Grace Bible Mission, Hosur V. CIT, Salem

ITA 1190/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81279 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-10-2014
• Assessment Year: misc
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: A K VENUGOPAL
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , !' # , $ % BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO. 1190/MDS./2014 M/S.GRACE BIBLE MISSION TRUST, NO.4/518,4 TH CROSS VINAYAKAPURAM,HOSUR 635 109. VS. THE COMMISSIONER OF INCOME TAX , SALEM 636 007. PAN AACTG 0789 Q ( &' / APPELLANT ) ( #(&' / RESPONDENT ) / APPELLANT BY : MR.A.K.VENUGOPAL, C.A / RESPONDENT BY : MR.GURU BHASHYAM, JCIT D.R / DATE OF HEARING : 07.10.2014 /DATE OF PRONOUNCEMENT : 28.11.2014 ) / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, SALEM, DATED 21 .02.2014 IN ITA NO.1190 /MDS/14 2 C. NO.9755(42)/2013-2014/CIT/SLM, WHEREIN THE LD.CI T HELD THAT THE ASSESSEE TRUST IS NOT ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT. 2. THE ASSESSEE HAS RAISED EIGHT ELABORATE GROUND S IN ITS APPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT, SALEM FOR NOT GRANTING REGIST RATION TO THE ASSESSEE-TRUST U/S. 12AA OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE-TRUST HAD SOUGHT REGISTRATION THROUGH AN APPLICATION IN FORM NO.10A ON 22.11.2013 UNDER SECTION12AA OF THE ACT. DURING T HE COURSE OF THE PROCEEDINGS, THE ASSESSEE TRUST WAS ASKED TO FURNIS H DETAILS OF THE TRUSTEES, DONATIONS, BOOKS OF ACCOUNT, CHARITABLE A CTIVITIES ETC. IN RESPONSE, THE ASSESSEE TRUST FURNISHED THE DETAILS CALLED FOR VIDE ITS LETTER DATED 12.12.2013. IT WAS FURTHER SUBMITTED B Y PR.SAJI ABRAHAM,PR.AUGUSTINE ARUMUGAM WHO APPEARED BEFORE T HE LD.CIT ON BEHALF OF THE ASSESSEE TRUST THAT, THE ASSESSEE- TRUST IS RUN BY ORDAINED PASTORS TO SPREAD THE MESSAGE OF THE GOSPE L. IT WAS ALSO ADMITTED THAT THE TRUST WAS NOT REGISTERED WITH THE RELEVANT STATUTORY ITA NO.1190 /MDS/14 3 AUTHORITY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND REMAND REPORT OF THE ASSESSING OFFICER DATED 10.02. 2014, THE LD. CIT HELD IN HIS ORDER THAT:- 3. ----- ---- ON GOING THROUGH THE A.O.S REPORT, IT IS NOTICED THAT THE TRUST WAS CREATED BY A DEED DATED 13.11.2013, WHICH IS NOT REGISTERED. IT IS ALSO REPORTED BY THE A.O. THAT THE TRUST IS FUNC TIONING IN A SCHOOL PREMISES AND THE MAIN ACTIVITIES OF THE TRUST IS TO ORGANIZE PRAYERS IN A HALL AT SCHOOL BUILDING ON SUNDAYS AND COUNSELING F OR CHRISTIANS AS WELL AS TO PROVIDE KNOWLEDGE OF THE BIBLE. FURTHER, IT I S REPORTED THAT THE TUST HAS NOT OBTAINED PAN SO FAR AND HAS NO BANK ACCOUNT . MOREOVER, THE TRUST IS MEANT FOR RELIGIOUS PURPOSE. 4. ON GOING THROUGH THE DETAILS FILED BY THE TRUST , IT IS NOTED THAT THE TRUSTS RECEIPT IS B-TAXABLE LIMIT AND THE TRUST HA S NOT DONE APPRECIABLE CHARITABLE ACTIVITIES. MOREOVER, IN VIEW OF THE DI SCUSSIONS MADE IN PARA 3 ABOVE, IT IS NOTICED THAT THE APPLICANT TRUST HAS ENCLOSED A COPY OF THE UNREGISTERED DEED AND NOT THE REGISTERED DEED WHICH EVIDENCES THE CREATION OF THE RUST. THIS CREATES DISBELIEF ON THE EXISTENCE OF THE TRUST. THUS, THE APPLICANT TRUST HAS FAILED TO DISCHARGE T HE ONUS OF PROVING THE EXISTENCE OF THE TRUST, CHARITABLE NATURE OF THE OB JECTS OF THE TRUST AND GENUINENESS OF THE ACTIVITIES CARRIED OUT BY THE TR UST. UNDER THESE CIRCUMSTANCES, I AM CONSTRAINED TO HOLD THAT THE GE NUINENESS OF THE TRUST AND CHARITABLE NATURE OF ITS WORK HAS NOT BEEN ESTA BLISHED TO CONSIDER THE SAME AS ELIGIBLE FOR REGISTRATION UNDER SECTION .12AA OF THE INCOME TAX ACT, 1961. 4. BEFORE US, LD.A.R SUBMITTED THAT:- ON A COMBINED READING OF THE ABOVE PROVISIONS, IT WOULD BE CLEAR THAT THE APPLIC ATION FOR REGISTRATION ITA NO.1190 /MDS/14 4 U/S. 12A HAS TO BE MADE IN FORM 10A PRESCRIBED BY R ULE 17A OF THE INCOME-TAX RULES, 1962, BEFORE THE EXPIRY OF ONE YE AR FROM THE DATE OF THE CREATION OF THE TRUST OR ESTABLISHMENT OF TH E INSTITUTION WHICHEVER IS LATER. IT HAS TO BE MADE BY THE PERSO N WHO IS IN RECEIPT OF THE INCOME OF THE TRUST. IT IS WELL SETTLED LAW THAT COMMENCEMENT OF THE ACTIVITIES OF THE TRUST IS NOT A SINE QUA NON F OR REGISTRATION OF TRUST U/S. 12AA OF THE I.T.ACT, 1961. ONLY THE OBJECTS OF THE TRUST AND THE GENUINENESS OF THE TRUST ARE THE DECIDING FACTORS F OR GRANT OF REGISTRATION U/S. 12AA. IN THE PRESENT CASE, THERE IS NOTHING TO EVEN SUGGEST THAT THE OBJECTS OF THE TRUST ARE NOT IN TU NE WITH THE PROVISIONS OF SECTION 11 TO 13 OF THE I.T.ACT, 1961 NOR THERE IS ANY DISPUTE ON THE GENUINENESS OF THE TRUST. AS REGARDS, NON-REGISTRA TION OF TRUST DEED WITH THE REGISTRATION AUTHORITIES OR WITH THE REGIS TRAR OF SOCIETIES, IT MAY BE NOTED THAT REGISTRATION OF TRUST DEED WITH T HE AUTHORITIES OF AFORESAID, IS NOT A CRITERION FOR GRANT OF REGISTRA TION/S 12AA OF THE I.T.ACT, 1961. THE LD. A.R. ALSO PLACED RELIANCE ON THE DECISIO N OF MALLI RAM CHARITABLE TRUST VS. CIT IN (2003) 132 TAXMAN 0221. THE LD. A.R. FURTHER SUBMITTED THAT THE OBJECTS OF THE TRUST WAS CHARITABLE AND RELIGIOUS, THOUGH THE TRUST WAS NOT REGISTERED AND THERE WAS ITA NO.1190 /MDS/14 5 NOTHING ADVERSE ON RECORD TO SUGGEST ON THE GENUINE SS AND ACTIVITIES OF THE TRUST. IT WAS THEREFORE, PRAYED THAT REGIST RATION U/S. 12AA OF THE ACT MAY BE GRANTED. ON THE OTHER HAND, LD.D.R ARGUED IN SUPPORT OF THE ORDER OF THE LD. CIT. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE IT IS VERY CLEAR THAT THE ASSESSEE TRUST WHICH IS SUPPOSED TO BE RELIGIOUS (OR/AND) CHARITABLE IN NATURE WAS NOT REGISTERED WI TH ANY PRESCRIBED STATUTORY AUTHORITY. IN THIS EVENTUALITY NOTHING I S BROUGHT ON RECORD BEFORE US TO ESTABLISH THE LEGAL VALIDITY AND THE E XISTENCE OF THE ASSESSEE TRUST IN ACCORDANCE WITH THE RELEVANT CHAR ITABLE TRUST ACT/TRUST ACT. THEREFORE, IN THE LARGER INTEREST O F JUSTICE, WE REMIT THE MATTER BACK TO THE FILE OF THE LD. LD. CIT TO EXAM INE WHETHER THE ASSESSEE CHARITABLE (OR/AND RELIGIOUS) TRUST COULD BE RECOGNIZED AS A CHARITABLE (OR/AND RELIGIOUS) TRUST EXISTING IN THE EYE OF LAW, AND IF IT IS SO, THE LD. CIT SHALL EXAMINE THE OBJECTS OF THE TRUST AND IF THE OBJECTS OF THE TRUST IF FOUND TO BE CHARITABLE (OR/ AND) RELIGIOUS IN NATURE, HE SHALL GRANT REGISTRATION TO THE ASSESSEE TRUST U/S. 12AA OF ITA NO.1190 /MDS/14 6 THE ACT BECAUSE VARIOUS HIGHER JUDICIARY HAVE CONSI STENTLY HELD THAT AT THE TIME OF GRANTING OF REGISTRATION OF THE TRUST O NLY THE OBJECTS OF THE CHARITABLE (OR/AND) RELIGIOUS TRUST HAS TO BE LOOK ED INTO. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED ON 28 TH NOVEMBER, 2014 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD ) (A.MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 28 TH NOVEMBER, 2014. K S SUNDARAM. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE