Income Tax Appellate Tribunal - Chennai
Prayer For India, Tuticorin vs Assessee on 10 January, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
CHENNAI BENCH 'A' : CHENNAI
[BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND
SHRI HARI OM MARATHA, JUDICIAL MEMBER]
I.T.A No. 195/Mds/2011
Assessment year : 2008-09
M/s Prayer For India vs The CIT - I
6/519, 5th Street Madruai
St. Mary's Colony
Tuticorin 628 002
[PAN - AABTP3604Q ]
(Appellant) (Respondent)
Appellant by : Shri N.Devanathan
Respondent by : Shri Shaji P. Jacob
ORDER
PER HARI OM MARATHA, JUDICIAL MEMBER:
This appeal of the assessee-trust is directed against the order of the ld. CIT, Madurai, dated 10.1.2011, by which he has rejected the application for exemption u/s 80G(5)(vi) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act' for short).
2. In fact, the assessee-trust filed application for exemption u/s 50G(5) of the Act on 26.12.2008 alongwith application for grant of registration u/s 12AA of the Act. The application for registration was dismissed. The ld. CIT now refused to recognize the trust u/s 80G(5) because he had already refused to register the trust u/s 12AA of the :- 2 -: ITA 195/11 Act. Aggrieved the assessee went in appeal against rejection of registration. The Tribunal has allowed registration to the trust.
3. The case of the ld.AR appearing for the assessee-trust is that the Tribunal, vide its order dated 3.3.2011, has already granted registration to the trust u/s 12AA of the Act, hence, the reason given for denial of recognition u/s 80G(5) does not survive now. On the other hand, the ld.DR argued that even if the trust has been registered u/s 12AA of the Act, it is not a certificate for grant of recognition u/s 80G(5). According to him, a trust can be registered u/s 12AA of the Act even if its objects are charitable as well as religious in nature but for recognition u/s 80G(5), a trust which is also religious, cannot be recognized. To contradict this contention of the ld.DR, the ld.AR submitted that there is no such provision under section 80G as on date and hence, recognition has to be allowed to the assessee-trust.
4. After hearing both sides, we find that the reason for rejection of application filed u/s 80G(5)(vi) is only because the ld. CIT had refused to register the trust u/s 12AA of the Act. The relevant portion of the order contained in para 2, is being extracted herein-below, for ready reference:
"Vide separate order of even date, the application for registration u/s 12AA of the I.T.Act of this Trust has been rejected by the undersigned. Since clause(1) of section 80G(5) necessitates eligibility of exemption of the trust's income u/s 11 and 12, which in turn requires registration u/s 12AA of the I.T.Act, the trust makes itself ineligible for grant of initial exemption u/s 80G(5) of the I.T.Act.":- 3 -: ITA 195/11
5. From the above, it becomes crystal clear that the reason for refusal to grant exemption u/s 80G(5) is given as refusal to register the trust u/s 12AA of the Act. Admittedly, now the trust stands registered u/s 12AA with the date of application i.e 26.12.2008. Accordingly, from the order of the ld. CIT, we do not find any other reason for denial of exemption. Therefore, the arguments taken by the ld.DR would not help in confirming the impugned order of the ld. CIT. The decisions relied on by the ld.DR are not relevant for the simple reason that in that case the reasons to refuse exemption u/s 80G(5) are different from the reasons in the given case. Consequently, we direct the ld. CIT to grant recognition to the assessee u/s 80G(5)(vi) of the Act from the date of application i.e 26.12.2008.
6. In the result, the appeal of the assessee-trust stands allowed.
Order pronounced in the open court on 12.4.2011 Sd/- Sd/-
(DR. O.K. NARAYANAN) (HARI OM MARATHA)
VICE-PRESIDENT JUDICIAL MEMBER
Dated: 12th April, 2011
RD
Copy to: Appellant/Respondent/CIT(A)/CIT/DR