SHRI DIGAMBER JAIN MANDIR GODHAJI, Jaipur V. CIT-EXEMPTION, Jaipur

ITA 742/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5118 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 20-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLLY AGARWAL CIT DHK
• Keywords: Charitable institution
• Section: 12AA

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. 742/JP/2015 SHRI DIGAMBER JAIN MANDIR GODHAJI, NAGORION KA CHOWK, GHEEWALON KA RASTA, JOHARI BAZAR, JAIPUR. CUKE VS. THE CIT (EXEMPTION) JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAIAS 8234 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROLLY AGARWAL (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.07.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/07/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (EXEMPTION), JAIPUR DATED 18.08.2015. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 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 TRUST ARE F OR THE BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY AND THEREFORE PROVIS IONS OF SECTION 13(1)(B) ARE ATTRACTED AND IT CANNOT BE HELD AS A CHARITABLE TRUST. 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY ANY OF THE GROUNDS OF APPEAL. 3. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 2 ITA NO. 742/JP/2015 SHRI DIGAMBER JAIN MANDIR GODHAJI 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE H AD APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE IT ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) UNDER THE PRESCRIBED FORMAT. THE APPLICATION OF THE ASSESSEE WAS REJECTED BY LD. CIT (EXEMPTION) ON THE GROUND THAT ON THE BASIS OF MATE RIAL ON RECORD, THE OBJECTS OF THE ASSESSEE SOCIETY ARE NOT CHARITABLE. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 4. THE LD. COUNSEL FOR THE ASSESSEE SHRI PC PARWAL, CA VEHEMENTLY ARGUED THAT ACTION OF THE LD. CIT IS NOT JUSTIFIED AND CONTRARY TO THE SETTLED POSITION OF LAW. HE SUBMITTED THAT AT THE TIME OF REGISTRATION, THE LD. CIT IS NOT EMPOWERED TO LOOK INTO THE ISSUE WHETHER THE ASSESSEE HAS VIOLATED THE PRO VISIONS OF SECTION 13(1)(B) OF THE ACT. HE SUBMITTED THAT FROM THE OBJECTS OF THE ASS ESSEE TRUST, IT IS EVIDENT THAT THE ASSESSEE TRUST IS A CHARITABLE TRUST AND THE LD. CI T OUGHT TO HAVE GRANTED THE REGISTRATION. IN SUPPORT OF THE CONTENTION, LD. CO UNSEL HAS RELIED UPON VARIOUS JUDICIAL PRONOUNCEMENTS AS CITED IN THE WRITTEN BRI EF, AS UNDER :- CIT VS. BIGABASS MAHESHWARI SEWA SAMITI (2008) 14 DTR 29 (RAJ. HC) ST. JOSEPH ACADEMY VS. DIT (EXEMPTION) (2015) 153 ITD 669 (HYD. TRIB.) BHAI MANSA SINGH JI WELFARE SOCIETY VS. CIT (2016) 156 ITD 117 (CHD. TRIB.) BHAGWAN MAHAVIR PURUSHARTH PRERNA NIDHI NYAS VS. CIT (2012) 144 TTJ 379 (JPR TRIB.) KUL FOUNDATION VS. CIT (2015) 43 CCH 115 (PUNE TRIB.) AGGARWAL MITRA MANDAL TRUST VS. DIT (EXEMP.) 293 ITR (AT) 259 (DEL. TRIB.) 3 ITA NO. 742/JP/2015 SHRI DIGAMBER JAIN MANDIR GODHAJI CIT VS. DAWOODI BOHARA JAMAT 364 ITR 31 (SC) 4.1. ON THE CONTRARY, THE LD. D/R OPPOSED THE SUBMI SSIONS OF THE LD. COUNSEL AND SUBMITTED THAT FROM THE READING OF THE OBJECTS, IT CAN BE INFERRED THAT THE TRUST HAS BEEN FORMED FOR THE BENEFIT OF A PARTICULAR RELIGIO N. THEREFORE, IT CANNOT BE TERMED AS A CHARITABLE TRUST FOR THE BENEFIT OF THE PUBLIC AT LARGE AND ON THIS BASIS ALONE THE REGISTRATION CAN BE DECLINED AND THE LD. CIT HAS DO NE SO. 4.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. CIT HAS REJECTED THE APPLICATION B Y OBSERVING AS UNDER :- 6. FROM THE OBJECTS OF THE SOCIETY, IT CAN BE SEE N THAT THE SOCIETY HAS BEEN CREATED FOR THE BENEFIT OF PERSONS BELONGI NG TO THE JAIN SAMAJ ONLY. AS THE SOCIETY IS WORKING FOR THE BENEF IT OF A PARTICULAR RELIGIOUS COMMUNITY OR CASTE I.E. JAIN SAMAJ, IT VI OLATES THE PROVISIONS OF SECTION 13(1)(B) OF THE IT ACT, 1961. UNDER SECT ION 13(1)(B) R.W. EXPLANATION 2, A CHARITABLE ORGANIZATION WILL LOSE THE EXEMPTION U/S11 IF THE INCOME IS UTILIZED FOR THE BENEFIT OF ANY PARTI CULAR RELIGIOUS COMMUNITY. 7. SIMILAR ISSUE CAME UP BEFORE VARIOUS JUDICIAL AU THORITIES. THE FINDINGS ARE SUMMARIZED BELOW : AGRAWAL SABHA (2014) 45 TAXMAN.COM 273 (ALLAHABAD )/(2014) 223 TAXMAN 353 (ALLAHABAD) SECTION 2(15) READ WITH SE CTION 12AA OF THE INCOME-TAX ACT, 1961- CHARITABLE/RELIGIOUS PURPOSE (REGISTRATION APPLICATION) ASSESSMENT YEAR 2010-11 ASSESSEE H AD FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12AA D OMINANT OBJECT UNDERLYING CONSTITUTION OF TRUST WAS FOR BENEFIT OF ONLY AGRAWAL COMMUNITY NO DOCUMENTARY EVIDENCE HAD BEEN PRODUC ED TO SUPPORT THAT TRUST HAD CARRIED OUT ANY ACTIVITY OF GENERAL PUBLIC UTILITY SUCH AS ESTABLISHMENT OF HOSPITALS, DHARAMSHALAS, LIBRARIES AND SCHOOLS WHETHER, ITS APPLICATION UNDER SECTION 12AA SHOULD BE DISMISSED HELD, YES (PARA 9) (IN FAVOUR OF REVENUE) IT. WHERE DOMINANT OBJECT UNDERLYING CONSTITUTION OF TRUST WAS FOR BENEFIT OF ONLY AGRAWAL COMMUNITY, APPLICATION FOR REGISTRATION UNDER SECTI ON 12AA SHOULD BE DISMISSED. GOWRI ASHRAM (2013) 36 TAXMAN.COM (MADRAS)/2013) 217 TAXMAN 97 (MADRAS)/(2013) 356 ITR 328 (MADRAS) SECTION 2(15 ) READ WITH SECTION 12AA OF THE INCOME TAX ACT, 1961 CHARITAB LE PURPOSE 4 ITA NO. 742/JP/2015 SHRI DIGAMBER JAIN MANDIR GODHAJI (OBJECTS OF GENERAL PUBLIC UTILITY) WHETHER WHERE ASSESSEE SOCIETY WAS FORMED WITH AN OBJECT TO PROVIDE ACCOMMODATION AND FACILITIES FOR PERFORMANCE OF MARRIAGES AND OTHER AUSPICIOUS FUNCT IONS TO MEMBERS OF A PARTICULAR COMMUNITY, VIZ. TELEGU BERIVYSIA CO MMUNITY, IT COULD NOT BE REGARDED AS SOCIETY FORMED WITH A CHARITABLE PURPOSE WITHIN MEANING OF SECTION 2(15) AND, THEREFORE, ITS APPLIC ATION SEEKING REGISTRATION UNDER SECTION 12AA WAS TO BE REJECTED HELD, YES (PARA 12)(IN FAVOUR OF REVENUE) IT : WHERE ASSESSEE-SOCIE TY WAS FORMED WITH AN OBJECT TO PROVIDE ACCOMMODATION AND FACILITIES F OR PERFORMANCE OF MARRIAGES AND OTHER AUSPICIOUS FUNCTIONS TO MEMBERS OF A PARTICULAR COMMUNITY, VIZ.TELUGU BERIVYSIA COMMUNITY, IT COULD NOT BE REGARDED AS SOCIETY FORMED WITH A CHARITABLE PURPOSE WITHIN MEANING OF SECTION 2(15). 8. IN ALL THE ABOVE JUDGMENTS HONBLE COURT/TRIBUNA L HAVE HELD THAT IF THE OBJECTS OF THE SOCIETY/ASSOCIATION ARE FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY THEN IT IS NOT A CHA RITABLE ORGANIZATION. IN THE CASE OF PRESENT APPLICANT THE MEMBERSHIP IS LIMITED TO PERSONS BELONGING TO PARTICULAR COMMUNITY ONLY AND ALL THE OBJECTS ARE FOR THE BENEFIT OF JAIN COMMUNITY. THIS CONSIST OF A VERY LIMITED AND SMALL GROUP AND NOT THE PUBLIC AT LARGE. IN SECTION 2(15) THE LEGISLATURE HAS USED LANGUAGE OF GREAT AMPLITUDE CHARITABLE PURPOSE WHICH NOT ONLY INCLUDE THE SPECIFIC PURPOSE OF EDUCATION MEDICAL E TC. BUT ALSO ADVANCEMENT OF OTHER OBJECTS OF GENERAL PUBLIC UTIL ITY. THE CLAUSE IS INTENDED TO SERVE PUBLIC AT CHARITABLE FALLING UNDE R THE HEAD ADVANCEMENT OF ANY OTHER GENERAL PUBLIC UTILITY. TH IS IS TOTALLY MISSING IN THE CASE OF APPLICANT. 9. FROM THE DISCUSSION MADE ABOVE, IT IS CLEAR THAT THE OBJECTS OF THE TRUST/SOCIETY ARE NOT CHARITABLE IN NATURE AS T HEY ARE FOR THE BENEFIT OF THE PARTICULAR RELIGIOUS COMMUNITY. THER EFORE, THE PROVISIONS OF SECTION 13(1)(B) ARE ATTRACTED AND SOCIETY CANNO T BE HELD AS CHARITABLE WITHIN THE MEANING OF SEC. 2(15) OF THE I.T. ACT. BASED ON THE MATERIAL AVAILABLE ON RECORD, I AM SATISFIED TH AT THE OBJECTS OF THE SOCIETY ARE NOT CHARITABLE AND THEREFORE REGISTRATI ON TO THE SOCIETY IS REFUSED. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT AS PER DEFINITION OF CHARITABLE PURPOSE UNDER SECTION 2(15) INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF (PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND RESERVATION OF MONUMENTS OR PLACES OR OBJECTS OR AR TISTIC OR HISTORIC INTEREST) AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. DURING THE COURSE OF 5 ITA NO. 742/JP/2015 SHRI DIGAMBER JAIN MANDIR GODHAJI HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT JAINISM IS THE PHILOSOPHY AND PRESERVATION OF SYMBOL OF SUCH PHILOSOPHY WOULD DEFINITELY COME INTO THE EMBRACE OF THE WORD CHARITABLE. DURING THE COURS E OF HEARING, THE LD. D/R COULD NOT REFUTE THE FACT THAT CLAUSES 16 OF THE OBJECTS WHICH PROVIDES THAT WITHOUT ANY DISCRIMINATION OF THE CASTE OR CREED TO HELP ECONOM ICALLY POOR, OLD, AILING, HANDICAP, POOR STUDENTS AND CLAUSE 17 PROVIDES FOR HELP FOR H OSPITALIZATION OF AILING PERSONS, MEDICINES, COLD WATER, NIGHT SHELTER AND DHARAMSHAL A ETC. IN OUR CONSIDERED VIEW, BOTH THESE OBJECTS DEFINITELY FALL UNDER THE CATEGO RY OF CHARITABLE PURPOSE AND CANNOT BE CONSTRUED AS SOLELY FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. KEEPING THESE OBJECTS IN VIEW AND RESPECTFULLY FOLL OWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. DAWOODI BOHARA JAMAT, 364 ITR 31 (SC), THE ORDER OF LD. CIT (EXEMPTION) IS SET ASIDE AND WE HE REBY DIRECT THE LD. CIT (EXEMPTION) TO GRANT REGISTRATION TO THE ASSESSEE T RUST. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 28/ 07/2016. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER . JAIPUR DATED:- 28/07/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI DIGAMBER JAIN MANDIR GODHAJ I, JAIPUR. 2. THE RESPONDENT- THE CIT (EXEMPTION), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 742/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 742/JP/2015 SHRI DIGAMBER JAIN MANDIR GODHAJI