Income Tax Appellate Tribunal - Cochin
Qadosh Christian Church Mission, ... vs Assessee on 14 August, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH, COCHIN
BEFORE S/SHRI N.R.S.GANESAN, JM and CHANDRA POOJARI, AM
I.T.A. No. 774/Coch/2013
Assessment Year : -
Qadosh Christian Church Vs. The Commissioner of Income-tax,
Mission, Kottayam.
Pullavallil Building, Pullad P.O.,
Thiruvalla,
Pathanamthitta-689548
[PAN: AAACQ 2662D]
(Assessee -Appellant) (Revenue-Respondent)
Assessee by Shri Thomas K. George, CA
Revenue by Shri M. Anil Kumar, CIT(DR)
Date of hearing 22/07/2014
Date of pronouncement 14/08/2014
ORDER
Per CHANDRA POOJARI, Accountant Member:
This appeal filed by the assessee is directed against the order dated 10-10-2013 passed by the Ld. CIT, Kottayam u/s. 12AA of the Act.
2. The solitary issue in this appeal is with regard to rejection of the application filed by the assessee for registration u/s. 12AA of the I.T. Act 2 I.T.A. No. 774/Coch/2013
3. The brief facts of the case are that the assessee was an institution incorporated u/s. 25 of the Companies Act, 1956 on 15-09- 2010. Thereafter, the assessee filed an application in prescribed form on 12-04-2013 for registration u/s. 12AA of the I.T. Act. The same was rejected by the CIT on the reasoning that there are only three shareholders and the number of shares of each share holder is 340 shares, 330 shares and 330 shares respectively. The total number of shares subscribed is 1000 and each share is valued at Rs. 100/-. Since there are only three shareholders, there is no wider participation of other people. The institution has only narrow capital base and there is no building asset. In view of the above, the activity of the institution was not up to satisfactory level of the CIT. Accordingly, the application for registration u/s. 12AA of the Act was rejected by the CIT. Against this, the assessee is in appeal before us.
4. We have heard both the parties and perused the material available on record. A reading of the provisions of sub- section (a) and
(b) of sec. 12AA makes it clear that the CIT has to satisfy himself about the genuineness of the activities of the Trust or institution and also about the objects of the Trust or institution. On being satisfied about the genuineness of the activities of the Trust or institution and also about the objects of the Trust or institution, the CIT can call for such 3 I.T.A. No. 774/Coch/2013 documents or information from the Trust or institution as he thinks necessary and he is also empowered to make enquiries as he may deem necessary in this behalf. Unless the object of the Trust or institution is not in consonance with the public policy or that they are not the objects of any charitable purpose, registration cannot be refused on this ground. Charitable purpose has been defined in section 2(15) of the I.T. Act which reads as under:
"Charitable purpose" includes relief of the poor, education, medical relief, [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest,] and the advancement of any other object of general public utility:
Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity:
Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is [twenty-five lakh rupees] or less in the previous year;"
5. With regard to the genuineness of the activities of the Trust, if the objects did not run contrary to the public policy and are in fact, related to the charitable purpose, CIT is again empowered to make enquiries as he thinks fit. If there is apprehension that income of the Trust or institution is being misused or if there is some apprehension 4 I.T.A. No. 774/Coch/2013 that the same would not be used in the proper manner and for the purpose relating to any charitable Trust or institution, rejection can be made. The provisions of sec. 12AA does not contain any reason, as alleged by the CIT for refusing registration u/s. 12AA of the Act. The reasons advanced by the CIT in his order does not mention that the assessee is not carrying on any activity for charitable purpose and the reason advanced by him is not appropriate for denial of registration u/s. 12AA of the Act. The language used in this section only requires that the activities of the Trust or institution must be genuine, which accordingly, would mean, that they are in consonance with the objects of the Trust/institution, and which are not mere camouflage but are real, pure and sincere and not against the proposed object of the Trust. The profit earning or misuse of income derived by charitable Trust or institution from its objects, may be good reason for refusing registration u/s. 12AA of the Act. Being so, in our opinion, the reason advanced by the CIT cannot be upheld for refusing registration u/s. 12AA of the Act, if other requirements of the Act have been complied with by the assessee, the registration is to be granted by CIT. Accordingly, we remit this issue back to the file of the CIT for reconsideration. 5 I.T.A. No. 774/Coch/2013
6. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Pronounced accordingly on 14-08-2014.
sd/- sd/-
(N.R.S.GANESAN) (CHANDRA POOJARI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Place: Kochi
Dated: 14th August, 2014
GJ
Copy to:
1. Qadosh Christian Church Mission, Pullavallil Building, Pullad P.O., Thiruvalla, Pathanamthitta-689548
2. The Commissioner of Income-tax, Kottayam.
3. D.R., I.T.A.T., Cochin Bench, Cochin.
4. Guard File.
By Order (ASSISTANT REGISTRAR) ITAT COCHIN