NANDA GOKULA,SHIMOGA vs. COMMISSIONER OF INCOME TAX, DAVANGERE

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ITA 1229/BANG/2014Status: DisposedITAT Bangalore20 October 20155 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the main objects of the trust, which included maintaining goshala and veterinary hospitals, were charitable. The CIT incorrectly considered enabling clauses as part of the trust's objects.

What were the facts?

The assessee, a trust, applied for registration under Section 12AA of the Income-tax Act. The CIT denied registration, citing that some object clauses were not purely charitable and beneficiaries were not well-defined.

What were the issues?

Whether the objects of the trust are charitable in nature and whether the beneficiaries are clearly defined for the purpose of registration under Section 12AA.

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCH A, BANGALORE

Before: SHRI. ABRAHAM P. GEORGE & SHRI. VIJAYPAL RAO

For Appellant: Shri. G Venkatesh, Advocate

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER (Assessment Year : NA) Nanda Gokula, Uppalli, M. L. Halli Post, Sagara Taluk, Shimoga District .. Appellant PAN : AABTN5243R v. Commissioner of Income-tax, Davangere .. Respondent Assessee by : Shri. G Venkatesh, Advocate Revenue by : Shri. I. P. S. Bindra, CIT-DR Heard on : 12.10.2015 Pronounced on : 20.10.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

In this appeal filed by assessee it is aggrieved that CIT, Davangere denied registration sought by it u/s.12AA of the Income-tax Act, 1961 (‘the Act’ in short). 02. Facts apropos are that assessee a trust registered on 13.06.2008 had filed an application for registration u/s.12AA of the Act on 07.01.2014.

Ita.1229/Bang/2014 Page - 2 CIT required the assessee to furnish its financial statements for the years ending 31.03.2009, 31.03.2010, 31.03.2011, 31.03.2012 and 31.03.2013 and also a note on its activities. After verifying the Trust deed, CIT reached an opinion that trust had certain object clauses which were purely not charitable in nature. He therefore held that there was likelihood of misuse of the objects of the assessee. Further according to him, beneficiaries were not well defined. He rejected the application filed by the assessee.

3.

Now before us, Ld. AR strongly assailing the order of CIT submitted that the trust deed of the assessee clearly reflected its objects as maintenance of goshala, veterinary hospitals and the like. These could not be considered as non-charitable. As per the Ld. AR, CIT went by the supplementary objects which were only a means of achieving the main objects. According to him the registration was unfairly denied. Reliance was placed on the decision of ITAT, Chennai Bench in Snekalaya for Animals v. ITO [(2012) 52 SOT 352] and that of ITAT, Mumbai Bench in the case of Shree Nashik Panchvati Panjarpole v. DIT (Ex) [(2014) 148 ITD 343].

4. Per contra, Ld. DR supported the order of CIT.

Ita.1229/Bang/2014 Page - 3

5.

We have perused the orders and heard the rival contentions. Object clause of the assessee, as it appears in its trust deed dt.13.06.2008, is reproduced hereunder :

1.

To Establish maintain and run gosadanas, goshalas, free. Veterinary hospitals, save and protect the lives of aged cows, oxen, cattle and other domestic animals on mercy basis in the larger interest of animal kind

2.

To conduct, encourage research activities in animal husbandry and animal products .

3.To undertake, carryon, encourage production and marketing of cow based products

4.

To undertake any other activity incidental to the above aims.

5. To open, establish, run, maintain, take over, let on lease, sell or otherwise transfer branches at any place or places irrespective of geographical boundaries.

6. To collaborate and join hands with similar institutions for the purposes and objects of the Trust

To Co-operate with national and International 7. Organisations having similar aims and objects.

6.

Trust deed also carries in it an enabling clause no.3 for attaining the objects mentioned above. This is reproduced hereunder :

Ita.1229/Bang/2014 Page - 4

For the implementation of the above objects, the following activities shall be undertaken: a) To collect funds by way of subscriptions, contributions, fees, charities, donations, grants, subsidies, loans, deposits etc., from trustees, the general public, Government - State/Central, other Govt./Non-Govt. organisations and bodies corporate including foreign agencies and organisations. b) To sell, lease, license, mortgage, exchange, gift, alienate, dispose off, develop, improve or turn into account any of the properties or assets of the Trust as may be thought fit for, with a view to promote the objects of the Trust.

To take such other objects not inconsistent with the c) spirit of the Trust and the objects that the trustees may add to the above mentioned objects, having regard to the particular needs of the time and not inconsistent with the provisions of Income Tax Act, 1961.

To acquire and hold, construct, sell, mortgage, dispose of, d) turn to account or otherwise to deal with all or any of the properties of the Trust, by way of purchase, hire etc. 07. Reading of the main object clearly show that there was nothing which could be termed as non-charitable. If we take each of the objects mentioned in the main objects these were for general public utility. CIT considered the enabling clause three, intended for achieving the main

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