Ved Niketan Dham Public Charitable Trust, Ludhiana V. CIT-1, Ludhiana

ITA 959/CHANDI/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60894 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-06-2012
• Assessment Year: misc
• Appeal Filed On: 30-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: ANUP KUMAR JAIN
• Keywords: Charitable institution; Cancellation of registration
• Section: 12; 11; 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NOS.959/CHD/2009 (UNDER SECTION 12AA) & ITA NOS.960/CHD/2009 (UNDER SECTION 80G) VED NIKETAN DHAM VS. THE C.I.T-I, PUBLIC CHARITABLE TRUST, LUDHIANA. LUDHIANA. PAN: (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANUP KUMAR JAIN RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 07.06.2012 DATE OF PRONOUNCEMENT : 22.06.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THESE TWO APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX-I, LUDHIANA DATED 28.07. 2009 UNDER SECTIONS 12AA AND 80G OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2. BOTH THESE APPEALS RELATING TO THE SAME ASSESS EE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST WAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT VIDE ORD ER DATED 17.10.2003 ISSUED VIDE F.NO.CIT-I/LDH/TECH/12A/39/2003-04/2944 . THE ASSESSEE THEREAFTER MOVED AN APPLICATION IN FORM NO.10G FOR APPROVAL UNDER SECTION 80G(5)(V) OF THE ACT ON 19.2.2009. THE COM MISSIONER OF INCOME TAX-I, LUDHIANA ON PERUSAL OF THE AIMS AND OBJECTS, RULES AND REGULATIONS 2 OF THE TRUST FILED ALONWITH FORM NO.10G OBSERVED TH AT THE MAIN OBJECT OF THE ASSESSEE WAS AS UNDER: TO RUN PUBLIC CHARITABLE INSTITUTIONS WITH A VIEW TO PROMOTE SCIENTIFIC EDUCATION RELATING TO SCIENTIFIC WAY OF LIVING, SPIRITUALISM YOGA AND OTH ER DISPLINES OF LIFE INCLUDING EDUCATIONAL KNOWLEDGE O F RELIGION FOR THE WELFARE OF HUMAN BEINGS AND TO DO ALL OTHER ACTS AS ARE BEING COMMONLY UNDERSTOOD AS PUBLIC CHARITABLE OBJECTS INCLUDING ORGANIZE SATSAN G ON VARIOUS SUBJECTS BY EXPERTS INCLUDING THE SPIRIT UAL EXPERTS, SADHUS, MAHATAMAS AN OTHER SCHOLARS . 4. THE COMMISSIONER OF INCOME TAX DIRECTED THE ASSE SSING OFFICER TO SUBMIT THE REPORT IN RESPECT OF ACTIVITIES CARRI ED OUT BY THE TRUST AND THE ASSESSING OFFICER REPORTED THAT MOST OF THE EXP ENSES RELATED TO RELIGIOUS PURPOSES AND NOT FOR GENERAL PUBLIC/CHARI TABLE PURPOSES. THE COMMISSIONER OF INCOME TAX THEREAFTER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE FOR CANCELLATION OF REGISTRATION GRANTED U NDER SECTION 12AA OF THE ACT. THE COMMISSIONER OF INCOME TAX NOTED THAT THE ASSESSEE WAS PUBLISHING MONTHLY MAGAZINE VED LEHAR WHICH STRIVE S TO EDUCATE IDEOLOGY OF VEDAS AND OTHER HINDU MAHARAJS WHICH WE RE TOTALLY AND COMPLETELY FOR ADVANCEMENT OF HINDU RELIGION AND CO ULD NOT BE SAID TO BE FOR THE PURPOSE OF GENERAL PUBLIC UTILITY. THE EXPENSES INCURRED BY THE ASSESSEE, AS PER THE COMMISSIONER OF INCOME TAX , COULD NOT BE TREATED FOR THE PURPOSES OF GENERAL PUBLIC UTILITY. THE COMMISSIONER OF INCOME TAX HELD AS THE OBJECTS WERE FOR THE ADVANCE MENT OF HINDUISM, THE EXPENSES COULD NOT BE TREATED AS APPLIED FOR CH ARITABLE PURPOSES BEING FOR GENERAL PUBLIC UTILITY. THE COMMISSIONER OF INCOME TAX THUS CANCELLED THE REGISTRATION GRANTED TO THE ASSESSEE. IN CONCLUSION THE COMMISSIONER OF INCOME TAX OBSERVED THAT ON 22.7.2009 SH.RAMAN JAIN PRESENT ON BEHALF OF THE TRUST WAS OFFERED TO GET T HE TRUST REGISTERED AS 3 RELIGIOUS TRUST. HOWEVER, SH.JAIN INSISTED ON CONT INUATION OF REGISTRATION AS CHARITABLE TRUST. IN VIEW OF THIS REFUSAL THE TRUST CANNOT BE EVEN GRANTED REGISTRATION AS RELIGIOUS TRUST. A CCORDINGLY, REGISTRATION GRANTED N 17.1.2003 IS HEREBY CANCELLE D WITH IMMEDIATE EFFECT . 5. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE COMMISSIONER OF INCOME TAX I.E. CANCELLATION OF THE REGISTRATION GR ANTED TO THE ASSESSEE UNDER SECTION 12A OF THE ACT VIDE ORDER DATED 7.10. 2003. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT THE PROCEEDI NGS OF CANCELLATION OF REGISTRATION UNDER SECTION 12AA(3) OF THE ACT WERE STARTED BY THE COMMISSIONER OF INCOME TAX, AFTER THE ASSESSEE FILE D AN APPLICATION FOR APPROVAL UNDER SECTION 80G OF THE ACT. THE LEARNED A.R. FOR THE ASSESSEE FAIRLY SUBMITTED THAT WHETHER THE ASSESSEE WAS CARRYING ON CHARITABLE OR RELIGIOUS ACTIVITIES, IT WAS ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. FURTHER IT WAS POINTED OU T BY THE LEARNED A.R. FOR THE ASSESSEE THAT SUB-SECTION (3) TO SECTION 12 AA OF THE ACT POSTULATES THE CONDITIONS UNDER WHICH THE REGISTRAT ION ALREADY GRANTED COULD BE REVOKED AND THE ASSESSEE IN THE PRESENT CA SE CANNOT BE SAID TO HAVE FULFILLED THE SAID CONDITIONS WARRANTING WITHD RAWAL OF REGISTRATION TO THE ASSESSEE TRUST. IN RESPECT OF ITS APPEAL AG AINST THE ORDER PASSED 80G OF THE ACT THE LEARNED A.R. FOR THE ASSESSEE CO NCEDED THAT IT IS NOT INTERESTED IN THE AFORESAID RECOGNITION. 6. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE COMMISSIONER OF INCOME TAX. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE RAISED IN THE PRESENT APPEAL IS AGAIN ST THE ORDER OF REVOCATION PASSED BY THE COMMISSIONER OF INCOME TAX UNDER THE 4 PROVISIONS OF SECTION 12AA(3) OF THE ACT. THE ASSE SSEE TRUST WAS GRANTED REGISTRATION BY THE COMMISSIONER OF INCOME TAX VIDE F.NO. CIT- I/LDH/TECH/12A/39/2003-04/2944 VIDE ORDER DATED 17. 10.2003. THE SAID REGISTRATION HAS CONTINUED TO BE ALLOWED TO THE ASS ESSEE FROM YEAR TO YEAR. THE ASSESSEE TRUST ON 19.2.2009 MADE AN APPL ICATION IN FORM NO.10G FOR APPROVAL UNDER SECTION 80G(5)(V) OF THE ACT. THE ASSESSEE HAD ENCLOSED AIMS AND OBJECTS OF THE ASSESSEE SOCIE TY AND ALSO AUDITED ACCOUNTS AS ON 31.3.2007 AND 31.3.2008 ALONGWITH SA ID APPLICATION FILED IN FORM NO.10G. ON THE PERUSAL OF THE SAID APPLICA TION AND ALSO THE AIMS AND OBJECTS OF THE ASSESSEE TRUST THE COMMISSI ONER OF INCOME TAX CANCELLED THE REGISTRATION GRANTED TO THE ASSESSEE TRUST OBSERVING THAT THE TRUST WAS ENGAGED IN ADVANCEMENT OF HINDUISM AND TH E EXPENSES THUS COULD NOT BE TREATED AS APPLIED FOR CHARITABLE PURP OSES FOR GENERAL PUBLIC UTILITY. THE COMMISSIONER OF INCOME TAX OBSERVED T HAT ON 22.7.2009 SH.RAMAN JAIN PRESENT ON BEHALF OF THE TRUST WAS OF FERED TO GET THE TRUST REGISTERED AS RELIGIOUS TRUST. HOWEVER, SH.JAIN IN SISTED ON CONTINUATION OF REGISTRATION AS CHARITABLE TRUST. IN VIEW OF TH IS REFUSAL THE TRUST CANNOT BE EVEN GRANTED REGISTRATION AS RELIGIOUS TR UST. ACCORDINGLY, REGISTRATION GRANTED N 17.1.2003 IS HEREBY CANCELLE D WITH IMMEDIATE EFFECT . 8. UNDER THE PROVISIONS OF SECTION 11 OF THE ACT TH E PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES IS ELIGIBLE FOR DE DUCTION AS PRESCRIBED UNDER THE SAID SECTION. HOWEVER, THE CONDITIONS FO R THE APPLICABILITY OF SECTIONS 11 AND 12 OF THE ACT ARE THAT THE PERSON I N RECEIPT OF THE SAID INCOME SHOULD MAKE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN PRESCRIBE D MANNER TO THE COMMISSIONER OF INCOME TAX UNDER SECTION 12A OF THE ACT. THE COMMISSIONER ON RECEIPT OF SAID APPLICATION FOR REG ISTRATION OF TRUST OR 5 INSTITUTION IS TO PASS AN ORDER IN WRITING REGISTER ING THE TRUST OR INSTITUTION OR REFUSING THE TRUST OF INSTITUTION, A S THE CASE MAY BE, UNDER SECTION 12AA OF THE ACT. CONSEQUENTLY, THE REGISTR ATION UNDER SECTION 12AA OF THE ACT IS TO BE ALLOWED BY THE COMMISSIONE R OF INCOME TAX TO BOTH THE CHARITABLE OR RELIGIOUS TRUST, IN CASE ACT IVITIES OF THE TRUST OR INSTITUTION WERE FOUND TO BE GENUINE AND IN ADVANCE MENT OF ITS OBJECTS. THUS A TRUST OR INSTITUTION WHETHER ENGAGED IN CHAR ITABLE OR RELIGIOUS IF IS FOUND TO BE CARRYING ON ITS ACTIVITIES AND THE S AID ACTIVITIES ARE GENUINE, THEN SUCH TRUST OR INSTITUTION SUBJECT TO FULFILLMENT OF THE PROVISIONS OF THE ACT, ARE TO BE REGISTERED UNDER S ECTION 12AA OF THE ACT, IN ORDER TO ENTITLE THE TRUST OR INSTITUTION T O CLAIM DEDUCTION ALLOWABLE UNDER SECTION 11/12 OF THE ACT. 9. THE ASSESSEE TRUST BEFORE US WAS GRANTED THE REG ISTRATION UNDER SECTION 12AA OF THE ACT VIDE ORDER DATED 17.10.2003 AND THE ACTIVITIES OF THE TRUST CONTINUED TO BE SAME AS IN THE PAST. THUS, WE FIND NO MERIT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX IN C ANCELING THE REGISTRATION GRANTED TO THE ASSESSEE TRUST BY HOLDI NG THAT THE SAID TRUST WAS TO BE REGISTERED AS RELIGIOUS TRUST. FURTHER E VEN FOR WITHDRAWING THE REGISTRATION EARLIER GRANTED TO A TRUST OR INSTITUT ION THE REQUIREMENT OF SECTION 12AA (3) OF THE ACT ARE THAT WHERE REGISTRA TION HAS ALREADY BEEN GRANTED TO A TRUST OR INSTITUTION AND SUBSEQUENTLY THE COMMISSIONER OF INCOME TAX IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION WERE NOT GENUINE OR WERE NOT BEING CARRIED ON IN AC CORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, THEN THE COMMI SSIONER OF INCOME TAX BY AN ORDER IN WRITING SHALL CANCEL THE REGISTRATIO N OF SUCH TRUST OR INSTITUTION. IN THE FACTS OF THE PRESENT CASE THE COMMISSIONER OF INCOME TAX HAS NOT GIVEN ANY FINDING FOR NON FULFILLMENT O F THE ABOVE SAID CONDITIONS PRESCRIBED UNDER SECTION 12AA (3) OF THE ACT. THE ACTIVITIES 6 OF THE TRUST WERE NOT FOUND TO BE NON-GENUINE AND F URTHER THERE IS NO FINDING THAT THE TRUST WAS NOT CARRYING OUT ITS ACT IVITIES IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. IN THE ABSENCE OF T HE SAME, WE FIND THE EXERCISE OF POWER BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 12AA(3) OF THE ACT TO BE UNWARRANTED AND THE SAME I S HEREBY CANCELLED. WE DIRECT THE COMMISSIONER OF INCOME TAX TO CANCEL THE ORDER OF REGISTRATION UNDER SECTION 12AA(3) OF THE ACT AND A LSO TO PASS CONSEQUENTIAL ORDER GRANTING REGISTRATION TO THE AS SESSEE UNDER SECTION 12AA OF THE ACT. GROUNDS OF APPEAL RAISED BY THE A SSESSEE IN ITA NO.959/CHD/2009 ARE THUS ALLOWED. 10. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT THE ASSESSEE TRUST WAS NOT INTERESTED IN REGISTRATION UNDER SECT ION 80G OF THE ACT. IN VIEW OF THE ADMISSION OF THE LEARNED A.R. FOR THE A SSESSEE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO.960/CHD/200 9 ARE THUS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.959/CHD/2009 IS ALLOWED AND THE APPEAL OF THE ASSESSEE IN ITA NO.96 0/CHD/2009 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF JUNE, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND JUNE, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7