Income Tax Appellate Tribunal - Chennai
Jairam Educational Trust, Chennai vs Assessee on 26 February, 2010
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. 571/Mds/2010
Assessment year : N.A
M/s Jairam Educational Trust vs The CIT
No2, Deivanayagam Street Salem
Chennai 636 002
(Appellant) (Respondent)
Appellant by : Shri D. Anand
Respondent by : Shri K.E.B Rengarajan, Jr. Standing
Counsel
ORDER
PER HARI OM MARATHA, JM:
This appeal of the assessee is directed against the order of the ld. CIT, Salem, dated 26.2.2010, vide which application for renewal of exemption u/s 80G of the Income-tax Act, 1961 (hereinafter referred to as 'the Act' for short) was rejected.
2. The assessee-trust applied for renewal of exemption in Form 10G on 10.6.2009. Registration u/s 12AA was granted to it on 26.9.2006 and earlier such approval for exemptions u/s 80G were granted from 1.4.2006 to 31.3.2008 on 27.11.2006. The Assessing :- 2 -: ITA 571/10 Officer did not recommend the renewal of exemption u/s 80G because the objects of the trust deed executed on 26.3.1999 were not found to be charitable in nature. The objects are enumerated as under:
(a) To open, run, continue an educational and vocational school or institution Il1 healthy and salubrious surrounding.
(b) To establish, maintain or grant aid to homes for the aged, orphanages or other establishments for the relief and help to the poor, needy and destitute people, orphans, widows and aged persons.
(c) To establish and develop institutions for the physically handicapped and disabled or mentally retarded persons and to provide them education, food, clothing or other help.
(d) For aiding religious institutions and objects propagating philosophy, religion, Arts and culture.
(e) For contributing towards renovations of temples, charitable and religious institutions and much causes, in kind and by way of cash donations.
(f) For aiding professionals, technical and arts educational institutions and for awarding stipends, scholarship and such other helps to deserving cases of poor students in schools and colleges including free supply of books, refreshments and cloths.
(g) For providing medical help to the poor and helping medical institutions rendering such help.
(h) To accept donation, grants, presents and other offering and to deal with the same for the purpose of the Trust.
(i) For doing such other acts in addition to and in furtherance of the above subjects."
3. The case of the Revenue is that the assessee did not fulfill the condition laid in clause(iii) of sub-section (5) of section 80G according to which if the institutional fund is not expressed to be for the benefit :- 3 -: ITA 571/10 of any religious community or cause. But in this case the objects of the trust is for contributing towards renovation of temples, charitable and religious institutions and much causes, in kind and by way of cash donations. When called to explain against this, it was explained on behalf of the assessee-trust, as under:
"Clarification on the object clause 4 d:
Your lordship had called for our clarification on the object clause 4 d, wherein it was stated as follows "... for aiding religious institutions and objects propagating philosophy, religion, arts and culture......"
Your lordship had raised a query on this clause since it specifies religion. In this regard, I would like to state that this clause does not specify any particular religion. Our country is an ocean of almost all the religions existing in the earth and all the religions favour love and respect to every other living being, all the religions favour helping the poor and needy be it human being or any animal. The purpose of having this clause is only to further strengthen the object of the Trust, wherein our object is also to help aged, orphans, poor etc., this trust would only support those institutions following which ever religion, who are with an object similar to that of ours.
At no point of time till date the trust has spent its resources for propaganda of any particular religion or its belief. Similarly the other clauses also does not specify any particular religion or sector or community. Its only for those institutions that have objects similar to that of ours.
Hence, on the basis of the above submission, it is hereby sincerely prayed that the above object does not confine to any particular religion, sector. This clause is only in support of other main clauses."
4. But still the ld. CIT rejected the application with reference to the decision of Hon'ble Supreme Court rendered in the case of Upper Ganges Sugar Mills Ltd vs CIT, 227 ITR 578, in which it has been held :- 4 -: ITA 571/10 that donation given to an institution processing religious character fully or partly, would not secure the advantage of deduction u/s 80G. This decision was rendered in the context of claim of deduction by the donor to a trust. It was argued before us that the trust is continued to be registered u/s 12AA of the Act and exemption u/s 80G was granted earlier on 27.11.2006. Only by introducing the above mentioned items
(d) and (e), the ld. CIT has found that the same is hit by clause (iii) of sub-section (5) of section 80G. It was argued that at the time of grant of approval, this cannot be a relevant factor because as and when the assessment for a particular year is done this fact can be ascertained whether the assessee has, in fact, given any such aid to religious institution or not. It is found from the record that the trust was carrying on charitable activities and this fact has not been disputed by the ACIT and his team of inspectors who had visited the trust premises. When required to do, the trust explained its sand towards the specific queries raised with respect to books of account and other records. One more ground taken by the assessee is that application for approval of exemption u/s 80G was filed on 10.6.2009 and the order was passed on 26.2.2010 which is beyond six months (which comes almost eight months). This issue was not seriously contested by the ld.AR.
5. Per contra, the ld.DR has supported the appellate order. :- 5 -: ITA 571/10
6. We are of the considered opinion that the objects of the assessee-trust are only charitable in nature. The trust can be registered u/s 12AA only if its objects are charitable in nature. Undisputedly, the trust continues to be registered u/s 12AA of the Act. Hence, we do not find any valid reason to deny approval u/s 80G. The explanation, extracted above is sufficient to answer the doubts of the ld. CIT. Therefore, we direct him to grant approval u/s 80G to the assessee-trust.
7. In the result, the appeal of the assessee-trust stands allowed.
Order pronounced in the open court on 26.11.2010.
Sd/- Sd/-
(DR. O.K. NARAYANAN) (HARI OM MARATHA)
VICE-PRESIDENT JUDICIAL MEMBER
Dated: 26th November, 10
RD :
Copy to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR