ITAT COCHIN BENCH
Mother Superior, Sacred Heart Convent
versus
Commissioner of Income-tax, Kottayam
IT Appeal No. 4 (Coch.) of 2012
[ASSESSMENT YEAR 2011-12]
APRIL 5, 2013
ORDER
B.R. Baskaran, Accountant Member
The assessee has preferred this appeal challenging the order dated 25-10-2011 passed by Ld CIT, Kottayam rejecting the application filed by the assessee seeking registration u/s 12A of the Act.
2. The facts relating to the case are set out in brief. The assessee herein filed an application in the prescribed Form No.10A before Ld CIT, Kottayam on 07.03.2011 seeking registration u/s 12A of the Act. The Ld CIT rejected the same with the following observations:-
“3. The Income tax Officer, Ward 1, Thiruvalla in his report dated 09.06.2011 has stated that the applicant is not a separate entity, but one of the convents under the Generalate of the Sacred heart congregation, Manganam, Kottayam. Since the mandatory clauses are not satisfied in this case, physical verification to substantiate the very existence of the institution could not be done. Accordingly, he has recommended granting registration u/s 12A to the applicant.
4. The Assessing Officer’s contention is found to be correct as it is observed that the institution does not have separate bye laws, without which the objects of the trust and mandatory requirements for granting registration u/s 12A could not be verified. In view of the above, I am not satisfied myself about the genuineness of the Trust and its activities. Therefore, the application filed by the assessee for registration u/s 12AA of the Income tax Act, 1961 stands rejected.”
Aggreived, the assessee has filed this appeal before us.
3. The ld Counsel for the assessee explained the hierarchy of the congregation as under:-
“Sacred Heart Convent, Kurumpamoozhy, Chathanathara P.O., Pathanamthitta District, PIN – 686 510 (the assessee herein) is one of the convents under the Sacred Heart Congregation (Vimala Province), Kanjirapally. The hierarachy of Sacred Heart Congregation is as under:
(a) Generalate
(b) Provinces
(c) Region
(d) House (Convents/Local body)
The constitution of the SACRED HEART CONGREGATION for generalate, province, region and convents is the same. The constitution of the congregation is a written instrument consisting of about 86 pages, besides 20 pages for preamble index etc. Chapters VII, VIII, IX & X are authority and services, from pages 51 to 83 are for generalate, Province and convents. Constitution of the Sacred heart Congregation is divided into XI chapters, out of which Chapter X is authority of services, local community i.e. convents”
The Ld Counsel further submitted that the assessee submitted a copy of constitution of the congregation, but the Ld CIT rejected the application without considering the same. He further submitted that the documents contemplated under section 12A or under Rule 17A to prove the existence of a trust or institution are not only the formal trust deed, but other documents such as revenue record relating to lands held by the trust, property tax receipts, orders, affidavits and declaration of citizens in support of the existence of the trust etc., can also be considered as documents evidencing the trust. In support of this proposition, the Ld A.R placed reliance on the decision of Honorable Madhya Pradesh High Court in the case of Laxminarayan Maharaj v CIT[1984] 150 ITR 465. He further submitted that the assessee herein is a religious institution owning land, buildings etc., and hence there should not be any difficulty for the revenue to vouch the existence of the assessee.
4. The Ld D.R, however submitted that the assessee herein is only a branch of a larger body known as “Sacred Heart Congregation” and hence it cannot be considered as a separate institution. It also does not have separate bye laws. Hence the Ld CIT has pointed out that the objects of the institution and other mandatory requirements could not be verified.
5. We have heard the rival contentions and perused the record. As per the provisions of sub-section (1) of sec. 12AA of the Act, the Commissioner, on receipt of an application for registration of a trust or institution shall call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and also make such inquiries as he may deem necessary in this behalf and after satisfying himself about the objects of the trust or institution and genuineness of its activities, he shall pass an order in writing registering the trust or institution. If the Commissioner is not so satisfied, he shall pass an order in writing refusing to register the trust or institution. Thus the twin conditions prescribed under section 12AA(1) is that the Commissioner has to satisfy himself (a) about the objects of the trust or institution and (b) genuineness of its activities. While making application to the Ld CIT u/s 12A of the Act, the applicant should establish itself that it is a trust or an institution by furnishing the documents evidencing creation of the trust or the establishment of the institution.
6. In the instant case, the income tax officer who made the inquiry has given a report that the applicant is not a separate entity and it is only one of the convents coming under the Generalate of the Sacred heart Congregation. Accordingly he has reported that the mandatory clauses prescribed under the Act were not satisfied in the instant case and hence the field inspection to verify the existence of the institution could not be done. The Ld CIT has also noticed that the applicant herein does not have separate bye laws and accordingly held that the objects of the institution and other mandatory requirements could not be verified.
7. The assessee has explained before us the hierarchy of ‘Sacred Heart Congregation” viz., Generalate, Province, Region and Convents. There is no dispute that the applicant herein is a “Convent”. It was further submitted that the constitution (meaning ‘bye laws’) is the same for all the four hierarchies stated above. It was further submitted that Chapter X of the constitution, referred above, is the authority of services given to the convents. We have gone through the Chapter X of the constitution referred above. We notice that the Chapter X discusses about the formation of new houses, local communities, colonial house, local supervisor, local assembly, local council, service centers etc., and the mode of regulation of the same. In clause 278, which is prescribed under the head “Colonial House”, it is stated as under:-
“In a spirit of co-responsibility, the policy of the local community is shaped according to the constitution, directives of the Church and the decisions of the General, Provincial Synaxis”
Thus, it is seen that the applicant herein is coming under the exclusive control of the Generalate through the hierarchies placed above it. It is directed under Chapter X to form further small units viz., local communities. From these discussions, in our view also, the assessee appears to be one of the branches coming under the “Sacred Heart Congregation”. In the absence of any other documents, we are of the considered view, the applicant cannot be considered to be a separate and independent institution. As pointed out by Ld CIT, the assessee has failed to prove that it is an independent institution, having its own bye-laws and regulations. Accordingly, we do not find any infirmity in the order passed by Ld CIT.
8. In the result, the appeal filed by the assessee is dismissed.
