Living Spring, CHENNAI v. ITO, Nagercoil

ITA 182/CHNY/2012 | misc
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 18221714 RSA 2012
Assessee PAN AAATL9231E
Bench Chennai
Appeal Number ITA 182/CHNY/2012
Duration Of Justice 2 month(s)
Appellant Living Spring, CHENNAI
Respondent ITO, Nagercoil
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-03-2012
Assessment Year misc
Appeal Filed On 30-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABARAHAM P.GEORGE ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY JUDICIAL MEMBER .. ITA NO.181/MDS./2012 ITA NO.182/MDS./2012 LIVING SPRING NO.180 JOSHUA STREET NAGERCOIL 629 001. VS. THE COMMISSIONER OF INCOME TAX WARD 1(1) NAGERCOIL. PAN AAATL 9231 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.S.SRIRAMAN ADVOCATE DEPARTMENT BY : SHRI S.MOHARANA C.I.T. DR DATE OF HEARING : 27.03.12 DATE OF PRONOUNCEMENT : 30.03 .12 O R D E R PER ABARAHAM P GEORGE ACCOUNTANT MEMBER : THESE ARE APPEALS OF THE ASSESSEE DIRECTED AGAIN ST THE ORDERS DATED 28.12.2011 OF COMMISSIONER OF INCOME T AX-1 MADURAI DENYING ITS REGISTRATION U/S.12AA OF THE IN COME TAX ACT 1961 (IN SHORT THE ACT) AND ITS APPLICATION FOR APPROVAL U/S.80G(5) OF THE ACT RESPECTIVELY. 2. WHILE DENYING THE REGISTRATION SOUGHT U/S.12AA OF THE ACT COMMISSIONER OF INCOME TAX NOTED THAT ASSESSEE WAS ITA. 181/182 /MDS/12 2 HAVING TWIN OBJECTIVES SOME OF WHICH WERE CHARITAB LE AND SOME OF WHICH RELIGIOUS IN NATURE. ACCORDING TO TH E COMMISSIONER OF INCOME TAX TRUST DEED OF THE ASSES SEE SHOWED THAT THE ACTIVITIES CARRIED OUT BY THE TRUST WAS ADMIXTURE OF BOTH RELIGIOUS AND CHARITABLE. COMMIS SIONER OF INCOME TAX ALSO NOTED THAT THE ASSESSEE-TRUST WAS C REATED ON 14.09.2011 AND THE TRUST HAD NOT CARRIED OUT ANY WO RTHWHILE CHARITABLE ACTIVITIES. IN THIS VIEW OF THE MATTER HE DENIED THE ASSESSEE-TRUST REGISTRATION U/S.12AA OF THE ACT. SI NCE THE REGISTRATION U/S.12AA WAS NOT ALLOWED HE ALSO DENI ED THE APPROVAL SOUGHT U/S.80G OF THE ACT. 3. NOW BEFORE US THE LD. AUTHORIZED REPRESENTATIV E OF THE ASSESSEE STRONGLY ASSAILING THE ORDER OF THE COMMIS SIONER OF INCOME TAX SUBMITTED THAT REGISTRATION U/S.12AA COU LD NOT BE DENIED EVEN IF OBJECTS WERE BOTH RELIGIOUS AND CHAR ITABLE TRUST SINCE SECTIONS 11 AND 12 CLEARLY ALLOWED EXEMPTION EVEN FOR PUBLIC RELIGIOUS TRUSTS. INSOFAR AS OBSERVATION OF THE C.I.T. THAT ACTIVITIES WERE NOT CARRIED OUT IN ANY WORTHWHILE M ANNER SUBMISSION OF THE LD.AR WAS THAT THE ASSESSEE-TRUST WAS ONLY FEW MONTHS OLD AND IT COULD NOT BE EXPECTED THAT SU BSTANTIAL ACTIVITIES WOULD HAVE HAPPENED IN SUCH A SHORT SPAN OF TIME. RELIANCE WAS PLACED ON THE DECISION OF HONBLE KARN ATAKA ITA. 181/182 /MDS/12 3 HIGH COURT IN THE CASE OF DIT(E) V. MEENAKSHI AMMA ENDOWMENT TRUST (2011) 50 DTR (KAR) 243. PER CONTR A LD. DR SUBMITTED THAT ASSESSEE EVEN IF IT WAS ELIGIBLE FOR REGISTRATION U/S.12AA OF THE ACT IT COULD NOT BE G IVEN AN APPROVAL U/S.80G OF THE ACT SINCE IT HAD SUBSTANTI AL RELIGIOUS OBJECTS AS WELL. 4. WE HAVE PERUSED THE ORDER OF COMMISSIONER OF IN COME TAX AND HEARD THE RIVAL CONTENTIONS. TWO REASONS H AVE BEEN CITED BY THE COMMISSIONER OF INCOME TAX FOR DENYING REGISTRATION U/S.12AA OF THE ACT. FIRST IS THAT TH E ASSESSEE HAD OBJECTS WHICH WERE ADMIXTURE OF BOTH RELIGIOUS AND CHARITABLE. THERE IS NO FINDING BY THE COMMISSIONER OF INCOME T AX THAT THESE OBJECTS WERE NOT OF A PUBLIC NATURE THOUGH I T WAS RELIGIOUS AND CHARITABLE. IN OUR OPINION AS LONG AS THE OBJECTS WERE PUBLIC WHETHER RELIGIOUS OR CHARITABLE ASSES SEE WAS ELIGIBLE FOR REGISTRATION U/S.12AA OF THE ACT. IN TAKING THIS VIEW WE ARE FORTIFIED BY A THIRD MEMBER DECISION OF THIS TRIBUNAL IN THE CASE OF SOCIETY OF PRESENTATION SISTERS VS. ITO 121 ITD 422 (COCHIN)(TM). SECOND REASON CITED BY THE COMM ISSIONER OF INCOME TAX IS THAT ASSESSEE-TRUST HAD NOT CARRIE D OUT ANY WORTHWHILE ACTIVITY. ADMITTEDLY ASSESSEE-TRUST WA S CREATED ONLY ON 14.09.2011 AND ITS APPLICATION FOR REGISTR ATION ITA. 181/182 /MDS/12 4 U/S.12AA OF THE ACT WAS FILED ON 22.11.2011. THERE FORE NOT EVEN FOR TWO MONTHS HAD ELAPSED FROM THE DATE OF FO RMATION OF THE TRUST. IN OUR OPINION IT MAY NOT BE POSSIBLE FOR A TRUST TO HAVE HUGE ACTIVITIES IN SUCH A SHORT SPAN OF TIME. IN THE CASE OF DIT(E) V. MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA) H ONBLE KARNATAKA HIGH COURT HAS DEALT WITH A CASE WHERE TR UST WAS ESTABLISHED BY A DEED DATED 23 RD JANUARY 2008 WHICH SOUGHT A REGISTRATION U/S.12AA OF THE ACT ON 31 ST OCTOBER 2008. DIRECTOR OF INCOME TAX (EXEMPTION) HAD DENIED SUCH REGISTRATION ON A GROUND THAT THE ASSESSEE HAD NOT YET COMMENCED ITS ACTIVITY. THEIR LORDSHIP HELD THAT SU CH A DENIAL OF REGISTRATION WAS NOT JUSTIFIED SINCE ONE CANNOT EXPECT AN ASSESSEE TO CARRY OUT CHARITABLE ACTIVITIES IMMEDIA TELY ON ITS FORMATION AND THERE WAS NO REASON FOR COMING TO A C ONCLUSION THAT THE TRUST WAS NOT INTENDING TO DO ANY CHARITAB LE ACTIVITY. THEREFORE WE ARE OF THE OPINION THAT THIS REASON C ITED BY THE COMMISSIONER OF INCOME TAX IS ALSO NOT JUSTIFIED. NEVERTHELESS IT REMAINS AN UN-REFUTED FACT ASSESSEE WAS ALSO HAVING RELIGIOUS OBJECT THOUGH PUBLIC IN NATURE. H ENCE IT COULD NOT CLAIM AN APPROVAL U/S.80G OF THE ACT FOR THE S IMPLE REASON THAT CLAUSE (II) OF SUB-SECTION (5) TO SECTION 80G OF THE ACT CLEARLY SPECIFIES THAT THE INSTRUMENT UNDER WHICH T HE INSTITUTION ITA. 181/182 /MDS/12 5 IS CONSTITUTED SHALL NOT CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME THE WHOLE OR ANY PART OF T HE INCOME FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE. THERE FORE THE COMMISSIONER OF INCOME TAX THOUGH NOT JUSTIFIED IN DENYING THE REGISTRATION SOUGHT U/S.12AA WAS RIGHT IN DENY ING THE APPROVAL SOUGHT U/S.80G OF THE ACT. IN THE RESULT WE DIRECT THE COMMISSIONER OF INCOME TAX TO GIVE THE ASSESSEE REG ISTRATION SOUGHT U/S.12AA OF THE ACT WHILE SUSTAINING HIS ORD ER DENYING APPROVAL SOUGHT U/S.80G OF THE ACT. 5. TO SUMMARIZE THE APPEAL OF THE ASSESSEE IN ITA NO.181/MDS./12 STANDS ALLOWED WHEREAS APPEAL IN ITA NO.182/MDS./12 IS DISMISSED. ORDER PRONOUNCED ON 30 TH MARCH 2012. SD/- SD/- ( VIKAS AWASTHY ) (ABRAHAM P. GEORGE ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 30 TH MARCH 2012. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 181/182 /MDS/12 6