Income Tax Appellate Tribunal - Delhi
Ito (Exemptions), Dehradun vs Bharat Susamachar Samiti, Dehradun on 16 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'A' : NEW DELHI)
BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.235/Del./2015
(ASSESSMENT YEAR : 2009-10)
ITA No.236/Del./2015
(ASSESSMENT YEAR : 2011-12)
ITO (Exemption), vs. Bharat Susamachar Samiti,
Dehradun. Kulhan, PO - Sahastradhara Road,
Dehradun.
(PAN : AAABB0034D)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri George Koshi, Advocate
REVENUE BY : Shri Ravi Kant Gupta, Senior DR
Date of Hearing : 28.02.2018
Date of Order : 16.03.2018
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
Since common questions of facts and law have been raised in both the aforesaid appeals, the same are being disposed of by way of consolidated order to avoid repetition of discussion.
2. The appellant, Income-tax Officer (Exemption), Dehradun (hereinafter referred to as 'the Revenue') by filing the present appeals, sought to set aside the impugned orders, both dated 2 ITA Nos.235 & 236/Del./2015 07.10.2014 passed by Ld. CIT(Appeals)-I, Dehradun qua the assessment years 2009-10 & 2011-12 respectively on the identical grounds inter alia that :-
"1. The Ld. CIT(A) has erred in law and on facts of the case by allowing relief (of Rs.99,13,305/- in AY 2009-10 and Rs.2,11,41,720/- in AY 2011-12) by holding the "merely because the society or trust draws its inspiration for certain charitable activities from religious tenets as long as charitable activities of the society are not confined to the benefits of any particular community, it is entitled for exemption u/s 11 of IT Act, 1961" .
2. The Ld. CIT(A) has erred in law and on facts of the case by holding that merely because the assessee society/ trust based its activities on the basis of a religious calling, there is no reason to hold that Section 13(l)(b) of the I,T. Act, 1961 would be attracted it.."
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessee trust is a charitable society registered under section 12AA of the Income-tax Act, 1961 (for short 'the Act') w.e.f. 01.10.1987 with object to open school, colleges, orphanage and destitute home in Uttara Khand and Uttar Pradesh. However, during the course of assessment Assessing Officer proceeded to conclude that activities carried out by the society are not charitable as per section2(15) of the Act as the assessee had applied its income to a particular community and thereby withdrew the exemption u/s 11 of the Act by invoking the 3 ITA Nos.235 & 236/Del./2015 provisions contained u/s 13(1)(b) of the Act and assessed the total income of the assessee society at Rs.99,13,305/- and Rs.2,11,41,719/- for AYs 2009-10 and 2011-12 respectively.
3. Assessee society carried the matter before the ld. CIT (A) by way of filing appeals who has allowed the appeals by allowing the claim of the assessee society exempted u/s 11 of the Act. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeals.
4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
5. Undisputedly, the assessee society is a charitable society registered u/s 12AA of the Act w.e.f 01.10.1987. It is also not in dispute that in the earlier years, the assessee society has been continuously getting exemption u/s 11 of the Act and since then it has not amended its aims and object. It is also not in dispute that the main source of income of the society is foreign donation.
6. When we examine para 4.0 of assessment order for AY 2009-10, AO has categorically given the detail of application of income which is reproduced for ready perusal as under :- 4 ITA Nos.235 & 236/Del./2015
Total Fixed Running Total
Income Assets expendit application
during ure
the
year
Schools 5 40,54,754 16,73,360 55,19,963 71,93,323
Schools
College NTC 65,45,833 29,36,596 1,54,72,253 1,84,08,849
Hospitals Nil
Orphanages JJBVK, - 1,54,900 14,46,637 16,01,537
Pathri
Asylums Nil - - - -
Destitute Nil - - - -
homes
Handicraft Nil - - - -
institutions
Mechanical Nil - - - -
institutions
Other Nil - - - -
vocational
institutions
7. Application of income of the assessee trust tabulated above for the year under assessment shows that the primary object of the assessee society is to run the school, college and orphanage and has applied major portion of its income on the same.
8. During the assessment proceedings, the AO has traced out the history of assessee society from official website of Goods News for India and based his findings on the premise that assessee society runs schools with the motive to evangelize. However, there is no material or data on record to prove if the assessee society under the garb of running school and colleges applied for affiliation with ICSE and UGC has converted Indians into Christianity, particularly, when from the aims and objects of the 5 ITA Nos.235 & 236/Del./2015 assessee society it is apparently clear that it is imparting education and providing help to the orphans without any discrimination on the basis of religion, caste and creed.
9. So far as question of having "Theology" as a subject in the school and college curriculum is concerned, we are constrained to hold that imparting religious education along with our recognized education is part of the Indian heritage and any society/trust cannot be barred from claiming exemption u/s 11 of the Act merely because of the fact that it is imparting Theological courses to its students. Many institutions being run by different minorities and religious trust in India are invariably imparting religious education along with recognized curriculum to make the students better Indian.
10. Even, during the course of assessment proceedings, AO was requested by the assessee trust to visit any of its school or college or orphanage for making discreet enquiry if the assessee society is not carrying out its aims and objects and is into conversion. But instead of basing findings on the fact, AO proceeded on surmises that the activities of the assessee society are not genuine. During the assessment proceedings, it is categorically brought on record by the assessee trust that in Pathri, a connecting road to the school was connected by the local MLA from the MLA area fund and in 6 ITA Nos.235 & 236/Del./2015 Bhagwanpur, a local landlord has built about 14 rooms for the use of the school and the same was taken by the assessee trust on monthly rent.
11. It is also brought on record that after successful completion of the building of Narendra Nagar school, the Joint Director of Education visited the school on 07.05.2009 and the school has applied for ICSE affiliation. AO also relied upon Principal's annual report for 2008-09 of New Theological College, Dehradun but when the report is read as a whole, it is mentioned that, "the focus of their training therefore is on the character, skill and knowledge level of our trainees". No doubt, it is mentioned that their mission is to train Christ like servant leaders for Church and society, but it has merely given analogy to make better human beings.
12. This annual report cannot convert the nature of Trust merely because of the fact that vision is to produce committed leaders for the Church and society. Even perusal of the courses and method of learning explained by AO himself at page 55 of his order shows that apart from Theology, other subjects are also part of the school / college curriculum and above all, school and college education is being imparted indiscriminately.
7 ITA Nos.235 & 236/Del./2015
13. In para 3.18 of the assessment order, the AO has categorically held that, "It is not denied that the society is trying to help the poorest sections of society; but it is taking advantage of their poverty; assessee society is reaching them with the motive to bring them in the vineyard of Lord. The motive is not amelioration of poorest section of Indian community but to attain personal goals of serving Lord which in present context means conversion of unreached people." This goes to prove that when education is being imparted to the lowest strata of the society at school or college level without having any single instance of forced conversion pointed out by the AO, the entire findings of the AO are based upon conjectures and surmises.
14. Moreover, in AYs 2006-07, 2007-08 and 2008-09, assessee society has been found eligible by the Revenue authorities to claim exemption u/s 11 of the Act and since then there is no change in the aims and objects of the assessee society. More so, when the assessee society is expanding its horizon to impart the school and college education to the needy students, it cannot be deprived from claiming exemption u/s 11 of the Act.
15. The ld. CIT (A) while deciding the issue in controversy has thrashed each and every facts of the case in the light of the decisions rendered by the Hon'ble Supreme Court in cases of Sole 8 ITA Nos.235 & 236/Del./2015 Trustee, Lok Shikshan Trust vs. CIT - (1975) 101 ITR 235, CIT vs. Dawoodi Bohra Jamat - (2014) 364 ITR 361 (SC) and Hon'ble High Court of Kerala in CIT vs. St. Mary's Malankara Seminary - 348 ITR 69 (Kerala) and has rightly came to the conclusion that the donors might have donated money to the assessee society in the belief that they were propagating and promoting Christianity but the assessee society has confined its activities to the aims and objects laid down in the Memorandum of Association and the assessee society is imparting secular education and as such, provisions contained u/.s 13(1)(b) are not attracted and found the assessee society eligible for exemption u/s 11 of the Act. So, we find no illegality or perversity in the findings returned by the ld. CIT (A), hence both the appeals filed by the Revenue is hereby dismissed.
Order pronounced in open court on this 16th day of March, 2018.
Sd/- sd/-
(B.P. JAIN) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 16th day of March, 2018
TS
9 ITA Nos.235 & 236/Del./2015
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT-I, Dehradun.
5.CIT(ITAT), New Delhi. AR, ITAT
NEW DELHI.