M/s Mandir Shree Mahakali Sabha, Sangrur V. CIT (Exemptions), Chandigarh

ITA 821/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6761 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 28-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12; 11; 12A; 12AA; 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 821/CHD/2016 ASSESSMENT YEAR: 2016-17 (U/S 12AA) M/S MANDIR SHREE MAHAKALI SABHA, VS. THE CIT (EXEM PTIONS), MANDIR COMPLEX, OUTSIDE PATIALA GATE, CHANDIGARH SANGRUR PAN NO. AAAAM9773B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VIBHOR GARG RESPONDENT BY : SH. RAVI SARANGAL DATE OF HEARING : 10.08.2017 DATE OF PRONOUNCEMENT : 11.10.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE SOCIETY AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTIONS ) [HEREINAFTER REFERRED TO AS CIT(E)], CHANDIGARH DATED 29.04.20 16 AGITATING THE DENIAL OF REGISTRATION U/S 12AA OF THE INCOME-TAX ACT, 196 1 (IN SHORT 'THE ACT'). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SUBMITTED AN APPLICATION SEEKING REGISTRATION 12A OF THE ACT TO THE LD. CIT(E) ON 27.10.2015. IT WAS PLEADED IN THE APPLICATION THAT THE ASSESSEE SOCIETY HAS 2 BEEN AN OWN GOING ENTITY IN OPERATION SINCE 10.5.19 95. THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY ARE STATED AS UNDER :- 1. THE NAME OF THE SOCIETY IS MANDIR SHREE MAHAKALI , SABHA SANGRUR. 2. THE REGISTERED OFFICE OF SABHA SHALL BE AT SANGR UR IN MAHAKALI MANDIR COMPLEX OUTSIDE PATIALA GATE, SANGRUR. 3 AIMS AND OBJECTIONS OF THE SOCIETY ARE - (A) TO MAINTAIN, MANAGE, IMPROVE, FURNISH, RESHAPE, RESTRUCTURE, RECONSTRUCT AMEND ALTER OR ADD IN THE EXISTING BUILDING, FACILITIES AND AREA SO THAT THESE COULD B E USED IN BETTER WAY BY MAHAKALI DEVI DEVOTEES, WORSHIPERS, S AINTS AND VISITORS TO THE MAHAKALI DEVI MANDIR FOR RELIGI OUS, CHARITABLE & SOCIAL PURPOSES. (B) TO CONSTRUCT MORE BUILDING IN MAHAKALI DEVI COM PLEX AND DEVELOP THE ENTIRE COMPLEX FOR BETTER USE BY TH E DEVOTEES, WORSHIPERS, SAINTS, AND PUBLIC IN GENERAL FOR RELIGIOUS, CHARITABLE, EDUCATIONAL AND SOCITAL PURP OSES. (C) TO PROPAGATE HINDU RELIGION, TEACHING OF SANATA M DHARAM AND BROTHERHOOD AMONGST THE PUBLIC IN GENERA L AND SANGRUR CITIZENS IN PARTICULAR (D) TO ARRANGE AND CELEBRATE HINDU FESTIVALS, RELIG IOUS OCCASIONS, AND TO PROPAGATE AND INCULCATE THE RELIG IOUS FEELINGS BROTHER-HOOD AND NATIONALISM AMONGST THE P UBLIC IN GENERAL AND HINDUS IN PARTICULAR. (E) TO DEVELOP AND INCULCATE SOUND, MORAL, RELIGIOU S AND NATIONAL CHARACTER IN YOUNGER GENERATION. (F) TO HELP THE NEEDY AND POOR CHILDREN FOR THEIR EDUCATION. (G) TO OPEN AND RUN CHARITABLE DISPENSARIES AND HOS PITALS FOR PUBLIC IN GENERAL AND PROPAGATE AND INCULCATE T HE HABIT OF KEEPING GOOD HEALTH. (H) TO OPEN LIBRARY AND READING ROOM FOR PUBLIC IN GENERAL AND PROVIDE BOOKS PARTICULAR RELATING TO RELIGION, HISTORY AND CULTURE. (I) TO ARRANGE RELIGIOUS DISCOURSES, TEACHINGS, SAT SANG LECTURE TO PROPAGATE HINDU RELIGION, BROTHERHOOD, 3 NATIONALISM, GENERAL UPLIFT OF MANKIND, TO BUILD MO RAL FIBRE AND DEVELOP HEALTHY SOCIETY AND HARMONY AMONG ST PUBLIC IN GENERAL. (J) TO CREATE ATMOSPHERE AND IMPART TEACHINGS TO HE LP THE YOUNGER GENERAL TO DEVELOP AND BECOME SUCCESSFUL CI TIZENS OF SOUND HEALTH, CHARACTER, NATIONALITY AND FOLLOWI NG OF HINDU RELIGION IN ITS TRADITION AND CULTURE. (K) TO ARRANGE TO PROVIDE HELP IN CASH AND KIND TO THE PUBLIC IN GENERAL IN THE EVENT OF NATURAL CALAMITIE S. (L) TO RUN FREE BHANDARAS, TO HELP POOR WIDOWS, ORP HANS AGES PERSONS AND SUFFERERS OF NATURAL AND NATIONAL CALAMITIES. (M) TO ESTABLISH AND RUN EDUCATIONAL AND VOCATIONAL INSTRUCTIONS, CHILDREN RECREATIONS PART AND SENIOR CITIZENS HOME (N) ANY OTHER WORK OF CHARITABLE NATURE FOR PUBLIC IN GENERAL. 3. THE LD. CIT(E) AFTER CONSIDERING THE APPLICATION S OF THE ASSESSEE SOCIETY ASKED THE ASSESSEE TO SUBMIT THE FOLLOWING INFORMATION:- (I) FIXED ASSETS DETAILS & PROPERTY DETAILS WITH DOCUME NTARY EVIDENCES. (II) IN THE ABSENCE OF DISSOLUTION CLAUSE, BENEFICIARY CLAUSE, AND UTILIZATION CLAUSE EXPLANATION WHY THE BYE- LAWS OF THE SOCIETY SHOULD NOT BE TERMED RESTRICTIVE AND IN THAT TOKEN NOT ENDURING TO THE BENEFIT OF GENERA L PUBLIC. (III) DETAILS OF INCOME FROM PROPERTY HELD FOR CHARITABLE PURPOSE AS ENVISAGED U/S 11OF THE IT. ACT AND INCOME OF INSTITUTION FROM CONTRIBUTIONS AS ENVISAGED U/S 12 OF THE IT. ACT THAT ARE SOUGHT TO BE EXEMPTED. (IV) OWNERSHIP/RENT DEED OF LAND AND BUILDING OWNED BY T HE SOCIETY ALONG WITH NECESSARY DOCUMENTS. 4 (V) DETAILS OF CORPUS FUNDS RECEIVED ALONGWITH EVIDENCE OF THE SPECIFIC PURPOSE FOR WHICH THE DONATIONS HAVE B EEN PROVIDED. (VI) ITRS FOR LAST THREE ASSESSMENT YEARS, IF ANY. (VII) DETAILS OF NAMES AND ADDRESSES OF THE MEMBERS OF TH E SOCIETY ALONG WITH THEIR PANS. (VIII) EXPLANATION WHY RULES FOR ENROLMENT AS MEMBERS ARE RESTRICTIVE. (IX) NOTE ON ACTIVITIES WITH SUPPORTING DOCUMENTS OF TRU ST AND NATURE OF RECEIPTS IN THE ACCOUNT. (X) BOOKS OF ACCOUNTS FOR FINANCIAL YEAR 2015-16. (XI) BANK NARRATION & SOURCES OF THE SAME. (XII) PROOF OF ACTIVITIES WHICH WERE OTHERWISE NOT FOUND ON RECORD. (XIII) EXPLAIN HOW, THE SOCIETY PRIMA FACIE BEING A RELIGI OUS SOCIETY, THE OBJECTS AND ACTIVITIES ARE COVERED UND ER CHARITABLE ACTIVITIES. (XIV) THE APPLICANT, WAS ALSO ASKED IN LIGHT OF APPLICATI ON OF FUNDS NOT BEING UNDERTAKEN TO THE EXTENT OF 85%, WH ETHER APPLICATIONS BEEN MADE WITH THE ASSESSING OFFICER I N THE PRESCRIBED FORMAT FOR ACCUMULATION OF INCOME BEYOND THE SPECIFIED AMOUNT ALONG WITH PROOF, IF ANY. (XV) IN LIGHT OF REPLY DATED 17.02.2016 WHEREIN THE PRIM ARY OBJECT HAD BEEN SPECIFIED AS MANAGEMENT AND MAINTENANCE OF THE TEMPLE OF SHREE MAHA KALI DEVI MANDIR AT SANGRUR AND BUILDING UP FUNDS TO PROVIDE MONIES TOWARDS CONSTRUCTION OF BUILDING HALL FOR US E OF MAHAKALI DEVI DEVOTEES ETC., EXPLANATION HOW THIS PRIMARY OBJECT GETS COVERED BY THE LIMBS OF 'CHARIT ABLE PURPOSE' ENVISAGED IN SECTION 2(15) OF THE ACT. 5 4. IN RESPONSE, THE ASSESSEE SOCIETY FURNISHED THE REPLY DATED 8.4.2016 AND FURTHER A SUPPLEMENTARY REPLY DATED 26.4.2016 A LONG WITH PHOTOGRAPHS AND OTHER DOCUMENTS ETC. THE MAIN CRUX OF THE REPL Y IS REPRODUCED BY THE LD. CIT(E) IN PARA 6 OF THE ORDER, WHICH READS AS U NDER:- (A) THE SOCIETY DOES NOT OWN ANY PROPERTY AND HAVE NOT TAKEN ANY PREMISES ON RENT. THE SOCIETY IS FORMED FOR UPKEEP AND MAINTENANCE OF MANDIR SHREE MAHAKALI DEVI, SANGRUR WHICH IS OWNED BY GOVERNMENT AND REPAIR, RENOVATIONS OF MAND IR COMPLEX OR CONSTRUCT NEW HALLS OR COMPLEXES FOR USE AS COMMUNI TY HALL BY THE PUBLIC IN GENERAL FOR ORGANIZING BHOG CEREMONIES ET C. (B) SINCE THE SOCIETY DOES NOT OWN ANY IMMOVABLE PROPER TY AND IS CONSTRUCTING AND DEVELOPING THE PROPERTY ON THE GOV ERNMENT LAND AND IS FORMED BY THE PUBLIC IN GENERAL THE SOCIETY IS FORMED FOR THE BENEFITS TO PUBLIC IN GENERAL. ALSO THAT THE SOCIET Y HAS PASSED A RESOLUTION THAT IN CASE THE SOCIETY IS DISSOLVED AN Y ASSET WHETHER MOVABLE OR IMMOVABLE SHALL BE PASSED ON TO THE GOVE RNMENT OR ANY OTHER TRUST WITH SIMILAR OBJECTIVES. (C) OBJECTS OF THE SOCIETY ARE CHARITABLE IN NATURE FOR PUBLIC IN GENERAL INCLUDING TO ORGANIZE BLOOD DONATION CAMPS, FREE MEDICAL CHECK-UP CAMPS, YOGA SEMINARS, ART OF LIVING CAMPS AND PROVIDING COMMUNITY HALLS TO THE PUBLIC IN GENERAL FOR USE OF VARIOUS SOCIAL, RELIGIOUS AND OTHER FUNCTIONS . 5. AFTER CONSIDERING THE REPLY, THE LD. CIT(E) REJE CTED THE APPLICATION OF THE ASSESSEE OBSERVING AS UNDER:- 7. THE EXAMINATION OF THE REPLIES FILED ON BEHALF OF THE APPLICANT REVEALS THE FOLLOWING: (A) THE LAND AND THE COMPLEX, SELF-CONFESSEDLY, ARE SAI D TO BELONG TO THE GOVERNMENT. TO THAT EXTENT THE PROPER TY 6 FROM WHICH INCOME WOULD BE GENERATED AND THAT IS SOUGHT TO BE EXEMPT FROM TAXATION DOESN'T BELONG TO THE SOCIETY. NO EVIDENCE HAS BEEN ADDUCED THAT THE GOVERNMENT HAS BESTOWED THE RIGHTS FOR THE USE OF T HE SAID PROPERTY UPON THE SOCIETY. NEITHER HAS ANY EVIDENCE BEEN PROVIDED TO CONVEY THAT THE GOVERNMEN T IS REPRESENTED IN THE SOCIETY. (B) NO EVIDENCE WITH REGARD TO THE ACTIVITIES HAVING ACTUALLY BEEN CARRIED OUT HAS BEEN FURNISHED. ONLY SOME PHOTOGRAPHS HAD BEEN PRODUCED INITIALLY WHILE DOING HAWAN POOJA AND SANKIRTANS. ON PERUSAL OF ASSESSE'S REPLY IT IS SEEN THAT THE ACTIVITY CARRIED OUT BY THE TRUST IS PURELY RELIGIOUS AND IN THE ABSENCE OF ANY APPARENT CHARITABLE ACTIVITY IT IS S AFE TO PRESUME THAT THE SOCIETY'S MAIN FOCUS IS ON RELIGIO US ETHICS AND CONSTRUCTION OF BUILDING HALL. ITS ACTI VITIES DO NOT GET COVERED UNDER ANY OF THE LIMBS OF CHARIT ABLE PURPOSE AS DEFINED IN SECTION 2(15) OF THE INCOME T AX ACT, 1961. FURTHER, ON PERUSAL OF PAYMENTS ACCOUNT IT IS EVIDENTLY CLEAR THAT ASSESSEE HAS NOT SPENT EVEN MINISCULE AMOUNTS ON THE SO CALLED OTHER CHARITABLE ACTIVITIES CLAIMED AS THE SOCIETY'S OBJECTS. (C) THE SOCIETY HAS PROVIDED ITS MEMORANDUM AND AIMS & OBJECTIVES ALONG WITH BALANCE SHEETS. IN THE MEMORANDUM OF THE SOCIETY ATTACHED WITH THE APPLICATION THERE WAS NO EVIDENCE OF ANY DISSOLUTIO N CLAUSE, BENEFICIARY CLAUSE OR UTILIZATION CLAUSE BE ING INCORPORATED THEREIN. IT HAS ALSO NOT BEEN CLARIFIE D IN ANY CLAUSE OF THE MEMORANDUM THAT IN CASE THE SOCIE TY BECOMES DEFUNCT OR CEASES ITS OPERATIONS WHERE THE ASSETS AND LIABILITIES OF THE SOCIETY WILL GO. 7 THE PROVISIONS OF SECTION 13(1) (C) OF THE I.T ACT STATES THAT 'IN CASE OF A TRUST FOR CHARITABLE OR RELIGIOUS PURPOSES OR A CHARITABLE OR RELIGIOUS INSTITUTION, ANY INCOME T HEREOF - (I) IF SUCH TRUST OR INSTITUTION HAS BEEN CREATED O R ESTABLISHED AFTER THE COMMENCEMENT OF THIS ACT AND UNDER THE TERMS OF THE TRUST OR THE RULES GOVERNING THE I NSTITUTION, ANY PART OF SUCH INCOME ENURES, OR (II) IF ANY PART OF INCOME OR ANY PROPERTY OF THE T RUST OR THE INSTITUTION (WHENEVER CREATED OR ESTABLISHED) IS DU RING THE PREVIOUS USED OR APPLIED, DIRECTLY OR INDIRECTLY FO R THE BENEFIT OF ANY PERSON REFERRED TO IN SUB-SECTION (3 ):' IN THE ABSENCE OF THE DISSOLUTION CLAUSE, BENEFICIA RY CLAUSE, AND UTILIZATION CLAUSE, THE PRESUMPTION OF THE LAW IS THAT THE ASSETS AND LIABILITIES OF THE SOCIETY WILL BE DISTR IBUTED AMONGST THE MEMBERS OF THE SOCIETY IN CASE THE SOCI ETY CLOSES ITS OPERATIONS OR IS DISBANDED. THE PROVISIO NS OF SECTION 13(1)(C) OF THE ACT ARE CLEARLY ATTRACTED W ITHOUT THIS DISSOLUTION CLAUSE. FURTHER, THE QUESTIONNAIRE SENT BY THE DEPARTMENT H AD SPECIFICALLY ASKED WHY IN THE ABSENCE OF THESE CLAU SES THE BYE-LAWS OF THE SOCIETY SHOULDN'T BE CONSTRUED AS R ESTRICTIVE AND NOT ENURING TO THE BENEFIT OF GENERAL PUBLIC. T HE RESPONSE FURNISHED BY THE APPLICANT ON 26 TH OF APRIL CLAIMED THAT THE SOCIETY HAS PASSED A RESOLUTION TO THIS EF FECT. NO COPY OF THE RESOLUTION WAS APPENDED EVEN THOUGH A M ENTION HAD BEEN MADE IN THE RESPONSE THAT IT WAS BEING APP ENDED. IN THE ABSENCE OF THE SAME AND ALSO THE FACT THAT T HE SAID RESOLUTION SEEMINGLY HAS NOT BEEN REGISTERED, THE R ESOLUTION EVEN IF PASSED HAS NO LEGAL SANCTITY AND DOESN'T HE LP THE CAUSE OF THE APPLICANT. 8 8. A SUM OF RS. 12,99,527 HAS BEEN SHOWN AS LIABILITY AS ON 31.03.2013 ON ACCOUNT OF SOME CREDITORS HOWEVER SAME HAS NOT BEEN SHOWN IN SUCCEEDING YEARS' BALANCE SH EETS AND IT IS PERTINENT TO MENTION NO PAYMENT HAS BEEN SH OWN IN THE SUCCEEDING YEARS ON THIS ACCOUNT, WHICH CLEARLY E XEMPLIFY THAT THESE CREDITORS ARE NON-VERIFIABLE. 9. THE CLAIMS MADE THROUGH THE PHOTOGRAPHS ABOUT ACTIVITIES UNDERTAKEN FOR MEDICAL CHECKUP CAMP O RGANIZED BY THE SOCIETY ARE ALSO NOT VERIFIABLE AS EXPENDITURE ON THE SAME DON'T FIND MENTION IN THE INCOME & EXPE NDITURE ACCOUNT AND ARE ALSO NOT SUBSTANTIATED WITH THE EN TRIES IN THE BANK ACCOUNT. 10. IN THE INSTANT CASE, IN LIGHT OF THE DISCUSSIO N ABOVE, IT IS CLEAR THAT THE INCOME FROM PROPERTY THAT IS SOUGHT TO BE EXEMPTED BY SEEKING REGISTRATION IS NOT COR ROBORATED GIVEN THE FACT THAT THE OWNERSHIP OF THE LAND AND T EMPLE DOESN'T BESTOW WITH THE SOCIETY. NO EVIDENCE HAS BE EN ADDUCED ABOUT THE ARRANGEMENT WITH THE GOVERNMENT ( THE ACTUAL OWNER), IF ANY, IN RESPECT OF UTILIZATION OF THE LAND AND TEMPLE PREMISES. FURTHER, THE CONSTITUTION OF T HE SOCIETY IS HELD TO BE RESTRICTIVE AND NOT ENURING TO THE BE NEFIT OF THE GENERAL PUBLIC. ALSO THE GENUINENESS OF ACTIVITIES OF THE SOCIETY DOESN'T STAND CORROBORATED VIS-A-VIS THE ST ATED OSTENSIBLE AIMS AND OBJECTS. ACCORDINGLY, THE APPLI CATION UNDER SECTION 12A FOR GRANT OF REGISTRATION IS ACCO RDINGLY REJECTED. 6. BEING AGGRIEVED BY THE ABOVE REJECTION OF THE AP PLICATION, THE ASSESSEE SOCIETY HAS FILED THE PRESENT APPEAL BEFOR E US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE SOCIETY IS MAINTAINING A COMPLEX OF MANDIR SHREE MAHAKALI DEVI , SANGRUR. APART 9 FROM RENOVATION AND REPAIR OF MANDIR COMPLEX, THE A SSESSEE SOCIETY HAS CONSTRUCTED A COMMUNITY HALL FOR USE OF PUBLIC IN G ENERAL FOR ORGANIZING RELIGIOUS, CHARITABLE AND SOCIAL FUNCTIONS. THAT TH E LAND IN QUESTION OVER WHICH THE CONSTRUCTION IS MADE, THOUGH, IS OWNED BY THE GOVERNMENT, BUT, THE PROPERTY SO DEVELOPED IS HELD UNDER THE TRUST. THE SOCIETY HAS BEEN CONSTRUCTING AND DEVELOPING THE PROPERTY FOR THE US E AND BENEFIT OF PUBLIC IN GENERAL WITHOUT CLAIMING OWNERSHIP RIGHTS OVER T HE SAME. THE LD. COUNSEL HAS FURTHER RELIED UPON VARIOUS DOCUMENTS T HAT THE BUILDING, COMPLEX AND THE COMMUNITY HALL ARE BEING USED BY TH E PUBLIC AT LARGE AND BY SOCIAL ORGANIZATIONS FOR ORGANIZING BLOOD DONATI ON CAMPS, FREE MEDICAL CAMPS, YOGA SEMINARS AND OTHER SOCIAL AND RELIGIOUS FUNCTIONS. 8. ON THE OTHER HAND, LD. DR WHILE RELYING UPON THE ORDER OF THE CIT(E), HAS SUBMITTED THAT ASSESSEE SOCIETYS ACTIV ITIES ARE RESTRICTED TO RELIGIOUS ACTIVITIES ONLY AND THE ASSESSEE SOCIETY HAS FAILED SO FURNISH THE RELEVANT EVIDENCE ON RECORD CARRYING OUT THE ACTIVI TIES WHICH ARE CHARITABLE IN NATURE. HE, THEREFORE, HAS SUBMITTED THAT THE OR DER OF THE LD. CIT (E) MAY BE AFFIRMED. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THE F IRST GROUND POINTED OUT BY THE LD. CIT (E) FOR REJECTION OF APPLICATION OF THE ASSESSEE IS THAT THE LAND AND COMPLEX OF WHICH THE ASSESSEE SOCIETY IS CARRYING OUT DEVELOPMENT AND MAINTENANCE BELONGS TO THE GOVERNME NT. THE PROPERTY FROM WHICH INCOME WOULD BE GENERATED AND THAT IS SO UGHT TO BE EXEMPT FROM TAXATION DOES NOT BELONG TO ASSESSEE SOCIETY A ND EVEN THE GOVERNMENT HAS NOT BESTOWED ANY RIGHT ON THE ASSESSEE SOCIETY FOR THE USE OF THE SAID PROPERTY. WE ARE NOT CONVINCED BY THE ABOVE FINDIN GS OF THE LD. CIT (E). ADMITTEDLY, THE LAND AND MANDIR COMPLEX IS OWNED BY THE GOVERNMENT 10 WHICH IS OPEN TO THE GENERAL PUBLIC AT LARGE. THE P UBLIC AT LARGE IS ENTITLED TO VISIT AND USE THE PROPERTY FOR COMMON PURPOSES, THE SAME BEING THE PUBLIC PROPERTY. IT IS GENERALLY OBSERVED THAT THES E TYPES OF MANDIR COMPLEXES / PUBLIC PROPERTIES THOUGH VISITED / USED BY PUBLIC AT LARGE / DEVOTEES OF THE DEITY TOO FREQUENTLY, BUT ARE POORL Y MANAGED AND CONTROLLED BECAUSE OF LACK OF INTEREST OF THE GOVERNMENT OFFIC IALS AND ALSO BECAUSE OF SHORTAGE OR INSUFFICIENCY OF FUNDS ALLOCATED FOR TH E SAID PURPOSE. IN THE CIRCUMSTANCES, THE MAINTENANCE AND DEVELOPMENT OF T HESE TYPES OF PROPERTIES / COMPLEXES IS TAKEN OVER BY DEVOTEES OR SOCIAL ORGANIZATIONS WHICH NOT ONLY MANAGE THE CROWDS DURING AUSPICIOUS DAYS B UT ALSO ARRANGE FOR COMMON FACILITIES LIKE DRINKING WATER, FOOD SHE LTER FOR THE VISITORS. THESE TYPES OF SOCIAL ORGANIZATIONS / SOCIETIES NEE D FUNDS FOR SUCH TYPE OF DEVELOPMENT WORKS AND ARE DEPENDENT UPON THE DONATI ONS / CONTRIBUTIONS FROM THE PUBLIC AT LARGE. HAVING OBSERVED SO, WE H AVE TO EXAMINE THAT EVEN THOUGH THE PROPERTY DEVELOPED BY SUCH AN ORGAN IZATION IS NOT OWNED BY IT, WHETHER THE ACTIVITY OF DEVELOPMENT OF THE P ROPERTY AS WELL AS THE OTHER ACTIVITIES CARRIED OUT BY SUCH ORGANIZATION F OR THE BENEFIT OF PUBLIC AT LARGE WOULD DISENTITLE IT FROM REGISTRATION U/S 12A A OF THE ACT. WE DO NOT FIND ANY SUCH RESTRICTIONS IN THE RELEVANT PROVISIO NS OF INCOME-TAX ACT. RATHER, WE SEE IT OTHERWISE, NO MOTIVE OF PROFITEER ING IS INVOLVED IN SUCH TYPES OF ACTIVITIES AS THE ASSETS CREATED ARE NOT O WNED BY THE SOCIETY BUT ARE PASSED ON TO THE PUBLIC AT LARGE FOR COMMON USE AND BENEFIT. SINCE AS PER THE PROVISIONS OF SECTION 11 OF THE ACT, TO CLA IM EXEMPTION FROM TAXATION, THE INCOME SHOULD BE DERIVED FROM PROPERT Y HELD UNDER THE TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES AND TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA.; ADMI TTEDLY IN THIS CASE, THE 11 SOCIETY HAS CONSTRUCTED THE BUILDING OF MANDIR COMP LEX AND COMMUNITY HALL ETC. THE PROPERTY, THOUGH IS NOT OWNED BY THE TRUST, YET, IT HAS BEEN HELD UNDER THE TRUST, WHOLLY FOR CHARITABLE AND REL IGIOUS PURPOSE, THE INCOME FROM WHICH, AS PER THE OBJECTS OF THE SOCIET Y, IS TO BE APPLIED FOR SUCH PURPOSES ONLY. 10. THE SECOND ISSUE DISCUSSED BY THE LD. CIT(E) IS THAT NO RELIABLE EVIDENCE WITH REGARD TO THE ACTIVITIES ACTUALLY CAR RIED OUT BY THE ASSESSEE SOCIETY HAS BEEN FURNISHED AND FURTHER THAT THE ACT IVITIES CARRIED OUT BY THE ASSESSEE ARE PURELY RELIGIOUS IN NATURE. HOWEVER, A N OBSERVATION HAS ALSO BEEN MADE BY LD. CIT(E), THAT IT IS SAFE TO PRESUM E THAT THE SOCIETYS MAIN FOCUS IS ON RELIGIOUS ETHICS AND CONSTRUCTION OF BUILDING HALL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT APA RT FROM DEVELOPING AND MAINTAINING THE COMMUNITY HALL, THE ASSESSEE SOCIET Y IS ALSO ORGANIZING LANGAR (FREE FOOD) TO ALL ON VARIOUS OCCASIONS. THE LD. COUNSEL HAS FURTHER INVITED OUR ATTENTION TO THE PAPER BOOK PAG ES 35 TO 83, WHICH ARE COPIES OF THE REQUEST LETTERS NOT ONLY FROM THE IND IVIDUALS BUT ALSO FROM VARIOUS SOCIAL / RELIGIOUS ORGANIZATIONS FOR BOOKIN G OF THE COMMUNITY HALL FOR ORGANIZING SOCIAL / RELIGIOUS OR CHARITABLE FUN CTIONS AND ACTIVITIES, SUCH AS BLOOD DONATION CAMPS, HEALTH & MEDICAL CAMPS, SO CIAL AWARENESS CAMPS AND BHOG CEREMONIES AND ORGANIZING OF RELIGIOUS D ISCOURSES, DELIVERY OF PREACHINGS, SERMONS, BHAGWAT GEETA PATH, GURU GRANT H SAHIB PATH ETC. WE FIND FROM THE RECORD THAT SUCH TYPES OF FUNCTION S ARE BEING ORGANIZED THERE BY SOCIAL CLUBS LIKE LIONS CLUB, ROTARY CLUB AND OTHER VARIOUS SOCIAL ORGANIZATIONS. FURTHER, WE FIND THERE IS A LETTER D ATED 18.5.2013 ON BEHALF OF COOPERATIVE BANK, SANGRUR FOR BOOKING OF THE HAL L FOR ORGANIZING THE BLOOD DONATION CAMP BY THE EMPLOYEES OF THE BANK. F URTHER ANOTHER LETTER 12 FROM THE BANK FOR TAKING OF HALL FOR ORGANIZING THE AKANDH PATH (DELIVERY OF SERMONS) OF THE HOLY SCRIPTURE OF SIKH RELIGION SHRI GURU GRANTH SAHIB WHICH SHOWS THAT THE USE OF THE COMMUNITY HALL IS N OT RESTRICTED FOR RITUALS OF ANY PARTICULAR RELIGION. ALSO IS PLACED A LETTE R FROM ASSOCIATION FOR PHYSICALLY HANDICAPPED (PUNJAB), CHANDIGARH VIDE WH ICH THEY HAVE REQUESTED FOR PROVIDING ONE HALL FOR ORGANIZING THE CONFERENCE AND FUNCTION FOR THE WELFARE AND HELP OF PHYSICALLY HANDICAPPED PERSONS. A REQUEST LETTER DATED 8.9.2014 FROM THE SAID ASSOCIATION REV EALS THAT A REQUEST HAS ALSO BEEN MADE TO THE PRESIDENT OF THE ASSESSEE SOC IETY TO MAKE ARRANGEMENT FOR FOOD FOR 1500 HANDICAPPED PERSONS O N THE DAY OF THE FUNCTION. THERE IS A COPY OF THE ADVERTISEMENT ON B EHALF OF THE SAID ASSOCIATION INVITING THE MEMBERS OF THE PUBLIC AT LARGE AND THE HANDICAPPED PERSONS IN PARTICULAR, TO JOIN THE CON FERENCE AT THE COMPLEX, MANDIR SHREE MAHAKALI, SANGRUR AND FURTHER A NOTE AT THE BOTTOM OF THE ADVERTISEMENT HAS BEEN GIVEN THAT FREE TEA AND FOO D WILL BE SERVED . THERE ARE ALSO PLACED COPIES OF LETTERS FROM THE INDIVIDU ALS AS WELL FROM ORGANIZATIONS FOR BOOKING OF ROOMS AND PROVIDING OF UTENSILS AND BEDDINGS ETC. THESE EVIDENCES ON THE FILE PROVE BEYOND DOUBT THAT THE USE OF COMMUNITY HALL AND THE MANDIR COMPLEX IS NOT LIMITE D TO ANY PARTICULAR SECTION OR LIMB OF THE SOCIETY, RATHER, THE SAME IS OPEN TO ALL AND OFFERED FOR UTILIZATION NOT ONLY TO THE INDIVIDUALS BUT ALS O TO SOCIAL, CHARITABLE AND RELIGIOUS ORGANIZATIONS AS OBSERVED ABOVE. FURTHER , A PERUSAL OF THE OBJECTS OF THE SOCIETY REVEAL THAT NONE OF THE OBJE CTS GIVES ANY PRESUMPTION THAT ANY ACTIVITY OF THE ASSESSEE SOCIETY IS RESTRI CTED TO A PARTICULAR CASTE, COMMUNITY OR RELIGION. 13 11. SO FAR AS THE OBSERVATION OF THE LD. CIT(E) THA T THE SOCIETYS MAIN FOCUS IS ON RELIGIOUS ETHICS IS CONCERNED, THERE IS NO BAR U/S 11 OR 12A OF THE ACT FOR GIVING REGISTRATION TO A RELIGIOUS TRUS T. RATHER FOR CLAIMING EXEMPTION U/S 11, THE APPLICATION OF THE INCOME IS REQUIRED TO BE FOR CHARITABLE OR RELIGIOUS PURPOSES. FROM THE DISCUSSI ON MADE ABOVE, IT IS PROVED THAT NOT ONLY THE OBJECTS OF THE ASSESSEE SO CIETY ARE CHARITABLE IN NATURE BUT THE SOCIETY IS ALSO CARRYING THE ACTIVIT IES OF RELIGIOUS AND CHARITABLE IN NATURE. SO FAR AS THE OBSERVATION OF THE LD. CIT (E) THAT THERE IS NO DISSOLUTION CLAUSE IN THE MEMORANDUM OF ASSOC IATION, THE LD. AR OF THE ASSESSEE HAS BROUGHT OUR ATTENTION TO PAPER BOO K PAGE 93, WHICH IS A COPY OF RESOLUTION DATED 17.12.2015 WHEREIN IT HAS BEEN RESOLVED IN THE GENERAL BODY MEETING THAT IN CASE THE SOCIETY IS DI SSOLVED, ANY ASSET WHETHER MOVABLE OR IMMOBILE WILL BE TRANSFERRED TO SOME OTHER RELIGIOUS TRUST WHOSE OBJECTS WILL BE SIMILAR TO THAT OF THE ASSESSEE TRUST AND THAT THE NAME OF SUCH TRUST WILL BE DECIDED IN THE GENERAL B ODY MEETING WITH THE CONSENT OF 3/4 TH OF ITS MEMBERS. SO FAR AS THE DISCREPANCY IN ACCO UNTS POINTED OUT BY THE LD. CIT (E) IS CORNERED, THE LD. AR OF THE ASSESSEE HAS EXPLAINED THAT THE LIABILITY SHOWN AS ON 31.3.2013 HAS BEEN DISCHARGED IN SUBSEQUENT YEARS. IN OUR VIEW THE EXAMINATION OF TH E ACCOUNT IN DETAIL / APPLICATION OF INCOME IS TO BE SEEN AT THE TIME OF GIVING EXEMPTION U/S 11 OF THE ACT AND NOT AT THE TIME OF GRANTING OF REGIS TRATION U/S 12A OF THE ACT. WHILE GRANTING REGISTRATION U/S 12A OF THE AC T, IT IS TO BE SEEN WHETHER THE OBJECTS OF THE ASSESSEE SOCIETY ARE CH ARITABLE OR RELIGIOUS IN NATURE AND THE ACTIVITIES CARRIED OUT BY THE ASSESS EE ARE IN FURTHERANCE OF SUCH OBJECTS. IN VIEW OF THE ABOVE DISCUSSION, WE DIRECT THE LD. CIT (E) TO GRANT REGISTRATION U/S 12AA OF THE ACT TO THE ASSES SEE SOCIETY. 14 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.10.L201 7 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11 TH OCT, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR