIAN MEMBERS ONLY AND NOT HELP AND SUPPORT TO WORKERS OF ALL COMMUNITY. THE ASSESSEE SOCIETY SEEM S TO BE CARRYING ON ACTIVITIES RELATED TO EXPANSION OF PARTICULAR RELIG ION AND THE TRUST HAS BEEN CREATED FOR THE BENEFIT OF PARTICULAR RELIGION I.E. CHRISTIAN ONLY. THUS, THE TRUST HAS VIOLATED THE PROVISIONS OF SEC. 13(1)(B) OF THE ACT, 1961 AND CANNOT BE HELD AS CHARITABLE U/S 2(15) OF THE IT AC T, 1961. ACCORDINGLY, THE ITA NO. 713 & 714/JP/15 MINISTRY OF COMPASSION INDIA VS. CIT(E), JAIPUR 3 LD CIT(E) REJECTED THE APPLICATION OF ASSESSEE FOR REGISTRATION U/S 12AA BY PLACING RELIANCE ON CASES REPORTED AT 254 ITR 212 ( SC), 223 TAXMAN 353 (ALL.) AND 356 ITR 328 (MAD.). AS THE APPLICATION F OR REGISTRATION U/S 12AA WAS REJECTED, AS A CONSEQUENT THERETO, THE APPLICAT ION FOR GRANT OF EXEMPTION U/S 80G(5) OF THE ACT, 1961 WAS ALSO REJE CTED. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT FOR GRANT OF REGISTRATION U/S 12AA, THE LD CIT, AS PER SUB-SECTI ON (1) OF SECTION 12AA IS REQUIRED TO SATISFY HIMSELF ABOUT THE OBJECTIVES OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. THEREFORE, THE CIT H AS INCORRECTLY REFERRED TO SECTION 12AA(4) INSERTED W.E.F. 01.10.2014 WHICH P ROVIDES FOR CANCELLATION OF THE REGISTRATION IF IT IS SUBSEQUENTLY NOTICED T HAT ACTIVITIES OF THE TRUST ARE CARRIED OUT IN THE MANNER THAT PROVISION OF SECTION 11 AND 12 DO NOT APPLY DUE TO OPERATION OF SEC. 13(1). THE PROVISO TO THIS SECTION FURTHER PROVIDES THAT REGISTRATION SHALL NOT BE CANCELLED IF THERE I S A REASONABLE CAUSE FOR THE ACTIVITIES TO BE CARRIED OUT IN THE SAID MANNER. TH EREFORE, IT IS INCORRECT ON PART OF LD CIT TO GUIDE HIMSELF BY SUB-SECTION (4) OF SECTION 12AA TO REFUSE REGISTRATION U/S 12AA(1). 3.1 IT WAS FURTHER SUBMITTED THAT IT IS SETTLED LAW THAT AT THE STAGE OF GRANT OF REGISTRATION, LD CIT IS NOT REQUIRED TO EN QUIRE WHETHER THE CONDITION OF SECTIONS 11 TO 13 IS FULFILLED OR NOT. CONDITION OF SECTION 13(1)(B) DO NOT APPLY TO REGISTRATION U/S 12AA & THEREFORE THE REGI STRATION U/S 12AA REFUSED BY CIT IS BAD IN LAW. RELIANCE IN THIS CONNECTION I S PLACED ON FOLLOWING CASES:- CIT VS. BIGABASS MEHESHWARI SEWA SAMITI (2008) 14 D TR 0029 (RAJ.) ST. JOSEPH ACADEMY VS. DIT(EXEMPTION) (2015) 153 IT D 669 (HYD.) BHAI MANSA SINGH JI WELFARE SOCIETY VS. CIT (2016) 156 ITD 0117 (CHD.) BHAGWAN MAHAVIR PURUSHARTH PRENA NIDHI NYAS VS. CIT (2012) (144 TTJ 379 (JPR.) KUL FOUNDATION VS. CIT (2015) 43 CCH 0115 (PUNE) ITA NO. 713 & 714/JP/15 MINISTRY OF COMPASSION INDIA VS. CIT(E), JAIPUR 4 AGGARWAL MITRA MANDAL TRUST VS. DIT (EXEMP.) 293 IT R (AT) 259/106 ITD 531 (DEL.) 3.2 IT WAS FURTHER SUBMITTED THAT IN THE OBJECT CLA USES WHEREVER LORD CHRIST/BIBLE IS REFERRED TO, IT IS WITH REFERENCE T O FOLLOWING THE FUNDAMENTAL PRINCIPALS LAID DOWN IN THESE HOLY SCRIPTURES WHICH SHOWS THE PATH IN WHICH A PERSON SHOULD LEAD HIS LIFE. THIS CANNOT BE EQUAT ED WITH FOLLOWING A PARTICULAR RELIGION. THESE OBJECT ITSELF STATES THA T THEY ARE FOR ALL CAST, CREED AND SEX. THIS APART, THERE ARE VARIOUS OTHER OBJECT S OF THE TRUST ON WHICH THERE IS NO OBJECTION OF CIT. FURTHER, AS FAR AS TH E ACTIVITY IS CONCERNED, FROM THE DETAILED NOTE GIVEN TO THE CIT ALONG WITH THE PHOTOGRAPHS OF THE ACTIVITIES CARRIED OUT, IT CAN BE NOTED THAT IT IS FOR THE BENEFIT OF PUBLIC IN GENERAL AND NOT TO A PARTICULAR CAST OR CREED. THER EFORE, WITHOUT ANY FINDING THAT THE ACTIVITIES OF THE TRUST ARE FOR ANY PARTIC ULAR RELIGION OR COMMUNITY, IT CANNOT BE PRESUMED THAT THE SAME IS FOR THE BENEFIT OF CHRISTIAN ONLY. 3.3 THE LD AR FURTHER PLACED RELIANCE ON THE FOLLOW ING CASES:- CIT VS. DAWOODI BOHARA JAMAT 364 ITR 0031 (SC) DIOCESE OF PUNE (CNI) VS. CIT (2015) 42 ITR (TRIB.) 0348 (PUNE) DECISION DATED 31.03.2015 CIT VS. CHRISTIAN MEDICAL COLLEGE (2015) 374 ITR 00 17 (P&H) SHIV MANDIR DEVSTTAN PANCH COMMITTEE SANSTHAN VS. CIT (2012) 79 DTR 276 (NAG.) UMAID CHARITABLE TRUST VS. UOI& ORS. 307 ITR 226 (2 008) (RAJ.) IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT THE LD CIT BE DIRECTED TO GRANT REGISTRATION U/S 12A AND APPROVAL U/S 80G(5)(VI) OF THE IT ACT, 1961 TO THE ASSESSEE TRUST. 4. THE LD. CIT DR OPPOSED THE SUBMISSION OF THE LD. AR AND SUBMITTED THAT FROM THE READING OF THE OBJECT CLAUSE OF THE A SSESSEE TRUST AS HIGHLIGHTED BY THE LD. CIT(E), IT IS CLEAR THAT THE TRUST HAS BEEN FORMED FOR ITA NO. 713 & 714/JP/15 MINISTRY OF COMPASSION INDIA VS. CIT(E), JAIPUR 5 THE BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY ONLY AND ACCORDINGLY, THE LD CIT(E) WAS CORRECT IN REFUSING THE REGISTRATION. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THE LD. CIT(E ) HAS REFERRED TO THE VARIOUS OBJECT CLAUSES OF THE ASSESSEE TRUST DEED W HEREIN LORD CHRIST AND BIBLE HAVE BEEN MENTIONED. DURING THE COURSE OF HEA RING, THE LD. AR SUBMITTED THAT THE REFERENCE TO LORD CHRIST/BIBLE I N THE OBJECT CLAUSES OF THE TRUST DEED IS TO FOLLOW THE FUNDAMENTAL PRINCIPALS LAID DOWN IN THE SAID HOLY SCRIPTURE WHICH SHOWS THE PATH IN WHICH A PERSON SH OULD LEAD HIS LIFE AND THE SAME CANNOT BE EQUATED WITH FOLLOWING A PARTICU LAR RELIGION AS ALLEGED BY THE CIT(E). THESE OBJECT ITSELF STATES THAT THE Y ARE FOR ALL CASTE, CREED AND SEX. FURTHER, IT WAS SUBMITTED THAT THE ASSESSE E TRUST HAS CARRIED OUT THE NECESSARY AMENDMENT/MODIFICATION OF ITS OBJECT CLAUSES OF ITS REGISTERED TRUST DEED DATED 23.08.2006 BY DEED OF CORRECTION A ND AMENDMENT DATED 12.04.2017 AND A COPY OF THE DEED OF CORRECTION AND AMENDMENT IS PLACED ON RECORD TO WHICH OUR ATTENTION WAS DRAWN DURING T HE COURSE OF HEARING. 6. SINCE THE ASSESSEE HAS SUBMITTED A DEED OF CORRE CTION AND AMENDMENT DATED 12.04.2017 AMENDING/DELETING THE VA RIOUS OBJECTS CLAUSES AS HIGHLIGHTED BY THE LD. CIT(E), WE DEEM I T FIT AND APPROPRIATE TO REMAND THE MATTER BACK TO THE FILE OF LD. CIT(E). THE LD CIT(E) SHALL TAKE THE SAID DEED OF CORRECTION AND AMENDMENT INTO CONS IDERATION AND ALSO THE VARIOUS CONTENTIONS RAISED BY THE ASSESSEE AND THE JUDICIAL AUTHORITIES AS ABOVE. WHERE, ON EXAMINATION, THE SAME IS FOUND TO BE IN ORDER AND AS PER LAW, HE SHALL GRANT THE NECESSARY REGISTRATION U/S 12AA OF THE ACT. NEEDLESS TO SAY, THE ASSESSEE TRUST WILL COOPERATE IN THE PR OCEEDINGS BEFORE THE LD CIT(E) AND THE LD CIT(E) SHALL PROVIDE REASONABLE O PPORTUNITY TO THE ASSESSEE TRUST. ITA NO. 713 & 714/JP/15 MINISTRY OF COMPASSION INDIA VS. CIT(E), JAIPUR 6 7. REGARDING GRANT OF APPROVAL U/S 80G(5)(VI) OF TH E ACT, THE LD CIT(E) HAS HELD IN HIS ORDER THAT GRANT OF APPROVAL UNDER SECTION 12AA IS A PRE- CONDITION FOR GRANT OF APPROVAL UNDER SECTION 80G(5 ) AND SINCE THE SOCIETY HAS BEEN DENIED REGISTRATION UNDER SECTION 12AA, IT IS NOT ELIGIBLE FOR GRANT OF APPROVAL UNDER SECTION 80G OF THE ACT. THE ONLY REASON FOR DENIAL OF APPROVAL UNDER SECTION 80G HAS THEREFORE BEEN DENIA L OF REGISTRATION UNDER SECTION 12AA OF THE ACT. SINCE WE HAVE SET ASIDE T HE ISSUE OF REGISTRATION U/S 12AA TO THE FILE OF LD. CIT(E), THE ISSUE REGAR DING GRANT OF APPROVAL U/S 80G(5)(VI) OF THE ACT, WHICH IS HELD CONSEQUENTIAL BY THE LD CIT(E) TO GRANT TO APPROVAL UNDER SECTION 12AA, IS ALSO SET ASIDE T O FILE OF THE LD. CIT(E). IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15/06/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 15 /06/2017 SANTOSH VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- MINISTRY OF COMPASSION INDIA, D-3/169, CHITRAKOOT, VAISHALI NAGAR, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- CIT (E), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, 6. XKMZ QKBZY@ GUARD FILE (ITA NO.713 & 714/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR .