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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED
आदेश / O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order passed under section 80G(5)(vi) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") of the Commissioner of Income Tax, Rajkot-I [CIT in short] dated 11/01/2008.
The assessee has raised the following grounds of appeal:-
The Ld. Commissioner of Income-tax has erred in law and facts in rejecting to grant renewal for approval U/s. 80G(5) of the Income-tax Act, 1961. The trust deserves recognition of renewal of approval U/s. 80G(5).
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 2 - 2. The Ld. Commissioner of Income-tax has erred in law and facts in forming an opinion against the appellant that the object of the trust are of religious nature. The trust deserves recognition of renewal of approval U/s. 80G(5).
The Ld. Commissioner of Income-tax has erred in law and facts in forming an opinion against the appellant that the object of the trust are of religious nature although at para 5 of the order he admits that object of the trust are religious and charitable. The trust deserves recognition of renewal of approval U/s. 80G(5).
The Ld. C.I.T. has erred in coming to the conclusion that appellant is not fulfilling the condition for approval of the provisions of section 80G(5) of the IT Act. The trust deserves recognition of renewal of approval U/s. 80G(5).
The Ld. C.I.T. has erred in coming to the conclusion based on irrelevant aspect that the trust has not carried out activities which entitle it's for recognition U/s. 80G(5) as per object of the trust. The trust deserves recognition of renewal of approval U/s. 80G(5). 6. The Ld. C.I.T. has erred in not considering the real aspect of the provisions of section 80G(5) of the IT Act, 1961. The trust deserves recognition of renewal of approval U/s. 80G(5).
Taking into considering the legal, factual and statutory aspect of the object of the trust, the Ld. C.I.T. ought to have granted recognition U/s 80G(5) as applied for. It is therefore prayed that the order passed by the Ld. C.I.T. refusing to grant recognition U/s. 80G(5) may kindly be cancelled and he may be directed to grant recognition U/s. 80G(5) to the appellant as applied for.
Without prejudice, the Ld. CIT has erred in not granting adequate and reasonable opportunity. The order passed by the Ld. CIT needs cancellation / restoration to consider a fresh that the trust deserves recognition U/s. 80G(5).
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 3 - 9. Without prejudice, the order passed U/s. 80G(5) is bad in law deserves cancellation.
Without prejudice, the Ld. CIT has erred in law and facts in not considering the factual aspect that the trust was registered with the Charity Commissioner on 26-12-1988 and since then at every 3 years the trust was considered as eligible for registration and subsequent renewal U/s. 80G(5) on the same objects which has been accepted by the department and various Commissioner Sir and has granted recognisation as well as renewal till 31-3-2006. The application for further renewal under appeal is for the period from 1-4-2006 to 31-3- 2009 and thereafter there was no need for such approval for renewal because of amendments under the Income-tax Act requiring no approval subsequently. When on the same objects from 26-12-1988 to 31-3-2006 the trust is considered as eligible for recognisation U/s. 80G(5) not to consider the same for the period 1-4-2006 to 31-3-2009 where also there would be no need for seeking such approval thereafter, there is an absolute error in not considering the past history and actions of his predecessor accepted by the department. The trust deserves recognition of renewal of approval U/s. 80G(5).
The appellant craves leave to add/alter/amend and/or substitute any or all grounds of appeal before the actual hearing takes place.
The assessee has raised as many as 11 grounds of appeal, but the effective issue raised by the assessee is that Ld. CIT erred in not granting registration under section 80G(5) of the Act.
The facts of the case are that the assessee in the present case is a trust and engaged in the spiritual activities like the celebration of festivals, to coordinate and get-together the people of spiritual mind of Dyans, yoga, etc. The assessee was also registered under section 12AA of the Act vide
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 4 - No. CIT.R/65-R-70/88-89 dated 20-3-1989. The assessee was also holding valid registration under section 80G(5) of the Act up to 31st March 2006 from 31st March 1993.
As such the certificate granted under section 80G(5) of the Act was expired on 31st March 2006. Therefore the assessee vide application in form 10G dated 16th July 2007 applied for the renewal of the registration under section 80G(5) of the Act. But the Ld. CIT rejected the registration application of the assessee by holding that the objects of the trust are mixed as these cover religious and charitable activities. Therefore the Ld. CIT was of the view that the assessee does not deserve to get the certificate under section 80G(5) of the Act as per explanation 3 to section 80G of the Act. Accordingly the Ld. CIT rejected the registration application of the assessee.
Being aggrieved by the order of Ld. CIT, the assessee is in appeal before us. The Ld. AR before us filed a written submission which is reproduced as under: “Kind attention is invited to the hearing fixed of the above matter on 27-02-2019.
The Ld. C.I.T has rejected application made for renewal of registration U/s. 80G(5). The order itself state the following factual position. 3. As mentioned at para. 2 of the order the trust is registered U/s. 12A vide order dated 20-3-1989. This registration granted is still continued even today and not withdrawn.
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- 5 - 4. As mentioned at par. 3.1 registration U/s. 80G(5) was granted to the trust from 31-3-1993 to 31-3-2006.
There is no change in the object and activities of the trust since from its registration till date and the order passed by the Ld. C.I.T also itself no where mentioned that there is any change.
Thus base on the admission as per order under appeal right from insertation the trust object an activities remain the same and on that base the trust has been registered U/s. 12A since 20-3-1989 and registered U/s. 80G(5) till 31-3-2006. Now when the department has accepted these, the actions of the Ld. C.I.T. to reject application for renewal is erroneous and does not contain any thing to established that how department committed error in granting 12A and 80G(5] registration granted up till now. If he wants to defer with his past decisions then there must have been cogent evidence supporting his action but in the instant case nothing has been brought by the Ld. C.I.T to support his action which is purely change of opinion and that to without mentioning anything how the object of the trust are not charitable.
6.1 In fact the Ld. C.I.T. admit at para. 5 page no. 2 of the order as under.
From the free English translation of the trust given above, it is quite clear that the trust is having mixed objects that are religious and charitable.
6.2.2 Thus the Ld. C.I.T himself agrees that the trust has charitable objects. In respect of the trust contains mix object the matter is fully covered by the decision of Hon. I.T.A.T Ahmadabad (Copy enclosed) in the following case where the decision of the Hon. Gujarat High Court has been followed by the Hon. Bench.
6.3 In Jamiya Hamidiya Anjumane Himayatul Millat Trust v. CIT ITA No. 2145 (Ahd) of 2009 [Ahd 'A'- Trib), it was observed that though several objects are for the benefit of particular religious community, but there are various objects , which are charitable in nature and which are applicable to public at large without any discriminations of caste. Therefore, the assessee trust is a charitable cum religious trust to which
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 6 - section 13(l)(b) would not be applicable . The commissioner in his order under section 12AA has not pointed any other reason for refusing the registration of the assessee trust. In view of the above, respectfully, relying upon the decision of Hon. Jurisdictional High Court direct the Commissioner to grant registration to the assessee trust under section 12AA. (Copy enclosed)
7.1 In respect of factual aspect that assessee trust has been granted 12A certificate vide order dated 20-3-1989, as admitted by the Ld. C.I.T. that the Trust has been granted registration U/s. 12A, the Hon. Punjab and Haryana High Court has been pleased to decide the matter against the revenue as under to provide guidelines for renewal of approval vis-a-vis rule of consistency.
7.2 Since the assessee was covered under section 11, as registration under section 12AA had already been granted to it, therefore all the requirements were satisfied and hence, revenue was not justified in denying the recognition under section 80G (5) . - vide Arya Sanstha v. CIT (2012) 13 ITR 491 (jp - Trib). Also see, CIT v. Rajmala Education Society, ITA No. 820 of 2010 (P&H - HC).
7.3 And further registration granted to assessee under section 12A persist and has not been withdrawn, the denial of renewal of section 80G certificate was not justified - vide Gian Educational Society v. CIT (2010) 6 ITR 350( Del 'C' - Trib)
7.4 Thus when registration U/s. 12A is granted and is not withdrawn, denial of renewal of registration U/s. 80G(5) is erroneous.
8.1 In respect of position as admitted by the Ld. C.I.T that trust was granted registration U/s. 80G(5) from 31-3-1993 to 31-3-2006, without there being any change either in the object or activity of the trust the Punjab and Haryana High Courts provides guidelines that the action of the Ld. C.I.T to reject the renewal application is erroneous.
8.2 Activities of assessee - society were devoted to charity and social welfare activities. Even in earlier years similar activities had been accepted by revenue. Therefore Tribunal had rightly continued the benefits to assessee U/s 80G(5). The appeal was wholly without merit and the same was accordingly dismissed vide CIT v. Sewa Bharati
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 7 - Haryana Pradesh (2010) 325 ITR 599 (P&H). Also see, D.J. Shah Foundation v. DIT (Exemption) (2010) 6 ITR (Trib) 196 (Kol 'A' - Trib).
8.3 The above views has also been accepted in the following decisions Accepting the principals viz Renewal of approval vis-a-vis rule of consistency.
8.4. As there was no change in the facts and circumstances vis -a-vis the object of assessee - society which was promotion of the educational and the same was duly recognize by department by allowing registration under section 11AA as well as granting registration under section 80G , there was no justifiable reason for declining the continuation of registration so applied for. - vide Uddar Bharati v. Director of IT (Exemption) (2008) 24 SOT 147(Delhi Trib).
8.6 There were practically no changes in the objects and the original object of providing hostel accommodation remained the same. Only the scope was enlarged to all students. The only new object was medical - aid to poor which was also charitable. Thus, the objects continued to be charitable. The trust has already been registered under section 12A and the registration has not been cancelled. The assessing officer, therefore, cannot probe the objects and declare the trust invalid. Principle of consistency is also in favour of the assessee as based on the amended objects renewal consistency is also in favour of the assessee as based on the amended objects renewal of approval under section 80G has already been granted and factual and legal position remaining the same, there is no justification for rejecting the application for renewal under section 80G - vide Mehta Jivraj Makandas & Parekh Govndaji Kalyanji Modh Vanik Vidhyarthi Public Trust v. DIT (E) (2011)131 ITD 462 (Mum 'G' - Trib)
8.6 Right from 1936 the assessee has been carrying on its activities with the same intent and purpose pronounced by the father of nation and assessee was granted registration under section 10(23C)(iv), section 12A and section 80(5) , therefore, assessee trust was entitled to recognition under section 80G(5) - vide Sevagram Ashram Pratishthan v. CIT 2010 129TTJ [Nag- trib) 506.
8.7 In the past also renewal of recognition under section 80G(5) was granted from time - to - time. Director of IT (Exemption) was, therefore
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 8 - not justified for rejection of recognition under section 80G(5) - vide Envision v. Dy. Director of income tax (Exemption ) (2009) 124 TTJ (Bang- Trib) 714.
8.8 In Shiksha Sankalp Society v. CIT ITA No. 418 (Agra) of 2010 (Agra-Trib), renewal application under section 80G(5)(vi) was rejected mechanically without giving opportunity of being heard to assessee by merely relying upon order sheet of ITO (Tech. ) Since assessee enjoyed registration under section 12AA continuously and also complied with the provision of section 80G(5) , therefore assessee was entitled for grant of approval under section 80G(5).
8.9 And further registration granted to assessee under section 12A persist and has not been withdrawn, the denial of renewal of section 80G certificate was not justified - vide Gian Educational Society v. CIT (2010) 6 ITR 350( Del 'C - Trib)
8.10 Right from 1936 the assessee has been carrying on its activities with the same intent and purpose pronounced by the father of nation and assessee was granted registration under section 10(23C)(iv) , section 12A and section 80(5) , therefore, assessee trust was entitled to recognition under section 80G(5) - vide Sevagram Ashram Pratishthan v. CIT 2010 129TTJ (Nag-trib) 506. %
8.11 Amount in question having been advanced to lessor by the assessee educational society as refundable advances and there has been no change in the facts and circumstances of the case after the earlier approval was granted vide letter dated 19-4-2006, therefore, as per the rule of consistency , the director of IT (Exemption ) should have allowed the approval for renewal under section 80G vide - Skylark Educational Society vs. Director of IT (exemption )(2009) 24 DTR (Bang - Trib).
8.12 Further, the facts and circumstances prevailing in the period prior to 31/3/2009 had not changed materially thereafter , in view of foregoing reasons , it was held that CIT was not justified in denying renewal of approval under section 80G(5) (vi) - vide Shiv Shankar Memorial Education Society v. CIT (2012) 51SOT 279 (Del 'G' - Trib) :2012 147 TTJ ( Del 'G' - Trib) 753.
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 9 - 9. The humble attention of the Most Hon. Bench is also drawn to the position as mention at ground no. 10 which runs as under.
Without prejudice, the Ld. CIT has erred in law and facts in not considering the factual aspect that the trust was registered with the Charity Commissioner on 26-12-1988 and since then at every 3 years the trust was considered as eligible for registration and subsequent renewal U/s. 80G(5) on the same objects which has been accepted by the department and various Commissioner Sir and has granted recognisation as well as renewal till 31-3-2006. The application for further renewal under appeal is for the period from 1-4-2006 to 31-3- 2009 and thereafter there was no need for such approval for renewal because of amendments under the Income-tax Act requiring no approval subsequently. When on the same objects from 26-12-1988 to 31-3-2006 the trust is considered as eligible for recognisation U/s. 80G(5) not to consider the same for the period 1-4-2006 to 31-3-2009 where also there would be no need for seeking such approval thereafter, there is an absolute error in not considering the past history and actions of his predecessor accepted by the department. The trust deserves recognition of renewal of approval U/s. 80G(5).
It is therefore humbly prayed that the object of the trust as mention at para. 3 of the order describing charitable objects and also accepted by the Ld. C.I.T at pare 5 of the order, the rejection made by the Ld. C.I.T may kindly be cancelled and direction may kindly be issued to grant renewal of registration U/s. 80G(5) as applied for since the Hon. The decision of the Hon. Gujarat High Court followed by the I.T.A.T Ahmedabad and decisions of the Hon. Punjab and Haryana High Court against the revenue and Hon. I.T.A.T various benches having decided the matter against the revenue, as mention above, the prayer of the assessee may kindly be accepted.”
On the other hand, the Ld. DR vehemently supported the order of authorities below.
We have heard the rival contentions and perused the materials available on record. At this juncture we find important to refer the
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 10 - provisions as contained under explanation 3 to section 80G(5) of the Act which is reproduced as under: “Charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature.”
8.1. As per the above provision, the assessee cannot get the benefit of registration under section 80G(5) of the Act if it’s activities wholly or substantially the wholly are of religious nature. However, in this regard, we note that the Ld. CIT has not brought any specific instances suggesting that the activities of the assessee are religious in nature.
8.2. Besides the above, we also note that the assessee has been getting the registration under section 80G(5) of the Act right from the year 1993 to the year 31st March 2006 on the same kind of activities. It is also an undisputed fact that there was no change in the objects and the activities of the trust. Therefore we are of the opinion that the assessee deserves the registration under section 80G(5) of the Act as per the rule of consistency in view of the judgment of Hon’ble. Supreme Court in the case of Radhasoami satsang reported in 193 ITR 321 wherein it was held as under: “13. We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assess ment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
- 11 - 14. On these reasonings in the absence of any material change justifying the revenue to take a different view of the matter—and if there was no change it was in support of the assessee—we do not think the question should have been reopened and contrary to what had been decided by the Commissioner in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under sections 11 and 12.”
In view of the above, we reverse the order of Ld. CIT and direct him to grant the registration certificate under section 80G of the Act. Hence, the ground of appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
This Order pronounced in Open Court on 11/03/2019
Sd/- Sd/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 11/03/2019
ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS
ITA No.52/Rjt/2016 Rajkot Jilla Gayatri Parivar Trust vs. CIT
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)-concerned 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,राजोकट/DR,ITAT, Rajkot 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, राजोकट / ITAT, Rajkot 1. Date of dictation .. 4.3.19 (word processed by Hon’ble AM in his computer by dragon) 2. Date on which the typed draft is placed before the Dictating Member …6.3.19 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S…….12.3.19 7. Date on which the file goes to the Bench Clerk…………………12.3.19 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………