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 ITO vs. Vikram A. Pradhan (ITAT Mumbai)

Shree Swami Samarth Pariwar (Thane), 4 Ashirwad Building,Vs. CIT II Thane
August, 24th 2012
                              ITA No.2506 of 2011 Shree Swami Samarth Pariwar Thane E Bench




            IN THE INCOME TAX APPELLATE TRIBUNAL
                       "E" Bench, Mumbai

            Before Shri B.R. Mittal, Judicial Member and
             Shri B. Ramakotaiah, Accountant Member

                     ITA No. 2506/Mum/2011
                     (Assessment year: 2010-11)

Shree Swami Samarth Pariwar        Vs.      CIT ­II
(Thane), 4 Ashirwad Building,               Thane
Smarth Chowk, Vishnu Nagar,
Naupada, Thane (W) 400 602
(Appellant)                                       (Respondent)

                    Assessee by:   Shri V.N. Vaze
                    Department by: Shri V.K. Jaiswal, DR

                    Date of Hearing:                   30/07/2012
                    Date of Pronouncement:             22/08/2012

                             ORDER

Per B. Ramakotaiah, A.M.

       This is an appeal by assessee against the order of the CIT-II
Thane, refusing registration under section 80G r.w.r. 11AA of the
I.T. Act.




2.     Assessee is a Trust registered under the Bombay Public Trust
Act, 1950 on 19/11/1981. Assessee is registered under section 12A
of the I.T. Act and there was registration under section 80G(5)
granted upto March, 2009. Assessee applied for renewal of
registration under section 80G by filing statement in Form No.10G
on 03/05/2010 (wrongly stated as 03/05/2009 by the CIT in the
order). The application was accompanied by a copy of Memorandum
of Association, Certificate from Charity Commissioner, copy of
certificate under section 12A and copy of acknowledgement of I.T.
returns and accounts for assessment years 2007-08, 2008-09 and
2009-10. The CIT vide the letter dated 22/10/2010 asked for an
explanation for applying less than 85% of the income on the objects
of the Trust and note on the activities. Assessee Trust submitted a


                                 Page 1 of 5
                               ITA No.2506 of 2011 Shree Swami Samarth Pariwar Thane E Bench




letter dated 27.10.2010 stating that the Trust has accumulated
funds under section 11(2) and Form No.10 has been filed. The
Trustee also further stated that mass meeting/gatherings are being
conducted on weekly, fortnightly and monthly basis at more than
40 Centres in which guidance and teaching is given for self
development, better living and leading a happy life (as stated by the
CIT in Para 5 of the order). However, vide Para 6 of the order the CIT
came to conclusion the objects of the Trust as mentioned are
religious in nature. He invoked explanation-3 of sub-section 5 of
section 80G, the `charitable purpose' to state that the definition
does not include any purpose whole or substantially the whole of
which is of a religious nature. CIT was of the opinion that since the
objects as mentioned in clause a & b of the Memorandum of
Association are religious in nature, the Trust is not eligible for
registration under section 80G. Accordingly vide the order dated
11/12/2009, he rejected the application for renewal of registration
under section 80G.

3.    This appeal was to be preferred by assessee Trust on or before
20.2.2011. However, the appeal was preferred on 30.03.2011.
Assessee filed a petition for condonation of delay with an affidavit by
the Trust, that being a Trust of charitable nature, they were unable
to follow any course of action when the CIT rejected 80G, which was
renewed from time to time earlier and there has been no change in
the objects as well as activities of the Trust. Therefore, there was
some delay in understanding the correct legal position and because
of the ignorance of remedy available under the law, they could not
prefer the appeal in time. Considering the averments and the
arguments by the rival parties, we are satisfied that there is a
sufficient and reasonable cause and accordingly the delay in filing
the appeal is condoned and the appeal is admitted.

4.    The learned Counsel referred to the paper book and the
objects of the Trust at the time of original registration and the fact



                                  Page 2 of 5
                               ITA No.2506 of 2011 Shree Swami Samarth Pariwar Thane E Bench







that the 80G was being granted year after year upto 31/03/2009.
He also explained the various activities of assessee trust and further
admitted that the application was filed only on 3rd May, 2010 after
expiry of earlier granted 80G registration. It was further submitted
that there is no change in the objects of Trust since its creation and
the Trust was undertaking the activities every year in the same
manner and returns are being filed regularly. It was his submission
that there is no reason to hold that the activities are religious in
nature.

5.    The learned DR however, relied on the orders of the CIT to
submit that the objects are religious in nature.

6.    We have considered the issue and perused the record. As far
as the registration of the Trust as charitable trust is considered, it
is on record that the Trust was registered under section 12A of the
Act and incomes claimed as exempt under section 11 of the I.T Act
are being allowed. There is also no denial of the fact that on the
same objects of the Trust, which the present CIT considered as
religious in nature, the registration under section 80G was being
granted from its inception way back in 1982 which was renewed
from time to time and there has been no change in the objects as
well as activities of the Trust. Therefore, we are unable to
understand how the following clauses (a&b) can be considered as
religious in nature:

      (a) To promote the philosophy of "Shree Swamisamarth"
          (Maharaja of Akalkot), To achieve power by
          combination of intellect, `Bhakti', `Karma' in person-to-
          person. Self-elevation is the science of human being
          for his betterment. With the help of this self-progress
          can be made.
      (b) "See the `GOD' in creature, know The `GOD' in self" is
          the teaching of Shree Swamisamarth. To fulfill this,
          come together, arrange meetings, lectures, sermons,
          mass prayers, conferences".
These objects are general in nature meant for general public and for
elevation of the self- human being. There is no religion mentioned in


                                  Page 3 of 5
                              ITA No.2506 of 2011 Shree Swami Samarth Pariwar Thane E Bench




any of the objects nor it is restricted to any particular religious
group. Like "Ahimsa" principle propagated by Mahatma Gandhi, the
objects are socio-cultural in nature and no way it can be considered
as religious in nature. It is also on record that devotees from
different background can participate in the activities of the Trust
and these are for the benefit of the society as a whole without any
religious intent. Coupled with the fact that the Trust has been
granted registration under section 12A on the very same objects
and has been granted registration under section 80G also from time
to time upto 2009, it is surprising that the CIT considered these
objects as religious in nature. Coming to the issue of definition of
`charitable purpose' as stated in Explanation-3 to sub-section (5) of
section 80G, `charitable purpose' does not include any purpose the
whole or substantially the whole of which is of a religious nature.
The CIT did not specify how these two objects are whole or
substantially whole of which is of a religious nature. In our opinion,
the application was rejected without any valid reason and on that
reason the order of the CIT cannot be sustained.

7.    There is another aspect to the issue. The time limit within
which the Commissioner shall pass an order either granting the
approval or rejecting the application shall not exceed six months
from the date on which such application was made, provided that in
computing the period of six months any time taken by the applicant
in not complying with the directions of the CIT shall be excluded. As
can be seen from Rule 11AA(6), the CIT shall pass an order not
exceeding six months from the date on which such application was
made. The order of the CIT mentions that application was made on
03.05.2009. Assessee admits that an application was made only on
03.05.2010. Be that as it may, if we are to take the later date, the
order of the approval or rejection should have passed by the CIT on
or before 3.11.2010. The order was passed on 1.12.2010 i.e. beyond
the time limit allowed to the CIT under Rule 11AA. Therefore, the
order is time barred.


                                 Page 4 of 5
                               ITA No.2506 of 2011 Shree Swami Samarth Pariwar Thane E Bench




8.    The learned DR however, pointed out to the proviso that the
time taken by the applicant shall be excluded. There is no time
taken by the applicant in complying with the directions of the CIT
under Rule 11AA(3). The CIT directed on 22.10.2010 asking for
explanation and assessee replied immediately on 27.10.2010. Even
if one were to consider five days time given to assessee for
explanation, the order should have been passed on or before
8.11.2010. Therefore, either way the order of the CIT rejecting the
registration was time barred. Therefore, on this reason also the CIT
order cannot be upheld.

9.    We, for the reasons stated above allow assessee's appeal and
direct the CIT to grant registration w.e.f. 03.05.2010, from the date
of application under 80G(5). Assessee's appeal is allowed.

10.   In the result appeal filed by assessee is allowed.

      Order pronounced in the open court on 22nd August, 2012.



             Sd/-                                     Sd/-
         (B.R. Mittal)                          (B. Ramakotaiah)
       Judicial Member                         Accountant Member


Mumbai, dated 22nd August, 2012.

Vnodan/sps
Copy to:
  1. The Appellant
  2. The Respondent
  3. The concerned CIT(A)
  4. The concerned CIT
  5. The DR, "E " Bench, ITAT, Mumbai
                            By Order



                        Assistant Registrar
                   Income Tax Appellate Tribunal,
                     Mumbai Benches, MUMBAI




                                  Page 5 of 5
 
 
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