TaxTMI 
TaxTMI 
2017 (12) TMI 62
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.... over the provisions of section 11 & section 12, are applicable to the assessee society since the society has been created/established for the benefit of a particular community I.e Christians?" Appeal No.110/2012 admitted on 4.7.2012 "Whether the Tribunal was legally justified in setting aside the order of the CIT passed u/s 12AA(3) cancelling the registration when the Registrar of Societies has also cencelled the registration of the respondent on account of irregularities found, police case and illegal activities carried on by the society?" 4. The facts of the case are that the assessee filed return of income at nil and the AO completed the assessment u/s 143(3) of the Act at an income of Rs. 2,02,21,283/-. During the course of assessment proceedings it was noticed by the AO that the assessee was not carrying out its activities in accordance with the objects of the Samiti so the activities were not genuine. The expenditure which was incurred mainly related to propagating of Christianity. It was noticed by the AO that the Registrar of Societies has also cancelled the registration on 27.2.2006. Therefore, under the facts and circumstances the AO assessed the assessee's in....
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....ution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and section 13 shall apply accordingly. (2) The value of any services, being medical or educational services, made available by any charitable or religious trust running a hospital or medical institution or an educational institution, to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13, shall be deemed to be income of such trust or institution derived from property held under trust wholly for charitable or religious purposes during the previous year in which such services are so provided and shall be chargeable to income-tax notwithstanding the provisions of sub-section (1) of section 11. Section 13(1)(b) in The Income- Tax Act, 1961 (b) in the case of a trust- for charitable purposes or a charitable institution created or established after the commencement of....
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....visit our orphanages, widows and Leper colonies where they presently working. The President & Chairman of the organization visit in India and abroad to promote the objective of the society. He visiting the Donor & updating them, During the visit they need donors share about the need of Organization, attend conferences. Personally invites medical professional and teachers to come and give free service to orphanages at different places. 7. Rs. 606171/-, Gift given for promotion of fund collection to fulfill objective of the society. 8. Rs. 2513385/- We helped them in the construction of prayer hall/ community centre. Our churches are mainly established and organized to impart spititual education and awareness to the people. We have church building where the local Chirstian community gathers for worship. Our churches are also a means of reaching out to the needy people with help. We have gone through the social activity. 9. Rs. 10000/-, We paid donation to other Christian school like Chiristian Council for Mother Teresa Social Justice and other. In such school there are student who are from very poor family. Our small amount helps to provide the basic need for those children. Th....
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....benefit of a particular religious community, namely Christians. From a plain reading of section 11, it is evident that benefit of this section is available for both charitable and religious purposes, a view underscored by Hon'ble ITAT, Cochin Third Member Bench in the case of The society of Presentation Sisters (ITA # 457/Coch/2007-datd 22.09.09),relevant portion of which is reproduced below: "So for as the provision of sec. 11(1)(a) is concerned, no distinction is made between charitable and religious purposes. A charitable institution can have religious purposes; whereas a religious institution may be partly charitable. Even otherwise relief and help to the poor, medical help to the needy, looking after of deity and temples (mosque, church included) are no doubt religious purposes but these are also considered as charitable in India. Therefore, the view taken that exemption under Sec 11(1)(a) can not be allowed to a charitable trust as it is also carrying on some purposes which are termed as 'religious' is totally unwarranted. Pt. Ram Chandra Shukla vs. Mahadeoji mahabirji & Hazrat All Kanpur & Ors. AIR 1970 SC 450 applied; CIT vs Social Service Centre (2001) ....
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....t proceedings, the assessing officer did not bring any evidence on record to show that activities of the appellant were meant exclusively for members of the Christian community. As mentioned above, there is evidence to show that Children Homes run by the Samiti do admit Hindu and Muslim children, a fact on which the assessing officer did not make any adverse observation, in course of appeal proceedings. For the sake of argument, even if it is accepted that the appellant was catering only to Christians, in the opinion of the Hon'ble Rajasthan High Court, the appellant was still eligible for registration and, thus, entitled to benefit of section 12 A of the IT Act, 1961. It is pertinent that Samiti was granted registration under Section 12A of the IT Act, 1961 on 17.09.80. Since then it has been pursued the objects laid down in the Memorandum of Association and there has been no change in the constitution or the objects of the Samiti. Further, from AY 82-83 and up to AY 06-07, the department never denied benefits of section 11 and 12A of the IT Act, 1961. The assessing officer has not explained the import of his observation that even while the Samiti is registered under the FCR....
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....llowed exempt in case such income is applied to such purposes in India. The word 'such purposes' referes to the charitable as well as religious purposes. Thus one has to see the requirement that application of income for charitable or religious purposes is to be made to the extent of 85%. The Hon'ble Apex Court in the case of Hazrat Pirmahomed Shah Sahib Roza Committee vs. CIT, 63 ITR 490 had an occasion to consider as to whether the income of the Roza property held for wholly religious purposes is exempt from assessment. The Hon'ble Apex Court held that the Roza properties were held for wholly religious purposes and income is exempt u/s 4(3)(i) of the Act 1922 corresponding to Section 11 of the Income Tax Act, 1961. In that case, the Tribunal noticed that surplus income of the property was utilized for running Madrassas, Library and giving food to pilgrims attending Roza and the Mosque on festive occasions. It is not the case of the Revenue that the expenses have not been incurred for purposes for which the society was established. It is also nt the case of the Revenue that the expenses have been incurred for benefit of the persons referred to Section 13(3) of the Act. The ld. C....
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....rm has been registered or is deemed to have been registered or its registration has effect u/s 7 of the Section 184 for an assessment year, the AO is of opinion that there was during the previous year no genuine firm in existence as registered, he may, after giving the firm a reasonable opportunity of being heard cancel the registration of the firm for that assessment year." 21. The dictionary meaning of cancellation is to annul, abrogate or terminate. Hence the legislature provided u/s 186 for cancellation for particular assessment year but in Section 12AA(3), it is mentioned that ld. CIT can cancel the registration. It mean the order of registration passed by the ld. CIT is cancelled and hence order u/s 12AA(3) will terminate or annul that order. 22. The tribunal in the case of the assessee for the assessment year 2007-08 (140 TTJ 508) has held that expenses of Rs. 2.02 crore are to be considered as applied for the objects of the society. The tribunal also held that assessee is entitled to registration as a religious trust. It will be useful to refer to held portion:- "It is nowhere mentioned in the registration certificate that the society is being registered as charitable....
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.... cancelled registration on account of certain irregularities and the following are relevant for Income Tax matter. (a) Without amending the regulations, the posts of president and Chairman were created. Furthermore, father and son were shown as elected for these two posts. (b) Enquiry committee constitute by social weelfare department has noticed serious allegations. A case on the basis of this report is pending with police department. (c) The society is receiving huge sums from foreign services and the society is registered under foreign contribution Act. The sum is not being spent for the purpose for which the funds were received. (d) The society is doing unconstitutional activities by hurting the sentiment of persons belonging to other religions. It is trying to create hatred against other religion. (e) The irregularities committed by the society and the documentary evidences available show that the society is indulging in unconstitutional activities and such activities are also against the national security. 26. On the basis of various procedural irregularities and the regularities referred to above, the Registrar of societies cancelled the registration of societies....