ADIT (E) II(2), MUMBAI v. ASHA HANDICRAFT ASSOCIATION, MUMBAI

ITA 2901/MUM/2013 | 2008-2009
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 290119914 RSA 2013
Assessee PAN AAATA0206A
Bench Mumbai
Appeal Number ITA 2901/MUM/2013
Duration Of Justice 2 year(s) 3 month(s) 15 day(s)
Appellant ADIT (E) II(2), MUMBAI
Respondent ASHA HANDICRAFT ASSOCIATION, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-07-2015
Date Of Final Hearing 23-07-2015
Next Hearing Date 23-07-2015
Assessment Year 2008-2009
Appeal Filed On 15-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI SANJAY GARG JUDICIAL MEMBER ITA NO.2901/M/2013 ASSESSMENT YEAR: 2008-09 ADIT(E)-II(2) R.N.507 PIRAMAL CHAMBERS LALBAUG PAREL MUMBAI - 400012 VS. M/S. ASHA HANDICRAFT ASSOCIATION ASHA HOUSE 28 SUREN ROAD ANDHERI E MUMBAI PAN: AAATA 0206A (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI M.J. KAPADIA A.R. REVENUE BY : SHRI SANJAY SINGH D.R. DATE OF HEARING : 23.07.2015 DATE OF PRONOUNCEMENT : 31.07.2015 O R D E R PER SANJAY GARG JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 29.01.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2008-09. 2. THE ISSUE RAISED IN THE PRESENT APPEAL IS WHETHE R THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT . THE ASSESSEE CLAIMED THAT IT WAS A CHARITABLE INSTITUTION ENGAGED IN GRO WTH AND DEVELOPMENT OF COTTAGE INDUSTRIES AND TO PROVIDE MARKETING FACILIT IES FOR NEEDY CRAFTSMEN DEFUSE THE KNOWLEDGE OF THE GOSPEL OF LORD JESUS CH RIST AND TO SHOW HIS LOVE BY WORD AND DEED AND ACTIVITIES OF CHARITABLE NATUR E TO BRING RELIEF TO ANY IN NEED. IT IS TO MENTION HERE THAT THE ASSESSEE HAS BEEN REGISTERED AS A CHARITABLE INSTITUTION UNDER SECTION 12A OF THE INCOME TAX ACT . THE ASSESSING ITA NO.2901/M/2013 M/S. ASHA HANDICRAFT ASSOCIATION 2 OFFICER (HEREINAFTER REFERRED TO AS THE AO) HOWEVE R OBSERVED THAT AS PER THE PROVISIONS OF SECTION 13(1)(B) IN CASE TRUST HAS BEEN ESTABLISHED AFTER COMMENCEMENT OF THE ACT EXEMPTION IS NOT AVAILABLE IF THE TRUST IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIG IOUS COMMUNITY. THE AO ALSO HELD THAT IN CASE OF MIXED OBJECTS I.E. PARTLY CHAR ITABLE AND PARTLY RELIGIOUS EXEMPTION UNDER SECTION 11 WAS NOT AVAILABLE. 3. THE LD. CIT(A) HOWEVER ALLOWED THE CLAIM OF TH E ASSESSEE WHILE RELYING UPON THE DECISION OF THE TRIBUNAL IN THE OW N CASE OF THE ASSESSEE FOR EARLIER ASSESSMENT YEARS I.E. A.Y. 2006-07 AND A.Y. 2007-08 VIDE COMMON ORDER DATED 31.10.11 IN ITA NO.5310/M/2009 AND ITA NO.5776/M/2010 RESPECTIVELY OBSERVING AS UNDER: 4.3 THE AR ALSO STATED THAT THE HON. ITAT VIDE THE IR ORDER ITA NO.5310/MUM/2009 AND ITA NO.5776/MUM/2010 DTD. 31.1 0.2011 FOR AY: 2006-07 AND 2007-08 RESPECTIVELY UPHELD THE ORDER OF THE CI T(A). THE RELEVANT PORTION OF ITAT ORDER IS EXTRACTED BELOW: THE ASSESSEE HAS SUBMITTED THAT DIFFUSING KNOWLEDG E OF THE GOSPEL OF JESUS CHRIST DENOTES ENCOURAGING PEOPLE TO SHOW THEIR LOV E TO FELLOW HUMAN BEINGS BY GOOD AND CHARITABLE DEEDS. THE DETAILS OF EXPENDITURE UNDER 'GOSPEL EFFORTS' HAVE BEEN REPRODUCED IN PARA -2.2 EARLIER WHICH SHOWS THAT THE EXPENDITURE HAD BEEN INCURRED ON CONDUCTING SCH OOLS RUNNING MEDICAL CENTRES AND PROVIDING RELIEF TO POOR. CIT(A) HAS GI VEN A CLEAR FINDING THAT THE AO HAD PLACED NO MATERIAL ON RECORD TO SHOW THAT TH E TRUST HAD BEEN CREATED FOR THE BENEFIT OF A PARTICULAR RELIGIOUS C OMMUNITY. NO SUCH MATERIAL HAS BEEN PLACED BEFORE US ALSO. PROVISIONS OF SECTI ON 11 ARE APPLICABLE EVEN IN CASES WHERE TRUST HAS MIXED OBJECTIVES. I.E. PAR TLY RELIGIOUS AND PARTLY CHARITABLE. THIS VIEW IS SUPPORTED BY THIRD MEMBER DECISION OF THE TRIBUNAL IN THE CASE OF SOCIETY OF PRESENTATION SISTERS VS. INCOME TAX OFFICER (121 LTD 422) (SUPRA). THE PROVISIONS OF SECTION 13(1)(B) ON WHICH THE AO HAS PLACED RELIANCE ARE APPLICABLE TO THE TRUSTS WHICH ARE PUR ELY CHARITABLE AND CREATED FOR A PARTICULAR COMMUNITY. THIS VIEW IS SUPPORTED BY THE JUDGMENT OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF BARKAT E SAIFIYAH SOCIETY (213 ITR 492). THE ASSESSEE TRUST IS PARTLY RELIGIOUS AN D PARTLY CHARITABLE AND IT HAS NOT BEEN CREATED FOR THE BENEFIT OF A PARTICULA R RELIGIOUS COMMUNITY AND THEREFORE IT IS NOT HIT BY THE PROVISIONS OF SECTIO N 13(1)(B). THE AO HAS PLACED RELIANCE ON THE JUDGMENT OF HON'BLE HIGH COU RT OF JAMMU AND KASHMIR IN CASE OF GHULAM MOHIDIN TRUST VS. CIT (24 8 ITR 587) (SUPRA) BUT ITA NO.2901/M/2013 M/S. ASHA HANDICRAFT ASSOCIATION 3 THE SAID JUDGMENT IS ALSO DISTINGUISHABLE AS IN THA T CASE THE TRUST HAD BEEN EXCLUSIVELY CREATED FOR A PARTICULAR RELIGIOUS COMM UNITY I.E. THE MUSLIM COMMUNITY. CONSIDERING THE ENTIRETY OF FACTS AND CI RCUMSTANCES WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) ALLOWING THE CLAIM OF EXEMPTION. THE ORDERS OF CIT(A) FOR BOTH THE YEARS ARE ACCORDINGLY UPHELD . 4.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT ASSESSMENT ORDER AND FACTS OF THE CASE. RESPECTFULLY FOLLOWIN G THE HON. ITATS ORDER THAT THERE IS NO VIOLATION OF SECTION 13(1)(B) OF THE I.T. ACT I HOLD THAT THE APPELLANT IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT. IN VIEW OF THE AB OVE I DIRECT THE AO TO ALLOW THE EXEMPTION U/S 11 OF THE ACT TO THE APPELLANT. 5. IN THE RESULT APPEAL IS ALLOWED. 4. THE LD. A.R. HAS BROUGHT OUR ATTENTION TO THE FA CT THAT THE ORDER OF THE TRIBUNAL WAS CHALLENGED BY THE REVENUE BEFORE THE H ONBLE BOMBAY HIGH COURT. THE HONBLE BOMBAY HIGH COURT AFTER CONSID ERING THE FACTS AND CIRCUMSTANCES OF THE CASE HAS DISMISSED THE APPEAL OF THE REVENUE OBSERVING AS UNDER: 4. WE DO NOT AGREE. THE CONCURRENT FINDINGS OF FAC T ARE THAT BEARING IN MIND THE OBJECT AND PURPOSE OF THE TRUST AND WHICH HAVE TO BE READ AND CONSTRUED IN TOTALITY THIS IS NOT THE TRUST WHICH WILL FALL WITHIN THE PURVIEW OF CLAUSE (B) OF SUB-SECTION (1) OF SECTION 13 OF THE INCOME TAX ACT. THE COMMISSIONER AS ALSO THE TRIBUNAL HAS FOUND THAT THERE IS NO DIS PUTE THAT THE TRUST IS REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT. THE OBJEC TS OF THE TRUST HAVE BEEN REPRODUCED. THE ASSESSING OFFICER HIMSELF FOUND TH AT SAVE AND EXCEPT OBJECT NO.1 WHICH WAS RELIGIOUS THE OTHER OBJECTS ARE CHARITAB LE IN NATURE. THE OBJECTS WERE THUS OF A NATURE AS WOULD NOT COME WITHIN THE PURVI EW OF CLAUSE (B) OF SUB-SECTION (1) OF SECTION 13 THE INCOME TAX ACT 1961. THE TRI BUNAL ALSO THE COMMISSIONER OF INCOME TAX (APPEALS) HAVE UPON PERUSAL OF THE OBJE CT AND THE ENTIRE MATERIAL ON RECORD HELD THAT THIS IS NOT A CASE WHERE DIFFUSIN G KNOWLEDGE OF THE GOSPEL OF JESUS CHRIST OR OTHER OBJECTS DEMONSTRATES THAT THE TRUST HAS BEEN CREATED FOR BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. THERE IS NO MATER IAL PLACED OF THAT NATURE. IN SUCH CIRCUMSTANCES THE VIEW TAKEN BY THE COMMISSIONER O F INCOME TAX (APPEALS) AND THE INCOME TAX APPELLATE TRIBUNAL IN THE FACTS PECU LIAR TO THE RESPONDENT - ASSESSEE CANNOT BE SAID TO BE VITIATED BY AN ERROR OF LAW AP PARENT ON THE FACE OF RECORD OR PERVERSITY. IN THE FACTS AND CIRCUMSTANCES OF THE P RESENT CASE NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERMINATION AND CONSID ERATION OF THIS COURT. 5. CONSEQUENTLY THE APPEAL FAILS AND IS DISMISSED. ITA NO.2901/M/2013 M/S. ASHA HANDICRAFT ASSOCIATION 4 5. SINCE THE ISSUE IS SQUARELY COVERED BY THE DECIS ION OF THE HONBLE BOMBAY HIGH COURT HENCE RESPECTFULLY FOLLOWING SAM E THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 31.07.2015. * KISHORE SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR ITAT MUMBAI.