M/s Assisi Education Trust, Mangalore V. CIT, Mangalore

ITA 730/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90053 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-07-2015
• Assessment Year: misc
• Appeal Filed On: 27-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT HUSSAIN QURESHI
• Assessee Lawyers: V K GURUNATHAN
• Keywords: Capital asset; Gift; Charitable institution
• Section: 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.730(B)/2014 (ASSESSMENT YEAR : NA) M/S ASSISI EDUCATION TRUST, BAGAMBILA, DERALAKATTA P.O., MANGALORE-575 018 PAN NO.AADTA9053A APPELLANT VS THE COMMISSIONER OF INCOME-TAX, MANGALORE. RESPONDENT ASSESSEE BY : SHRI V.K.GURUNATHAN, ADVOCATE REVENUE BY : SHRI FARHAT HUSSAIN QURESHI, CIT DATE OF HEARING : 08-07-2015 DATE OF PRONOUNCEMENT : 17-07-2015 O R D E R PER SHRI VIJAY PAL RAO, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30- 04-2014 OF CIT, MANGALORE PASSED U/S 12AA OF THE IT ACT, WHEREBY THE APPLICATION OF THE ASSESSEE SEEKING REGISTRATION U/ S12AA OF THE ACT WAS REJECTED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS; ITA NO.730(B)/14 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT OUGHT TO HAVE GRANTED REGISTRATION U/S12 AA OF THE ACT TO THE APPELLANT TRUST ON THE BASIS OF THE APPL ICATION MADE. 2. ON THE FACTS, THE ORDER OF THE LD. CIT, IS ERR ONEOUS WHEN SHE HELD THAT SUB-CLAUSES(I),(J),(K) & (L) OF CLAUSE 4 OF THE TRUST DEED WERE OF NON-CHARITABLE NATURE, WITHOUT T AKING A HOLISTIC VIEW OF ALL THE CLAUSES OF THE SAID TRUST DEED. 3. THE ORDER OF THE LD. CIT, IS ERRONEOUS IN AS MU CH AS THE ORDER REFUSING TO GRANT APPROVAL UNDER SECTION 12AA WAS PASSED WITHOUT CONSIDERING THE CLAUSES SUBSEQUENT T O CLAUSE 4 OF THE TRUST DEED, PARTICULARLY CLAUSES 5(V)AND 7 OF THE TRUST DEED THAT CLARIFY THAT THE SAID SUB-CLAUSES(I ), (J),(K) & (L) OF CLAUSE 4 WERE INCORPORATED TO AID AND ACHIEVE TH E CHARITABLE OBJECTS THE APPELLANT AND THAT THE SAID SUB-CLAUSES WERE NOT NON-CHARITABLE IN NATURE. 4. ON THE FACTS, THE LD.CIT OUGHT TO HAVE ACCEPTED THE EXPLANATION AND SUBMISSIONS OF THE APPELLANT AND GR ANTED REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE A PPELLANT TRUST AS PRAYED FOR. 5. ON THE FACTS, THE LD.CIT FAILED TO APPRECIATE T HAT THE REASONS GIVEN TO DENY THE REGISTRATION UNDER SECTIO N 1AA OF THE ACT WERE NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND CONTRARY TO LAW AND ACCORDINGLY, THE ORDER OF T HE LD.CIT IS LIABLE TO BE SET ASIDE. ITA NO.730(B)/14 3 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT TH E APPEAL MAY BE ALLOWED. 3. THE ASSESSEE IS A TRUST CREATED BY A DEED OF TR UST DATED 22-02- 2013. THE ASSESSEE APPLIED FOR REGISTRATION U/S 12AA OF THE IT ACT, 1961 VIDE ITS APPLICATION IN FORM-10A ON 30-01-2014. TH E CIT REJECTED THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT, W HILE PASSING THE IMPUGNED ORDER ON THE GROUND THAT SOME OF THE OBJEC T OF THE TRUST MENTIONED IN SUB-CLAUSES-(I),(J),(K),AND (L)OF CLAU SE-4 OF THE TRUST DEED ARE NOT CHARITABLE IN NATURE. 4. BEFORE US LEARNED AR OF THE ASSESSEE HAS REFERR ED TO THE OBJECTS OF THE ASSESSEE TRUST AND SUBMITTED THAT THE OBJECTS O F THE TRUST INCLUDES TO PROVIDE EDUCATION, LEARNING, TRAINING FACILITIES TO STUDENTS OF ALL BRANCHES OF EDUCATION BY ALL MEANS POSSIBLE. TO ACHIEVE THIS MAIN OBJECT OF PROVIDING LEARNING, TRAINING FACILITIES TO STUDENTS OF ALL BRANCHES THE OBJECTS IN CLAUSE-4 OF THE ASSESSEE ALSO INCLUDE TO ESTABLISH, START PROMOTE MAINTAIN, SUPPORT RUN & GUIDE SCHOOLS, COLLEGES, IN STITUTES TRAINING CENTRES, RESEARCH CENTRES AND ALL CENTRES OF LEARNI NG AND TO EDUCATION RIGHT FROM BASIC PREPARATORY AND PRIMARY EDUCATION UPWARD S TO THE HIGHEST ECHELONS OF LEARNING IN ALL BRANCHES AND FIELDS OF KNOWLEDGE. THE LEARNED AR HAS SUBMITTED THAT THE SUB-CLAUSE-I, J, K & L CO NTAIN THE OBJECTS AND ACTS TO ACHIEVE MAIN OBJECT OF THE ASSESSEE AND TH EREFORE, THESE OBJECTS ITA NO.730(B)/14 4 ARE VERY MUCH CHARITABLE IN NATURE. HE HAS REFERRED SEC.11((1)(E),11(IA)(A),11(5)(III),11(4) & 11(4A) A S WELL AS SEC.12(1) OF THE IT ACT, 1961 AND SUBMITTED THAT THE OBJECT TO ACQUIRE BY PURCHASE, LEASE GIFT OR GRANT OR BEQUEATH MOVABLE OR IMMOVABLE PROPERTIE S DEEM NECESSARY OR USEFUL FOR THE PURPOSE OF TRUST. SIMILARLY, TO AC CEPT AND RECEIVE ANY GIFT WHETHER THE MOVABLE OR IMMOVABLE, DONATION OR CONTR IBUTION FOR THE WORK OF THE TRUST AND ALL OTHER ACTS IN RELATION TO THE TRUST PROPERTY FOR ACHIEVING THE OBJECT OF THE TRUST INCLUDING INVEST DEPOSITS I N BANKS ARE PERMISSIBLE UNDER THE PROVISION OF SEC.11 & 12 OF THE IT ACT, 1 961. THEREFORE, THE SAID ACTS AND PURPOSES ENUMERATED IN SUB-CLAUSE I TO L O F OBJECT CLAUSE OF TRUST ARE PERMISSIBLE UNDER THE IT ACT, SO FAR THESE ARE FOR THE PURPOSE OF ACHIEVING THE MAIN OBJECT OF THE ASSESSEE TRUST. I N SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF ADDL.CIT VS SURAT ART SILK CLOTH MAN UFACTURERS ASSOCIATION 121 ITR 1(SC) AS WELL AS IN CASE OF DHARMADEEPTI VS CIT 114 ITR 454. THUS, THE LEARNED AR HAS PLEADED THE IMPUGNED ORDER PASSED BY THE CIT IS NOT SUSTAINABLE UNDER LAW AND THE ASSESSEE IS ENTIT LE AND ELIGIBLE FOR GRANT OF REGISTRATION U/S 12AA OF THE IT ACT, 1961. 5. ON THE OTHER HAND, LEARNED DR HAS SUBMITTED THA T THE CIT SPECIFICALLY ISSUED THE SHOW CAUSE NOTICE TO THE AS SESSEE REQUIRING THE ASSESSEE TO FILE THE RELEVANT RECORD FOR EXAMINATIO N. IN RESPONSE THE ASSESSEE HAS FILED A LETTER DATED 29-04-2014 WITHOU T COMPLYING THE ITA NO.730(B)/14 5 DIRECTIONS OF THE CIT VIDE SHOW CAUSE NOTICE DATED 24-04-2014 THEREFORE, THE ASSESSEE DID NOT PRODUCE THE RELEVANT RECORD FO R THE EXAMINATION OF THE CIT. HE HAS RELIED UPON THE IMPUGNED ORDER OF THE CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CA REFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. THOUGH, THE CIT HA S ISSUED A SHOW CAUSE NOTICE DATED 24-4-2014 HOWEVER, AFTER CONSIDERING T HE RESPONSE OF THE ASSESEE THE CIT HAS REJECTED THE APPLICATION FOR RE GISTRATION U/S 12AA BY CITING THE ONLY REASON THAT THE OBJECTS MENTIONED I N SUB-CLAUSE ,J, K,& L OF THE ASSESSEE TRUST AN NON-CHARITABLE IN NATURE AND HAVE HAVING NOT BEEN DELETED FROM THE TRUST DEED. FOR READY REFERENCE, WE RE-PRODUCE THE ORDER OF THE CIT. M/S ASSISI EDUCATION TRUST HAD APPLIED FOR REGISTRATION U/S 12AA VIDE ITS APPLICATION IN FORM 10A FILED ON 30-01-2014. DURING THE COURSE OF VERIFICATION IT WAS OBSERVED THAT SOME OF THE OBJECTS OF THE APPLICANT MENTIONED AT S UB- CLAUSES I,J,K & L UNDER CLAUSE-4 OF THE TRUST DEED WERE NOT CHARITABLE IN NATURE AS THEY PERTAIN TO ACQUISITION OF PROPERTY, ACCEPTANCE OF GIFTS, ALIENATION OF PROPER TY BY SALE AND INVESTMENT OF MONEY IN BANKS. IN VIEW OF THIS, OFFICE SHOW CAUSE LETTER DATED 22.04.2014 THE APPLICANT WA S OFFERED AN OPPORTUNITY UNDER THE PROVISO TO SEC.12AA(1)(B)(II) OF THE IT ACT, 1961 TO SHOW CAUS E WHY AN ORDER REJECTING ITS APPLICATION SHOULD NOT BE PASSE D. ITA NO.730(B)/14 6 IN RESPONSE, THE APPLICANT HAS FILED A LETTER DATE D 29.04.2014. HOWEVER, THE NON-CHARITABLE OBJECTS H AVE NOT BEEN DELETED FROM THE TRUST DEED. IN VIEW OF THE ABOVE, I AM NOT SATISFIED ABOUT THE OBJECTS OF THE TRUST. I AM CONSTRAINED TO DISMISS THE APPLICATION FOR REGISTRATION U/S 12AA. CONSEQUENTL Y, THE ABOVE APPLICATION DATED 30.04.2014 STANDS REJECTED. SD/- (LAKSHMI HANDE PURI) CIT, MANGALORE TO M/S ASSISI EDUCATION TRUST BAGAMBILA, DERALAKATTA P.O 575 018 7. IT IS CLEAR FROM THE ORDER THAT THE SOLE OBJECT ION RAISED BY THE CIT IS NON-CHARITABLE NATURE OF THE OBJECTS MENTIONED I N THE SUB-CLAUSES I,J,K & L OF CLAUSE-4 OF THE TRUST DEED. IT IS PERTINEN T TO MENTION THAT THE OBJECTS STIPULATED IN SUB-CLAUSES I TO L OF CLAUSE- 4 ARE NOT THE MAIN OBJECTS OF THE ASSESSEE TRUST, BUT ARE THE ANCILLARY OBJECT S FOR THE PURPOSE OF ACHIEVING THE MAIN OBJECT OF THE ASSESSEE. FOR REA DY REFERENCE WE QUOTE THE OBJECTS OF CLAUSE-4 AS UNDER; 4. OBJECTS ; A) TO PROVIDE EDUCATION, LEARNING, TRAINING FACILI TIES TO STUDENTS IN ALL BRANCHES OF EDUCATION BY ALL MEANS POSSIBLE. ITA NO.730(B)/14 7 B) TO ESTABLISH, START, PROMOTE, MAINTAIN, SUPPORT , RUN, GUIDE, AND ASSIST SCHOOLS, COLLEGE, INSTITUTES, TRA INING CENTRES, RESEARCH CENTRES AND ALL CENTRES OF LEARNI NG AND IMPART EDUCATION RIGHT FROM BASIC, PREPARATORY AND PRIMARY EDUCATION UPWARDS TO THE HIGHEST ECHELONS OF LEARNI NG IN ALL BRANCHES AND FIELDS OF KNOWLEDGE. C) TO AFFILIATE, COLLABORATE OR ASSOCIATE WITH UNI VERSITIES, INSTITUTIONS OR BODY PUBLIC, PRIVATE OR GOVERNMENT IN ORDER TO PROVIDE HIGH QUALITY EDUCATION, TRAINING AND RECOGN ITION TO ITS STUDENTS, SOURCE AND INSTITUTES. D) TO WARD CERTIFICATES, DEGREES, DIPLOMAS OR ANY OTHER DUE RECOGNITION, SCHOLARSHIPS, FREE SHIPS ETC TO IT S STUDENTS AND CANDIDATES IN THEIR RESPECTIVE DISCIPLINES. E) TO DO WHATEVER NECESSARY IN THE FIELD OF EDUCAT ION AND LEARNING FOR PROMOTING LITERACY, JOB ORIENTATIO N AND EMPLOYMENT. F) TO AWARD SCHOLARSHIP, PRIZES, DONATIONS ETC. FO R THE POOR AND DESERVING STUDENTS AND INSTITUTIONS HAVING SIMILAR OBJECTS. G) TO ESTABLISH MAINTAIN, RUN, IMPROVE DEVELOP LIB RARIES, READING ROOMS AND OTHER FACILITIES FOR THE BENEFIT OF THE STUDENTS AND PUBLIC. H) TO PUBLISH BOOKS, PERIODICALS, ELECTRO DATA PRO CESSING AND OTHER COMMUNICATION MEDIA WORKS WITHOUT ANY MOT IVE FOR PROFIT. ITA NO.730(B)/14 8 I) TO ACQUIRE BY PURCHASE, LEASE, MORTGAGE LOAN, G IFT, GRANT OR BEQUEST MOVABLE OR IMMOVABLE PROPERTIES OF ALL DESCRIPTION DEEMED NECESSARY OR USEFUL FOR ANY OF T HE PURPOSES OF THE TRUST. J) TO ALIENATE AND RECEIVE ANY GIFT WHETHER MONEY, PROPERTY, MOVABLE AND IMMOVABLE, DONATIONS AND CONTRIBUTIONS FOR THE WORKS OF THE TRUST. K) TO ALIENATE BY WAY OF SALE, MORTGAGE, LEASE, RE LEASE, LOAN, PLEDGE, EXCHANGE THE PROPERTIES OF THE TRUST AS MAY BE DECIDED UPON BY THE TRUSTEES IN ACCORDANCE WITH THE CANONICAL PROVISIONS. L) TO INVEST, LAY ASIDE, DEPOSIT I BANKS OR OTHERW ISE DEAL WITH THE MONEY OR FUNDS OF THE TRUST IN KEEPING WIT H THE OBJECTS OF THE TRUST. 8. AS MANIFEST FROM THE OBJECTS OF THE ASSESSEE TH AT EVEN THE OBJECTS UNDER SUB-CLAUSE I TO L CANNOT BE SAID TO BE NON-CH ARITABLE IN NATURE, WHEN THESE OBJECTS ARE CLEARLY FOR ACHIEVING AND IN FURTHERANCE TO THE MAIN OBJECTS OF THE ASSESSEE TRUST TO PROVIDE EDUCATION, LEARNING, TRAINING FACILITIES TO THE STUDENTS IN ALL BRANCHES OF EDUCA TION. THE CIT HAS NOT DISPUTED THE OBJECTS OF THE ASSESSEE AS PER THE OTH ER SUB-CLAUSES ARE CHARITABLE IN NATURE. WE FURTHER NOTE FROM THE CLA USE 7(VI) OF THE TRUST DEED THESE OBJECTS OF INVESTMENTS ARE REQUIRED TO B E IN CONFORMITY WITH SEC.13 R.W.S.11(5) OF THE IT ACT. THEREFORE, THESE OBJECTS ARE STRICTLY IN CONSONANCE WITH THE PROVISIONS OF SECTIONS 11 & 12 OF THE IT ACT. WE FIND THAT SEC.11(1A) PERMITS THE INCOME FROM VOLUNTARY C ONTRIBUTION MADE WITH ITA NO.730(B)/14 9 A SPECIFIC DIRECTION THAT THIS SHALL FORM PART OF C ORPUS. SIMILARLY, SEC.12(1) PERMIT ANY VOLUNTARY CONTRIBUTION RECEIVED BY THE T RUST CREATED SOLELY FOR CHARITABLE OR RELIGIOUS PURPOSE. THUS, RECEIVING THE CONTRIBUTION, DONATION OR GIFT WHICH IS TO BE USED FOR THE STATED PURPOSE CANNOT BE TERMED AS A NON-CHARITABLE OBJECT OF THE ASSESSEE. SEC.11(1A)(A) FURTHER, PROVIDES THAT FOR THE PURPOSE OF SUB-SEC.1 A CAPITA L ASSET BEING PROPERTY HELD UNDER THE TRUST WHOLLY FOR CHARITABLE OR RELIG IOUS PURPOSE IS TRANSFERRED AND WHOLE OR ANY PART OF CONSIDERATION IS UTILIZED IN ACQUIRING THE NEW CAPITAL ASSET THAN SUCH CAPITAL GAIN IS ELI GIBLE FOR EXEMPTION. SECTION 11(5) PERMITS THE DEPOSIT IN ANY ACCOUNT WI TH A SCHEDULE BANK OR CO-OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUS INESS OF BANKING AS WELL AS DEPOSIT IN ANY ACCOUNT WITH THE POST OFFICE SAVI NGS BANK. APART FROM THE OTHER INVESTMENTS AS PRESCRIBED THERE UNDER. THUS, WE FIND THAT THE OBJECTS UNDER SUB-CLAUSE-I TO L ARE CHARITABLE IN N ATURE AND CANNOT BE TERMED AS NON-CHARITABLE. THE HONBLE SUPREME COU RT IN CASE OF ACIT VS SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION (SUP RA) HAS OBSERVED IN PARA-8 AS UNDER; 8. BUT THE QUESTION STILL REMAINS WHETHER THIS P RIMARY PURPOSE F THE ASSESSEE NAMELY, TO PROMOTE COMMERCE AND TRADE IN ART, SILK, YARN, RAW SILK, COTTON YARN, AR T SILK CLOTH, SILK CLOT AND COTTON CLOTH COULD BE SAID TO BE NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFITS. THIS QUES TION ARISES ON THE TERMS OF S.2 CL.(15) WHICH GIVES AN INCLUSIVE D EFINITION OF CHARITABLE PURPOSE. IT PROVIDES THAT CHARITABLE PUR POSE ITA NO.730(B)/14 10 INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL REL IEF AND THE ACTIVITY FOR PROFIT. I IS NOW WELL SETTLED AS A R ESULT OF THE DECISION OF THIS COURT AND IN DHARMADEEPTI VS CIT19 78 CTR(SC) 120: (1978) 114 ITR 454(SC): TC23R, 289 THA T THE WORDS NOT INVOLVING THE CARRYING ON OF ANY ACTIVIT Y FOR PROFIT QUALIFY OR GOVERN ONLY THE LAST HEAD OF CHARITABLE PURPOSE AND NOT THE EARLIER THREE HEADS. WHERE, THEREFORE , THE PURPOSE OF A TRUST OR INSTITUTION IS RELIEF OF THE POOR, EDUCATION OR MEDICAL RELIEF, THE REQUIREMENT OF THE DEFINITIO N OF CHARITABLE PURPOSE SHOULD BE FULLY SATISFIED, EVEN IF AN ACTIVITY FOR PROFIT IS CARRIED ON IN THE COURSE OF THE ACTUAL CARRYING OUT OF THE PRIMARY PURPOSE OF THE TRUST OR INSTITUTION. BUT IF THE PURPOSE OF THE TRUST OR INSTITUTION IS S UCH THAT IT CANNOT BE REGARDED AS COVERED BY THE HEADS OF RELI EF OF THE POOR, EDUCATION AND MEDICAL RELIEF, BUT ITS CLAIM T O BE A CHARITABLE PURPOSE RESTS ONLY ON THE LAST HEAD ADVA NCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY, THEN THE QUESTION WOULD STRAIGHT ARISE WHETHER THE PURPOSE OF THE TRU ST OR INSTITUTION INVOLVES THE CARRYING ON OF ANY ACTIVIT Y FOR PROFIT. (I) THE PURPOSE OF THE TRUST OR INSTITUTION MUST BE ADV ANCEMENT OF AN OBJECT OF GENERAL PUBLIC ACTIVITY; AND (II) THAT PURPOSE MUST NOT INVOLVE THE CARRYING ON OF ANY ACTIVITY FOR PRO FIT. THE FIRST CONDITION DOES NOT PRESENT ANY DIFFICULTY AND, AS W E HAVE ALREADY POINTED OUT ABOVE, IT IS FULFILLED IN THE P RESENT CASE, BECAUSE THE PRIMARY PURPOSE OF THE ASSESSEE, NAMELY , PROMOTION OF COMMERCE AND TRADE IN ART SILK YARN, R AW SILK, COTTON YARN, ART SILK CLOTH, SILK CLOTH AND COTTON CLOTH IS CLEARLY ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY. BUT THE REAL DIFFICULTY ARISES WHEN WE TURN TO CONSIDER THE APPLICABILITY OF THE SECOND CONDITION. WHAT DO THE WORDS NOT ITA NO.730(B)/14 11 INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFI T, MEAN AND WHAT IS THE NATURE OF THE LIMITATION THEY IMPLY, SO FAR AS HE PURPOSE OF ADVANCEMENT OF AN OBJECT OF GENERAL PUBL IC UTILITY IS CONCERNED. 9. THUS, IT IS CLEAR THAT THE ASSESSEE IS NOT FOUN D TO BE INVOLVED IN THE ACTIVITY OF PROFIT AND THE OBJECTS OF THE ASSES SEE ARE ALL ONLY TO ACHIEVE THE MAIN OBJECTS TO PROVIDE EDUCATION, LEARNING, TR AINING FACILITIES TO THE STUDENTS OF ALL BRANCHES OF EDUCATION. THEREFORE, ALL THESE ANCILLARY OBJECTS INCLUDED IN THE OBJECT CLAUSE OF THE ASSESSEE ARE F OUND TO BE FOR THE PURPOSE OF ACHIEVING AND FURTHERANCE OF THE MAIN OB JECTS THAN, THESE ANCILLARY OBJECTS AND ACTS TO ATTAIN THE MAIN OBJEC T CANNOT BE HELD AS NON- CHARITABLE IN NATURE. SIMILARLY, IN THE CASE OF DH ARMADEEPTI VS CIT(SUPRA), THE HONBLE SUPREME COURT HAS OBSERVED INPARA-5 AS UNDER; 5. ACCORDING TO SUB-CL.(A) OF CL.3 OF THE MOA, THE MAIN OBJECTS FOR WHICH THE APPELLANT WAS FORMED ARE TO G IVE CHARITY AND TO PROVIDE EDUCATION. THE THIRD SUB-L. MERELY CONFERS POWER TO ESTABLISH ASSOCIATIONS AND OTHER B ODIES WITH THE OBJECT OF PROMOTING THE TWO MAIN OBJECTS. HAVING REGARD TO THE LANGUAGE USED AND HE CONTEXT IN WHI CH THE TWO MAIN OBJECTS ARE SET FORTH, IT WOULD BE REASONA BLE TO IDENTIFY THE EXPRESSION TO GIVE CHARITY AND TO PROM OTE EDUCATION WITH THE FIRST TWO HEADS, RELIEF OF THE P OOR AND EDUCATION IN THE DEFINITION OF CHARITABLE PURPOSE I N S.2(15) O THE IT ACT. IF THE MOA HAD REFERRED TO CHARITY AS THE SOLE ITA NO.730(B)/14 12 OBJECT WITHOUT ANY LIMITATION, INCLUDING THOSE PRES CRIBED BY THE CONTEXT. IT MAY HAVE BEEN POSSIBLE TO EXTEND IT TO ALL THE FOUR HEADS MENTIONED IN S.2(15), AS WAS DONE IN CHATURBHUJ VALLABHDAS VS CIT(1946) 14 ITR 144(BOM.) TC23R,357. BUT THE WORDS ARE TO GIVE CHARITY AND THEN TO PROMOTE EDUCATION IS ALSO SPECIFIED. OBVIOUSLY, T HE FORMER MUST BEAR A LIMITED MEANING. TO OUR MIND, THE MOS T APPROPRIATE SEEMS TO BE RELIEF OF THE POOR. THAT BEING SO, NEITHER OF HE MAIN OBJECTS CAN BE CLASSED UNDER THE RESIDUAL GENERAL HEAD. THE ADVANCEMENT OF ANY OTHER OBJECT OF THE GENERAL PUBLIC UTILITY. NOW THOSE WORDS ARE FOLLOWE D BY THE WORDS NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT. DO THESE RESTRICTIVE WORDS GOVERN THE RESIDUAL GENE RAL HEAD ONLY OR ALSO THE PRECEDING SPECIFIC HEADS RELIEF OF THE POOR, EDUCATION AND MEDICAL RELIEF ?. THE SPECIFIC HEADS RELIEF OF THE POOR EDUCATION AND MEDICAL RELIEF DEFINE WELL K NOWN CHARITABLE PURPOSES. BUT THE RESIDUAL GENERAL HEAD . THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY IS OF WIDE COMPREHENSION. THIS HEAD WAS DEFINED IN T HE SAME TERMS IN THE DEFINITION OF CHARITABLE PURPOSE IN S.4(3) OF THE INDIAN IT ACT, 1922. THE SAME WORDS WERE U SED IN ENGLISH LAW TO DESCRIBE ONE OF THE HEADS OF CHARITA BLE PURPOSE IN MORICE VS BISHOP OF DURHAM (1805) 10 VES.522,532. UNDER THE ENGLISH LAW, THEY WERE REGA RDED AS WORDS OF SUFFICIENTLY EXTENSIVE IMPORT TO WARRAN T THE OBSERVATION BY THE HOUSE OF LORDS IN WILLIAMS TRUS T VS IRC (1947) 27 TAX CASES 409: (1948) 16 ITR (SUPP) 41 (H L) TC23R. 194, THAT ALL OBJECTS OF GENERAL PUBLIC UTIL ITY WERE NOT NECESSARILY CHARITABLE, AND THAT WHILE SOME MAY BE SO OTHERS MAY NOT. THE LAW IN INDIA UNDER THE INDIAN IT ACT, ITA NO.730(B)/14 13 1922, WAS NOT IN CONGRUENCY WITH THE ENGLISH LAW OF CHARITY IN AS MUCH AS BY INCLUDING THOSE WORDS IN I TS STATUTORY DEFINITION THE INDIAN LAW EXTENDED THE EX PRESSION CHARITABLE PURPOSE TO AN AREA BEYOND THAT COVERED B Y THE ENGLISH LAW. IN OTHER WORDS, PURPOSES RECOGNIZED AS CHARITABLE PURPOSES UNDER THE ENGLISH LAW, THEY EXT ENDED ALSO TO OBJECTS WHICH WERE NOT ACCEPTED AS CHARITAB LE UNDER THE ENGLISH LAW. APPARENTLY, WHEN FRAMING THE IT ACT, 1961. PARLIAMENT CONSIDERED IT APPROPRIATE TO CUT DOWN THE WIDE SCOPE OF THESE WORDS BY QUALIFYING THEM WITH T HE RESTRICTIVE WORDS NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT. THIS WAS DONE TO EMPHASIZE THA T THE RESIDUAL GENERAL HEAD WAS TO BE CONFINED TO OBJECTS WHICH WERE ESSENTIALLY CHARITABLE IN NATURE. IT IS THER EFORE, CLEAR THAT THE WORDS NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT GOVERN THE WORDS THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND NOT THE WORDS RELIEF OF THE POOR, EDUCATION AND MEDICAL RELIEF, IN S.2(15). TH E HEADS RELIEF OF THE POOR, EDUCATION AND MEDICAL RELIEF RE MAINED UNQUALIFIED BY ANY EXPRESS STATUTORY RESTRICTION AN D INCOME ARISING FROM A PROFIT-MAKING ACTIVITY LINKED WITH T HOSE HEADS ENJOYED EXEMPTION WITHOUT EXPRESS LIMITATION UNTIL S.13(1)(B) AS INSERTED IN THE ACT BY TAXATION LAWS(AMENDMENT) ACT, 1975, WITH EFFECT FROM 1 ST APRIL, 1977. 10. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE, WE HOLD THAT THE IMPUGNED ORDER REJECTING THE REGISTRATION U/S 12AA OF THE IT ACT ON THE GROUND THAT THE OBJECTS MENTIONED IN THE SUB -CLAUSES I TO L OF CLAUSE-4 OF THE TRUST DEED ARE NOT CHARITABLE IN NA TURE IS NOT SUSTAINABLE ITA NO.730(B)/14 14 AND ACCORDINGLY, THE SAME IS SET ASIDE. HOWEVER, THE ASSESSEE HAS NOT FILED THE RELEVANT RECORD, AS REQUIRED U/S 12AA OF THE ACT TO SATISFY THE AUTHORITY CONCERNED ABOUT THE GENUINENESS OF THE AC TIVITY. WE ACCORDINGLY, DIRECT THE CIT TO RE-CONSIDER THE APPLICATION OF TH E ASSESSEE FOR REGISTRATION U/S 12AA OF THE IT ACT, IN THE LIGHT OF THE ABOVE O BSERVATION. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE 17 TH JULY, 2015. SD/- SD/- (JASON P BOAZ) (VIJA Y PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER D A T E D : 17-07-2015 PLACE: BANGALORE AM* COPY TO : 1 APPELLANT 2 RESPONDENT T3 CIT(A) BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE