The Nagara Trust, New Delhi v. DIT (E), Delhi

ITA 4272/DEL/2009 | misc
Pronouncement Date: 08-01-2010 | Result: Allowed

Appeal Details

RSA Number 427220114 RSA 2009
Assessee PAN AAATT4182A
Bench Delhi
Appeal Number ITA 4272/DEL/2009
Duration Of Justice 2 month(s) 2 day(s)
Appellant The Nagara Trust, New Delhi
Respondent DIT (E), Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 08-01-2010
Date Of Final Hearing 05-01-2010
Next Hearing Date 05-01-2010
Assessment Year misc
Appeal Filed On 05-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH F DELHI ] BEFORE SHRI A. D. JAIN JM SHRI K. D. RANJAN AM I. T. APPEAL NO. 4272 (DEL) OF 2009. ASSESSMENT YEAR : ----. THE NAGARA TRUST DIRECTOR OF INCOM E-TAX 16-A PALAM MARG VS. [ EXEMPTION ]; V A S A N T V I H A R N E W D E L H I. N E W D E L H I - 110 057. PAN / GIR NO. AAA TT 4182 A. ( APPELLANT ) ( RE SPONDENT ) ASSESSEE BY : SHRI M. S. SEKHON C. A.; DEPARTMENT BY : SHRI H. K. LAL SR. D. R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LD. DIRECTOR OF INCOME-TAX [EXEMPTIONS] NEW DELHI PASSED UNDER SECTION 80-G(5 )(VI) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT]. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO REJE CTING THE APPLICATION FOR RENEWAL OF RECOGNITION UNDER SECTION 80-G OF THE ACT. THE FAC TS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE TRUST WAS CONSTITUTED AS A PUBLIC CHARITAB LE TRUST AND WAS REGISTERED WITH SUB- 2 I. T. APPEAL NO. 4272 (DEL) OF 2009. REGISTRAR-VII NEW DELHI ON 7/7/1998. THE ASSESSEE TRUST WAS REGISTERED UNDER SECTION 12-A AND ALSO WAS GRANTED REGISTRATION UNDER SECTION 80- G OF THE ACT FROM ITS INCEPTION. THE LAST 80-G CERTIFICATE WAS ISSUED VIDE ORDER UNDER SECTIO N 80-G(5)(VI) DATED 10/10/2006 VALID FOR THE PERIOD 1/04/2006 TO 31ST MARCH 2009 SUBJECT TO CERTAIN CONDITIONS SPECIFIED IN THE ORDER. THE ASSESSEE VIDE APPLICATION DATED 13TH APRIL 200 9 SOUGHT RENEWAL OF RECOGNITION UNDER SECTION 80-G OF THE ACT FOR A FURTHER PERIOD BEYOND 31.03.2009. THE ASSESSEE FILED REQUISITE INFORMATION / CERTIFICATES / REPORTS IN SUPPORT OF THEIR CLAIM. THE LD. DIRECTOR OF INCOME-TAX [EXEMPTIONS] NEW DEL HI VIDE LETTER DATED 17/8/2009 REQUESTED THE ASSESSEE TO FILE CERTAIN INFORMATION INTER ALIA A NOTE ON ACTIVITIES OF THE SOCIETY SINCE ITS INCEPTION/DURING LAST THREE YEARS ALONG W ITH SUPPORTING DOCUMENTARY EVIDENCES. THE ASSESSEE DID NOT ATTEND ON 28/08/2009 AND IN RESPON SE TO REMINDER DATED 3/09/2009 CERTAIN INFORMATION WAS FILED VIDE LETTER DATED 4/09/2009 S TATING THEREIN THAT THE INSTITUTION FULFILS THE CONDITIONS LAID DOWN IN SECTION 80-G(5) FOR FURTHER RECOGNITION UNDER THE SECTION FROM 1/04/2009 ONWARDS. THE LD. DIT (E) HOWEVER REJECT ED THE CLAIM OF RENEWAL OF RECOGNITION UNDER SECTION 80-G OF THE ACT. IT HAS BEEN OBSERVE D THAT THE ASSESSEE TRUST HAD DERIVED INCOME FOR THE PERIOD ENDING ON 31ST MARCH 2009 FR OM SUBSCRIPTION OF MAGAZINE 'NISHAAN' AT RS.4 79 954.53 AND THE NET PROFIT FROM SUBSCRIPT ION WAS RS.2 69 79.47 WHICH GAVE THE NET PROFIT RATE OF 56.06 PER CENT. IN VIEW OF THESE FA CTS THE LD. DIT (E) WAS OF THE VIEW THAT THE ACTIVITY OF PUBLISHING MAGAZINE WAS PURELY A BUSINE SS ACTIVITY AND THEREFORE THE ACTIVITY CARRIED ON BY THE TRUST FELL UNDER THE FOURTH LIMB OF SECTION 2(15) I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. HE FURTHER NOTED THAT AS PER THE AMENDED PROVISIONS OF SECTION 2(15) THE ADVANCEMENT OF ANY OTHER PUBLIC U TILITY WILL NOT BE CHARITABLE IF IT WAS INVOLVED IN BUSINESS ACTIVITIES. HE THEREFORE CA ME TO THE CONCLUSION THAT IN VIEW OF AMENDED PROVISIONS OF SECTION 2(15) OF THE I. T. AC T 1961 THE ACTIVITIES CARRIED ON BY THE ASSESSEE WERE NOT CHARITABLE IN NATURE. THE LD. DI T (E) FURTHER NOTED THAT THE CONTENTS OF MAGAZINE INDICATED THAT THEY WERE DIRECTED FOR THE PROPAGATION OF AGENDA NEWS VIEWS ETC. IN RELATION TO SIKH COMMUNITY. EACH AND EVERY TOPIC I N THE MAGAZINE WAS IN RESPECT OF SOME ASPECT RELATED TO SIKHISM. THE CONTENTS OF THE MAG AZINE WERE PURELY RELIGIOUS IN NATURE. THEREFORE IN VIEW OF EXPLANATION 3 TO SUBSECTION ( 5) OF SECTION 80-G THE PURPOSE OF THE TRUST COULD NOT BE TERMED AS CHARITABLE. THE LD. DIT (E) FURTHER NOTED THAT THE PRINCIPLES OF INCONSISTENCY WAS NOT APPLICABLE ON THE GROUND THAT THE ORDERS GRANTING RECOGNITION UNDER 3 I. T. APPEAL NO. 4272 (DEL) OF 2009. SECTION 80-G HAVE BEEN ERRONEOUSLY ISSUED. HE PLAC ED RELIANCE ON THE DECISION OF HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF ARSHA VIJN ANA TRUST VS. D.P. SHARMA IRS DIRECTOR OF INCOME-TAX [EXEMPTION} 295 ITR 437 (AP) FOR THE PROPOSITION THAT IF AN EXEMPTION HAD BEEN GRANTED TO THE ASSESSEE-PETITION ER FOR A LONG PERIOD OF 20 YEARS BY MISCONSTRUING THE LAW THAT WOULD NOT BE BAR FOR TH E RESPONDENT TO PASS AN ORDER DENYING EXEMPTION WHILE APPLICATION OF GRANT OF EXEMPTION W AS MADE BEFORE HIM. HE ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT I N THE CASE OF DISTRIBUTORS (BARODA) P. LTD. VS. UNION OF INDIA & OTHERS 155 ITR 120 (SC) FOR TH E PROPOSITION THAT THE ERROR COMMITTED EARLIER SHOULD NOT BE REPEATED AND THE REQUIREMENT OF LAW WAS THAT CORRECT VIEW SHOULD BE TAKEN IN THE MATTER. THE LD. DIT (E) ACCORDINGLY R EJECTED THE RENEWAL OF EXEMPTION UNDER SECTION 80-G(5) OF THE ACT. 3. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT 80-G RECOGNITION HAD BEEN GRANTED FROM INCEPTION TILL 31ST MARCH 2009. NONE OF THE ACTIVITY OF THE ASSESSEE IS RELIGIOUS IN NATURE. SIMPLY BECAUSE THE MAGAZINE PUBLISHED BY TH E TRUST CARRIES NEWS AND VIEWS ABOUT SIKHISM IT CANNOT BE SAID THAT THE ACTIVITIES OF T HE TRUST ARE RELIGIOUS IN NATURE. THEREFORE THE LD. DIT (E) WAS NOT JUSTIFIED IN DENYING RENEWAL OF RECOGNITION UNDER SECTION 80-G OF THE ACT FOR THE PERIOD BEYOND 31ST MARCH 2009. ON THE OTH ER HAND THE LD. SR. DR SUPPORTED THE ORDER OF THE LD. DIT (E). HE FURTHER SUBMITTED THA T 80-G RECOGNITION CERTIFICATE CANNOT BE GRANTED TO THE INSTITUTIONS WHOSE ANY PURPOSE THE WHOLE OR SUBSTANTIALLY WHOLE IS OF A RELIGIOUS NATURE. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE TRUST WAS GRA NTED RECOGNITION UNDER SECTION 80-G UPTO 31ST MARCH 2009. THE RECOGNITION CERTIFICATE HAS BEEN REJECTED MAINLY ON TWO GROUNDS THAT THE PUBLICATION OF THE MAGAZINE 'NISHAAN' IS COMMER CIAL IN NATURE. SECONDLY THE MAGAZINE CARRIES THE PROPAGATION OF AGENDA NEWS AND VIEWS I N RELATION TO SIKH COMMUNITY. THE LD. DIT (E) HAS NOT POINTED OUT ANYTHING TO PROVE AS TO HOW THE ACTIVITIES BY WAY OF PUBLICATION OF MAGAZINE 'NISHAAN' IS RELIGIOUS IN NATURE. THE DIT (E) HAS ALSO NOT BROUGHT ON RECORD ANY MATERIAL TO PROVE AS TO HOW THE SUBSCRIPTION FE E RECEIVED INVOLVES CARRYING ON OF ANY ACTIVITY IN NATURE OF TRADE COMMERCE OR BUSINESS. MERELY BECAUSE THE RESULTANT AMOUNT IS A HIGHER PROFIT WOULD NOT BE CONCLUSIVE EVIDENCE THAT THE ASSESSEE TRUST WAS PUBLISHING THE 4 I. T. APPEAL NO. 4272 (DEL) OF 2009. MAGAZINE ON COMMERCIAL LINES. FURTHER THE LD. DIT (E) HAS RECORDED A FINDING THAT EARLIER RECOGNITION CERTIFICATES WERE ERRONEOUSLY GRANTED. THE LD. DIT (E) IS NOT AN APPELLATE AUTHORITY FOR HIS PREDECESSORS AND THEREFORE IT I S INCORRECT ON HIS PART TO SAY THAT THE RECOGNITION GRANTED EARLIER WAS ERRONEOUS. THEREFO RE WE ARE OF THE CONSIDERED OPINION THAT THE MATTER REQUIRES FURTHER EXAMINATION WHETHER THE PUBLICATION OF THE MAGAZINE 'NISHAAN' INVOLVES THE CARRYING OF THE RELIGIOUS ACTIVITY AND WHETHER PUBLICATION OF THE MAGAZINE HAD BEEN CARRIED OUT ON COMMERCIAL LINES OR THE SURPLUS IS INCIDENTAL TO THE PUBLICATION OF THE MAGAZINE IN LINES WITH THE OBJECTS OF THE TRUST. T HE LD. DIT (E) IS ALSO DIRECTED TO EXAMINE THAT WHICH OF THE PURPOSE IS WHOLLY OR SUBSTANTIALL Y IN WHOLE IS RELIGIOUS. WE ARE ALSO AWARE OF CHANGE IN SECTION 2(15) OF THE ACT W.E.F. 1.4.20 09. WE THEREFORE DIRECT THE LD. DIT (E) TO RECONSIDER THE CASE OF THE ASSESSEE FOR RECOGNITION UNDER SECTION 80-G KEEPING IN VIEW THE FACTS AND AS DISCUSSED ABOVE. 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 08TH JANUARY 2010. SD/- SD/- [ A. D. JAIN ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 08TH JANUARY 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 5 I. T. APPEAL NO. 4272 (DEL) OF 2009. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. 6 I. T. APPEAL NO. 4272 (DEL) OF 2009.