Income Tax Appellate Tribunal - Hyderabad
Sri Kamakoti Punya Bhoomi Trust, ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH 'A', HYDERABAD
BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND
SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
ITA No.1059/Hyd/10
Sri Kamakoti Punya Bhoomi V/s. Director of Income Tax-
Trust, Hyderabad (Exemption), Hyderabad
(PAN - AADTS 4001 L )
(Appellant) (Respondent)
Appellant by : Shri Pramod Avadhani
Respondent by : Shri Amlan Tripathi
ORDER
Per G.C.Gupta, Vice President:
This appeal by the assessee is directed against the order of the Director of Income Tax(Exemption), refusing renewal of registration under S.80G of the Income-tax Act, 1961.
2. Grounds of the assessee in this appeal read as follows-
"1. The learned Director of Income Tax(Exemption) Hyderabad has erred in rejecting the claim of the Trust for renewal of exemption U/s. S.80G(5)(vi) of the Income Tax Act, 1961.
2. The learned Director of Income Tax(Exemption) Hyderabad has erred in citing the A.P. High Court decision in the case of Arsha Vignana Trust 295 ITR 437 which is not at all applicable to the facts of the case.
3. The learned Director of Income Tax(Exemption) Hyderabad has held without verification of the fact that the objects of the Trust was religious in nature.2 ITA No.1059./Hyd/10
Sri Kamakoti Punya Bhoomi Trust, Hyderabad
4. The trust has never published any book on Vedanta till date.
5. The Trust has never run a "Veda Pathashala' for Propagation of Vedas as held by the Director of Income Tax(Exemption), Hyderabad.
6. The only activity of Trust is to do Charitable Activities.
7. The Director of Income Tax(Exemption) Hyderabad, has not considered the facts pleaded by the Petitioner in its application for renewal of exemption U/s. S.80G(5)(vi) of the Income Tax Act, 1961."
2. The learned counsel for the assessee submitted that the assessee-trust was registered under S.12A of the Act by the Commissioner of Income-tax and was also granted the benefit of S.80G of the Act. However, the application of the assessee for renewal of approval under S.80G filed on 15.12.2009 was rejected by the Director of Income Tax(Exemption). The only reason advanced by the Director of Income Tax(Exemption) for refusing approval under S.80G was that the assessee was engaged in the spread of knowledge of Vedanta and Advaita by publishing books and periodicals and also engaged in propagation of Vedas by running a residential Veda Patasala and that the assessee trust was created with the blessings of Shri Sankaracharya of Kanchi Kamakoti Peetham, which is a religious institution. The Director of Income Tax(Exemption) has referred to the decision of Hon'ble Andhra Pradesh High Court in the case of Arsha Vignana Trust (295 ITR 437)-AP. The learned counsel for the assessee submitted that the reasoning of the Director of Income Tax(Exemption) is patently contrary to facts. The assessee has not spent even a single rupee on publication of books and periodicals for the spread of knowledge in 'Vedanta' and 'Advaita' nor has it ever run a residential patasala for the propagation of Vedas. He submitted that the decision of the Hon'ble jurisdictional High Court in Arsha Vignana Trust (supra) is distinguishable on facts since in the case before the Hon'ble A.P. High Court, the assessee has published books on Ramayana, 3 ITA No.1059./Hyd/10 Sri Kamakoti Punya Bhoomi Trust, Hyderabad Mahabharatha and Darshanas. He submitted that the only activity undertaken by the assessee trust was giving scholarships to the poor and meritorious students studying in the affiliated schools, as is evident from the statement of accounts of the assessee for the last many years filed in the compilation by the assessee.
3. The learned Departmental Representative has opposed the submissions of the learned counsel for the assessee. He submitted that the decision of the Hon'ble Andhra Pradesh High Court in the case of Arsha Vignana Trust (supra) squarely applies to the facts of the case of the assessee. The objects of the assessee trust was to propagate the learning of Vadas by running residential Veda Patasalas and also to spread the knowledge of Vedanta and Advaitha by publishing books and periodicals and by holding seminars and lectures. He relied on the order of the Director of Income Tax(Exemption).
4. We have considered the rival submissions carefully and have perused the orders of the Director of Income Tax(Exemption) and also the various materials placed in the compilation by the assessee before us. We find that the assessee trust was granted registration under S.12A of the Act and the same has not been withdrawn by the Revenue till date. We find that the assessee has not published any book or periodical for spreading Vedanta and Advaita as recorded by the Director of Income Tax(Exemption) in his order. The assessee was not running any residential Veda Patasala at any point of time.
5. Regarding the mention of some objects for the spread of Vedas in the objects of the Trust Deed, we find that firstly Vedas could not be termed 4 ITA No.1059./Hyd/10 Sri Kamakoti Punya Bhoomi Trust, Hyderabad as religious books as it belongs to the whole mankind. Vedas means 'wisdom', 'knowledge' or 'vision'. Vedas incorporate knowledge on Ayurveda, Vastu Sastra and knowledge relating to all aspects of life. Vedas could not be termed as for propagation of Hinduism. There is no definite period when in fact, the Vedas came into existence and who wrote them. Vedas are for the benefit of mankind in general and handed down from generation to generation from the times immemorial and may be from the period prior to evolution of civilization. It is undisputedly the most comprehensive and universal of all ancient scriptures. Even otherwise, there is nothing unusual in mentioning some noble objects in the objects of a Trust, which may not have been carried out by the trust concerned. The test for the purposes of deciding whether the assessee trust is entitled to the approval under S.80G or not is that whether any of the activities undertaken by the assessee violates provision of S.80G(5) of the Act and in case there is no violation of any of the provisions under S.8G(5), there is no scope for rejection of renewal of registration under S.80G of the Act.
6. We find that the only activity undertaken by the assessee trust was to accept donations and to grant scholarships of small amounts to poor and meritorious students. In fact, scholarships have been titled as merit scholarships by the assessee and have been awarded to various students studying in affiliated schools in the State of Andhra Pradesh. The recipients of merit scholarships are not confined to a particular school and were studying in different affiliated schools. The assessee has filed photocopies of the receipts in respect of merit scholarships from the year 2006 to the year 2008 before us and a test check thereof shows that the students receiving merit scholarships have secured marks ranging from 77% to 95% in their qualifying examinations. The scholarship was given on the recommendation 5 ITA No.1059./Hyd/10 Sri Kamakoti Punya Bhoomi Trust, Hyderabad of the Head Master of the school in which the recipient of the merit scholarship was studying and the receipt is duly signed by the Head Master of the School as well as the parent of the beneficiary and the authorized trustee of the assessee trust. Details of the scholarships granted during the year 2009-10, as furnished by the assessee at pages 50 to 53 of the second compilation, are tabulated as under-
Sl. Name of the School No. of Students Range of class- Range of
No. to whom scholar- es in which percentage of
ship was granted concerned marks obtained
students were by the concern-
studying ed students in
the qualifying
examination
1. Vijayalakshmi High 12 Students Classes VII to 80 to 91
School, Santosh Nagar IX
Colony, Mehdipatnam,
Hyderabad
2. St. Lawreate School, 11 Students VI to X 81 to 89
SBI Colony, Kothapeta,
Hyderabad
3. Z.P.High School, 10 Students VI to X 75 to 95
Jillelaguda, Hyderabad
4. Swathi High School, 9 Students VIII to X 70 to 92
Madhapur, Hyderabad
5. Sarada High School, 12 Students VII to X 81 to 96
Kothaguda, RR District
6. NGRI School, Uppal 1 Student VI 96
Road, Hyderabad
7. Sri Saraswathi Sishu 16 Students VI to X 60 to 92
Mandir High School,
Badangpet, Hyderabad
8. Sri Saraswathi Sishu 28 Students VII to X 70 to 92
Mandiramu, Madhava
Naar, Saidabad
Hyderabad 58
9. Ramchand Girls High 4 Students VII to X 61 to 87
School, Andhra mahila
6 ITA No.1059./Hyd/10
Sri Kamakoti Punya Bhoomi Trust, Hyderabad
Sabha, Hyderabad
10. Z.P. High School, 8 Students VII to X 77 to 85`
Bahadurguda, Saroor
NagarMandal,
R.R.Dsitrict
11. Govt. High School, 1 Student X 70
Devai Jham Singh,
Gudimalkapur,
Hyderabad.
12. Govt. High School, 8 Students VIII to X 69 to 83
Kulsumpura, Hyd.
It is clear from the above tabulation that the students who are awarded scholarships are from various schools, ranging from Government Schools to public schools. Details furnished by the assessee in respect of the beneficiaries also reveal that the scholarships awarded by the assessee are not confined to any one community.
7. On an earlier date of hearing, the Tribunal has asked the assessee to file copies of the statement of accounts for the last three years. A perusal of the same filed by the assessee shows that the assessee trust in the year 2006-07 has received total donation of Rs.50,000 and the scholarships granted to the students during that year aggregated to Rs.50,000 and no other activity was undertaken by the assessee. In the accounting year 2007-08, assessee received donation of Rs.30,503 and the total amount of scholarships granted to students during that year was Rs.50,000, and thus there was in fact, deficit in that year, and no other activity was carried out by the assessee during that year as well. In the accounting year 2008-09, the total donation received by the assessee was Rs.48,601, as against the amount of total scholarships granted to the students during that year of Rs.50,000. In this year also, no other activity was undertaken by the assessee trust. The learned Departmental 7 ITA No.1059./Hyd/10 Sri Kamakoti Punya Bhoomi Trust, Hyderabad Representative could not controvert the fact emerging from these statements of account of the assessee for the last three years that the only activity undertaken by the assessee during these three years was distribution of scholarship amounts, and the assessee has not undertaken any publication of religious books nor was running a residential Veda Patasala at any point of time during the last three years. In these facts of the case, we find that the decision of the Hon'ble jurisdictional High court in the case of Arsha Vignan Trust (supra) was distinguishable on facts. In the case before the Hon'ble Andhra Pradesh High Court, the assessee trust has published various books on Ramayana, Mahabharata and Darshanan, and a clear finding of fact was recorded that the assessee has contravened the provisions of S.80G(5)(iii) of the Act. We find that the plea of the Director of Income Tax (Exemption) based on the fact that the assessee trust was created with the blessings of Shri Sankaracharya of Kanchi Kamakoti Peetham, which is a religious institution, is not sustainable in law. Mere fact that a trust was created with the blessings of a person associated with some religious institution, does not disqualify the assessee trust to claim the benefit of S.80G of the Act. The deciding factor is whether the assessee has undertaken any activity for the benefit of any particular religious community or caste or whether it has undertaken activity of some charitable nature. In the case of the assessee trust, the assessee has granted merit scholarships to poor and meritorious students of different affiliated schools, who have secured high percentage of marks in their qualifying examination on the recommendation of the Head Master of the concerned schools and such activity in the advancement of imparting education was clearly charitable in nature. The assessee has received a very small amount as donation during the last three accounting years, and has distributed the entire amount of donation and in two out of three years more than the amounts of donation received by it, was spent for 8 ITA No.1059./Hyd/10 Sri Kamakoti Punya Bhoomi Trust, Hyderabad the purpose of granting scholarships to the needy students. As a matter of fact, the assessee in this case has undertaken activities which are clearly of charitable nature and as such the assessee is entitled to the approval under S.80G of the Act. In these facts of the case, we hold that the assessee is entitled to the approval under S.80G of the Act and accordingly approval under S.80G of the Act is granted to the assessee and grounds of appeal of the assessee are allowed.
8. In the result, assessee's appeal is allowed.
Order pronounced in the Court on 11.2.2011
Sd/- Sd/-
(Chandra Poojari) (G.C.Gupta)
Accountant Member Vice President
DT/- 11.2.2011
Copy forwarded to:
1. Sri Kamakoti Punya Bhoomi Trust, C/o. M/s. Murthy & Kanth, Chartered Accountants, Flat No.113,Sovereign Shelters, 11-4-650, Niloufer Hospital Road, Hyderabad 500 064
2. Director of Income Tax(Exemption) Hyderabad
3. Dy. Director of Income Tax(Exemption), Hyderabad.
4. The Departmental Representative, ITAT, Hyderabad.
B.V.S