Income Tax Appellate Tribunal - Chennai
Shree Jain Sangh Trust, Chennai vs Assessee on 21 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
'D' BENCH, CHENNAI
BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER
AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
ITA No.14/Mds/2013
M/s. Shree Jain Sangh Trust, Vs. Director of Income Tax (Exemptions),
40, High Court Colony, Aayakar Bhawan Annexe
Villivakkam, M.G.Road,
Chennai-600 049. Chennai-600 034.
PAN:AACTS9660C
(Appellant) (Respondent)
Appellant by : Mr. K.Balasubramanian, Advocate
Respondent by : Mrs. Ruby George, CIT
Date of Hearing : 21st May, 2013
Date of Pronouncement : 25th June, 2013
ORDER
Per Challa Nagendra Prasad, JM :
This is an appeal filed by the assessee against the order of the Director of Income Tax (Exemptions) Chennai dated 26.11.2012.
2. The counsel for the assessee submits that Director of Income Tax (Exemptions), Chennai refused registration under section 12AA of the Act on the ground that objects of the trust deed contain both charitable as well as religious 2 ITA No.14/Mds/2013 activities. The Director of Income Tax (Exemptions) was of the view that the trust's intention is to engage in both charitable and religious activities and therefore, does not quality for registration under section 12AA of the Act. The counsel submits that in view of the decision of the Hon'ble Madras High Court in the case of CIT Vs. Arulmigu Sri Kamatchi Amman Trust (206 Taxman 69) the Director of Income Tax (Exemptions) is not justified in refusing registration under section 12AA of the Act on the ground that objects of the trust are both charitable and religious activities.
3. The Departmental Representative relied on the order of the Director of Income Tax (Exemptions) in refusing registration under section 12AA of the Act.
4. Heard both sides. Perused the order of the Director of Income Tax (Exemptions). The only ground on which the Director of Income Tax (Exemptions) refused registration was that the intention of the assessee trust is to engage both in charitable and religious activities simultaneously and 3 ITA No.14/Mds/2013 therefore does not qualify for registration. We find that this issue has been considered by the co-ordinate Bench of this Tribunal in the case of M/s. Seervi Samaj Tambaram Trust Vs. Director of Income Tax (Exemptions) in ITA No.2144/Mds/2012 vide order dated 20th March, 2013, wherein the Tribunal has held as under:-
"4. We have heard both sides. Perused the materials on record and the order of DIT(E). The Hon'ble Jurisdictional High Court in the case of CIT v. Arulmigu Sri Kamatchi Amman Trust (supra) held as under :-
"2. The respondent/assessee, viz., Arulmigu Sri Kamatchi Amman Trust, applied under Section 12AA of the Income Tax Act to the Commissioner of Income Tax, for the grant of registration of the Trust on the ground that the object of the Trust was religious. The Commissioner of Income Tax considered the said application and rejected the same by its order dated 11.11.2010 on the ground that the Trust was spending money in receipts towards religious and administrative purposes. According to the Commissioner of Income Tax, the activities claimed to have been carried out by the applicant Trust are admixture of both religious and charitable.
3. The Trust took the said order to the Income Tax Appellate Tribunal, which, by its order dated 13.62011 allowed the said appeal on the ground that there is no longer a provision having admixture of both religious and charitable objects. For the said purpose, the Tribunal had relied upon the judgments reported in Upper Ganges Sugar Mills Ltd. v . ClT [1997] 227 ITR 578/ 93 Taxman 645(SC) and State of Kerala v. MP. Shantiverma Jain [1998] 231 ITR 787 (SC).4 ITA No.14/Mds/2013
4. Heard Mr. T. Ravikumar, learned counsel appearing for the appellantlRevenue and perused the materials placed on record. The learned counsel would contend that the order passed by the Tribunal is without any basis and justification and that the Tribunal failed to appreciate the activities claimed to have been carried out by the assessee are admixture of both religious and charitable in nature. It is also further contended that the Commissioner of Income Tax made an enquiry as contemplated under Section l2AA(l)(b)(ii) of the Act and passed an order and the same is in accordance with law. It is also contended that the assessee is not entitled to claim exemption under Section 11 of the Act since the objects of the Trust are both charitable and religious in nature. Therefore, the learned counsel seeks to set aside the order of the Tribunal.
5. We have carefully considered the above submission. For the purpose of making an application under Section 12AA, the applicant must apply in Form 10. The said form prescribes the format of the notice of accumulation of income to be given by charitable and religious trusts under Section 11(2) of the Act. For the purpose of availing the benefit of Section 11, registration is required. Section 11(1)(a) reads as under:-
"11 (1). Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income--
(a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property;"
6. From a reading of the above, it is clear that the income derived from the property held under trust wholly for charitable or religious purposes, shall not be included in the total income of the Trust. Therefore, the 5 ITA No.14/Mds/2013 said provision would be applicable to both the Trusts established with the object of charitable as well as religious purposes Therefore, Section 12AA of the Act does not make any difference between the Trusts created with the object of charitable and religious purposes and, even if the Trust is not created with both the objects, law does not make any disqualification for the trust to make an application for registration. Therefore, the Tribunal has correctly applied the provision of law and allowed the appeal, which finding is based on valid material evidence. The finding of the Tribunal is not perverse and it is a question of fact. Therefore, we find no ground to cause our interference into the order passed by the Tribunal. Accordingly, the order passed by the Tribunal is confirmed and both the substantial questions of law raised herein are answered against the Revenue.
7. In the result, the appeal is devoid of merits and hence the same is dismissed.
In view of the decision of the Hon'ble Jurisdictional High Court, wherein it was held that registration under sec.12AA of the Act cannot be refused on the ground that Trust was created for the objects of charitable and religious purposes. The DIT(E)'s order is not correct in refusing registration. We also find that Hon'ble Gujarat High Court in the case of CIT v. Kutchi Dasa Oswal Moto Pariwar Ambama Trust (supra) held that registration under sec.12AA of the Act should not be refused on the ground that the activities of the Trust have not commenced. In view of the above, we direct the DIT(E) to grant registration under sec.12AA of the Act to the assessee Trust. The grounds raised by the assessee are allowed."
6 ITA No.14/Mds/20135. Respectfully following the order of the co-ordinate Bench of this Tribunal, we direct the Director of Income Tax (Exemptions) to grant registration to the assessee under section 12AA of the Act.
6. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on Tuesday, the 25th day of June, 2013, Chennai.
Sd/- Sd/-
( N.S. Saini ) (Challa Nagendra Prasad)
Accountant Member Judicial Member
Chennai,
Dated the 25th June, 2013.
somu
Copy to: (1) Appellant (4) CIT(A)
(2) Respondent (5) D.R.
(3) CIT (6) G.F.