TMI Blog1993 (2) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the Income-tax Officer to treat the assessee as a charitable institution and, therefore, granting exemption under sections 11 and 12 of the IT Act. The assessee has filed returns of income for all the assessment years in question on 30-9-1986. The reasons given by the ITO in refusing to treat the assessee as a charitable institution under section 2(15) of the IT Act and his refusal to grant exemption to the assessee under sections 11 and 12 of the IT Act are contained in the assessment order passed by him for the assessment year 1984-85. The DCIT(A) also has given detailed reasons in allowing exemption to the assessee under sections 11 12 in the order passed by him for the assessment year 1984-85. Therefore, I proceed to decide the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, rejected the claim of exemption made by the assessee under sections 11 12 of the IT Act. 3. The second claim made by the assessee before the ITO is that it is a public religious institution. The ITO examined the rules and regulations of the society and found that the membership is confined to members of the sisterhood and that the Chapter shall have its own right to admit candidates to the monastery and the decisions in this regard are final. In other words, the membership is restricted. The ITO, on the ground that there is neither any contact with the public nor is there any public participation in the activities, held the society cannot be termed as a public religious trust. 4. As against the order of the ITO, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the material world. However, they do meet people, their activities involve the public and they too have interaction with the general public. Any person wishing to be counselled or wishing to meet the carmelite nuns with a personal request that prayers and sacrifices be made on their behalf is welcome in the institution. The carmelite nuns meet and converse with the public, listen to their problems and give them counselling/advice. They offer prayers, penance and sacrifices on their behalf. In specific instances they recommend a poor and deserving person to a sister catholic institution for employment purposes or vocational guidance/training. The general public is permitted to offer prayers in the Chapel, subject however, to the observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 12A of the ITAct. After carefully considering the arguments advanced by the learned counsel for the assessee and perusing the objects of the assessee society, as per the memorandum of association, the DCIT(A) directed the ITO to treat the assessee as a charitable institution and also grant exemption to the assessee under sections 11 12 of the IT Act. As against this order of the DCIT(A) the revenue is in appeal before me. 5. The learned departmental representative contended before me that the assessee is a carmelite convent belonging to carmelite sect. The nuns in the aforesaid society are kept in seclusion and they have no interaction with the public. Apart from offering prayers the society is engaged in activities like maintenanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object of general public utility", there are various other objects which, by their nature, should be judged whether they are charitable or not. For the proposition that the definition of ' charitable purpose ' as contained in section 2(15) is only illustrative and not exhaustive he relied upon the decision of the Andhra Pradesh High Court in the case of Andhra Pradesh State Road Transport Corpn. v. CIT [1975] 100 ITR 392 and subsequently confirmed by the Supreme Court in CIT v. Andhra Pradesh State Road Transport Corpn. [1986] 159 ITR 1. To counter the argument of the learned departmental representative that the nuns in the assessee society are kept in seclusion he contended that the carmelite nuns meet and converse with the public, listen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association, it cannot be disputed that the main object of the association is to offer prayer. For this purpose the assessee society has constructed a prayer tower where the general public is permitted to offer prayers. It is also seen that the carmelite nuns meet and converse with the public, listen to their problems and give them counselling. From this it can be concluded that though the nuns are kept in seclusion they have also interaction with the public and they involve the public while offering prayers. Incidentally, the assessee society is also engaged in the activities of maintaining dairy, poultry, hosts, etc. for earning income which income, of course, enures to the benefit of the members only. The fact that the income earned by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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