Income Tax Appellate Tribunal - Raipur
Shree Vimalnath Jain Swetamber Mandir ... vs The Commissioner Of Income Tax ( ... on 16 January, 2019
आयकर अपीलीय अधधकरण न्यायपीठ रायपुर में ।
IN THE INCOME TAX APPELLATE TRIBUNAL,
RAIPUR BENCH, RAIPUR
BEFORE SHRI ANIL CHATURVEDI, AM AND
SHRI PARTHA SARATHI CHAUDHURY, JM
आयकर अपील सं. / ITA No. 50/RPR/2018
Shree Vimalnath Jain Swetamber
Mandir Trust.
Nakoda Bhairav Nagar,
Pachpedi Naka
Raipur-492001 (CG)
PAN : AANTS8720L
.......अपीलाथी / Appellant
बनाम / V/s.
The Commissioner of Income Tax (Exemption)
Bhopal (M.P)
........प्रत्यथी / Respondent
Assessee by : Shri R.B Doshi
Revenue by : Shri P.K. Mishra
सुनवाई की तारीख / Date of Hearing : 15.01.2019
घोषणा की तारीख / Date of Pronouncement : 16.01.2019
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM :
This appeal preferred by the assessee emanates from the order of Ld. CIT (Exemption), Bhopal dated 28.03.2018. The only grievance of the assessee is rejection of application for granting registration u/s.12AA of 2 ITA No. 50/RPR/2018 the Income Tax Act, 1961 (hereinafter referred to as 'the Act') by the Ld. CIT (Exemption).
2. At the time of hearing, the Ld. AR of the assessee submitted that the Ld. CIT(Exemption) has rejected the application for granting registration u/s.12AA of the Act in the case of the assessee primarily because of two reasons:
i) That the objects of the Trust are only for benefit of Jain community and therefore, section 13(1)(b) of the Act is attracted. The membership of the Trust is limited to the people who are Jain Swetamber. This also attracts section 13(1)(b) of the Act.
ii) Donations, including corpus donations received in cash. However, no details of donors are mentioned in the receipt book.
2.1 The Ld. AR of the assessee vehemently argued that at the time of granting registration u/s.12AA of the Act, the objects of the Trust are only to be looked into and not the applicability of funds or the sources of the funds. In this regard, the Ld. AR of the assessee has placed reliance on the decision of the Hon'ble Rajasthan High Court in the case of CIT Vs. Vijay Vargiya Vani Charitable Trust in ITA No.17/2014 wherein the Hon'ble High Court categorically held that at the time of granting registration, the objects of the Trust for which it was formed, is only to be looked into and 3 ITA No. 50/RPR/2018 the CIT's satisfaction about genuineness of activities of the Trust was not criteria as the Trust was just commencing activities. 2.2 The Ld. AR of the assessee further contended that regarding whether the Trust is attracting section 13(1)(b) of the Act, is a matter to be looked into at the time of assessment by the Assessing Officer and it is not a matter of concern to be enquired at the time of granting registration u/s.12AA of the Act. In this regard, the Ld. AR has placed reliance on the decision of the Co-ordinate Bench of the Tribunal, Jaipur in the case of Bhagwan Mahavir Purusharth Prerna Nidhi Nyas Vs. Commissioner of Income Tax, in ITA Nos. 645 & 646/Jp/2011 wherein it was held that conditions mentioned in section 13(1)(b) do not apply to registration u/s.12AA of the Act. If the conditions of the section 13(1)(b) are violated, exemption u/s.11 of the Act is not to be allowed. However, such violation will not affect the registration. The conditions mentioned in section 13(1)(b) of the Act does not apply to registration u/s.12AA of the Act and therefore, registration could not be denied to the assessee, a charitable Trust, merely on the ground that it has given all scholarship to the students belonging to a particular community.
Similarly, the parameter of section 13(1)(b) of the Act has been analyzed in great details by the Co-ordinate Bench of the Tribunal, Pune in the case of Kul Foundation Vs. Commissioner of Income Tax, in ITA 4 ITA No. 50/RPR/2018 No.1692/PN/2013. It has been observed by the Co-ordinate Bench at the time of granting of registration that the powers of the CIT enshrined u/s.12AA of the Act, provided that the CIT is to look into the objects of the Trust and the genuineness of its activities. Merely because, one of the objects of the Trust was for the benefit of upliftment of the Jain Community as against the predominant object of providing education by the Trust or the Institution, the issue arises whether the grant of registration u/s.12AA of the Act could be denied to the assessee. The allowability of the deduction u/s.11 and 12 of the Act is to be looked into by the Assessing Officer while completing assessment in the hands of the assessee at the relevant time. Whether the said deduction u/s.11 and 12 of the Act is allowable or not to the Trust or the Institution by way of non- fulfillment of the conditions laid down in section 13(1)(b) of the Act is to be considered by the Assessing Officer while completing assessment in the hands of the assessee Trust or Institution. But the said violation by the Trust or Institution on account of provisions of section 13(1)(b) of the Act, if any, are not to be considered by the CIT while granting registration u/s.12A of the Act.
3. On the other hand, the Ld. DR has placed reliance on the order of the Ld. CIT (Exemption).
5ITA No. 50/RPR/2018
4. We have perused the case records and heard the rival contentions and considered the judicial pronouncements placed before us. We find that the Ld. CIT(Exemption) has refused registration u/s. 12AA of the Act to the assessee since donations received were not properly accounted for and also because that the objects of the Trust was for betterment of Jain Community and for benefit of the people of Jain Community which therefore, attracts section 13(1)(b) of the Act and so the registration u/s.12AA of the Act was rejected.
5. In deciding the issue, we take guidance from the decision of the Rajasthan High Court in the case of CIT Vs. Vijay Vargiya Vani Charitable Trust(supra.) wherein it has been held that at the time of granting registration u/s.12AA of the Act, the Ld. CIT(Exemption) should only look into the objects of the Trust. The issue regarding satisfaction of genuineness of the activities of the Trust is not a matter to be looked into at the time of granting registration u/s.12AA of the Act. That may be considered and decided accordingly at the time of assessment proceedings. Similarly, the Co-ordinate Bench of the Tribunal, Pune in the case of Kul Foundation Vs. CIT (supra.) has specifically observed the intricacy with regard to section 13(1)(b) of the Act which provides certain parameter following which the assessee /Trust or Institution will not get benefit of exemption u/s.11 and 12 of the Act. The Co-ordinate Bench of the 6 ITA No. 50/RPR/2018 Tribunal Pune Bench has specifically held that where the conditions of section 13(1)(b) is attracted so to denying exemption u/s.11 and 12 of the Act is a matter to be looked into by the Assessing Officer at the time of assessment proceedings. However, at the time of granting registration u/s.12AA of the Act, the main criteria which are to be looked into are:
i) Objects of the Trust;
ii) Whether the Trust has applied for registration u/s.12AA of the Act with proper details as enshrined in the Act.
iii) Whether the entire prescribed format for application as in the Act has been complied with;
Where the Trust attracts section 13(1)(b) of the Act and therefore, not entitled to the claim of deduction u/s.11 and 12 of the Act is a matter of concern only at the time of assessment proceedings.
6. We also observe the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax Vs. Barkate Saifiyah Society in ITA No.900 to 9-3/(Ahd.) of 1979 wherein it has been held that the provisions of section 13(1)(b) will apply only to the Trust which are purely for charitable purposes. If the assessee Trust has objects in both charitable and religious in nature, in such Trust, Section 13(1)(b) is not applicable.
7ITA No. 50/RPR/2018
We have perused the objects of the Trust placed in the paper book. We find that the assessee Trust has objects which are both charitable and religious in nature. Therefore, it can safely be said that assessee Trust is a composite Trust and not purely for charitable purposes. It is the Trust for both charitable and religious purposes. In such circumstances by applying the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax Vs. Barkate Saifiyah Society (supra.), section 13(1)(b) is also not applicable in the case of the assessee Trust herein.
7. That in examination of facts on records, analyzing the judicial pronouncements placed before us, we, therefore, set aside the order of the Ld. CIT(Exemption) and direct the grant of registration u/s.12AA of the Act to the assessee.
8. In the result, appeal of the assesse is allowed.
Order pronounced on 16th day of January, 2019.
Sd/- Sd/-
ANIL CHATURVEDI PARTHA SARATHI CHAUDHURY
ACCOUNTANT MEMBER JUDICIAL MEMBER
रायपुर/ RAIPUR ; ददनांक / Dated : 16th January, 2019. SB 8 ITA No. 50/RPR/2018 आदेश की प्रधतधलधप अग्रेधषत / Copy of the Order forwarded to :
1. अपीलाथी / The Appellant.
2. प्रत्यथी / The Respondent.
3. The CIT (Exemption), Raipur.
4. The Joint Commissioner of Income Tax (Exemption), Raipur
5. धवभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, रायपुर बेंच, रायपुर / The DR, ITAT, Raipur Bench, Raipur.
// True Copy // आदेशानुसार / BY ORDER, धनजी सधचव / Private Secretary आयकर अपीलीय अधधकरण, रायपुर / ITAT, Raipur.
9ITA No. 50/RPR/2018 Date 1 Draft dictated on 15.01.2019 Sr.PS/PS 2 Draft placed before author 16.01.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order