The Commissioner Of Income Tax (Exemptions), Chandigarh v. M/S Mandir Shree Mahakali Sabha Mandir Complex

ITA No. 339 of 2018} 1] IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH ITA No. 339 of JO18Date of decision: 20.1.2020 The Commissioner of Income Tax (Exemptions), Chandigarh.. Appellant V. M/s Mandir Shree Mahakali Sabha Mandir Complex .. Respondent CORAM:HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEBEESH JHING Present:Mr. Denesh Goyal, Senior Standing Counsel for the appellant. AVNEESH JHINGAN, J. The revenue is in appeal against the order dated 11.10.2017passed by the Income Tax Appellate Tribunal, Chandigarh (for short, ‘theTribunal’) allowing the appeal of the respondent-society (hereinafterreferred to as ‘the society’) and directing the Commissioner of Income Tax(Exemptions) (for short, ‘the CIT") to grant registration under Section 12AAof the Income Tax Act, 1961 (for short, ‘the Act'). Following substantialquestions of law have been claimed; “1. Whether on the facts and circumstances of the case thHon'ble ITAT has erred in directing to grant registrationinstead of reverting it back for re-examination in the lightof judgment of the Hon'ble Allahabad High Court inHon'ble ITAT has erred in directing to grant registrationinstead of reverting it back for re-examination in the lightof judgment of the Hon'ble Allahabad High Court in ITA No. 339 of 2018|2] appeal No. 112 of 2013 in the case of CIT, Meerut Vs.M/s A.R. Trust, Meerut, wherein it was held that theTribunal could have ordered for setting aside the order ofRegistering Authority refusing registration but it couldnot have directed for registration straight away in as muchas there has to be satisfaction recorded by the RegisteringAuthority which was lacking?M/s A.R. Trust, Meerut, wherein it was held that theTribunal could have ordered for setting aside the order ofRegistering Authority refusing registration but it couldnot have directed for registration straight away in as muchas there has to be satisfaction recorded by the RegisteringAuthority which was lacking? Il. Whether on the facts and circumstances of the case thHon'ble ITAT has erred in ignoring the fact that theassessee did not produce evidence that the Governmenthad bestowed the rights for the use of the aland andcomplex upon the assessee society, that had claimedcarrying out development and maintenance for public atlarge?Hon'ble ITAT has erred in ignoring the fact that theassessee did not produce evidence that the Governmenthad bestowed the rights for the use of the aland andcomplex upon the assessee society, that had claimedcarrying out development and maintenance for public atlarge? III. Whether on the facts and circumstances of the case, theHon'ble ITAT, even when according to the ffinding thatthe property (land and buildings) is not owned by thetrust, has erred by holding the same as property held bythe trust?Hon'ble ITAT, even when according to the ffinding thatthe property (land and buildings) is not owned by thetrust, has erred by holding the same as property held bythe trust? IV. Whether on the facts and circumstances of the case thHon'ble ITAT has ignored the facts that the applicantsociety had not produced any evidence with regard to theactivities having actually been carried out?Hon'ble ITAT has ignored the facts that the applicantsociety had not produced any evidence with regard to theactivities having actually been carried out? V. Whether on the facts and circumstances of the case thHon'ble ITAT has erred in directing to grant ofregistration u/S I2ZAA ignoring the tact that theHon'ble ITAT has erred in directing to grant ofregistration u/S I2ZAA ignoring the tact that the ITA No. 339 of 2018}3] IV. Whether on the facts and circumstances of the case thHon'ble ITAT has ignored the facts that the applicantsociety had not produced any evidence with regard to theactivities having actually been carried out?Hon'ble ITAT has ignored the facts that the applicantsociety had not produced any evidence with regard to theactivities having actually been carried out? V. Whether on the facts and circumstances of the case thHon'ble ITAT has erred in directing to grant ofregistration u/S I2ZAA ignoring the tact that theHon'ble ITAT has erred in directing to grant ofregistration u/S I2ZAA ignoring the tact that the ITA No. 339 of 2018}3] memorandum of society was designed in a manner thatwas devoid of dissolution clause, beneficiary clause, andutilization clause and to that extent capable of givingundue advantage to the members of the society and that inan event of dissolution of the society the possibility of thefunds being mis-utilized was high?was devoid of dissolution clause, beneficiary clause, andutilization clause and to that extent capable of givingundue advantage to the members of the society and that inan event of dissolution of the society the possibility of thefunds being mis-utilized was high? VI. Whether on the facts and circumstances of the case, thorder of the Appellate Tribunal is contrary to the evidenceand material on the record of the case and therefore,3&%4&%'&DForder of the Appellate Tribunal is contrary to the evidenceand material on the record of the case and therefore,3&%4&%'&DF Facts in brief are that the respondent-society came intooperation since 10.5.1995 with the following aims and objects: “(a) to. maintain, manage, improve, furnish, reshape,restructure, reconstruct amend alter or add in theexisting Buildings, facilities and area so that these couldbe used in better way by Mahakali Devi devotees,worshipers, saints and visitors to the Mahakali DeviMandir for religious, charitable and social purposes;restructure, reconstruct amend alter or add in theexisting Buildings, facilities and area so that these couldbe used in better way by Mahakali Devi devotees,worshipers, saints and visitors to the Mahakali DeviMandir for religious, charitable and social purposes; :6;to construct more building in Mahakali Devi complexand develop the entire complex for better use by thedevotees, worshipers, saints and public in general forreligious, charitable, educational and socital purposes;and develop the entire complex for better use by thedevotees, worshipers, saints and public in general forreligious, charitable, educational and socital purposes; :7;to propagate Hindu Religion, teaching of SanatamDharam and brotherhood amongst the public in generaland Sangrur citizens in particular;Dharam and brotherhood amongst the public in generaland Sangrur citizens in particular; :0;to arrange and celebrate Hindu festivals, religious ITA No. 339 of 20181/4] occasions, and to propagate and inculcate the religiousfeelings brother-hood and nationalism amongst thepublic in general and Hindus in particular; :&;to develop and inculcate sound, moral, religious andnational character in younger generation;national character in younger generation; (f)to help the needy and poor children for their education;| :1;to open and run charitable dispensaries and hospitals forpublic in general and propagate and inculcate the habitof keeping good health;public in general and propagate and inculcate the habitof keeping good health; :*;to open library and reading room for public in generaland provide books particular relating to religion, historyand culture;and provide books particular relating to religion, historyand culture; :/;to arrange religious discourses, teachings, satsanglecture to propagate Hindu religion, brotherhood,nationalism, general uplift of mankind, to build moralfibre and develop healthy society and harmony amongstpublic in general;lecture to propagate Hindu religion, brotherhood,nationalism, general uplift of mankind, to build moralfibre and develop healthy society and harmony amongstpublic in general; :*;to open library and reading room for public in generaland provide books particular relating to religion, historyand culture;and provide books particular relating to religion, historyand culture; :/;to arrange religious discourses, teachings, satsanglecture to propagate Hindu religion, brotherhood,nationalism, general uplift of mankind, to build moralfibre and develop healthy society and harmony amongstpublic in general;lecture to propagate Hindu religion, brotherhood,nationalism, general uplift of mankind, to build moralfibre and develop healthy society and harmony amongstpublic in general; :B;to create atmosphere and impart teachings to help theyounger general to develop and become successfulcitizens of sound health, character, nationality andfollowing of Hindu religion in its tradition and culture;younger general to develop and become successfulcitizens of sound health, character, nationality andfollowing of Hindu religion in its tradition and culture; :A;to arrange to provide help in cash and kind to the publicin general in the event of natural calamities;in general in the event of natural calamities; (1)to run free Bhandaras, to help poor widows, orphansages persons and sufferers of natural and nationalages persons and sufferers of natural and national calamities; ITA No. 339 of 2018}5| (m) to establish and run educational and _ vocationalinstructions, children recreations art and senior citizenshome;instructions, children recreations art and senior citizenshome; :(;any other work of charitable nature for public ingeneral.”general.” An application was filed by the society claiming registrationunder Section 12AA of the Act. The CIT rejected the application vide orderdated 29.4.2016, considering that the land and complex whose maintenancewas one of the aim and object of the society belonged to the government;further that for constructing the building hall, the focus was on religion andnot on charity. The CIT considered that liability of=12,99 527/- shown on31.3.2013 was not shown in succeeding years and no payment was shown tobe made. Aggrieved of the rejection, an appeal was preferred, theTribunal vide order dated 11.10.2017 allowed the same. The ‘Tribunalconcluded that there was no pre-requisite in the provisions of the Act thatassets should be owned by the society. The Tribunal considered theaverment of the society that though the land belonged to the Governmentbut the property developed was held under the trust. It was noted that theMandir complex was visited by public at large and by the work done by thesociety, the devotees were benefitted. No dispute was raised by thedepartment that the society had constructed community hall etc. and theproperty though not owned by the society but the income was applied forreligious and charitable purposes. The hall constructed was not forparticular section of the society and the same was opened to all forutilisation. ITA No. 339 of 2018160] The Tribunal concluded that in case there was any discrepancyin the accounts, the same is not to be considered at the time of grantingregistration under Section 12AA of the Act but the same could be taken careof while framing assessment and allowing exemption under Section 11 ofthe Act, hence the present appeal. Learned counsel for the revenue argued that ownership of theland and the temple was not of the society and there was no right for thesociety to use the said property. The contention raised is beyond the provisions of the Act,Under Section 12AA of the Act, the CIT has to satisfy himself with regardto the genuineness of the activities of the trust and compliance ofrequirements of other laws for the time being in force. section I2A of the Act lays down the conditions ofapplicability of Sections 11 and 12 of the Act. Title of Section 11 of theAct iS aS under: ‘Income’ from property held for charitable orreligious purposes” Learned counsel for the revenue argued that ownership of theland and the temple was not of the society and there was no right for thesociety to use the said property. The contention raised is beyond the provisions of the Act,Under Section 12AA of the Act, the CIT has to satisfy himself with regardto the genuineness of the activities of the trust and compliance ofrequirements of other laws for the time being in force. section I2A of the Act lays down the conditions ofapplicability of Sections 11 and 12 of the Act. Title of Section 11 of theAct iS aS under: ‘Income’ from property held for charitable orreligious purposes” The Section states that subject to the provisions of sections 60to 63 of the Act, the income mentioned in it shall not be included in the totalincome of previous year. The section nowhere provides that the property|Should be owned by the trust. The requirement is “held for charitablepurpose”. In the present case, the land though belonged to the governmentbut the construction made on it was held under the trust and it is for theincome from such property that application for registration under Section1JAA of the Act was moved. section 12 of the Act gives a deeming fiction that voluntary ITA No. 339 of 2018|/| contribution received by the trust created for charitable or religiouspurposes shall be deemed for the purpose of Section 11 of the Act to beincome derived from the property held by the trust for charitable andreligious purposes. In view of the above discussion, the objection that the propertywas not owned by the society cannot be sustained. In the present case, there is no dispute raised that the work ofthe society was for general public and the work done by it, including raisingof the construction on the land that belonged to the Government was forcommunity at large, for charitable and religious purposes. Further that fromthe record it is established that various functions were being organised bysocial organisations for blood donation, ‘Akandh Path’, conference,function for welfare of differently-abled persons and that use of communityhall in the temple complex was not limited to any particular limb of thesociety but was utilised for social, charitable and religious organisations. The explanation of the society to the effect that the hability Shown as on 31.3.2013 was discharged in the subsequent year was accepted.Needless to add at this stage that the said aspect can be looked into by the Assessing Officer at the time of framing of assessment and allowingexemption under Section 11 of the Act. | No interference is warranted in the order of the Tribunal. Nosubstantial question of law arises in the present appeal. The appeal is dismissed. However, it would be needless to state that in case the revenue subsequently comes to the conclusion that the activities of the society arenot for charitable purposes, it would always be at liberty to initiate action in ITA No. 339 of 201813] accordance with law including invoking of sub-section (3) of Section 12AAof the Act. (AVNEESH JHINGAN) (AJAY TEWARIT)JUDGE JUDGE 20.1.20208A Whether speaking/reasoned:Yes/NoWhether reportable:Yes/No