SHRI SAI BABA MANDIR VIKASH SAMITI, Sikar V. CIT-III, Jaipur

ITA 1213/JPR/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7211 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-10-2011
• Assessment Year: misc
• Appeal Filed On: 12-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Charitable institution
• Section: 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO. 1213/ JP/2010 U/S 12AA OF THE I.T. ACT SHRI SAI BABA MANDIR VIKAS SAMITI VS. THE LD. CIT POST: MOONDWARA, DISTT. SIKAR JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY: SHRI P.C. PARWAL DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 31-10-2011 DATE OF PRONOUNCEMENT: 04-11-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT-III, JAIPUR DATED 30 TH SEPT. 2010 PASSED U/S 12AA OF THE I.T. ACT, 1961. 2.1 THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AR E AS UNDER:- 1. THE LD. CIT-III JAIPUR HAS ERRED IN FACTS AND IN LAW IN DENYING THE REGISTRATION OF THE TRUST U/S 12AA OF THE INCOME TAX ACT, 1961. 2. THE LD. CIT-III JAIPUR HAS ERRED IN FACTS AND LA W IN REFUSING REGISTRATION U/S 12AA ON THE GROUND THAT S INCE LAND IS NOT TRANSFERRED TO TRUST BY EXECUTING THE T RANSFER DEED, THE TEMPLE IS OWNED AND ENJOYED BY TRUSTEE PERSONALLY AND THE TRUST IS NOT EXISTING GENUINELY. 2 2.2 THE ASSESSEE SAMITI HAS FILED AN APPLICATION I N FORM NO. 10A ON 30- 03-2010 FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961. THE SAMITI WAS CREATED ON 30-08-2007. THE LD. CIT REQUIRED THE CONCERNED AO I.E. ITO, SIKAR TO EXAMINE THE CASE AND SEND HIS REPORT AND I N THE REPORT THE AO HAS NOT RECOMMENDED THE GRANTING OF REGISTRATION U/S 12A OF THE ACT. THE LD. CIT THEREFORE, PROVIDED A FINAL OPPORTUNITY. IN RESPONS E TO THE LETTER ISSUED BY THE LD. CIT, SHRI P.C. PARWAL AND SHRI ANIL NUHAL, CAS OF THE ASSESSEE SAMITI ATTENDED THE HEARING ON 27-09-2010 AT 11.30 AM. 2.3 DURING THE COURSE OF HEARING BEFORE THE LD. CIT , IT WAS SUBMITTED THAT THE SAMITI IS CARRYING OUT RELIGIOUS ACTIVITIES AND TEMPLE HAS BEEN CONSTRUCTED FOR THE PUBLIC. SHRI RADHA KISHAN SHARMA IS THE MAI N TRUSTEE WHO IS ALSO A TRUSTEE OF PARTH SARTHI YOG SANSTHAN. SHRI RADHA KI SHAN SHARMA HAS SURRENDERED THE LAND MEASURING 0.44 HECTARES FOR CO NSTRUCTION OF SAI BABA TEMPLE AND THIS IS EVIDENCED BY THE RESOLUTION DAT ED 15-08-2008. AN AFFIDAVIT OF SHRI RADHA KISHAN SHARMA WAS ALSO FILE D TO SHOW THAT HE HAS SURRENDERED THE LAND. 2.4 THE LD. CIT AFTER CONSIDERING THE REPORT OF THE AO AND TAKING INTO ACCOUNT THE SUBMISSIONS OF THE LD. ARS REJECTED THE APPLICATION OF SAMITI, REQUESTING FOR REGISTRATION U/S 12A OF THE ACT AFTE R OBSERVING AS UNDER:-. 3 I HAVE CONSIDERED THE SUBMISSION CAREFULLY, IT HA S BEEN OBSERVED THAT NO SUCH LAND WAS BROUGHT TO THE AUDITED ACCOUNTS OF THE SAI BABA TEMPLLE SAMITI, APPLICANT. IN THE CASE OF TRANSFER OF IMMOVABLE PR OPERTY A DUE TRANSFER DEED SHOULD HAVE BEEN EXECUTED BY THE OWNER, BUT NO SUCH DEED WAS EXECUTED. THUS, THE LAN D FOR TEMPLE COULD NOT BE BROUGHT TO THE SAI BABA TEMPLE SAMITIS ACCOUNT. IT GIVES A FULL RIGHT TO SHRI R.K . SHARMA TO OWN THE TEMPLE PERSONALLY AND ENJOY THE BENEFITS ACCRUED FROM THE TEMPLE. UNDER SUCH CIRCUMSTANCES, I AM NOT SATISFIED THAT THE TRUST IS EXISTED GENUINELY. I THEREFORE, REJECT THE APPLICATION OF THE SAMITI REQUESTING FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961. 2.5 DURING THE COURSE OF PROCEEDING BEFORE US, IT W AS SUBMITTED BY THE LD. AR THAT FOR GRANTING REGISTRATION, THE LD. CIT IS T O SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND OBJE CTS OF THE PRESENT TRUST ARE PARTLY CHARITABLE AND PARTLY RELIGIOUS IN NATURE. THE GENUINENESS OF THE ACTIVITIES OF THE TRUST ARE EVIDENT FROM THE MINUTE S OF THE TRUST AND THE COPIES OF SUCH MINUTES HAVE BEEN PLACED AT PAGES 31 TO 38 OF THE PAPER BOOK. THE TRUST ALSO CARRIED OUT VARIOUS OTHER CHARITABLE ACT IVITIES LIKE INSTALLING WATER HUTS, PROVIDING FODDER TO BIRDS ETC. 4 2.6 IT HAS BEEN SUBMITTED BY THE LD. AR THAT LD. CI T HAS NOT ALLOWED REGISTRATION BECAUSE THE LAND ON WHICH TEMPLE IS CR EATED IS NOT REGISTERED IN THE NAME OF THE TRUST. ON THIS ISSUE, THE LD. AR HA S SUBMITTED AS UNDER:- IT MAY BE NOTED THAT SHRI RADHA KISHAN SHARMA HAS DONATED 0.44 HECTARE OF HIS LAND TO THE TRUST F OR WHICH POSSESSION WAS HANDED OVER TO THE TRUSTEE AS RECORD ED IN THE MEETING OF THE TRUSTEE DATED 15-08-2007 (PB 27) . A MEMORANDUM OF SURRENDER OF LAND WAS ALSO WRITTEN BY SHRI RADHA KISHAN SHARMA ON 24-10-2010 (PB 23-24). THIS IS SUFFICIENT FOR TRANSFER OF THE LAND TO A CHARITABLE/RELIGIOUS ENDOWMENT. THE HON'BLE SUPREME COURT IN CASE OF SHRI GOVIND LAL VS. STATE OF RAJAS THAN (PB 39) HAS HELD THAT DEDICATION OF PRIVATE PROPERT Y TO A CHARITY NEED NOT BE MADE IN WRITING. IT CAN BE ORAL LY OR CAN BE INFERRED FROM CONDUCT. HON'BLE RAJASTHAN HIGH C OURT IN CASE OF IDOL OF SHRI NARSINGHJI MAHARAJ AND OTHE R VS. PRABAHTI VAISH (PB 40-42) HAS HELD THAT DEDICATION OF THE PROPERTY TO GOD BY A HINDU DOES NOT REQUIRE ANY DOCUMENT AND PROPERTY CAN BE VALIDLY DEDICATED WITH OUT ANY REGISTERED INSTRUMENT. IT FOLLOWED THE DECISION OF FULL BENCH OF THE HON'BLE MADRAS HIGH COURT REPORTED IN AIR 1927 MADRAS 636 WHERE IT WAS HELD THAT DEDICATION O F PROPERTY TO GOD DOES NOT REQUIRE ANY DOCUMENT AND THAT PROPERTY CAN BE VALIDLY DEDICATED WITHOUT ANY REGIS TERED INSTRUMENT. 5 2.7 ON THE OTHER HAND, THE LD. DR DREW OUR ATTENTIO N TO THE COPY OF ANNUAL ACCOUNTS FOR THE ASSESSMENT YEARS 2008-09 AND 2009- 10. THE DONATION SHOWN FOR THE FINANCIAL YEAR 2009-10 IS ONLY TO THE EXTEN T OF RS. 1,49,935/-. THEREAFTER THE LD. DR DREW OUR ATTENTION TO THE APP LICATION GIVEN BY SHRI YATEENDRA SHARMA ON BEHALF OF PARTH SARTHI YOG SAN STHAN TRUST, SIKAR FOR ALLOWING HIM TO BECOME AN INTERVENER. THE APPLICATI ON SO FILED CONTAINED THE NEWSPAPER CUTTING DATED 25-08-2009 IN THE NEWSPAPE R SIKAR STATEMENT. IN THIS NEWSPAPER CUTTING, IT IS MENTIONED THAT 90 QTL WEIGHING IDOL OF SAI BABA WAS INSTALLED ON 9.25 MTR HIGH THRONE IN THE HALL M EASURING 46 FT X 51 FT. FROM THIS, THE LD. DR STATED THAT SUBSTANTIAL AMOUN T OF FUNDS WERE REQUIRED FOR INSTALLING THE IDOL OF SAI BABA IN A BIG HALL. HOWEVER, THE DONATIONS SHOWN BY THE TRUST ARE NOT OF THAT MUCH AMONT TO HAVE ENA BLED THE TRUSTEE TO MAKE SUCH EXPENSES. IT WAS THEREFORE, SUBMITTED THAT THE TRUST HAS BEEN CREATED ONLY FOR THE BENEFIT OF THE TRUSTEE. 2.8 THE LD. DR DREW OUR ATTENTION TO SECTION 39 OF THE RAJASTHAN STAMPS ACT. IF A DOCUMENT IS TO BE STAMPED AND IN CASE IT IS NOT SUFFICIENTLY STAMPED THEN THE DOCUMENT SHOULD NOT BE ADMITTED AS AN EVID ENCE. OUR ATTENTION WAS FURTHER DRAWN TO 5 TH CLAUSE OF SCHEDULE OF RAJASTHAN STAMP ACT, 1998 IN WHICH IT HAS BEEN MENTIONED THAT MEMORANDUM OF AGRE EMENT IS TO BE STAMPED. THE LAND WHICH IS STATED TO BE TRANSFERRED TO THE TRUST IS NEITHER BY 6 ANY REGISTERED DEED NOR AGREEMENT HAS BEEN STAMPED. IT WAS SUBMITTED BY THE LD. DR THAT THE LD. CIT WAS JUSTIFIED IN NOT ALLOWI NG THE REGISTRATION. 2.9 THE LD. DR ALSO STATED THAT THE INFORMATION GIV EN BY SHRI YATEENDRA SHARMA IN HIS APPLICATION TO THE TRIBUNAL IS ALSO T O BE CONSIDERED FOR DECIDING THE ISSUE OF REGISTRATION OF THE TRUST. 2.10 THE LD. AR HAS STATED THAT THE LAND HAS NOT BE EN SOLD THROUGH AGREEMENT BUT IT HAS BEEN DONATED TO THE TRUST. IN CASE THE PROPERTY IS DEDICATED TO GOD BY A HINDU THEN IT DOES NOT REQUIR E ANY DOCUMENT. 2.11 THE LD. AR HAS ALSO FILED THE SUBMISSIONS ON T HE OBJECTIONS RAISED BY SHRI YATEENDRA SHARMA IN RESPECT OF REGISTRATION O F THE TRUST. 2.12 WE HAVE HEARD BOTH THE PARTIES. AS PER ORDER U /S 12AA OF THE ACT, LD. CIT COMPLETED THE HEARING OF PROCEEDINGS ON 27 TH SEPT. 2010. THE ASSESSEE HAS FILED A LETTER DATED 29 TH SEPT.2010 BEFORE THE LD. CIT, JAIPUR . THE COPY OF THIS LETTER IS AVAILABLE AT PAGE 16 OF THE PAPER BO OK. IN THE REPLY, THE ASSESSEE ENCLOSED CERTAIN PAPERS SHOWING MALAFIDE INTENTION OF SHRI YATEENDRA SHARMA. THE ORDER OF THE LD. CIT DOES NOT INDICATE THAT THIS LETTER HAS BEEN CONSIDERED BY HIM WHILE REJECTING THE APPLICATION F OR REGISTRATION. WE HAVE ALREADY MENTIONED ABOUT THE CONTENTION OF THE LD. D R THAT SUBSTANTIAL AMOUNTS HAVE BEEN SPENT BEFORE TEMPLE WAS OPENED FOR THE PU BLIC ON 10-03-2008. HOWEVER, THE BALANCE SHEET AS ON 31-03-08 SHOWED TH E BUILDING CONSTRUCTION 7 TO THE EXTENT OF RS. 91,630/-. IT IS TRUE THAT THE LD. CIT SHOULD NOT HAVE REFUSED THE REGISTRATION ONLY ON THE GROUND THAT THE LAND W AS NOT REGISTERED IN THE NAME OF THE TRUST. THE DEDICATION OF THE PROPERTY T O A HINDU GOD IS NOT TO BE REGISTERED. IN CASE THE PROPERTY IS BEING TRANSFER RED TO THE TRUST FOR CHARITABLE PURPOSES THEN IT CANNOT BE SAID THAT REGISTRATION I S NOT NECESSARY. IN CASE THE LAND STANDS RECORDED IN THE REVENUE RECORD IN THE N AME OF THE TRUST AND THERE IS AN AFFIDAVIT BY THE OWNER THAT HE HAS TRANSFERRE D THE LAND TO THE TRUST THEN IT IS SUFFICIENT TO HOLD THAT LAND BELONGS TO THE TRUS T. OF COURSE, THE REFUSAL OF REGISTRATION BY THE LD. CIT ON ACCOUNT OF TRANSFER OF LAND BEING NOT REGISTERED IS NOT PROPER BUT CONSIDERING THE OVERALL FACTS, WE FEEL THAT LD. CIT WILL CONSIDER ALL THE ASPECTS FOR GRANTING OF REGISTRATI ON TO THE TRUST. THE ITAT JAIPUR BENCH IN THE FOLLOWING CASES AFTER CONSIDERI NG THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DI GAMBER JAIN MANDIR, CHAKSU (2009) 29 DTR 65 HAD HELD THAT RELIGIOUS TRU STS ARE ENTITLED FOR REGISTRATION. 1. SHRI SHAYM MANDIR COMMITTEE VS. CIT-III (ITA NO. 789 JP/2009 DATED 28-10-2010) 2. EMMANUEL BIBLE COMMITTEE VS. CIT, KOTA (ITA NO.1 395 JP/2010 DATED 21-10-2011. 8 2.13 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE ENUMERATED ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. THE LD. CIT WILL CONSIDER ALL THE RELEVANT FACTS FOR THE PURPOSE OF REGISTRATION AND MAY CONSIDER THE FACTS WHICH HAVE BEEN PLACED BEFORE US BY THE L D. DR. THE LD. CIT WILL ALLOW OPPORTUNITY TO THE ASSESSEE. 3 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04-11 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 04 /11/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI SAI BABA MANDIR VIKASH SAMITI, SIKAR 2. THE LD. CIT-III, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD.DR 5. THE GUARD FILE (ITA NO. 1213/JP /10) A.R, ITAT, JAIPUR 9