Eternity for all Trust(EFA Trust), Thiruvalla V. CIT, Kottayam

ITA 730/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73809 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12AA; 12; 11

Judgement Text

1 ITA NO.729 & 730/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 729/COCH/2013 RIGHTEOUS PATH PUBLICATION TRUST VS CIT, KOTTAYAM BUILDING NO.39, MACKAL HOUSE AMAYANNOOR P.O. AYARKUNNAM, KOTTAYAM 686 025 PAN : AABTR9831M (APPELLANT) (RESPONDENT) I.T.A. NO.730/COCH/2013 ETERNITY FOR ALL TRUST (EFA TRUST ) VS THE CIT, KO TTAYAM PARAYILKUNNUMPURATH HOUSE VALLAMKULAM EAST P.O. THIRUVALLA PAN : AAATE3965G (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI R KRISHNA IYER RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 08-01-2014 DATE OF PRONOUNCEMENT : 10-01-2014 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE TWO INDEPENDENT ASSESSEES ARE DIRECTED AGAINST THE TWO INDEPENDENT ORDERS OF THE ADMINISTR ATIVE COMMISSIONER REJECTING THEIR APPLICATION FOR REGISTRATION U/S 12 AA OF THE ACT. SINCE THE 2 ITA NO.729 & 730/COCH/2013 FACTS OF THE CASE ARE SAME, WE HEARD THE SAME TOGET HER AND DISPOSE OF THE APPEALS BY THIS COMMON ORDER. 2. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE TRUSTS WERE ESTABLISHED BY DEEDS DATED 16-08-2011 AND 20-07-2010 RESPECTIVELY. BOTH THE ASSESSEES FILED APPLICATIONS FOR REGISTRATION U/S 12AA OF THE ACT. ACCORDING TO THE LD.REPRESENTATIVE, THE MAIN OBJECT OF THE TRUST IS TO PROPAGATE THE CHRIST IAN FAITH AND DOCTRINE AS CONTAINED IN THE BIBLE. TO ACHIEVE THIS OBJECT, AC CORDING TO THE LD.REPRESENTATIVE, THE ASSESSEES PRINTED AND PUBLIS HED BOOKS. APART FROM THIS, THE TRUST DEEDS PROVIDE FOR SEVERAL CHARITABL E ACTIVITIES. THE ASSESSEES CLAIMED REGISTRATION AS RELIGIOUS AS WELL AS CHARITABLE TRUSTS. ACCORDING TO THE LD.REPRESENTATIVE, A TRUST CAN ENG AGED ITSELF IN BOTH RELIGIOUS AS WELL AS CHARITABLE ACTIVITY SIMULTANEO USLY. FOR THIS PROPOSITION, THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE DE CISION OF THIS BENCH OF THIS TRIBUNAL IN CALICUT ISLAMIC CULTURAL SOCIETY V S A.C.I.T. IN ITA NOS 641 & 729 (COCH) OF 2006 ORDER DATED JULY 31, 2008. TH E ADMINISTRATIVE COMMISSIONER FOUND THAT SALE OF BOOK CANNOT BE CONS IDERED TO BE A CHARITABLE ACTIVITY, BUT IT IS ONLY AN ACTIVITY FOR EARNING OF PROFIT. THE COMMISSIONER FAILED TO CONSIDER THE OTHER OBJECT FO UND IN THE OBJECT CLAUSE. THE ASSESSEES HAVE ALSO FILED THE COPIES O F THE INCOME AND 3 ITA NO.729 & 730/COCH/2013 EXPENDITURE ACCOUNT TO ESTABLISH THAT THE ASSESSEES ARE CARRYING ON BOTH RELIGIOUS AND CHARITABLE ACTIVITY. 3. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR S UBMITTED THAT PRINTING AND PUBLISHING OF BOOKS CANNOT BE CONSIDER ED TO BE A CHARITABLE ACTIVITY. THEREFORE, THE COMMISSIONER HAS RIGHTLY REJECTED THE APPLICATIONS OF THE ASSESSEES FOR REGISTRATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTION 11 OF THE INCOME-TAX ACT PROVIDES FOR EXEMPTION OF INCOME DERIVED FROM PROPE RTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSE TO THE E XTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA. THERE FORE, THE TRUST ESTABLISHED FOR A RELIGIOUS OR CHARITABLE PURPOSE I S ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. THIS TRIBUNAL HAS ALREADY CONSI DERED THE ISSUE WHETHER A TRUST WHICH IS ENGAGED IN RELIGIOUS AS WELL AS CH ARITABLE ACTIVITY SIMULTANEOUSLY IS ELIGIBLE FOR EXEMPTION UNDER THE INCOME-TAX ACT IN THE CASE OF CALICUT ISLAMIC CULTURAL SOCIETY (SUPRA). IT WAS FOUND THAT WHEN THE RELIGIOUS AS WELL AS CHARITABLE ACTIVITIES ARE INDE PENDENTLY ELIGIBLE FOR EXEMPTION U/S 11, A SIMULTANEOUS ACTIVITY BY A SING LE TRUST IS ALSO ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. SECTION 2(15) OF THE INCOME-TAX DEFINES CHARITABLE PURPOSE. HOWEVER, THE RELIGIOUS PURP OSE IS NOT DEFINED IN THE 4 ITA NO.729 & 730/COCH/2013 INCOME-TAX ACT. THEREFORE, WE HAVE TO TAKE A PRAGM ATIC APPROACH. IN THIS CASE, THE CLAIM OF THE ASSESSEES IS THAT THEY ARE P ROPAGATING CHRISTIAN FAITH AMONGST THE PEOPLE. 5. WE HAVE ALSO CAREFULLY GONE THROUGH THE TRUST DE EDS SAID TO BE EXECUTED FOR ESTABLISHMENT OF THE TRUSTS. THE FIRS T OBJECT OF THE TRUSTS IS TO SHARE AND PRACTICE FAITH AND DOCTRINE OF LIFE CONTA INED IN BIBLE TO REACH CTHE UNREACHED AND TO REVIVE THE REACHED. THEREFORE, WE HAVE TO EXAMINE, WHETHER THIS OBJECT WOULD FALL WITHIN RELIGIOUS PU RPOSE. IF THIS OBJECT FALLS WITHIN RELIGIOUS PURPOSE, THEN DEFINITELY, THE AS SESSEES ARE ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT. UNFORTUNATELY, T HE COMMISSIONER HAS NOT EXAMINED THIS ASPECT. THE COMMISSIONER PROCEEDED O N THE PRESUMPTION THAT THE ASSESSEES WERE PRINTING AND PUBLISHING BOO KS WHICH IS A PROFIT EARNING ACTIVITY. IF THE PRINTING AND PUBLISHING O F THE BOOKS IS TO FACILITATE THE PRACTICE OF PROPAGATION OF CHRISTIANITY, THEN I T IS WITH AN INTENTION TO CARRY OUT THE OBJECT OF THE TRUSTS. THEREFORE, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE COMMISSIONER SHOULD EXA MINE WHETHER THE ACTIVITY OF THE ASSESSEES WOULD FALL WITHIN THE RE LIGIOUS PURPOSE FOR THE PURPOSE OF GRANT OF REGISTRATION. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITY ARE SET ASIDE IN BOTH THE APPEALS AND THE ISSUE OF REGISTRATION IS REMITTED BACK TO THE FILE OF THE COMMISSIONER OF IN COME-TAX. THE COMMISSIONER OF INCOME-TAX SHALL RE-EXAMINE THE ISS UE IN THE LIGHT OF 5 ITA NO.729 & 730/COCH/2013 ABOVE OBSERVATIONS AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEES. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH JANUARY, 2014. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 10 TH JANUARY, 2014 PK/- COPY TO: 1. RIGHTEOUS PATH PUBLICATION TRUST, BUILDING NO.39 1, MACKAL HOUSE, AMAYANNOOR P.O., AYARKUNNAM, KOTTAYAM 686 025 / ETE RNITY FOR ALL TRUST (EFA TRUST), PARAYILKUNNUMPURTH HOUSE, VA LLAMKULAM EAST P.O., THIRUVALLA 2. THE CIT, KOTTAYAM 3. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH