2015 (10) TMI 15 - AT - Income Tax

Eligibility for claiming exemption under section 11 - it was submitted that the assessee is carrying religious activities - religious activities v/s charitable activities - Held that - The assessee has not carried any activity relating to the objects as enumerated for the purpose of which the assessee is incorporated. The assessee has not incurred single paise for the purpose of charitable activities. The assessee itself has admitted before the ld. CIT(A) that the it is a religious organization and the assessee organization has undertaken religious pilgrimage and other activities relating to the religious. Under these facts and circumstances of the case, we find that the assessee is not entitled for claiming exemption under section 11 of the Act. The assessee, in his written submission, has submitted that there was a mistake occur while filing MoA along with Form No. 10A before the ld. DIT(E) on 12.02.2004. Subsequently, on 13.03.2014, the assessee has corrected the mistake in the amended fifth clause and submitted before the ld. DIT(E), Chennai. However, we have not find any reference with regard to the correct fifth clause either from the assessment order or from the order of the ld. CIT(A). Even before us, the assessee has not filed any revised order passed by the ld. DIT(E). As on the date, as per the certificate dated 30.07.2004 vide DIT(E) No. 2(845)/03-04 issued by the ld. DIT(E), the assessee is a Public Charitable Trust under section 12AA of the Income Tax Act, 1961. The activities carried by the assessee are only religious activities. The assessee has not obtained any certificate from the DIT(E) to treat the assessee as a religious trust. Under these facts and circumstances of the case, we hold that the assessee is a Public Charitable Trust and therefore, the activities relating to religious are not eligible for exemption under section 11 of the Act. Thus, we find no infirmity in the order passed by the ld. CIT(A). In the present case, the assessee is registered as a public charitable trust and the assessee carried only religious activities and no charitable activities are carried out. Therefore, having registered under section 12AA of the Income Tax Act, 1961 as a Public Charitable Trust, the assessee cannot claim benefit under section 11 carrying any charitable activities. For the religious activities carried by the assessee, no approval from the DIT(E) has been obtained. - Decided against assessee.

Summary

Issues:
1. Exemption under section 11 of the Income Tax Act, 1961 for the assessment years 2010-11 and 2011-12.
2. Nature of activities carried out by the assessee - charitable or religious.
3. Eligibility of the assessee for exemption under section 11 based on the nature of activities.
4. Correctness of registration as a Public Charitable Trust under section 12AA of the Income Tax Act, 1961.

Issue 1: Exemption under section 11 of the Income Tax Act, 1961 for the assessment years 2010-11 and 2011-12:

The assessee, a company initially incorporated under section 25 of the Companies Act, applied for registration as a Public Charitable Trust under section 12AA of the Income Tax Act, 1961. The Assessing Officer denied the exemption claim under section 11, alleging that the assessee concealed the religious nature of its activities while obtaining registration. The Assessing Officer concluded that the assessee's activities were religious in nature, leading to the denial of the exemption claim.

Issue 2: Nature of activities carried out by the assessee - charitable or religious:

The assessee maintained a TV channel called "GOD TV" and engaged in activities related to Christianity. The ld. CIT(A) determined that the assessee was exclusively involved in propagating the activities and faith of Christianity. The Tribunal noted that the assessee admitted to being a religious organization and had not conducted any charitable activities as per its objects.

Issue 3: Eligibility of the assessee for exemption under section 11 based on the nature of activities:

The Tribunal observed that the assessee had not undertaken any charitable activities as per its objects but was primarily engaged in religious activities. Despite the assessee's claim of correcting a mistake in its application for registration, the Tribunal found no evidence of the corrected clause. The Tribunal held that the assessee, registered as a Public Charitable Trust, was not eligible for exemption under section 11 due to its religious activities.

Issue 4: Correctness of registration as a Public Charitable Trust under section 12AA of the Income Tax Act, 1961:

The Tribunal emphasized that the assessee, registered as a Public Charitable Trust, had not obtained approval for conducting religious activities. The Tribunal distinguished a case law cited by the assessee involving a public religious trust, noting that the present case involved a public charitable trust engaged solely in religious activities. Consequently, the Tribunal upheld the decision of the ld. CIT(A) and dismissed the appeal filed by the assessee for both assessment years.

This detailed analysis of the judgment highlights the key issues surrounding the denial of exemption under section 11 of the Income Tax Act, 1961 to the assessee based on the nature of its activities and registration status as a Public Charitable Trust.