Income Tax Appellate Tribunal - Hyderabad
Perika Vidyarthi Vasthi Gruham,, ... vs Assessee on 30 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "A", HYDERABAD
BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER
ITA No. 219/HYD/2013
Perika Vidyarthi Vasathi Gruham, ... Appellant
Hyderabad.
(PAN - AAAAP1469)
Vs.
Director of Income-tax(Exemptions), ...Respondent
Hyderabad.
Appellant by : Shri V. Sivakumar
Respondent by : Shri Gangadhar Panda
Date of Hearing : 30/05/2013
Date of Pronouncement : 26/07/2013
ORDER
PER ASHA VIJAYARAGHAVAN, J.M.:
This appeal preferred by the assessee is directed against the order of DIT(Exemptions), Hyderabad dated 30/01/2013.
2. Briefly the facts of the case are that the assessee trust filed application in Form No. 10G on 13/04/2009, seeking approval u/s 80G(5) of the IT Act, and the same was rejected by the DIT(E) on the ground that the assessee trust could not furnish the details called for by the DIT(E). However, referring to Item No. 3 of the Trust Deed, the DIT(E) noted that the predominant object of the trust is to provide facilities for the students of Perika community/caste and in view of the restriction in sub-clause (iii) 2 ITA No. 219/H/13 Perika Vidyarthi Vasathi Gruham of Sub-section (5) to section 80G of the Act, the assessee trust is not eligible for approval u/s 80G(5) of the Act. Therefore, he rejected the said application of the assessee trust for renewal of approval u/s 80G(5), vide his order dated 07/08/2009.
3. Aggrieved, the assessee filed an appeal before the ITAT, Hyderabad and the ITAT has set aside the matter to the file of the DIT(E) for reconsideration in accordance with law after affording an opportunity of being heard to the assessee.
4. Before the DIT(E), the AR appeared and submitted a copy of the G.O. Ms.No. 1973, dated 23/09/1970 issued by the Government of AP declaring Perika community is a backward class and, thus, the case of the assessee was covered by Explanation - 2 to section 13(1)(b) of the Act. The learned AR filed copies of income & expenditure account and receipts & payments account for the FY 2009-10, 2001-12. It was also brought to the notice of the DIT(E) renewal of approval has been allowed earlier till 31/03/2009 and requested that renewal of approval u/s 80G(5) of the Act may be accorded with effect from 01/04/2009.
5. The DIT(E) observed that the DIT(E) in his earlier order has held that predominant object of the trust is to provide facilities to students of Perika community/caste and however under Explanation - 2 to section 13(1)(b) reference is made to such trust or institution created for the benefit of persons belonging to more than one specific caste or specific class i.e., persons belonging to a number of communities on that account and reproduced Explanation - 2 to section 13(1)(b), as under:
"Explanation - 2 - A trust or institution created or established for the benefit of Scheduled Castes, backward classes, scheduled tribes or women and children shall not be deemed to be a trust or institution created or established for 3 ITA No. 219/H/13 Perika Vidyarthi Vasathi Gruham the benefit of a religious community or caste within the meaning of clause (b) of sub-section (1)."
6. The DIT(E) held that specific mention 'for the benefit of Scheduled Castes, backward classes, Scheduled Tribes' clearly shows that such trust should be for the benefit of a number of castes or a number of classes or number of tribes i.e., belonging to more than one caste or class or tribe and that such trust or institution shall not be created or established for the benefit of a religious community or caste within the meaning of clause (b) of sub-section (1). He also held that in the present case is meant for the benefit of persons or students only from Perika community, which fact is not disputed by the assessee and, hence, the trust is only meant for Perika community is not covered by Explanation - 2 to section 13(1)(b). Accordingly, he held that the assessee trust being for the benefit of students of only Perika community, does not fulfill the condition stipulated in clause (iii) to sub-section (5) to section 80G of the Act, hence, is not eligible for approval u/s 80G(5) of the Act.
7. Aggrieved, the assessee is in appeal before us and has raised five grounds of appeal, the sum and substance of which is the DIT(E) erred in rejecting the application filed by the assessee for renewal of approval u/s 80G of the IT Act.
8. The learned counsel for the assessee Shri Siva Kumar argued that DIT(E) erred in interpreting Explanation - 2 to section 13(1)(b), which refers to a trust created for the benefit of persons belonging to more than one specific caste or specific class and that since the assessee trust is meant for the benefit of persons or students of only one community viz., perika 4 ITA No. 219/H/13 Perika Vidyarthi Vasathi Gruham community, the DIT(E) has held that the assessee trust does not fulfill the condition stipulated in sec. 80G(5)(iii) of the Act.
9. The learned DR relied on the decision of the Hon'ble Supreme Court in the case of Palghat Shaadi Mahal Trust, 254 ITR 212 (SC).
10. We have heard the arguments of both the parties, perused the record and have gone through the orders of the authorities below as well as the decision cited. We find that at page 15 of the paper book, a copy of the letter is placed, which was issued by CIT, AP-I, Hyderabad, dated 24/06/1998 granting registration u/s 12A of the Act. On perusal of the Deed of Declaration of Trust, the Objects of the Trust, reads as under:
"In pursuances of these presents and for the consideration aforesaid for the benefit of educational facilities of poor and deserving students of the Perika community and any other Backward Classes if there be any surplus accommodation, with the consent of the Trust."
11. The question before us is whether the assessee trust fulfills the conditions stipulated in section 80G(5)(iii) of the IT Act as this meant only for the benefit of one community namely Perika community and not more than one community i.e. the Trust is not created or established for the benefit of SC, Backward classes and ST. For the proposition of plural include singular, we refer to the decision of Hon'ble MP High Court in the case of CIT Vs. Bhikamchand Jankilal, [1981] 131 ITR 554 (MP) wherein it has been held as follows:
"The opening words, no doubt, say that the enacting provision in the Explanation will apply where "speculative transactions " carried on by an assessee are of such a nature as to constitute a business. But much significance cannot be attached to the use of the expression "speculative transactions" in plural, for, as enacted in Section 13(2) of the General Clauses Act, 1897, the words in the singular include the plural and vice versa. Consistent with the 5 ITA No. 219/H/13 Perika Vidyarthi Vasathi Gruham presumption contained in Section 13(2) of the General Clauses Act, the expression "speculative transactions " should be read to mean "
speculative transaction or transactions". There is nothing in the context of Expln. 2 to show that to constitute a speculation business a different definition of " business " from that as given in Section 2(13) should be applied and that a single speculative transaction, though it is an adventure in the nature of trade, cannot amount to a speculation business. Contrary intention to exclude the operation of the rule that the plural includes the singular is not readily inferred. The rule is not excluded merely because the relevant provision is drafted in the plural and the subsidiary and ancillary provisions follow the same pattern and use plural words or words implying the plural. It is only when the substance and the tenor of the legislation as a whole suggests to the contrary that the rule, that the plural includes the singular and vice versa, can be taken to be excluded. [See Sin Poh Amalgamated (H.K.) Ltd. v. Attorney-General [1965] 1 All ER 225 (PC), Blue Metal Indus- tries Ltd. v. R. W. Dilley [1969] 3 All ER 437; [1971] 41 Comp Cas 833 (PC) and Floor v. Dams (Inspector of Tuxes) [1979] 2 AH ER 677 (HL)]. Applying these principles, we do not find anything- in the Explanation or in any other provision of the Act to show an intention to exclude the operation of the rule that the plural includes the singular."
12. In the case relied on by the Departmental Representative, the benefit under the Trust was available to all the muslims and not limited to muslims of Kerala, who alone were classified as backward classes. This is factually different and not applicable to the facts of the case.
13. We need not go into the rule of singular including plural and vice versa since in the present case object of the trust clearly states that the trust is created for rendering benefit of educational facilities for the poor and deserving students of Perika Community and any other backward classes if there be and hence the trust in the case before us the benefit is for more than one community and hence satisfies Explanation 2 to section 13(1)(b) of the IT Act.
6 ITA No. 219/H/13Perika Vidyarthi Vasathi Gruham
14. We find that 12A registration has been granted to the assessee and approval u/s 80G(5) has been granted earlier till 31/03/2009 and DIT(E) has denied approval with effect from 01/04/2009. Following the principle of consistency the DIT(E) could have granted approval u/s 80G(5).
15. Hence, considering the totality of facts placed before us, we direct the DIT(E) to grant renewal of approval u/s 80G(5) of the IT Act sought by the assessee.
16. In the result, appeal of the assessee is allowed.
Pronounced in the open court on 26 th July, 2013.
Sd/- Sd/-
(CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 26 th July, 2013.
kv
Copy to:-
1) Perika Vidyarthi Vasathi Gruham, No. 6-3-636, Perika
Bhavan, Rajbhavan Raod, Hyderabad - 04
2) DIT(E), 3 rd Floor Annexe, Aayakar Bhavan,
Basheerbagh, Hyderabad.
3) The ADIT(E) - I, Hyderabad
4) The Departmental Representative, I.T.A.T., Hyderabad.