SAHAYOG,CHENNAI vs. CIT, COIMBATORE

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER: Both the appeals of the assessee are directed against the orders of the Commissioner of Income Tax-III, Coimbatore, dated

2 I.T.A. Nos.10 & 11/Mds/15

12.11.2014, rejecting the registration under Section 12A and recognition under Section 80G of the Income-tax Act, 1961 (in short 'the Act'). Since both the appeals were heard together, they are

disposed of by this common order.

submitted that the assessee was established by a Trust deed dated 28th April, 2014. The assessee filed an application for registration under Section 12A and recognition under Section 80G of the Act on 20.05.2014. According to the Ld. representative, the Commissioner

rejected both the applications on the ground that the assessee has not produced any books of account. Therefore, it is not ascertainable whether the Trust was engaged in charitable activities

within the meaning of Section 2(15) of the Act. The Trust filed its application before the Commissioner within a month from the date of its establishment. Therefore, rejection of the application on the

ground that the assessee has not filed any books of account is not justified. On a query from the Bench, what is the object of the Trust as per the Trust deed, the Ld. representative submitted that this was

not considered by the Commissioner. The Commissioner simply rejected the applications of the assessee only on the ground that books of account were not produced. The Ld. representative placed

3 I.T.A. Nos.10 & 11/Mds/15

his reliance on the judgment of Delhi High Court in the case of

DI(Exemptions) v. Foundation of Opthatmic & Optometry Research

Education Centre (254 CTR 133) and the judgment of Karnataka

High Court in the case of DI v. Garden City Educational Trust (330

ITR 480). The Ld. representative has also placed reliance on the

judgment of Madras High Court in the case of NewLife in Christ

Evangelistic Association v. CIT (246 ITR 532) and also the

judgment of Punjab & Haryana High Court in the case of Sonepat

Hindu Educational and Charitable Society v. CIT and another (278

ITR 262).

Representative, submitted that the assessee has not done any

charitable activities. Therefore, the Commissioner has rightly

rejected the applications for registration under Section 12A and

recognition under Section 80G of the Act. As one of the objects of

the assessee was education, according to the Ld. D.R., the

assessee entered to establish school with profit motive.

perused the relevant material on record. We have also gone

through the copy of the Trust deed filed by the assessee. As per

the Trust deed, the objects of the Trust is as follows:-

4 I.T.A. Nos.10 & 11/Mds/15

(1) The Authors of the Trust hereby declare and create the Trust called SAHAYOG (hereinafter called the Trust) for the purposes and objects hereinafter appearing:

(a) To establish, constitute, build, administer and maintain educational institutions, of all kinds – Nursery of Kindergarten Schools, Primary schools, Secondary Schools, Arts Colleges, Science Colleges and Technological Institutions up to the highest standards for the imparting of scientific knowledge generally. (b) To give practical training in the manufacture of all kinds of articles by opening, establishing, constructing, developing workshops and factories and manufacturing electrical and other goods of commercial value and utilizing the income thereof for the furtherance of the charitable Trust hereby constituted. (c) To encourage and provide literary, scientific and technical knowledge by establishment of laboratories, libraries and start publication of journals, periodicals and other books in furtherance of this object. (d) To establish and conduct hostels, boarding houses and residential retreat accommodations for the benefit of the students studying in the institutions, program participants and others. (e) To establish, maintain and conduct nursing homes. (f) To establish, maintain and conduct medical dispensaries and centres offering affordable medical aid and give grants for medical services to those requiring specialized care who are unable to afford it. (g) To either establish by the Trust or through other Trusts Yoga and Meditation centres either in the property of the Trust or by donating any part of the property of the Trust to any other Trust or institution which can administer yoga and meditation centres. (h) To provide any other facility or infrastructure incidental to education provided by the Trust and to benefit those beneficiaries who are interested in availing any other facilities while seeking pursuit of education in the institutions established by the Trust. (i) To establish and provide sports facilities including training and coaching centres for sports activities, building gymnasium or any indoor or regular stadium directly or through any other Trust by donating any part of the property of Trust. (j) To establish well equipped ayurvedic and holistic health centres to provide treatment and therapies for the relief of persons who are afflicted with or suffer

5 I.T.A. Nos.10 & 11/Mds/15

from rheumatism, paralysis, neuralgia, insanity, diabetes, obesity, anxiety, depression, hypertension, stress, blood pressure, digestion issues etc. and also to educate and sensitize the public about the advantage of ayurvedic and holistic health enhancing methods and their application for proper and good health. (k) To carry out any other philanthropic Public Charitable purpose which the Charities is empowered and capable of doing not inconsistent with the objects set out above. (2) The objects specified in clause (1) supra shall be independent of each other and the Board of Trustees hereinafter constituted may, from time to time, apply the funds of the Trust in carrying out all or any of the aforesaid objects of the Trust as it may in its absolute discretion think fit.”

Apparently, the Commissioner has not considered the objects of the

Trust. It is not known how establishment of workshop and factories

would come within the meaning of “charitable activities” under

Section 2(15) of the Act. Similarly, to establish and conduct hostels

and boarding houses are also included in object clause.

Establishment and administration of educational institution would fall

within the meaning of “education” under Section 2(15) of the Act.

The income incidental to education would be eligible for exemption,

provided the same is applied for educational activities. However,

the Trust deed provides for establishment of workshops, factories,

hostels, boarding houses, etc. These objects have to be examined

by the Commissioner and find out whether these objects would fall

within the meaning of charitable activities under Section 2(15) of the

6 I.T.A. Nos.10 & 11/Mds/15

Act. Moreover, the assessee-Trust was established by a registered deed on 20th April, 2014 and the application was filed for registration on 20.05.2014. Therefore, within a short span of time, the assessee

could not have carried out substantial work. However, the CIT has to examine the objects as per the Trust deed and other details so as to satisfy himself the genuineness of the activities of the Trust.

Accordingly, without expressing any opinion on merit, the orders of the lower authority are set aside and the issue of registration under Section 12A and recognition under Section 80G of the Act is sent

back to the file of the Commissioner. The Commissioner shall examine the objects of the Trust and other details, regarding beneficiaries who are entitled for benefit of the Trust, utilization of

surplus funds at the end of the financial year and utilization of the available funds on the dissolution of the Trust. Thereafter, the Commissioner shall decide the issue in accordance with law, after giving a reasonable opportunity to the assessee.

7 I.T.A. Nos.10 & 11/Mds/15

Order pronounced on 1st of May, 2015 at Chennai.

sd/- sd/- (A. Mohan Alankamony) (N.R.S. Ganesan) (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, �दनांक/Dated, the 1st May, 2015.

Kri.

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त/CIT-III, Coimbatore 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.