Sri Kondandarama Trust, Hyderabad V. DIT(Exemptions), Hyderabad

MA 123/HYD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2608 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 25-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER M.A. NO. 123/HYD/2014 (ARISING OUT OF ITA NO. 1133/HYD/2013) ASSESSMENT YEAR NA M/ S. SRI KODANDA RAMA TRUST, HYDERABAD PAN: AALTS9964J VS THE DIRECTOR OF INCOME - TAX (EXEMPTIONS) HYDERABAD APPLICANT RESPONDENT APPLICANT BY: SRI MOHD. AFZAL RESPONDENT BY: SRI P. SOMA SEKHAR REDDY DATE OF HEARING: 19.09.2014 DATE OF PRONOUNCEMENT: 14.1 1.2014 ORDER PER ASHA VIJAYARAGHAVAN, JM: BY THIS MISCELLANEOUS APPLICATION (MA) THE ASSESSE E SEEKS AMENDMENT IN THE DIRECTIONS GIVEN IN THE ORDER OF T HE TRIBUNAL IN ITA NO. 1133/HYD/2013 DATED 13.11.2013. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE APPLIED FOR REGISTRATION U/S. 12AA OF INCOME-TAX ACT, 1961 IN FORM NO. 10A O N 27.11.2012 BEFORE THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) [(DIT(E)]. THE DIT(E) HAS TAKEN A VIEW THAT THE OBJECTS OF THE TRUST ARE BOTH RELIGIOUS AND CHARITABLE IN NATURE, THEREFORE, NOT ELIGIBLE FOR R EGISTRATION U/S 12AA OF THE 1961. ACCORDINGLY, THE DIT(E) REFUSED REGISTRA TION OF THE SOCIETY U/S. 12AA OF THE ACT. THE ASSESSEE CAME IN APPEAL BEFORE THIS TRIBUNAL AND THE 'A' BENCH OF THIS TRIBUNAL IN THE ORDER IN ITA NO. 1133/HYD/2013 DATED 13.11.2013 AFTER EXAMINING ALL THE OBJECTS, WHICH WERE REPRODUCED IN PAGE 3 OF THAT ORDER, HELD IN PA RAS 12 AND 13 AS UNDER: 2 MA NO. 123/HYD/2014 M/S. SRI KODANDARAMA TRUST ===================== PARA-12: WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD. WE HAVE GONE THROUGH THE OBJECTS MENTIONED AT PARA 3(SUPRA). WE FIND THAT THE ASSESSEE IS CARRYING ON THE RELIGIOUS OBJECTS ALONG WITH CHARITABLE ACTIVITIES, BUT, THE MAIN OBJ ECT OF THE ASSESSEE IS RELIGIOUS IN NATURE. WE ARE OF THE VIEW THAT TO OBTAIN REGISTRATION U/ S 12AA OF THE ACT, T HE ASSESSEE'S OBJECTS MAINLY SHOULD BE CHARITABLE IN NATURE. IN OUR OPINION, REQUIREMENT OF THE PROVISI ON U/S 12AA IS THAT THE SOCIETY'S OBJECT CLAUSE SHOULD NOT CONTAIN ANY NON CHARITABLE ACTIVITIES AND THERE IS NO RESTRICTION IN CARRYING ON RELIGIOUS OBJECTS ALONG WITH THE CHARITABLE OBJECTS. THE ASSESSEE IS AT LIBERTY TO CARRY ON RELIGIOUS ACTIVITIES ALONG WITH CHARITABLE ACTIV ITIES. IN SIMILAR CIRCUMSTANCES, THE COURTS HELD THAT THE ASS ESSEE CAN CARRY ON CHARITABLE ACTIVITIES ALONG WITH RELIG IOUS ACTIVITIES. PARA-13: FURTHER, THE OBJECTS OF THE ASSESSEE CANNO T BE SAID DESCRIPTIVE AND THE OBJECTS MENTIONED IN THE T RUST DEED ARE IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 2(15) OF THE IT ACT AND THERE IS NO ALLEGATION THAT THE OBJECTS MENTIONED THEREIN ARE NOT CHARITABLE IN NAT URE AND IT CANNOT BE SAID THAT THE OBJECTS MENTIONED IN CLAUSE 1 & CLAUSE 2 CANNOT BE SAID THAT THEY ARE NO T CHARITABLE IN NATURE. BEING SO, IN OUR OPINION, TH IS REASON ADVANCED BY THE DIT(E) ARE NOT PROPER TO DEN Y THE REGISTRATION U/ S 12A, OF THE ACT. 3. BY THIS MA, THE ASSESSEE HAS POINTED OUT THAT THE T RIBUNAL HELD THAT THE OBJECTS OF THE ASSESSEE WHICH ARE RE LIGIOUS AND CHARITABLE IN NATURE ARE IN ACCORDANCE WITH THE PRO VISIONS OF SECTION 2(15) OF THE IT ACT. HOWEVER, CONTRARY TO THE OBSER VATIONS AT PARAS 12 AND 13, THE TRIBUNAL ADVERTENTLY RECORDED AND DIRE CTED THE ASSESSEE TO CAUSE NECESSARY AMENDMENTS TO THE TRUST DEED WIT H REFERENCE TO THE OBJECT CLAUSE TO THE SATISFACTION OF THE DIT(E) AND RESTORED THE MATTER TO THE FILE OF THE DIT(E) TO CONSIDER THE IS SUE AFRESH AND ONCE NECESSARY AMENDMENT IS MADE TO THE TRUST DEED, AS P ER THE PROVISIONS OF SECTION 12AA OF THE ACT, DIRECTED THE DIT(E) TO GRANT REGISTRATION U/S 12AA OF THE ACT, ON RECEIPT OF THE AMENDED TRUS T DEED. 4. THE LEARNED COUNSEL SUBMITTED THAT THE OBJECTS OF THE ASSESSEE WERE SCANNED BY THE BENCH AND A FINDING WAS GIVEN I N PARAS 12 AND 3 MA NO. 123/HYD/2014 M/S. SRI KODANDARAMA TRUST ===================== 13 AS THE OBJECTS ARE IN ACCORDANCE WITH THE PROVIS IONS OF SECTION 2(15) OF THE IT ACT. HOWEVER, A CONTRARY DIRECTION WAS IS SUED IN PARA 16 OF THE ORDER OF THE TRIBUNAL. ACCORDINGLY, THE LEARNE D COUNSEL PLEADED THAT THE BENCH MAY AMEND THE DIRECTIONS IN PARA 16 OF THE ORDER IN CONSONANCE WITH THE FINDINGS AT PARAS 12 AND 13 OF THE ORDER OF THE TRIBUNAL. 5. HEARD BOTH PARTIES. AT PARA 12 OF THE TRIBUNAL ORD ER, IT HAS BEEN OBSERVED THAT IN SIMILAR CIRCUMSTANCES, THE CO URTS HELD THAT THE ASSESSEE CAN CARRY ON CHARITABLE ACTIVITIES ALONG W ITH RELIGIOUS ACTIVITIES AND RELIED ON SEVERAL CASE LAWS ON THE I SSUE. AT PARA 16 THE TRIBUNAL DIRECTED THE ASSESSEE TO CAUSE NECESSARY A MENDMENT TO THE TRUST DEED WITH REFERENCE TO THE OBJECT CLAUSE TO T HE SATISFACTION OF THE DIT(E) AND ACCORDINGLY REMITTED THE ISSUE TO TH E FILE OF THE DIT(E) FOR CONSIDERING THE ISSUE AFRESH AND ONCE NECESSARY AMENDMENT IS MADE IN THE TRUST DEED, AS PER THE PROVISIONS O SEC TION 12AA OF THE ACT, THE TRIBUNAL FURTHER DIRECTED THE DIT(E) TO GR ANT REGISTRATION U/S. 12AA OF THE ACT ON RECEIPT OF THE AMENDED TRUST DEE D, AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE TO REPRESENT ITS CAS E. 6. WE ARE OF THE OPINION THAT THE OBSERVATION BY THE T RIBUNAL AT PARAS 12 AND 13 IS ONLY TO ENLIGHTEN THE LEGAL ASPE CT OF THE ISSUE. NEVERTHELESS, THE TRIBUNAL WAS OF THE OPINION THAT IT WOULD HAVE TO CLARIFY THAT CLAUSE 7 OF THE TRUST DEED COULD BE AM ENDED, IN ORDER TO HAVE SPECIFIC OBJECTS INSTEAD OF VAGUE AND GENERAL CLAUSE/OBJECTS: CLAUSE 7 OF THE TRUST DEED READS AS FOLLOWS: '(7) TO PURSUE ANY OTHER ACTIVITY INCLUDING WORKS O F CHARITY OR OTHER SCHOLARSHIPS IN CONSONANCE WITH OU R OBJECTIVE TO MAKE PRESENTATIONS ON OUR OBJECTIVES, RAISE AND COLLECT FUNDS, PARTICIPATION OR ASSISTANC E REQUIRED FOR OUR ACTIVITIES FROM GENERAL PUBLIC, NG OS AND/OR ANY GOVERNMENT BRANCHES OR DEPARTMENTS AS FOUND NECESSARY. ALL FINANCES AND PROFITS, IF ANY, ACCRUED TO THE TRUST SHALL BE USED ONLY TOWARDS PUR SUIT OF THE OBJECTIVES OF THE TRUST.' 4 MA NO. 123/HYD/2014 M/S. SRI KODANDARAMA TRUST ===================== 7. THE TRIBUNAL REMITTED THE ISSUE TO THE FILE OF THE DIT(E) TO CONSIDER THE SAME AFRESH AND GRANT REGISTRATION TO THE TRUST AFTER RECEIVING THE AMENDED TRUST DEED. 8. WE FIND NO INFIRMITY IN THE ORDER OF THE TRIBUNAL. THERE IS NO CONTRADICTION BETWEEN PARAS 12 & 13 AND PARA 16. A S STATED EARLIER, AN OBSERVATION MADE BY THE TRIBUNAL (AT PARAS 12 AND 13) IS NOT T HE SAME AS DIRECTION GIVEN BY THE TRIBUNAL (IN PARA 16) TO RECTIFY THE ORDER OF THE TRIBUNAL U/S. 254(2) OF THE ACT. FURT HER, WE ARE IN AGREEMENT WITH THE ORDER OF THE TRIBUNAL INASMUCH A S IT IS NECESSARY THAT ANY GENERAL OR VOGUE OBJECTS ARE ENUMERATED IN CLAUSE 7 OF THE TRUST DEED NEED TO BE AMENDED TO BE MORE SPECIFIC A ND TO THE SATISFACTION OF THE DIT(E). HENCE, WE DISMISS THIS MA AS THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIB UNAL. 9. IN THE RESULT, MA BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER, 2014 SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED THE 14 TH NOVEMBER, 2014 TPRAO COPY TO: 1. M/S. SRI KODANDARAMA TRUST, C/O. SRI MOHD. AFZAL, A DVOCATE, 11 - 5-465, FLAT NO. 402, SHERSON'S RESIDENCY, CRIMINAL COURT ROAD, RED HILLS, HYDERABAD-500 004. 2. THE DIRECTOR OF INCOME - TAX (EXEMPTION), 3 RD FLOOR, AAYAKAR BHAVAN, HYDERABAD. 3. THE DDIT(E) - I, HYDERABAD. 4. THE DR, A - BENCH, ITAT, HYDERABAD.