Shree lakshmi Venkateshwara Seva Samithi Trust, Bangalore V. Director Of Income -Tax (Exemptions), Bangalore

ITA 125/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57445 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-01-2012
• Assessment Year: misc
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARCHANA CHOWDHRY CITIIDR
• Assessee Lawyers: B S RAVINDRANATH
• Keywords: Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.125/BANG/2011 ASSESSMENT YEAR : N.A. SHREE LAKSHMI VENKATESHWARA SEVA SAMITHI TRUST, # 54/3, SRI MAHALAKSHMI, NAGADEVANAHALLI, JNANABHARATHI POST, BANGALORE 560 004. PAN : AAJTS 2718L VS. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI B.S. RAVINDRANATH, C.A. RESPONDENT BY : SMT. ARCHANA CHOWDHRY, CIT-II(DR) DATE OF HEARING : 18.01.2012 DATE OF PRONOUNCEMENT : 31.01.2012 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 22.12.2010 OF THE DIRECTOR OF INCOME-TAX (EXEMPTION S) [DIT(E)], BANGALORE. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: ITA NO.125/BANG/11 PAGE 2 OF 6 1. THE IMPUGNED ORDER OF THE CIT(E)/DIT(E) IS OPP OSED TO THE LAW & FACTS OF THE CASE. 2. DIT/(E) ERRED IN REJECTING THE APPLICATION FOR R EGISTRATION FILED IN FORM NO. 10A TOGETHER WITH COPY OF THE TRU ST DEED AND OTHER DOCUMENTS REQUIRED U/S 12A R.W RULE 17A AND T HE OBJECTS OF THE TRUST ARE CLEARLY STATED IN THE TRUST DEED. 3. CIT(E)/DIT(E) ERRED IN STATING THAT PRIOR PERMIS SION FROM THE MUJARAI DEPARTMENT IS AN INGREDIENT TO ISSUE TH E REGISTRATION U/S 12A SINCE THE DIT(E) IS REPRESENTING THE INCOME TAX DEPARTMENT WHICH IS BEING GOVERNED UNDER THE INCOME TAX ACT AND RULES, IF THERE IS ANY VIOLATION IN CONDUCTING POOJAS AT THE MUJRAI DEPARTMENT TEMPLES, THAT DEPARTMENT ALON E TAKES A SUITABLE ACTION. THEREFORE AT THIS STAGE OF ENQUIRY DIT(E) CAN NOT INSIST UPON THE TRUST ANY OTHER REQUIREMENTS OTHER THAN THE REQUIREMENTS SPECIFIED U/S 12A R.W RULE 17A. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(E)/DIT(E) MAY BE CANCELLED WITH A FURTHER PRAYE R TO DIRECT TO THE CIT(E)/DIT(E) TO ISSUE THE REGISTRATION U/S 12A WITH RETROSPECTIVE FROM THE DATE OF APPLICATION FILED. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR TO DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO REJECTION OF THE APPLICATION FO R REGISTRATION U/S. 12AA OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S THE ACT IN SHORT]. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE TRUST WAS REGISTERED ON 11.2.2010 WITH SUB-REGISTRAR AND APPL IED IN FORM 10A IN DUPLICATE ON 29.06.2010, SEEKING REGISTRATION U/S. 12AA OF THE ACT. THE LD. DIT(E), BANGALORE CALLED FOR THE FOLLOWING DETAILS: 1. IT IS STATED IN THE TRUST DEED THAT THE TRUST WAS FORMED FOR REGULAR POOJAS AND FUNCTIONS IN SRI LAKSHMI VENKATE SHWARA TEMPLE AT TOVINAKERE. IT IS ALSO STATED THEREIN TH AT THE TEMPLE IS UNDER THE MANAGEMENT OF MUJARAI DEPARTMENT. YOU AR E THEREFORE ITA NO.125/BANG/11 PAGE 3 OF 6 REQUESTED TO CLARIFY WHETHER ANY PERMISSION HAS BEE N OBTAINED FROM THE MUJARAI DEPARTMENT TO CARRY OUT YOUR ACTIV ITIES. IF SO, PLEASE FURNISH PROOF IN THIS REGARD. 2. IT IS STATED IN THE ACTIVITY REPORT THAT THE TRU ST HAS ARRANGED THE POOJA FOR THE DEITY I.E. PANCHAMURTHA ABHISHEKA , PRAKARA UTSAVA AND CULTURAL ACTIVITIES. WHEREAS, THERE ARE NO EXPENSES DEBITED IN THE ACCOUNTS FOR THE YEAR ENDING 31-03-2 010. PLEASE EXPLAIN. 5. THE ASSESSEE IN RESPONSE TO THE ABOVE SUBMITTED THAT THE TEMPLES, SRI LAKSHMI VENKATESHWARA SWAMY AND SRI VIRUPAKSHA SWAMY SITUATED AT TOVINAKERE, KORATAGERE TALUK, TUMKUR DISTRICT, K ARNATAKA, BELONG TO MUJARAI DEPARTMENT, GOVT. OF KARNATAKA, BUT THE POO JAS WERE NOT PROPERLY CONDUCTED BY THE GOVERNMENT AT ITS COST. IT WAS FUR THER SUBMITTED THAT BEFORE FORMATION OF THE TRUST, POOJAS WERE CONDUCTE D THROUGH PERSONAL CONTRIBUTIONS AND TO MAINTAIN THE PERPETUITY OF POO JA, THE ASSESSEE TRUST WAS FORMED. IT WAS EXPLAINED THAT TO CONDUCT POOJA , PERMISSION OF THE MUJARAI DEPARTMENT WAS NOT REQUIRED AND PERMISSION WAS REQUIRED ONLY FOR REPAIRS/ALTERATIONS AND ADDITIONS/DELETIONS. IT WAS ALSO STATED THAT BY CONDUCTING POOJAS, MUJARAI DEPARTMENTS INTEREST IN THE TEMPLE WOULD NOT BE DISTURBED AND THE TRUST DID NOT CLAIM THE OWNERS HIP AS THE TEMPLES ARE LISTED IN THE ENDOWMENT COMMISSION, WHICH PROVIDES THAT ONLY MUJARAI DEPARTMENT CAN INSTALL HUNDI FOR COLLECTION AND DON ATIONS, THEREFORE THE TRUST WOULD NOT BE INSTALLING ANY HUNDI. IT WAS ALSO EXP LAINED THAT FOR THE PERIOD ENDING 31.03.2010, NO POOJAS WERE CONDUCTED, HENCE NO EXPENSES WERE DEBITED FOR THAT YEAR, HOWEVER DURING THE CURRENT F INANCIAL YEAR, THE TRUST HAD STARTED CONDUCTING POOJAS AND RS.10,000 HAD BEE N DEBITED TO THE PROVISIONAL INCOME AND EXPENDITURE ACCOUNT FOR TH E PERIOD ENDING ITA NO.125/BANG/11 PAGE 4 OF 6 30.11.2010. IT WAS ALSO STATED THAT THE TRUST VIDE LETTER DATED 06.12.2010 BEFORE THE TAHSILDAR, KORATAGERE, TUMKUR DISTRICT, SOUGHT PERMISSION TO REPAIR THE EXISTING 400 YEARS OLD TEMPLE BUILDING. ACCORDINGLY IT WAS REQUESTED THAT REGISTRATION U/S. 12AA OF THE I.T. A CT MAY BE GRANTED. 6. THE LD. DIT(E) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE MAIN OBJECT OF THE ASSESSEE TRUST WAS TO CONDUCT REGULAR POOJAS AT SRI LAKSHMI VENKATESHWARA SWAMY AND SRI VIRUPAKSHA SWAMY TEMPLES AND THE PROPERTY SITUATED ON THOSE TEMPLES BELONGED TO MUJARAI DEPARTMENT, GOVT. OF KARNATAKA AND NOT TO THE ASSES SEE. THEREFORE NEITHER THE TEMPLES BELONGED TO THE TRUST NOR ANY LEGAL RIG HTS/OBLIGATIONS ANNEXED TO THE TEMPLE TO PERFORM POOJAS VESTED WITH THE ASS ESSEE TRUST. THE LD. DIT(E) WAS OF THE VIEW THAT ONE OF THE BASIC INGRED IENT OF A VALID TRUST WAS THAT THE PROPERTY SHOULD BE HELD BY THE TRUST ONLY FOR CHARITABLE/RELIGIOUS PURPOSES OR AN OBLIGATION ANNEXED TO THE PROPERTY S HOULD HAVE VESTED WITH THE TRUST. REFERENCE WAS MADE TO THE JUDGMENT OF T HE HONBLE SUPREME COURT IN THE CASE OF RAMRATHAN VS. BAJRANGLAL 1978 AIR SC 1393. THE LD. DIT(E) OBSERVED THAT THE ASSESSEE TRUST DID NOT HAV E A LEGAL RIGHT TO PERFORM THE POOJAS AND AS SUCH THE SUBJECT OF THE T RUST WAS ABSENT AS THE PROPERTY IN QUESTION WHERE POOJAS WERE PERFORMED BE LONGED TO MUJARAI DEPARTMENT, GOVT. OF KARNATAKA. HE FURTHER OBSERVE D THAT THE ASSESSEE HAD NOT OBTAINED ANY PERMISSION OR SANCTION FROM TH E MUJARAI DEPARTMENT, THEREFORE THE SOLE BASIS OF CREATION OF THE TRUST F OR PERFORMING POOJAS IN TEMPLES IS NON-EXISTENT AND THE LEGAL OBLIGATION AN NEXED TO THE PROPERTY TO PERFORM POOJAS ALSO DID NOT VEST WITH THE ASSESSEE TRUST. HE THEREFORE ITA NO.125/BANG/11 PAGE 5 OF 6 REJECTED THE APPLICATION MOVED BY THE ASSESSEE FOR REGISTRATION U/S. 12AA OF THE ACT. 7. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. DIT( E), BANGALORE AND FURTHER SUBMITTED THAT THE ASSESSEE WAS PERFORMING POOJAS REGULARLY IN SRI LAKSHMI VENKATESHWARA SWAMY TEMPLE AND FOR THAT PU RPOSE, EXECUTED A TRUST DEED AND APPLIED FOR REGISTRATION U/S. 12AA O F THE ACT, BUT THE LD. DIT(E) WITHOUT GOING INTO THE OBJECTS OF THE ASSESS EE TRUST, DENIED REGISTRATION BY STATING THAT THE ASSESSEE WAS NOT R EGISTERED WITH MUJARAI DEPARTMENT AND NOT OBTAINED ANY SANCTION OR PERMISS ION FROM THE SAID DEPARTMENT. IT WAS STATED THAT THE LD. DIT(E) OUGH T TO HAVE ALLOWED REGISTRATION TO THE ASSESSEE BY CONSIDERING THAT TH E NATURE OF THE ACTIVITIES PERFORMED BY THE ASSESSEE WAS CHARITABLE. 8. IN HER RIVAL SUBMISSIONS, THE LD. CIT(DR) STRONG LY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. DIT(E). 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE TRUST WAS ESTABLISHED BY A TRUST DEED REGISTERED ON 11.02.2010 BEFORE THE SUB-REGIST RAR AND THE OBJECT OF THE ASSESSEE TRUST WAS TO PERFORM POOJAS IN THE TEM PLES OF SRI LAKSHMI VENKATESHWARA SWAMY AND SRI VIRUPAKSHA SWAMY SIT UATED AT TOVINAKERE, KORATAGERE, TUMKUR DISTRICT. THE LD. D IT(E) DENIED REGISTRATION SOUGHT BY THE ASSESSEE U/S. 12AA OF THE ACT BY STAT ING THAT THE ASSESSEE WAS NOT OWNING ANY PROPERTY BECAUSE THE PROPERTY ON WHICH THE TEMPLE WAS SITUATED BELONGED TO MUJARAI DEPARTMENT. IN OU R OPINION, THE ITA NO.125/BANG/11 PAGE 6 OF 6 OWNERSHIP OF THE PROPERTY CANNOT BE A CONDITION BEF ORE SEEKING REGISTRATION U/S. 12AA OF THE ACT. THE LD. DIT(E) BEFORE GRANTI NG REGISTRATION, SHALL SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST OR I NSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES. IN THE PRESENT CASE , THE LD. DIT(E) NEITHER DISCUSSED THE OBJECTS OF THE TRUST NOR THE GENUINEN ESS OF ITS ACTIVITIES, WE THEREFORE DEEM IT APPROPRIATE TO SET ASIDE THE IMPU GNED ORDER AND REMAND THE ISSUE BACK TO THE FILE OF THE LD. DIT(E)/COMMIS SIONER TO BE DECIDED AFRESH IN ACCORDANCE WITH THE LAW, AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2012. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST JANUARY, 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.