Madras High Court
Commissioner Of Income Tax vs Indomer Ananathi on 6 July, 2021
Tax Case Appeal No.506 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.07.2021
CORAM
THE HON'BLE MR.JUSTICE M. DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R. HEMALATHA
Tax Case Appeal No.506 of 2013
Commissioner of Income Tax,
Chennai. ... Appellant
Vs.
Indomer Ananathi
Chandramohan
Charitable Trust
Plot 115, Alwar
Thirunagar Annexe
Chennai – 600 087. ... Respondent
Tax Case Appeal filed under Section 260A of the Income Tax Act,
1961 against the order of the Income Tax Appellate Tribunal, Chennai
"D" Bench, dated 21.01.2013 passed in I.T.A.No.1903/Mds/2012.
For Appellant : Mr.J.Narayanaswamy
Senior Standing Counsel
For Respondent : Mr.T.Vasudevan
for M/s.R.Janakiraman
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Tax Case Appeal No.506 of 2013
JUDGMENT
(Delivered by M.DURAISWAMY, J.)
Challenging the order passed in I.T.A.No.1903/Mds/2012 on the
file of the Income Tax Appellate Tribunal, Chennai "D" Bench, the
Revenue has filed the above appeal.
2.The assessee trust was constituted by a Trust Deed dated
16.03.2011 and had filed an application in Form-10A on 19.05.2011 for
registration under Section 12-AA. While processing the application, the
Director of Income Tax (Exemptions) (“DITE” for brevity) issued a letter
dated 26.09.2011 calling for details and asking to show cause why
registration under Section 12-AA on the ground that the object clause
2(e) of the Trust Deed states about contribution of the funds towards
developing, renovating and maintaining the places of worship, and
clause 2(g) of the Trust Deed promotes God consciousness. The DITE
rejected the application under Section 12-AA on the ground that the
objects of the Trust contains mixed objects both religious and charitable
as against the provisions of Section 11(1)(a) which only allows
exemptions to the Trust which is either charitable or religious and not
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Tax Case Appeal No.506 of 2013
both.
3.Aggrieved by the said order, the assessee filed an appeal before
the Income Tax Appellate Tribunal and the Tribunal allowed the appeal
by following the decision of this Court in the case of Arulmigu
Kamakshi Amman Trust in T.C.A.No.643 of 2011 dated 25.01.2012.
The DITE, while giving effect to the order of the Tribunal, granted
registration to the Trust as “Public Religious Trust”.
4.Challenging the same, the assessee filed an appeal before the
Income Tax Appellate Tribunal, and the Tribunal, by the impugned
order, directed the DITE to grant registration to the Trust as “Public
Religious Trust”.
5.Aggrieved over the order passed by the Income Tax Appellate
Tribunal, the Revenue has filed the above appeal.
6.The above appeal was admitted on the following substantial
question of law :
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Tax Case Appeal No.506 of 2013
“Whether on the facts and circumstances of the case, the
Tribunal was right in holding that the assessee trust is
entitled for registration u/s.12AA as public charitable
trust?”
7.While modifying the order passed by the DITE, the Tribunal
followed the judgment of the Division Bench of this Court, dated
25.01.2012, made in T.C.A.No.643 of 2011, wherein, the Tribunal held
as follows :
“3.It was submitted by the Id.A.R. that the issue in
this appeal was agains the action of the DIT in holding that
the assessee was not eligible for registration u/s.12AA of
the Act on the ground that one of the objects of the assessee
speaks about developing and maintenance of places of
worship as also promoting god consciousness. It was the
submission that the issue was squarely covered by the
decision of the Hon'ble jurisdictional High Court of
Madras in the case of Arulmigu Kamakshi Amman Trust in
Tax Appeal No.643 of 2011 dated 25.01.2012 wherein the
Hon'ble jurisdictional High Court has held as follows :
“We have carefully considered the above submission. For
the purpose of making an application under Section 12AA,
the applicant must apply in Form 10. The said Form
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Tax Case Appeal No.506 of 2013
prescribes the format of the notice of accumulation of
income to be given by charitable and religious trusts under
Section 11[2] of the Act. For the purpose of availing the
benefit of Section 11, registration is required. Section
11[1][a] reads as under:-
"11[1]. Subject to the provisions of sections
60 to 63, the following income shall not be
included in the total income of the previous year of
the person in receipt of the income--
[a] income derived from property held
under trust wholly for charitable or religious
purposes, to the extent to which such income is
applied to such purposes in India; and, where any
such income is accumulated or set apart for
application to such purposes in India, to the extent
to which the income so accumulated or set apart is
not in excess of fifteen per cent of the income from
such property;"
6.From a reading of the above, it is clear that the
income derived from the property held under trust wholly
for charitable or religious purposes, shall not be included
in the total income of the Trust. Therefore, the said
provision would be applicable to both the Trusts
established with the object of charitable as well as
religious purposes. Therefore, Section 12AA of the Act
does not make any difference between the Trusts created
with the object of charitable and religious purposes and,
even if the Trust is not created with both the objects, law
does not make any disqualification for the trust to make an
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Tax Case Appeal No.506 of 2013
application for registration. Therefore, the Tribunal has
correctly applied the provision of law and allowed the
appeal, which finding is based on valid material evidence.
The finding of the Tribunal is not perverse and it is a
question of fact. Therefore, we find no ground to cause our
interference into the order passed by the Tribunal.
Accordingly, the order passed by the Tribunal is confirmed
and both the substantial questions of law raised herein are
answered against the Revenue.”
It was the further submission that in view of the decision of
the Hon'ble jurisdictional High Court the assessee was
entitled to be registered u/s.12AA of the Act.
4.In reply, the Id.D.R. Vehemently supported the
order of the DIT. It was the submission that the assessee
trust had religious clauses in its objects and consequently
was not entitled to registration u/s.12AA of the Act.
5.We have heard the rival submissions. As it is
noticed that the issue in this appeal is squarely covered by
the decision of the Hon'ble jurisdictional High Court in the
case of Arulmigu Kamakshi Amman Trust (supra), the DIT
is directed to grant registration u/s.12AA of the Act.”
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Tax Case Appeal No.506 of 2013
8.Mr.J.Narayanaswamy, learned Senior Standing Counsel,
appearing for the appellant/Revenue, fairly submitted that the ratio laid
down by the Division Bench of this Court in T.C.A.No.643 of 2011
squarely applies to the facts and circumstances of the present case.
9.The Tribunal has rightly observed that there is no trust called
“Public Religious Trust” and there can only be a “Public Charitable
Trust”, therefore, the order passed by the DITE on 06.09.2012 granting
registration to the Trust as “Public Religious Trust” is erroneous and the
same should be modified as “Public Charitable Trust”. The reasoning
given by the Income Tax Appellate Tribunal is just and proper. We do
not find any ground much less any substantial question of law to
interfere with the order passed by the Income Tax Appellate Tribunal.
10.Accordingly, this Tax Case Appeal is dismissed. No costs.
[M.D., J.] [R.H., J.]
06.07.2021
mkn
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Tax Case Appeal No.506 of 2013
Index : Yes/No
Internet : Yes
To
1.The Income Tax Appellate Tribunal, Chennai "D" Bench
2.The Commissioner of Income Tax, Chennai.
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Tax Case Appeal No.506 of 2013
M. DURAISWAMY, J.
and
R. HEMALATHA, J.
mkn
Tax Case Appeal No.506 of 2013
06.07.2021
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