Sundareswari Medical Educational Research Social Welfare Charitable Trust, Virudhunagar v. CIT, Madurai

ITA 1987/CHNY/2010 | misc
Pronouncement Date: 19-09-2011 | Result: Allowed

Appeal Details

RSA Number 198721714 RSA 2010
Assessee PAN AAITS3035M
Bench Chennai
Appeal Number ITA 1987/CHNY/2010
Duration Of Justice 9 month(s) 27 day(s)
Appellant Sundareswari Medical Educational Research Social Welfare Charitable Trust, Virudhunagar
Respondent CIT, Madurai
Appeal Type Income Tax Appeal
Pronouncement Date 19-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 19-09-2011
Date Of Final Hearing 19-09-2011
Next Hearing Date 19-09-2011
Assessment Year misc
Appeal Filed On 22-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE DR. O.K.NARAYANAN VICE-PRESIDENT AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO.1987(MDS)/2010 SUNDARESWARI MEDICAL EDUCATIONAL RESEARCH AND SOCIAL WELFARE CHARITABLE TRUST 180-KAMMAPATTI ST. SRIVILLIPUTHUR VIRUDHUNAGAR DT. -626125. PAN AAITS3035M. VS. THE COMMISSIONER OF INCOME-TAX-II MADURAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR ADVOCATE RESPONDENT BY : SHRI SHAJI P JACOB IRS SR.DR. DATE OF HEARING : 19 TH SEPTEMBER 2011 DATE OF PRONOUNCEMENT : 19 TH SEPTEMBER 2011 O R D E R PER DR.O.K.NARAYANAN VICE-PRESIDENT: THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX-II AT MADURAI DATED 18-1-2010 REJECTING THE APPLICATI ON FILED BY THE - - ITA NO 1987 OF 2010 2 ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME-TAX ACT 1961. 2. THE ASSESSEE IS A TRUST CONSTITUTED FOR THE PUR POSE OF CARRYING ON EDUCATIONAL ACTIVITIES. IN PURSUANC E OF ITS OBJECTIVE THE ASSESSEE IS RUNNING A TEACHERS TRAIN ING INSTITUTE. IT IS IN THIS CONTEXT THAT REGISTRATION HAS BEEN SO UGHT UNDER SECTION 12AA OF THE ACT. 3. THE FIRST APPLICATION FILED BY THE ASSESSEE WAS REJECTED BY THE COMMISSIONER OF INCOME-TAX. THEREA FTER THE ASSESSEE AGAIN SUBMITTED A FRESH APPLICATION FOR RE GISTRATION AFTER CURING CERTAIN DEFECTS POINTED OUT BY THE COM MISSIONER OF INCOME-TAX IN THE EARLIER APPLICATION FILED BY THE ASSESSEE. THE SECOND APPLICATION ALSO WAS REJECTED. THE PRESENT APPEAL ARISES OUT OF THE ABOVE SECOND ORDER. 4. ONE OF THE MAIN GROUNDS RAISED BY THE COMMISSIONER OF INCOME-TAX TO REJECT THE APPLICATIO N FILED BY THE ASSESSEE IS THAT THE ASSESSEE HAD NOT GONE IN APPEA L AGAINST HIS EARLIER ORDER REJECTING THE APPLICATION OF THE ASSESSEE. ANOTHER GROUND POINTED OUT BY THE COMMISSIONER OF I NCOME-TAX IS THAT THE ASSESSEE IS GENERATING PROFIT YEAR AFTE R YEAR AND - - ITA NO 1987 OF 2010 3 THEREFORE IN SUCH CIRCUMSTANCES THE ACTIVITIES OF THE ASSESSEE CANNOT BE TREATED AS CHARITABLE IN NATURE. 5. WE HEARD BOTH SIDES IN DETAIL AND CONSIDERED TH E MATTER. THE ASSESSEE IS A TRUST. IT IS RUNNING A T EACHERS TRAINING COLLEGE. THE ASSESSEE IS NOT CARRYING ON ANY OTHER ACTIVITIES. THE COLLEGE RUN BY THE ASSESSEE IS REC OGNISED BY THE STATE GOVERNMENT AS WELL AS BY THE UNIVERSITY. THE ASSESSEE IS CHARGING FEES AS PRESCRIBED BY THE COMPETENT AUTHOR ITIES. 6. THE COMMISSIONER OF INCOME-TAX HAS NO CASE THAT THE ASSESSEE HAS EVER CARRIED ON ANY OTHER ACTIVITI ES THAN RUNNING THE TRAINING COLLEGE. EDUCATION IS ONE OF THE PROMINENT CHARITABLE ACTIVITIES. WHEN THE ASSESSEE IS CARRYI NG ON EDUCATIONAL ACTIVITIES BY RUNNING THE TRAINING COLL EGE WHEN THERE IS NO ALLEGATION THAT THE ASSESSEE IS CARRYING ON A NY OTHER ACTIVITIES AND ALSO WHEN THERE IS NO CASE THAT THE FUNDS OF THE ASSESSEE TRUST HAVE BEEN USED FOR THE BENEFIT OF AN Y TRUSTEES OR RELATED PERSONS THERE IS NO REASON TO REJECT THE A PPLICATION FILED BY THE ASSESSEE. EARNING OF SURPLUS BY THE TRUST B Y ITSELF CANNOT BE A REASON TO UNDO ALL OTHER ENTITLEMENTS OF THE A SSESSEE. GENERATING SURPLUS IS NOT BY THAT WAY AGAINST THE P ROVISIONS OF - - ITA NO 1987 OF 2010 4 LAW. LAW INTERVENES ONLY WHEN THE SURPLUS IS APPLI ED FOR PURPOSES OTHER THAN CHARITABLE PURPOSES OR WHEN THE AUTHORITIES ESTABLISH A CASE OF PROFIT MOTIVE IN THE ACTIVITIES CARRIED ON BY THE ASSESSEE. NO SUCH HAZARDS ARE REFLECTED IN THE PRE SENT CASE. THEREFORE WE FIND THAT THE COMMISSIONER OF INCOME- TAX IS NOT JUSTIFIED IN REJECTING THE APPLICATION FILED BY THE ASSESSEE. ACCORDINGLY THE COMMISSIONER OF INCOME-TAX IS DIRE CTED TO GRANT REGISTRATION UNDER SECTION 12AA OF THE INCOME-TAX A CT 1961. 7. IN RESULT THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY THE 19 TH OF SEPTEMBER 2011 AT CHENNAI. SD/- SD/- (GEORGE MATHAN) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI DATED THE 19 TH SEPTEMBER 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.