Tejas Foundation, Hyd, Hyderabad V. Director of Income Tax (Exemption), Hyderabad

ITA 1080/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66407 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIDISHA KALRA
• Assessee Lawyers: PAUL D J RATNAM
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1080/HYD/2012 ASSESSMENT YEAR: 2012-13 TEJAS FOUNDATION, ... APPELLANT HYDERABAD. (PAN AACTT0731B) VS. DIRECTOR OF INCOME TAX(EXEMPTIONS), RESPON DENT HYDERABAD. APPELLANT BY : SHRI PAUL D.J. RATNAM RESPONDENT BY : SMT. VIDISHA KALRA DATE OF HEARING : 18/10/2012 DATE OF PRONOUNCEMENT : 31/10 /2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF DIT(E), HYDERABAD DATED 31/05/2012 FOR THE ASSES SMENT YEAR 2012-13. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED AN APPLICATION IN FORM NO. 10A ON 24/11/2011 SEEKING REGISTRATION U/S 12AA OF THE IT ACT, 1961. 2 ITA NO. 1080/HYD/2012 TEJAS FOUNDATION 3. THE DIT(E) VIDE HIS LETTER DATED 22/02/2012 SOUG HT FOR CERTAIN INFORMATION/CLARIFICATION/DOCUMENTS FROM TH E ASSESSEE AND THE ASSESSEE VIDE ITS LETTER DATED 28/03/2012 R EPLIED THE QUERIES RAISED BY THE DIT(E). 4. THE DIT(E), AGAIN, VIDE HIS LETTER DATED 08/05/2 012 ASKED TO FURNISH THE COMPLETE ADDRESSES OF THE FOUNDERS/M EMBERS OF THE SOCIETY ALONG WITH DECLARATION U/S 11(5) AND CE RTIFICATE U/S 13(1)(C) OF THE ACT DULY SIGNED BY ALL THE MEMBERS OF THE SOCIETY ON OR BEFORE 23/05/2012 AND THE SAME WERE C OMPLIED WITH BY THE ASSESSEE. HOWEVER, THE DIT(E) REFUSED T O REGISTER U/S 12AA OF THE ACT FOR THE REASONS WHICH ARE EXTRA NEOUS TO THE LETTER DATED 22/02/2012 AND LETTER DATED 08/05/ 2012. 5. THE REASON GIVEN BY THE DIT(E) FOR REJECTING THE APPLICATION THAT THE MEMORANDUM OF ASSOCIATION DID NOT CONTAIN CORRECT ADDRESSES OF THE 7 FOUNDING MEMBERS , SPACES FOR WITNESSES WERE LEFT BLANK, AS THESE REQUIREMENT S ARE MANDATORY IN SEEKING REGISTRATION OF THE SOCIETY UN DER APSR ACT. THE DIT(E) FURTHER MENTIONED THAT THE EXPRESSI ON GOVERNING BODY WAS NOT DEFINED IN THE RULES OF TH E SOCIETY WHEREAS IT IS A GOVERNING BODY, WHICH HAS TO DECIDE THE ELIGIBILITY CRITERIA IN DIFFERENT CATEGORIES OF MEM BERSHIP. HENCE, THE DIT(A) CONCLUDED THAT THE LEGAL REQUIREMENTS HA S NOT BEEN SATISFIED BY THE SOCIETY AS THE MEMORANDUM OF ASSOC IATION AND RULES AND REGULATIONS ARE FOUND TO BE NOT FOLLOWED AND, THEREFORE, REFUSED TO REGISTER THE SOCIETY U/S 12AA OF THE ACT. 3 ITA NO. 1080/HYD/2012 TEJAS FOUNDATION 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI PAUL D.J. RATNAM ARGUED THAT THIS IS BECAUSE EVEN IF A S OCIETY IS NOT REGISTERED UNDER THE STATE ACT, IT IS NOT A BAR FOR REGISTRATION OF THE SOCIETY U/S 12AA OF THE INCOME TAX ACT. ACCO RDING TO RULE 17A OF THE INCOME TAX RULES, 1962, THE DOCUMEN T EVIDENCING THE CREATION OF THE TRUST/ESTABLISHMENT OF THE INSTITUTION IS ADEQUATE AND SUCH CREATION/ESTABLISH MENT UNDER AN INSTRUMENT IS NOT NECESSARY. FOR THIS PROPOSITIO N, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECI SION OF THE ITAT, AMRITSAR BENCH IN THE CASE OF MALLIRAM CHARIT ABLE TRUST VS. CIT[2003] 260 ITR (AT) 118 (ASR-TRIB) IN WHICH IT IS HELD THAT MERELY BECAUSE A TRUST WAS NOT REGISTERED WITH REGISTRAR OF DOCUMENTS OR REGISTRAR OF SOCIETIES, REGISTRATIO N U/S 12A CANNOT BE REFUSED. HE FURTHER HELD THAT WHILE DISPO SING OF AN APPLICATION MADE U/S 12AA OF THE ACT, THE COMMISSIO NER OF INCOME-TAX IS REQUIRED TO EXAMINE WHETHER THE APPLI CATION IS MADE IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 12AA READ WITH RULE 17A OF THE IT RULES AND WHETHER FORM NO. 10A WAS PROPERLY FILED AND WHETHER THE OBJECTS OF THE T RUST ARE CHARITABLE IN NATURE AND WHETHER THE ACTIVITIES OF THE TRUST WERE GENUINE AND CANNOT GO BEYOND. FOR THIS PROPOS ITION, HE RELIED UPON THE DECISION IN THE CASE OF MANSUKHI DE VI BIHANI JAN HITAKARI TRUST VS. CIT [2005] 277 ITR (AT) 140 (JODH), AGARWAL MITRA MNDAL TRUST VS. DIT(E) [2007] 293 ITR 259 (AT) (DEL.) AND SHRI SAINJI DHARMARTH TRUST [2006] 8 SOT 446 (DELHI). 4 ITA NO. 1080/HYD/2012 TEJAS FOUNDATION 8. ON THE OTHER HAND, THE LEARNED DR SMT. VIDISHA K ARLA RELIED UPON THE ORDER OF DIT(E). 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE DIT(E) HAS NOT RAISED ANY OBJECTION REGARDING PROPER FILING OF FORM NO. 10A O R REGARDING OBJECTS OF THE TRUST OR GENUINENESS OF THE ACTIVITI ES OF THE TRUST. FURTHER, MERELY BECAUSE THE TRUST IS NOT RE GISTERED, REGISTRATION U/S 12AA CANNOT BE REFUSED. IN THIS CO NNECTION, WE REFER TO THE DECISION OF THE JURISDICTIONAL ITAT IN THE CASE OF M/S KAMALAKAR MEMORIAL CHARITABLE TRUST VS. DIT(E), HYDERABAD IN ITA NO. 1145/HYD/09 HAVE OPINED THAT I N VIEW OF THE DECISION OF THE HONBLE NAGPUR BENCH OF THE ITA T IN THE CASE OF AGRICULTURAL PRODUCE AND MARKETING COMMITTE E, TELHARA AND ORS VS. CIT, 97 TTJ 165, THE MERE FACT THAT THE ASSESSEE TRUST IS NOT REGISTERED UNDER THE PROVISIONS OF SEC TION 43(1) OF AP CHARITABLE AND HINDU RELIGIOUS INSTITUTIONS AND ENDOWMENTS ACT, 1987, SHALL NOT RENDER THE ASSESSEE AS A NON C HARITABLE ONE AND THE ASSESSEE COULD NOT HAVE BEEN DENIED EXE MPTION U/S 11 OF THE ACT EVEN ON THIS GROUND. IN VIEW OF T HE ABOVE, WE THEREFORE RESTORE THE MATTER TO THE FILE OF THE DIT(E) WITH A DIRECTION TO GRANT THE REGISTRATION TO THE ASSESSEE SOCIETY U/S 12A. THE ASSESSEE IS DIRECTED TO FULFILL THE LEGAL REQUIREMENTS AS RAISED BY THE DIT(E). 5 ITA NO. 1080/HYD/2012 TEJAS FOUNDATION 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 31/10/2012. SD/- SD/- ( CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 31 ST OCTOBER, 2012. KV COPY TO:- 1) TEJAS FOUNDATION, C/O K. VASANTKUMAR & A.V. RAGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYD.-1.. 2) DIT(E), AAYAKAR BHAVAN, HYDERABAD. 3) ADIT(E), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.