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Income Tax Appellate Tribunal, [ DELHI BENCH “A”: NEW DELHI ]
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M.
This appeal is filed by the ld. DCIT (Exemption) Circle, Ghaziabad for Assessment Year 2012-13 against the order of the ld. Commissioner of Income Tax (Appeals), Dehradun, dated 19.05.2017.
The solitary ground of appeal is as under:- “ The Ld. CIT (Appeals) has erred in law and on facts in deciding that the assessee is eligible for exemption u/s 11 of I.T. Act, 1961 as the activities carried out by the society during the instant Assessment Year were not found to be covered by any limb of ‘charitable purpose’ as defined in section 2(15) of the I. T. Act, 1961. “
3. The brief facts of the case shows that assessee is a Society registered under the Societies Act as well as under Section 12AA of the Act. It carries out object of education. It has schools in Uttarakhand and Western UP. The ld. Assessing Officer noted the return filed by the assessee on 27.09.2012 declaring ‘NIL’ income for the assessment year 2012-13 claiming exemption under Section 11 of the Act. The case of the assessee was selected for Page | 1 scrutiny as limited scrutiny because the receipt of the assessee from foreign donation more than Rs.1 crore. The ld. AO examined the object and the activities of the trust. He examined the annual reports and held that the activities of the trust were carried on for benefit of a particular community and, therefore, it is not carrying on its activity for any charitable purposes as defined under Section 2(15) of the Act. Therefore, according to him assessee is not entitled to exemption under Section 11 of the Income Tax Act. Therefore, he considered the total receipt of the assessee at Rs.6,58,53,934/- reduced this by the expenditure incurred by the assessee at Rs.8,70,88,959/- and determined a loss of Rs.2,12,35,025/- as per order dated 13.03.2015. Such order was passed under Section 143(3) of the Act. The assessee aggrieved with that order preferred an appeal before the ld. CIT (Appeals) wherein he followed his own order for assessment years 2009-10 and 2011-12 in assessee’s own case and allowed the appeal of the assessee vide para Nos. 14 and 15 of the order as under:-
“ 14 I have duly considered the facts and circumstances of the case. In the assessee’s own case for the AY. 2009-10 & 2011-12 in Appeal Nos.241/CIT(A)-1/DDN/2011-12 & 623/C!T(A)-l/DDN/2013-14 respectively, I have held as under:-
I have duly considered the facts and circumstances of the case. , the observation of the Assessing Officer, replies of the assessee and the paper book submitted by it and the judgments cited in support of its claim. While the views as expressed on the website of Good News for India and represented by the foreign donors which contribute to the assessee society are relevant basis of information, they remain the views of third parties and cannot be said to be reflective of the activities of the assessee society. Ultimately, the assessee society has to be judged according to the rules and regulations under which it was set up in India and asking whether its activities have been in compliance with the rules and regulations as laid out in the Memorandum of Association on the basis of which it was granted registration and exemption from tax under Indian I.T.Act, 1961. I have perused the Memorandum of Association of the assessee society. The aims and objects of the society are mainly to establish, found, take over, maintain, manage school, colleges, hospitals, orphanages, asylums, destitute homes, handicraft institutions, mechanical institutions and such other vocational institutions for men. women and children without regard to their caste, color, community, creed, nationality, race, religion or sex. The objects are also to train suitable men and women for moral and ethical life that they may in turn serve the needy irrespective of caste, color, community, creed, nationality, race, religion or sex. The aims and objects of the society, as laid down in the Memorandum of Association do not show that the society was created to provide the benefit for any particular community I have also perused the letters and e-mails of foreign donors to tin society wherein the aims and objects of the donations are spelt out It is seen that none of these donations have been made to the society for the avowed Page | 2
purposes of promoting Christianity oi evangelical work Most of them are for building, construction educational support, land purchase, for school and colleges or for general work of the society A perusal of the FCRA returns of the assessee also show that almost of the money received from foreign contributors has been declared before FCRA authorities as being used for construction and maintenance of schools/colleges. Furthermore, it is observed from the syllabus of the various schools run by the assessee society that the student in the societies are being imparted a secular education within the meaning of education as defined by the Hon'ble Supreme Court in the case of Sole Trustee, LokShikshan Trust vs. C/7 (1975) 101 ITR 235. I have also noticed that the New Theological College is imparting education in Theology as per the syllabus of the Senate of Seram pore College (University) which is a University set up under the Bengal Act-IV of 1918 and which has been recognized under section 2(f) of the UGC Act 1956 by the Government It is also observed from the submissions of the assessee that activities such as Bible translation are not being done by the assessee society but by another organization known as Wycliffe Bible translators. Furthermore, it is observed that the society has not established any Churches or Missionaries that could be used to propagate Christianity. It is also seen that even while the Assessing Officer has quoted from the website of Good News for India regarding their advancing the cause of Christianity in supporting and funding the NTC and the various schools and also from accounts of various visitors to the schools, he has not been able to bring on record either from the website or blogs or otherwise, a single instance of conversion to Christianity as a result of the efforts of the society. Therefore, irrespective of the views as stated on the website Good News for India, the assessee society has neither been set up for the purposes of serving a particular religious community, nor have its activities been directed towards furtherance of a particular religion or serving a particular religious community. The assessee has quite effectively rebutted the allegations that various expenses were made for the sole benefit of the Christian community. 6.1 The only issue that remains to be resolved is whether the application of income towards funding the activities of the NTC qualifies as education within the meaning of section 2(15) of the I.T. Act, 1961 or whether it amounts to application of income for the benefit of particular religious community. As already pointed out, The New Theological College or the NTC is affiliated to Senate of Serampore College (University), which is a University recognized u/s 2(f) of the UGC Act, 1956. It is conferring formal degrees for theology as per the syllabus laid down by the Senate of Serampur College (University). The question, therefore, is whether an institution teaching Theology can claim to be imparting education within the meaning of section 2(15) of the I.T.Act, 1961 that would enable it to claim exemption either u/s 10(23C)(iiiad) or under section 11 of the I T Act, 1961. In this context the judgment of the High Court of Kerala in the case of CIT vs. St Mary’s Malankara Seminary 348 ITR 69 (Kerala) is relevant In this case the assessee which was a seminary teaching students for priesthood claimed additional and alternative exemption u/s 10(23C)(mad) The Hon'ble High Court held that the term education enjoys wide connotation covering all kind of coaching and training carried on in a systematic manner leading to personality development of individual It held that religious training in the seminaries are education and seminary is a educational institutions. Therefore it allowed the assessee benefit of exemption u/s 10(23C)(mad) of the I T.Act Recently the Hon'ble Supreme Court of India in the case of CIT vs. Dawoodi Bohra Jarnat (2014) 364 ITR 361 (SC) favoured exemption u/s 11 to be given to the organization The facts of this case were that the assessee s application for registration u/s 12A was rejected by the CIT(A). holding that as the object and purpose of the trust was confined only to a particular religious community, the same would attract the provision of section 13(1)(b). In this case, the Hon'ble Supreme Court held that the objects of the trust were not indicative of a wholly religious purpose but were collectively indicative of both charitable and religious purposes It held that while some of the objects provided for activities were completely religious in nature and restricted to specific community, other objects which trace their source to the Holy Koran did not Page | 3 restrict activities of the trust to religious obligations or benefit of members of any one community. The Hon'ble Supreme Court held that since the objects of the trust exhibited dual tenor of religious and charitable purposes and the charitable activities are not exclusively meant for a particular religious community, the provision of section 13(1)(b) are not applicable and the assessee trust is entitled to claim exemption u/s 11. 6.2 What flows from these judgments is that imparting of education in theology, of the nature given in New Theological College is very much an education within the meaning of education as defined by the Hon'ble Supreme Court in the case of Sole Trustee LokSiksha Trust and which would entitle an institution to claim exemption under the beneficial provision of the I T.Act. It also flows that merely because a 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 benefit of any particular community, it is entitled for exemption u/s 11 of the I T.Act. In the instant case while the donors to the society may have been giving to it in the belief that they were propagating and promoting Christianity, the society itself has confined its activities to the aims and objects laid down in the Memorandum of Association in as much as in Theology can be described as vocational training and the school, run by it, impart a secular education. Accordingly, merely because it based its activities on the basis of a religious calling, there is no reason to hold that section 13(1)(b) of the Act would be attracted to it. Therefore, it is eligible to claim exemption u/s 11 of the I.T. Act. 1961.
The facts and circumstances of this case being identical, following my order in the case of the above said appeals, there is no reason to hold that section 13(1)(b) of the Act would be attracted to the assessee. Therefore, it is eligible to claim exemption u/s 11 of the I. T. Act, 1961. “ Therefore, the ld. Assessing Officer is aggrieved with the order.
The ld. DR vehemently supported the order of the ld. Assessing Officer.
The ld. AR submitted that the orders of the ld. CIT (Appeals) which was relied by the ld. CIT (Appeals) for deciding the present appeal travelled to the ITAT and as per order dated 16.03.2018 the order of the ld. CIT (Appeals) was upheld. Therefore, the issue is squarely covered in favour of the assessee. 6. We have carefully considered the rival contentions and perused the orders of the lower authorities. In assessee’s own case on identical facts and circumstances for assessment years 2009-10 and 2011-12 the co-ordinate bench in and 236 (Del) of 2015 decided this issue on 16.03.2018. The co-ordinate bench in para Nos. 8 to 15 decided the issue holding that assessee Society is eligible for exemption under Section 11 of the Act. Thus, the orders of the ld. CIT (Appeals) were upheld. The ld. DR could not show us any reason that why we should differ from the issue already decided by the co-ordinate bench when same facts and circumstances prevailed. In view of this, respectfully following the decision of the co-ordinate bench in assessee’s own case for assessment years 2009- Page | 4 10 and 2011-12 we dismiss the appeal of the ld. Assessing Officer. Thus, appeal of the Assessing Officer is dismissed.
Order pronounced in the open court on 15.03.2021.