SCMS MARITIME TRAINING INSTITUTE, MUMBAI V. DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI

ITA 1167/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0903 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-07-2010
• Assessment Year: misc
• Appeal Filed On: 20-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Set aside
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1167/MUM/2009 SCMS MARITIME TRAINING INSTITUTE DIRECTOR OF INCOME TAX (EXEMPTION) 5/6, POONAM KIRTI, POONAM NAGAR PIRAMAL CHAMBERS, 6 TH FLLOR OFF MAHAKALI ROAD, ANDHERI (E) VS. MUMBAI MUMBAI 400093 PAN - AAGTS 8333 N APPELLANT RESPONDENT APPELLANT BY: SHRI MEHUL SHAH RESPONDENT BY: SHRI A.K. NAYAK O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE TRUST IS AGAINST THE OR DER OF THE DIRECTOR OF INCOME-TAX (EXEMPTION), MUMBAI DATED 24.12.2008 WIT H REFERENCE TO REJECTION OF REGISTRATION OF TRUST. 2. BRIEFLY STATED, THE ASSESSEE IS A TRUST FORMED WITH AN OBJECT TO IMPART EDUCATION AND PURSUE OTHER CHARITABLE OBJECTS AND A T PRESENT IMPARTING TRAINING TO MERCHANT NAVY CADETS BY RUNNING VARIOUS COURSES AS SUBSIDIZED RATES AND WITH AN OBJECT TO MAKE NO MATERIAL SURPLU S. AT THE DIRECTIONS OF THE DIRECTORATE OF SHIPPING, GOVERNMENT OF INDIA VI DE LETTER DATED 11.09.2002 THE TRUST WAS UNDER THE OBLIGATION TO RU N SUCH ACTIVITY. THE ASSESSEE APPLIED FOR REGISTRATION OF THE TRUST WITH THE DIRECTOR OF INCOME-TAX (EXEMPTION) AND DURING THE PENDENCY OF PROCEEDINGS THE DI (EXEMPTIONS) ISSUED NOTICE ASKED FOR THE FOLLOWING DOCUMENTS: - I) ORIGINAL TRUST DEED II) DOCUMENTARY EVIDENCE WITH REGARD TO CREATION OF TH E TRUST III) TWO COPIES OF THE ACCOUNTS OF THE TRUST RELATING TO EACH OF SUCH EARLIER FINANCIAL YEARS IV) EVIDENCE OF ACTIVITIES V) THE N.O.C. FROM THE OWNER OF THE PREMISES ALONG WIT H PROOF OF OWNERSHIP FOR THE PREMISES FROM WHICH THE TRUST IS FUNCTIONING ITA NO. 1167/MUM/2009 SCMS MARITIME TRAINING INSTITUTE 2 VI) CERTIFICATE OF REGISTRATION ISSUED BY THE CHARITY C OMMISSIONER/ REGISTRAR OF SOCIETIES/CERTIFICATE OF INCORPORATION UNDER SECTION 25 OF THE COMPANIES ACT VII) COPY OF BANK ACCOUNT SHOWING TRANSACTION SINCE OPEN ING OF THE ACCOUNT TILL DATE VIII) PAN OF THE TRUST AND ALSO THE TRUSTEES IX) COPIES OF INCOME TAX RETURNS FILED FOR THE LAST THR EE YEARS 3. IN RESPONSE TO THE ABOVE REQUIREMENTS, IT SEEMS THA T THE ASSESSEE HAS FILED ALL THE DETAILS EXCEPT THE ORIGINAL TRUST DEE D, WHICH WAS NOT RECEIVED FROM THE OFFICE OF THE CHARITY COMMISSIONER AFTER R EGISTRATION. FURTHER THE DI (EXEMPTION) ALSO ASKED FOR VARIOUS BOOKS OF ACCOUNT AND DOCUMENTS WHICH THE ASSESSEE CLAIMED THEY WERE FURNISHED BUT THE DI (EXEMPTION) STATED THAT THEY WERE NOT FURNISHED. ULTIMATELY, VIDE ORDER DAT ED 24.12.2008 THE DI (EXEMPTION) HAS PASSED AN ORDER REFUSING TO REGISTE R THE ASSESSEE TRUST BY STATING AS UNDER: - THESE DOCUMENTS WERE ASKED TO BE PRODUCED PARTICUL ARLY TO VERIFY THE GENUINENESS OF THE ACTIVITY IN VIEW OF THE FACT THAT THERE HAS BEEN NO PROPER AND TIMELY SUBMISSION INSPITE BY GIVING SEVE RAL OPPORTUNITIES. IN ADDITION TO THIS, IT IS SEEN FROM THE COPY OF ACCOU NT SUBMITTED FOR THE 3 YEARS THAT THE APPLICANT TRUSTEE HAS FILED RETURN O F INCOME FOR A.Y. 2006- 07 AND A.Y. 2007-08 FILED ON 09.01.2008 IN THE I.T. O. WARD 20(3)(4), MUMBAI; FOR A.Y. 2008-09 IN THE I.T.O., WARD 20(3)( 2), MUMBAI ON 11.12.2008. IT IS ALSO SEEN THAT THERE HAS BEEN CLA IM OF HEAVY EXPENDITURE AGAINST THE INCOME AS PER THE INCOME & EXPENDITURE ACCOUNT. THE BALANCE SHEET OF THE INSTITUTION FOR T HE YEAR ENDING 2007, 2008 THAT ADVANCES HAVE BEEN MADE TO THE TRUSTEE AP PARENTLY IN VIOLATION OF SECTION 13 OF THE ACT. SUMMARY OF THE BANK TRANSACTIONS WAS ALSO NOT FURNISHED AS REQUIRED. IN TOTO, THE GENUIN ENESS OF THE ACTIVITIES OF THE INSTITUTION IN LIGHT OF THE ABOVE MENTIONED NON-COMPLIANCES AND DISCUSSION IS NOT PROVED. AS PER THE PROVISIONS OF SECTION 12AA(1)(B), A TRUS T IS TO BE REGISTERED IF THE COMMISSIONER IS SATISFIED ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. THE APPLICANT HAS NO T COMPLIED PROPERLY WITH THE REQUIREMENTS NECESSARY FOR REGISTRATION U/ S. 12A OF THE ACT. THERE IS, THUS, NO MATERIAL BEFORE ME TO SATISFY MY SELF ABOUT THE GENUINENESS OF ITS ACTIVITIES, THE CONDITION PRECED ENT TO GRANT REGISTRATION IN THIS CASE IS NOT SATISFIED. IN VIEW OF THE ABOVE , I REFUSE TO REGISTER THE APPLICANT TRUST. 4. BEFORE US THE LEARNED COUNSEL SUBMITTED THAT THE A SSESSEE HAS COMPLIED WITH ALL THE REQUIREMENTS EXCEPT THAT THE ORIGINAL DEED WAS NOT FURNISHED AS THE SAME WAS PENDING WITH THE CHARITY COMMISSIONER AT THAT ITA NO. 1167/MUM/2009 SCMS MARITIME TRAINING INSTITUTE 3 POINT OF TIME AND THE SAID TRUST DEED WAS RECEIVED BY THE ASSESSEE ON 30 TH DECEMBER 2008 BY WHICH TIME THE ORDER UNDER SECTION 12AA REFUSING REGISTRATION WAS ALREADY PASSED. IN VIEW OF THIS IT WAS THE PRAYER OF THE ASSESSEES COUNSEL THAT THE MATTER CAN BE RESTORED TO THE FILE OF THE DI (EXEMPTION) FOR FRESH EXAMINATION AS THE ASSESSEE I S HAVING THE ORIGINAL TRUST DEED COPY. 5. THE LEARNED D.R., HOWEVER, SUPPORTED THE ORDER OF T HE DI (EXEMPTION). 6. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE ORDE R OF THE DI (EXEMPTION) HE WANTED TO EXAMINE THE ORIGINAL TRUST DEED COPY. THE COPY OF THE TRUST DEED WAS ALSO FILED WITH THE APPLICATION. NOWHERE IN THE ORDER THE DI (EXEMPTION) HAS CONSIDERED WHETHER THE OBJECTS O F THE TRUST ARE CHARITABLE IN NATURE OR NOT. HE HAS RELIED ONLY ON THE FACT THAT THE ASSESSEE HAS NOT PRODUCED THE ORIGINAL TRUST DEED FOR VERIFI CATION. SINCE THE ORIGINAL DOCUMENT WAS NOW AVAILABLE WITH THE ASSESSEE, HAVIN G BEEN RECEIVED FROM THE CHARITY COMMISSIONER, WE ARE OF THE OPINION THA T THE MATTER CAN BE RE- EXAMINED BY THE DI (EXEMPTION). SINCE THE TRUST IS ALREADY REGISTERED WITH THE CHARITY COMMISSIONER THIS FACT ALSO HAS TO BE E XAMINED BY THE DI (EXEMPTIONS). IN OUR VIEW, REGISTRATION CANNOT BE S IMPLY REFUSED JUST BECAUSE THE ASSESSEE HAS NOT FURNISHED ORIGINAL DOC UMENT FOR VERIFICATION. IN VIEW OF THIS WE SET ASIDE THE ORDER OF THE DI (EXEM PTIONS) TO CONSIDER THE ISSUE OF REGISTRATION AFRESH AFTER GIVING PROPER OP PORTUNITY TO THE ASSESSEE. GROUNDS ARE ALLOWED TO THAT EXTENT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY 2010. SD/- SD/- (N.V. VASUDEVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH JULY 2010 ITA NO. 1167/MUM/2009 SCMS MARITIME TRAINING INSTITUTE 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME-TAX (EXEMPTION), MUMBAI 4. THE ITO (E)-II(1), MUMBAI 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.