Hindu Dharmsabha Seva Trust, , ... vs Assessee
- CitationITA No.2709/Ahd/2014
Ratio decidendi
The rule this decision rests on
The Tribunal set aside the Director's rejection and restored the matter for fresh consideration, without itself deciding whether the trust's objects disqualify it under section 80G(5)(iii) and Explanation 3. The reasoning that the decision rests on is as follows. Where the Director of Income Tax (Exemption) has rejected an application for approval under section 80G(5) on the ground that the trust's objects are expressed for the benefit of a particular religious community, and the assessee contends that its objects have since been modified through the prescribed procedure and that its actual activities are not confined to a particular community, the question of whether the amended objects and the nature of the activities satisfy the conditions of section 80G(5) must be examined by the Director in the first instance, and the matter is to be restored to the Director for de novo consideration rather than decided by the Tribunal on the record before it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Hindu Dharsabha Seva Vs Director of Income Tax Trust, (Exemption), Ahmedabad. A-404, New Avani Apartment, Near Ghia Nagar, Naroda, Ahmedabad. PAN: AABTH 1998P (Appellant) (Respondent)
Revenue by : Smt. Sonia Kumar, Sr.D.R. Assessee(s) by : Shri U.S. Bhati, A.R.
सुनवाई क तार ख/ Date of Hea ring : 22 /01/201 5 घोषणा क तार ख /Date of P ronouncement: 30/01/2015
आदेश /O R D E R
PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER
This is an Appeal filed by the Assessee arising from an order of the Director of Income Tax (Exemption), Ahmedabad dated 22.08.2014 passed u/s. 80G(5) of IT Act. The grounds raised are as under:
"1.0 The learned Director of Income-tax (Exemption) erred in law and on facts in rejecting the application for approval of the appellant society under section 80G of the Income Tax Act, 1961.
2.0 The learned Director of Income-tax (Exemption) erred in law and on facts in refusing the approval u/s 80G(5) of the Income Tax Act, 1961 to the appellant society under provisions of section 80G(5)(iii) read with Explanation 3 to the above section.
3.0 The learned Director of Income-tax (Exemption) further erred in law and on facts in holding that the appellant society is expressed for the benefit of a particular religion i.e. Hindu and therefore the activities of the society are not genuine.
ITA No.2709/Ahd/2014 Hindu Dharmsabha Seva Trust Vs Director of Income Tax (Exemption) Ahmedabad.
A.Y. Block Period -2- 4.0 Without prejudice to the above, the learned Director of Income-tax (Exemption) further erred in law and on facts in refusing approval u/s 80G(5) even in the context of modification report submitted to the office of the Charity Commissioner inserting the word "every' in place of 'Hindu Samaj' in the objects of the society."
2. The trust has moved an application on Form No.10G(5) seeking registration of Exemption u/s.80G(5) of IT Act. Learned Director of Income Tax (Exemption) has commented that the said application was not accompanied by the activities of the trust and a declaration u/s.11(5) of IT Act. A show cause notice was issued. On verification of Trust Deed, it was found that the trust was having the objects which were found to be religious in nature. The learned Director of Income Tax (Exemption) has reproduced the English translation of those objects. To overcome of this objection, the applicant trust has submitted a modified object and informed that the modified objects have also been forwarded to "Charity Commissioner". In place of Hindu Samaj, the trust has used the word "every" and on that basis pleaded to grant certificate of exemption. However, it was held that the assessee was not entitled to alter the objects. It was also mentioned that the "charitable purpose" does not include the purpose of religious nature by referring few case laws. Learned Director has held as under:
"3.4 Further, as per the provisions of Section 80G(5)(iii), the approval cannot be given if the institution/trust is expressed to be for the benefit of any particular religious community or caste.
As stated above, the trust is expressed for the benefit of a particular religion i.e Hindu.
3.5 In view of the above, it is held that Explanation 3 to section 80G and" provisions of Section 80G(5)(iii) are squarely applicable in this case. Therefore, considering this, since the trust is having religious objects and the same being created for the benefit of a particular religion i.e Hindu, its application for Exemption u/s. 80G(5) is hereby rejected.
4. Looking to the above facts, I am unable to arrive at the satisfaction of the genuineness of the activities. Hence, the application filed in Form No.10G for the approval u/s. 80G(5) of the Income-tax Act, is rejected."
ITA No.2709/Ahd/2014 Hindu Dharmsabha Seva Trust Vs Director of Income Tax (Exemption) Ahmedabad.
A.Y. Block Period -3-
3. With these factual backgrounds, we have heard both the sides. A compilation is placed before us containing the certificate of registration issued by Registrar of Society Ahmedabad, certificate of registration u/s.12AA issued by Director of Income Tax (Exemption) Ahmedabad dated 228.08.2014 and Memorandum of Association. As per the English translation, there were several objects of the trust for which it was created. However, an object of the trust was meant for the benefit of Hindu Society/Samaj. In fact, this object was questionable as per the provisions of IT Act. To overcome the said objection, the trust has amended its object but those amended objects have not been looked into by the Director of Income Tax. It has been argued before us that there is a specific procedure through which the object of a trust can be altered and that procedure was followed by the assessee. Thereupon the modified objects have also been submitted before the Charitable Commissioner. We have also been informed that the activity of the trust was not purely religious that too for a particular community. It is vehemently argued that by examining the nature of activity the assessee trust is in a position to establish that it was not created for a particular community. In this situation, when the assessee vehemently contesting that objects have been modified and the activities were not purely religious in nature therefore we deem it proper to restore this issue back to the stage of Director of Income Tax (Exemption) so that he can examine the correctness of the amended objects and the nature of the activities carried out by the trust. On being satisfied that the assessee had fulfilled the conditions prescribed u/s.80G(5); the requisite approval can be granted. Since, the matter has been restored back for denovo consideration; hence the ground raised by the assessee may be treated as allowed but for statistical purpose only.
ITA No.2709/Ahd/2014 Hindu Dharmsabha Seva Trust Vs Director of Income Tax (Exemption) Ahmedabad.
A.Y. Block Period -4-
4. In the result, Assessee's Appeal is allowed but for statistical purpose only.
Sd/- Sd/- (ANIL CHATURVEDI) (MUKUL Kr. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/01/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT 4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad
5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदेशानुस ार / BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
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