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TMI Blog2018 (4) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has erred in allowing the expenditure of Rs. 13,86,39,904/- to the assessee, which was assessed as the income of assessee. 3. The appellant craves leave to add, alter, amend any ground of appeal raised above at the time of hearing." CO No. 297/Del/2015 1. That the learned Commissioner of Income Tax (Appeals) has erred in not holding that the objects and the activities of Indian Society of the Church of Jesus Christ of Latter -day Saints ("the Society") are for the benefit of the general public at large, and that it has not been created or established for the benefit of any particular religious community or caste. 2. That the learned Commissioner of Income Tax (Appeals) has erred in failing to appreciate that the Hon'ble Tribunal has held in ITA o. 2240 / DEL/2013 for the assessment year 2009-10 that the objects of the Society are both religious and charitable and that its activities are not for the benefit for any particular religious community and caste, but for the benefit of the general public. 3. That the learned Commissioner of Income Tax (Appeals) has erred in not holding that the ADI (E) was not justified in denying deduction of the aggregate expenditure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igious community, and therefore Ld.AO was of the opinion that assessee is not entitled to claim exemption under section 13 (1) (B) of the Act. 3. Aggrieved by order of Ld.AO, assessee preferred appeal before Ld. CIT (A), and order passed by Ld. AO was reversed. 4. Aggrieved by order of Ld.CIT (A), revenue is in appeal before us for both the assessment years. In Cross Objection, assessee supports order of Ld. CIT (A). 5. Ld. DR supported the observations of Ld. AO. 6. Ld. Counsel submitted that Assessing Officer disallowed the claim of assessee for Assessment Year 2009-10 and this issue travelled till this Tribunal. It has been submitted that this Tribunal vide order dated 21/02/14 passed in ITA No. 2240/Del/2013 dealt with this issue as under: "14. We have heard the rival submissions of both the parties and have gone through the material available on record. The appeal was earlier heard on 21.10.2013 but certain clarifications were required, therefore, it was fixed for clarifications and finally it was heard on 27.1.2014. The first question to be decided by us is as to whether the society was eligible for exemption u/s 11 of Act or not. We find that assessee is a charitable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Barkate Saifiyah Society (1995) 213 ITR 492. If Jainism is accepted to be a religion and from- the convents of the trust deed it can be spelt out that not only to propagate Jainism, or help and assist maintenance of the temple, sadhus, sadhvis, shraviks and shravks yet other goals are set in the trust deed, then the trust would become a charitable trust so also a religious trust or it can be addressed as a charitable religious trust and if that be so section 13(1 )(b) would not be applicable," 17. Moreover we observe that in the A.Y. 2007-08 the issue of exemption u/s 11 along with violation of section 13(1)(b) was examined by the Assessing Officer and after detailed examination the exemption was allowed to the assessee society. We find that during assessment proceedings in assessment year 2007- 08 the issue of violation of provisions of section 13(1)(b) was examined by Assessing Officer as is apparent from page 85 to 104 of paper book where a copy of notice for violation of provisions of section 13( 1 )(b) along with reply of assessee as well as consequent assessment order is placed. In this year, the Assessing Officer has not denied exemption u/s 11 and had accepted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified at all as the expenses were incurred for the fulfillment of the objects of the society and moreover for the purpose of disallowing claim u/s 11 the income as understood in the commercial sense has to be considered and not the gross receipts. The case law reported at 201 ITR 564 relates to the Hindustan Welfare Trust v. Director of Income Tax exemption and in that case the Hon'ble Calcutta High Court held-as under: "The income from property held for trust has to be arrived at in normal commercial manner and there is no scope for complying with the provisions of section 14 of Income Tax Act, 1961. In other words, the real income has to be taken into account for the purpose of considering the exemption. If there be any loss that cannot form part of the real income of trust and necessarily it has to be excluded from consideration. Similar views were held by the Calcutta High Court in the case law of CIT v., Birla Janhit Trust reported at 208 ITR 372. Therefore, following the above judgments the income of assessee was to be computed in a commercial sense and that can only be calculated after allowing expenses incurred by the assessee. Therefore, the disallowance of expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re purpose and activities of the trust would be purely religious in color. The objects reflect the intent of the trust as observance of the tenets of Islam, but do not restrict the activities of the trust to religious obligations only and for the benefit of the members of the community. The Privy Council Trustees of The Tribune In re [1939] 71TR 415 has held that in judging whether a certain purpose is of public benefit or not, the Courts must in general apply the standards of customary law and common opinion amongst the community to which the parties interested belong to. Therefore, it is pertinent to analyse whether the customary law aid restrict the charitable disposition of the intended activities in the objects. 5 The provision of food to the public on religious days of the community as per object (a) and (b), the establishment of Madarsa and organizations for dissemination of religious education under object (d) and rendering assistance to the needy and poor for religious activities under object (e) would reflect the essence of charity. The objects (a) and (b) provide arrangement for nyaz and 'majlis (lunch and dinner) on the religious occasion of the birth anniversary' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the activities of the trust though both charitable and religious are not exclusively meant for a particular religious community. The objects, as explained in the preceding paragraphs, do not channel the benefits to any community if not. the Dawoodi Bohra Community and thus, would not fall under the provisions of Section 13(l)(b) of the Act. 50. In that view of the matter, we are of the considered opinion that the respondent-trust is d charitable and religious trust which does not benefit any specific religious community and therefore, it cannot be held that Section 13(l)(b) of the Act would be attracted to the respondent-trust and thereby, it would be eligible to claim exemption under Section 11 of the Act. 11.1. When we examine the facts of the present case before us, in view of the ratio laid down by the Hon'ble Supreme Court in the above cited two decisions, we come to the conclusion that although the appellant society before us has both charitable and religious purposes, it is not been created or established for the benefit of any particular religious community only and its activities are for the benefit of the public at large. Hereinabove, in the preceding paragraph w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct the AO to grant the claimed exemption to assessee society. The issue raised in the above grounds is thus decided in favour of assessee society and in result grounds are allowed. 6.1. Ld.Counsel submitted that Hon'ble Jurisdictional High Court in assessee's own case in ITA No. 319/2017 vide order dated 07/09/17 has upheld the order of this Tribunal for Assessment Year 2012-13. Hon'ble High Court commenting upon the order of this Tribunal observed as under: "15. In the present case, the factual determination by the ITAT that (i) the programmes conducted by the Society "are open for public at large without any distinction of caste, creed or religion and the benefits of these programmes held at the meeting house are available to the general public at large and (ii) priests are not managing the affairs of the society, have not been shown by the Revenue to be perverse. It is not the percentage of expenditure on persons not belonging to the religious community that mattered. What was significant was that there were donations made by the Society for the general public utility. This showed that it was not exclusively for the benefit of one particular religious community. 16. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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