Siradi Sainathar Samarasa Trust, Dindigul v. CIT, Madurai

ITA 1424/CHNY/2010 | misc
Pronouncement Date: 14-03-2011 | Result: Allowed

Appeal Details

RSA Number 142421714 RSA 2010
Assessee PAN AAHTS6860K
Bench Chennai
Appeal Number ITA 1424/CHNY/2010
Duration Of Justice 6 month(s) 13 day(s)
Appellant Siradi Sainathar Samarasa Trust, Dindigul
Respondent CIT, Madurai
Appeal Type Income Tax Appeal
Pronouncement Date 14-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 14-03-2011
Date Of Final Hearing 14-03-2011
Next Hearing Date 14-03-2011
Assessment Year misc
Appeal Filed On 31-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI (BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER) .. I.T.A. NOS. 1423 & 1424/MDS/2010 M/S SIRADI SAINATHAR SAMARASA TRUST #288 4 TH WARD VADAKATTUPATTI POST SANARPATTI(VIA) DINDIGUL DISTRICT. PAN : AAHTS6860K (APPELLANT) V. THE INCOME TAX OFFICER WARD I(1) DINDIGUL. (RESPONDENT) APPELLANT BY : SHRI R. MANIMARAN RESPONDENT BY : SHRI K.E.B. RENGARAJAN JUNIOR STANDING COUNSEL O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINS T ORDERS OF THE CIT REFUSING REGISTRATION UNDER SECTION 12AA OF INCOME-TAX ACT 1961 (HEREINAFTER CALLED THE ACT) AND APPROVAL UN DER SECTION 80G OF THE ACT RESPECTIVELY. 2. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD FILED APPLICATIONS DATED 3.11.2009 ONE SEEKING REGISTRATION UNDER SECT ION 12AA OF THE I.T.A. NOS. 1423 & 1424/MDS/10 2 ACT AND OTHER SEEKING APPROVAL UNDER SECTION 80G OF THE ACT. THE CIT REQUIRED AN ENQUIRY REPORT FROM THE JURISDICTIO NAL ASSESSING OFFICER. THE ASSESSING OFFICER VIDE HIS REPORT DAT ED 28.4.2010 RECOMMENDED GRANT OF REGISTRATION AS A PUBLIC RELI GIOUS TRUST. ASSESSEE HAD SOUGHT REGISTRATION AS PUBLIC CHARITA BLE TRUST. LD. CIT NEVERTHELESS REFUSED TO ENTERTAIN THE APPLICATIONS OF THE ASSESSEE AND HELD THAT IT WAS NOT ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT NOR FOR APPROVAL UNDER SECTION 80G OF THE A CT. THE REASONS CITED BY THE CIT WERE AS UNDER:- (I) THERE WAS NO INFORMATION ON THE EDUCATIONAL QUALIFI CATION FINANCIAL CAPACITY AND PROFESSIONAL COMPETENCE OF TH E TRUSTEES TO RUN A CHARITABLE ORGANIZATION. (II) WHEN THE TRUSTEES WERE NOT COMPETENT TO RUN CHARITA BLE ORGANIZATION THE ACTIVITIES OF THE TRUST CANNOT BE CONSIDERED AS GENUINE. (III) THE FOUNDER AND MANAGING TRUSTEE SHRI S. RAJA WAS A N AGRICULTURAL COOLIE WITH AN INCOME OF RS.2000 TO RS .3000 PER MONTH AND THEREFORE HE COULD NOT CONTRIBUTE FO R ANY CHARITABLE ACTIVITY. (IV) NAME OF THE OTHER TRUSTEES HAVING SOURCE OF INCOME FOR RUNNING CHARITABLE ORGANIZATION. (V) EXPENSES DEBITED WERE NOT SUPPORTED BY PROPER EVIDEN CE. (VI) IT WAS INCOMPREHENSIVE HOW THE TRUSTEES WITH WEAK CREDENTIALS COULD MOBILIZE ANY DONATIONS FROM THE PU BLIC. 3. NOW BEFORE US THE LEARNED A.R. STRONGLY ASSAIL ING THE ORDER OF THE CIT SUBMITTED THAT THERE WAS NO MANDATE UNDER THE INCOME-TAX ACT THAT A FOUNDER OR A TRUSTEE SHOULD BE HAVING AN Y PARTICULAR LEVEL I.T.A. NOS. 1423 & 1424/MDS/10 3 OF EDUCATIONAL QUALIFICATION. ACCORDING TO HIM FO R DOING CHARITY ANY SPECIFIC EDUCATIONAL QUALIFICATION WAS NOT NECESSAR Y. FURTHER IT WAS POINTED OUT BY HIM THAT PUBLIC WOULD DONATE TO A PU BLIC CAUSE EVEN WHERE THE TRUSTEES WERE POOR. FURTHER ACCORDING T O HIM ASSESSEE HAD PRODUCED BOOKS OF ACCOUNTS AND THE ACCOUNTS STA TEMENTS WHICH PROVED CHARITABLE ACTIVITIES BEING CARRIED ON BY IT . IN ANY CASE ACCORDING TO HIM THE ACTIVITIES HAVING NOT BEEN DO UBTED REGISTRATION UNDER SECTION 12AA OF THE ACT AND APPROVAL UNDER SE CTION 80G OF THE ACT WERE ARBITRARILY UNJUSTIFIABLY REFUSED. 4. PER CONTRA THE LEARNED D.R. SUPPORTED THE ORDER S OF THE CIT. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. WE FIND THAT THE ORDERS OF THE CIT CANNOT STAND THE TEST OF LAW. PRIMARILY HE HAD GONE BY VARIOUS ASSUMPTIONS. FIRS T ASSUMPTION WAS THAT ONLY A PERSON WITH LARGE INCOME CAN DO CHARITY WORK. SECOND ASSUMPTION WAS THAT ONLY A PERSON WITH HIGH EDUCATI ONAL QUALIFICATION CAN DO CHARITY. THIRD ASSUMPTION WAS THAT ONLY PRO FESSIONALLY COMPETENT TRUSTEES WOULD BE ABLE TO RUN A PUBLIC CH ARITABLE TRUST AND COULD GIVE DONATIONS TO SUCH TRUST. THESE ARE IN OUR OPINION SIMPLY ASSUMPTIONS AND SURMISES. THE ACTIVITY AND GENUINE NESS HAVE TO BE I.T.A. NOS. 1423 & 1424/MDS/10 4 VERIFIED FROM THE OBJECTS MENTIONED IN THE TRUST DE ED AND THE ACTIVITIES ACTUALLY CARRIED ON BY A TRUST. THERE I S NO EVEN AN IOTA OF EVIDENCE SHOWN BY THE CIT FROM THE ACCOUNTS SUBMIT TED BY THE ASSESSEE-TRUST THAT ITS ACTIVITIES WERE NOT CHARITA BLE. THERE IS NO PROVISION IN THE INCOME-TAX ACT WHICH PRESCRIBES AN Y PARTICULAR LEVEL OF EDUCATION OR PARTICULAR LEVEL OF INCOME FOR A PE RSON TO BE A TRUSTEE OF A TRUST. JUST BECAUSE TRUSTEES WERE PERSONS WIT H LOW LEVEL OF INCOME WOULD NOT MEAN THAT THE TRUST WAS NOT GENUI NE. PURSUING A CHARITABLE ACTIVITY AND ASSOCIATING WITH IT IS THE RIGHT OF EVERY CITIZEN AND ANY DISCRIMINATION BASED ON EDUCATION FINANCIA L CAPABILITY ETC. IN THIS REGARD IS AGAINST THE SPIRIT OF CONSTITUTION AND CANNOT BE SUSTAINED. JUST BECAUSE THE ASSESSEE HAD MENTIONED THE TERM TEMPLE IN THE TRUST DEED CANNOT BE CONSIDERED AS A REASON FOR TREATING IT AS A RELIGIOUS INSTITUTION. BY THE MAN DATE OF SUB-SECTION (5) OF SECTION 80G OF THE ACT ANY EXPENDITURE INCURRED BY AN INSTITUTION OR FUND FOR RELIGIOUS PURPOSE IF IT DOES NOT EXCEE D 5% WOULD NOT DISENTITLE SUCH INSTITUTION OR FUND FROM CLAIMING R EGISTRATION UNDER SECTION 80G OF THE ACT. EVEN OTHERWISE ASSESSEES CONTENTION WAS THAT SIRADI SAIBABA SHRINE WAS VISITED BY PERSONS F ROM ALL COMMUNITIES AND IT WAS NOT A SHRINE BASED ON ANY RE LIGION. WE ARE OF I.T.A. NOS. 1423 & 1424/MDS/10 5 THE OPINION THAT ASSESSEE WAS UNJUSTIFIABLY DENIED REGISTRATION UNDER SECTION 12AA OF THE ACT AS ALSO APPROVAL UNDER SECT ION 80G OF THE ACT. WE THEREFORE QUASH THE ORDERS OF THE CIT AN D DIRECT HIM TO GRANT THE ASSESSEE REGISTRATION UNDER SECTION 12AA OF THE ACT AND APPROVAL SOUGHT UNDER SECTION 80G OF THE ACT. 6. IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE FOURTEENTH DAY OF MARCH 2011. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 14 TH MARCH 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-II MADURAI (4) D.R. (5) GUARD FILE