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Income Tax Appellate Tribunal - Chennai

Desperate For Him Ministries, , Chennai vs Assessee on 29 May, 2012

             IN THE INCOME TAX APPELLATE TRIBUNAL
                           'A' BENCH, CHENNAI

       BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
        AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER

                          I.T.A. No. 690/Mds/2012


M/s Desperate For Him Ministries,
94/95, Avalkara Street, Kosapet,                 The Director of Income Tax
Vellore - 632 001.                        v.     (Exemptions),
                                                 Chennai - 600 034 .
PAN : AABTD4793Q
      (Appellant)                                    (Respondent)

                   Appellant by  :             Shri S. Sridhar, Advocate
                   Respondent by :             Shri Sanjay Punglia, JCIT

       Date of Hearing                :        29.05.2012
      Date of Pronouncement           :        29.05.2012


                                O R D E R


PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

In this appeal, assessee is aggrieved that DIT(Exemptions), Chennai, denied registration sought by it under Section 12AA of Income- tax Act, 1961 (in short 'the Act').

2. Short facts apropos are that assessee-Trust established on 31st December, 2008 through a Trust deed executed and registered on 2nd January, 2009, had applied for registration under Section 12AA of the Act before the DIT(Exemptions), Chennai. DIT(E) sought certain 2 I.T.A. No. 690/Mds/12 clarifications on such application. Based on the letter issued by DIT(E) , assessee appeared before him and submitted the details on 29.12.2011. The DIT(E) was of the opinion that the Trust deed consisted of mixed objects, i.e. both religious and charitable objects. According to him, when the objects were mixture of both charitable and religious, it could not be given registration under Section 12AA of the Act. He, therefore, refused registration sought by the assessee under Section 12AA of the Act.

3. Now before us, learned A.R., assailing the order of DIT(E), submitted that the objects of the assessee-Trust could be either charitable or religious and just because it was a mixture of charitable and religious objects, registration could not be denied. Reliance was placed on the decision of Third Member of Cochin Bench of the Tribunal in the case of Society of Presentation Sisters v. ITO (2009) (121 ITD

422) and that of Hon'ble jurisdictional High Court in the case of CIT v. Arulmigu Sri Kamatchi Amman Trust in TCA No.643 of 2011 dated 25th January, 2012.

4. Per contra, learned D.R. supported the order of DIT(E) .

5. We have perused the order of DIT(E) and heard the rival submissions. The only reason why the DIT(E) denied registration 3 I.T.A. No. 690/Mds/12 sought by the assessee-Trust was that its objects contained both religious and charitable. There was no finding that any of the objects were not public in nature. Sections 11 and 12 of the Act facilitate registration for both public religious Trust and public charitable Trust. Just because objects are mixture of charity and religion, registration could not be denied. Exemption under Sections 11and 12 of the Act could not be denied to a Trust simply because it had objects which could be termed as religious as well as charitable or vice versa. This view taken by the Third Member decision of the Tribunal in the case of Society of Presentation Sisters (supra), has also been accepted by Hon'ble jurisdictional High Court in the case of Arulmigu Sri Kamatchi Amman Trust (supra). Para 6 of the judgment is reproduced hereunder:-

"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 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."

We are, therefore, of the opinion that the reason cited by the DIT(E) for denial of registration was not justified. The order passed by DIT(E) is quashed and he is directed to grant the assessee registration sought by it under Section 12AA of the Act.

6. In the result, appeal filed by the assessee is allowed. The order was pronounced in the Court on Tuesday, the 29th of May, 2012, at Chennai.

                sd/-                                    sd/-
       (Challa Nagendra Prasad)                    (Abraham P. George)
         Judicial Member                           Accountant Member

Chennai,
Dated the 29th May, 2012.

Kri.

               Copy to:    (1)   Appellant
                           (2)   Respondent
                           (3)   DIT(Exemptions), Chennai
                           (4)   D.R.
                           (5)   Guard file