THE COMMISSIONER OF INCOME TAX vs. SHREE PUBLIC CHARTIBALE TRUST

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ITA/696/2009HC KarnatakaKAHC01068331200909 March 2015Bench: S.SUJATHA,VINEET SARAN6 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal found that the Director's order was devoid of reasons and that the trust's objects were indeed charitable and not hit by the proviso to Section 2(15). The High Court agreed that the denial of approval was unjustified.

What were the facts?

A charitable trust applied for renewal of its Section 80(G) exemption, which was denied by the Director of Income-tax (Exemptions) without assigning specific reasons. The Director cited a proviso to Section 2(15) and claimed certain trust objects were not charitable.

What were the issues?

Whether the denial of Section 80(G) exemption renewal by the Director was justified, and if the trust's objects were charitable in nature considering the proviso to Section 2(15).

Which sections of the Income-tax Act were involved?

Section 80(G),Section 2(15)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 9TH DAY OF MARCH 2015

PRESENT

THE HON’BLE MR.JUSTICE VINEET SARAN

AND

THE HON’BLE MRS.JUSTICE S SUJATHA

ITA NO.696/2009

Between:

1.

THE COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, C R BUILDING, QUEENS ROAD BANGALORE

2.

THE DIRECTOR OF INCOME TAX EXEMPTIONS, C R BUILDING, QUEENS ROAD, BANGALORE. ..APPELLANTS

(BY SRI K V ARAVIND, ADV.)

AND:

SHREE PUBLIC CHARITABLE TRUST 294/C, 17TH MAIN, IDEAL HOMES TOWNSHIP RAJARAJESHWARI NAGAR BANGALORE – 560098.

.. RESPONDENT

(BY SRI A SHANKAR, ADV.)

THIS APPEAL IS FILED UNDER SECTION 260- A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 29-05-2009 PASSED IN ITA NO.1471/BNG/2008 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN

2 ITA NO.1471/BNG/2008 DATED 29-05-2009 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DIRECTOR OF INCOME TAX, (EXEMPTIONS), BANGALORE.

THIS APPEAL COMING ON FOR HEARING THIS DAY, VINEET SARAN J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal is directed against the order passed by the ITAT dated 29.05.2009 whereby the order of the Director of Income-tax (Exemptions) dated 31.10.2008 refusing to renew the certificate under Section 80(G) of the Income Tax Act has been set- aside and a direction has been issued to renew the approval under Section 80(G) of the Act of the appellant.

2.

We have heard Sri K V Aravind, learned counsel for the appellant as well as Sri A Shankar, learned counsel for the respondent and perused the records.

3.

The brief facts of the case are that:

- the respondent – assessee is a charitable trust duly registered and it applied for grant of exemption under Section 80(G) of the Income Tax Act which was initially granted to the assessee upto the period 31.03.2008. The renewal was denied by the Director without assigning any reasons and by merely stating that certain clauses of the trust deed, giving out objects, were not charitable in nature, in view of insertion of proviso to Section 15(2) which came into effect from 1.4.2008. It was also stated by the Director that the amendment was sought in the trust deed which was rejected on 24.10.2008 and as such, the renewal of approval was rejected.

4.

The tribunal has, in its order, considered the objects of the trust deed which the Director had referred to and has come to the conclusion that the said objects were all of charitable nature and were not hit by the proviso to Section 2(15) of the Act. From a plain reading of the order of the Director, it is clear that the same has been passed without even

4 specifying as to which of the objects, and how the same, were not charitable in nature. It has also not been mentioned or clarified in the order as to why on the same objects the trust had been granted exemption under Section 80(G) earlier, and it was being denied at this stage.

5.

Proviso to Section 2(15) of the Act was inserted with effect from 1.4.2009 and not from 1.4.2008 as has been mentioned by the Director in his order. The order of the Director was totally devoid of reasons and thus, the same was rightly set-aside by the Tribunal and after considering all the objects mentioned in the trust deed as well as Section 2(15) of the Act and also the proviso to the said Section, the Tribunal has, in our view, rightly come to the conclusion that denial of approval under Section 80(G) of the Income Tax Act was not justified.

6.

Sri Aravind has made attempt to justify the order of the Director stating that the religious

5 activities would not be covered under the definition of ‘charitable purpose’ and according to the learned counsel, certain objects relating to construction of ‘prayer house’ etc. would come within the ambit of ‘religious purpose’.

7.

This is an attempt made by the learned counsel for the appellant to justify the order of the Director, which justification has not been taken by the Director himself. Even otherwise, on merits also, we are not satisfied with the aforesaid objection raised by the learned counsel for the appellant as, in our opinion, construction of ‘prayer hall’ or encouraging meditation yoga etc. would not be religious activities. We are, thus, not satisfied with the submission of the learned counsel for the appellant, especially when such is not the ground which has been taken by the Director while denying approval to the assessee.

6 8. In view of the aforesaid, we are of the opinion that no substantial question of law arises in this appeal for determination and as such, no interference is called for with the order impugned in this appeal. Accordingly, appeal is dismissed. There will be no order as to costs.

Sd/-

JUDGE

Sd/-

JUDGE

Brn

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